Every organisation has problems at some point in its lifetime. The evolution of an organisation involves changes and challenges that need to be addressed in order to improve the structure, procedures, and even the culture depending on the actual circumstances. Tackling a project, creating a project office and carrying out organisational transformation projects are all very important and significant challenges that require collective resolve, the support of management and exceptional communication.
These processes of transformation cannot be undertaken in an individual effort. The simple will of one person does not change an organisation, but it is necessary to combine the willpower, interests and attitudes of everyone so that the desired outcome can be achieved. When facing a process of organisational change, it is helpful to have as a guide, a series of steps that have proven to be effective in the case of such a process. A good reference is the 8 steps model proposed by Jonh Kotter in his book “Leading Change", we can briefly summarise the points:
Create a sense of urgency: For the most successful changes, it is helpful if the entire company wants it. To ensure this kind of backing and the necessary motivation, it is imperative that a sense of urgency is felt about the need for change.
Form a powerful coalition: Work toward gaining the necessary support by creating a coalition of people who, motivated by your ideas and proposals, help to persuade others that there is a need for change.
Create a vision for change: Outline a clear and extensive vision that explains the required effort and strategic initiatives that will contribute to achieving this vision. This will support the change.
Communicate the vision: Spread the vision and surround yourself with people who support the change and understand the criticality of implementing it. Talk about your vision frequently and set the example as one who wholly believes in the change.
Remove obstacles: Reduce hindrances by revising procedures, structures and beliefs that limit or jeopardize the desired change. Reward those who embrace and implement the change speedily and with conviction.
Create short-term wins: Produce, evaluate and celebrate achievements and look at how they complement the final results. Nothing motivates like success, especially at the beginning of a project.
Build on the Change: Many projects relating to change fail because victory is declared too quickly. It is important to do evaluations throughout the process, and only consider it a success when the change has become a new habit in the organisation.
Anchor the Changes in Corporate Culture: To sustain a change in the organisation, it must be incorporated into the core of the organisation and should be reflected in its strategic principles, operational procedures and in its culture.
Remember: Never try to make an organisational change on your own. Look for support, create an optimal environment and work steadfastly.
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As we have seen, the project life cycle comprises the set of phases into which a project is organized. Depending on the organization in question and any overlapping between phases, various types of project life cycle can be defined: predictive or classic life cycles define the product and deliverables at the start of the project; iterative or incremental life cycles adopt an approach that gradually increases or expands the product in steps; and adaptive or flexible life cycles develop the product through numerous iterations, with the scope for each iteration only defined at the start thereof.
Predictive, classic or planning-focused life cycles
Predictive life cycles (also known as classic or planning-focused life cycles) are those in which the scope, deadline and cost are determined as soon as possible in the project life cycle and efforts are focused on meeting the commitments established for each one of these factors. These projects are normally organized into a series of sequential or consecutive phases, where each one is focused on a specific sub-product or activity. Normally, the work undertaken in one phase is very different to all the rest and so the project team will vary according to the phase under way at any given time. From the start, project management focuses on defining the scope and drawing up a detailed plan of the necessary activities. From there, work is focused on following the plan. Any project scope change must be managed explicitly and usually leads to a review of the plan and formal acceptance of the new plan. Predictive life cycles are chosen when the product to be delivered is well-defined and relatively extensive knowledge exists on how to build the product. This has traditionally been the most common work model but does not necessarily suit the circumstances of all projects and organisations.
Iterative or incremental life cycles
Iterative or incremental life cycles are those in which the activities of the project are repeated in phases or iterations and understanding of the product by the project team increases in each one. The iterations develop the product through a series of repeated cycles that successively add functionality to the product. At the end of each iteration, a deliverable or set of deliverables will have been produced. Future iterations may improve said deliverables or create new ones. The final product will be the accumulation of functionalities built up during the various iterations. Iterative or incremental life cycles are chosen when it is necessary to manage vague objectives or considerable complexity, or when the partial delivery of the product is key to success. This type of life cycle enables the project team to incorporate feedback and gradually increase the experience of the team during the course of the project.
Adaptive or flexible life cycles
Adaptive life cycles, also known as change-focused methods or flexible methods, respond to high levels of change and to ongoing participation by the interested parties. There are two basic models for this type of life cycle, those focused on the flow (for example, Kanban) and others focused on iterative and incremental cycles (for example, Scrum). Very clear limitations are set on the concurrence of activities (Work in Progress) for the former and on very rapid iterations (between 1 and 4 weeks) in which the work is done for the latter (Sprint). In flexible models, the overall scope of the project will usually be broken down into a set of requirements or projects to be undertaken (sometimes called Product Backlog). At the start of an iteration, the team defines the functionalities to be tackled in that cycle. At the end of each iteration, the product should be ready for review by the client. This type of life cycle requires teams to be highly involved and the sponsor or client to provide constant feedback. Generally-speaking, flexible methods are chosen in environments that change swiftly, when the scope is unclear or when the value contribution is highly variable and with highly involved teams.
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When considering a poor quality product, with several design or aesthetic problems, and difficulties in determining how it was constructed to begin with, it is quite likely that it is the product of a project which suffered significant complications. This pattern is true for all kinds of products. Ones in engineering, construction, software and creativity. When pressed for time and costs increase, or scope is reduced, the quality is sacrificed.
When planning becomes overwhelming the first element that is sacrificed is always quality. There is a tendency to not do things well, to take shortcuts that will supposedly work with one’s deadlines more easily. The thing is that sometimes when these measures are used, both consciously and unconsciously by the team, they do not effectively solve the issues with time when we encounter them, but makes them more difficult to prevent overall.
When a team is under extreme pressure, there is a tendency to hide the flaws and other weaknesses with product.
The problems appear later, in the implementation and maintenance stages. The rush has now passed, but the problems in the product are there, waiting for someone to notice and address them. As soon as it is time to make some sort of adjustment or do a simple routine maintenance exercise, the problems emerge and the product works poorly or stops working altogether. But this problem is ‘normally’ one for the maintenance team.
Planning complications are unfortunately more common than we would like to acknowledge and they cannot always be avoided. When the product contains ‘invisible problems’ we must be quick to document these problems and not wait for them to arise in later production phases. If aware of a problem deal with it. We must think about those dealing with the implementation and maintenance of the product and not only of finishing the project at any cost.
Always remember: “More haste, less speed!”
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Project governance is the framework encompassing all guidelines, processes, decision-making models and tools when undertaking a project.
Each organisation should adjust this general framework to the policies and governance method it has in place. Projects are undertaken within an organisation and should be aligned to the way in which decisions are taken and the corporate culture in which it will be developed.
The project governance framework should be revised during the course of its life-cycle by the project leader and project team; with adjustments sometimes being necessary to suit certain circumstances, developments or experiences.
This is an especially critical issue for major or complex projects as it provides a coherent method that provides definition, documents, tools and the communication of reliable and repeatable practices within the project. It also defines roles and tests the effectiveness of the project manager, while always leaving a framework for decision-making.
Project governance involves the interested parties, policies, procedures, tools, standards, responsibilities and documented authorities. Despite the fact that the framework in which a project is developed aids governance, the team continues to be responsible for planning, implementation, control and closure.
A few aspects of the project governance framework are defined in the PMBoK:
Criteria for success of the project and acceptance of the deliverables
The process for identifying, scaling and resolving incidents that may arise during the project
The relationships between the project team, the groups within the organisation and the external parties
The project organisation chart that identifies the roles within the project
The processes and procedures for the communication of information
The processes for decision-making within the project
The guidelines for aligning project governance with the organisation
The project life-cycle approach
The process for revising phases or stage changes
The process for revising and approving changes to the budget, scope, quality or Gantt Chart
The process for aligning the interested parties with the project requirements
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The success of projects is key to any company, but even more so to those where the outturn account depends on projects. Programming, design, construction and consultancy companies and, generally-speaking, any company that undertakes projects for its clients must pay significant attention to the profitability of each project.
This article offers an analysis of the main factors influencing project profitability. This is a complicated topic and no sweeping generalizations should be made. Hence, these factors must be adapted to the specific circumstances surrounding each organization, sector and client.
The first and major issue affecting project profitability is linked to discrepancies between what should be included or excluded from the scope of a project. Clients tend to consider a broader scope than project leaders and this difference in perception often leads to problems and conflicts that eventually affect project profitability.
Spending the necessary time to define and share the scope of a project is a key factor in project profitability.
2.- Estimate the effort
There can occasionally be little time to provide a client with a commercial offer for the project. This can lead to hasty estimations based on similarities between the project in question and others carried out in the past. As a result, the risk of mistakes is very high and should be reduced by breaking down the tasks involved and producing a bottom-up estimation to confirm that the overall estimation is in line with the work that needs to be done.
This estimate should include as much detail as possible on the profiles needed for each activity.
A good estimate will avoid project cost deviations.
3.- Plan slowly
The break-down of tasks and their estimation should be undertaken as part of careful planning of the work to be done. The organization of activities and their inter-relationships may result in the need for additional tasks or certain tasks being completed after others, which can lead to additional project costs.
Optimistic planning will mean the client has hard-to-meet expectations about the delivery date and this will eventually affect the cost.
4.- Choose the right team
The project team is a key piece of the puzzle in transforming project estimates and planning into reality, thereby meeting client expectations and maintaining the appropriate level of quality. Scrimping on resources may be more expensive in the long run. Using under-qualified personnel with no experience or little motivation may be cheaper to begin with but this can very easily become a negative factor for profitability when having to do the same work more than once, wasting time on ensuring people are clear on what needs to be done or learning how they need to do it.
High-productivity teams are capable of significantly increasing project profitability.
5.- Identify risks
All projects have some sort of risk that must be analyzed and assessed. Some risks may be unlikely while others may have a minimal impact on the project, meaning that highly significant corrective actions to counteract such risks would be unnecessary.
Those risks with the greatest exposure, i.e. those whose impact and likelihood are average or high, should be managed and may require specific actions to guarantee project profitability.
It might even be necessary to establish a safety margin in the cost to be paid by the client depending on the degree of uncertainty and the risk posed by the project.
6. Analyze profitability at the start
While considering all the aforementioned factors, project profitability should be analyzed before the project begins. It is possible that, for commercial reasons, projects with little initial profitability will sometimes need to be undertaken in the hope that the client will contract other services in the future. At any event, this fact and the level of profitability to be expected from the project should be ascertained.
Only by ascertaining the expected profitability will we be able to manage it.
7.- Foster communication by the team and with the client
Communication within the team and communication with the client are key to project profitability.
If the team communicates quickly and smoothly, it will be possible to identify any problems in time and any confusion or misunderstanding that could ruin a project will be avoided.
Communication with the client will enable expectations to be properly managed and the client to understand and collaborate on any stumbling block that may arise.
8.- Record data and manage them
Data are key to project management. Feelings and anecdotes in management may provide a comfortable or negative sensation of progress and advancement, but only objective and recorded data will be able to provide the information needed for efficient management. Recording data may lead to conflict with the project team, the members of which tend to focus on activities they consider to be productive.
It is essential for the team to understand the importance of tracking information and undertaking data entry on a regular basis and without unnecessary effort.
9.- Track profitability at all times
Tracking project profitability is not an issue that should be left until the end, once the project has finished: it should be undertaken constantly, regularly checking project status to date and taking any necessary steps when unforeseen deviations or circumstances are identified.
If they are identified quickly and a timely response is given, we will be able to correct any problems and return to maximum profitability.
10.- Project deviations
Small deviations at the start of a project tend not to be considered seriously in the hope that the project will get back on track as time goes by. However, recovery from such initial deviations is usually a very complex task that is hard to achieve.
Furthermore, these deviations are often the symptom of a larger problem, meaning it is important to project them into the future and gain a clear picture of the situation.
The Earned Value technique is a very useful tool for making project status projections.
11.- Learn from mistakes and successes
If we properly record the most relevant data from our projects, we will be able to analyze what really happened and what the specific factors were that meant certain projects achieved greater profitability than others.
We should learn from both our mistakes and our successes, being able to identify those we should correct and improve upon as well as those we can repeat and encourage.
12.- Use the right tools
For all these reasons, it is important to use the right tools (without generating a high cost for the project) that will enable swift and efficient project management, help estimate and plan, record and analyze data, and allow the team to work comfortably from anywhere.
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Organizations have a set of assets that are key to project management and which must be looked after and treasured as items of great value within the company. Organizations are sometimes unaware of how important these assets are, even though they form the basis of many of their competitive advantages.
They basically consist of the plans, processes, policies, procedures and specific knowledge bases that are used by the organization during the course of its projects. They include any object, practice or knowledge of the organization, as well as knowledge bases, that can be used when implementing or managing a project.
The assets comprising the processes in place at an organization can be divided into two main areas:
Processes and procedures
In other words, the practices applied within the company for the various project phases.
Processes and procedures during the start-up and planning: these consist of all the standards applied by the organization and the guidelines and criteria to be adopted by all standard processes and procedures within the organization. They will include the organization’s policies regarding project and product life-cycles, planning models, etc
Processes and procedures during the implementation, monitoring and control: these consist of the change control procedures; the financial control procedures; the incident and defect management procedures defined by said controls, as well as the identification and monitoring actions to be performed; the communication requirements within the organization; procedures for prioritizing, approving and issuing work authorizations; risk control procedures; and guidelines and criteria for evaluating proposals and measuring standardized performance.
Processes and procedures during the closing: these are the guidelines and requirements for closing the project, e.g. final assessments and audits, release of resources from the project, closure of contracts, etc.
Corporate knowledge
In other words, storing and collecting information on what happened during the projects:
Configuration management: versions and baseline of the performing organization procedures, standards and policies.
Financial data, budgets or man hours for each activity.
Historical information and knowledge base from lessons learned, registers and documents or historical archives from previous projects.
Incidents and defects, including their status, control and resolution.
Data for measuring completed processes.
Archives and documents on previous projects.
All these assets are key to the organization and should not be left scattered between different files, documents and computers. The organization should ensure they are clearly and accessibly collected for those people responsible for project management in a centralized computer system such as ITM Platform.
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