Here’s an excerpt:

The concert hall at the Syndey Opera House holds 2,700 people. This blog was viewed about 12,000 times in 2011. If it were a concert at Sydney Opera House, it would take about 4 sold-out performances for that many people to see it.

Click here to see the complete report.

By Dexter Duncan

In a previous article on Australia’s National Broadband Network (NBN), we gave a brief update on roll-out and initial applications being trialed.  This article explores some of the broad trends so you can plan your IT investment over the next few years.   The NBN will accelerate the adoption of some key technologies which will reduce costs and increase efficiency for those that plan for it.

Whether you outsource or keep elements of an IT department in-house, the role of IT services is changing.  The speed of these changes is likely to increase over the next three years with the roll-out of higher broadband connections like Australia’s NBN.

Quote from Michael Harte, CIO of CBA

“Storage, for example, should be cheap, whereas the management of critical applications should be expensive.  You pay a premium for stuff that adds value close to the customer.”

The above quote from a global leader in using technology to grow revenue and profits outlines a crude division of two types of IT services that has emerged:

1)      Commodity services

2)      Value or “premium” Services.

Commodity Services

Over the next three years you’ll find it more cost effective to outsource many areas since outside vendors will do a better job than you.   Some of the services (like Managed Services) are already widely available at a fraction of the cost of delivering the service internally.  Many of the commodity services are available “on-demand” where payment is arranged based on usage and Service Level Agreements (SLA’s).    Examples on-demand specialty services are:

• Servers (CPU power and RAM) as a service
• Data Storage as a service
• E-mail as a service
• Testing as a service
• Software as a service (hosted “pay as you go” services like CRM)
• IT support as a service (Managed Services)

Although the above have been available in one form or another, the new era of “cloud computing” is grouping them into a competitive shopping list due to lower cost in delivering computer resources over the internet.    You can thank large organisations for the proliferation of new commodity services.    The aim is to use the savings in the commodity area to invest and develop new premium service areas like mobility.

Value (Premium) Services

Adding value to customers or automating some of your routine processes are competitive advantages instrumental in delivering business strategy.   Sample premium services to invest in:

1)      Human-to-human tasks are automated into “work-flows”.   The most common human-to-human task is sales and the things to track and automate are documents, e-mails, meetings and conversations.    Customer Relationship Management (CRM) tools such as one from SalesForce or Microsoft Dynamics CRM are example productivity tools that are customized around your business.

2)      Cross functional tasks are automated involving more complex business processes.   In addition to above, these include machine to human and machine to machine automation.   Examples are contract management, asset management, risk management and others that touch HR, finance, sales and operations with common delivery using a combination of CRM back-end with a Microsoft SharePoint front-end.

3)      Mobility – smart phones and touch screen “pads” like iPad.   These tools change the relationships with employees, clients and vendors.     On-site services are becoming more prevalent with transactions and reports being done on spot.

4)      Big Data – cheap storage, legislation, marketing/sales pressure is driving us to store more data on our customers, vendors, partners and staff.   We need to be able to quickly find “needles in haystacks” every day.   Examples of services in this area include document management using Microsoft SharePoint, but also mining and transforming your data to become “business intelligence”.

IT compresses the value chain resulting in the elimination of waste and freeing up cash and people.    This starts with replacing human to human tasks, but increasingly means the automation of end-to-end processes across multiple business functions.     Wringing savings out of the commodity services and investing in strategic or premium services is your next plan.

See our website for more:

www.EmpowerIT.com.au

or

www.EmpowerCS.com.au

About the author: Dexter Duncan is a Division Manager at Empower IT Solutions. Contact Dexter at dd@EmpowerIT.com.au

1)      “CBA banks on savings in the cloud”, 08 Nov 2011, Australian Financial Review.

2)      Want to know more information on NBN roll-out?:   www.nbnco.gov.au

By Dexter Duncan

Save Money and Productivity

A recent customer quotation for a WAN service for multiple locations was a reminder that there are still huge price differences in from the various service providers.   For five sites across Australia, three quotes were gathered for a similar WAN (Fiber, MPLS, etc.) services.    One quote was $13,000 per month and others were $3,500 & $4,800 for similar services!

In a previous article on Australia’s National Broadband Network (NBN), we showed that roll-out of NBN is driving down the price of high speed internet, especially in “uploads” and size of data allowances.    We showed that your business could get 25M download with 2M upload and 200GB data for as little as $70.    A recent press release from NBN Co. in October 2011 has shed more light onto the roll-out schedule and provides information on how fast internet can be used to schedule and conduct medical appointments, a.k.a. called “TeleHealth”.

The October 2011 press release included a 12 month national roll-out plan with 28 new locations bringing the rollout to over half a million of the planned 13 million premises.     (See the NBN Co website for full listing.)  New locations are added every 3 months.

One implication for business is for staff to “visit the doctor” from the office.    For follow-ups and test results, this means more productivity in the office.    With over 40,000 doctors in Australia, the Federal Government is looking to modernize health and extend reach to the bush using modern technology.   Telehealth trials are expected to begin at two cities in the Australia Government’s National Broadband Network (NBN) in early 2012.   Lucky residents in Kiama and Armidale (where NBN services are already available) will benefit from the government’s $4 million trial for the delivery of monitoring and high-quality video conferencing systems mainly targeted at older Australians.   Monitoring will be used to check blood pressure, glucose levels and lung function.

If businesses start to think creatively, another implication is to expand the reach of your business.  For example, “head-office” is involved in important customer meetings by sending the “regional” representative equipped with video on the laptop.   A whole team or a specialist can then participate in the meeting effectively without spending the travel time.   This is true for legal or medical specialist, tradespeople or engineers.  Design drawings, legal files, modifications and other  files are shared and reviewed via live chat session while maintaining a video connection.   Tradespeople can also update files, submit forms and update databases without going back to base.

Perhaps the most common productivity outcome for all businesses is a faster internet connection at affordable prices.   This means you interact more freely with you customers and suppliers without experiencing “world wide wait”.    It also means Voice over IP (VoIP) is widely used to delivers cost savings to all your office and mobile calls.

A more specialised area of cost savings is the ability to harness and access all of your data for a central data centre.    Although this option is available today, the increase in faster uploads and data sizes means the transactions are less expensive per second both in terms of infrastructure costs and staff time when compared to similar offerings without NBN.    Centralised access to data in data centres becomes more cost effective and faster as uploads and data sizes increase.

A few entrepreneuring brains will certainly think of more ideas and bring a new generation of innovation and job growth.   Location based services where mobile phones are used to find and do business is already taking hold overseas.   More collaborative forms of communication that combine chat, video, information and location are sure to bring dollar signs to a few Aussie start-ups.     Whether monitoring or tracking staff, suppliers, customers, assets or combining all with technology such as barcodes and/or RFID codes, the new NBN promises to bring new winners and losers.

See our website for more:

www.EmpowerIT.com.au

or

www.EmpowerCS.com.au

About the author: Dexter Duncan is a Division Manager at Empower IT Solutions. Contact Dexter at dd@EmpowerIT.com.au

Want to know more information on NBN roll-out?:

www.nbnco.gov.au

Inquiry into the role and potential of the NBN, Chapter 3 Health – http://www.aph.gov.au/house/committee/ic/NBN/report.htm

By Dexter Duncan

How much should you spend in IT?   You have computers, servers, internet, document management, voice mail and other types of IT spend, but how do you tell if you are paying too little or too much.  Whether you are a large enterprise or a small business, the cost of IT is either a necessary evil or a necessary advantage.     IT spend is strategic when you have a unique advantage in delivering solutions through software or better KPI information through IT integration.  Regardless of whether your IT spend is strategic or not, we recommend all business owners or GM’s to review their IT spend.

How do you know if you are paying too little or too much?    One way is to compare your IT spend against similar organisations in your industry.   The below is some indicative data from technology research firm, Gartner Group, which looks across a broad section of companies.

According to Gartner Group, IT spend is related to your business choices around products, processes, organization and service levels.       There are multiple ways of looking at IT spend.   Depending on changes in your business, growth, volume of work, repetition in tasks, competition, number of employees, regulation and legislation you could spend a heap more or a heap less than the folks with the same revenue and office size across the street.

The below figures are quoted from the 2009 report from Gartner on “IT key metrics data”.    First we look at IT headcount versus total employees, then IT spend as a percent of revenue, both are reporting cross-industry averages based on size of revenue.

IT headcount versus total employees:

• For businesses under $50 million in revenue, IT employees is 8.7% of all employees in a cross-industry average.
• For businesses between $50 million and $250 million, IT employees represent 7.9% of all staff
• If you are over $250 million, IT staff represents 7.3% of staff

You do $10 million in revenue and have 40 staff,  3.5 Full-Time Equivalent staff are working in IT.   You do $2 million and have 15 staff, then 1.3 of them are doing IT related work.

IT spend as a percent of revenue:

• Between 6-7% of revenue is being spent towards IT each year on average for companies  under $50 million and upto $250 million.   Most businesses in Australia would fall in this category.
• 5% and lower is typical spend for anyone above $250 million in revenue, with the number getting lower the higher the revenue.  In other words, only around 3.3% of revenue is spent on IT if revenue is greater than $1 Billion but under $10 Billion.

You do $10 million in revenue; your peers could be spending $600K.   Of course this could be higher for banks and lower for engineering companies.    A company doing $2 million should spend $140,000 per year (on average) on IT.

Before you congratulate yourself on how efficient you are as CFO or CIO, think about the competitive disadvantage you may have by not investing in technology.

Perhaps a better measure of IT health (according to Gartner) is “IT headcount” to free cash-flow.   Because “IT systems can integrate processes and information flows which improve end-to-end performance and cash flows”, you may not be spending enough in IT to guarantee the long-term success of your business.   Give your local technology partner a call for more information.

See our websites for more:

www.EmpowerIT.com.au

www.EmpowerCS.com.au

About the author: Dexter Duncan provides marketing advice and is a Division Manager at Empower IT Solutions. Contact Dexter at dd@EmpowerIT.com.au

References:

IT Key Metrics Data from Gartner Group.

http://www.gartner.com/technology/consulting/key_metrics_data.jsp

IT headcount versus free cash-flow

http://blogs.gartner.com/mark_mcdonald/2010/04/06/it-spend-as-a-percent-of-revenue-%E2%80%93-a-dubious-metric-at-best/

Part 2.

By Dexter Duncan

A “clever business person” uses the “good times” to improve productivity which either helps grow the business faster or offsets any losses in “down times”.   Putting your cash to work for the benefit of growing the business usually involves investing in equipment, people or processes to improve productivity.     This article focuses on business processes.

How much should your business spend?   According to Gartner, large corporates with $10B or more in revenue spent 2.5% of revenue on IT.   Small companies spend 7% or more of revenue on IT.    (IT spend is the average across all industries and includes hardware, software, support and processes.)  They spend because they know that IT provides both the critical apparatus to keep the business going, but also has ability to automate many of their contract compliance, finance, field operations, manufacturing, sales and HR functions and therefore improve productivity.

The improved productivity gained by regular improvements is often the difference between growing the company versus downsizing & retrenchment.   Small businesses are notorious on only spending money when they need to, but as they reach 20 or more staff, little efficiencies go a long way.     Think of the amount of time spent:

1. Getting approvals for leave or travel
2. Claims for reimbursement of expenses
3. Searching for company policies or forms
4. HR or pay related queries

At least 10% of employee time could easily be spent on above, which works out to more than $100,000 per year for an organization of only 20 staff with wages at $25/hour.      Putting workflows can cost around $50,000, which means a net savings in productivity within the first year.

Any task or paperwork that is repeated regularly can be improved with software.   For example, leave forms, travel forms, new hires, and requests for training.   These processes are common across all industries and often automated with some workflow software and someone who knows how to customize it.    The more workflows you do, the more cost effective it can be as you have a starting cost of up to $8,000 for software and labour to automate your first process such as a leave form.

Here is a sample screen shot for a leave form which is automatically routed to management for approval(s).   Once approval is gained, payroll, staff and staff manager are informed.  On the other hand, if the form is not approved, similar notifications go out to staff and manager with the reason for disapproval.

The time savings is through the establishment of a standard process and having one clear place to track the approval or disapproval instead of a manual process.    In a recent interview with Thomas Friedman, a New York Times Columnist, he stated:

“The principle driving forces behind the need for a more inventive worker is access to more automation, more software, more machines and more people, and more talent of an above average quality, noting that even “cheap genius,” is a click away”   

The essence of genius is therefore the Business invests a portion of their revenue each year in IT to gain the competitive efficiencies needed to grow and/or survive in the future.

See our website for more:

www.EmpowerIT.com.au

About the author: Dexter Duncan provides marketing advice and heads business development at Empower IT Solutions. Contact Dexter at dd@EmpowerIT.com.au

References:

IT Key Metrics Data from Gartner Group.

http://www.gartner.com/technology/consulting/key_metrics_data.jsp

(Published in Western Sydney Business Access)

Large companies tend to take a systematic approach to business processes by looking at all of their “front-end”, “backend” and standard processes.   They employ SAP or Oracle who charge $1M+ to “transform the business” with on-going fees in the order of $25,000 or more per month.     However, you do not have to spend a million dollars to improve your business processes.   This article defines business processes and gives you examples where you can use software to optimize your business.

Why Business Processes?

-          Reduce on-going costs by optimizing work

-          Allow you to focus on the business

-          Improves productivity by allowing staff to focus on “high value” work

The three “standard” areas where people install improvements to business processes are:

-          Human Resources

-          Payroll

-          Finance

“Back-end”

Many folks tend to focus on improving their “back-end”.    This is usually the financial side of things and can take several employees to process things manually.   A good example of where businesses pay for a business process improvement is Payroll/Invoicing software.     For small businesses, MYOB and Attaché are examples that automate your payroll and/or invoicing by offloading some of the manual processes associated with paying someone and keeping track of superannuation, leave and pay-rates.

“Front-end”

Quotations that are accepted as orders can be fed directly into a system to set up a contract or schedule work.   This saves the time involved with manually entering this information in multiple places.

Any task or paperwork that is repeated regularly can be improved with software.   For example, leave forms, travel forms, new hires, and requests for training.   For small companies, these types of items are accomplished simply by asking “the boss”.    However, the larger your business grows, asking “the boss” eats into productivity.   These processes are common across all industries and can often be automated with some workflow software and someone who knows how to customize it.    The more workflows you do, the more cost effective it can be as you have a starting cost of upto $5,000 for software and a minimum of $3,000 in labour to automate your first process such as a leave form.

For many, the process of getting, doing and billing for work is a manual process.   As you grow your business, you assign multiple staff across many sites.   Throw in a few Enterprise Bargaining Agreements (EBAs) and contracts and you now rely on a manual process to pay and invoice with potentially many errors.   An example of this is shift work.   Over 1.4 million people in Australia work in shift work which is about 16% of the workforce (according to Australia Bureau of Statistics).   The main industries in shift work – Transportation, Retail, Manufacturing, Healthcare, Security & Mining.    There are lots of software packages out there that will help you with rostering, including some that will also integrate with your front-end quotations and back-end finance packages.     Think for example of a large event that needs catering, security guards, parking attendants, ushers, etc.    The software imports the quotation and automatically configures the shifts needed for the event.   After assigning workers in the software, they are informed by phone or SMS.   The software then tracks completion of work and they are paid their award rates and the event is billed once the completed roster is sent over to the finance “back-end”.    See the below for a sample screen of what the roster might look like.

For some tips on rostering, go to www.logicsas.com.au

The real savings is when the software replaces a business process that normally is done manually.     The more work that is done manually, the greater need for a business process.   See our website for more:

www.EmpowerIT.com.au

About the author: Dexter Duncan provides marketing advice and heads business development at Empower IT Solutions. Contact Dexter at dd@EmpowerIT.com.au

You are the project manager and you just spent heaps of money for labour and materials that were unnecessary.   How did that happen?!

I am sure you have heard of GIGO?   GARBAGE IN = GARBAGE OUT

Part of a quality plan is to ensure all your assumptions and data you are using are correct, especially when it involves success criteria involving multiple stake holders.     In short, you have to ensure you do not have garbage information.       How do you do this?

In our simple example of building a bridge, our stake holders each identified the key success criteria:

1)  Council – identified safety as key criteria with related criteria being dimensions required such as height, width and length

2) Mayor – identified beauty as key criteria

3) Finance – identified budget and resources

We need to break key criteria down further.    For safety, we need to pass two cars going in each direction and have ability to pass ships through.     This information is critical and should be verified against your initial assumptions.    The best way to ensure you do not overspend is to get all our assumptions checked by the stakeholders.   This may involve getting them to sign off your initiation document or may involve a meeting to discuss details.   The earlier you do this the less money it will cost in terms of time and materials.

Often the easy way is always to get the stake holders to clearly define their requirements either in a scoping session, meeting or document.    The more clearly you define, the better.   You then can verify the cost of your labour and materials needed based on this information and share back with stakeholder for “approval”.        You should also plan to share your results along the way and allocate a change budget.       As long as stakeholders have approved the expected outcome, assumptions and other information, you can be more assured that your focus on detailed planning and delivery has a better chance to succeed!

A common mistake in planning is to forget about the stakeholders by not detailing a communications plan and acting on it.    Some tend to jump straight into planning the details of how they going to complete the project without regular or any communications with the Stakeholders:

• How do you verify that you understand the documents they give you?
• How do you establish risks associated with changes to the project
• How do you get buy-in that your result will be signed off.

Stakeholder Communications

The Empire State Building was successful in achieving its goal of being the tallest building in the world, building under budget and delivering on-time.     From an execution point of view, the architects and builders did well enough for the building to earn titles like “eighth wonder of the world” and “tallest building in world for 40 years”.

The "Empty State Building"

Many people do not know that the Empire State Building was a failure at the business level – in fact, it was nicknamed the “Empty State Building” for almost two decades.     They often made more from charging tourists to visit the observation deck than they made in rent.    One of the golden principles of real-estate is “location, location, location” and the building was erected in an area that left it 50% empty and unprofitable until they sold it in 1951.      Nobody wanted to go there, when the Chrysler building, which was completed less than 2 months before,  was fully occupied and in a more central location.   The reason it was not a success is likely related to how they defined the scope for the project.       They achieved quality, built in record time, were under budget and made their goal of being the tallest, but they did not think through the function of the building.   Being the largest office building in New York, this is a major oversight.

In Part I of this series, I gave a overview of Project Management based on PMBOK ideas.    This post dives into the pre-project, and initiation phase. Pre-project vs Initiation.  Prior to initiating a project, the question that needs to be answered is:

Why are we doing this?

The answer to this question is the purpose of the project.   The other important questions for pre-project include:

1. What organisational goals does this project support/achieve?
2. What are project dependencies and and context for the project (especially if there are other projects)?
3. What is the business case? – e.g. expected benefits, value, return of investment, alternatives
4. What are we going to do? (Scope)
5. Who has a vested interest in project being a success? (Stakeholders)
6. How will we know the project is successful?  (Success Criteria)

The above seven will be carried through and checked, updated and expanded on in subsequent phases. During the pre-project phase, the decision maker (“Executive”) can be appointed from the preliminary list of stakeholders.     A Project Manager  can also be selected prior to starting the project.

The initiation phase is where the project is set-up and defined.

In this initiation phase, we define who is involved and refine what we will do.    Later in the planning stage, we focus on how we will do it.

The key outputs of the initiation stage are to identify stakeholders (including the stakeholder management strategy) and developing a project charter (project definition document).      If an executive is not yet appointed, an appropriate person from the list of stakeholders should be made the decision maker. If you are lucky enough to already have team members available, you can start by reviewing all the stakeholders, scope, success factors together with them.

I suggest starting with a list of all the stakeholders or anyone with a vested interest in the project outcome.    The stakeholder can be the person paying (i.e. department head, sponsor or customer), senior management, other department/division leaders, suppliers or other outside parties.     Give each stakeholder a rating (i.e. high, med, low, etc.) according to their level of interest in the project and share their style/personality/manner and expectations based on your experience.

Managing Stakeholders

*Also try to identify if the stakeholder is a negative or positive for the project.  Those that want the project to succeed can be enlisted to help and those with a vested interest in the project failing should be treated cordially.   This is a balancing act for the project manager.   Sharing this with the team is usually best, but sometimes office politics require you to keep the negatives to yourself.

It is important to ensure all the stakeholders are in agreement on the project purpose, goals and success criteria early.     It is also important to define a communication strategy to give stakeholders updates on project according to the type of project and personalities involved.   Identifying Stakeholders and managing expectations early is a critical success factor. If there is a big risk that quality will not be met, timing will slip or features will be missing, this should be shared early.

Do not over promise and under deliver.    Leave yourself some buffers in terms of time and money, as there are often variables outside your control.   These unknown variables often start appearing in the planning stage and depend largely on the skill and experience of your team, but also on how well the project scope was documented. The project definition document should be done based on key stakeholder input. The one with the most vested interest is often the one paying (but not always).

Developing project definition document is critical before moving to planning. Some suggestions for the Project Definition document are to dust off, review and expand all the pre-project factors (identified above):

1. Define Purpose by answering “Why?”.   What business value is expected, what problems are being solved, what is the objective being supported, etc.   A priority level should be assigned to all if there are is list involved.

2. What are you going to accomplish?   What are the goals and objectives?

3. Clearly identify all the Success Criteria associated with above goals/objectives.   Identify measurable items such as quantity, quality, costs, time limitations or other unique business or support outcomes.

4.   Project Context and Dependencies.   Identify all the dependencies that could impact results or success of the project.     Identify other related projects and how/if they depend on your outcome.

5. Scope and out-of-scope.    Clearly identify all the parameters and boundaries for the project.   Include definitions, measurements, sketches or anything that helps define what you are doing.  The better you define the scope – what is included and what is not, the easier it will be for you to set expectations.

6.  Assumptions, constraints and risks.   Identify anything that you’ve been given to be true, especially if it comes from outside suppliers or other departments not part of the project.   Constraints are usually related to money, timing, resources, skills or technical limitations beyond your control.    Anything that is uncertain or could have a negative impact on all or part of the project is a risk.    All risks should be identified with their probable causes and probability of happening.    A planned response or action in the event of the “risk” occurring is called a risk mitigation strategy.

7. Stakeholders should be identified, along with their role, their decision making authority and information about the department or organisation they are part of.

8. Approach.   Discuss the approach to getting the work done and why the recommended approach is better than the other options.

9. Identify all the team members, their roles, skills, availability and weaknesses.

10. Plan the Quality, Identify how measurement and control will be done and decide how project will be approved.

 

a

References

1. Some of the above example planning comes from Managing Successful Projects with Prince 2,  Published by TSO, 2005

http://www.leadge.com/renzheng/doc/prince2_2005_Version.PDF

Whether you are deploying a project in the cloud or with bricks and mortar or developing a new product launch or scheduling a regular marketing event, you’ll need to use some project management tools.   This series is the result of a request to give a project management overview to 50 esteemed students, so here is a work in progress:

Firstly, let’s define a Project:

A temporary endeavour undertaken to create a unique product, service or result.

A project (different from routine work) has a defined beginning  and end.  The end is when objectives are achieved or project is terminated.      Temporary does not mean short duration nor does it imply that the result is short lived.   In fact, many projects are undertaken to create a lasting outcome.    For example – buildings, monuments or parks.

Here is a popular “successful” project from past:   Empire State Building

The Empire State Building held the record of the tallest building in the world for 40 years and it was started after another building, the Chrysler Building, was already in progress of becoming the world’s tallest.     The building and its construction is a legend of how crazy ideas can be achieved with a mix of bravado, competition, risk, networking and money.   In the age before computers and at the start of the Great Depression, this mammoth building was erected in just over 12 months.   From American Society of Civil Engineers:

The building’s framework rose at an astonishing rate of 4 ½ stories per week. During construction of the Empire State Building, its peak workforce amounted to 3,400 workers including 328 arch laborers, 290 bricklayers, 384 brick laborers, 225 carpenters, 107 derrick operators, 105 electricians, 249 elevator installers, 194 heating and ventilation installers, 192 plumbers, 285 steelworkers, a number of other specialists, plus clerks, foremen, inspectors, and water boys.

See the ASCE website for more facts.     We will use this example later when talking about project life cycles.

Secondly, project management is a system with standard definitions.   Perhaps the most well known is Project Management Institute (PMI) and their Project Management Body of Knowledge (PMBOK) which is representative of a global standard.    The importance of having common language and practices is the foundational science part.  There are around 40 micro processes that are defined.   The good product manager knows the art of when, where and how to apply them.   If you apply all the micro processes to each project, you are likely wasting time and money.

Project management is:

The application of knowledge, skills, tools and techniques to project activities to meet project requirements. (Source: PMBOK Guide)

Those that are interested can become full-time, certified project managers by passing exams and applying the craft.

Why PM?   The main outcome is to achieve results that are:

• Delivered on time
• Within the budget ($)
• High Confidence in Quality
• Meets Original Purpose
• Is a win/win for all stakeholders

Importance of Processes

• A good process should be written down, known & followed by all and have built-in reviews that result in constant improvement(s) (e.g. a feedback loop).

Here is one way to look at the big picture of the major components in project management:

Figure 1: How to manage a project - the process groups (Source: LDT consulting).

The five processes groups:

1. Initiation – Determines if project is worth doing.

The Initiation Process Group is where stakeholders are identified, goals and vision are set, business case is prepared and project is authorised by the sponsor.      The most important part of this is the business case which looks at whether the project is worth doing.     The scope is broadly defined giving parameters and boundaries for the project.

2. Planning (Design) – how work will be done, including how the deliverables and project will be developed and managed.

This stage is perhaps the most important since the scope of effort is established, boundaries are drawn, risks are estimated and methods of monitoring and control are defined based on the course of action taken.  A project needs to be broken into a group of the smallest possible deliverables (where possible) with clear definitions/descriptions, including responsibility, cost, dependencies and risks.   The process of subdividing deliverables into smaller tasks is called Work Breakdown Structure (WBS) which will be covered later.  Each activity is defined including resources, time durations, sequence (dependencies) into an activity list that is analysed and placed into a project schedule.    An estimated cost for each activity is developed and an overall budget is developed.   Another important feature of the planning process that is often missed is the communications plan.

3. Executing -

After all the planning, this is where the work gets done.    It is important to direct and manage the various teams, control quality and ensure good communication with team and stakeholders.    In some cases, the plan needs to be changed in order to meet quality, time or budget constraints.

4. Monitoring and Controlling -

Monitoring and Controlling processes are used throughout the initiation, planning and executing phases to ensure project objectives are met.    The overall control of scope, schedule, costs, quality, risks and a change process are part of this.

5. Closing -

One of the most important aspects of closing is to get acceptance from stakeholder(s).   This is usually done after going through a task check-list, documenting project results and making recommendations for future.

Other General Information: Project Teams, Sample Projects and Approaches.

For large projects, each of the above can have a dedicated team.    For smaller projects a single team can divide all the tasks to fit into process areas.

Sample Teams can be divided in a number of ways:

1. Project Manager, Expert Resources, Sponsor(s) & Stakeholders
2. Teams based around processes – Initiation team, Planning team, Execution team, Monitoring team & Closing team.
3. Phase based teams:  Different teams assigned according to outcomes in a multiple phase project.

Figure 1.2: Sample of process group interaction.

Sample projects

• An example single phase project.  Installation of a telecommunications network.
• An example of a multiphase project.   Cleaning up a hazardous waste site.
• Sample Mega projects - from $1.5 Billion to $40 Billion (from PMI)

Figure 2: Single and Multi phase projects (source: PMBOK Guide)

Deciding whether to use a single phase, multiple phase or layered multi-phase structure of a project can vary dramatically.    Some organisations have policies on which structure to use and some leave it to the project team.     The structure might be applied based on common industry practice or based on the project team.   In other words, a research study can be treated as pre-project work, the first phase of a project or as a stand-alone project.   Similarly, one project team might elect to apply a multi-phase approach and another team may use a single phase for an identical project.    An overlapping, multiphase project is sometimes called “fast-tracking”.

Figure 3: Cost and Staffing across Project Life cycle (Source: PMBOK Guide)

With 3400 labourers and the Empire State Building had a cost of around $USD41 million in 1932.   The Empire State Building was a multi-phase and overlapping project.

Occupying a plot of land approximately two acres (8,100 square meters) in size, the Empire State Building contains 70 miles (121 km) of water mains, 2.5 million feet (232,000 m) of electrical wiring, 1,060 miles (1,700 km) of telephone cables, 50 miles (129 km) of radiator pipe, and 73 elevators in 7 miles (18 km) of shafts.  (Source ASCE website.)

Article on how to prioritise projects from PMI:

Ideas on Success or Failure of projects:   Was Sydney Opera house a success?   Was Empire State Building a failure?     It depends on your perspective.  Have a look at this article on success and failure.

Part 2 will go into Initiating a project in more detail.

Importance of Risk Assessment (& Mitigation)

Part 3 in this series will go into Project Planning in more detail.

Importance of Planning

References:

1.Project Management Institute (PMI):

http://www.pmi.org

2. Project Management History and Overview:

http://www.ireference.ca/search/Project%20management/

3. Empire State Building Links

Construction Company.com  http://www.constructioncompany.com/historic-construction-projects/empire-state-building/

Wikipedia

http://en.wikipedia.org/wiki/Empire_State_Building