Developing project strategy for Ramanujam’s project

Ramanujam is about to start a new product development assignment in a product company. He is working on the product development strategy, and not very sure about whether he should follow the traditional project management approach or the agile approach. What about a mix of both traditional and agile?. Will it work?.

Projects fail at the beginning. One of the key success criteria is the right project strategy. This post gives suggestions for developing the right project strategy for your project, based on the nature of your project.

Let us revisit the definition of projects;

• Projects are temporary in nature. Every project has a definite start and end date. Once the project is done, the team is dissolved.
• Projects produce unique products or services as output
• Projects are progressively elaborated. Before we start a project we have very less information about the project. As the projects progresses, we gain more and more insight about the project.

Because of the uniqueness and the progressive elaboration, project strategies are also unique. There is not fit for all kind of project strategies. Here are some of the key factors to be considered before developing a project strategy;

• Requirements volatility
  • Are the requirements of the project very clear?
  • Are they stable?
• Technology
  • Is the team familiar with the technology?
  • Are we using cutting edge technologies for the project?
• Flexibility of the engineering domain. For civil, electrical, mechanical domains, the engineering discipline is not that flexible where as for product design, software development, research projects etc, the engineering work is flexible.
• Contract types used or intended to use for the project. For example, ‘Fixed price’ contracts does not promote scope changes where as ‘time and material’ supports.
• The interest and the decision making authority of the key stakeholders of the project.

Schewhart coined the PDCA cycle;

• Plan – Whatever we want to do must be planned first
• Do – Do the work as per the plan
• Check – Check the actual progress against the plan
• Act – If there is a variance, then take action

PDCA cycle is the backbone of  traditional (predictive) project management.

Deming coined the PDSA cycle;

• Plan – create a road map, not a detailed plan.
• Do – Do the work as per plan
• Study – While performing the work, we may succeed or fail. Continuously learn from the successes and failures.
• Act – Continuously incorporate the learning into the planning and execution of the remaining work

Fast PDSA cycle is the foundation of agile (adaptive) project management.

While developing the project strategy the following tips will help;

• If the requirements are not stable, and the technology is new, agile (PDSA) will be the right fit till the requirements stabilizes and the team becomes familiar with the technology.
• Do not adopt agile for the project where the engineering discipline do not allow for constant change (Civil, mechanical, electrical). The traditional project management revolving around PDCA is the right fit in this scenario.
• The ideal contract type for agile is cost plus benefit sharing. If the contract type with the customers are fixed price, then the risk element is high.
• If the interest of the key stakeholders are not high enough to commit their time to frequent demo and feedback cycles, agile frameworks will not fit in.

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Working out the business case of a project

Jennifer wants to build a product, and she wants to know;

• Whether the product idea is valid one or not?
• How much time and resources it is going to take?
• What could be the major risks, and how they can be managed proactively?
• Which are the tools and techniques that will help her in this endeavor of hers?
• Is it possible for someone to mentor her throughout her journey?

Validating Jennifer’s product idea

Financial validation 

1. First research must be about similar existing products already launched, and what are their strengths, weaknesses, opportunities, and threats (SWOT)
2. If the product idea still holds good, then perform the cash flow analysis (income from the product minus expenditure in building, marketing and maintaining the product. The best tool for this an electronic spreadsheet.
3. Work out the following;
   1. Net present value (NPV, sum of the present value of all future cash flow minus the initial investment). If this is a positive number then the project has a business case.
   2. Work out the NPV for other opportunities as well.
4. If Jennifer’s project idea has the highest NPV, then it is a very strong candidate for funding.
5. Jennifer can also use ratios like Benefit cost ratio (BCR) and Internal rate of return (IRR) to justify her product idea for further funding.
6. Jennifer must also consider the payback period. This will give her an idea about in which year she can take her initial investment out of the project.

Technical feasibility

While financial viability is a major factor, the technical feasibility of building the product also must be considered. It will be a good idea if she can perform the cost benefit analysis at the feature level which will help her to prioritize the features into;

• Low risk, high value
• High risk, high value
• Low risk, low value
• High risk, low value

Who will be able to help her on this journey?

• Cost accountants
• Technical team

Conclusion

Very often product ideas sound very impressive till we analyze the financial risks and the technical risks surrounding the product. It is worth to explore the competing products, financial ratios like NPV, BCR, Payback period, Opportunity cost, Payback period along with the technical risks before investing into any project. At a minimum, the returns from the project must be higher than the cost of capital if you are planning to avail a loan for the project. If you are spending from your earnings, then the returns from the product must be equal to the bank interest you would have fetched by investing that amount in a bank with a compounding rate of interest.

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PMP insights

Insights into PMP certification

I always remember the Australian, who attended one of my workshops at Abu Dhabi. He was elder to me, and had tremendous experience in project management. He was managing a project which had a funding close to a billion USD. He was in charge of fiber optic cabling of an entire country. Why should he learn from me, while he had all the knowledge and experience to teach me, that was my dilemma. This gentleman was trying for a job in USA or Canada and he could not get it without a PMP credential. That is how he landed up in my class. he took his PMP, and immediately got a job in Canada. PMP title has become the de-facto standard for getting into the league of professional project managers, globally. Especially when one does business with strangers, this is a minimum guarantee. PMP credential is like a hygiene factor. The presence of that credential  may not motivate you, where as it’s absence can really hamper your progress as a project manager. I see tremendous value in the project management best practices explained in the project management body of knowledge (PMBOK), which is the foundation of the PMP credential, and the PMP credential is an acknowledgement of your mastery over project management as per PMBOK. While the PMP title will get you the acknowledgement as a professional project manager, the real benefits will come from really practicing the concepts explained in the ten knowledge areas of PMBOK like; Project integration management Project time management Project scope management Project cost management Project quality management Project human resources management Project risk management Project communications management Project procurement management Project stakeholder management If one does not know the concepts like work break down structures, activity definition, activity sequencing, stakeholder management, critical path, earned value management, fast tracking, crashing, she can not even claim to be a project manager despite the titles on the visiting card. A PMP credential, achieved with proper preparation will give you that edge. Professional project management is easier than adhoc project management. There are multiple ways to coach someone for PMP credential. One way is through brain dumps and flash cards which will help the aspirant to mug up things without really understanding the underlying concepts and their application in real life. The method I found as easy and effective is to explain the concepts in the context of real  project management, so that the participants can never forget them during the rest of their career, and then prepare them for the exam through self study and practice tests. This approach has worked well for me in the past, and it will give tremendous value to the participant. To summarize, adopt these steps, while preparing for PMP; Identify an instructor who has the knowledge, experience and aptitude to explain the key concepts explained in PMBOK in the context of real life project management scenarios. Do not decide on a course just because it is cheap. Look for clear, crisp reference material, not bulky documents. The course material I have designed is only 128 pages :-). When we started it was 300+ pages, and years of teaching experience helped us to remove all the unwanted things from the material and bring it down to 128 pages, which is easy to understand and remember. This along with PMBOK is suffcient material. Understand the key project management concepts explained in PMBOK and their logical sequencing. It is humanly impossible to by heart the logical sequences, and at the same time it will come to you naturally, once the concepts are clear. After the course, read PMBOK thrice. There is no substitute document for PMBOK. First reading can be a quick one, just to understand the structure of the document. The second reading should be to really understand the concepts (take notes). The third reading should be make notes of the key formulae and definitions as an easy last minute reference before entering the exam hall (making your own flash cards). While reading PMBOK, do the exam practice on a good sample of questions, Exam practice is inevitable for success. Initially you will go wrong on many, and it can be quite frustrating. The right answers could be different from what you are doing in real life. Do not loose sight of one key factor. We are doing all these to master professional project management as per the PMBOK, hence the answers must be in conformance to that, not just as per our past experiences. When you go wrong, be happy of the fact that you are learning something new, and come back with a vengeance to defeat the test. A never say die attitude is very important throughout the whole process. Especially while taking the 4 hours final exam, struggling with the online test in a cold room, there can be many moments of self doubt. Do not succumb to it. When the questions get tougher, be happy about it, because that is an indication that you are doing well in the exam. The internal intelligence built into the test engine is programmed to throw some tough questions when the test taker has answered a stream of questions correctly 🙂 Wish you all the best. Keep coming back. I will be adding more insights here, as and when they happen to me. Please feel free to ask all your questions and suggestions as comments. PMP online mentoring

Unboxing PMBOK Version6 post#2

I hardly took half an hour to skim through the first seventy pages of PMBOK6, which constitutes the chapters 1,2,3. Like the older versions, the knowledge areas starts from chapter 4. Chapters 1,2,3 covers;

• The purpose and basis of the PMBOK guide.
• Characteristics of projects
• Purpose of projects
• Triggers leading to the creation of projects
• Relationship between business strategy, project portfolio, programs, projects and operations management
• Different components that constitute the PMBOK guide 6
• Project development cycle and project phases
• Phase gates / Stage gates
• Importance of project management data and information
• Tailoring guidelines
• The key project management business documents
• Understanding the contents and purpose of project business case
• Purpose and contents of the project benefits plan
• Enterprise environmental factors (EEF)
• Organizational process assets (OPA)
• Organizational systems
• Different organizational structures and their impact on project management
• Project management office
• The roles, responsibilities and competencies of the project manager

This much constitute chapters 1,2,3. In fact PMBOK 6 is much easier to read and understand. I must really appreciate the team who worked at bringing in more clarity and readability. For a person who is familiar with PMBOK older versions ( 3,4,5), chapters 1,2,3 must be a cakewalk. Out of the 756 pages, we are already at Page No 70. Will update you with more information, as it unfolds to me.

The project management body of knowledge (PMBOK) is the registered trademark of PMI, USA. 

Unboxing PMBOK Vesrion 6 post#1

Improved clarity, that is the first impression. Then there are 49 processes grouped into 10 knowledge areas and the 5 process groups.

10 knowledge areas

• Project integration management
• Project scope management
• Project schedule management
• Project cost management
• Project quality management
• Project resource management (In the earlier version, this was human resource management. In the sixth edition, they have combined all resources (man, material)
• Project communications management
• Project risk management
• Project procurement management
• Project stakeholder management

5 process groups 

• Initiating
• Planning
• Executing
• Monitoring and controlling
• Closing

I purchased it from Amazon.in , and they delivered it in 10 days time (hard copy). One can get the kindle version as well.