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Performance -Based Project Management in a Nutshell




                                                            Performance-Based Project Management
                                                            provides 5 practice areas that measurably
                                                            increase the probability of success for
                                                            projects and programs in every technical
                                                            and business domain.
                                                            Performance-Based Project Management
                                                            provides step–by–step guidance to the
                                                            management team and project
                                                            stakeholders through 5 process areas
                                                            needed for success.
                                                            These process areas appear obvious, but
                                                            the processes are many times skipped
                                                            over during the “heat of the battle” to get
                                                            the project out the door.
                                                            By applying Performance-Based Project
                                                            Management the project team focuses
                                                            their efforts on increasing the probability
                                                            of success, not just measuring cost and
                                                            schedule numbers.
                                                            This notion of “increasing the probability
                                                            of success” is significantly different than
                                                            simply applying a method and thinking
                                                            that positive results will be the outcome.
                                                            If we do not have a calculated probability
                                                            of a successful outcome, we can not
                                                            determine if we will actually reach the
                                                            end goal of the project – we can not
                                                            determine what DONE looks like.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                 1
Performance-Based Project Management in a Nutshell
                                                               The Customer Bought Outcomes
                                                            No matter the customer is, a commercial
                                                            firm deploying and enterprise IT solution,
                                                            to a government agency, it is the
                                                            outcome of the project that was paid for.
                                                            The work needed to produce this
                                                            outcome, the materials that support the
                                                            development of this outcome, all
                                                            collateral activities from the project are
                                                            not what the customer paid for.
                                                            They paid for the beneficial outcome from
                                                            their investment in the project.
                                                            Performance-Based Project Management
                                                            starts with defining what that outcome is
                                                            in terms of the capabilities provided by
                                                            the project.
                                                            These capabilities are the starting point
                                                            for the project’s success. They are
                                                            defined in Measures of Effectiveness.
                                                            These Measures of Effectiveness (MoEs)
                                                            are quantitative measures that provide
                                                            some insight into how effectively a
                                                            product or service is performing. MoE’s
                                                            are derived from stakeholder expectation
                                                            statements. MoE’s are deemed critical to
                                                            the mission or operational success of the
                                                            system.
                                                            For example a MoE that defines a
                                                            capability is: “95% of all work will be
                                                            completed within 15 business days or the
                                                            negotiated deadline.”
                                                            This MoE is a description of what DONE
                                                            looks like for the project. The project
                                                            provided this capability.

Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                2
Performance-Based Project Management in a Nutshell



                                                            The five immutable principles of project
                                                            success are the mechanisms for
                                                            increasing the probability of success.
                                                            1. Know where you are going by defining
                                                               “done” at some point in the future. This
                                                               may be far in the future – months or
                                                               years from now. Or closer in the future
                                                               days or weeks from now.
                                                            2. Have some kind of plan to get to where
                                                               you are going. This plan can be simple
                                                               or it can be complex. The fidelity of the
                                                               plan depends on the tolerance for risk
                                                               by the users of the plan. The plan
                                                               answers the question how long are we
                                                               willing to wait before we find out we
                                                               are late?
                                                            3. Understand the resources needed to
                                                               execute the plan. How much time and
                                                               money is needed to reach the
                                                               destination. This can be fixed or it can
                                                               be variable.
                                                            4. Identify the impediments to progress
                                                               along the way to the destination. Have
                                                               some means of removing, avoiding, or
                                                               ignoring these impediments.
                                                            5. Have some way to measure your
                                                               planned progress, not just your
                                                               progress. Progress to Plan must be
                                                               measured in units of physical percent
                                                               complete.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                  3
Performance-Based Project Management in a Nutshell



                                                            There are 11 practices needed to
                                                            generate the data necessary to provide
                                                            actionable information to the decision
                                                            makers in Performance-Based Project
                                                            Management
                                                            This information is connected to the 5
                                                            Immutable Principles of project
                                                            management and the artifacts from the
                                                            practices of the these principles.
                                                            These 11 criteria are a subset of the 32
                                                            criteria of ANSI–748B Earned Value
                                                            Management.
                                                            While Earned Value is certainty not
                                                            necessary for project success, some form
                                                            of measuring physical progress to plan is.
                                                            Without this ability, only measures of the
                                                            passage of time and consumption of
                                                            resources remains.
                                                            Using these 11 practices, based on
                                                            measures of physical percent complete,
                                                            real progress to plan can be measured.
                                                            This provides visibility into the final cost,
                                                            schedule, and technical performance of
                                                            the project needed to answer the
                                                            question how long are we willing to wait
                                                            before we fins out we are late? And
                                                            provide sufficient time to take corrective
                                                            actions to avoid being late, over budget,
                                                            and non–compliant with the technical
                                                            performance measures.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                   4
Performance-Based Project Management in a Nutshell




                                                            The connection between principles of
                                                            Performance-Based Project Management
                                                            and the 11 Practices is shown to the left.
                                                            The 5 Immutable Principles of Success
                                                            must be connected with artifacts and
                                                            outcomes of the 11 Practices that
                                                            implement those principles.
                                                            If any of the 11 Practices or the 5
                                                            Principles are missing the probability of
                                                            success is measurably reduced.
                                                            Each Principle and each Practice must be
                                                            in place for the Probability of Project
                                                            Success to increase.
                                                            That is the goal of Performance-Based
                                                            Project Management – Increase the
                                                            Probability of Project Success.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                5
Performance-Based Project Management in a Nutshell




                                                            Projects exist in a Domain and a Context
                                                            in that Domain. This can be a business of
                                                            technical Domain and a Business or
                                                            Technical Context in that domain
                                                            No matter the Domain and the Context in
                                                            that Domain, projects consist of a
                                                            collection of problems to be solved and
                                                            needs of the stakeholders each seeking to
                                                            solution.
                                                            Performance-Based Project Management
                                                            provides a framework for addressing each
                                                            of these elements in a cohesive and
                                                            consistent manner, while providing
                                                            visibility to the project’s Performance in
                                                            units of measure meaningful to the
                                                            decision maker.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                6
Performance-Based Project Management in a Nutshell



                                                            When we say outcome what do we mean?
                                                            We certainly don’t mean the work effort
                                                            or the cost absorbed during that work
                                                            effort.
                                                            We mean something tangible that
                                                            benefits the customer. This tangible
                                                            outcome must be assessed by the
                                                            Measures of Effectiveness (MoE) that are
                                                            quantitative measures that provide
                                                            insight into how effectively a product or
                                                            service is performing.
                                                            This product or service must provide the
                                                            customer with a capability to do
                                                            something tangible, something
                                                            measureable, something that benefits the
                                                            business or mission.
                                                            The outcome must be capable of being
                                                            measured in some way as it moves from
                                                            left to right in the schedule. As it
                                                            increases in its maturity. The outcomes
                                                            must be testable in some form. Testable
                                                            Requirements are the starting point.
                                                            The outcomes are produced through Work
                                                            Packages – “units of work.” These Work
                                                            Packages are resource loaded, have
                                                            specific periods of performance, and
                                                            produce a tangible, measureable outcome
                                                            that can be traced to the requirements
                                                            and further traced to the needed
                                                            capabilities.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                               7
1. Identify Needed Capabilities that
                                                               achieve the program objectives or the
                                                               particular end state. Define these
                                                               capabilities through scenarios from the
                                                               customer point of view in units of
                                                               Measures of Effectiveness (MoE)
                                                               meaningful to the customer.
                                                            2. Define The Technical And
                                                               Operational Requirements that
                                                               must be fulfilled for the system
                                                               capabilities to be available to the
                                                               customer. Define these requirements
                                                               in terms that are isolated from any
                                                               implementation technical products.
                                                               Only then bind the requirements with
                                                               technology.
                                                            3. Build The Performance
                                                               Measurement Baseline – describing
                                                               the work to be performed, the
                                                               budgeted cost for this work, the
                                                               organizational elements that produce
                                                               the outcomes from this work effort,
                                                               and the Measures of Performance
                                                               (MoP) showing this work is proceeding
                                                               according to cost, schedule, and
                                                               technical Performance plan.
                                                            4. Execute the PMB’s Work Packages
                                                               in the planned order, assuring all
                                                               Performance assessments are
                                                               0%/100% complete before
                                                               proceeding. No rework, no transfer of
                                                               activities to the future. Assure every
                                                               requirement is traceable to work and
                                                               all work is traceable to requirements.
                                                            5. Apply Continuous Risk
                                                               Management for each Performance-
                                                               Based Project Management process
                                                               area to Identify, Analyze, Plan, Track,
                                                               Control, and Communicate
                                                               programmatic and technical risk.


Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                8
Performance-Based Project Management in a Nutshell




                                                            With these five process areas, the next
                                                            level of detail is show to the left. These
                                                            are a repeat of the Performance-Based
                                                            Project Management processes.
                                                            A statement of intent is the starting point
                                                            for the successful application of each
                                                            process area.
                                                            This statement is provided in the form of
                                                            a question.
                                                            1. What are the needed capabilities?
                                                            2. What are the technical and operational
                                                               requirements?
                                                            3. What is the cost and schedule?
                                                            4. What are the periodic measures of
                                                               performance?
                                                            5. What are the impediments to
                                                               progress?
                                                            By asking and answering these questions
                                                            at every juncture of the program, the
                                                            participants gain visibility into the
                                                            Performance of the program in ways not
                                                            found in other approaches to program
                                                            management.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                 9
Performance-Based Project Management in a Nutshell




                                                            Transforming the System Capabilities into
                                                            System Requirements begins with the a
                                                            narrative description of the needed
                                                            Capabilities in some form meaningful to
                                                            the customer.
                                                            This sounds like a tautology – a Chicken
                                                            or the Egg problem. But discovering the
                                                            system requirements is difficult in the
                                                            absence of some higher level description
                                                            of the needed “Capabilities” of the desired
                                                            system.
                                                            The concept of a “Capability” is a capacity
                                                            or potential:
                                                             Provided by a set of resources and
                                                              abilities.
                                                             To achieve a measureable result.
                                                             In performing a particular task.
                                                             Under specific conditions.
                                                             To specific Performance standards.
                                                            The four steps here result in a Concept of
                                                            Operations (ConOps) for the resulting system.
                                                            The ConOps describes the systems application
                                                            to the problem domain and how the system will
                                                            produce measurable value to the user in that
                                                            domain.
                                                            The ConOps is the story of how the system will
                                                            work when it is delivered to the customer.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                    10
Performance-Based Project Management in a Nutshell




                                                            Here are some examples of capabilities.
                                                            They appear obvious.
                                                            But in many instances this approach is
                                                            missing. The requirements are many time
                                                            the starting point for the solution.
                                                            In the absence of the capabilities statement and
                                                            the Concept of Operations the user community
                                                            may have trouble envisioning how the system
                                                            will benefit them when it becomes available.
                                                            The tendency to start with the requirements
                                                            should be avoided. Requirements need a home,
                                                            a reason for being.
                                                            These examples are from actual projects. They
                                                            represent clear and concise statement about
                                                            the need for the system, the use of the system
                                                            for the business or mission purpose, and how
                                                            the end user will benefit from the system.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                      11
Performance-Based Project Management in a Nutshell


                                                            Requirements are the necessary
                                                            attributes defined for an item prior to the
                                                            efforts to develop a design for the item.
                                                            System requirements analysis is a
                                                            structured, or organized, methodology for
                                                            identifying an appropriate set of
                                                            resources to satisfy a system need (the
                                                            needed capabilities) and the requirements
                                                            for those resources that provide a sound
                                                            basis for the design or selection of those
                                                            resources.
                                                            Requirements elicitation acts as the
                                                            transformation between the customer’s
                                                            system needs and the design concept
                                                            implemented by the organization’s
                                                            engineering resources.
                                                            The basic process decomposes a
                                                            statement of the customer need through
                                                            a systematic exposition of what that
                                                            system must do to satisfy that need.
                                                            This need is the ultimate system
                                                            requirement which all other requirements
                                                            and designs flow.
                                                            There are two fundamental classes of
                                                            requirements.
                                                            The Process Performance Requirements
                                                            define how the work processes are used
                                                            to produce a beneficial outcome to the
                                                            customer.
                                                            The Product Performance Requirements
                                                            define the product specifications and how
                                                            they are related to the process
                                                            requirements.


Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                 12
Performance-Based Project Management in a Nutshell




                                                            Poorly formed requirements have been
                                                            shown to contribute as much as 25% to
                                                            the failure modes of programs and
                                                            projects.
                                                            Requirements engineering can be
                                                            decomposed into the activities of
                                                            requirements elicitation, specification,
                                                            and validation.
                                                            Most of the requirements techniques and
                                                            tools today focus on specification, i.e.,
                                                            the representation of the requirements.
                                                            The Performance-Based Project
                                                            Management method concentrates
                                                            instead on elicitation.
                                                            This method addresses problems found
                                                            with requirements engineering that are
                                                            not adequately addressed by specification
                                                            techniques.
                                                            This Performance-Based Project
                                                            Management method incorporates
                                                            advantages of existing elicitation
                                                            techniques while addressing the activities
                                                            performed during requirements
                                                            elicitation.
                                                            These activities include fact–finding,
                                                            requirements gathering, evaluation and
                                                            rationalization, prioritization, and
                                                            integration.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                13
Performance-Based Project Management in a Nutshell



                                                            The Performance Measurement Baseline
                                                            (PMB) is the primary assessment
                                                            document for assuring the credibility of a
                                                            project plan. The PMB is the baseline of
                                                            the cost, schedule and outcomes for each
                                                            Work Package in the plan.
                                                            Constructing the PMB requires knowledge
                                                            of the business requirements, skill in
                                                            developing the Work Packages that
                                                            produce the outcomes for these
                                                            requirements, and discipline in
                                                            assembling the cost, schedule and
                                                            relationships between the Work Packages.
                                                            It is the discipline that requires the most
                                                            focus for the planners and project
                                                            controls staff. Without this discipline, the
                                                            development of a credible baseline is
                                                            simply not possible.
                                                            The concept of a producing measureable
                                                            outcomes is at the core of the
                                                            Performance Measurement Baseline
                                                            (PMB).
                                                             Outcomes are the units of measure of
                                                              progress to plan.
                                                             Outcomes are what the customer has
                                                              paid money for.
                                                             Outcomes contain the business
                                                              capabilities, the associated value that
                                                              fulfill the requirements of the business
                                                              plan




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                14
Performance-Based Project Management in a Nutshell




                                                            The critical success factor in building the
                                                            Performance Measurement Baseline
                                                            (PMB) is the decomposition of the system
                                                            requirements into technical capabilities,
                                                            then into outcomes that enable those
                                                            technical capabilities, and finally into the
                                                            Work Packages (WP)that produce those
                                                            outcomes.
                                                            Performance-Based Project Management
                                                            using WPs includes:
                                                             Defining the decomposed outcomes
                                                              from the needed system capabilities in a
                                                              Work Breakdown Structure. This
                                                              decomposition process MUST be
                                                              iterative and incremental. Assessment
                                                              of the validity of this decomposition
                                                              requires thought. The first
                                                              decomposition is likely not the best
                                                              approach.
                                                             Estimating the duration and work effort
                                                              for each WP. Duration and effort
                                                              estimating is iterative and incremental,
                                                              it cannot be a one–time effort. The
                                                              initial estimate MUST be assessed after
                                                              the assembly of the WPs into the
                                                              Activity Network with inter–work stream
                                                              dependencies. Only then can they be
                                                              considered credible.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                  15
Performance-Based Project Management in a Nutshell



                                                            With the Performance Measurement
                                                            Baseline established, its execution
                                                            becomes critically important.
                                                            The execution process is called the
                                                            “project rhythm.” this means the
                                                            processes are performed in a repeated
                                                            manner – at least on a monthly basis and
                                                            many times on a weekly basis.
                                                            This business rhythm must create
                                                            actionable information for the program
                                                            manager on a time scale that allows
                                                            actions to be taken.
                                                            These tangible, physical outcomes must
                                                            be defined in the work packaged created
                                                            during the Planning process of
                                                            Performance-Based Project Management.
                                                            The measures of physical percent
                                                            complete can be applied on weekly
                                                            boundaries in a variety of ways:
                                                            1. Have weekly outcomes.
                                                            2. Have apportioned milestones for each
                                                               week.
                                                            3. Have tasks that are one week long
                                                               and record 0%/100% complete at the
                                                               end of each week.
                                                            In all cases, a measure of physical
                                                            percent complete is mandatory if the
                                                            program manager is to receive actionable
                                                            information.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                              16
Performance-Based Project Management in a Nutshell

                                                            The focus of Performance Measurement
                                                            Baseline execution steps is to physically
                                                            assess the progress of the program in
                                                            units reflecting the progress using the
                                                            three independent variables: C,S,P
                                                             Cost
                                                             Schedule
                                                             Performance both technical and
                                                              programmatic
                                                            The traditional Earned Value Management
                                                            approach uses three data sources, the
                                                            budget (or planned) expenditures
                                                            (BCWS), the actual expenditures (ACWP),
                                                            and the Earned Value (BCWP) captured
                                                            from the Work Package Manager. The
                                                            comparison of budget versus actual
                                                            expenditures indicates what was planned
                                                            to be spent versus what was actually
                                                            spent at any given time. The use of
                                                            Earned Value (BCWP) indicates what was
                                                            produced for that expenditure.
                                                            With this approach the use of physical
                                                            percent complete for the amount of work
                                                            performed is a starting point. It does not
                                                            indicate anything about the conformance
                                                            to specification of the work produced for
                                                            the amount of money spent.
                                                            By adding Technical Performance
                                                            Measures (TPM) to the analysis of Earned
                                                            Value Management, the program
                                                            manager can assess the actual progress
                                                            of the program. Non–compliance with the
                                                            planned Technical Performance Measures
                                                            dilutes the Earned Value proportionally.


Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                17
Performance-Based Project Management in a Nutshell




                                                            Continuous Risk Management is based on
                                                            the underlying principles, concepts, and
                                                            functions of risk management and
                                                            provides guidance on how to implement it
                                                            as a continuous practice in projects and
                                                            organizations.
                                                            Risk management is used to continuously
                                                            assess what can go wrong in projects,
                                                            determine which of these risks are most
                                                            important, and implement strategies to
                                                            deal with these risks.
                                                            These principles are based on proven
                                                            practices confirmed through research,
                                                            field testing, and direct work with clients.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                  18
Performance-Based Project Management in a Nutshell




                                                            Continuous Risk Management, when
                                                            performed successfully, provides a
                                                            number of benefits:
                                                             Prevents problems before they occur –
                                                              indentifies potential problems and deals
                                                              with them when it is easier and cheaper
                                                              to do so – before they are problems.
                                                             Improves product or service quality –
                                                              focuses on the project’s objectives and
                                                              consciously looks for things that may
                                                              effect quality throughout the project
                                                              lifecycle.
                                                             Enables better use of resources – allows
                                                              the early identification of potential
                                                              problems – proactive management –
                                                              and provides input into management
                                                              decisions regarding resource allocation.
                                                             Promotes teamwork – involves
                                                              personnel at all levels of the program.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                19
Performance-Based Project Management in a Nutshell




                                                            Traditional project management methods
                                                            are usually focused on the activities of
                                                            the project management method. Process
                                                            Groups and Knowledge Areas of PMBOK®.
                                                            These Groups and Knowledge Areas are
                                                            necessary for project success.
                                                            But they may not be sufficient.
                                                            Using these baseline processes, project
                                                            management activities are guided by field
                                                            proven examples.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                               20
Performance-Based Project Management in a Nutshell




                                                            Using traditional project management
                                                            process groups and knowledge areas,
                                                            Performance-Based Project Management
                                                            adds the concept of Capabilities.
                                                            As well the integration of Cost, Schedule,
                                                            and Technical Performance Measures
                                                            (TPM) in the Performance Measurement
                                                            Baseline (PMB).
                                                            The Work Packages (WP) of the PMB
                                                            contain the measures of Physical Percent
                                                            Complete for the individual outcomes of
                                                            each Work Package.




Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                21
Performance-Based Project Management
                                                            is a comprehensive approach to
                                                            managing cost, schedule, and technical
                                                            performance of programs and projects by
                                                            assessing the interaction between
                                                            programmatic and technical processes.
                                                            The method starts by capturing the
                                                            technical and operational needs of the
                                                            proposed system. These are stated in a
                                                            Concept of Operations describing how the
                                                            system operates, how it fulfills the stated
                                                            mission, what major components
                                                            comprise the system, and how they
                                                            interact with each other.
                                                            From the capabilities description of the
                                                            Concept of Operation, technical and
                                                            operational requirements are elicited.
                                                            These requirements define the
                                                            development progress of the outcomes
                                                            captured in the Performance
                                                            Measurement Baseline (PMB).
                                                            This PMB is constructed from a collection
                                                            of Work Packages, arranged in a logical
                                                            network describing the increasing
                                                            maturity of the products or services
                                                            needed to deliver the stated capabilities.
                                                            Measures of physical percent complete
                                                            are used for each Work Package and the
                                                            outcomes they produce. Performance-
                                                            Based Project Management is a Systems
                                                            Engineering approach to program and
                                                            project management [INCOSE],
                                                            [Stevens].



Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                 22
This method incorporates all three
                                                            aspects of a program performance
                                                            measurement process – Cost, Schedule,
                                                            and Technical Performance Measures
                                                            (TPM).
                                                            Conventional approaches use the cost
                                                            and schedule baseline and the variances
                                                            generate the values for Earned Value.
                                                            Performance-Based Project Management,
                                                            measures of Physical Percent Complete
                                                            derived from pre–defined targets of
                                                            Technical Performance.
                                                            The Earned Value variables are
                                                            augmented with adjustments from the
                                                            Technical Performance compliance for
                                                            each outcome to produce a true
                                                            assessment of progress.
                                                            Technical Performance Measures
                                                            integrate technical achievement with
                                                            earned value using risk assessments that
                                                            provides a robust program management
                                                            tool to identify early technical and
                                                            programmatic disruptions to a program.
                                                            [Pisano] TPMs:
                                                             Provide an integrated view across all
                                                               programmatic and technical elements.
                                                             Support distributed empowerment
                                                               implicit in the IPT approach, through
                                                               interface definitions.
                                                             Logically organizes data resulting from
                                                               systems engineering, risk
                                                               management, and earned value
                                                               processes.
                                                             Provide a "real time" indication of
                                                               contract performance and future cost
                                                               and schedule risk.
                                                             Support the development of systems
                                                               thinking within an integrated program
                                                               model focused on the interface
                                                               definitions.

Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                               23
Performance-Based Project Management in a Nutshell
                                                            Performance-Based Project Management
                                                            provides tools, processes, and training
                                                            needed to increase the probability of
                                                            success of a projects.
                                                            This approach is unique in its integration
                                                            of the critical success factors for projects,
                                                            no matter the domain.
                                                            Our approach answers the following 5
                                                            immutable principles:
                                                            1. Where are we going?
                                                                Do we have a definitive
                                                                 description of the needed
                                                                 capabilities and the requirements
                                                                 needed to deliver those
                                                                 capabilities?
                                                            2. How do we get there?
                                                                What is the sequence of the work
                                                                 efforts to achieve the plan?
                                                            3. Do we have enough time,
                                                               resources, and money to get
                                                               there?
                                                                Are the resources properly
                                                                 allocated to the sequence of work
                                                                 activities?
                                                            4. What impediments will we
                                                               encounter along the way?
                                                                Have we captured the risks and
                                                                 their handling plans for all the
                                                                 critical work activities?
                                                            5. How do we know we are making
                                                               progress?
                                                                Can we measure progress to plan
                                                                 in units meaningful to the
                                                                 decision makers?

Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011                                                   24
Copyright ® 2012, Glen B. Alleman, All Rights Reserved




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                                                         If you have questions that weren’t
                                                         answered here, would like a soft copy of
                                                         this briefing or any others from today or
                                                         last night’s PMI Chapter meeting, please
                                                         drop me a note.




The 5 Immutable Principles of Project Management                                                25/58

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Performance-Based Project Management In A Nut Shell

  • 1. Performance -Based Project Management in a Nutshell Performance-Based Project Management provides 5 practice areas that measurably increase the probability of success for projects and programs in every technical and business domain. Performance-Based Project Management provides step–by–step guidance to the management team and project stakeholders through 5 process areas needed for success. These process areas appear obvious, but the processes are many times skipped over during the “heat of the battle” to get the project out the door. By applying Performance-Based Project Management the project team focuses their efforts on increasing the probability of success, not just measuring cost and schedule numbers. This notion of “increasing the probability of success” is significantly different than simply applying a method and thinking that positive results will be the outcome. If we do not have a calculated probability of a successful outcome, we can not determine if we will actually reach the end goal of the project – we can not determine what DONE looks like. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 1
  • 2. Performance-Based Project Management in a Nutshell The Customer Bought Outcomes No matter the customer is, a commercial firm deploying and enterprise IT solution, to a government agency, it is the outcome of the project that was paid for. The work needed to produce this outcome, the materials that support the development of this outcome, all collateral activities from the project are not what the customer paid for. They paid for the beneficial outcome from their investment in the project. Performance-Based Project Management starts with defining what that outcome is in terms of the capabilities provided by the project. These capabilities are the starting point for the project’s success. They are defined in Measures of Effectiveness. These Measures of Effectiveness (MoEs) are quantitative measures that provide some insight into how effectively a product or service is performing. MoE’s are derived from stakeholder expectation statements. MoE’s are deemed critical to the mission or operational success of the system. For example a MoE that defines a capability is: “95% of all work will be completed within 15 business days or the negotiated deadline.” This MoE is a description of what DONE looks like for the project. The project provided this capability. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 2
  • 3. Performance-Based Project Management in a Nutshell The five immutable principles of project success are the mechanisms for increasing the probability of success. 1. Know where you are going by defining “done” at some point in the future. This may be far in the future – months or years from now. Or closer in the future days or weeks from now. 2. Have some kind of plan to get to where you are going. This plan can be simple or it can be complex. The fidelity of the plan depends on the tolerance for risk by the users of the plan. The plan answers the question how long are we willing to wait before we find out we are late? 3. Understand the resources needed to execute the plan. How much time and money is needed to reach the destination. This can be fixed or it can be variable. 4. Identify the impediments to progress along the way to the destination. Have some means of removing, avoiding, or ignoring these impediments. 5. Have some way to measure your planned progress, not just your progress. Progress to Plan must be measured in units of physical percent complete. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 3
  • 4. Performance-Based Project Management in a Nutshell There are 11 practices needed to generate the data necessary to provide actionable information to the decision makers in Performance-Based Project Management This information is connected to the 5 Immutable Principles of project management and the artifacts from the practices of the these principles. These 11 criteria are a subset of the 32 criteria of ANSI–748B Earned Value Management. While Earned Value is certainty not necessary for project success, some form of measuring physical progress to plan is. Without this ability, only measures of the passage of time and consumption of resources remains. Using these 11 practices, based on measures of physical percent complete, real progress to plan can be measured. This provides visibility into the final cost, schedule, and technical performance of the project needed to answer the question how long are we willing to wait before we fins out we are late? And provide sufficient time to take corrective actions to avoid being late, over budget, and non–compliant with the technical performance measures. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 4
  • 5. Performance-Based Project Management in a Nutshell The connection between principles of Performance-Based Project Management and the 11 Practices is shown to the left. The 5 Immutable Principles of Success must be connected with artifacts and outcomes of the 11 Practices that implement those principles. If any of the 11 Practices or the 5 Principles are missing the probability of success is measurably reduced. Each Principle and each Practice must be in place for the Probability of Project Success to increase. That is the goal of Performance-Based Project Management – Increase the Probability of Project Success. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 5
  • 6. Performance-Based Project Management in a Nutshell Projects exist in a Domain and a Context in that Domain. This can be a business of technical Domain and a Business or Technical Context in that domain No matter the Domain and the Context in that Domain, projects consist of a collection of problems to be solved and needs of the stakeholders each seeking to solution. Performance-Based Project Management provides a framework for addressing each of these elements in a cohesive and consistent manner, while providing visibility to the project’s Performance in units of measure meaningful to the decision maker. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 6
  • 7. Performance-Based Project Management in a Nutshell When we say outcome what do we mean? We certainly don’t mean the work effort or the cost absorbed during that work effort. We mean something tangible that benefits the customer. This tangible outcome must be assessed by the Measures of Effectiveness (MoE) that are quantitative measures that provide insight into how effectively a product or service is performing. This product or service must provide the customer with a capability to do something tangible, something measureable, something that benefits the business or mission. The outcome must be capable of being measured in some way as it moves from left to right in the schedule. As it increases in its maturity. The outcomes must be testable in some form. Testable Requirements are the starting point. The outcomes are produced through Work Packages – “units of work.” These Work Packages are resource loaded, have specific periods of performance, and produce a tangible, measureable outcome that can be traced to the requirements and further traced to the needed capabilities. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 7
  • 8. 1. Identify Needed Capabilities that achieve the program objectives or the particular end state. Define these capabilities through scenarios from the customer point of view in units of Measures of Effectiveness (MoE) meaningful to the customer. 2. Define The Technical And Operational Requirements that must be fulfilled for the system capabilities to be available to the customer. Define these requirements in terms that are isolated from any implementation technical products. Only then bind the requirements with technology. 3. Build The Performance Measurement Baseline – describing the work to be performed, the budgeted cost for this work, the organizational elements that produce the outcomes from this work effort, and the Measures of Performance (MoP) showing this work is proceeding according to cost, schedule, and technical Performance plan. 4. Execute the PMB’s Work Packages in the planned order, assuring all Performance assessments are 0%/100% complete before proceeding. No rework, no transfer of activities to the future. Assure every requirement is traceable to work and all work is traceable to requirements. 5. Apply Continuous Risk Management for each Performance- Based Project Management process area to Identify, Analyze, Plan, Track, Control, and Communicate programmatic and technical risk. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 8
  • 9. Performance-Based Project Management in a Nutshell With these five process areas, the next level of detail is show to the left. These are a repeat of the Performance-Based Project Management processes. A statement of intent is the starting point for the successful application of each process area. This statement is provided in the form of a question. 1. What are the needed capabilities? 2. What are the technical and operational requirements? 3. What is the cost and schedule? 4. What are the periodic measures of performance? 5. What are the impediments to progress? By asking and answering these questions at every juncture of the program, the participants gain visibility into the Performance of the program in ways not found in other approaches to program management. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 9
  • 10. Performance-Based Project Management in a Nutshell Transforming the System Capabilities into System Requirements begins with the a narrative description of the needed Capabilities in some form meaningful to the customer. This sounds like a tautology – a Chicken or the Egg problem. But discovering the system requirements is difficult in the absence of some higher level description of the needed “Capabilities” of the desired system. The concept of a “Capability” is a capacity or potential:  Provided by a set of resources and abilities.  To achieve a measureable result.  In performing a particular task.  Under specific conditions.  To specific Performance standards. The four steps here result in a Concept of Operations (ConOps) for the resulting system. The ConOps describes the systems application to the problem domain and how the system will produce measurable value to the user in that domain. The ConOps is the story of how the system will work when it is delivered to the customer. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 10
  • 11. Performance-Based Project Management in a Nutshell Here are some examples of capabilities. They appear obvious. But in many instances this approach is missing. The requirements are many time the starting point for the solution. In the absence of the capabilities statement and the Concept of Operations the user community may have trouble envisioning how the system will benefit them when it becomes available. The tendency to start with the requirements should be avoided. Requirements need a home, a reason for being. These examples are from actual projects. They represent clear and concise statement about the need for the system, the use of the system for the business or mission purpose, and how the end user will benefit from the system. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 11
  • 12. Performance-Based Project Management in a Nutshell Requirements are the necessary attributes defined for an item prior to the efforts to develop a design for the item. System requirements analysis is a structured, or organized, methodology for identifying an appropriate set of resources to satisfy a system need (the needed capabilities) and the requirements for those resources that provide a sound basis for the design or selection of those resources. Requirements elicitation acts as the transformation between the customer’s system needs and the design concept implemented by the organization’s engineering resources. The basic process decomposes a statement of the customer need through a systematic exposition of what that system must do to satisfy that need. This need is the ultimate system requirement which all other requirements and designs flow. There are two fundamental classes of requirements. The Process Performance Requirements define how the work processes are used to produce a beneficial outcome to the customer. The Product Performance Requirements define the product specifications and how they are related to the process requirements. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 12
  • 13. Performance-Based Project Management in a Nutshell Poorly formed requirements have been shown to contribute as much as 25% to the failure modes of programs and projects. Requirements engineering can be decomposed into the activities of requirements elicitation, specification, and validation. Most of the requirements techniques and tools today focus on specification, i.e., the representation of the requirements. The Performance-Based Project Management method concentrates instead on elicitation. This method addresses problems found with requirements engineering that are not adequately addressed by specification techniques. This Performance-Based Project Management method incorporates advantages of existing elicitation techniques while addressing the activities performed during requirements elicitation. These activities include fact–finding, requirements gathering, evaluation and rationalization, prioritization, and integration. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 13
  • 14. Performance-Based Project Management in a Nutshell The Performance Measurement Baseline (PMB) is the primary assessment document for assuring the credibility of a project plan. The PMB is the baseline of the cost, schedule and outcomes for each Work Package in the plan. Constructing the PMB requires knowledge of the business requirements, skill in developing the Work Packages that produce the outcomes for these requirements, and discipline in assembling the cost, schedule and relationships between the Work Packages. It is the discipline that requires the most focus for the planners and project controls staff. Without this discipline, the development of a credible baseline is simply not possible. The concept of a producing measureable outcomes is at the core of the Performance Measurement Baseline (PMB).  Outcomes are the units of measure of progress to plan.  Outcomes are what the customer has paid money for.  Outcomes contain the business capabilities, the associated value that fulfill the requirements of the business plan Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 14
  • 15. Performance-Based Project Management in a Nutshell The critical success factor in building the Performance Measurement Baseline (PMB) is the decomposition of the system requirements into technical capabilities, then into outcomes that enable those technical capabilities, and finally into the Work Packages (WP)that produce those outcomes. Performance-Based Project Management using WPs includes:  Defining the decomposed outcomes from the needed system capabilities in a Work Breakdown Structure. This decomposition process MUST be iterative and incremental. Assessment of the validity of this decomposition requires thought. The first decomposition is likely not the best approach.  Estimating the duration and work effort for each WP. Duration and effort estimating is iterative and incremental, it cannot be a one–time effort. The initial estimate MUST be assessed after the assembly of the WPs into the Activity Network with inter–work stream dependencies. Only then can they be considered credible. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 15
  • 16. Performance-Based Project Management in a Nutshell With the Performance Measurement Baseline established, its execution becomes critically important. The execution process is called the “project rhythm.” this means the processes are performed in a repeated manner – at least on a monthly basis and many times on a weekly basis. This business rhythm must create actionable information for the program manager on a time scale that allows actions to be taken. These tangible, physical outcomes must be defined in the work packaged created during the Planning process of Performance-Based Project Management. The measures of physical percent complete can be applied on weekly boundaries in a variety of ways: 1. Have weekly outcomes. 2. Have apportioned milestones for each week. 3. Have tasks that are one week long and record 0%/100% complete at the end of each week. In all cases, a measure of physical percent complete is mandatory if the program manager is to receive actionable information. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 16
  • 17. Performance-Based Project Management in a Nutshell The focus of Performance Measurement Baseline execution steps is to physically assess the progress of the program in units reflecting the progress using the three independent variables: C,S,P  Cost  Schedule  Performance both technical and programmatic The traditional Earned Value Management approach uses three data sources, the budget (or planned) expenditures (BCWS), the actual expenditures (ACWP), and the Earned Value (BCWP) captured from the Work Package Manager. The comparison of budget versus actual expenditures indicates what was planned to be spent versus what was actually spent at any given time. The use of Earned Value (BCWP) indicates what was produced for that expenditure. With this approach the use of physical percent complete for the amount of work performed is a starting point. It does not indicate anything about the conformance to specification of the work produced for the amount of money spent. By adding Technical Performance Measures (TPM) to the analysis of Earned Value Management, the program manager can assess the actual progress of the program. Non–compliance with the planned Technical Performance Measures dilutes the Earned Value proportionally. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 17
  • 18. Performance-Based Project Management in a Nutshell Continuous Risk Management is based on the underlying principles, concepts, and functions of risk management and provides guidance on how to implement it as a continuous practice in projects and organizations. Risk management is used to continuously assess what can go wrong in projects, determine which of these risks are most important, and implement strategies to deal with these risks. These principles are based on proven practices confirmed through research, field testing, and direct work with clients. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 18
  • 19. Performance-Based Project Management in a Nutshell Continuous Risk Management, when performed successfully, provides a number of benefits:  Prevents problems before they occur – indentifies potential problems and deals with them when it is easier and cheaper to do so – before they are problems.  Improves product or service quality – focuses on the project’s objectives and consciously looks for things that may effect quality throughout the project lifecycle.  Enables better use of resources – allows the early identification of potential problems – proactive management – and provides input into management decisions regarding resource allocation.  Promotes teamwork – involves personnel at all levels of the program. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 19
  • 20. Performance-Based Project Management in a Nutshell Traditional project management methods are usually focused on the activities of the project management method. Process Groups and Knowledge Areas of PMBOK®. These Groups and Knowledge Areas are necessary for project success. But they may not be sufficient. Using these baseline processes, project management activities are guided by field proven examples. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 20
  • 21. Performance-Based Project Management in a Nutshell Using traditional project management process groups and knowledge areas, Performance-Based Project Management adds the concept of Capabilities. As well the integration of Cost, Schedule, and Technical Performance Measures (TPM) in the Performance Measurement Baseline (PMB). The Work Packages (WP) of the PMB contain the measures of Physical Percent Complete for the individual outcomes of each Work Package. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 21
  • 22. Performance-Based Project Management is a comprehensive approach to managing cost, schedule, and technical performance of programs and projects by assessing the interaction between programmatic and technical processes. The method starts by capturing the technical and operational needs of the proposed system. These are stated in a Concept of Operations describing how the system operates, how it fulfills the stated mission, what major components comprise the system, and how they interact with each other. From the capabilities description of the Concept of Operation, technical and operational requirements are elicited. These requirements define the development progress of the outcomes captured in the Performance Measurement Baseline (PMB). This PMB is constructed from a collection of Work Packages, arranged in a logical network describing the increasing maturity of the products or services needed to deliver the stated capabilities. Measures of physical percent complete are used for each Work Package and the outcomes they produce. Performance- Based Project Management is a Systems Engineering approach to program and project management [INCOSE], [Stevens]. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 22
  • 23. This method incorporates all three aspects of a program performance measurement process – Cost, Schedule, and Technical Performance Measures (TPM). Conventional approaches use the cost and schedule baseline and the variances generate the values for Earned Value. Performance-Based Project Management, measures of Physical Percent Complete derived from pre–defined targets of Technical Performance. The Earned Value variables are augmented with adjustments from the Technical Performance compliance for each outcome to produce a true assessment of progress. Technical Performance Measures integrate technical achievement with earned value using risk assessments that provides a robust program management tool to identify early technical and programmatic disruptions to a program. [Pisano] TPMs:  Provide an integrated view across all programmatic and technical elements.  Support distributed empowerment implicit in the IPT approach, through interface definitions.  Logically organizes data resulting from systems engineering, risk management, and earned value processes.  Provide a "real time" indication of contract performance and future cost and schedule risk.  Support the development of systems thinking within an integrated program model focused on the interface definitions. Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 23
  • 24. Performance-Based Project Management in a Nutshell Performance-Based Project Management provides tools, processes, and training needed to increase the probability of success of a projects. This approach is unique in its integration of the critical success factors for projects, no matter the domain. Our approach answers the following 5 immutable principles: 1. Where are we going?  Do we have a definitive description of the needed capabilities and the requirements needed to deliver those capabilities? 2. How do we get there?  What is the sequence of the work efforts to achieve the plan? 3. Do we have enough time, resources, and money to get there?  Are the resources properly allocated to the sequence of work activities? 4. What impediments will we encounter along the way?  Have we captured the risks and their handling plans for all the critical work activities? 5. How do we know we are making progress?  Can we measure progress to plan in units meaningful to the decision makers? Copyright ©, Glen B. Alleman, Niwotridge Consulting, 2011 24
  • 25. Copyright ® 2012, Glen B. Alleman, All Rights Reserved Here’s my contact information. If you have questions that weren’t answered here, would like a soft copy of this briefing or any others from today or last night’s PMI Chapter meeting, please drop me a note. The 5 Immutable Principles of Project Management 25/58