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2007 International Institute for Learning, Inc.
2007 Dr. Harold Kerzner
Version 1.1
ByDr. Harold Kerzner
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2007 International Institute for Learning, Inc.
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Most of the material in this presentation has been takenfrom two sources; Advanced Project Management: BestPractices on Implementation, 2nd Edition, 2004, andProject Management Best Practices: Achieving GlobalExcellence, 3rd Edition, 2006, both by Harold Kerzner,
John Wiley & Sons Publishers.
2007 by Dr. Harold Kerzner. All rights reserved.Material and slides cannot be copied or transmitted in
any electronic format without written permission ofDr. Harold Kerzner.
Copyright
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Todays View of Project Management
Today we are managing our business byprojects.
Project management has evolved into a
business process rather than a projectmanagement process.
The project management enterprise
methodology contains businessprocesses.
Capturing best practices is a necessity.
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Benefits of Project Management (1 of 6)
Project management
will require more
people and add to the
overhead costs.
Profitability maydecrease.
Project management
allows us to perform
more work in less time
and with less people.
Profitability will
increase.
Present ViewPast View
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Benefits of Project Management (2 of 6)
Project management
will increase the
amount of scope
changes.
Project management
creates organizational
instability and
increases conflicts.
Project management
will provide better
control of scope
changes.
Project management
makes the organization
more efficient and
effective.
Present ViewPast View
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Benefits of Project Management (3 of 6)
Project management
is really eye wash
for the customers
benefit.
Project management
will create problems.
Project management
will allow us to work
closer with our
customers.
Project management
provides a means for
problem solving.
Present ViewPast View
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Benefits of Project Management (4 of 6)
Only large projects
need project
management.
Project management
will increase quality
problems.
All projects will benefit
from project
management.
Project management
improves quality.
Present ViewPast View
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Benefits of Project Management (5 of 6)
Project management
will create power and
authority problems.
Project management
focuses on
suboptimization by
looking at only the
project.
Project management
will reduce the majority
of the power struggles.
Project management
allows people to make
good company
decisions.
Present ViewPast View
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Supporting Processes for Best Practices
As project management evolved, thereappeared supporting processes aligningthemselves with project management.
Each of these supporting processeshave allowed us to capture additionalbest practices related to both projectmanagement and the supportingprocesses.
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Processes Supporting Project Management
1960-1985 1985 1990
1991-1992 1993 1994
NoAllies
Total
QualityManage-
ment
ConcurrentEngineer-
ing
Empower-
ment andSelf-
directed
Teams
Re-engineering
LifeCycle
Costing
Increasing Support
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Processes Supporting Project Management
1995 1996 1997-
1998 1999 2000
ScopeChange
Control
RiskManagement
Project
Officesand
COEs
Co-LocatedTeams Multi-NationalTeams
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Processes Supporting Project Management
2002 2003 2005 2006
Maturity
Models
Strategic
Planning
for Project
Management
IntranetStatus
Reports
CapacityPlanning
Models
Six
Sigma
Project
Mgt.
VirtualProject
Teams
2001 2004
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Processes Supporting Project Management
2008 2009 2011 2012
Enter.Project
Mgt.
Knowledge
Librariesfor Project
Management
Internal
Certificationas well as
by PMI
2007 2010
??? ??? ???
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Microsoft 2007 International Institute for Learning, Inc.
2007 Dr. Harold Kerzner
Increasing Support
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Best Practices Questions
DEFINITION VALIDATION
IMPLEMENTATION
PUBLICATION
UTILIZATION
MANAGEMENT
REVALIDATION
DISCOVERY
CLASSIFICATION
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Question #1
What is the
definition of a
best practice in
projectmanagement?
(Past view vs.
present view)
DEFINITION
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Question #2
How do we
discover best
practices? Where
should we lookfirst? Who is
responsible for
the discovery?
DISCOVERY
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Question #3
How do we
validate that
something
actually is a bestpractice? Who
should perform
the validation?
VALIDATION
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Question #4
Are there levels or
categories of best
practices? If so,
who is ultimatelyresponsible for
determining the
levels?
CLASSIFICATION
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Question #5
Who has the
responsibility for
the ultimate
management /administration of
the best practice
once it isidentified?
MANAGEMENT
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Question #6
Who has the
responsibility for
revalidation of
current bestpractices? How is
this accomplished
and how often?
REVALIDATION
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Q i #7
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Question #7
How are best
practices
commonly used by
companies oncethey are validated
and / or
revalidated?
UTILIZATION
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Q i #8
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Question #8
What techniquesare available by
which best
practices can beeffectively
communicated to
the employees
within a company?
PUBLICATION
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Q i #9
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Question #9
How do we get
employees to use
a best practice?
How do wevalidate that it is
used properly?
IMPLEMENTATION
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Evaluation of a Best Practice (1 of 2)
Best Practice Characteristics Yes No
Measurable Metric
Measurable Efficiency
Measurable EffectivenessAdds Value to the Company
Adds Value to Our Customers
Transferability to Other Projects
Has Potential for Longevity
Applicability to Multiple Users
Differentiates Us from Competitors
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Evaluation of a Best Practice (2 of 2)
Best PracticeIdentification
TrainingRequired
GovernanceRequired
ProprietaryKnowledge
1.
2.
3.
4.
5.
6.
7.
8.
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Levels of Best Practices
Three levels of best practice maturityhave been defined with minimumrequirements for an associate best
practice, best practice, and masterybest practice.
(EDS)
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Levels of Best Practices
___________ ___________ ___________ ___________ ___________ ___________
___________ ___________ ___________ ___________ ___________ ___________
Characteristicsor Drivers ofthe Ideal Best
Practice
Wish List
Level 4: > 60%
Note: Each level contains a percentageof the ideal characteristics or drivers.
Level 3: 40 % - 60%Level 2: 20 % - 40%Level 1: 0 % - 20%
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Project Management and Sales (1 of 2)
When asked about his vision forEricsson into the 21st century, RobertShepherd believes that there will be:
a stronger tie to sales where the project
manager supports the sales phase to ensure
successful proposal generation and project
implementation to meet the customers
contractual requirements, which leads to
customer satisfaction.
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Project Management and Sales (2 of 2)
According to Jim Triompo, GroupSenior Vice President at ABB:
Project management is being introduced intoareas that traditionally havent used project
managers. Project management in a sales
organization has proven to be critical and
should be made a central part of the salesprocess.
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Best Practices and the Sales Force
How do we get salespeople to discussbest practices with the clients? (bothinternal and external clients)
The salespeople must know the bestpractice and what value / benefit canbe achieved with it.
The salespeople must make the bestpractice easy for the customer tounderstand.
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Need for a Best Practices Library
Every new project should directly buildon the learning from any similar project
undertaken anywhere else in theworld.
Bill Gates in Business @ the Speed of Thought
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Best Practices Library
Effectiveness andEfficiency
Satisfaction
Future Business
TechnologyAdvances
Project Management
CONTINUOUS IMPROVEMENTS
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(3)
(32)
(6)
(136)
Computer Associates (Before 2005 Update)
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Growth of Knowledge Management
PM BestPractices
PM BestPractices
Libraries
KnowledgeRepositories
(PM andBusiness
Knowledge)
Integration of BusinessProcesses into the EPMMethodology
TimeQuantity
ofInform
ation
Project KnowledgeBase or TechnologyKnowledge Base(PKB or TKB)
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Growth of Enterprise Project Management
Functional Project Management (Products)
Enterprise Project Management (Solutions)
Extended Enterprise Project Mgt. (Partnerships)
Suppliers Customers
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Engagement Project Management
Engagement project managementdescribes the steps that must beaccomplished to successfully leverageyour project management skills(including best practices) to attract newcustomers and receive follow-on workfrom existing customers.
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Engagement Project Management
What are you selling?
Solutions generated by your EPM system
Sharing of best practices and lessons learned
including Six Sigma expertiseContinuous flow of information from the EPM
system to the customer (perhaps EPM to EPMsystems)
In exchange for this, you want the customerto treat you as a long-term partner, not just acontractor
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Project Focus Project Completion Long-Term
Relationships
Approach Single Sale Follow-On Work
Customer Contact When Required Continuous /Structured
Selling Emphasis Product Features Customer Value
Deliverables Products / Services Solutions
Time Horizon Short-Term Long-Term
Customer Service Low Importance High Importance
Quality Concern Product Quality Solution Quality
Conventional Selling Engagement Selling
Engagement Project Management
Factors
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The Hexagon of Excellence
Behavioral
ExcellenceCulture
InformalProject
Mgmt. Trainingand
Education
ManagementSupport
IntegratedProcesses
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The Hexagon of Excellence
Integrated
Processes
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Integrated Processes for the 21st Century
Project Management
ConcurrentEngineering
Total QualityManagement
And SixSigma
RiskManagement
ChangeManagement
Integrated Processes (Past Present and42
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Integrated Processes (Past, Present, andFuture)
Yrs: 1990-2000
IntegratedProcesses
Project
management
Total qualitymanagement
Concurrentengineering
Scope changemanagement
Risk management
CurrentIntegratedProcesses
Yrs: 2001-2010
Integrated
Processes
Supply chain
management
Business
processes
Feasibility studies
Cost-benefit
analyses (ROI)
Capital budgeting
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The Hexagon of Excellence
Culture
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The Hexagon of Excellence
ManagementSupport
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The Executive Interface
Executive is activelyinvolved in projects
Executive acts as the projectchampion
Executive questions theproject managers decisions
Priority shifting occursfrequently
Executive views projectmanagement as a necessaryevil
Very little projectmanagement support
Executive involvement ispassive
Executive acts as the projectsponsor
Executive trusts the projectmanagers decisions
Priority shifting is avoided(if possible!!)
Executives view projectmanagement as beneficial(for the company)
Visible, ongoing support
MM TUR TY M TUR TY
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The Project-Line Interface
Project manager is vestedwith power/authority overthe line managers
Project manager negotiates
for best peopleProject manager worksdirectly with functionalemployees
Project manager has no
input into employeeperformance evaluations
Project manager-centeredleadership
Project and line managersshare authority and power
Project manager negotiates
for deliverablesProject manager worksthrough line managers
Project manager makes
recommendations to the linemanagers
Team-centered leadership
MM TUR TY M TUR TY
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The Hexagon of Excellence
Trainingand
Education
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The Hexagon of Excellence
Informal
ProjectMgmt.
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The Hexagon of Excellence
BehavioralExcellence
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The Five Levels of Maturity
Feedback
Level 1
Common
Language
Level 2
CommonProcess
Level 3
Singular
Methodology
Level 4
Benchmarking
Level 5Continuous
Improvement
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The Project Office (PO) or the ProjectManagement Office (PMO)
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Governance Issues
Poor alignment between projectobjectives and broader business goals
Poor business case development
resulting in the go-ahead of projectsthat provide limited or no value
Badly specified project outcomes
measured in real business terms
(QA)
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The Project Office (COE) (1 of 6)
An organizationdedicated to
benchmarking forproject management
Organizationalmentorship for
inexperienced projectmanagers
BenefitsBenefits
A strategic planningfocal point for the
project managementprocess
An organizationdedicated to continuous
improvement and costreduction
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The Project Office (COE) (2 of 6)
Centralized lessons
learned files on
completed projects
A hot line for
problems without
involvement seniormanagement
An organization for
sharing ideas and
experiences
An organization for
creating project
management standards
BenefitsBenefits
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The Project Office (COE) (3 of 6)
Assist Human Resources
in the creation of a
project managementcurriculum and course
content
Centralized cost controland reporting
BenefitsBenefits
Assist Human Resources
in the creation of a
project managementcareer path ladder or
competency model
Centralized projectplanning and scheduling
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The Project Office (COE) (4 of 6)
Development of
project management
templates
Assessing risks
Identification of best
practices, internal and
external
Planning for disaster
recovery
BenefitsBenefits
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The Project Office (COE) (5 of 6)
Globalization and
training on EPM
Establishing metrics
Customer relations
management
Multilingual tools
especially for
networked PMOs
BenefitsBenefits
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The Project Office (COE) (6 of 6)
Development of a
corporate capacity
planning model
Stakeholder
management
Maintain project
management
information systems
The guardian of project
management
intellectual property
BenefitsBenefits
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The Project Office (COE)
Companies are now struggling withthe organizational reporting locationfor the Project Office/COE.
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Types of Project Offices
Functional Project Office: ResourceManagement
Corporate Project Office: Strategic and
Operational Issues
Customer Focus Project Office:Customer Management
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Project Office Growth
According to Jim Triompo, Group Senior VicePresident at ABB:
The project office does not deliver projects.
The projects managed by the projectmanagement office are limited to process/
tools development, implementation, and
training. The project management office is
sometimes requested to perform reviews,
participate in division-level risk reviews, and
operational reviews in various countries.
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CEOAmericas
Senior Director
Solution Design
EPM
PMO Mexico PMO Brazil PMO UK/Europe PMO Asia
CEOAmericas
Senior Director
Solution Design
EPM
PMO Mexico PMO Brazil PMO UK / Europe PMO Asia
Exels Networking PMOs
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Role of the PMO in Portfolio Management
Planning Recommendations
Are we working on the right projects?
Are we working on enough of the right projects?
Evaluation Recommendations
Are we doing the right projects right?
Are there projects that should be terminated so thatthe resources can be applied elsewhere?
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Ideas are generatedthroughout the entireorganization
Evaluateprojects
Opportunity options
Resource requirements
Refined project costs
Refined savings
Benefits (financial,strategic, payback)
Project metrics
Benefits realization
Risks
Exit strategies
Refined people, process,technology impacts
Schedule / milestones
Complexity
Standard technology?
Business
Case
then evaluated using astandard business case
NON-VALUE ADDEDBUSINESS CASES
non-value added opportunities & projectsare eliminated
Filter
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Cost Savings Due to Software
Typical cost per meeting = $550
As a result of the new software, meetingseliminated per week = 4
Total annual savings = ($550/meeting) x(4 meetings/week) x ( 52 weeks/year) =$114,400 per year.
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Cost Savings Due to Software
Current average number of meetings required perproject schedule approval = 10
Expected average number after organizationbegins using software = 5
Average number of attendees/meeting = 10Average duration of a meeting = 1.25 hours
Fully burdened labor rate = $70/hour
Total annual savings = (204 projects) x(5 meetings/project) x (10 people) x(1.25 hours/meeting) x ($70/hr.) = $892,500
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Project Management Software
INITIATION PLANNING EXECUTION CONTROLLING CLOSURE
95 % of Todays Software
Portfolio management Benefit-cost analyses Feasibility studies Criteria definition Assumptions defined Evaluation criteria Risk management
Portfolio Management Lessons learned Best practices library Failure analyses
Areas of Deficiency