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Choosing which projects to invest in is a strategic decision to be taken based on objective data. In this article, we explore the problem of subjectivity and analyze the solution that allows management to make decisions based on a business plan, in a rigorous and transparent way.

The Problem

In businesses where the source of income comes from making projects for clients, it is easy to decide which ones are to be put in place: (usually) those of greater profitability. And in some cases, all, if sufficient resources are available.

However, internal projects, such as those of transformation, tend to not offer such an obvious criterion as their value to the business is less evident and often more subjective to anticipate.

The fact that an expected value is subjective does not mean that its effects are not going to be real. It means that the benefits are hard to predict, and investment decisions can be based on perceptions.

This is a challenge that managing directors have always tried to address. The most used resource as a solution has been that of the "business case", which requires promoters to express the profitability or value contribution of their initiative in measurable terms, either in sales increase or in cost reduction.

The main difficulty presented by the business case is the human factor: a promoter of an initiative that has a strong motivation to give positive figures and show that their idea is profitable. Though it is desirable to have intrapreneurs on your team it is essential to validate their figures through a homogenous and and objective process.

The second difficulty of requesting profitability to internal projects arises from each promoter having limited vision to their area of competence, defending their plot without considering the overall vision. In turn, management considers these business cases as if they had been generated with the same criteria, which is not usually the case. Each promoter applies with different degree of ingenuity the data to the same template.

The issue at hand is knowing when to recognize, in an objective fashion, what initiatives will bring more value to the business when the projects deliver their expected benefits.

The Approach

When it comes to value, it is not always possible to apply a purely financial standard via project profitability based on forecasts in isolation and in comparison of each other.

The value contribution of a project to a strategic plan may be broader than profitability, even if the savings or earnings have been realistically calculated. For example, a process automation project can throw modest savings, but positively influence a priority target of customer quality perception.
Strategic project planning should not consider initiatives in isolation, as the result of the set may be greater than the sum of the parties. It is common for the result of some projects to enable others, and its set to offer strategic value. This is why program and portfolio management exceeds project management.

The strategic management of projects lies in the competence of the management and must be facilitated by the Project Management Office (PMO) to the extent that their objectives are the maximization of value and not only the transversal coordination.

Thus, the strategic planning approach to the composition of the project portfolio should consider two main elements:

A strategic plan that exposes the objectives of the Organization
A list of project proposals (initiatives)

With these two elements, we can prioritize initiatives that will order them from higher to lower value, generating an orderly list of approved projects (portfolio backlog).

Strategic management of project portfolios

A great advantage that offers prioritization of projects by value is that it supports applying resource constraints as a cut-line to its output. If we have a list ordered by value and – for example-a budgetary limitation, we will be able to establish the approval of projects based on those that contribute more value and that are within the available budget.

The Process

Once we have the two main elements (objectives and demand), we can start two classification processes that can run in parallel or go in sequence. What is important is to isolate each other to ensure objectivity and ease of adaptation to the general standard.

Process 1: Prioritization of Objectives

Participants: Board of Directors
Objective: To put some objectives in front of others, with specific weight of each one on the total.

Sometimes strategic plans already specify priorities, but in others they do not give explicit weight by objective. For example, how much more important is "to grow in sales by 20%" than "to increase operating efficiency by 15%"?

There are several techniques that can be employed to achieve a table like the one above. From something as simple as an agreement amongst the Board of Directors to the most sophisticated such as an Analytic Hierarchy Process (AHP). The latter could be considered more rigourous, though its execution could be simple if you have a Pairwise Comparison Tool, like the one provided by ITM Platform.

This simple table will generate an orderly and quantified list of objectives.

As an added feature, ITM Platform calculates a "consistency ratio" that indicates how logical and objective the prioritization is. In this article, you will find an explanation of how this index is calculated.

It is possible to make different sets of the same objectives through scenarios, and even use different objectives for different programs. The reality is complex and there is not always a single combination or scenario.

Process 2: Contribution of project value to objectives

Participants: The Project committee and promoters

Objective: To determine how much each project contributes to each objective

Ignoring for now the relevance of each objective on the strategic plan, this step will assign a weight to the contribution of each initiative to each objective. This weight will be translated to a number base on 100, but if you use ITM Platform you can also use the comparison by pairs previously used or use a qualitative methodology based on ideograms such as the image (Harvey balls), providing a visual support.

Process 3: Analysis of the optimal selection of the Portfolio

The two previous phases provide the necessary parameters for the system to calculate the value of each project, based on 100 and depending on the value of each objective.

List of initiatives orders by value

If money wasn't a problem, then we would probably carry out all “reasonable" projects. But in a real organization, the resources available are finite and the previous list of initiatives is not enough to make a good selection of project portfolios.

Thus, it is not only enough to select the most valuable projects, but it is also necessary to filter those that fall within the constraints, be it economic, technical and human resources, or temporary.

In this article, we will use the available budget as an example of a main constraint because this is the most frequent case. Imagine that we should select a portfolio of projects that does not exceed $900.000. Taking the previous list into account, the "New Star Product" ($ 1.5 M) exceeds that amount and also provides a similar value to other more economical projects.

So, with the data we have, we choose the combination of projects that are closer to the available budget: a total of $885.400 and a value of 61% accumulated in three projects.

With this selection achieve the given criteria. But note that the efficient central border graph is indicating the selection is not optimal (value/cost) and that there are better combinations: similar value for less money or greater value for the same sum.

And, indeed, with a portfolio of a total of $528.840 we achieved a contribution of value very similar for 35% less in cost.

If you are interested in understanding how the calculation scheme is made,

Download the guide here.

Conclusion

It is possible to apply rigorous standards in the selection of a portfolio of projects, basing the selection on the value they bring to the business strategy.
Key points to consider:

A separation of work between the management team that defines and prioritizes objectives, and the teams that analyze the benefits by project.
A process sponsored by management requiring rigorous standards when making investment decisions and implementing transparency between teams.
An integrative platform that combines information and exposes the results.

If you want to know more about the management of organizations by projects, download the white paper, where you will learn to:
- Connect management of your Organization with that of projects
- Manage portfolio of projects to create competitive advantage
- Agile Portfolio Management

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Why make status reports?

Every project needs a status report , also known as progress report, in which the status of the project is clearly, accurately and objectively reported.

Start feeding your project status reports with live data on ITM Platform.

A project status report is intended to provide an evaluation of the progress and communicate execution details. Therefore, the development of the progress report is of great importance, since it is vital that it be carried out following a predetermined model. Only in this way will the users of the reports be able to compare them with each other:

Comparing status reports for different phases of the same project gives you a better idea of the distance covered, analyzing how far future projections from previous phases have been verified or denied
Comparing reports from different projects is crucial, especially among similar projects using Gantt charts, to understand where discrepancies between estimates and real data are

If you do not have a reporting model in your organization, you are missing out on the advantage of being able to compare reports. To make matters worse, homogeneous models allow users of such reports to find the information they need quickly, as they know how it’s structured. This is one of the aspects where by a Project Management Office can bring great benefits for internal communication in an organization.

A status report contains a brief description of the main elements of the report, establishing causes and explanations that justify and give context to the data. Metrics and graphics will allow the user to understand the progress of the project in a very short time.

The executive summary: Basis for monitoring a project

This section requires an objective description of how the project is running . The summary should present clearly and simply the most important results of the project, including:

Milestones fulfilled
Deliverables and quality
Risks or unforeseen events
Relationship between estimates and real, in at least three aspects: resource allocation, costs and deadlines
The difference between the estimated progress and the progress to date. If the date of delivery is considered unrealistic, this alarm signal is the first step to alert the customer and negotiate a new date with him.

On the other hand, the executive summary is very effective for a detailed follow-up of the unplanned challenges that arose during project development, as well as actions to be implemented in the short term , so that any eventuality can be mitigated.

The purpose is to ensure that the project continues on the path to success, delivering the project on time, with the expected quality.

Project progress reporting: steady progress assessment

The constant evaluation of a project is vital to know what countermeasures should be taken to make the project successful. Hence the preparation of this section outlines the most problematic areas of the project.

Likewise, suggestions and corrections can be advanced to solve a specific problem. As the project, often, cannot wait to receive feedback on these aspects, decisions are already taken, so this point can delineate already decided actions.

Registration Template: Project Control

The status report should generate relevant information about the risks recorded. It is advisable to start from a registry template by means of which you can retrieve useful information in an orderly way. This registry template will contain:

Project Risk Factors,
Probabilities
Project impact

You can visit ITM Platform’s free risk assessment matrix to compile this information quickly.

Know all about metrics: Promotes project tracking

Managing a project is only possible if you have the tools to quantify the different parameters involved, offering objective and comparable data. Thus, you can measure, for example:

Delivery times
Quality of the deliverables, based on the number of requirements included
Costs incurred to date
Percentage costs over total
Amount of unanticipated costs incurred
Hours worked, either per worker or by professional category

Result indicator

If the result is not a material product but a service, and the project covers the phases of implementation and marketing, there will be a large number of quantifiable aspects related to the result, such as the number of users, their average cost, and so on. These indicators will serve to measure the quality of delivery.

If you are interested in knowing which indicators you can use to manage your portfolio, you can continue reading these articles:

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A project involves devoting effort, capital and human resources to achieve the satisfactory results expected. Early detection of the project not being carried out as well as desired is essential, it is imperative to take steps to improve the measures and its development in order to avoid any unnecessary costs.

In order to improve the management efficiency and detecting problems earlier, or even before they occur, it is essential to have a specialized project management software. Thus, in a simple and economical manner, improving the efficiency of your work an reducing your costs.

There are signs that allow for early detection if a project is not developing properly. In this article we discuss some of them.

1.- Spending too much time solving problems

Obviously, one of the most fundamental tasks of the project manager is to resolve project issues as they arise.

However, the best project managers are not the ones that solves problems, but who best avoids problems.

Anticipation is an essential characteristic of a project Manager and is related to their ability to predict the risks that may occur during the execution of a project, the impact the risks can have on it, and their occurrence.

Stopping the progress of a project because there has been a problem which needs the project manager to provide a solution. This leads to a delay in the delivery of the project and requires additional effort. This can be avoided if the project has been redirected so that the problem is avoided or there is a quicker solution to the problem which has been planned prior to implementing the project, avoiding improvisation at the time of submission.

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2.- Customers constantly ask for results

A customer who fully trusts you asks not for project results, but trusts that you perform the management of the project in the most appropriate way.

However, since the customer is primarily interested in the project achieving the expected results, it is reasonable for him to ask to be adequately informed of the development and implementation of the project.

Therefore, planning should include checkpoints at which the customer is informed of the results achieved so far, so he can see for himself that project management is still appropriate.

You can also use cloud resources for sharing real-time updates on the progress of the project. This way, the customers can see for themselves at any time how the project is developing.

If you do not use these resources, you can resort to more traditional methods, such as making periodic meetings. In this case you must be careful with the frequency and duration of the meetings, seeking to improve the efficiency and utilization of both your teams work time and your customer’s time.

Transparency generates trust between the project manager and the customer that will be beneficial for both parties.

3.- Workers spend too many hours

If the project is properly planned, employees should only be actively working in the allocated work time that has been planned prior to the implantation of the project, neither more nor less.

If less time than expected is used to execute the tasks, this could mean that the quantity or complexity is insufficient, therefore you should review the relevant work of each of the team members or assign any member of that team to another project.

However, if the opposite happens, it means that workers are overworked. This has negative consequences in both the short and long term.

In the short term, this will mean that tasks cannot be developed at the satisfactory level required.

In the long run, the employees will most likely end up burned out from being overworked, which will decrease productivity and, above all, creativity.

If there is a specific need, you can and should ask the team members to make an extra effort, but this should not be the norm. If so, project planning has been inadequate and must be reviewed.

It should also influence the work methodologies. It is possible that the workload is correct but the way to do it is not optimal.

4.- Too many changes to the project

If customers constantly demand more changes and this prevents you from staying on course for the project, it means that there is a planning problem.

In these cases, the most convenient way to deal with this would be to meet with the customers and talk to them about what they believe the purpose and scope for the project is. Once everything is clarified, the project should go ahead.

Proceeding aimlessly with the project, is a waste of resources and effort and will in turn decrease confidence that employees have in you.

Rethinking the project with the customers will allow you to plan it properly and find the solution together that is most satisfactory.

See all the advantages to using ITM platform by viewing a free demo!

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As the famous poet Mattie Stepanek once said, “when there is collaboration, wonderful things can be achieved.” But what happens when those who are meant to collaborate are geographically separated, physically incapable of meeting with one another? The answer is virtual collaboration.

Rather than having projects run on generic face-to-face communication, businesses become reliant on technology-mediated communication. This approach integrates online tools into the workplace to help maintain interactions amongst group members. Now you may wonder where and when this would be used?

Why virtual collaboration?

Simply put, virtual collaboration is made for virtual teams. If you’re unfamiliar with the term “virtual teams” you can always refer back to the article on remote work because the two are very familiar. Regardless, virtual teams are known as groups of individuals who work together despite being geographically dispersed. In this case, they highly depend on communication technologies to link them with one another and keep their team strong.

In fact, many companies today prefer virtual collaboration rather than the traditional one. The reason for this is because with traditional collaboration you run into an unavoidable barrier. Confused? Well, picture this: you and your colleagues sit around a table brainstorming ideas for your latest project. You want to be productive but can only have one person speaking or writing on the white board at a time. Virtual teams don’t come across this problem because technology permits them to make group chats, audio calls, face-time, or even use shared documents and whiteboard all at once.

Even though virtual collaboration has been implemented across millions of businesses it is still a fairly new concept and way-of-work. Many are still unsure how to go about of incorporating virtual collaboration into their own businesses. The following tips can help you with using virtual collaboration for your next project:

1. Create team rules

It’s essential for all team members to understand expectations for virtual communication. Agree upon the standards for decision making, resolving conflicts and meeting business protocol via technological softwares. Furthermore virtual team members must have a very firm grasp on company objectives and priorities, their particular duties and responsibilities. Because this will be communicated virtually, it’s extremely important that it’s done efficiently to help reduce confusion.

2. Play online games

A fun and effective way to get team members familiar with virtual collaboration is through the use of virtual games. Workers can find online versions of “scavenger hunt” customized to their particular industry. Such games encourage players to pool their knowledge and develop connections with co-workers to solve problems. In many multi-player games, workers have to collaborate and continuously communicate with one another if they wish to survive.

3. Don’t be afraid of social media platforms

When individuals feel comfortable with one another they tend to work better together. Furthermore, people are more prone to being more willing to collaborate if they feel as though their co-workers are similar to them. This is where social media sites step in. The trick is to use these websites to find common ground amongst team-members. Put work aside and use social media tools to encourage and enable employees to communicate about non-work related topics.

Apart from taking these tips into account when planning the development of your own virtual team and the virtual collaboration that inevitably comes along with it, there is still one extremely important thing that must be done. You must find a strong, effective and virtual project management solution such as ITM Platform. ITM Platform is a cloud-based solution therefore it is perfect for virtual collaboration since it can be used across numerous technological devices, at any time and anywhere.

Learn more about how ITM Platform will help you with the creation of your own virtual team and all of your future projects by visiting http://www.itmplatform.com/en/

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Perhaps the most important part of project management is that of control. Once the decision has been taken to launch and implement a project, the project manager must assume the responsibility for ensuring that each person involved completes their assigned tasks in order to thereby guarantee that the project runs according to plan.

The concept of project control is very simple: a project is created with certain targets after studying the resources available and drawing up a schedule to reach those goals. Control is what ensures oversight of these plans, ensuring that no team member deviates from the course set. The completion of control-related tasks will ensure achievement of the targets as they were defined in the planning stage.

After planning a project, it is recommended to implement a control system. The main requirement to begin with will be for the project to be fully defined and approved by the steering committee or shareholders’ meeting and, as appropriate, by the sponsor of the actions to be carried out.

These lines of action will indicate the costs, the scope for the project and the schedule to be followed for meeting the targets:

Cost base: this specifies the costs to be incurred by the project, with a distribution over time that will be coherent with completion of the tasks over time. This is very useful when wishing to compare estimates with actual cost.
Schedule base: a timeline with the targets set for each stage of the project will be created.
Scope base: formed by the various activities that comprise the project and that will enable the deliverables to be produced. All this is reflected in the WBS that was approved. The scope base allows the progress of each activity and each deliverable to be known.

Once these baselines are defined, it is time to get to work on project control. Of course, it is very important to consider certain factors when doing so.

Scope: This will control the tasks that should be carried out by each member of the project and that the result meets the requirements initially stipulated. Whenever a task fails to meet these requirements, it is considered as incomplete.
Deadline: Within project control, it is essential to monitor compliance with agreed deadlines. It should be noted at this point that the first schedule is drawn up without considering a margin for risks. This is because if these margins were to be considered at that point, they would end up being used to cover other issues that are not strictly considered as risks.
Cost: Two factors require control in this regard: the total cost of the project and treasury control.
Risks: It is important to keep risks under control because, in the event of an unforeseen eventuality, this will have an immediate effect on the achievement of project targets.

Professional help for projects: Being able to undertake large-scale projects and fully control them is a process that can sometimes prove rather complicated. It is therefore necessary to have software such as ITM Platform that incorporates the flexible management methods used by major corporations into your company. It is a great tool that will facilitate project implementation and delivery within established deadlines, and that offers advanced solutions to business.