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

• Analog Estimation
• Parametric Estimation
• Difference between analog and parametric estimation

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

 

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.

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.

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.

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.

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.

 

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.

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.

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.

 

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.

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

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.

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.

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.

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 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.

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.

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

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.

Program Management is a different sort of project management and until now we have never mentioned it in our blog. In our articles we have always talked about project management and never about program management. Let’s have a look at what it is all about.

Let’s start by saying that in both cases we have to deal with two key actors: Project Management, which by now we should know quite well, and Program Management. However, what is the difference between these two if in both cases they manage projects?

Actually, the program manager and the project manager can share similar responsibilities, but there are some key differences between the two positions.

The same applies to program management as to project management.

Program management vs Project management: Projects vs. Programs

Before discussing the similarities and differences between the two figures, it is essential to understand what separates the projects from the programs.

They are generally limited by costs, resources, budgets and time and generally have a clear and objective end date that delivers tangible results.

While in the Project the single project is an end to itself and once completed brings immediate benefit to the enterprise, in the Program management interconnected projects are widely discussed.

They are projects that complement and develop one another to achieve a broader and longer-term goal.

A successful program brings strategic benefits and organizational growth, rather than a single tangible result.

 What is a Program Manager?

When we talk about program managers, we mean the person who shapes the strategy and objectives of a program and assesses how it will impact the organization in general.

The Program Manager must define and supervise a set of dependent projects necessary to achieve the overall objectives of the program.

A program manager, in short, can be compared to an architect who designs a project.

Architects do not install plumbing and do not build walls, but they do ensure that all these pieces come together to create and shape a particular building.

The role of the program manager transcends the completion of individual projects – for example: the electrical system or the construction of walls – but it takes care of the long-term implementation of the entire program – i.e. the construction of the building.

The responsibilities of a program manager include recruiting teams, implement strategies, measure ROI and other large-scale initiatives.

Program Manager priorities

A program manager typically supervises multiple projects and people, which requires strategic resource allocation and planning.

Sometimes individual projects need to be suspended or discontinued to ensure that the overall objectives of the program are heading in the right direction.

The typical tasks of a program manager are:

• Define and assign projects within the program and work with the project manager to set a time frame, budget and the required manpower and resources.
• Routine checks with project managers on the status of the project, as well as with senior managers, customers and other parties involved.
• Re-qualify, downgrade, promote or add projects to a programme, if necessary, and adjust the timing and expectations of stakeholders and staff, if required.
• Identify potential risks (company, programme and project level) to the programme and make timely adjustments and revisions to the process if necessary.

Differences with Project Manager

Project managers, on the other hand, supervise the operations of individual projects within the programs.

They coordinate the schedule, budget and resources to complete the work within the program guidelines and report the work progress to the program head and any changes made to the initial project plan.

The role of the project manager is more tactical than the position of the program manager.

As we saw in our previous example, the program managers are the architects, while the project managers are painters, plumbers and electrical engineers.

Project managers focus primarily on the execution and management of the functional elements of the project, i.e.:

• meeting deadlines,
• observance of the budget,
• delegation of activities
• achievement of the results.

It is true that program managers and project managers have different roles, but their challenges are similar.

Although they have different daily responsibilities, both program managers and project managers supervise many dynamic parts and must ensure maximum organization and efficiency.

Common tools for both the Program Manager and Project Manager

These two actors can meet many similar or equal challenges and benefit from the use of similar techniques and tools. Let’s see which ones:

• Dashboard: A clear picture of the status of activity and advancement is crucial when success depends on several people and dynamic parts. Every program manager and project manager should have a dashboard that shows exactly who is working on what. There are several project management software that allows one to have a dashboard with these properties and with the most diverse functionalities.
• Templates: Many programs feature similar projects. For example, each marketing project could involve an advertising campaign. Instead of starting from scratch each time, project managers, along with program managers, should structure their work and prepare templates that can be reused for similar jobs. This minimizes the need for new initiatives and helps replicate past success stories. In a nutshell, templates should contain best practices.
• Versatile work graphics: not all people work the same way, and each person has their own preferred working method. The work assigned by program managers and project managers is therefore much easier when the project team does not necessarily have to adhere to their work approach. It is important that a single program or project can be viewed from different perspectives and with different tools, such as tabs, charts, lists or Kanban timelines. This means that everyone involved can stay on the same page while using tools that make them feel comfortable.
• Contextual partnership: Keeping track of each resource, update and request can be daunting. Browsing through emails and spreadsheets for details is a waste of time for both project managers and program managers. Keeping all program and project communications in a single thread that is readily available and understandable is therefore extremely useful.

 

When the right person is the program manager, this inevitably becomes a valuable asset for the project managers whose projects are part of the program.

The program manager will tailor the program to meet the organization’s most important financial objectives to ensure the success of projects in all aspects.

Project management may seem very formal to those unfamiliar with the project. This is due to the fact that project management draws up a specific, seemingly inflexible process for starting, monitoring and closing a project. Everything is carried out according to a consolidated methodology.

For an entrepreneur or a start-up coordinator, the inflexibility of these project management systems may appear limiting. However, the need to have a framework around which to focus team and resources is critical to every business success.

As rigorous and formal as project management may seem, it can be adapted to the most diverse situations.

There are many ways, approaches and project management software, depending on the industry and type of project. In addition, there are always new ideas being released, including hybrid methodologies that achieve the best from two different worlds.

So, how entrepreneurs and start-up teams can get the most out of project management, regardless of the start-up environment or business life cycle?

Project Management for start-ups: Kicking off with a vision

To employ project management effectively, one must start the project with a vision.

It is necessary to have a definite idea or objective on which the team can concentrate. In order to get somewhere, there must always be a destination and this destination must have a specific result that affects the organization.

Start-ups and entrepreneurs often strive to accomplish a million things simultaneously with a limited staff, so developing a vision is essential to ensure the success of the project.

How do you establish this vision?

You need to be specific and invest some time and energy to think about what you want to achieve and the impact you want to have.

It’s not enough to say something like “We want to make our business grow”.

To give the projects some meaning, you should take this general idea and fine-tune it. Saying something like “We want to grow our business by 10% this quarter by creating a new line of services for our existing customers” is already a more specific and limited vision in its scope.

This is a rather simple example, but the bottom line is that you have to switch from a vague idea to a specific set of objectives.

This applies to any type of activity, as all projects must be targeted, whatever the sector.

Project Management for start-ups: Developing a plan

Once the specific goal or result has been achieved, the second step in implementing project management is to establish a plan.

Even though we have just said that we need a plan, we need to know that the creation of a plan to follow can have its drawbacks. Sticking to a plan that is too strict can lead to the freezing of the team, just like a pair of handcuffs. If you do not grant your team any flexibility in the work, in the end the plan can only be counterproductive.

Creating a plan is therefore essential, but you need to be flexible in its creation and application.

As a start-up entrepreneur, you need to be at ease with the changes.

There will always be changes and, especially when you start a new path, being able to rotate is the key to success.

Whatever plan you can think and create today, it will only be a starting point for where you will go in the future.

A plan must be drawn up with the objective in mind:

• Where are we going?
• When do we want to get there?
• What kind of resources do we need?
• What other factors are involved in the completion of this project?

So, the plan is important, but it can change.

For planning, you could create a time sequence of the project with milestones, or main stages of the project. It will be used to break down the steps or activities that need to be accomplished in order to complete the project in the allotted time.

Let’s not forget about flexibility, though.

Project Management for start-ups: Executing the project

Now it’s time to move on to the project execution stage.

When people and organizations are not optimal, the first two steps we have talked about (vision and strategic plan) are often missed and progress is made directly to this execution phase.

When this happens, the problem is that you can’t ask yourself: “Why?”. For example, if you want to develop a new feature, you’d normally ask yourself, “Why do we want that new feature? Why do we want to create a new product?”

An inefficient organization (and start-ups can’t afford to be inefficient) that lacks a vision and a plan risks devoting a lot of time and resources to things that should never have received attention.

The actual execution stage of the project, when you have created a complete plan and worked backwards, starting from a deadline to create a realistic schedule and a list of activities, should not be hindered in any way.

Obviously, it is necessary to monitor and analyse the progress of the project to ensure that the benchmarks are met, including appropriate meetings.

Project Management for start-ups: Monitoring the progress

• “Are the plans and milestones still relevant to achieving the goal or result?”
• “Are we early or late with regard to the milestones?”
• “Is the result still relevant to our business or are we just finalizing what we started?”

These are just a few examples of questions that a start-up project manager should constantly ask himself.

In addition to asking these questions, you also need to monitor your KPIs and other metrics.

A project dashboard can be invaluable when it comes to keeping track of these numbers on a daily basis.

One obstacle that start-ups and entrepreneurs encounter is the reluctance to recognize and accept a faulty goal.

The best thing to do in such cases is to drop the things that need to be dropped. Knowing when to quit is some kind of art.

Project Management for start-ups: Archiving the documentation

A good idea, especially in the case of a start-up, is to collect all the lessons learned in a framework that can be used for future projects.

Write down the factors and methods that worked and those that didn’t and state why.

You can collect communication programs, reports and other documents that can be used to create templates for future projects.

Creating a resource that helps to accelerate the kick-off of future projects is the key to a successful project.

The word start-up is often closely related to the concept of uncertainty.

Although this uncertainty provides fresh air for many new ideas and innovative cues, it can also lead to the fall of a start-up.

In general, however, if a start-up is able to think about projects structured in these simple five phases, the use of the principles of project management will certainly be easier and more streamlined.