Best practices--the nine elements to success
James N. Salapatas, PE, PMP, Keller Graduate School of Management
How do we evaluate our current project performance within the myriad of benchmarked practices and maturity models? Experience with clients over the years in a wide variety of industries and projects have indicated that an effective project management process should contain nine basic elements, or best practices.
This article defines the Nine Elements to Success for Project Management and explains why each is a “best practice” necessary for successful project implementation. Experience has shown that most organizations involved in project business employ these elements to some extent, or at least give them lip service. How they are used, formally or informally, or if they exist at all, have been found to be clear indicators of an organization’s ability to manage projects successfully. While all Nine Elements are important for projects to be successful, several of the elements are more complex. These will be presented in more detail. The article discusses the three applications of the Nine Elements and gives examples of how they were used to perform an organizational assessment and a project audit.
The Nine Elements Defined
(1) Defined Life Cycle and Milestones: Organizations need to map and define phases, deliverables, key milestones and sufficiency criteria for each group involved in the project. There are four phases to a project life cycle—Concept, Planning, Implementation and Closeout. Project management is used in all types of industry and business. Adopting four basic phases provides a common understanding about projects that cross industry lines.
Every firm organizes its projects into phases in special ways. These communicate to stakeholders how project work is done in that particular firm. The technical processes used in the project may dictate what phases are named, how many there are, and how they relate to other phases. For example, some are called; Pre-contract, Contract, Construction and Turnover, others will use the following phases: Start-up, Analysis, Design, Develop, Implement, Post-implementation Audit. The greatest benefit for establishing and naming phases in a project life cycle results from having a consistent process or methodology for doing project work and that everyone knows what it is.
(2) Stable Requirements and Scope: Effective project management requires that project requirements, objectives and scope be documented and become stabilized at some point early in the project life cycle. Project requirements should be established in the concept phase. Answering the questions below assures that all stakeholders share a common understanding of the requirements and scope:
What is to be done?
What product/service, system or result will be produced?
What are the goals and benefits?
When result is achieved what will be the measure of its success?
What are the deliverables?
What physical manifestation will there be of the product, system or result?
What are the standards of performance?
How is the validity, utility, correctness, completeness of deliverables to be determined?
What are the constraints impacting performance, time, cost?
What are the limits on cost, time or performance on the product itself? What are the limits on the project in terms of priorities, resources and interfaces?
What are the risks to be aware of?
Are there risks associated with the project or the product? What is the impact of magnitude, complexity and technology of the product and the project?
(3) Defined Organization, Systems, and Roles: In any organization projects must have defined roles for the project manager, functional managers and project team members. Accountabilities must be identified for all. Leadership and interpersonal skills are essential. A system of communications and team involvement is essential to success.
Organizational forms for project management may be viewed as a continuum, from the functional form on one end to the pure project form on the other and the matrix somewhere in between. A functional organization is oriented toward functional groups, with work activities organized into similar specialties, the organization is said to have the functional form. The staff is grouped by specialty. Functional organizations still have projects; however, the scope of the project is limited to the function. A project organization is organized around projects, with project managers having formal authority over the people who perform the work, the organization is said to have the project form. The staff is grouped by project and project managers, which have a great deal of independence and authority.
A matrix organization is a combination of the project and functional organizations. The matrix form of organization is often found in companies that have a number of projects underway at any given time, none of them sufficiently large to warrant the creation of a separate project organization. The matrix organization is by its very nature a compromise, attempting to balance the needs of the project manager and the functional manager. The relationship between the project manager and the functional personnel may be a “strong” one, with the project manager assuming a supervisory role over the functional personnel for the duration of the project. It may also be a “weak” one where the functional personnel receive their work direction through the functional supervisor. In the “weak” situation, the project manager plays the role of a coordinator working through the functional manager rather than working directly with the functional personnel.
The role of the functional manager is to provide functional policy, procedural guidance, adequately skilled personnel, and maintain technical excellence. The functional manager is responsible for the project HOW and WHO. That is, how the technical work will be done, selecting the technology required standards, codes, and discipline practices. The functional manager is responsible for who will be assigned to perform the project work representing the functional department, division, or group.
The role of the project manager is to plan, organize, staff, evaluate, direct, control, and lead the project from concept to completion. The project manager is responsible for the project WHAT and WHEN. That is, what project work will be done to meet the project scope, cost, and quality objectives and when the work will be done to meet the project schedule objectives. However, with regard to project cost objectives, the functional manager is responsible for estimating the cost of the project work and the project manager is responsible for determining whether or not the project budget can afford it. In the event of a conflict between the project manager and the functional manager, both should be able to resolve their conflict and arrive at an equitable solution that will benefit their company and is a credit to their profession and their industry.
The project manager performs many leadership functions in directing project activities. These include planning, organizing, monitoring and controlling project activities. When selecting a project manager, there are a number of factors that must be considered in developing criteria. These factors include interpersonal, technical and political skills. Perhaps the project manager might be an expert in the primary technology at play in the project, but often this is not the case. Although a generalist, the project manager needs to have enough expertise and credibility to lead a team of technical experts.
Project managers need good information to successfully manage their projects. In a company of any size, the amount of information that will need to be collected will dictate the use and interaction with computerized corporate information reporting system. These systems may or may not have been designed with the needs of the project manager in mind. If weaknesses exist in these systems, they may need to be corrected. For this reason, it is important for a project manager to understand the requirements of a project information reporting system.
(4) Quality Assurance: Many projects management processes are inadequate in the quality dimension. Quality on projects requires the identification of standards and criteria to be set in each phase of the project life cycle for both the product and the process. Quality means making and meeting agreed to commitments with a constant eye for improvement.
(5) Planned Commitments: Plans must be based upon the process capability of the organization and not upon wishful thinking. It is common to see wishful project schedules built upon a “house of cards” where sufficient resources are not available. Plans must be more than schedules in that they address all nine elements of the project management process. Planned Commitments includes:
•Planning the project
•Scheduling the project
•Resource allocation and staffing
It’s never too early to start planning. Planning needs to go on even when there isn’t enough information to do the formalized plan. Planning aims to reduce the unknowns and uncertainty and to increase the likelihood of the project succeeding. If there is not enough information to produce a plan, then the planning should focus on how to learn enough to plan the next stage. The following are the components of a project plan:
I. Scope and mission define project boundaries establish goals and objectives. This includes the business case and provides a basis for decision-making.
II. Scheduling requires the evaluation of activity sequences and duration plus resource requirements to create the project schedule.
III. Budgeting is the development of an overall cost estimate based on individual work items. This can then be used as a cost baseline for measuring project performance.
IV. Personnel needs are specified based on project activities. Determines recruitment, selection, and training of project team members.
V. Evaluation and control is required during all phases of the project. A system must be in place to provide a complete picture of the project’s progress.
VI. Risk and problems must be systematically identified, assessed and managed. Proper risk management implies control of possible future events, and is proactive rather than reactive.
VII. Quality means that established performance requirements will be satisfied.
Scheduling is an essential element of the planning process. Project requirements and the WBS are used to create network diagrams and Gantt charts. Critical Path Method (CPM), and Program Evaluation and Review Technique (PERT), are used determine realistic schedules and project management reports. Fast tracking and crashing are used to compress schedules.
Project cost, schedule and performance are highly dependent on available resources. The project owners have a responsibility to provide the necessary resources to support the project and to maintain ongoing surveillance over the use of those resources. Project planning estimates the resources to tasks. However, there must be flexibility in assigning resources so that they can be used in the most effective manner.
Budgeting extends the concept of resource allocation to include estimates of equipment, overhead and contingency. The project budget is the total financial plan for the project. Accurate budgeting is critical because it provides management with an understanding of the return on investment (ROI) from a project. In addition, a project budget establishes the foundation for effective project control.
(6) Tracking and Variance Analysis: Projects should be managed using an exception process in which deviations from plans are reported and resolved. Any other way is inefficient. An effective project management process requires regular reports and regular meetings of the project team to identify when things are off target. Schedule slips, cost overruns, open issues, new risks and identified problems must be dealt with as early as possible.
Earned value is a highly regarded technique for measuring project performance. Earned value is important because it integrates cost and schedule performance simultaneously. It is the budgeted cost for work performed and represents accomplishment. This technique can be applied to work elements in the WBS or any units of project work. The following measurements are used:
•ACWP—Actual Cost of Work Performed as of a given date. This is determined by the data provided by the company accounting systems.
•BCWS—Budgeted Cost of Work Scheduled. This is the budgeted amount for the tasks that have been scheduled as of a given date.
•BCWP—Budgeted Cost of Work Performed = Earned Value. This is what was budgeted for the work that has been completed as of a given date.
•EAC—Estimated Cost at Completion, or current estimate. This figure represents how much the project is expected to cost when it is completed. This number is calculated at a point in time during the course of project execution.
The WBS can be a foundation for rigorous tracking and control of a project. However, the most important requirement for effective tracking and control is the establishment of a baseline. Once a baseline has been established for a project it is possible to measure the completion status of project tasks against it. The comparison may produce a variance that is simply the difference between planned and actual values at a point in time. The issue becomes what variances should be calculated to ensure that the performance of the project can be understood for the project manager to make corrective action decisions.
(7) Corrective Action Decisions: When variances from plan are detected, the default assumption is that the team or functional groups will work to put the project back on track. Without a clear procedure corrective action can have many outcomes, not all consistent with corporate objectives. Some tradeoffs must often be made, increase cost to save time, decrease scope to save time, etc. As a last resort, the project performance baseline can be reset, perhaps causing the sponsor to challenge the original business case. A fundamental job of the project manager is to manage these tradeoffs.
(8) Escalation and Issue Management: Often in project environments, good news rises and bad news stays down at the working levels of the organization until it is too late. An effective escalation procedure requires issues and problems to be worked first by the lowest appropriate level. If the issue cannot be resolved and closed, then it must be elevated to the next highest organizational level, and so on until the issue is closed. A formal process needs to be in place, similar to dispute clause in a contract or a grievance procedure in a labor contact, to escalate issues before they become fatal to the project cost or schedule.
(9) Work Authorization and Change Control: Late changes in projects are a major source of disruption that lead to schedule slippage, cost overruns, insertion of defects and rework. A formal system of change control and change management must be in place. Changes caused by scope creep must be resisted and change control is needed to prevent these problems.
A critical challenge to project managers is to ensure that control is established over both the ways work is authorized and the way changes are approved. When it comes to configuration change control, the project manager is at the center of communications. Depending on the professional discipline or industry, change communications have different names such as: PCN (Production Change Notice), EWO (Engineering Work Order), ER (Error Report), LTR (Lost Time Report), SR (Service or System Request), TSR (Technical Service Request) and so on.
It doesn’t really matter what they are called or how they are processed. What is important is that the project manager is in the loop to make timely decisions. A Project Change Request is necessary to properly evaluate a change in project requirements or commitments. Since changes will occur, it is important that a change notice log be established. This will enable the project manager to properly evaluate proposed changes based on the latest information.
Applying the Nine Elements
The Nine Elements have three primary applications. They are:
•Project Management Training
•Project Management Organizational Maturity Assessment
•Project Performance Audits.
Project Management Training
The first application of the Nine Element of Project management is training. The mission of Keller Graduate School of Management is to provide high-quality education, practitioner-oriented graduate management degree programs with emphasis in teaching and service to working adults. To that end, the faculty members at Keller are practicing professionals who face challenges of a complex competitive and rapidly changing business environment every day. They bring expertise to the classroom, emphasizing theory and practices most beneficial to the students. Keller Graduate School of Management offers a graduate degree in Project Management and certificates in project management.
But, students and their companies wanted even more. The demand for more rapid, on-site, effective corporate training focused on the best practices of project management gave birth to the NINE ELEMENTS. The result was the development of several training courses from two to five days using the Nine Elements as the foundation. More recently the Nine Elements have also been linked to the project management process in the PMBOK® Guide. As an added feature, depending upon a needs analysis, a company can have a customized version of the Nine Elements to fit their particular business or industry.
BEST PRACTICES—THE NINE ELEMENTS TO SUCCESS training courses offer the following objectives:
Participants will be expected to learn how to make and meet realistic schedules and control costs using the basic techniques of project management. By the end of the training classes the participants, in the near term, will be able to perform project work more effectively and efficiently, specifically they will be able to:
1. Determine customer requirements
2. Identify scope and develop a work plan
3. Break the work down into deliverables and activities
4. Determine the sequence of activities and identify risks
5. Use basic scheduling tools and set realistic schedules
6. Establish milestones and deliverables
7. Determine resources required and assign owners
8. Control assignments and report progress
9. Obtain customer acceptance and complete project documents
Project Management Organizational Assessment
The second application of the Nine Elements of Project Management is project management organizational assessment. The feature for a company to have a customized version of the Nine Elements to fit their particular business or industry was the catalyst that led to the development of the Project Management Organizational Assessment Model. Clients were eager to discover how they compared to the best practices. The comparison produced where and how much project management training was needed. The Evaluation of Project Management Practices (Nine Elements) Questionnaire was used in several ways. Management, project teams and project managers were surveyed independently. Results were tallied and training recommendations were made. Sometimes mixed group sessions were held and the results were facilitated ‘live’ with lots of discussion and conflict resolution. Regardless of the maturity level, a consistent pattern that emerged in all cases was the differing opinions of the project teams and management. Typically management perceived the Nine Elements at higher level of achievement than did the project teams.
Below are actual survey results of two project organizations. Their names have been changed to preserve confidentiality. The ABC Company is a government agency with a high profile project office and matrix project organization. As you can see from their survey results, ABC Company appears to use the best practices of project management effectively. Most of their projects are competitively bid using federal and state acquisition regulations, which adhere to strict rules and procedures for managing project work. ABC Company project management training focused on specific procedural training, tools and techniques for project team members.
The XYZ Company is a heavy equipment manufacturing organization competing in a global market. The company has an excellent reputation for manufacturing reliable, high quality equipment. However, schedules were forever being extended and costs were eroding profit margins. Senior management initiated a strategy to improve “time to market” while holding down costs and maintaining product quality. The key to this strategy was a project management initiative, but how, where, and how much?
The XYZ Company Evaluation of Best Practices showed where emphasis should be placed. High priority training sessions focused on life cycle methodology, scope stabilization, and planned commitments. Training was conducted top-down starting with executives and division managers learning the basics of project management. The difference between the manager training sessions and the project team member sessions was workshop time and practice. Project team members spent many more hours in the classroom and had hands-on practice using the project management tools and techniques on simulated projects. Project communications improved almost immediately with everyone using the same project language. Management could ask, “how’s it going?” and get answers that they understood.
Both companies benefited from the Nine Elements assessment. ABC Company learned that they were already using the best practices of project management and only modest improvement was warranted. XYZ Company discovered major gaps in their project management process and were able to determine improvement potential and training priorities. Other companies have achieved similar benefits. However, an important caveat exists. The benefit to be derived from conducting the Nine Elements assessment depends heavily on honest answers to the questions. In most cases the assessment of the Nine Elements has proven to be an effective measure of Project Management Organizational Maturity.
Project Performance Audits
The third application of the Nine Element of Project Management is project performance audits. The Evaluation of Project Management Practices (Nine Elements) Questionnaire, used to survey management, project managers and team members, results in a macro perspective of organizational project practices. The Nine Elements transformed into a checklist, with minor modification, results in a micro perspective of individual project practices. Thus, it is possible to conduct a project performance audit on an individual project at any time during its life cycle. Management, peer managers, or third party auditors can conduct project performance audits. Using The Nine Elements Check List.
As stated before, the WBS is the foundation for rigorous tracking and control of a project and earned value results in quantitative measures of project progress. On the other hand, The Nine Elements Check List measures the project process. Still, the most important requirement for effective process measurement is the establishment of a baseline. In this situation the baseline is made up of the process steps as defined by the Nine Elements. Below is an example of a completed project performance audit.
The Nine Elements to Success for Project Management represent the “best practices” necessary for successful project implementation. Experience has shown that most organizations involved in project business employ these elements to some extent. How they are used, or if they exist at all, are indicators of an organization’s ability to manage projects successfully. The Nine Elements form the basis for three interrelated applications, namely; training, organizational assessment, and project audits. The article discussed examples of how they were used to perform organizational assessments and a project audit. The Evaluation of Project Management Practices Questionnaire was used to determine project management maturity of an organization. The Project Management “Nine Elements” Checklist was used to assess the health of an example project. In summary, it can be concluded that the Nine Elements of project management are effective in project management training and have earned an important place among the myriad of benchmarked practices and maturity models.
Proceedings of the Project Management Institute Annual Seminars & Symposium
September 7–16, 2000 • Houston, Texas, USA