Introduction
Sunoco’s Information Technology (IT) organization is on the road to success by development and implementation of a consistent project management process, along with supporting procedures and documentation for use across all Business Units. This paper will discuss the driving forces which led to the establishment of a Project Management Office and a focus on project management excellence. The project process will be described, along with the supporting procedures, documentation, and training of project personnel, implementation challenges and initial benefits achieved by Sunoco. The paper will finish up with a description of Sunoco’s plans to ensure the journey to project management excellence continues along the road to success.
Background
Driving forces for Project Management Excellence
The original recognition of the need to improve the IT project process emanated from a strategic systems planning initiative. Computer Sciences Corporation (CSC) was hired in 2002 to help formulate a strategic plan and assess the IT organization. CSC recommended that Sunoco establish a project management organization, and standardize on a project methodology to achieve improved results in new systems and projects requested by the Business Units.
Further verification on the need for project management discipline came from a 2003 survey of Sunoco’s top 100 executives. One survey result was the need to clearly establish the business case before starting work on a project. A second survey result was the need to assure the benefits and business case are not diminished during the project life due to scope changes or cost/schedule variances. The third survey result was the need to make sure the project benefits are realized after project completion.
Chronology of events
Based on the inputs above, Sunoco IT management formed a team of the senior Project Managers to look at existing best practice project management processes and procedures used by the Business Units. One goal in developing the IT Project Process was to ensure consistency with existing project processes in successful use within Sunoco. For example, the Refinery Business Unit had a well-established project process for capital construction projects. Their process used a front-end loading approach with gate reviews, which is a successfully used process for capital construction projects in the oil and chemical industry. As the IT Project Process was developed, frequent checks were made to ensure alignment existed with the capital construction process.
As work started on the IT Project Process, it quickly became clear the composition of the original team had to be altered to minimize the schedule. In December, 2003 a core team was established consisting of a consultant, the Chief Technology Officer (CTO) and the head of the Project Management Office (PMO). The consultant provided an external perspective, had experience in project process and procedures development and helped ensure consistency with A Guide to the Project Management Body of Knowledge (PMBOK® Guide). The Sunoco senior Project Managers were used as a review team to provide input on the products developed by the core team. The core team first developed flowcharts for the project process. Project procedures covering areas such as project team roles and responsibilities, requirements definition, risk management, project reviews and change management were then developed. Finally, over 30 standard documentation templates were developed for items such as project charter, project plan, issues log and project review checklists. SharePoint was used as the repository for the project management documentation, and is also the repository for project files.
By June, 2004 a four-day training course on the Sunoco IT project methodology was prepared, reviewed and accepted by the review team and IT management. The work done extends beyond just project management and includes both portfolio management and Systems Development Life Cycle (SDLC).
Sunoco Project Process
The Sunoco IT Project Process consists of phases and specific defined steps and decision points a project team follows to complete the projects product, such as a new software application, computer replacements, or new software functionality. The Sunoco Project Process was defined to be consistent with the PMI Project Management Body of Knowledge, and is shown in Exhibit 1.
Exhibit 1 – Sunoco Project Phases
The principle activities for each phase are:
- Genesis: This phase includes the steps for identifying and documenting a potential project, and the activities required to gain support for a formal project within the organization.
- Initiation: The principal activity during this phase is the project assessment leading to a solution approach, a Preliminary Project Plan and project reviews to decide whether to proceed with the project.
- Planning: During this phase detailed requirements, the solution architecture and Project Plan are finalized and specifications are started. Reviews are held to decide whether to proceed to the Execution phase.
- Execution: This is the phase where project deliverables are completed based on the Project Plan. This includes activities such as design, technical environment, testing, and document preparation.
- Controlling: This includes all activities to control the work of the project including risk monitoring & control, project plan progressing, deliverables acceptance, change management, testing, quality assurance & control and project communications. Controlling also includes status and management reporting, where a traffic light indicator (red, yellow, green) was used to indicate project health. Due to limitations on the paper length, information on the controlling activities used on Sunoco projects will not be covered.
- Close-out: This phase consists of formal acceptance of the project and bringing the project to an orderly end. This includes closing contracts and the appropriation, close-out report, staff transition and filing project information.
- Value Achievement: This is the work done to ensure the project benefits are obtained.
The Genesis, Initiation and Planning Phases are also known collectively as the Project Initiation & Planning Process (PIPP) Framework, and Exhibit 2 on the next page shows the process steps for these phases.
Genesis Phase
During the Genesis Phase strategic analysis is done, business requirements and benefits defined and a decision is made on whether to include the project in the IT portfolio budget and proceed to project initiation. The goal of the Genesis Phase is improved portfolio management by removing subjectivity and providing consistent information on each potential project for business value, feasibility, and alignment with the strategic goals of the organization.
Each potential project is expected to define some basic information about the project including a business case. Potential projects are documented using a standard template called the Project Profile-Financial Worksheet, which consists of two separate worksheets in an Excel workbook. The Project Profile provides standardized information to improve project portfolio comparison and prioritization, and includes information on high-level project definition, strategic value and benefits, project risks (business and technical) and infrastructure impact. The Financial Worksheet is used to list the estimate of project expenditures (project and operating costs), and quantifiable benefits for the current year plus next five years. The worksheet then calculates the project financial indicators. The completed workbook is submitted to the Chief Information Officer (CIO) for inclusion in an overall IT plan.
The methodology used for the Genesis Phase provides a consistent and uniform procedure for evaluating potential IT projects and the ability to more effectively prioritize IT technology investments. Non-viable projects are screened out, and multiple evaluations or multiple teams working on overlapping initiatives are avoided.
Initiation Phase
Exhibit 2 below shows the Project Initiation & Planning Process (PIPP). The principal activity during the Initiation Phase is the project assessment leading to a solution approach and Preliminary Project Plan. Typical Initiation Phase activities include better definition of project scope, establish a firm basis of feasibility, and improve schedule, cost and benefit estimates to a ±30% accuracy level. The main deliverable of the Initiation Phase is the Preliminary Project Plan document, which is the vehicle to communicate and ensure a common understanding of objectives and deliverables with project stakeholders.
Exhibit 2: Sunoco IT Project Initiation and Planning Phases (PIPP)
At the start of the Initiation Phase, a Project Oversight Committee (POC) is formed. The role of the POC is to oversee the project and ensure it will be done within budget, on schedule and meet the functional and quality requirements. In some cases, the Project Manager may have been involved during the Genesis Phase of the project. If not, a Project Manager is now assigned to the project. At this time, the Project Manager works with functional management and the POC to determine the makeup of the core project team.
Another early activity in the Initiation Phase is completion of the Project Controls Index. Completing this checklist provides a project rating of high, medium or low which defines the appropriate amount of project management controls that should be applied to the project to help ensure success. The Project Manager then completes the Project Phases Checklist, which is used to determine the appropriate project procedures, documentation and activities to be used with each project phase based on the Project Controls Index rating. The Project Manager can modify the list to meet specific project needs, but is required to provide an explanation for any deviations.
A key activity during the Initiation Phase is the development of functional and technical requirements. The Project Manager is responsible for engaging the appropriate groups to provide detailed input on requirements. Sufficient user involvement is critical since incomplete requirements can lead to scope creep and project failure. Documenting and understanding customer requirements leads to the optimal solution architecture, which is the technology framework to meet the customer need. The solution architecture must consider requirements concerning infrastructure, technology and interfacing systems. The Requirements Discovery Document is a checklist used to help document general considerations, desktop, server, network, database and security needs.
After completion of the project assessment and preparation of the Preliminary Project Plan, the project is reviewed and approved by IT management. This review and approval process contains three elements of review, known as the “TIP-off”. These are a review of:
- Technology – for Solution Architecture
- Infrastructure
- Project Management Office (PMO) - for project process and procedures
A Preliminary TIP-off Review is held at the end of the Initiation Phase, and a Final TIP-off Review is held at the end of the Planning Phase. The purpose of the Preliminary TIP-off Review is to evaluate the proposed technology and infrastructure solution, along with any technology options that will be considered during the Project Planning Phase. The review meeting is used to ensure the project follows the IT and project process standards established by the Sunoco IT organization. For non-standard technologies, a plan to deal with ongoing support is needed, and the impact to project costs, operating costs and the business case must be considered. In addition, agreement for any standards variance is needed from infrastructure services and the Chief Technology Officer (CTO).
After successful completion of the Preliminary TIP-off review, a project review is held with the POC to determine if the project should proceed to the Planning Phase. The Project Oversight Committee (POC) will review the project for business case and functionality.
Planning Phase
During the Planning Phase, the Project Plan document is finalized. In addition, other project management and technical documents are prepared to help manage project execution. All projects begin the Planning Phase with a formal project kick-off meeting attended by Project Team members. If possible, the Business Sponsor and/or members of the POC attends at least the first part of the project kick-off meeting to discuss the project goals, objectives and business value.
One of the first steps in the Planning Phase is to verify with the client that the project requirements are accurate and complete. A good technique for accomplishing this is holding a final requirements review meeting with the appropriate project stakeholders, with a formal sign-off process for the project requirements.
Many IT projects involve changes to one or more business processes. For example, the project may include a new software package to enter and track customer orders, which will eliminate existing manual steps. Since people can resist change, the Project Manager needs to work with the Business Sponsor to develop a plan to ensure successful implementation of the business process change. This plan should address issues such as communications, training and ongoing support. Also during the Planning Phase, the Project Manager works with the Business Sponsor plan on the value achievement plan, which is the plan to bring the project benefits to fruition. The business case is reviewed for the list of project benefits, along with the success criteria listed in the Preliminary Project Plan. Value achievement is treated as a separate project, with a preliminary plan prepared during the Planning Phase, and a detailed plan prepared during the Close-out Phase.
During the Planning Phase the solution architecture is finalized and sufficient specifications detailed to support a ±15% estimate. The decision on software package selection and hosted or internal platform are made during this step. The solution architecture and specifications provide definition on “how” the solution will accomplish the requirements, and provide the required information to fully design, build and implement the solution.
After completion of the solution architecture and preparation of the Project Plan document, the Sunoco Project Process requires a final review and approval by IT management before the project is reviewed by the POC. The purpose of the Final TIP-Off Review is to evaluate the proposed technology and infrastructure approach to ensure the project follows the IT and project process standards established by the Sunoco IT organization.
Execution Phase
During PIPP, the Project Manager’s role is focused on planning activities. With the commencement of the Execution Phase, the Project Manager’s role shifts with the planning role diminishing and the leading and controlling roles taking on more importance. Good communications is vital to ensure all stakeholders remain in alignment with project objectives and deliverables. Exhibit 3 below shows the steps that make up the Execution Phase.
Exhibit 3: Execution Phase Process Flowchart
A paper could be done on just the many activities done during the Execution Phase. This paper will highlight some important and unique points regarding the Sunoco Execution Phase process steps, which are generally done in a sequential order with some overlap. The progressive elaboration concept applies, which means that it is common to cycle back through some process steps as more information is developed for the project. The key is even though the steps are shown sequentially, the specific project needs will drive the Execution Phase process steps. For example, on a large, complex software development program, several iterations of design, build, and test may be done to support a phased implementation approach for the software features.
During the Execution Phase, reviews by the Project Oversight Committee provide the opportunity to evaluate the project progress to ensure that the project plan and benefits will be achieved. Due to the length of the Execution Phase, project reviews are held on a regular basis. The Project Manager decides with the POC the frequency of reviews during the Execution Phase. At a minimum, the two project reviews held during the Execution Phase are at completion of design and before data migration and implementation. In addition, POC review is required for resolution and approval of significant project issues involving scope, cost, or schedule changes.
It is important to note that project planning is not completely done at the end of the Planning Phase. Detailed specifications are still under development, and a plan at a fine level of detail is needed to manage the many activities done during the Execution Phase. During the detailed estimating and scheduling step, the project deliverables are subdivided using a Work Breakdown Structure (WBS) into smaller components called Work Packages. Each Work Package must result in a tangible product, require no more than 80 hours of work effort, and have an elapsed time of no more than two weeks. Each Work Package is assigned to an individual resource, estimated, and scheduled. Using the 80-hour rule makes progressing project work very simple. Progress on a work packages remains at 0% even while the work is being done. Progress only changes to 100% when completed and accepted by the Project Manager.
A key step prior to implementation is the security & internal controls review, which looks at the required security elements for the project. This check ensures that the project meets Sunoco standards and procedures. A Security & Internal Controls Checklist is used to ensure all relevant points are considered by the Project Team, such as access control, data control, process control, application owner, code control, privacy of data and internal controls.
Close-out Phase
The purpose of the Close-out Phase is to ensure the project is brought to a complete and successful finish on a timely basis. Proper planning and coordination between the development and ongoing support team prior to project completion is essential for a successful and “seamless transition” from project to production. The Project Manager ensures the final product is successfully turned over to appropriate production and support groups, which may include applications support, operations, database administrator (DBA) or end user support. Retirement planning and decommissioning of legacy systems and/or systems components is also accomplished prior to project closure. Project Close-out also ensures that resources are released as planned and that all deliverables are complete and accepted by the client. The Project Manager is responsible for making sure final updates for all key project documents are done. Any unresolved project activities or issues are listed in the final project documentation.
Typically the Project Team will support the IT product for a short period after implementation. However, during project close-out, a smooth hand-off must occur from the project team to production. This transition includes the transfer of documentation such as source code, system configuration, back-up and recovery procedures. The Systems Support Checklist is completed prior to implementation to ensure roles and responsibilities are addressed for future support of the system including software and hardware, data, security administration and documentation.
Value Achievement
Value achievement is a separate project managed by the Business Unit, with a detailed plan prepared during the Close-out Phase. The Value Achievement project runs in parallel with the associated IT project as shown below.
Exhibit 4: Relationship of IT Project & Value Achievement Project Process Phases
The Value Achievement Execution Phase can start during the Project Close-out Phase and extends typically for up to one year. Value achievement can also include an audit to verify the project benefits are achieved. An audit, if held, is done approximately 6-12 months after project completion.
Project Documentation
An overall process guide was prepared as an introduction to the Sunoco IT Project Process. Detailed process guides were also prepared for each project phase, describing the work and deliverables for each process step. Procedure documents were also prepared to describe specific practices and methods to be followed on projects. An example is Sunoco’s risk management procedure, which describes the specific process steps to follow (identification, analysis, planning), along with the documents used to create a risk management plan. Another example is Sunoco’s Change Management procedure, which describes the specific process steps to follow for handling change requests, along with the documents to use for change management. Additionally over 30 project management and technical templates were prepared, along with over 100 project examples using the templates. All documentation is reviewed on a regular basis to ensure recommended changes from project teams are incorporated.
Training and Roll-out
The training and roll-out included multiple sessions of a four-day class, which covers the Sunoco IT Project Process and project management skills such as scheduling and risk management. All Sunoco Project Managers and other key IT practitioners are encouraged to attend this four-day class, which is still offered twice a year. Half-day overview sessions have been held with business management teams, so they understand the process and their role in the process. All training courses were developed by the consultant working with the PMO and CTO.
As with any new business process, acceptance of the IT Project Process was a challenge. Initially the perception of more ‘bureaucracy’ and extra work did exist. Meetings by the CIO and CTO at the senior organizational level helped to achieve buy-in by the Business Units. Coaching by the PMO is being used to get IT and business teams to fully utilize the process on their projects. The requirements of the Sarbanes-Oxley act (SOX) has helped convey the importance in using the IT Project Process. The goal is to provide the necessary training and PMO support to institutionalize the new project process.
Path Forward
Sunoco will continue to improve the project management methodology to meet the changing needs of the business. One initiative is to increase the numbers of templates and samples in the SharePoint knowledge repository. For example, a Requirements Discovery Document template was recently developed to better communicate technical requirements from the applications group to the infrastructure group. This fall a Small Project Process with supporting templates will be introduced and will cover projects that are more than an enhancement but under $100,000 (the threshold for using the IT Project Process). Adding this ensures that all IT work is covered either by the formal change management process or by a standardized project process.
Another initiative is conducting more project post audits. A plan has been developed with internal financial auditors to conduct project reviews as part of the annual planning process. Continued skill development is another important aspect of our path forward. The next activity is training on the use of Microsoft Project software, and specifically in how MS Project will be used based on the project process, scheduling practices and templates. Business skill is another improvement area where procedures and training will be launched late in 2006 to help the client with business case development and in defining business and functional requirements.
Conclusion
When Sunoco formulated their IT Strategy in 2002, four IT management processes were identified as critical in order to successfully use IT to support and drive business growth. These were security, technical and process change control, front-end planning process for IT projects and project management. The work done to establish an IT project process, procedures and documents successfully addressed the last two items. In the eyes of the Sunoco business community, the ability of the IT organization to effectively implement projects is one of the most important measures they use to judge IT performance. The use of a standard project management methodology, supported by training, has resulted in projects that are more consistently to specification, on time and within budget.