project perimeter

Project perimeter

Defining the project perimeter, also called the scope of a project, is a challenge that project managers always meet when they first work on a new project.

Project scope is the part of project planning that involves determining and documenting a list of specific project objectives, end results, features, duties, tasks, deadlines, and costs.

Simply put, it is what needs to be done and the work that needs to be accomplished to realize a project.

It is important to define this perimeter in the early stages of a project’s lifecycle as this can have a significant impact on the planning and/or costs of the project along its way.

A well-defined project scope is mandatory to ensure the success of any project and we have already discussed this in this article about Scope management.

Without it, no matter how efficiently, how effectively and how hard a project manager works with their team, generally speaking, they will not be able to get the job done successfully.

The significance of defining the perimeter of a project

Here are the benefits that the definition of the perimeter of a project offers to any organization:

  • Defines what the project involves so that all stakeholders can understand what is (or is not) involved in the work;
  • Provides information that project managers can use to assign tasks, plan jobs and budgets accordingly (a perimeter in fact), within which project managers can plan;
  • Helps team members to focus on common goals;
  • Prevents projects, particularly complex ones, from growing beyond the established vision – beyond the perimeter.

The perimeter of a project provides a solid foundation for project management and helps to ensure that resources are not redirected or wasted on elements beyond its scope.

This will allow the project manager to allocate activities more efficiently and provide guidance to team members so that the project can be delivered on time and on budget.

How do we set the perimeter of a project?

The following steps can help the project manager to effectively define the perimeter of a project:

1. Identify project needs

When you are definitely able to identify the needs of a project, you are more likely to establish a solid point of reference from the beginning.

Understanding the “what and why” of a project will allow the project manager to set specific, achievable goals.

The identification of project needs also allows establishing the basics for which activities should be followed and how they should be performed.

2. Confirm project objectives

The establishment of a project perimeter should imply that the objectives are those that follow a SMART guideline; i.e. specific, measurable, achievable, relevant and completed within a given period of time.

Let’s see them in detail.

  • Specific is what it means to state precisely what the project wants to achieve. That is, what, why and how it will be accomplished. Openness will reduce the potential for ambiguities and misunderstandings.
  • Measurable: Are the objectives objectively measurable?
  • Achievable: Is it possible to achieve the project objectives, given the resources available?
  • Relevant: the objective must have a – positive – impact on the organization’s business.
  • Temporary: Can the objectives of the project be achieved on schedule?

the project perimeter

3. Definition project perimeter

As project leader, one must be clear about the features and operation required for the product or service that will be the project output.

That is, what certain qualities will be required to successfully achieve the final goal of a project.

4. Expectations and acceptance

Successful projects are those that meet the end user’s expectations.

End users can be either customers or the project team or some other entity within the organization.

For customers, this means the price, value and quality of the products/services as well as the availability, delivery and return policies.

For employees or internal figures within the company, this includes, for example, the effectiveness and efficiency of new operational processes.

Finally, the scope of the project is the one that should be in accordance with the best results to anyone who can be the end user.

5. To identify constraints

There are always obstacles – more or less significant – on the way to achieving a certain goal, and this applies to projects as well.

When one is aware of possible limitations along the way, this can help to minimize problems that could delay or limit the capability to achieve the project result.

These constraints can be caused by environmental conditions, technological problems and/or lack of resources.

Communicating such problems to team members in a timely manner and adopting measures to overcome these obstacles will reduce delays in project completion and keep expenses within budget.

 6. To identify required changes

It is always best to avoid redesigning the project perimeter, as this implies investing more time, money and resources.

However, sometimes these changes are unavoidable and necessary, so the key is to limit them as much as possible.

Tips for project perimeter management

Here are some tips for the project perimeter management, which can help to avoid some of the most frequent problems that can occur during the project lifecycle.

  • Ambiguity: Ambiguity in the scope often leads to unnecessary work and confusion. To avoid this, the perimeter must be well defined and specified.
  • Incomplete definition: A not fully defined perimeter leads to incorrect scheduling leading to cost overruns. To avoid this, the project perimeter must be complete and accurate.
  • Transience: A transient perimeter is the main cause of late deliveries and “endless” projects. To avoid this, the purpose document must be finalized and remain unchanged for the duration of the project.
  • Non-cooperative environment: An inadequately prepared project perimeter causes misinterpretations. To avoid this, the document should be shared with all stakeholders at every stage of the perimeter definition process.

 

The management of the project perimeter is not difficult to implement; however, it requires effort, time and patience.

When it comes to project planning, the definition of the perimeter of the project is one of the most critical steps.

If a project is launched without knowing precisely where the boundaries are, there is little chance of success.

The main purpose of establishing the perimeter of a project is to clearly describe which area will be under the control of the project.

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project framework

Project management framework

What is a project Framework? Let’s try to learn it together.

A strong reason why project management is increasing in virtually all sectors is because the world economy has become project-focused.

Basically, everything that is not considered a routine operation is a project.

Therefore, by adopting project management frameworks and strategies – such as the establishment of clear results and the definition of a work programme – operations can be managed more effectively.

Project management in organizations is no longer an extra, but rather a priority and, in some cases, an essential part.

While the role of the project manager has changed radically over the past decade, largely due to rising technologies, the bases remain the same.

The six stages of the Project Framework

An example of one of the main tools that every project manager uses is the project management framework.

This framework integrates a number of tools and processes to ensure that a project runs smoothly from start to finish.

Depending on the company, this framework may have different names for different phases, but the six phases that comprise all the basic elements are:

Project framework 1. Initiation phase

This phase concerns the launch of a project.

Here stakeholders, the scope and objectives are defined and the requirements of the project are set out. It is during this phase that the feasibility of the project is measured.

The main end result of this phase is the start of the project.

Project framework 2. Planning phase

This is the moment when all decisions are finalized and the project roadmap is developed.

The team develops a project plan and a corresponding timeline and determines which materials and resources will be needed to successfully conclude the project.

It also identifies potential threats that could delay the end of the project or prevent activities from being completed on budget.

The final result in this phase is the development of a project plan.

Project framework 3. Execution phase

The project progresses here from design to development.

This is often the lengthiest phase of the framework and involves developing the results according to the project plan.

Here, the team will often use status reports and hold regular meetings with sponsors and key stakeholders to assess progress.

The main end result at this stage is to obtain approval of the planned product or service.

Project framework 4. Control phase

This is the tuning phase in which project stakeholders will take corrective action in response to deviations from budget, timing and scope.

The project manager could re-evaluate resource levels, monitor project objectives, and arrange meetings with stakeholders to approve changes.

The main outcome at this stage is the reporting of progress.

Project framework 5. Evaluation phase

It is at this phase of the Framework that the performance of the project as a whole is reviewed.

The project manager will use key performance indicators to determine whether the project is well on track or not.

The factors that will be monitored include, but are not limited to:

  • if the project is within budget;
  • if the project follows the established schedule;
  • any change in the scope of the project.

The main end result at this phase is the measurement of project performance and progression.

Project framework 6. Resolution phase

A successful project ends – successfully – when it achieves all the expected results.

The lessons learned will then be collected and documented in a special paper.

This paper provides an opportunity to learn from the mistakes of the past (lesson learned) and implement successful processes for future projects.

project management framework

Thus, these are the six basic phases of a project management framework.

Clearly, traditional project management processes are constantly evolving with the adoption of new practices.

Finding the right balance between the adoption of new modern tools and established classical methodologies is and will be a great challenge for project managers.

Project management framework in depth

The PMBOK Guide describes a project management framework as a basic structure for understanding project management.

Different frameworks are available and project managers will choose the one that works best for the project within their organization.

In some cases, organizations leverage multiple frameworks depending on the departmental unit or project type.

Let’s see what some of the most popular project frameworks are.

Critical Chain Project Management (CCPM)

The CCPM is designed to address the uncertainties inherent in project management.

This method focuses on resource allocation, including personnel, skills, management and capabilities during the project.

The aim is to maintain the workload level for all resources.

Lean

The key concept of Lean project management is to deliver high value with minimal waste.

The Lean method aims to achieve this through standardization, maximum compatibility, safety, repeatability, interoperability and quality.

Lean often employs the Six Sigma methodology, which is geared towards improving quality by eliminating defects, standardizing and formalizing processes.

Extreme Project Management / Megaproject (XPM)

Extreme Project Management (XPM) is a framework designed to meet the needs of very complex and often highly flexible projects.

XPM is more about stakeholder management than about the timing of activities.

In a traditional project, the result is much less complex, the change is expensive and therefore minimized, the technology is assumed to remain largely unchanged and the project is driven by the project plan.

This is not particularly suitable in high technology environments where change is a constant because the technology is constantly evolving.

XPM is therefore characterized by very short development (sprint) periods of two weeks or less.

Scrum

The Scrum method is also based on short sprints, although Scrum sprints are longer than XPM sprints and generally last two to four weeks.

Waterfall

The Waterfall methodology is generally recognized as a traditional approach to project management.

Waterfall is based on the idea that everything happens in sequence, with one phase of a project ending before the start of another.

Why are there so many project management frameworks?

Every framework has its own strengths and weaknesses, but, above all, every project has its own needs and requires specific resources.

Some elements that can determine which framework to use are the type of activity, the unique nature of the projects and the different departments involved.

A project manager must therefore be aware of what the project management frameworks are and must be able to identify which one is best suited to each occasion.

Only by choosing the right framework can a project be carried out successfully, respecting the corporate culture and the ultimate goal of the organization.

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negotiation skills in a project

The importance of negotiations in projects

Negotiating skills for a project manager are crucial and improving them will set the foundation for a successful project.

Project managers hold different roles at the same time: leaders, intermediaries, delegators and even negotiators.

This is why negotiation skills for project managers are on the list of soft skills they should develop.

What is the negotiation in a project

Negotiation is a process consisting of the activities necessary to resolve different types of disputes through consultations between the parties involved in order to reach a consensus.

Negotiations can take place at any time in the project lifecycle and may be formal or non-formal.

Formal negotiation implies an agreement through contracts and formal documents, while informal negotiations include debates to resolve a conflict between team members, for instance.

In project management, the negotiation process is divided into phases and include:

  • Planning: the preparation of all relevant information necessary for the discussion.
  • Debate: here the key issues are examined and discussed.
  • Proposal: the creation of the proposal as a way of solving the problem presented.
  • Revision: this can include negotiating compromises before an agreement is formalized and before the information is shared throughout the organization.

Why negotiation is important for project managers

Here are some situations where negotiating skills play a key role in the success of a project. Cases in which the project manager:

Ultimately, negotiating skills enable project managers to achieve stronger relationships with stakeholders, better relationships with clients and, in general, a more positive working environment.

Negotiating can also be a useful strategy for dealing with conflicts on a project.

While it is almost impossible to avoid conflict entirely, being able to negotiate the way around it is a useful skill.

In the most serious situations, conflict can also halt a project.
negotiation in a project

Improving project manager’s negotiating skills

Here are 5 tips that can help improve project manager’s negotiating skills.

1. Improving negotiating skills: Practice

The very first thing to do, as happens in all things, is to practice a lot.

Probably everyone negotiates more than they think – both in their professional life and in their private life.

It is therefore important to be aware of these negotiating situations, to analyse how you approach and deal with the moment, how you feel and what could be improved for the next time.

2. Improving negotiating skills: Preparation

It is important to spend some effort on preparation for negotiation.

If a project manager knows they are meeting a supplier, for example, they should think in advance about what they want to achieve from this agreement and explore potential alternatives.

This way you will engage in the discussion more confidently and know in advance what you want to achieve.

However, it is important to remember to remain receptive to other people’ points of view as well.

It is not a negotiation if you refuse to change your standpoint and force the other person to accept your ideas.

3. Improving negotiating skills: Manage your emotions

Conflict situations and negotiations often expose the worst in people.

It is therefore important for the project manager to be prepared for how they will react in a potentially difficult and perhaps embarrassing conversation.

4. Improving negotiating skills: Take your time

Negotiations can take a long time and be running on a continuous basis; it is unlikely that in a single meeting, everything will be discussed and resolved.

For large projects, multiple meetings could be held to ensure that everything is documented effectively and to the satisfaction of both parties.

And even when the agreement is concluded, the project manager may find himself negotiating more precise details or new terms to move the project in the right direction.

5. Improving negotiating skills: Listen

When preparing for a negotiation, you need to try your best to think about what you want to say, how to say it, how to reply to what you think the other person will say.

Simply put, a project manager must also be ready to listen.

Listening will help you identify the other party’s weaknesses and help you really understand what others want.

When you listen actively, you are more likely to formulate answers that the other person finds acceptable.

The importance of negotiating: conclusions

Ultimately, negotiation is an excellent project management tool and is critical to getting the best out of any situation.

Negotiation goes beyond reducing or increasing the price of an offer and is a necessary tool in the daily activities of the project manager.

Like all soft skills, knowing how to hold engaging conversations that translate into good results for both parties is something that can always be improved over time.

With the right knowledge, structures and techniques, any project manager will be able to approach negotiations knowing how best to target the project and the organization in general.

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project information flows

Project information flows

Project information flows are crucial to the Project Manager.

Also due to new design methods, pioneering products, technologies and processes, the amount of information within an organization has increased significantly.

However, the increase in the amount of information available for projects is not being exploited effectively and therefore does not add any value to the project.

This is particularly true for complex projects.

The main reason for this is the ineffective management of the information flow.

 What happens to the information?

To better understand how to manage the flow of information, we must try to familiarize with it. The flow of information requires four components:

  • a starting point (source),
  • an endpoint (receiver),
  • a path (interaction)
  • a leading force (mutual relevance).

There are two types of actors that can act as a source or recipient of information:

1) people

2) documents, i.e. tools such as graphs, reports and other documents that allow communication between groups of people.

The role of a person in the information flow is determined by their contractual role within the project.

This role defines:

  • the type of information expected from a person,
  • the type of information the person can provide,
  • how this information is shared and how it is received by it.

Documents affect the flow of information through their structure, their depth of news and the process of information acquisition and use.

This set, i.e. the characteristics of the people and documentation involved in a project, create the potential flow of information, but this does not mean that the available information will actually be embedded in the project.

information flows

Interaction between people and documents as a key element for the Information Flow

It is the interaction between these actors that ultimately determines the fate, and thus the actual flow, of information.

Depending on the type of interaction, information may be accepted, rejected or ignored.

In order for information to add value to a project, three critical steps must be executed:

  • The information must be shared by an individual in the project team.
  • The information shared must be accepted by other project team members. Information that gets ignored or rejected becomes useless and basically disappears from the project unless it is shared again under other circumstances. The information accepted by others is retained in the project team’s collective memory. However, accepting information does not automatically mean that this information is used and creates value in a project.
  • It is only when the information is used in a decision that they are finally able to add value to the project

The “Big Four” of interactions and communication

Several factors moderate and affect the outcome of interactions.

Basically, it is possible to reduce these factors to four main ones: trust, commitment, learning and common understanding.

These key factors then determine what information is shared, how it is shared, how it is received and lay the foundation for future interactions.

Trust implies having positive expectations about another person’s future actions when an individual is vulnerable to such actions.

Commitment is the strength of an individual’s identification in a particular organization or project.

Together, these two factors influence a person’s values in relation to the project, such as:

  • how one sees others in the project team,
  • how one sees their role,
  • how much commitment one is willing to put in,
  • one’s sense of association and interest in the project.

Learning occurs when the processing of new information changes – potentially – the behavioral range of an individual.

The common understanding comes from an informal agreement on what is relevant for the other team members and the project in general.

Together, learning and common understanding form the mental model of an individual. Mental patterns determine how one:

  • Evaluates new information,
  • Links new information to their existing knowledge,
  • Ranks and sorts information for the project.

Project information flows: Values, mental models and decision-making process

People are rationally limited, which means that they can understand only a limited amount of information.

Therefore, one relies on one’s own values and mental models to limit the amount of information one needs.

Based on their frame of reference, people are only aware of a subset of the total information available.

From this information, people filter the information even further according to what they think is important.

The remaining information is what they use to interpret the situation and make decisions.

Due to different settings, individuals may be exposed to the same situation and information, but they may come up with very different conclusions and ideas on the subject in question.

As far as the project team interactions are concerned, the main purpose is to share information and make decisions.

Consequently, the effectiveness of the interaction becomes one of the most crucial factors in determining the outcome of a project.

In a project team moreover, the way in which others share information and the way in which a person’s contributions are received affects trust building.

This includes issues concerning how individuals feel:

  • How are their contributions weighed up by others?
  • Are they treated fairly?
  • Is there mutual responsibility in the team?
  • Have their expectations been met?
  • Do project team members show commitment to team goals above their personal goals?

These considerations affect the quantity, type and quality of information shared in subsequent interactions, interpersonal dynamics among team members and people’s willingness to share and accept information.

Therefore, as mentioned above, the effectiveness of the interaction becomes one of the most crucial factors in determining the outcome of a project.

Project information flows: complex cases

In more complex cases, the increasing importance of information management and integration requires a project team entity responsible for social integration and communication flow.

The main role of the integrator is to create an environment that facilitates trust and positive learning cycles. This includes:

  • Emphasize the value of individual contributions in relation to the objectives of the project,
  • Manage expectations while maintaining responsibility, discipline and fairness by setting clear and consistent objectives
  • Understanding of existing mental models and positive interaction between them.

This is how a proper management of information flows becomes crucial for the success of a project.

If the information is not managed correctly, some important details could fall into “oblivion” generating a series of problems that could have been easily prevented.

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the project estimation methods

Analog and parametric estimation: differences in calculation for time and cost of a project

Analog and parametric estimation is what we will discuss today, partly to continue the discussion started in the last article about how to estimate the resources of a project.

Project estimation is a key aspect of project management and analogical and parametric estimation techniques are the most commonly used methods.

CONTENTS

These kind of estimates are universally applicable to any kind of project of any kind of organization.

They are used to perform any type of estimate, whether it concerns time/duration, effort, resources, or costs.

There are certainly many other estimation techniques that can be used in a project, however, in this article we will focus on analog and parametric estimation.

Analog Estimation

Analog estimation is a technique used to estimate the duration or cost of an activity or project using historical data from a similar activity or project.

Analog estimates are made based on the time or cost employed by similar previous projects.

Therefore, these estimates are based on team experience or project history.

The only disadvantage of this method is that the estimate may not always be accurate.

By applying this method, historical data from similar previous work can be used to estimate the current work, however, be careful when applying this method.

This should only be used when reliable data from similar works is available. Otherwise, this method may be counterproductive.

Here is an example:

Let’s suppose you want to estimate the timing required to paint a house. Let’s also assume that you have access to data – quality data – of the actual duration of another similar project in the past. This data could come from the same house or one with a similar structure and size, painted in the same location and during the same season – there may be a difference between painting in summer or winter.

Using this technique and applying this data, one can therefore safely say that the current painting work will take 10 days if a similar work was done in 10 days in the past.

Parametric Estimation

project estimation methods

 

The parametric estimation is executed on a unitary basis and employs the ratio between variables to arrive at the cost or duration of an activity or project.

Compared to the analog estimation, the parametric one is more accurate, but the measurement must be scalable to confirm accuracy.

You can use this method only after you have identified one or more parameters and devised an algorithm or formula to perform the specific calculations.

These calculations will then be performed on the historical data obtained and, unlike the previous technique, it is not necessary for the historical data to derive from a similar work or project.

The algorithm, or formula, should be good and effective enough to produce predictable results. Otherwise, this method cannot be used.

Here is an example:

Let’s suppose you want to estimate the duration to paint a house and you know the size of its walls. Let’s also assume that you have access to detailed data on the actual duration of another project, where another building – this time with different sizes – was painted some time ago in another location.

In this case you can use two parameters to get to the parametric estimation: These are:

  • first parameter = size of the overall surface area to be painted
  • second parameter = average duration for painting one square meter of surface area

Our formula for the estimation will therefore be:

Estimated duration = (size of the overall surface area to be painted) * (average duration for painting one square meter of surface area)

Thanks to this formula it is therefore possible to estimate the duration required to paint the house of the project.

Let us now use specific data to illustrate the example more clearly:

  • It is necessary to paint 1000 square meters of walls of a house.
  • On average, it takes 6 minutes to paint one square meter of the area.
  • So you will need 1000 * 6 minutes = 100 hours to paint the whole house.

Difference between analog and parametric estimation

Many professionals misunderstand the difference between analog and parametric estimation because they believe that parametric estimation does not need historical data. This, as seen above, is not true.

Historical data are in fact used in both estimation techniques of the project, only in the analogical one data similar to the project in question are required, while in the parametric one more general data are required.

Here are the main differences between these two techniques in the following table.

ANALOG ESTIMATION PARAMETRIC ESTIMATION
Method Uses historical data from a previous similar project Uses a formula based on historical data from a previous project
When is it used? Usually in the early stages of the project when only high quality data can be used Usually when comprehensive data is available
Usefulness Only when quality data from a similar project is available Only when it is possible to devise a formula, an algorithm or a statistical model
Accuracy Usually less accurate. Depends on the expertise and experience of the individual making the estimate Usually more accurate. It depends on the accuracy of the available data and the refinement of the model used for the calculation
Effort Usually less expensive in terms of effort and time Usually more expensive in terms of effort and time

Generally speaking, the estimation of a project’s activities is not always easy.

How come? Usually because the only time you know exactly how long it takes to complete a project is when it comes to completion.

Up to the delivery point, the project teams led by the project manager, they employ “guesswork” to predict the future.

And the bigger and more complex a project is, the more confused the future will be.

Wrong estimates mean missing deadlines and over-budget spending, two of the main causes of a project’s failure.

Being an experienced estimator is therefore a key skill for a project manager and using proper project management software can be a great advantage in this case.

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the project work

Project work: a method that pays off

Working on projects and more in detail project management is not an impractical science, even if some people see it that way.

In fact, project work is a set of tools and practices, a kind of roadmap, which allows managers to lead a project from point A to point B and to do it efficiently and cost-effectively.

Everyone, in any sector, can benefit from project work, with clearly defined roles and a life cycle and structured processes.

Following a project management method can help to avoid negative situations resulting from failure to properly manage events.

A method provides the project management framework to manage the tasks that need to be performed.

Of course, this does not mean that there will be no problems and that all projects will run smoothly, but this will minimize risks and prepare everyone to deal with them.

Since projects depend on people and often one is working on something new, there will always be a certain level of uncertainty in situations. However, being clear about roles, responsibilities, behaviours, skills, processes and models can ensure that the programme is accurate, that adequate resources are available, that everyone understands what is expected of them, what will be delivered and how much it will cost.

Why project work is a method that pays off

The advantages of a correct project work are different:

  • The project manager is responsible for managing a project while leading his team and establishing a strategy that will result in the execution of the specific project.
  • The client benefits from the fact that they are allowed to give feedback, relying on the knowledge that their input really means something.
  • The project team benefits from this because without it the project would not have started in the first place and certainly not finished. In addition, the project team is able to take part in something, work on it, and see a process carried out from start to finish.

In this way you have the perfect triangle for projects: manager, client and employee working together for the common goal.

In fact, it is this application of knowledge, skills, tools and techniques that will ultimately meet the needs and/or expectations of a stakeholder on a given project.

These are the basic rules of working for projects. So let’s see what some of its advantages are.

1. Improved efficiency in service delivery

Project work provides a sort of roadmap that can be easily followed and leads to the completion of a project. Once you know the risks and the general aspect of the path to be taken, it is clear that you will be able to work smarter and more effectively.

2. Improved customer satisfaction

Every time a project is carried out on time and on budget, the client is satisfied. And a happy client is the one who will continue to come back in the future. Smart project management provides the tools that allow this client > manager > organization relationship to continue.

3. Increased effectiveness in service delivery

The same strategies that have made it possible to successfully complete a project will continue to be applied to similar projects in the future.

4. Improved growth and development within the project team

Positive results not only boost respect, but most of the time inspire the team to keep looking for ways to do the job more efficiently.

5. Increased stability and competitive advantage

This isn’t just a good advantage of project management in the workplace, but also beyond it. Word of mouth travels fast and there is nothing like superior performance to ensure a privileged place for an organization in the marketplace.
project work

6. Opportunities to expand services

Great performance brings more opportunities for success.

7. Improved flexibility

Perhaps one of the greatest advantages of project work is the flexibility it allows. Surely project management allows you to map the strategy you want to follow to see a completed project, yet the great thing about such an organization is that if you find a smarter direction to take, you can change it and embrace it.

8. Increased risk assessment

When all players are aligned and the strategy is in place, potential risks will arise. Project management provides a red flag at the right time.

9. Quality increase

This goes hand in hand with greater effectiveness.

10. Quantity increase

An increase in quantity is often the result of improved efficiency.

Project work: achieving the objectives

The implementation of fundamental project work strategies therefore allows to narrow the focus, achieve the desired objectives and, above all, achieve them within specific time and cost limits.

The end result is that everyone comes out a winner, which could be the best advantage of project work ever and the confirmation that it is a method that pays off.

Finally, the main advantage of project work is that it helps to manage projects effectively, allowing problems to be resolved more quickly.

It takes time and money to manage a project, but following good practice can help you to:

  • Improve the chances of achieving the desired result
  • Get a new perspective on the project and how it fits the company’s strategy
  • Prioritize resources of the activity and ensure their proper use
  • Set the scope, planning and budget accurately from the outset
  • Keep on schedule and keep costs and resources within budget
  • Improve productivity and quality of work
  • Promote consistent communications between staff, suppliers and customers
  • Meet the diverse needs of the project stakeholders
  • Mitigate the risk of project failure
  • Increase customer satisfaction
  • Gain a competitive advantage and increase profits

Not working on projects, therefore, can lead to loss of time, money and in the end, poor performance.

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Project management: fundamentals and tools

Project Management is a series of activities that allow, in coordination with each other, to successfully implement certain projects.

Many organizations struggle, however, to understand how to control the success and profitability of their projects and the reason is very simple. They lose touch with what are the true foundations on which Project Management is built: people, processes and technology.

Companies that want to implement new strategic objectives need to know that people, processes and technology are the drivers of change that must be identified as catalysts for success.

Only when these three pillars are aligned is it possible for the entire organization to operate as one.

So let’s take a closer look at the fundamental attributes of a project management par excellence.

The first fundamental of Project Management: the people

Talent management is important for effective project management, and project management is important for effective talent management.

They are the people who work and deliver the projects.

Resources must be teamed up in a performing group in order to deliver the project effectively. It begins with the project manager’s leadership skills.

This includes “cross skills” such as communication, business insight and change management – With an increased focus on understanding the requirements and constraints of customers and stakeholders, customer relationship management capabilities are essential.

Although this confrontation between talent and project management has been going on for years, the emphasis on “people” is now a more widely appreciated perspective, as employees and their varied skills offer organizations the chance to gain a competitive advantage.

Project managers may cover different roles from one project to another, yet the need to understand and collaborate with other staff is still present.

The mentality for success is simple: people come first.

The goal is to find, hire and retain project managers who combine technical skills with solid leadership and possess strategic and business management skills.

Moreover, with the importance given to a person’s individuality and the way it relates to their performance with an organization, talent management must also take into account other characteristics such as personality, communication style and even attitude.

The process may be complex, yet the goal is simple: execute project objectives efficiently, using the right people.

However, considering people just as specialised “tools” for the task at hand is not as easy as it might seem.

A person is not just a “tool” you are working with, but an individual who needs consistent communication and guidance to get the job done right.

Nowadays, the best project managers have a multi-level understanding of the business challenge, a multidisciplinary approach to the project and effective communication with project stakeholders.

Furthermore, the key to the success of any project is to ensure that all stakeholders remain enthusiastic and inspired when faced with often tedious tasks and unexpected developments, particularly in long-term projects.
fundamentals of pm

The second fundamental of Project Management: the process

The second mainstay, both for talent and project management, is based on having solid processes.

Although each organization will probably modify them to best fit its business structure, the value of having one (or many) remains similar.

The process, whatever industry it covers, can be divided into three general phases:

  • preparation,
  • identification,
  • communication.

The preparation phase begins with an understanding of an organization’s needs and how best to fill that gap, both currently and in the future.

In the identification process, we begin to look for key factors or attributes that have been previously discussed.

The communication phase, as the name suggests, requires strategic action to initiate interaction.

This phase not only brings awareness of the opportunities available, but also represents the time, energy and skills needed to successfully conclude the process.

Business processes should be based on best practice tailored to the specific situation of the company and its customers.

Bodies such as the Project Management Institute (SME) for example, help in establishing these practices while providing learning and development opportunities for project managers.

Among the advantages of implementing clear processes and methodologies in an organization can include:

  • Avoid the use of a set of tools to reduce unnecessary costs and thus reduce the risk of error.
  • With reduced waste of time a project can be completed faster and more effectively.
  • Greater satisfaction among the main stakeholders of the project is noted.
  • Better effectiveness and motivation from the project team that perceives working in an environment of organizational certainty.
  • A better reputation for the organization that develops successful projects through the work of a committed team.
  • Greater opportunity to take advantage of potential opportunities thanks to a better reputation and greater capabilities of project teams in responding to customer and market demands.
  • Greater organizational flexibility thanks to the greater forecasting capacity provided by monitoring and control processes.
  • Better possibilities to predict and manage potential risks with targeted response strategies.
  • Improved output quality thanks to the reduced possibility of error, which allows energies to be focused on innovation and process improvement.
  • All in all, more and better productivity through greater efficiency.

The third fundamental of Project Management: the tecnology

With an increasing number of IT tools to choose from, deciding what is best for the team can be challenging.

However, the introduction of new technologies can also play a key role in the way talent and project management teams communicate, often influencing them to be proactive in adopting new innovative solutions.

For everyone, and especially project managers, the learning process is constant and has become an expectation of anyone working on complex projects.

Technology has also influenced the development of new project management and planning tools, with dozens of models available, ranging from complex software to simple cloud-based interfaces.

 

Speaking of this topic, did you know that you can try TWproject for free for 15 days? You can do it by clicking here.

Having a unified tool that can integrate with software within an organization is an easy way to increase efficiency for both project managers and the team in general.

 

So here are the three main fundamentals and tools in project management.

Before starting any work, therefore, an organization must ensure that it has no gaps in these areas.

Once the “foundation” is in place, you can move on to project management in more detail to ensure successful projects and motivated teams.

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the risk matrix

The matrix system for risk evaluation

What is the matrix system for risk evaluation and why should we talk about it? Well, it’s pretty simple. In today’s era of changing market trends, risks are unavoidable.

Whether it’s a start-up or a multinational company, in the end everyone faces risks that require the utmost dedication.

Every time you start a new business, one of the most important questions to ask yourself is “what could go wrong?“.

Some issues are in fact destined, in most cases, to go wrong during the life cycle of a project.

It is not easy to assess risks, even less to manage them, and if you are not ready to assess and control these risks, the very survival of the project could be at stake.

Companies spend a lot of time and financial resources analyzing different types of risks and devising valuable measures to reduce their impact.

There are some essential steps that need to be taken for proper risk management.

The risk management process – or risk management – begins with a risk assessment and then moves on to risk analysis and actions to be taken to minimise it.

The project risk analysis is not a simple process and there are various methods for effective risk management and one of those methods used for risk evaluation is the matrix system. So let’s examine it further in this article.

What’s the risk matrix?

The risk matrix is also known as the probability matrix or impact matrix.

It is an effective tool that helps in the risk assessment considering the probability versus the severity related to the potential risks of a project.

A risk matrix is a visual representation of the risks associated with a particular project to help organizations prepare a containment plan and the resulting decision making process.

In a nutshell, it is a tool that helps to reduce the impact of risk that might otherwise result in negative costs for the company.

The matrix consists of a grid, showing the probabilities on the Y-axis and the resulting impact on the X-axis.

These two elements are considered to depict accurately the nature of the risk.

Different levels of risk in the risk matrix

risk matrix

A risk matrix looks just like the one shown in the picture (rifare figura per copyright) and features different levels of risk:

  1. Critical or high priority risks: these risks hold a high call to action. They are an absolute priority and must be addressed immediately.
  2. Main risks: these risks are also high, although generally classified lower than the “extreme” risk cell seen previously.
  3. Moderate risks: These risks are also referred to as medium level risks. They do not rank high priority and are associated with the development of an alternative strategy to overcome possible blockages during the life cycle of a project.
  4. Minor risks: Last but not least, these risks represent a low ranking in the risk evaluation matrix, but this does not mean that they aren’t important. However, these risks tend to be considered only after the major risks have been mitigated.

The grid of a risk matrix is used to assign a certain priority to the risk.

The resulting figure therefore helps to understand the nature of the risk and what needs to be done to minimize it.

In addition to these divisions, as can be seen in the figure, there are three main zones within the matrix.

After having analyzed the risk, it can belong to one of these three zones:

  • A low-risk area considered acceptable – coloured yellow;
  • A moderate risk zone that may or may not be acceptable, coloured green;
  • A high risk area considered critical or unacceptable, coloured red.

These areas makes the result of a risk matrix more open, giving a clear division as to the priorities and future steps to be taken.

The advantages of a risk matrix

Let’s examine some of the advantages of a risk matrix and how it can be effectively used for risk management. A risk matrix helps to:

  • Prioritize risks according to their level of severity;
  • In risk planning, it helps to neutralize possible consequences;
  • Allows the analysis of potential risks with minimum effort;
  • It improves the security measures of the organization;
  • Gives the team an overview of the potential risks of a project.

Without a risk matrix, chaos can result within the organization and some unexpected circumstances can be faced.

By contrast, using the risk matrix for risk management will not only reduce the probability of the risk itself, but will also reduce the magnitude of its impact on operations.

It provides timely data that quantifies threats and facilitates the organization to take consistent measures to reduce the potential chaos that could occur in the event of ambiguities or wrong decisions.

The numerical values in the risk matrix provide an effective way to represent the organization’s exposure to risks and how much effort is required to minimize them.

For a project manager, it is also possible to create a risk assessment matrix and integrate it into project management software (link to home) or create one directly within innovative project management software.

Having a clear view of risks in any organization is in fact a tool that can change the perception of any project.

However, it is important to understand that a risk matrix is a tool and not a complete solution for the needs of a project.

The final decision and how risks are handled depends on the intellectual value of the people who interpret the results of the risk matrix.

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Project Management events and conferences in 2020: European overview

This article provides an overview of the most important conferences and events planned for 2020 in Europe.

Project management is a constantly developing factor within organizations and among projects.

Conferences are a key resource to stay up to date on the most effective and modern project management tools and strategies and are very important for networking with colleagues in the field of project management.

Here is an overview of the Italian and European dimension.

Project management events outside Italy

Let’s start by having a look at the most important project management events that will take place in Europe outside of Italy.

 PMO Conference 2020 – London

The PMO Conference is highly acclaimed by the project management community for its learning and networking opportunities.

Offering the most in-depth and modern tools and research to develop project management skills, the PMO Conference hosts a full program of expert speakers in 2020, an exhibition of the latest PMO products and services, and extensive networking opportunities in the field of project management.

Focusing on portfolios, programs and project offices, this two-day conference – June 2 and 3, 2020 – will delve deeper into the knowledge of any PMO, whether it is at an early stage or already advanced.

APM Project Management Conference – Edinburgh, London, Manchester

This conference hosted by the APM – Association for Project Management Conference – named “Power of Projects 2020” – The power of projects – is scheduled to take place on several dates and locations throughout the year. Specifically:

  • Edinburgh, 17 March 2020
  • London, 21 May 2020
  • Manchester, 24 June 2020

This series of conferences focuses on topics that add value to the ever-changing field of project management and focuses on topics such as team management and project management tools.

This cycle of events aims to strengthen the project manager’s profession and emphasize their ability to adapt, work smarter and develop in an ever-changing environment.

The 2020 conferences will focus on the power of the profession and how projects can truly be a catalyst for the social and financial well-being.

Passion for Projects Congress 2020 – Malmö

This congress is Scandinavia’s greatest hub for project managers, portfolio managers and program managers.

In 2020, the congress will celebrate its tenth year, with 4 key lectures and 25 seminars that will engage and inspire the public.

The topics will be different and important at the same time, such as:

  • how new trends on a human level can impact the future of project management,
  • the way value is created through sustainable projects that also include business cases
  • how teams can be enhanced to be more receptive to innovation, technology and change.

This exciting event will take place in Malmö, Sweden, 9 to 10 March 2020.

Portfolio and Project Management Summit – Berlin

The Portfolio and Project Management Summit, to be held in Berlin on 10th and 11th March 2020, will reveal strategies to meet the dynamic changes that occur daily in project management, exploring the evolution of the manufacturing sector.

The meeting will address issues related to business transformation, Agile development, people management, budget and financial management, shared knowledge and best practices on how to leverage innovative strategies with relevant tools.

Agile-Lean Ireland – Dublin

The Agile-Lean Ireland will also be back in 2020 at Croke Park, Dublin’s most historic venue, for its third edition.

This event will be attended by international and Irish speakers, with a mix of lectures, seminars and conferences.

The theme for the 2020 edition, which will be held on 20 and 21 April, will be “Go For It” and is aimed at conveying the spirit of the values of courage, commitment and concentration needed to learn and innovate, including in project management.

 SME® EMEA 2020 Congress – Prague

This congress will provide the concept, skills and behaviours a project management needs to differentiate himself.

For three days, specifically from 14 to 16 June 2020, prestigious international speakers will talk about innovative global perspectives on this fast-moving profession.

On this occasion, it will be possible to learn and share experiences with peers from all over the world and the skills learned will be applicable immediately, once back in the office, to solve everyday challenges and develop one’s career.

 PE Award Assessment Training Vilnius 2020 – Vilnius

A three-day event hosted by IPMA – International Project Management Association – for potential PE Award assessors.

Significant attention is paid to the evaluation process itself, including interviewing and reporting skills.

Two online webinar training sessions are planned before the training in Vilnius, Lithuania, from 6 to 8 March 2020, one on 22 January and the second on 12 February.

 Artificial Intelligence, Machine Learning and Big Data – Copenhagen

This conference about artificial intelligence, machine learning and big data, is not directly targeted to project managers, but can still be an interesting occasion to understand what technological innovation is bringing and will bring in the future.

In fact, these are aspects that will increasingly affect project management.

The conference will be held in Copenhagen, Denmark, on 17 and 18 August 2020.

Italian Project Management Events

After looking at the most important European events that will take place outside Italy, let’s see what Project Management has in store for us at home.

4 Forum Nazionale di Project Management

The 4th edition of the Forum Nazionale di Project Management will start in autumn 2020.

It’s a must-see for insiders. An event full of meetings and in-depth analysis as well as high-performance and absolutely targeted relationships.

We have been there in the past years and our experience has been absolutely positive. Our participation is guaranteed also for this year.

The organizers have not yet revealed the theme for the next edition but we are sure that the topics will be absolutely actual and capable of anticipating the subjects of the sector.

For example, in 2019 the focus was on the project sustainability. We talked about innovative approaches that balance the 3Ps of Sustainability: people, profit, planet.

Here is the link to a short video interview.

the 4th italian national forum

 

If you think there are other events worth mentioning, please contact our editorial staff and let us know. We will be happy to include them in this article.

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effort and costs

The Planning Game to overcome the risks of estimation of the effort and costs of a project

Estimating the effort and costs of a project is, for some project managers, one of the most difficult aspects of project management.

To prepare an accurate and complete project plan, it will be necessary, in fact, to estimate many factors. How much time it will take to accomplish the work, how much it costs, how much money the project will save or earn, the extent of the risk and a multitude of other aspects.

Estimation is the approximate determination of the size, extent, value, cost or nature of something.

As many project managers will say, the key word in this definition is “approximate”.

The core of project management is thus, even with significant prior experience, the uncertainty inherent in any project. This simply does not allow for absolute accuracy in estimates.

Estimation methods for project effort and costs

It is unnecessary to discuss again the differences between effort and duration of which we have discussed in depth in this article Let’s stick to the concept that estimation is essentially a hypothesis, and let’s see what can be done to make it the best possible scenario.

Here are five methods to achieve the most realistic possible estimates:

  • Ask the person in charge of carrying out the work to prepare the estimate.
  • Ask an expert or a person with experience in that particular area to give their opinion.
  • Use existing data – perhaps from similar past projects – and make appropriate changes (lessons learned).
  • Use tests, field studies or other simulated experiences as a guide.

All these approaches are definitely worthwhile and, depending on the occasion, some will work better than others.

The best approach will depend on factors such as the availability of historical data, the estimation capabilities of the performers or experts in the field and the amount of time available to prepare an estimate.

Estimates should represent what the project manager believes is the most likely outcome and therefore should not be worried about applying their judgement to the input they receive, as long as they have a reason to do so.
effort and costs of a project

Estimate dangers

Estimation is certainly a difficult process and there are many factors that can undermine the accuracy or validity of a project’s effort or cost estimates.

Among the most common dangers are the following:

  • Badly defined workplace: this may occur when the work is not sufficiently divided or the individual elements of work are misinterpreted.
  • Omissions: in a nutshell, something has been left behind..
  • Excessive optimism: in this case, a successful scenario is used as the basis for the estimate and the worst case is not even considered..
  • Padding: This happens when the estimator includes a safety factor in the estimate, a kind of padding that ensures that the estimate is met or not exceeded.
  • Lack of risk and uncertainty
  • Rushed estimates: if estimates are rushed to meet a deadline which is too tight, they are almost likely to be unrealistic..
  • The executor and the estimator both have two different levels of skill: people work at different levels of efficiency and sometimes have a significant impact on the time and cost of an activity. For this reason it is necessary to make an estimate considering who will actually do the work..
  • External pressure: Many project managers are assigned specific – and sometimes unrealistic – project effort and cost objectives. If a project manager finds himself in this situation, they should communicate what they think is within reasonable reach.
  • Failure to involve the executors of the activity: an estimate developed without involving the executors of that activity could be inaccurate because it is based on erroneous conceptions. This is why a direct comparison between the estimator and the executor is always important.

 Planning Game: an estimation method

In addition to the traditional methods to estimate the effort and costs of a project, another one exists, mainly used by the Agile teams: the Planning Game.

The purpose of using this method is to avoid the influence of other participants.

The Planning Game should force people to think independently and propose their estimate numbers at the same time, without input and influence from other participants.

Let’s see how a planning game normally takes place. Each participant has a series of cards with an estimated value (the values can be those, even approximate, of the Fibonacci sequence).

The individual activities to be carried out will then be taken into account. Each team member considers all the factors of the project activity and selects a card that they will place face down on the table. Once all participants have made their move, the cards are turned.

It is not possible to select two cards for the same activity.

Then, the participants will review the assessments made and discuss together the reasons for their choices.

Each participant, in this way, will think independently and how much effort the team will spend to complete the activity in question.

Once the discussion is over, the evaluation will be repeated until all the participants give the activity the same value. Then, this value will be written on the Activity in question and the process will be repeated for the next Project Activity, and so on until the end.

For each activity, the highest and lowest values attributed will be crucial. It is not necessarily the case that those who have given such assessments are wrong, but it may be possible that these team members may have valuable information or knowledge for a more realistic estimate.

This way, at the end of the Planning Game, a shared estimate of each individual project activity will be made. In this way, no team member and no external stakeholders can blame anyone for incorrect estimates.

The Planning Game is sometimes also called Planning Poker or Scrum Poker, and is a derivation of the Delphi Method, a group decision-making technique in which participants give their estimate to a facilitator who is responsible for providing an anonymous summary of the expert evaluations along with an explanation.

The Planning Game to overcome the risks of estimating the effort: conclusions

Ultimately, the most adequate effort and cost estimation technique for each individual project depends on the experience of the project manager, their preference and the parameters available in each situation.

In addition, there are now project management software programs that use statistics to help project managers calculate contingencies to deal with risks, uncertainties, and unknowns relatively smoothly.

Although there are some minor differences, the basic concept is the same in all tools: to provide a set of possible results for the individual work elements of each project. Have you ever tried the TwProject statistics for free? If you haven’t yet, enjoy the 15-day free trial now.

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the shared leadership

Shared Leadership in Project Management: benefits and techniques for developing it

Shared leadership in project management may not seem like a convenient solution; however, it is not. Let’s see together in this article what benefits could be gained from shared leadership and what are the best techniques to achieve it.

With global expansion, restructuring within each sector, the growing number of organizations merging, the need for dynamic flexibility, and broad knowledge and skills base is more significant than ever before.

Shared leadership, which means using the best-combined capabilities of leaders in this type of scenario, is considered a viable solution to meet these challenging business needs.

What is shared leadership exactly?

Shared leadership involves maximizing all human resources in an organization by empowering individuals and giving them the opportunity to take leadership positions in their areas of expertise.

With increasingly complex markets requiring more excellent leadership, project management work can sometimes become too extensive for an individual.

Shared leadership is not simple, but it is certainly possible and, in many cases, very successful.

Using the shared leadership model gives leaders the opportunity to focus on the areas where they are most talented, to hire team leaders, and then develop a project – and the organization in general – towards success.

Several organizations in different industries have realized that a properly formulated and executed leadership strategy can strongly influence the performance of a project or organization, elevating its results to exceptional levels.

Why implement shared leadership

Here are some of the benefits that can derive from shared leadership practice :

  • The act of sharing leadership promotes innovative and committed behavior among team members.
  • Shared leadership positively transforms the composition of verticalized companies, re-integrating teams.
  • Individuals in the organization create bonds of interdependence through the exercise of shared leadership, supporting teamwork.
  • Freedom and speech during the performance of shared activities increase levels of satisfaction and identification of the company among its members.
  • The example of positive behavior and proactivity of shared leadership motivates team members even more.
  • Successful results achieved through shared leadership lead to recognition of the participatory nature of each employee’s contribution, making teams actively desire the growth of the company.

Here are some tips to share leadership and maximize talent.

  • Giving power to the most qualified people to strengthen their skills.
  • Define the limits of decision-making power.
  • Support an environment in which people feel free to take initiatives.
  • Offer qualified people discretion and autonomy over their tasks and resources and encourage them to use these tools.
  • For leaders: consider yourself an asset rather than the manager.
  • Arrange appropriate follow-up meetings to review progress and take corrective action if necessary.

Empowering the people closest to the customer and allowing them to take responsibility means more time for leaders.

Even better, employees and team members can feel more involved in the project, paving the way for greater success for the organization, the team, and themselves.

shared leadership

What is the ideal moment to implement shared leadership?

Interest in the study of alternative models to one of absolute leadership, including shared leadership, has grown significantly in recent years, changing the way organizations are managed and organized.

In today’s ever-changing environment, understanding how organizations can achieve more innovative results is critical to ensure their continued survival and competitiveness.

It is, therefore, ideal to adopt a shared leadership format, especially if the organization is large and has multiple business lines and sectors.

Through shared leadership, activities will become easier to separate, manage, and coordinate.

Here are some suggestions for implementing a shared leadership model:

  • Always keep partners and team(s) updated on new ideas.
  • Never insist on implementing immediate changes without discussing the need for such changes with partners and colleagues.
  • Enabling partners and team members to interact freely by enabling them to take the initiative.
  • Consider shared leadership as an organizational method, exercising a more convivial type of leadership.

Here are the aspects on which to focus in the case of shared leadership:

  • Avoid situations where the use of power leads to difficulties or outcomes detrimental to other members and teams.
  • Not matching the control of leadership with the ability to achieve results.
  • Be aware and therefore avoid the risks associated with excessive accumulation of power.
  • Acting with self-control to prevent or suppress the desire to exercise control beyond what is strictly necessary.

Ultimately, for a long time, leadership models have been based on concepts such as “One lead and the others obey.”

This type of model is focused on one-person leadership and is mainly used in organizations with rigid hierarchies.

In the modern marketplace, this model is still used but is increasingly being replaced by others, such as shared leadership.

It is, therefore, crucial for an organization to know what is meant by shared leadership and what are the methods to apply it in the best possible way.

 

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pm and gig economy

Gig economy in project management

We often hear a lot about the gig economy, but what is it really and how much can project management be involved?

The work and commercial market scenario has changed dramatically in recent decades.

We live in an age in which the economy rewards companies that interrupt and innovate the old ways of creating new models that drive financial success.

One of the major trends in this new culture is in fact what’s called the “gig economy”.

The gig economy has been created by organizations that have chosen to hire contractors or freelancers for certain positions rather than full-time workers.

In theory, by adopting this method, organizations save money and workers are supposed to be free to set their own work schedules and even work from home, from where they connect via software or e-mail.

The projects are by definition limited in time and therefore represent the perfect environment for those seeking to capitalize on the gig economy.

The rise of the gig economy

The gig economy really kicked off after the significant economic recession of 2008-2009, when companies were forced to mass fire and unemployed workers started working temporarily to support their incomes.

The rise of this kind of “temporary” and self-employment became known as “gig economy“, borrowing the term used by musicians – gigs – denoting their pay-per-view in a bar or club.

This trend was born during a negative situation characterized by financial instability, although growth continued even after the economy stabilized.

Gigging – through a pre-arranged contract or advice – tends to offer a higher hourly wage to compensate for the lack of benefits, such as severance pay, health insurance, etc. The latter can also be used as an incentive to increase the number of people in the workforce.

Flexibility is attractive for those who want more control over their work programs or who are looking for breaks between contracts.

There is also an increasing opportunity to work in different companies and sectors, or to start as an external collaborator and then become a permanent full-time worker once the compatibility between employee and employer is established.

Nowadays, gig economy is even stronger than expected.
gig economy

Project management during the Gig economy

Gigging is becoming increasingly popular and can be found in virtually all sectors.

Since these contracts are usually short-term, there is less pressure than a commitment and a greater sense of freedom.

The gig economy empowers the person who performs the service rather than the person or organization that requires it.

What was the project management like before gig economy?

Traditionally, project management revolves around the idea of a temporary effort made within the wider context of an organization’s general objectives.

Led by a project manager, the project – before the gig economy – was carried out by a team of direct employees of the organization, usually consisting of people with different skills and expertise, from different departments.

Based on what was planned for the project, this project team estimated and approached the work while the project manager coordinated timing, scope, requirements and costs.

The project manager monitored progress and helped the team move into the end phase as smoothly as possible.

At the end of the project, the team and the project manager discussed what had been achieved, what could be improved, and any limitations encountered during project life cycle.

At the end of the project, the team was disbanded and all members were available once again to be included in a new project.

What is project management like in gig economy?

One of the most obvious changes in project management during the gig economy is the composition of the project team. One no longer draws on a pool of long-term employees within the organization, but is likely to work in the short term with external specialists.

In the gig economy, it can be difficult to build a sense of relationship and cohesion within the team, however, by taking care of interactions between members and encouraging communication, it is possible to promote an honest, transparent and efficient working environment.

The project manager must have insight on everything the team does.

  • How long can team members work and when are they available?
  • What dependent aspects are included in the activities?
  • Is the current timeline a reasonable indication of expected progress?

These – and many other – concepts of traditional project management are still applicable and, probably, it becomes even more crucial to have access to and monitor this data in the gig economy.

The advantages of the GIG economy for the Companies

There are many benefits for employers when hiring self-employed workers, including:

  • Saving money. With temporary workers, organizations no longer have to worry about expenses such as unemployment benefit, allowances and workers’ wages. This allows companies to save a lot of money that can contribute to their financial growth.
  • Creating a more engaged workforce. With the gig economy, the traditional roles between employee and employer are altered. Workers who have the freedom to choose when and on what they want to work, through project-based work, tend to be happier and more accommodating and, in the end, perform better.
  • Avoiding wrong recruitments. Organizations can now fill in vacant positions with freelancers or independent contractors. This gives managers the opportunity to part with no tax implications if the external employee does not meet expectations.

As times change, it is obvious that approaches and processes need to evolve to keep pace with changes.

The gig economy has radically changed the way we work, yet this shift to short-term contractual work must not lead us to think that there’s no proper management.

The gig economy has a clear model that requires equally clear workflows, planned and managed to meet its needs and complexities.

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Innovation Scouting & Project Management: how to understand what innovations are required in project management

Innovation has become a key expertise and is essential for success in a rapidly changing strategic environment.

In a way, if we think about it properly, every project, even if it looks like a duplicate, is undertaken for the first time.

A project team may not be the first to design a particular product, but it will be the first to build THAT exact product, which must be built at that time, using that team, with those suppliers and those limits.

Project management is based on opening up new horizons and doing things that have never been done before.

This puts innovation right at the heart of what the project manager does every day.

Let’s take a look at what is meant by innovation in project management and how a project manager can approach it in the right way.

The role of the innovation in project management

Innovation, as a management expertise, is difficult to be defined.

In a commercial sense, the term “innovation” refers to the translation of an idea into a commercially marketable product, thus giving the wrong idea that only people like Steve Jobs and other visionaries can be called “innovators”.

On the other hand, the dictionary’s definition – “doing something in a new way” – is too broad to be meaningful, since many “innovative” ideas have failed to produce real value.

Consider, for example, the mechanical bread slicer: invented in the early 1920s, this slicer was described by early users as impractical and cumbersome. .

The customers thought that the sliced bread looked unattractive, because once sliced, it was difficult to hold the bread together long enough to pack it in an orderly fashion.

The problem persisted until the baker Gustav Papendick decided to improve the device, by placing a cardboard tray that would hold the bread together long enough for the wrapping machines to work.

The mechanical bread slicer alone was therefore not an innovation and did not provide real value to the customer.

It was only when Papendick combined the bread slicer with the cardboard tray that real value was added, which was an innovation.

Innovation is in fact the origination and implementation of ideas that add value to the organization.

Daily innovation therefore comes from the combination of creativity and improvement.
innovation scouting and pm

Project management: traditional models vs. innovative models

Traditional project management models have focused almost exclusively on the delivery of products and services, i.e. results with precise and measurable execution criteria.

In this context, innovation opportunities are generally only focused on problem solving.

For example, when faced with a risk that needs to be avoided or mitigated, a project manager often needs to generate ideas that add value – innovate – in order to determine appropriate reaction to the risk and emergency plan.

The most recent project management models, on the other hand, focus mainly on achieving a result.

Scope, planning and costs are important, however they are subordinate to the overall results that the organization is trying to achieve.

For example, the task of a project manager could be to improve customer loyalty by 10% in one year.

In this model, the project manager’s work is partly tactical, i.e. responsible for executing the scope of work over the indicated time period, and partly strategic, i.e. responsible for:

  • Interpreting business strategy
  • Assessing the feasibility of the goal
  • Analyzing the cause of the problem
  • Advising and/or creating a solution
  • Formulating a work environment
  • Executing the project and monitoring performance
  • Ensuring the achievement of strategic objectives

In this model, innovation becomes more pivotal for the project manager’s work.

The project manager must actively look for ideas that add value throughout the project lifecycle in order to ensure the achievement of the result.

The attitude of an organization towards risk will strongly influence the ability of a project manager to carry out innovation.

In non-risk organizations, in fact, compliance with best practices, that is, a traditional model of project management, is generally preferred over innovation and experimentation.

Understanding innovation in project management

Innovation is not the result of a lone ingenious inventor – at least not in most cases – but it rather concerns the involvement of people who test the status quo.

Innovation is a collaborative process, where people in many areas contribute to the realization of new ideas.

Too often, a team member’s suggestions are evaluated or criticized or other ways are found to identify “rational” reasons why these suggestions cannot be accepted at the moment.

In short, many potential ideas are killed before they even have a chance to see the light of day.

The project manager is therefore responsible for motivating the team to openly express new ideas and creative thoughts.

Furthermore, it is necessary that any new idea does not get judged or classified negatively, however it is important that a constructive dialogue takes place in order to explain – if necessary – why one idea cannot be implemented.

 

In conclusion, like any other skill, the ability to innovate requires time, practice and a favourable environment.

When innovation is limited because of risk aversion or a reluctant environment to listen, competence cannot be developed.

When competence is not developed, companies struggle to remain competitive and fit for the market, leading to long-term negative results.

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Project priorities: 5 elements to know in order to define them correctly

The definition of priorities is one of project managers’ main tasks and is an area where there’s always uncertainty.

The need to set priorities comes from the fact that you don’t have enough resources to work on everything you want for the time you want.

Therefore, it is necessary to have a process that determines the sequences of activities that must be carried out in order to offer maximum value at all times, given the constraints we face.

In a nutshell, priority setting is a process that establishes which projects are most important so resources can be focused on the right delivery.

It is the first crucial step in building a strong and balanced project portfolio and making effective resource allocation decisions.

Why give priority to projects?

Many organizations consider project prioritization as a process of budget setting, however giving priority to projects is much more than that.

If you improve the process of prioritizing your project and select a portfolio that better reflects your organizational objectives, you will gain benefits in the following areas:

  • Increased project success rate. Good prioritization ensures project alignment and fewer errors.
  • Greater return on investment (ROI) (link to the previous article). Projects that are better aligned with business objectives will provide more value to the organization. Naturally, value does not just mean money and can be expressed in all kinds of forms; for every organization value has its meaning.
  • Improved quality of project requests. When strategic objectives are recognized, initiatives align accordingly. This allows project stakeholders to improve performance in relation to specific strategic drivers, thus increasing the quality of their demands.
  • Obsolete projects removal. A structured project prioritization process will ensure that only well-aligned projects will be approved and obsolete ones will be identified in advance.
  • Resource allocation. A good project prioritization process will allow the portfolio to be properly scaled up. Resources can therefore be allocated more effectively.

define priorities

Overview of the techniques for setting project priorities

Here are some of the most used techniques used to set project priorities.

1. MoScoW

The MoSCoW method is a priority-setting technique employed in multiple management fields to achieve consensus on what is most important to stakeholders and customers.

The term is an acronym that represents the different possible categories of prioritization – in English. The requirements are thus classified as:

  • “Must have”: essential requirements that must be absolutely included in the product. If even one of these is not present, the issuance of the product is considered an error.
  • “Should have”: these requirements are important yet not crucial. They generally share the importance of the requirements of the first point, but are not so necessary.
  • “Could have”: these requirements are desirable but not necessary for issuance. Usually they are low cost product improvements.
  • “Won’t have”: These requirements are the least critical or even those not aligned with the product strategy. They must be permanently discarded or possibly reconsidered for future versions.

This method offers a quick and simple prioritization solution. The problem, however, is: how is it possible to know which requirements should or could be more important than others?

As a result of this limitation, the MoSCoW method is probably more suitable for internal projects than for products involving many customers.

Talking to a few stakeholders about the subtleties of priorities will always be easier than contacting end customers on a large scale.

2. Financial analysis

Initiatives and projects are often carried out with the specific objective of increasing revenue or reducing costs.

For these situations, a financial analysis is required and, for those with the best results, priority will be assigned.

There are 4 types of financial objectives that can be addressed:

  • New revenues that should be generated;
  • Incremental revenues, i.e. additional revenues from existing customers who now can purchase an upgrade or additional services;
  • Revenue withheld, i.e. revenue not lost due to the reduction of the customer’s withdrawal quota;
  • Cost savings, i.e. any type of operational efficiency that is achieved within the company.

These targets can be estimated over a given period of time, thus providing an overview of the revenue and/or cost reductions they will be generating.

By analyzing these metrics in combination, teams can then make investment decisions based on the organization’s financial priorities and desired results.

However, these quantitative methods are all based on revenue and cost estimates, and it is known that these can easily be incorrect.

 3. Net Present Value (NPV)

“How much money do you have to save in the bank to get to the end of the year with 10 extra euros?”

This is what is called the present value of a certain amount and depends on the interest rate. Here’s its formula:

PV = C x (1 – i)-t

C= cash flow , i = interest rate and t = time

With an interest rate of 5% today we would have to invest 9.52 euros in the bank to obtain 10 euros in a year.

When assessing alternative projects in which to invest, companies consider an opportunity cost instead of an interest rate.

This is what is not earned as a result of investing in something else.

If a company usually gets a 15% return on its projects, this is the opportunity cost to which an alternative project should be compared.

A product initiative will produce a series of cash flows over time periods (e.g. months or quarters) and each must be discounted to its present value (PV).

The net present value is the sum of these elements over a certain period of time and is determined by this formula:

This method allows a company to prioritize projects by providing an answer to this question: “How much of today’s money we will have after X time, if we invest in Project A or Project B?”

4. Internal rate of return

The internal rate of return is a metric that expresses the performance of a project in percentage terms. In other words, it shows the speed with which an investment will increase in value.

It is difficult to calculate this value manually, however spreadsheet software offers this formula.

From this value, you can derive a return on a project and compare it with others.

However, this should not be considered separately when making decisions, as the investment time needed, for example, can be an important decision-making factor.

The longer it takes to return the money, the more risky the investment is.

Depending on the financial condition of the organization and the risk tolerance, this could be a key factor.

 5. Value vs. Risk

A classic way of prioritizing projects is to compare the value of what needs to be done with some other trade-off measure: usually that measure is the cost.

However, there is another method that suggests considering risk as a priority factor.

There are no established ways of estimating value, and for this it is necessary to use one of the other techniques however, as far as risk is concerned, these are the criteria:

  • Planning risk: the risk of not finishing a project within deadline.
  • Cost risk: the risk that the project will cost more than what is allowable at company level.
  • Functionality risk: the risk of not being able to execute a project.

There is a constant struggle between high risk and high value. What should be done first? There’ s no definitive answer and everything depends on the choice of the organization.

 

Ultimately, the most difficult part of the priority setting process is understanding what the team’s time is worth and thus to only commit to the most precious, urgent and important projects.

Once it is decided where to focus the energy, the project manager will be ready to draw up a plan and start working.

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The financial sustainability of a project

The term “sustainability” is gaining increasingly significant popularity in business development in recent decades.

Without mincing words, it is a factor that guarantees the success of a project and of an organization in general.

The current use of the word implies something that lasts a long time.

The financial sustainability of a project therefore implies the continuation of project activities without losses.

It must be acknowledged that ensuring the financial sustainability of a project requires long-term planning to facilitate stakeholder engagement and potential investors – including those external to an organization.

Key conditions for financial sustainability

Before starting to write a project’s financial sustainability plan, it is important for a project manager to discuss the various processes and mechanisms that can be used to ensure sustainability with the team.

It is therefore important to consider what follows:

  • Long-term vision: especially in the case of complex projects that span over a long period of time, it is important to know where the organization is seen after a period that can even last for several years. It is important to think about how and what is going to be achieved in the long term. Once this vision is clear, it is therefore easier to process the factors needed to achieve it. With the use of concrete data, it is possible to explain to the organization and investors the long-term goal and the processes and resources needed to ensure success.
  • Integrating financial sustainability into all projects: It is always advisable to integrate financial sustainability into every project of the organization from the very start. This will help to develop positive relationships with stakeholders from the earliest stage of project development.
  • Communication and awareness: It is important to develop a strong communication strategy so that the results of the project can be shared with stakeholders. Well-documented project results can help get support from stakeholders. A well thought-out stakeholder communication strategy can prevent a last-minute rush to find investors.
  • Involve major players: During the entire life cycle of the project, it is possible to establish opportunities for dialogue – meetings, e-mails, calls, etc. – with relevant parties to continue to involve relevant actors in the project.
  • Diversifying sources of funding: In some projects, it is important for financial sustainability, to diversify the investment base and develop long-term partnerships with investors to maintain continuous support.
  • Create an inventory of resources: Some devices and equipment purchased during a project may be used in the future for other projects, making it easier for these to be financially viable because some costs are thus already met.

How can the financial sustainability of a project be planned?

Every organization is unique and each will have its own specific way of getting things done.

However, financial sustainability planning follows some key milestones that we can summarize in these 5 points.

1. Decide who will develop the financial plan

If it is not the project manager himself, he will then have to decide who will be responsible for drawing up the financial plan for the project. Developing a plan is easier and more effective with shared leadership, while maintaining open communication.

2. Perform an internal audit

That is, to discover what resources and expenses the organization has already performed. You can’t decide where you’re going if you don’t know where you are right now. Make sure that all information is correct and that everyone working on the financial sustainability plan understands it.

3. Determine the budget required

This stage is divided into two parts: listing what you are currently doing and what the organization already owns and can be used and then listing what must necessarily be obtained – purchased – to carry out the project, with its related cost. In addition, it is possible to set specific funding objectives, both in short and long term. For example, a short-term goal could be to increase the size of the team with two new employees, while a long-term goal could be to purchase additional office space.

4. Develop a plan for financial sustainability

This draft should include all the information gathered so far, including:

  • The actual financial situation, including the yearly budget
  • Long-term and short-term financial objectives
  • General strategies that will be adopted to achieve such goals
  • History with specific actions
  • An “executive summary” consisting of one page at the beginning of the document which summarizes your work

Stakeholders will then be able to comment the plan and make suggestions for improvement. Obtaining feedback at this point can be very useful for at least two reasons. Firstly, there may be suggestions that will make the plan stronger than it would otherwise have been. Secondly, by giving those who will be involved in the implementation of the plan the opportunity to change it, it also becomes theirs and, in general, people are more willing to work on something they have created.

project sustainability

5. Monitor and evaluate progress

When the parts of the plan have been confirmed and start to be implemented, the process is not yet over. As long as the project continues and remains active, continuous evaluation and monitoring of progress is required and, if necessary, actions are taken to implement the changes.

Why is it necessary to compile a financial sustainability plan?

Drafting a financial sustainability plan certainly takes time, but it carries a series of benefits. This means:

  • More attention to actual work: it is possible to perform more freely what has been decided to be done, because the focus will be on the mission and the result, not on daily survival.
  • Becoming more competitive in the field: for instance, more money allows you to hire more and better staff, which, once again, enables you to do more to achieve your goal.
  • Easier transitions: a plan can help the organization to successfully overcome a temporary exhaustion of funding.
  • Support from investors: sometimes you have no choice, because some investors explicitly require the development of a plan for the financial sustainability of a project as a condition for their funding.

When should a financial sustainability plan be developed?

The answer is straightforward: it is never too early to start planning the financial sustainability of a project.

Planning should take place as soon as the project begins.

Even if the organization has been on the market for some time and holds a very good position, this is no excuse to develop a financial sustainability plan for each of its individual projects.

In short, developing a financial sustainability plan, like any other plan, requires a lot of work to be done in the right way.

However, by creating an effective financial sustainability plan, members of an organization will be able to achieve more to convert goals into reality and accomplish their mission.

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Create project models with best practice

Creating project models with best practices is a good starting point, whatever the sector and the project, although it may seem similar to others, is unique.

As technology grows and changes, projects become larger and more complex, and it’s easy to understand why.

Many project teams have grown to include members who work remotely from all over the world and modern project managers recognize that shorter project cycles are key to remain on the market.

Using these best practices will allow pro-active decision-making and help manage a project to succeed.

So here are the 9 best practices for creating project models.

Best practice n°1: Life cycle and set goals

The first best practice is about life cycle. Organizations should map and define key phases, outcomes, targets and criteria for each group involved in the project.

The life cycle of a project consists of four phases: concept, planning, implementation and deployment, and this type of management is implemented in all types of industry.

The adoption of these four basic phases provides a common understanding of the projects. Each company will then plan these basic phases of the projects in special ways.

Best practice n°2: Stable requirements and scope

A successful project management implies that the requirements, objectives and scope of the project are substantiated and defined at the beginning of the project’s life cycle.

Answering the following questions ensures that all stakeholders share a common understanding of the requirements and scope:

  • What is to be done?
  • Which product or service will be produced?
  • What are the objectives and benefits?
  • When the result will be achieved, what will be the measure of its success?
  • What are the final results?
  • What physical manifestation of the result will occur?
  • What are the performance standards?
  • How are the validity, usefulness, correctness and completeness of the results determined?
  • What are the conditions that affect performance, time and costs?
  • What are the limits of the project in terms of priorities and resources?
  • What are the risks to be aware of?

Best practice n°3: Defined organization, systems and roles

In all organizations, projects must have defined roles for the project manager, project managers, project team members, and corporate executives.

Responsibilities should be identified and understood by everyone. A system of communication and involvement of the team and stakeholders is essential for success.

Project managers need sound information to successfully manage their projects. Good project management software can help in this regard.

Best practice n°4: Quality assurance

The quality of projects requires the identification of standards and criteria to be established at each stage of the project life cycle for both the product and the process.

Each project should aim to improve this best practice, especially when a process has shown shortcomings in quality.

Quality means making and meeting agreed commitments with a constant focus on improvement.

Best practice n°5: Planned commitments

Plans must be based on the process capacity of the organization and not just on a mere desire.

Plans should be rigorously planned as they address all elements of the project management process.

It is never too early to start planning and the project planning must continue even when there is not enough information to execute the formalized plan.

The planning aims to reduce uncertainty and insecurity and increase the chances of success of the project.

If there is not enough information to produce a plan, the planning should focus on how to collect enough data to be able to plan the next phase.

The following are the components of a project plan:

  • The scope and mission, which define the limits of the project and establish the objectives.
  • Evaluation of the sequences and duration of the activities in addition to the requirements of the resources.
  • The budget, i.e. the development of an overall cost estimate based on the individual elements of work.
  • The personnel needs specified on the basis of the activities foreseen in the project.
  • Evaluation and control during all phases of the project.
  • Risks and problems that must be systematically identified, assessed and managed. Proper risk management implies the control of possible future negative events and a proactive action rather than a reactive one.
  • Quality, which indicates what are the established performance requirements to be met.

best practice

Best practice n°6: Variance monitoring and analysis

Projects should be managed using a process where deviations from plans are reported and resolved. Any other way is inefficient.

An effective project management process requires regular reporting and meetings of the project team to identify when things are off-target.

Cost overruns, unfinished business, new risks and identified problems should be addressed as soon as possible.

Best practice n°7: Corrective actions

When deviations from the plan are detected, the standard assumption is that the team or functional groups will work to get the project back on track.

Without a well-defined procedure, the corrective action can have many results, sometimes inconsistent with the company’s objectives.

Often it is necessary to make some compromises, such as increasing costs or reducing scope to save time, for example.

A key task for the project manager is to manage these compromises.

Best practice n°8: Escalation and problem management

Often in project environments, good news spreads and bad news remains silent until it is too late.

An effective escalation procedure requires that problems are dealt with at their lowest level.

If the problem cannot be solved and ended, it must be raised to the next higher organizational level and so on until the problem is settled.

A formal process must be set, similar to a complaint procedure, to address the problems before they become fatal to the project.

Best practice n°9: Authorization and monitoring of changes

Late changes in projects are one of the main sources of interruption leading to program deviations, cost overruns, defects and rework.

A formal system of monitoring and change management needs to be established.

A key challenge for project managers is to ensure that control is established over both ways in which work is authorized and how changes are approved.

When it comes to controlling configuration changes, the project manager is at the center of communications and must be ready to make timely decisions.

Since changes will occur, it is important to establish a change log.

This will allow the project manager to properly evaluate the proposed changes based on the most recent information.

 

These nine factors for creating project management models represent the best practices necessary for successful project implementation.

Experience has shown that most virtuous organizations involved in project management use these elements consistently.

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calculate the roi

How to calculate the ROI of a project

Calculating the true value of any project has always been a challenge. This is mainly due to the ambiguity of the change from a paper project to an economic value.

Let us show you some examples, just to be clearer. It is evident, for example, that the training of employees will improve the experience and productivity of our Project Team. But how does this benefit translate into cost savings and/or increased profits?

Spending thousands of euros on automated systems and software is likely to improve work efficiency, but what is the value of this improvement in euros?

Organizations are on the market to make a profit of course, and the return on investment – ROI – is a key figure for understanding what the profit margins of a project are. Calculating the ROI of a project will also answer the questions raised above, as well as showing the value of the project and its impact on the margin.

ROI is an indicator used to measure the profit/loss, or financial “value”, of a project in relation to its cost.

Typically, it is used to determine whether a project will generate a profit and therefore will be a benefit to the company.

Why is ROI important?

The ROI quantifies the value of the project and is capable of showing project managers, corporate executives and all stakeholders the value of a project in numbers that anyone can understand.

ROI converts the subjective into objective, which can often turn uncertainty into support.

Here’s why ROI is important:

  • It can create support when it comes to stakeholders: binding a euro value to a project can help with a “go/no-go” decision. Often, stakeholders want to see what the actual euro value to decide whether or not to support a particular project.
  • It may discover additional benefits: The ROI calculation process forces project managers to study benefits that may not seem obvious at the outset of a project.
  • It can lead to the definition of project priorities: once it is decided to start a project, the ROI helps to determine the priorities of the various projects. Usually, projects with a higher ROI are ranked higher and get faster support from project resources.

How to calculate ROI

The formula for determining the ROI is:

ROI = [(Financial value – Project cost) / Project cost] x 100

Considering the formula, there are two components that need to be determined: the financial value and the cost of the project. Let’s see how to do it.

How to calculate the Financial Value

The financial value is simply the reimbursement of the project.

The estimation of the value can sometimes be complicated due to the uncertainty of assigning an actual value expressed in dollars (or any other currency) to a suggested result.

The trick is to break down the value into currently known components and then define them.

When trying to quantify the value of the ROI formula, always remember the acronym TVD – time, volume, dollars.

If you can define the time, volume and dollars/euro needed to complete the process, the value of the project can be determined.

This acronym corresponds to a formula that calculates the potential value of the project from a different perspective:

TVD(current) – TVD(project)

As for:

  • T = time required for the process
  • V = Volume or quantity of units, transactions, people, etc. required
  • D = Dollars or cost required
  • Current = current value
  • Project = value that a project will have in case of success

 

To better understand this formula, let’s have a look at some examples.

The first is a project that will reduce the process cycle time of a given product by 10 percent.

In this example, the team calculated a single unit cost of € 2,455, based on current values for the time required (13 hours), volume (1 unit) and euros (salary of € 85/hour and total cost of materials amounting to € 1,350). It has also been calculated that, based on the production of 480 units per year, this cost will be equal to 1.178 million euros per year for this product line.

The team then calculated the project values, reducing the cycle time by 10 percent, from 13 hours to 11.7 hours; all other variables were left unchanged. The new costs are therefore €2,344.50 per unit and €1.125 million per year for the product line.

Therefore, the value of the project is: 1,178,400 € – 1,125,360 € = 53,040 € of savings per year.
how to calculate the roi

How to calculate Project Cost

The second unknown component of the ROI formula is the cost of the project.

To calculate this value, it is necessary to obtain revenue information and make a detailed cost analysis with a breakdown by different categories.

The breakdown by category can be useful if you want to evaluate different costs to build cost reduction strategies for a higher ROI on future projects.

 

Typical costs generally include the provision of materials, overheads for labor and employees, fuel, equipment, and work-related services.

Clearly, these factors vary according to the activity and type of project.

The cost assessment for a simple ROI analysis on a single project will not take into account annual expenses such as the lease for the construction of space and/or capital investments.

The formula is isolated for a single project and includes only costs associated with that single event.

You can forecast costs and returns based on past events before the start of a project.

Although it is not possible to obtain a perfect estimate, keeping project records allows you to know an approximate ROI interval based on available data.

How to calculate the ROI of a project: bottom line

Ultimately, understanding how to calculate the ROI for a project is the first step without which it is not possible to get a definite picture of the objectives and benefits of the project itself.

In many cases, moreover, without ROI, it can be very difficult for company executives to approve the budget required for a given project.

ROI evaluation, whatever the type of project, will help the project manager and stakeholders to better visualize and manage the project from a financial perspective.

Project managers should therefore fully understand all the elements underlying an ROI calculation in order to obtain an accurate view of the means and resources required, as well as all the benefits that the organization will derive from it.

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2020 Project Management Trends

It is essential to know and be aware of the 2020 project management trends.

Projects have always existed and will always exist.

Their implementation will always remain a challenge, sometimes overcome, sometimes defeated. Unique methods and solutions, however, will continue to arise in the market and take this area to a new level. It is human nature that leads to evolution and Project Management is no less important.

So let’s see what are the trends in project management for the coming year.

2020 Project Management Trends: Automation and Artificial Intelligence

The first trend of 2020 we want to address is artificial intelligence. Artificial intelligence is pushing our global society into its fourth industrial revolution.

In digital products and services, artificial intelligence algorithms are employed to customize the products and services of companies in real time to meet market demands.

Artificial intelligence technologies will help to set priorities for projects and allocate resources for production.

Real-time scheduling of operations means that organizations can adapt on the fly according to employee availability or customer needs.

Artificial intelligence can also help improve multi-level decision-making within an organization.

Consistency in decision making is achieved much more easily by machines than by people.

The more complex the projects are, the more value can be derived from automated learning strategies to understand the process, risks and results.

Artificial Intelligence research teams are developing automated learning systems to increase a project manager’s decision-making capacity by analyzing data from multiple projects. Previously, the PM used to decide in accordance with the lessons learned, now the trend is that the artificial intelligence will suggest decisions.

2020 Project Management Trends: increasing the commercial value of soft skills

Artificial intelligence and machines can definitely process, learn and visualize the most diverse information, but they lack a key ingredient in the management of successful projects: humanity.

Social skills, such as emotional intelligence and coordination and negotiation skills are increasingly considered to be some of the most valuable professional resources.

In fact, in a forecast of the professional skills most in demand by 2020 in the Report on the future of the work of the World Economic Forum, “social skills” have been classified as the second most desired skill by employers.

This means that as the use of artificial intelligence to manage some parts of the processes becomes more and more prominent, the project manager’s role as an empathic listener, forerunner of needs, expert coordinator, discreet negotiator and motivational leader becomes equally fundamental.
2020 pm trends

2020 Project Management Trends: an increasing trend towards fusion of methods

The Agile Methodology is no longer truly innovative, but to apply it well is still complicated.

And the Waterfall method, for example, is only suitable for switching from A to B, especially in those cases where the project path and the final result are well defined.

As a result of complex work environments, Agile, Waterfall and a number of different methodologies are often combined.

Organizations are adopting more and more simultaneous planning and flat hierarchies, replacing the linear and traditional method for a mix of methods.

For project managers, the mix of methodologies is a challenge, as it is necessary to recognize which parts of which methodology or combination of them will be relevant to a given case.

For this reason, PMs need to keep up with the latest methodologies and the way they are implemented.

 2020 Project Management Trends: the shifting and globalized “gig” economy

Project managers already possess direct knowledge of the ever-increasing gig economy. In many teams we already have gig workers and the growing number of working arrangements and remote collaborations has already begun to affect project management.

More than any other trend in project management, the gig economy has direct and immediate results in the work of a project manager.

There is often a smaller pool of full-time team members within the company who are supported by a widespread mobile network of freelancers.

To PMs, the management of a a remote team poses a whole new set of challenges in terms of time, people and activity management.

2020 Project Management Trends: an increasingly competitive market

The margins for organizations are becoming tighter than ever, partly as a result of the commodification of the digital industry.

Customers are expecting more, at a lower cost, and are becoming more and more expert on the subject.

In an increasingly competitive environment and tighter margins, organizations are therefore driven to specialize if they want to survive.

In short, PMs need to keep up with the times and understand market dynamics and customer needs.

Also for PM, it is necessary to develop skills that surpass the competition.

2020 Project Management Trends: the growing relevance of human-centred design

Human-centered design is a way of developing products with people at the heart of the design and the implementation process and can be considered as a way of integrating business and technology based around human needs.

This concept has already existed for several years, but has taken on a key role with the rise of the Agile and Lean principles and their emphasis on product design based on direct user feedback.

As digital products become more prevalent in our lives, organizations are becoming increasingly aware of how to proceed with their design.

Products that meet real needs, ensure the best user experience, present the least risk and have the greatest positive impact on humans are being sought.

Increasingly, companies will therefore be responsible for creating products that meet the needs of users, driven by the vision of customers and their feedback.

Today it is necessary to produce something innovative and with a strong impact, built on empathy towards human needs and desires.

2020 Project Management Trends: a greater attention to data

With new project management tools you can collect large amounts of data, but you also need to use them properly.

From understanding customer needs to retailing risks, analyzing data for important information is a key activity in almost every project.

A PM has to become a sort of data translator so that it can extract the basic information for the optimal execution of the project.

Understanding project management trends for 2020 will help both organizations and project managers to coordinate new and existing business strategies.

Whatever the future trends, the main thing is to understand that the key to success will remain people’s skills and creativity.

These two components will help to create the best project team and create a high quality product, in any industry.

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customer experience

The lifecycle of a project and the customer experience

Customer Experience is the set of processes that a company employs to track, supervise and organize any interaction between a customer and the organization during the life cycle of a project.

The purpose of customer experience management – also called CEM – is to fine-tune interactions from the customer’s point of view and promote customer loyalty.

To manage the customer experience, an organization must create a customer-focused strategy that includes all interactions.

Customer experience is an integral part of Customer Relationship Management – CRM – and therefore it is important because a customer who has a positive experience with an organization is more likely to become loyal.

In a nutshell, happy customers remain loyal.

How is the customer experience different from the customer service?

In most cases, a customer’s first point of contact with an organization takes place through an interaction with an employee, visiting a store or talking to him over the phone.

This gives the organization the chance to offer an outstanding customer service.

However, customer service is only one aspect of the entire customer experience.

For example: if you book a holiday over the phone and the person you are talking to is kind and helpful, this is a great customer service. And if the tickets are delivered early, i.e. if the hotel provides an upgrade or if the accommodation and treatment meet or exceed expectations, then this is a wonderful customer experience.

Like most things in today’s market, the customer experience has changed.

This is more than just a person-to-person service and, thanks to technology, organizations can get connected with their customers in innovative ways, also thanks to new project management software that allows you to monitor CRM.

This allows to:

  • Provide related products based on purchase history
  • Create and deliver targeted email marketing campaigns
  • Understanding the customer’s 360-degree vision

Customer service is undoubtedly very important, but it is no longer the only goal of the customer experience.

How important is the customer experience?

An organization cannot exist without its customers. That’s why, while it’s true that companies are focusing on how to acquire new businesses, it’s even truer that the greatest efforts are being put into maintaining existing customers.

Customers’ expectations are rising and they expect every interaction with the organization to be a fantastic experience.

So how can an organization provide an excellent customer experience? Let’s have a look at it in the next paragraph.

Top 7 ways to improve customer experience

There are many ways to improve the experience of our customers. Sometimes you just have to make your imagination run wild to try small functional solutions that can improve it. Here below we will examine 7 ways that, in our opinion, are the most important:

1. Establish a clear picture of the customer experience

The first step in the customer experience strategy is to establish a clear vision to communicate, focused on the customer.

The easiest way to define this vision is to create a series of statements that work as guidelines.

Once these guidelines are set, they will guide the behaviour of the organization and its projects.

Each member of the project team should be familiar with these principles and should be able to apply and integrate them into all areas of a project.

2. Understand who customers are

If the organization really wants to understand the needs of customers, it must be able to connect and tune in to the situations that customers face.

One way to do this is to segment customers and create “characters”, also called buyer persona.

One way to ease this process is to try to give each person a name and a personality.

For example: Anna is 35 years old, likes new technology and is quite experienced on the topic, so much so that she can manage electronic devices on her own, while John is 42 years old and needs clear instructions to follow even for the simplest processes.

By creating characters, the customer service team can recognize who they are and understand them better.

Many companies once created the buyer persona give it shape by creating real templates that represent them. They are placed in the offices of the Team to accustom the members to consider them as a real entity and not as a simple product of the imagination.

This is also an important step for the organization to focus entirely on the customer.

3. Make an emotional bond with customers

No sentence is more appropriate in this case that “it is not important what you say, but how you say it”.

The best customer experience is achieved when a team member creates an emotional bond with a customer.

A research of the Journal of Consumer Research has discovered that more than 50% of an experience is based on an emotion and feelings shape the behaviors that drive decisions.

Customers become loyal because they are emotionally committed to a brand or product and remember how they feel when using a product or service.

An organization that prefers an emotional bond, is 85% ahead of its competitors in sales.
the customer experience

4. Receive real-time customer feedback

How do you know if you are providing an excellent customer experience? Quite simple: you have to ask for feedback and, ideally, in real time.

Using live chat tools for real-time conversations and, at the end, sending a follow-up email using post-interaction surveys is one of the most widely used approaches.

In addition, you can make calls to customers for more in-depth feedback. Always remember that the caller represents the Company and will have to be very sensitive and polite in proposing the feedback. Human contact is an essential element to humanize the Company and improve the customer experience.

5. Use a high-quality framework for the development of the team project

Once you know what customers think about the quality of your service, the next step is to identify the training needs of each individual member of the project team to improve your customer experience.

6. Act according regular employee feedback

However, in order to improve the customer experience, it is also important to receive regular feedback from the project team.

This allows the personnel to share ideas on how to improve the customer experience and the project managers to see how they feel about the organization.

Only those in the project who are a member of the team and monitor customer reactions on a daily basis can really understand the needs.

7. Measuring ROI by providing an excellent customer experience

How do you know if all these investments – team, processes and technology – are working and paying off?

The answer is in business results.

Measuring the customer experience is one of the biggest challenges that organizations face, which is why many companies use the Net Promoter Score, or NPS, which collects valuable information by asking a single simple question: “Would you recommend this organization to a friend or relative?

The NPS, created by Rob Markey and Fred Reichheld of Bain and Company, is a convenient reference tool for measuring the customer experience.

The importance of the customer experience for the market

As customers gain more and more power in the market, the importance of customer experience management increases exponentially.

The customer experience is an area that needs constant and dedicated care. You should never take anything for granted or assume that the customer will act in a particular way.

With a greater focus on customer experience strategy, organizations can achieve a variety of goals more easily, from customer loyalty to product and brand positioning. This will lead to an increase in revenues.

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the customer satisfaction

Project customer satisfaction: 5 tips for dealing with it in the best possible way

Customer satisfaction, it may seem obvious, is the key element in defining a successful project. The project is modified, shaped and customized to achieve this goal.

Project management activities are essentially driven by customers who must be involved from the very beginning (collection of requirements) to the very end (provision of products and services).

This is why project managers must always include customer satisfaction, or customer satisfaction, during planning.

Fundamentals of customer satisfaction

Customer satisfaction is based on understanding, defining, assessing and managing customer needs so that their expectations are met.

This concept implies compliance with the requirements to ensure that the project produces the output it should create.

In project management, customer satisfaction is part of project quality management and ensures that policies, objectives and responsibilities of the project satisfy all stakeholders involved.

The concept of customer satisfaction is thus applied by project managers to generate quality products and services.

Customer experience and satisfaction will be the key differentiating factor by 2020 and will indeed be the most interesting area to work on in the future. That’s why:

  • Reliable support or service = customer satisfaction
  • Customer satisfaction = increased fidelity
  • Increased fidelity = increase in customer base
  • Increase in customer base = more profits/income

So, if one focuses on customer satisfaction, it’s obvious that business will grow and revenues will increase.

What are the advantages of customer satisfaction?

The greatest plus of a satisfied customer is word of mouth. According to a research conducted by Neil Patel:

  • 92% of consumers trust recommendations from friends and family.
  • 68% of consumers reported that a positive review led to them being more inclined to choose one organization, while 40% reported that a negative review diverted them to another.
  • 93% trust online reviews to decide whether an organization is trustworthy or not.
  • Word of mouth is the key influencer for 74% of consumers.

So, in a nutshell…

if you have a high number of satisfied customers, you will receive free positive advertising.

However, customer satisfaction is not an easy affair. During project execution, customers will always ask:

  • What is the state of progress of the project?
  • When will it be completed?
  • Where can I review my work?
  • Where should I give my feedback and/or to whom?
  • Where and how can I see the progress in real time?

The truth is, most project managers screw up. They decide to hide the actual information and then show wrong data or information to satisfy customers.

In the end, however, the truth emerges and the customer tends to be unhappy and refuses to choose the organization a second time.

It is important to consider that negative word of mouth spreads faster than positive reviews.

Why should customer satisfaction be measured?

  • To understand how well customers’ expectations are being met. If customer satisfaction is low, it’ s necessary to group up to find new methods to meet them.
  • To identify loyal customers and find ways to retain them.
  • To reward employees and internal teams that contribute significantly to customer satisfaction.
  • To track processes and strategies that help to satisfy and refine customers.
  • To understand the gap between the perception of quality given internally by the organization and the customer’s perception of the quality received.

5 ways to measure customer satisfaction

1. Customer satisfaction survey

This is one of the most important tools for measuring customer satisfaction. To motivate customers to carry out the survey in a truthful way, you can decide to send them a small reward: a discount on the next purchase, for example, or a free sample of a complementary product.

2. Monitoring of customer complaints through helpdesk

This is one of the implicit ways to measure customer satisfaction. If only a few customers complain about the product, this may indicate that satisfaction levels are high. A good helpdesk tool is essential to keep track of complaints over time. A downward trend in the complaints/sales ratio is a positive reflection for customer service.

3. Monitoring of recurring purchases through CRM

Satisfied customers are those who are more likely to purchase again from the same organization in the future. Therefore, it should be monitored which and how many customers are recurring. If more and more customers become recurring buyers, customer satisfaction is likely to improve.

4. Monitoring of social media engagement

This is becoming a very important way to measure customer satisfaction. According to this method, the influence of an organization – or a specific product – on social media gets measured and the amount of involvement – likes, retweets, shares, etc. – is assessed – that you receive for each post. In general, a higher level of engagement on social media channels reflects a higher level of customer satisfaction and loyalty.
customer satisfaction

5. Online sentiment monitoring

It isn’t just a matter of paying attention to customer sentiment in the organization channel, but also in other channels, such as personal customer blogs, forum posts, etc. Negative sentiments in blogs and forums may be a sign of decreased satisfaction and loyalty.

Customer satisfaction conclusions

Finally, it is necessary for an organization to interact and communicate regularly with customers to increase their satisfaction.

In these interactions and communications, it is necessary to recognize and address all individual customer needs and meet them accordingly.

The higher the level of satisfaction, the greater the sentimental attachment of customers to the specific brand of the product and also to the supplier.

This helps to create a strong and healthy bond between the customer and the organization.

Hence, customer satisfaction is a very important factor on which every organization should focus to establish a position in the market and improve business and profits.

We have the tools, we have the culture.