skills of pm

Abilities and skills of a successful project manager

What are the most important skills and abilities for a project manager to be successful?

Being good at telling others what to do is not enough and not exactly right for a successful project manager. Instead, lead and inspire the team, this is another story.

A project manager is responsible for managing the work through the application of knowledge, skills, tools, and techniques to meet the requirements of the project.

Knowing the theory of project management, but not having the right skills and abilities, is useless.

Similarly, having the right tools and techniques, but without the ability to use them properly is insignificant.

So let’s see together in this article what are the most important skills and qualities for a project manager.

Inspire a shared vision

A successful project manager is often described as a person who owns and inspires the group a shared vision of where to go and has the ability to articulate it.

Visionaries thrive in change and are able to draw new boundaries.

Once it was said that …

a leader is someone who gives us a reason to be and gives the vision and the spirit to change.

Visionary leaders let people feel that they have a real interest in the project and allow people to experience this vision, create it, and explore it.

Good communicatio

The ability to communicate with people at all levels has always been considered a fundamental skill in project managers.

The leadership of the project requires clear communication on goals, responsibilities, performance, expectations, and feedback.

The project manager is also the team’s connection with the organization and therefore must have the ability to negotiate and effectively use persuasion, when necessary, to ensure the success of the team and the project.

Through effective communication, project leaders support individual and group results by creating explicit guidelines for achieving results and advancing team members’ careers.

Integrity

One of the most important things a project manager has to remember is that his actions, not his words, determine the modus operandi for the team.

Good leadership requires commitment and demonstration of ethical practices.

Creating standards of ethical behaviour for themselves and following them, in addition to rewarding those who exemplify them, are the responsibilities of project managers.

Leadership motivated by personal interest does not serve the general well-being of the team.

Integrity-based leadership represents nothing less than a set of values shared by others, behaviour that is consistent with values and dedication to honesty with oneself and with team members.

Enthusiasm

In a very clear and simple way, negative project managers break down and discourage the team.

People always tend to follow positive people with a so-called “can-do” attitude, not those that always give reasons why something cannot be done.

Enthusiastic project managers are committed to their goals and express this commitment through optimism.

Leadership emerges when someone expresses a commitment in such a manner that others want to share his optimistic expectations.

Enthusiasm is contagious and successful project managers know this well.

Empathy

Empathy presupposes the existence of the other as a separate individual with his own feelings, ideas, and emotional histories.

Understanding and caring for people, as well as being grateful for their help, are some of the qualities that a successful project manager shows to his team members.

For example:

it is particularly appreciated by the team when a project leader recognizes the fact that everyone has a life outside of work.


ability of pm

Competence

Of course, to believe in another person – especially in work – we need to make sure that person knows what he is doing.

Leadership competence does not necessarily refer only to the technical skills of the project manager, but also to the ability to successfully lead the team.

The ability to challenge, inspire, enable, shape, and encourage must be demonstrated if a project manager wants to be seen as capable, competent, and successful.

Ability to delegate tasks

Trust is an essential element in the relationship between a project manager and his team.

And this trust in others must be shown through the actions of the project manager, like for example: How much he controls the work of the team members, how much he delegates, how much he allows people to participate in the project.

Individuals who are unable to trust other people often fail as project managers and find themselves doing all the work on their own to the detriment of the project’s success.

Ability to manage stress and work under pressure

In a perfect world, projects would be delivered on time, within budget, and without major issues or obstacles to overcome.

But we know, we don’t live in a perfect world: Projects always have problems, more or less serious depending on the situation.

A successful project manager will then react to these problems calmly and will not panic.

When leaders encounter a stressful event, they consider it interesting, they feel they can influence the result and see it as an opportunity and not as something purely negative.

From the uncertainty and chaos of change, successful project managers articulate a new picture of the future that still leads the project towards a positive ending.

Team building skills

A project manager is a strong person who provides the substance that keeps the team together in a common purpose towards the final goal.

In order for a team to move from a group of strangers to a single cohesive unit, the project manager must understand the process and the dynamics required for this transformation.

He must also know the appropriate leadership style to use during each phase of team development.

Last but not least, the successful project manager must also understand the different styles and characters of the team members and be able to take advantage of everyone at the right time.

Ability to solve problems

Although it is said that an effective project manager shares responsibility for solving problems with the team, it is still expected that the project leader has excellent problem-solving skills.

In conclusion, creating realistic project plans, budgets, estimate times and efforts, etc. are certainly skills that a successful project manager must possess.

But keeping the work organized and the team informed and happy is fundamental and these skills are what a project manager needs to succeed in his work.

We have the tools, we have the culture.

the rolling wave

The rolling wave in project management

The rolling wave technique is a method that allows the project manager to plan a project while it is taking place.

In short, this technique requires iterative planning.

This type of planning is very similar to that used in Scrum or in other Agile methodologies.

In essence, the rolling wave method allows you to plan until you have visibility to implement the plan, while the next steps are planned while working directly to the previous phases.

An example of rolling wave

A simple example of rolling wave is one where you expect to complete a project in eight months, but you only have clarity for the first three months. In this case, the first three months are planned.

As the project progresses and greater clarity is achieved, the following months can be planned.

The rolling wave technique uses progressive processing, which means processing work packages in more detail as the project unfolds.

But be careful that it does not mean that this planning method does not exempt the project manager from creating a list of milestones and assumptions for the project.

It is necessary to provide milestones and the key hypotheses as they will help stakeholders to understand why they are using the rolling wave method and what to expect while the project progresses.

 When to apply the rolling wave method

This method can be applied when:

  • It is not possible to define a detailed project plan shortly.
  • It is not clear which deliverables should be produced.
  • It is not possible to organize the different phases of the project.

The rolling wave method is particularly useful in projects with high uncertainty. Therefore, it is necessary to use the best risk management practices.

The rolling wave planning, therefore, is the process of breaking down the work breakown structure into time intervals.

At the end of each phase, the project manager will study the structure of the WBS and will expand it to include more details.

It is particularly suitable for projects where the work involved in a phase is highly variable and depends on the result of the previous phase, such as projects that require prototypes and, in general, in the engineering sector.

The advantages of the rolling wave method

This type of approach to project management is particularly useful when the availability of the information needed to plan future work packages in detail is based on the successful completion of the previous phases of the project.

This technique can also help reduce turnaround time in two ways:

  • By allowing the start of productive activities without waiting for every detail of the work to be determined in advance.
  • By eliminating downtime for additional planning in the middle of a project, since planning is performed continuously.

This type of planning also has the following advantages:

  • Encourages adaptability
  • Encourages planning
  • It is excellent for research and development projects, high technology and inventions
  • It is excellent for projects with variable capacity

The rolling wave planning is done in 4 simple steps:

  • Create the WBS.
  • Divide the project into phases.
  • Provide a realistic level of detail for each phase.
  • Once the considered phase is completed, return to step 1 to manage the next phase.

The steps of the rolling wave planning

rolling wave

Now let’s look at these steps in detail.

Create the WBS

The work breakdown structure is the nucleus around which all the other project management planning processes take place.

This involves splitting each project into single work items.

Each work item requires an identification number, a description, and a member of the team responsible for that particular activity, and sometimes it has additional elements such as budget, expiration date, and dependencies with other tasks.

Throughout the project life cycle, these work items are monitored and progress is recorded and reported.

Divide the project into phases

The phases are more simply the points in which an important moment for the project in general takes place.

For example, if we consider the creation of a prototype, a phase could be concluded with the presentation of a first prototype model.

From this stage others may follow, depending on the result – which is still uncertain. For example, the prototype could be accepted, thus starting the large-scale production phase, or it could be declared unsuitable, thus starting the re-elaboration phase.

Provide a realistic level of detail for each phase

Clearly, as you continue planning on the timeline, the phases will have less and less detail.

This is a clear concept in the rolling wave methodology, given that information on future steps is few or there are no information at all.

The work breakdown structure will therefore contain less details regarding the successive phases, but these will be reviewed and completed when the phases begin to be near in time.

Once the considered phase is completed, return to step 1 to manage the next phase

There is not much to say at this point. As explained above, as the project continues in its cycle, it will be possible to determine and manage the phases that come near in the future.

In general, it is always important, before starting with the execution of a project, to have a plan at the beginning of any project.

If the project will be known in detail immediately, it will be possible to continue with traditional planning, otherwise the rollign wave method can be used.

Choosing the wrong planning methodology can lead to loss of control over the project.

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manage complex projects

The management of complex projects

Complex projects represent a great undertaking for a Project Manager.

It means coping with a variety of tasks, having different people to manage and with which to communicate and having multiple goals to achieve.

How can a project manager reach the goal with so many factors in the game? Let’s seeit in this article.

What makes a project complex?

It is important to understand that there is a difference between a complex project and a difficult project.

A complex project is not necessarily difficult. Conversely, projects can be difficult due to cost or performance, but this does not automatically mean that they are complex.

Complexity refers to projects that include ambiguity or uncertainty and are therefore surrounded by unpredictability.

There are a variety of factors that cause the complexity of the project, for example:

  • Technology: The technical content of a project can cause complexity. This could depend on the technology used or the development of the software.
  • Cost and budget: The project may have to face problems such as not attracting enough capital to achieve the goals or have problems in directing the funds towards the right aspects of the project.
  • Program: Complexity can come from the time of the project.
  • Very different political stakeholders: Projects can bring together different stakeholders, which can be a problem, especially if politics is involved. Different political interests can increase complexity, since the project must handle different requirements and expectations.
  • Legal: Even legal issues related to a project can increase complexity. Sometimes the legal complexity can be linked to the political one.
  • Social: This may be due to the fact that the members of the group come from different social contexts or it can be the case when the project works within a specific social context.

It is therefore necessary, first and foremost, to identify why a given project can be considered complex and then proceed to address it.

The essential skills needed to manage complex projects

 The management of a complex project requires different capacities, including:

  • Adaptability
  • Cooperation
  • Communication
  • Competence
  • Leadership

A project is constantly evolving and project managers must evolve with it. It is not always possible to think that there are “white or black” solutions.

The time will come when the project manager will be forced to adapt his management style based on the change in the situation.

The communication is probably the most important project management skill. It is essential that PMs effectively convey and manage vision, ideas, goals, and problems.

Moreover, project managers must also produce and display reports, also using disruptive technologies and presentations that are informative and clear.

Communication is closely linked to collaboration. A project manager must be willing to collaborate with the project team. Working with others in order to achieve goals is important for any type of project, especially if it is complex.

Competence and Leadership to manage complex projects

Finally, competence and leadership go hand in hand. Leadership consists of guiding, directing, and motivating the team to do its best and make the members understand how their tasks contribute to the overall vision. Leadership develops with experience, through practical and real work.

Having these essential skills is the key to identifying what makes a project complex and managing it.

So let’s see in practice how to manage a complex project.
complex projects

Manage complex projects: Document regularly

Project can be divided into perfectly manageable mini-projects, but without clear documentation on the single tasks and how they relate to the whole, the project remains unclear.

Clear and up-to-date documentation is the answer to this problem.

This allows the project manager to define everyone’s roles and their results and ensures that the overview is clear to all team members.

The project manager has the task of documenting everything and regularly sending the project status to the team and to the stakeholders – as agreed.

Managing complex projects: Continuously clarify goals

If you do not understand the “why” behind the project, it is very difficult to succeed.

When a project manager delegates without clearly defined goals, the team will fail. It is therefore important that team members understand their role and the tasks that they have to perform.

Clarifying the goals regularly also ensures that the project remains aligned with the initial plan.

Managing complex projects: Make everything more visible

 During a complex project, the team is often confused by the details and it becomes problematic to continue when it is saturated by too much information.

To create greater visibility within a project, a good practice is to adopt a project management tool that works for the project manager, the team, and the stakeholders.

This tool will allow all project users to stay informed and clearly see the status of the project and what is happening, using this tool as a unique source of information.

Managing complex projects: Be flexible

A constant in complex projects is the continous changing and for this, a project manager must be able to adapt and be flexible.

It is therefore important to ensure that processes are set up in such a manner to allow the team to remain agile and respond to changing requests.

The project manager adds value by making things more efficient and effective and / or reducing risks, precisely thanks to his ability to adapt.

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break down a project

How to break down a project. Examples of WBS

To ensure the success of a project, it is necessary that the project Manager knows how to break down the project and, consequently, structure a WBS.

WBS is the abbreviation of Work Breakdown Structure, which, in other words, means a division of the labor required to complete a project.

The WBS is widely used by professional project managers to represent the scope of the project and the results in a hierarchical manner.

Generally, creating a work breakdown structure is one of the first steps in project planning.

For project managers at the beginning of their careers, sometimes the WBS can be confusing and difficult to manage, but it is good that they quickly become familiar with it, because it is the key to success, especially in the case of complex projects.

The Work Breakdown Structure, in fact, is used to make complex projects more manageable. In essence, the WBS is designed to help divide a project into manageable blocks that can be effectively assessed and controlled.

How to break down a project: why do you use a WBS?

Obviously, a simple list of the activities and the people who will follow the project is not enough to clearly divide the project into smaller pieces.

Therefore, the use of a work breakdown structure provides a clear view of the project’s scope of work.

In a work program, the activities are grouped under certain levels of decomposition.

For example, in a construction project program, the electrical wiring activities are grouped in the level dedicated to the electrical system, while the piping activities are grouped in the level dedicated to mechanical works.

Therefore, the WBS allows to improve the quality of planning, traceability, and reporting and this is why it is used.

It should be kept in mind though, that the WBS describes the final results and the activity groups, not the activities in detail.

In short, some widely used reasons for creating a WBS include:

  • Help with an accurate project organization
  • Help to assign responsibilities
  • Show project control points and milestones
  • Allow a more accurate estimate of costs, risks, and time
  • Help explain the scope of the project to stakeholders

How to break down a project correctly

To start, the project manager and the experts determine the main final results for the project.

Once determined, it is possible to begin to break down these results into smaller and smaller work blocks.

But how small? This depends on the type of project and the management style, but some sort of rule should be established in order to determine the size and scope of the smallest work blocks.

For example, the two-week rule could be chosen, in which no piece / activity is smaller than two weeks of work required for completion.

Or, another method is the 8/80 rule, where no block should take less than 8 hours or more than 80 hours to complete.

Determining these rules for block sizes can take some practice, but these make WBS definitely easier to use and structure.

Regarding the format chosen for the WBS design, some project managers prefer to create tables or lists, but most use graphics to visualize the components of the project, such as a hierarchical tree structure or a diagram.

How to simplify a project: some examples

The WBS diagram starts with a single box or another graphic element, usually positioned at the top, which represents the entire project.

The project is then divided into main components with related activities or items listed below them.

In general, the superior components are the final results, while the lower level elements are the activities that lead to creating the final results.

Here are some simple examples of WBS:

Developing a computer:

Suppose your organization intends to start developing a computer.

To speed up the work, you can assign specific teams to different aspects of computer construction, as shown in the diagram below.

break down a project_chart 1

In this way, a team could work on the configuration of the frame, while another team will be dedicated to protecting the components.

Developing a computer game:

Let us now think, for example, that your organization wants to manage a project dedicated to a software, specifically the creation of a computer game.

To be the first to launch the game in the market, it is necessary to assign specific aspects of the game to different teams, as shown in the diagram below.

break down a project_chart 2

Construction project:

The convenient format of a Work Breakdown Structure allows you to use it for any type of project and, therefore, it is also useful in the case of a construction project.

This example of a work breakdown structure shows that all the elements are listed in the various levels of the WBS.

The lower levels of the structure show the results of the project. Tasks and activities will be grouped under these lower levels.

Level 1 is the overall project. Level 2 represents the main phases of the project. Level 3 shows the main final results, while level 4 represents the minor results.

break down a project_chart 3

The construction of an effective project work sharing structure can, in the long term, determine the success of the project.

The WBS provides the basis for project planning, cost estimation, resource planning and allocation, not to mention risk management.

The WBS simply provides a visual presentation by graphically organizing the project results. This structure shows everything that is needed in order to complete the project on a single graph.

In the ideal case, the high-level final results included in the WBS should correspond, word by word, to the goals and results written in the scope description of the project.

As a result, the WBS is one of the first documents created in the project management life cycle. This will be created even before creating the project plan.

This means that the WBS is often the first product in a project and defines the hierarchy of final results.

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RAM matrix

Assign responsibilities. The RAM matrix

The RAM matrix is used by project managers to assign responsibilities or to identify the role of the various members of a project team.

This matrix is a structural diagram in which it is visually clear what should be done by whom and what are the tasks and responsibilities of each of the team members.

The acronym RAM derives from Responsibility Assignment Matrix.

The RAM matrix

This RAM matrix is sometimes also called RACI matrix or VERI matrix or linear responsibility chart (LCR). Specifically, RACI stands for:

  • Responsible: the person who carries out and assigns the activities
  • Accountable: the person responsible for the correct completion of the task. In other words, an “accountable” must approve the work the “manager” provides.
  • Consulted: those who are asked for help in carrying out the activities.
  • Informed: those who are kept up to date on progress and with whom there is only one-way communication. In other words, the stakeholders.

A RAM matrix is used to designate roles, responsibilities, and levels of authority within a project team for each component of the work structure, also called Work Breakdown Structure (WBS).

The matrix format allows you to show all the activities associated with a person and all the people associated with a single activity.

the RAM matrix

This ensures that there is only one person responsible for each activity and this allows to avoid confusion.

Despite the simple nature of all the information in the matrix, it can be very time-consuming to assign each member the right tasks and responsibilities.

Moreover, the appropriate roles must be defined in advance before being included in the assignment matrix.

7 steps to complete the RAM matrix

In order not to make mistakes, here is a 7 steps guide thanks to which the matrix can be written in a correct way:

  • Step 1: Identify all the project participants.
  • Step 2: Identify all the final results for the project.
  • Step 3: Discuss with all team members which kind of support is required for the best performance and the best results. It is important to define the responsibilities of each participant so that there are no misunderstandings.
  • Step 4: Create the initial draft of the assignment matrix, with the activities in the left column and the project team members in the first column on the right. Enter the roles that each person will have in the cells.
  • Step 5: Ask the participants to approve the assignment matrix. Once again, to avoid misunderstanding, it is best to receive written approval.
  • Step 6: Any comments on changes in the assignment matrix can be submitted by the participants. Finally, the responsibility assignment matrix will be reviewed and, once approved, the project can begin.
  • Step 7: It is important to remember to carry out continous analyzes and assessments during the project life cycle. When it seems that it is better to change the assignment matrix, it will be necessary to return to step 3, where the changes must be discussed with all team members.

 Responsibility assignment matrix and complex projects

The responsibility assignment matrix is also suitable for complex projects.

When activities are neglected and the matrix contains incomplete and / or inaccurate information, efforts and work will duplicate without any sense.

It is therefore advisable to ensure that all information is included in the matrix and that all information is and remains accurate and up-to-dated.

The following suggestions contribute to a greater chance of success of a RAM matrix in the case of a complex project:

RAM Matrix: Graph Hierarchy

Divide the assignment matrix into separate graphs, so you can make a distinction based on priorities.

The responsibility assignment matrix with the highest levels identifies high priority activities within the project.

From here, it is possible to develop matrix charts of assignment of responsibilities derived from this higher level.

RAM Matrix: Involvement and feedback

By involving all members ft he project team in developing the responsibility assignment matrix, everyone will know exactly what is expected ft hem and will be more engaged during the entire project.

Moreover, by involving the entire team in the development of the matrix, it will be easier and more immediate to receive feedback from people who should be specialized in the single activities.

RAM Matrix: Written representation

By writing the assignment matrix, you can identify any errors or problems. Moreover, all the participants will have a better understanding of their role and responsibility within the project.

Finally, the RAM matrix is a project management tool that improves team communication and increases the efficiency and speed of project completion.

If used effectively, it helps in keeping everyone informed and, therefore, increases individual and group productivity.

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the scope statement

The Scope Statement and its importance for the Project Manager

The Scope Statement is a document that is extremely important for the success of a project. The project manager will develop the scope statement by processing the project start-up document (or project charter) produced by the project sponsor.


The project manager will be responsible for defining the scope of the project in this document, providing measurable goals.

Saving a project with the scope statement

It can also happen to be part of a project that, for different reasons, is delayed or out of budget. In these cases, the scope statement becomes vital. The project manager will ask the project team to explain the reasons why the project is not respecting the schedule.

Once the appropriate information has been taken, it is obvious that the PM will have to make decisions. Often, a real change of program will be indispensable together with the approval of a possible new budget in order, in the best case, to get everything back on track.

These situations can occur especially when the scope of the project has not been effectively defined. In these cases, if the Scope Statement is not implemented or not properly managed, the project will seriously run the risk of going astray with respect to the initial planning.

What is it and why the scope statement is important

Since a project is defined as a temporary effort that creates a product, a service or a result, the scope of the project is fundamental. The scope of a project, in fact, defines which activities are part of the project and which are not, what the project will carry out and what will not.

In short: The scope statement defines the project. The creation of a detailed scope statement will therefore help the project manager to bring the project to success.

In particular, the scope statement is fundamental for these three situations:

  • Define the boundaries of the project. The scope statement guarantees a common and clear understanding of the project between the interested parties and helps to manage the so-called scope creep. In other words, it describes what is included in the project and what is excluded and, therefore, forms the basis for the project plan.
  • Ensure a common understanding of the project among stakeholders. In addition to being the foundation of the project plan, the scope statement will also help ensure that all interested parties are on the same page. By setting the right expectations with stakeholders, the PM can reduce the chances of misunderstandings that could arise later and that could derail the project.
  • Help manage change requests. Another way in which the description of the scope can help the project manager to manage the project effectively, is to use it as a guide to evaluate all the modification requests that are made. If the change request does not fall within the limits defined in the project, this must necessarily be rejected.

According to the Project Management Institute changes in scope – due to little clarity at the initial stage – are the main cause of the failure of a project.

This is quite common in almost all sectors, and for this reason project managers must learn to define, communicate and control the scope of the project.

To avoid the unpleasant possibilities that derive from a poorly defined project scope, project managers must write a good scope statement.

This will facilitate the acceptance of the scope of the project by the stakeholders , will put on the same page the project team and will prevent the start of unauthorized activities.

A scope statement is a useful tool for outlining project results and identifying the constraints, assumptions, and key factors for success.

The affirmation of the well-written area clearly defines the boundaries of a project.

The scope of a project has a direct impact on the other two elements of the triple project constraint, ie time and resources.

Moreover, the project manager can consider the scope statement a formal documentation of the project scope.
scope statement

How to write a scope statement

The instructions in the scope statement must contain as many details as possible, but only up to a certain point and without exaggeration.

The minimum length of a scope statement is that which describes the primary risks of the project.

For example, stating that the project is to “build a fence” will communicate basic information, but these are certainly not enough. Everyone knows this already and there is no added value. It would therefore be preferable, in this specific example, to define the start and end points of the project, the height of the fence, the type of fence, the meteorological hypotheses, etc.

There is no default or maximum length for a scope statement, but this needs to be specific and to report the primary risks.

A good scope statement includes the following elements:

  • General description of the work. Returning to the previous example, here is where it is stated that the project is “building a fence”.
  • Final results. What will be produced by the project and what are its main features? Which customer must be satisfied by the output of the project?
  • Justification for the project. In order to provide a complete understanding of the purpose, sometimes it is necessary to deepen the justification of why the project was started in the first place.
  • If the project faces certain physical, legislative boundaries, etc. these can be a source of risk and therefore should be defined.
  • Hypothesis. All projects have taken certain conditions as part of their existence. For example, the fence construction project has assumed good weather conditions, availability of tools, etc. What are these hypotheses and what is the impact in the case of an inaccuracy of these hypotheses on the project?

A suggestion is to write a scope statement following the so-called SMART goals.

Of course, predicting the future is impossible. However, the Scope Statement represents a commitment to the project based on what is known “today” and what is realistically expected to happen in the future.

If and when situations change, it is necessary to evaluate the effect of the changes on all aspects of the project and propose the necessary changes in line with the Scope Statement in order to ensure the success of the project.

All this, however, only if the scope statement has been optimally implemented.

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business case

Business case: 7 key steps to build it and use it

A business case is essential whenever a new product needs to be launched or a new service must be created.

Once the business case is prepared, it must be presented to stakeholders, investors, supervisors, department managers … In any case, whatever the public, the project manager needs to be prepared to make a good impression and be convincing.

Today, we talk about how to build and use a business case that can convince the target audience.

What is a business case?

In short words:

A business case proves to the customer or to the stakeholders that the product/output wanted is a good investment.

The business case is traditionally a document that defines the main advantage of a project in order to justify its expense.

It often describes how the project aligns with the strategic goals of the organization.

Why create a business case?

The preparation of the business case allows the project manager to adopt a disciplined approach to critically examine the opportunities, alternatives, phases, and financial investment of a project. All this in order to formulate a plan for the best course of action in order to create business value.

A well-structured business case will increase the perception of the benefits and value of the project and reduce the risk perception. Moreover, it will create more chances of getting support from investors, both internal as well as external to the organization.

A business case is needed when:

  • We want to demonstrate the value of a product or service proposed for the organization;
  • We want to get investor approval;
  • It must be decided whether to outsource a particular function;
  • It is necessary to relocate and reorganize the commercial operations and the productive structures;
  • Priority must be given to projects within the organization;
  • It is necessary to ensure funding and financial resources to implement the project.

By working well and correctly on a business case, the project manager is able to competently present the project to stakeholders whose approval is essential.

The documented business case will provide security and a good level of certainty that the proposal will be accepted.

How to write, build and use a business case

the business case

A project manager needs to take the time to write a business case that can justify the costs of the project. It will have to identify the benefits for the business in general and has to emphasize the profits for the stakeholders.

The following 7 steps will show you how to effectively build and use a business case:

Step 1: identify the business problem

Projects are not created solely for the sake of the project itself, but they also have broader goals.

Usually, they are initiated to solve a specific business problem or create a business opportunity, but in the end, they have to benefit the company in general.

Therefore, the first task when drafting a business plan is to understand what the “general” problem or opportunity is, describe it, find out where it comes from, and then identify the time needed to deal with it.

Step 2: Identify alternative solutions

How to know if the project you are undertaking is the best possible solution to the problem defined above? Of course, choosing the right solution is difficult.

One way to narrow the focus and make the best solution clear is to follow these six steps that go from examining alternative solutions:

  • Record alternative solutions.
  • For each solution, quantify its benefits.
  • Predict the costs involved in each solution.
  • Understand the feasibility of each.
  • Discern the risks and problems associated with each solution.
  • Document everything in the business case in order to make the preferred solution clear.

Step 3: Identify and recommend the preferred solution

Once the solutions are classified, it is time to identify and recommend the preferred one.

A method that can be applied is to assign a score between 1 and 10 depending on the cost / benefit ratio of the solution.

Step 4: Predict the risks of the project

In order to predict the risks of the project, it must first be foreseen what the scope of the project could be. Once this has been done, it is possible to proceed with the forecast of the possible risks.

Here are the questions to ask in this case:

  • What will be the main goal?
  • How long will it take to make it happen?
  • What actions are included in achieving this goal? And which ones are excluded?

When we talk about risk, we will ask instead:

  • What are the obvious risks of undertaking this project?
  • What are the less obvious risks (such as opportunity costs)?
  • What is the point of taking these risks?
  • Does the benefit outweigh the cost?
  • What are the intangible benefits?

Step 5: Estimate the budget and search for funds

This is where we estimate the money needed to complete the work related to the project.

It is also a good time to indicate where the funds are expected to come from: will they be collected? Borrowed? Donated or transferred in the budget?

Moreover, the following questions must be answered:

  • What amount of money will be allocated to each of the necessary resources?
  • What is the interval you can expect to wait to pay for each resource?

Step 6: Describe the implementation approach

At this point, the business problem – or the opportunity – and how to reach it is identified. Now is the time to convince stakeholders of the advantages of the project by describing the best way to implement the process in order to achieve the goals.

Here, in short, a preliminary project plan is made and this will include:

  • Goals, preferably SMART
  • Deliverables
  • Scope
  • Project phases
  • Tasks required at each stage
  • Communication systems
  • Dependencies between resources
  • Budget

Clearly this part does not need to be detailed and precise for now, but it should still be a fairly credible and a truthful draft.

Step 7: The executive summary

An executive summary is simply a summary – a page – of everything that has been analyzed so far.

The easiest way to do this is to provide quick summaries of:

  • Problem
  • Solution
  • Costs
  • Return on investment potential
  • Time frame
  • Who is involved

To make the executive summary as clear and concise as possible, the project manager should aim for an average of one sentence for each point above.

To conclude, by clarifying the goals, identifying the value that the project will bring, and explaining the implementation with clarity and security, the project manager will already be on his way to building and presenting a credible business case.

The facts are important and the numbers are just as important.

But there is an additional element to consider when it comes to exposing a business case to the stakeholders: It is necessary to connect with the public also on an emotional level and tell “a story”.

When a solution is presented and a new story around it is created, it will be very unlikely that stakeholders will give a negative feedback to the presentation.

 

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The Project Management Plan as a project compass

What is a project management plan? You probably already know it, but if this is not the case, or if you still have doubts, read this article and we will try to explain it.

Contracts have been signed, handshakes have taken place and a new project is officially on its way.

But when it comes to planning a new project, a project manager might not know exactly where to start. This is where the project management plan comes into play.

But what is a project management plan? How do you accurately predict the duration of activities? How are the expectations of stakeholders translated into concrete outputs? What happens if something goes wrong?

The project management plan is the answer to these questions and the key to a successful project.

What is a project management plan?

The project manager creates the project management plan based on the input of the project team and the main stakeholders.

A project management plan is an approved formal document that defines how the project will be executed, monitored, and controlled.

It can be a summary or a detailed document and can include baselines and other planning documents.

As work progresses, project performance is measured and compared to the base included in the project management plan.

If, while the work progresses, a deviation from the baseline occurs, the project manager will take care of it by making the necessary corrections.

If these corrections fail to correct deviations, formal modification requests to the baselines become necessary.

What are the components of a project management plan?

A project plan is composed of three basic elements:

  • Activity: status of the activity, priority, time, allocation of human and financial resources, notifications, etc.
  • Tasks: the smallest jobs that make up the largest project.
  • Resources: what you need – people, equipment, site, etc. – to complete the tasks of the project.

Obviously, these are the indispensable macro elements that have to be taken into account, but starting to go into detail we can see how the plan must consider other countless aspects.

The details of a Project Management Plan

This is why a project management plan is further divided into many parts, each of which will be elaborated in detail and will be decisive for the success of the project. Let’s see what:

  • Determine the scope of the project: establish the limits of the project and the responsibilities of each team member. This is established by determining and documenting specific project goals, results, characteristics, functions, tasks, deadlines and costs.
  • Project phases: this is the life cycle, from initiation, planning and execution, to monitoring, control and, finally, project closure. So, here you are breaking a project’s schedule into smaller, more manageable parts. It is possible to think of these as mini-projects that can be marked by milestones.
  • Activity planning: this is basically a list of things to do to complete the project. It is here that all that concerns the flow of the project is collected from the beginning to the end.
  • Identify the key points of the activities: those activities that signal the end of a phase of the project are called milestones. These milestones are generally indicated in the plan with diamond-shaped icons and help to break down the project into smaller, more manageable pieces.
  • Tasks: these jobs should be small incremental steps towards the final output. They can be extracted directly from the program of activities that was created in the previous step.
  • Duration: here the project manager calculates how much time he thinks that each activity and project phase will require. These are estimates, but are based on the general deadline of the project and the project manager must still be realistic about them.
  • Dependencies: here we talk about the activities that depend on the completion of other activities; before the previous ones are not completed, the next cannot begin. It is possible to link these dependencies and set notifications so that the team knows when they are complete, so as not to block the work and make the process more fluid.
  • Resources: they are what is needed to carry out the project. These can be anything, from the people in the project team to the material management software they will need to complete their tasks, from the workplace to external suppliers and contractors, etc.
  • Timeline: it is the determination of how much time is available for each phase of the project. A timeline provides a view of the schedule and activities that lets the project manager know how to distribute the workload.
  • Budget: here the costs involved in assigning all the resources needed are determined. This number will generally have to be approved by the directors of the organization and / or by the project sponsor and normally lies within a number range; it is therefore necessary to be realistic when making estimates.
  • Monitor progress: clearly during the project, the project manager will have to keep track of the progress of the project plan. The actual progress compared to the planned one must be monitored, if possible, in real time, which allows changes to be made in the event of problems before they become unmanageable.

Clearly, at the end of a project, it is important to analyze the entire progress of the project from beginning to end, especially in the case of problems encountered during the life cycle (link to https://twproject.com/it/blog/ciclo- the-life-of-a-project-phase-and-features /).

It will also be necessary to compare the results obtained with the forecast results included in the project management plan. You will have to reflect on any mistakes you have made, to ensure that the next similar project does not fall into the same mistakes.

Creation of the project plan and support tools

As we could see a project plan includes many elements that have to be considered. This is why project management tools can make the creation of the project plan and its management much simpler and more efficient.

The market offers several project management tools, each with its own features and its own unique graphics.

A Project Management software such as Twproject, for example, also allows the sharing of the project management plan among all users.

Team members can use this tool to update their activities, which means getting real-time data on the project that will allow the project manager to manage it more productively.

The project management plan is practically a process of organizing the various small pieces in order to achieve the final goal outlined in the project.

You can have a good plan, but a project manager also needs the right tools to implement it correctly, especially in the case of more complex projects.

Even more so in the case of changes to the project management plan, PM tools can be particularly useful.

If you have never used TWproject you can try it for free by clicking here in order to evaluate all its features.

Conclusions

Although the project management plan is developed as part of the project, it should be a living document that evolves as the project progresses and is updated with the most recent relevant information.

This project management plan should be available to all project members, as it can provide essential information about the project itself. We are indeed talking about the main communication document for the project.

Creating a complete and strategically valid project management plan is essential to ensure the success of a project. Our guidelines can help you a lot in the making and creating it and this might not be as difficult as you think.

With a well-designed project management plan, the project manager will have a high probability of keeping the project on track and of fulfilling the promises initially made to the different stakeholders.

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detail of a time schedule

The level of detail of a time schedule

Creating a complete schedule is one of the most difficult tasks that a project manager has to face.

Precisely for this reason, we want to speak about this subject again in order to better clarify some points that concern the level of detail of the time schedule or, in other words, how deep we must go into details in order to predict the timing of the project.

The preparation of a time schedule should be carried out within a formal structure, in which clear lines of authority and responsibility should be established. Let’s start by seeing what the steps are.

5 basic steps for preparing a time schedule

There is a commonly used five-step process for preparing the time schedule. It looks like that:

  1. Definition of the activity: involves the identification and definition of those activities that must be carried out to achieve the goals.
  2. Sequencing of activities: involves the accurate identification of the constraints and relations between activities and establishes the order in which these will be carried out.
  3. Estimate of the duration of the activity: determination of the time required to complete the activities that make up the program.
  4. Development planning: involves the development of realistic start and end dates for each activity.
  5. Control planning: identify program changes and manage actual changes to the program.

The time schedule is therefore fundamental for the correct execution of the planning and control functions of the project management.

The planning phase of a project contributes to the development of detailed plans and budgets and the identification and allocation of the resources required in all project activities.

Moreover, during this phase, a series of integrated programs are developed at multiple levels that link all the activities of the time schedule, showing their logical relationships and possible constraints.

The level of detail developed for these programs depends on the scope and risk of the project.

This process provides a hierarchy of functional and layered programs that can be useful for monitoring the progress of the project.

The details of a time schedule

So let’s see what are the different levels of detail that a schedule can present.

Level 1: The Project Master Schedule (PMS).

This is usually reported in one single page, in which the main activities of the project are highlighted, the milestones, and the key results for the entire project.

It is used to summarize project planning in reports and other documents when more detailed planning is not required.

Frequently developed by the “client” as part of his first feasibility studies for the project and then maintained by the contractor; it can be used to assist in decision making.

Level 2: Summary Master Schedule (SMS).

It describes the overall project divided into main components by area and is used for higher level management reports.

It will include Level 1 information, but in more details in order to show the activities by area.

It should demonstrate the guiding path for the structures and the main process systems based on the purpose of the project.

The relevant public of this type of program includes – but is not limited to – general managers, sponsors, and project managers.

schedule

Level 3: Project Coordination Schedule (PCS)

This program is a summary of planning activities and is generally developed by the main contractor or project team during the initial planning stages.

Level 3 planning covers the entire project and is used to support the monthly report.

This includes all the major milestones, the main design, procurement, construction, verification, and start-up elements.

During the project execution phase, this planning defines the general critical path and is the main coordination tool for the project as a whole.

Level 4: Project Working Level Schedule

Level 4 presents the detailed plan of the work that needs to be done, where each part is an expansion of a part of the Level 3 program.

This is the program that shows the activities that must be performed by the project team.

The dates generated by the activities included in this program represent the expected start and completion of the project.

The level 4 program can cover the entire project or part of the project, depending on the size and complexity of the project.

A critical factor is to keep this type of planning in such a dimension that can be easily managed, updated, and validated.

The recipients of this type of program are mainly project managers with their teams.

Level 5: Detail Schedule

This program presents the further subdivision of the activities included in Level 4.

In short, this is a program used to map the detailed activities necessary to coordinate daily work in specific areas.

Level 5 schedules are developed by workforce supervisors to plan and coordinate their work in detail.

These level 5 programs are generally replaced every 1 or 2 weeks, depending on the complexity of the job.

Important notes on the level of detail in a time schedule

  • Level 1 and 2 programs are normally developed as part of the project’s pre-feasibility studies.
  • Only in the case of very complex projects, there will be a complete planning of Level 1 and Level 2. Generally, less complex projects have just level 2 planning.
  • If the project is relatively small, the level 3 program is expanded into a level 4 program to coordinate the execution of the work. In large projects with multiple Level 4 schedules, Level 3 planning is maintained as overall project planning.
  • Each project requires a level 4 program to coordinate the project work day by day. However, the overall size of this program must be “manageable” and focused on work in a single area. Therefore, Level 3 planning becomes essential for the overall coordination of the project.

In conclusion, each level of a time schedule has its specific function, also based on the complexity that a project presents.

It is important for a project manager to be able to “navigate” between the different levels and to be at the right level of detail in order to bring a project to its success. To do this, it is essential that a project management software such as TWproject is available with which to manage each time program level.

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Residual and secondary risks: What they are and how to deal with them

Probably, you have already heard about residual and secondary risks in a project without having a clear idea of what it is. In this article, we will try to explain the differences between.

We all face risks on a daily basis and, consequently, risks exist even in project management.

There are those who panic, those who try not to take obvious risks, and those who try absolutely to avoid them, but in the end the risks are inevitable. There is no way to prevent risks from entering our lives. The same is true in the case of project management.

Definition of risk

The PMBOK Guide  defines a risk as “An uncertain event or situation that, if it occurs, has a positive or negative effect on one or more objectives of the project. ”

A risk, therefore, does not necessarily always damage the project. A project can also get a positive result from a risk.

The PMBOK Guide also states that Risk Management is one of the areas of knowledge that a project manager should know.

The Project Managers must, in fact, be trained in risk management in order to ensure that the obstacles faced during a project are minimized.

This means that project managers must be able to think outside the box and not always take the same road, even if in the past it has been an optimal choice. For instance, the situation could have changed.

Which types of risks exist?

In addition to the main risk inherent in any project, positive or negative, individual activities may involve secondary and residual risks.

Let’s take a look at secondary and residual risks and their definitions.

Secondary risks

The PMBOK Guide defines secondary risks as “those risks that arise as a direct result of implementing a risk response to a specific risk”.

In other words, when you identify a risk, you have a response plan that can deal with that risk.

Once this plan is implemented, the new risk that could arise from the implementation represents a secondary risk.

For example, the project manager for a construction project might know, from past experiences, that one of the main risks is that the sand supplier will not be able to deliver the goods in time. In the risk management plan created, the project manager will therefore already have taken this risk into account. The action he takes if this happens could be to get the sand from a different supplier. However, a potential risk that the project manager may encounter in this case, is that there may be differences in the sand provided by the former compared to that provided by the second supplier, which would be a secondary risk.

secondary risks

Residual risks

Residual risks are the remaining risks, ie the minor risks that remain.

The PMBOK Guide defines residual risks as “those risks that are expected to remain after implementing the planned risk response, as well as those that are deliberately accepted”.

Residual risks are acceptable for the organization’s level of risk tolerance or, in some cases, a residual risk does not have a reasonable response.

Project managers therefore simply accept them as they are. If they must occur, they will occur, and there is not much they can do about it.

These risks are identified during the planning process and an emergency reserve is set up in order to manage risks like these.

Although residual risks are not particularly worrying, organizations cannot completely ignore them and should address them through:

  • Identification of relevant governance, risk, and compliance requirements.
  • Recognition of existing risks.
  • Determination of the strengths and weaknesses of the organization’s control framework.
  • Planning for appropriate contingencies.

For example, you could identify a risk in the possible rainy weather forecasted during an event lasting an hour or two, where this weather condition could interrupt some of the scheduled meetings. To manage this risk, the other meetings will be scheduled with a buffer of a couple of hours. In this way, even if it rains for two hours, the other plans will not be interrupted or postponed.

This, however, does not eliminate the risk that the program needs changes. Simply reduces it.

What is the difference between secondary and residual risks?

  • Secondary risks are those that occur as a direct result of implementing a risk response. On the other hand, it is expected that the residual risks will remain after the expected risk response.
  • The emergency plan is used to manage primary or secondary risks. The backup plan is used to manage residual risks. Note that if an identified risk occurs, the emergency plan is implemented and, if it becomes ineffective, the reserve plan is implemented.
  • If residual risks and secondary risks do not require a response plan, they will be monitored as they occur.

Example of a situation that contains both risks

Take for example a future project manager who is studying for one of the exams to obtain the official PM certification.

When the future PM plans the study program for the exam, the main risks that can affect it are:

  • suddenly he will commit himself full time to a new project that will not leave enough time to study
  • He will get sick during the exam preparation

An activity to respond to the first risk – not find enough time for the study due to the professional commitment – would be to start the preparation for the exam in a low working season, taking into consideration the work model of previous years.

The residual risk for this risk response would be that an unexpected large-scale project would present itself during the preparation for the exam. In that case, it may be necessary to postpone the exam, so as to find enough time to study in the future. This could be connected with an extra cost that can be covered thanks to the contingency reserve.

In the second case, the risk response activity to avoid getting sick during the exam preparation, would consist in doing the vaccination for five of the most common contagious diseases at the time of the preparation for the exam.

The secondary risk of this risk response would be that the vaccines themselves can cause side effects or even cause infections.

 

To conclude, risk management is an integral part of project management. It includes the identification, analysis, and monitoring of all these types of risks.

Understanding how to identify and manage risks is part of everyone’s life, even in the life of a project manager.

It is important that all types of risks are identified, analyzed, monitored, and cared for during the entire project.

For a project manager, learning to distinguish and plan for different types of risks will be a valuable aid to manage resources, time, and guide the project to success more efficiently.

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Feasibility study

Feasibility study of a project

Before giving the green light to a project that could cost up to thousands of euros, a feasibility study will certainly be required from the board of directors of the organization.

First of all, the feasibility study determines, if the project is likely to succeed and if it may or may not be an opportunity for the organization.

The feasibility study is generally conducted before undertaking any initiative concerning a project, including planning. It is one of the fundamental factors, if not the most important, which determine whether the project should be carried out or not.

Although project managers are not necessarily the ones who conduct the feasibility study, they can still act as reference persons during this phase.

Moreover, project managers can use the feasibility study to understand the parameters of the project, the business goals and the risk factors involved.

What is a feasibility study?

Specifically, a feasibility study is used to determine the feasibility of an idea, for example to ensure that a project is legally and technically feasible as well as economically justifiable.

The feasibility study says if a project is worth the investment. For example, if a project requires too many resources, this prevents those particular resources from performing other tasks. In general, failure to use those resources for the time necessary to carry out the project may also cost more than the organization could earn from that particular project.

A well-designed feasibility study should therefore offer a series of parameters that we a Project manager could define as essential for the complete evaluation of a project. We can start from a historical basis of the activity or project, including the description of the product or service, accounting statements, details of operations and management, market research and policies, financial data, legal requirements and obligations taxes, potential risks and possible alternative solutions. Nothing should be left to chance.

Generally, these studies precede the technical development and implementation of the project.

Five feasibility areas of the project

A feasibility study evaluates the potential success of the project. Perceived objectivity is therefore an important factor in the credibility of the study for potential investors and stakeholders.

There are five areas that relate to the feasibility of a project:

Technical feasibility

this evaluation focuses on the technical resources available to the organization. It helps organizations determine if technical resources meet capabilities and if the technical team is able to convert ideas into operating systems. The technical feasibility also involves the evaluation of hardware, software, and other technological requirements.

Economic feasibility

this evaluation usually involves a cost / benefit analysis of the project, helping organizations to determine the feasibility, costs, and benefits associated with a project before financial resources are allocated.

Legal feasibility

this evaluation examines whether any aspects of the project can go against legal requirements.

Operative feasibility

this evaluation involves carrying out a study to analyze and determine whether and to what extent the needs of the organization can be met by completing the project. The operational feasibility studies also analyze how a project plan meets the requirements identified in the analysis phase.
the feasibility study

Feasibility planning

this evaluation is the most important for the success of the project. A project will fail if it is not completed in time. In the feasibility planning, an organization estimates how long it will take to complete the project successfully.

Once these areas have been examined, the feasibility study makes it possible to identify any constraints that the proposed project could face, including:

  • Internal constraints: technology, budget, resources, etc.
  • Internal business constraints: financial, marketing, export, etc.
  • External constraints: logistics, environment, laws and regulations, etc.

Benefits of a feasibility study

The importance of a feasibility study is based on the organizational desire to guarantee an excellent job before using resources, time, or budget.

A feasibility study could reveal new ideas that could completely change the purpose of a project.

It is better to do this analysis in advance, rather than being halfway and understanding that the project will not work.

Here are some key advantages of a feasibility study:

  • Improves the attention and motivation of the project team
  • Identifies new opportunities
  • Restricts commercial alternatives
  • Identifies a valid reason to undertake the project
  • Improves the success rate by evaluating multiple parameters
  • Helps the decision making process on the project
  • Identifies the possible reasons for not proceeding

How to conduct a feasibility study

Anyone who conducts a feasibility study must follow several steps. These actions include:

  • Preliminary analysis: before proceeding with the actual feasibility study process, many organizations will conduct a preliminary analysis, a sort of project pre-selection. The preliminary analysis aims to discover insurmountable obstacles and risks that would make even a feasibility study useless. If important blocks are not discovered during this analysis, it is possible to proceed with the more detailed feasibility study.
  • Define the scope: it is important to outline the scope of the project in order to be able to determine the scope of the feasibility study. The scope of the project will include the number and composition of both internal and external stakeholders. Moreover, it is important not to forget to examine the potential impact of the project on all areas of the organization.
  • Market research: no project can be undertaken without this analysis. Those who conduct the feasibility study will deepen the existing competitive landscape and determine if there is room for the project within that market.
  • Financial evaluation: the feasibility study will examine the economic costs related to the project, including the equipment or other resources, the hours of work, the proposed benefits of the project, the associated financial risks, and the potential financial impact in case of failure of the project.
  • Alternative solutions: if any potential problems should emerge during the study, alternative solutions will be examined in order to ensure the success of the project.
  • Reassessment of the results: a reassessment of the feasibility study is essential, particularly if time has passed since it was first undertaken.
  • Go / No-go decision: this is the final step of a feasibility study. In short, here it is decided whether the project can be started (go) or not (no-go).

In conclusion, it must be remembered that a feasibility study is more a way of thinking than a bureaucratic process.

As the scope of the project grows, it becomes increasingly important to document the feasibility study, particularly if large amounts of money are involved and / or if the delivery is critical.

The feasibility study must not only contain sufficient details needed for the operational phase of the project. It should also be used for comparative analysis at the end of the project. It will be at this stage that a project manager will analyze what was produced compared to what was initially proposed in the feasibility study. The smaller the gap, the greater the professionalism of those who drafted the study.

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present a project

How to present a project to stakeholders

Is there an optimal way to present a project to stakeholders?

In the world of project management, presenting and communicating a product’s strategy is not an isolated phase of the project’s life cycle.

In fact, anyone involved in project management must deal with project sponsors and stakeholders and maintaining an open and effective communication with them is important.

In fact, it will be necessary to update the relevant stakeholders throughout the whole process, to keep everyone informed of progress and to ensure that everyone is working towards the same strategic goals.

But successful project managers also know that communication does not work in just one way and they must also seek feedback from stakeholders.

Of course, it is not possible to always listen and consider everyone, so the project manager needs to know who to talk to, when and what.

In this article, we will explain how to communicate with stakeholders at every stage of a project’s life cycle and how to obtain their consent.

How to communicate with interested parties throughout the process

There are more situations during a project ranging from planning to execution. For each of these phases, it is very important to communicate with stakeholders correctly. Let’s see the various steps together.

 Planning stage

It is important to work closely with the leaders of the organization, developing a clear vision of the product and identifying the most important strategic goals.

If the project manager and the stakeholders can agree in advance on the vision and the strategic goals of the project, there will certainly be less confusion on the definition of the priorities later.

Priority definition

Once the strategic goals are clear, priority can be given to specific tasks within the project.

This is where open communication with department managers becomes important, such as marketing, sales, customer support, etc.

It is important to discuss their main priorities and to establish together how these priorities fit into the more general themes and strategic goals.

If stakeholders are involved in the process of setting priorities, they are much more likely to favor decisions made by the project manager.

Execution Phase

Once the priorities have been established for initiatives aimed at reflecting strategic goals and a consensus has been reached between the main stakeholders, it is time to translate the vision into operative measures.

The roadmap must become now more detailed.

Here, the resources must be chosen and distributed for each initiative, assign ownership of the initiatives to the different team members and designate the deadlines.

Once the plans have been determined and the team has been set in motion, it is important to ensure that all stakeholders are always up-to-dated.

Planning meetings with the various interested parties allows the project manager to communicate the status of the project and explain what will happen in the future.

Sometimes, when an organization is very large, it becomes logistically difficult to include every single interested person. In this case, a solution is to directly involve the directors and the department managers, so that they can then pass the information to the respective teams.

Moreover, providing autonomous access to the project roadmap is another way to build consensus and engage stakeholders. In these cases, it is useful, for example, to use a project management software that includes this functionality.

This can fill potential communication gaps and prevent embarrassing conversations with interested parties who claim not to know what was being done.

Strategies for obtaining stakeholder consensus

how to present a project

As a project manager, it will be necessary to present the project to different audiences that have with different interests.

If the public is composed of managers, for example, the goal will probably be to convince them to accept the overall project strategy.

If the public is another segment of the organization, the goal will probably be to communicate the project’s goals and create consensus.

In both cases, it is necessary to be clear and persuasive, so that the stakeholders understand the strategy and agree with the priorities.

Here are some suggestions to best conduct this type of meetings:

1. Be prepared

Creating a presentation document is one of the steps, but it’s not enough. The project manager must be ready to tell a convincing story and justify why any planned initiative deserves to be completed.

  • Structuring the presentation: a good presentation starts with the general picture and after that explaines the details. Start with the “why”, sharing strategic goals, before moving on to a more detailed explanation of “how” and “what”.
  • Be concise: the content of the presentation must be simple, clear, and direct.
  • Anticipate objections: be ready to respond to concerns about why certain initiatives must be pursued. This is linked to market knowledge and the use of a priority-setting plan. If the project is based on data, the project manager should have no problem justifying priorities to the stakeholders.
  • Provide specific examples: it is one of the most powerful tools that can be used to convince an audience.

2. Know the audience

Bottom-up communications, such as the presentation of strategic goals to managers for example, follow a very different process than top-down communication, such as the presentation of specific task plans to developers.

In executive-oriented presentations, for example, it is important to focus on high-level issues and strategic goals.

The discussion should relate to market space, customer data, and potential return on investment.

Another audience, like the developer, may be interested primarily in specific activities, requirements, and deadlines.

Moreover, the language used during the presentation must be appropriate for the public.

If the public is not technical, it is necessary to use simple language without technicalities and avoid acronyms and abbreviations that are not commonly known outside of the sector.

3. Communicate the status

During the project life cycle, the stakeholders will want to know the status of the project, the way the resources are allocated, and how the status of the project could change based on different potential scenarios.

Here’s what helps in these cases:

  • Include the completion status as a percentage for each project activity. By providing these details, it is possible to stimulate conversations about how initiatives depend on each other.
  • Another approach is to use a color coding system to communicate the status of each activity. For example, it is possible to choose to distinguish planned, approved, developing, and completed initiatives through color schemes or tags.
  • Finally, the project manager must be sure to save previous versions of the project roadmap. By creating an archive of old roadmaps, it is possible to easily trace which initiatives have been completed, delayed, rejected, or canceled.

4. Use images

People only remember a small percentage of what they hear, so visual aids are critical in order to keep the audience’s attention and make sure the key points remain.

Images should integrate and clarify what is said verbally and not present additional information.

Avoid to publish lengthy or complicated slides that could distract the public.

Make sure the writings are large and easily readable, using color combinations to show how the initiatives relate to each other and to the larger strategic goals.

A project manager has the task of dealing with a project in its entirety and one of his very important responsibilities is continuous communication with all stakeholders, at every stage of the product life cycle in order to ensure that the project has the best chances of success.

After all, no project manager can manage every detail and task of project development alone.

Any successful project is the result of a talented and knowledgeable team that works together to achieve a common strategic goal.

With this in mind, a project manager should therefore devote sufficient energy and attention to iteratively communicating with his team and stakeholders.

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RACI matrix

RACI matrix what needs to be done and by whom

The RACI matrix is a very important tool that can help in the implementation and proper functioning of a process.

This matrix is mainly used to coordinate human resources within a process.

There are usually many different people involved in a process and each one has different responsibilities. A RACI matrix provides explicit documentation and a reference which can help in different phases of the process.

What does RACI mean?

To understand what the RACI matrix is, it is necessary to understand the meaning of its acronym.

RACI stands for “Responsible, Accountable, Consulted, Informed“. Here is the definition of each of these terms:

  • Responsible: this is the class of people who are responsible for completing the work. This can refer to individual workers who perform the assigned task or could refer to a system if the activity is automated.
  • Accountable: this is the class of people responsible for supervising and approving the work that is carried out. These are usually high level persons within the organization.
  • Consulted: these can be people that must be consulted at the time of an exception, both internally and externally, the so-called “consultants”.
  • Informed: it is the class of people who do not need to be actively involved in the project, but who in any case have an interest in its execution and must be kept informed. Informed people correspond to stakeholders.

Rules for using a RACI matrix

Let’s see what the general rules for the correct use of a RACI matrix must be:

One responsible person

it is essential that only one person is assigned to the roles of responsibility indicated by the initials R and A. Having more than one person responsible for the same task increases the ambiguity and the possibility that the work will not be carried out correctly.

Although this is the rule, having a single responsible person can, however, lead to other types of problems. If the responsible person is incompetent, for example, the whole process may not be done correctly. This is why there is often a hierarchy of responsible people.

Communication with the people consulted

There must be a two-way communication channel with the so-called “consultants”. The important aspect is that this communication works in both ways. Moreover, adequate follow-up must be ensured.

Inform informed people, ie stakeholders

this is a one-way communication channel. It is usually a control metric and is usually automated, but still needs a manager to deal with it in order to ensure it works properly.

There should always be at least one person responsible for each activity in a process. Similarly, there must always be at least one person responsible for each task.

There cannot be more than one person responsible for the same process activity.

In the same activity, however, there may be several people consulted and informed.

 How to create a RACI matrix

Now that we know the meaning of the letters of the word RACI, it is time to understand how to create a RACI matrix. Here are the basic steps:

  • Make a list of all the activities of a process.
  • Make another list, this time of all people involved in the process.
  • Assemble a table with a row reserved for each process activity.
  • In the same table, create columns corresponding to each person involved in the process.
  • Analyze each activity and mark it with one of the letters that are part of the initials RACI.

the RACI matrix

Benefits of using the RACI matrix

After all that what has been seen so far, a question will arise: why use the RACI matrix? What are the advantages of this method?

Here are the reasons why it is very important to use a RACI matrix:

  • Facilitates responsibility monitoring.
  • Helps other members of the process to know who to report, ask for help or entrust a delivery or activity.
  • Prevents a process from stopping because someone failed to fulfill an assigned responsibility.
  • Documents “who should do what”.
  • It is easy to use and create, it is in fact a visual and intuitive tool which makes it a method that can be consulted quickly.
  • Stimulates communication between team members, collaboration, and teamwork.
  • It allows to have a clear and objective division of tasks among the members of the work group.
  • Creates a greater sense of responsibility. The jobs and results of others depend on the performance of each on each activity.
  • Allows you to assign resources in the right measure.
  • Prevents duplicity of activities.
  • If a team member leaves the project, the substitute knows exactly what to do and where he is in the process.

Therefore, the use of a RACI matrix allows the project manager and all the people involved in the project to know exactly who is responsible for what without misunderstanding.

For this reason, the RACI matrix allows to obtain processes within a project that are more orderly and disciplined.

Have you ever used a RACI matrix for your projects? If you have any doubt, leave your question here.

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The project baseline and the measurement of the variables

The project baseline is an “instant photo” of the project taken at its initial moment.

The goal of the project baseline is to see how far actual results have deviated from the initial reference plan.

In project management, it is essential to establish a baseline with clearly defined requirements, an accurate cost structure, and planning estimates, before the project execution and monitoring start.

All this must be completely defined and documented before the actual activities of the project begin.

In the baseline, the following elements of a project are included:

  • Scope
  • Timelines
  • Costs
  • Resources
  • Risks
  • Quality

Project Manager and project baseline

The project manager must examine the deviations from the project baseline when the work is done and throughout the project life cycle.

After the planning process is completed, this plan is agreed by all stakeholders and everyone expects the actual results to match the planned ones.

The role of the project manager is to verify during the execution of the project, if there is any variation from the baseline, in any element mentioned above.

If an event occurs that causes the project budget to be exceeded, for example, or if there is a risk that will cause the project to be delayed, corrective and preventive actions must be taken.

The project baseline can be changed, but it is not an easy process.

In fact, the baseline should allow to verify how much the project is in line with the initial planning.

If a baseline changes too frequently and there are too many deviations from it, this can be considered misleading.

Therefore, in the real world, the baseline of the project is generally modified only if an important request for modification is approved and only with the recognition of the sponsor of the project.

These changes are considered and approved through a specific process, in which the impacts on the project are assessed.

If a change is approved by the control committee, first its impacts are reported in the project plan and, next, the modification can be implemented.

Deviations from the project baseline are often due to incomplete or incorrect risk identification.

There may be a deviation from the baseline of the project, for example, if the cost of an activity or article exceeds the planned values, or if an activity takes more time than the planned duration.

Why is the project baseline important?

Establishing a baseline allows the project manager to evaluate performance for the duration of a project.

If a project is behind schedule or above budget, it is time to make changes to the baseline or add more resources.

A technique often used by project managers to measure and compare the performance of a project with its baseline, is the following calculation:

Planned Value (PV) = The estimated cost of the planned work

Actual Value (AV) = Actual cost of work done up to the current date

Effective Value (EV) = Planned Value (PV) x % of project completion

Schedule Performance Index (SPI) = EV / PV , measures progress made up to the current date with respect to the initially planned progress.

When SPI <1, less work than expected has been done.

When SPI> 1, more work than expected has been done.

Cost Performance Index (CPI) = EV / AV , measures the value of completed work compared to the planned labor cost.

Finally, baseline determination helps with the accuracy of future estimations. This allows the project manager to get a better idea of how long it will take to complete the project and at what costs.

Estimated at Completion (EAC) = (total project budget) / CPI

EAC is a forecast of how much the overall project will cost, so that it is possible to approximate the correct allocation of resources.

Maintaining an accurate record of current project estimates and actual results allows estimates to be applied to similar future projects.

How to check the status of the baseline

 The check of the progress of the project with respect to the baseline, must follow specific procedures that are established even before starting the execution of the project.

Effective control is possible when these elements are defined:

  • Performance assessment standards and criteria
  • Data collection system
  • Frequency of monitoring, ie. when the checks must be carried out
  • Frequency of reporting
  • Approval process for the new programming
  • Stakholders communication plan.

Practices to follow for optimal calculation and good control of the project baseline

 Let’s see the “modus operandi” to set, track and maintain an optimal project baseline.

 1. Setting of the original baseline

At the beginning of any project, it is very important to set a baseline that represents the starting point of the work. This is a useful method to document the change of various parameters of a project. The goal of setting a baseline is to avoid rewriting its parameters, but eventually just adding new ones. The experience of the project manager in this operation has a very important role.

2. Keep track of previous baselines

As the project progresses, surely the project manager will have to make changes. However, before any change, it is important to save a history of the previous baselines so that it is possible to access the previous baselines for comparisons and restore changes, if necessary.

3. Maintenance of a baseline

Once a change has been approved, it is time to update the forecast by adding the new scope, deadlines, and approved changes. Keeping an accurate record of updates and changes to the baseline allows the project manager to keep the project in line with the new requirements.

In order for the project to be successful, a structured control system becomes fundamental, as well as a good initial planning.

In addition, a project manager must be able to manage contingencies and any changes that may occur during the life cycle of a project.

The control must not only be limited to reporting the changes and rescheduling the activities planned for the future. Instead, control must be a proactive process in which project managers try to anticipate problems.

The project manager must therefore have a continuous and detailed view of the project and must communicate continuously with the project team and with stakeholders.

For this reason, a project manager can refer to different baselines and it is important that he has an adequate control system available.

A good project software like TWproject that keeps track of project timings and deliverables, can certainly give a big help in the control of the project baseline, too.

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change requests

Management of change requests

The management of change requests refers to the tools and processes used to manage changes within a project and its team.

In the context of project management, the change is all that transforms or influences projects, activities, processes, structures or even work functions.

More often, the management of change requests refers to the supervision of the team to successfully integrate the change in the work routine in order to achieve the general goals of the project.

The triple constraint in the management of project change requests

A method used to understand change management is the triple constraint.

The triple constraint is what is defined as the process of managing the scope, budget, and time of a project in order for it to be successful.

In simple words, this means completing the project on time, within budget, and according to the standards set by stakeholders, customers or the sponsor.

Change management, therefore, is the process of checking the triple constraint on the project every time modifications are introduced to the project management plan.

Part of the change management is therefore to monitor the triple constraint and the ability to quickly identify anomalies.

When there are requests for changes to a project, it is not only necessary to have a plan to manage the change, but it is also necessary to have a responsible person in charge able to follow the resolution of the problem before it can seriously threaten the project.

To keep track of the triple constraint, it is therefore necessary to have an integrated control of the changes throughout the project.

This includes a review, analysis, and approval process for change requests as soon as they arrive.

Finally, it is also essential to document the changes at each stage of the process. This creates an historical record that can help future projects that will experience similar events.

The scope of the project

The change management process is the sequence of steps or activities that a change management team or project manager follows to ensure that the project meets the expected results.

During the development of a project, it is normal for the project manager to find himself facing the change management and this does not necessarily mean that the project is going in the wrong direction.

Other times, the project manager can really encounters episodes of scope creep – ie. moving away from the purpose of the project – which, in the long term, can lead to destruction.

The scope of the project defines the deliverables and outputs that the project must produce. It also includes information on the timing and budget available.

The scope is always defined at the beginning of a project’s life cycle, specifically during the planning phase.

Of course, even when the scope has been identified in detail, it is possible that some changes and modifications are necessary.

Among the causes that can lead to the need for changes we find:

  • Incomplete or incorrect requirements analysis
  • Lack of involvement – right from the start – of end users who must agree with the results that the project team is trying to achieve
  • Underestimation of the complexity of the project
  • Lack of control of changes and modifications
  • Weakness of the project manager and / or project sponsor

change requests management

Change management process

To avoid having to resort to a change management process due, for example, to scope creep, it is possible to follow these advice:

  • Ensuring that there is unambiguity about the vision that project managers, project teams, and stakeholders have on deliverables and project outputs
  • Understanding the priorities of the different stakeholders
  • Subdividing the works through a WBS – Work Breakdown Structure – also introducing milestones control.
  • Defining a clear change management process for each team member
  • Verbalizing and documenting the delivery and acceptance of the output at the end of the project

It is clear, however, that even if you follow these tips, the need to manage changes can become reality anyway.

The four steps of the change management process

Therefore, in these cases, the project manager should apply the change management process, consisting of four main phases:

  1. Planning change, where the strategy to be followed in the event of changes is defined. This must be clearly communicated to all team members. Therefore, initial communications are generally made in order to create awareness of the reasons for change and the risk that non-change would mean. The project manager must therefore prepare an adequate communication plan and be able to address the information needs. For instance, each public has particular information needs based on the role it plays during the implementation of the change and the project manager must take this into account in order to draft an effective communication plan.
  2. Implementation of changes. Here, the changes are put into practice by the project team. Employee engagement is here necessary and their feedback is a key element of the change management process.
  3. Monitor and control of changes. In this phase, all the changes made are verified and checked in order to find any errors and to have time to correct them promptly.
  4. Post-project review. The final step in the change management process is the review at the end of the project. It is at this point that it is possible to evaluate the entire program, evaluate the successes and failures, and identify the process changes necessary for any similar future projects. This is part of the continuous improvement of change management within an organization.

These were the fundamental elements of change management.

Good project managers apply these components effectively in order to ensure the success of the project, avoid the loss of good employees, and minimize the negative impact of change on a company’s productivity and customers.

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deming cycle

The Deming Cycle (PDCA) and the constant improvement of quality

Analizing the quality and trying to improve it, is probably the main purpose behind improving business processes.

This philosophy of process improvement comes from a very important person, William Edwards Deming, a statistician, often defined as a philosopher of science.

Deming’s goal was to reapply the scientific method to business processes, which he actually did with the so-called Deming Cycle, or PDCA.

Deming’s approach is not just about improving processes, but can also be about improving an entire organization in general.

What is the Deming Cycle

The Deming cycle is a model of continuous quality improvement which consists of a logical sequence of four key phases:

  • P – Plan, or planning
  • D – Do, or the execution
  • C – Check, ie the test and control
  • A – Act, which is the action

Deming’s experience as an engineer gave him an overview of industrial processes and the real attempt to standardize operations in order to ensure large-scale operation.

By studying mathematical physics, he found himself in a position that allowed him to contribute to the growing science of statistics.

Deming’s sampling techniques, for example, are still in use in the US Census Department and the Bureau of Labor Statistics.

The key points on which Deming was working are:

  • Having a system for continuous quality improvement
  • Reducing errors and defects through higher levels of quality uniformity
  • Understanding the meaning of quality in the context

the deming cycle

Let’s look at the four phases of the Deming Cycle in detail.

The phases of the Deming Cycle: Planning

The first goal of the Deming Cycle is to plan ahead in order to understand what you want to achieve based on the expected results. It is a both practical and theoretical step.

Here, we are dealing with business processes, where we intend to improve something within the organization.

At this stage, you will have to test and analyze what is currently wrong with the product or process and how this can be improved.

Also here, one tries to understand what changes can be made to tackle the problems or to achieve something better.

 The phases of the Deming Cycle: Execution

Execution begins first with a small-scale test and in a limited context.

Here, the changes are implemented to test the different variables and each step will be documented.

Instead of simply deciding to make a change and suddenly reviewing all the operations, it is essential to make changes slowly and iteratively during the hypothesis test.

The use of studies that can be measured with respect to control groups, allows to better understand the data received, allowing not only to improve the output, but to understand exactly why the output has been improved by the changes made.

For Deming, this phase should be like a model of a scientific experiment.

The phases of the Deming Cycle: Test and Control

In this phase, the results and findings are studied and collected.

For Deming, the results of the planning and execution will be shown at this stage.

Do the results coincide with the forecasts? In what ways do the results differ, and why?

This phase of study should teach us to draw conclusions exactly like a scientist does after an experiment. Instead of simply asking the question “Did it work?”, for Deming you will have to ask “Why did it work?”.

The phases of the Deming Cycle: Action

This phase is the final one of the process and the first phase of the next cycle.

Here, the recommended changes have been implemented and the process is finalized. Now that we have learned that the output can be generated by executing action X, this action will be performed in each relevant situation.

This phase can include both the implementation of improvements in the company as well as the implementation of new knowledge within the organization.

Just as the results of repeated experiments create new useful knowledge, so these business results must be incorporated into new premises from which the cycle can be restarted.

The company continues to go through the cycle until the expected and actual results coincide and no further changes are necessary.

 The pros and cons of the Deming Cycle

The Deming Cycle is a simple but powerful way to solve new and recurring problems in any sector or process.

Its iterative approach allows the project manager and his team to test solutions and evaluate results in a quality improvement cycle.

The Deming Cycle establishes a commitment to continuous improvement, however small, and can improve efficiency and productivity in a controlled way, without the risk of making untested large-scale changes.

However, going through the Deming Cycle can be much slower and more time-consuming than a direct implementation.

For this reason, it may not be the appropriate approach in the case of an urgent problem or an emergency.

Moreover, this methodology requires significant “buy-in” by team members and offers fewer opportunities for radical innovation.

For Deming, the PDCA treats process experiments as hypothesis tests by asking the questions “did it work or didn’t it work?” And “Is the hypothesis true or is the alternative true?”

This is the cycle through which an hypothesis is developed, the experiments are conducted, the results are evaluated, and the hypothesis is reviewed and repeated.

In simple words, Deming’s approach, seems to want to remove our blinders.

We need to stop looking for only minor changes to eliminate process inefficiencies and instead start thinking big about how processes can be improved in order to increase quality.

For Deming, the same levels of scientific rigor that one would expect from the best researchers should be used in business. Let’s try then.

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the schedule and the project manager

The schedule and its importance for the Project Manager

The time schedule generally refers to the skills, tools, and techniques used to manage time when executing projects to achieve specific goals.

A time schedule must adapt to a specified period of time and use available resources with the right skills.

Given the many uncertainties and variables and the possibility that the availability of resources or the scope of a project may change, it is difficult to create a schedule that remains stable from beginning to end.

Why you need to plan the time for a project

At the beginning of each project, it is necessary to know how events and activities will be organized during time.

And do not forget that during the project cycle, it will be necessary to spend some time to update deadlines by considering any changes to the project plan.

The investment of time for planning the project schedule may seem superfluous, but in reality it is absolutely necessary for success.

During the life cycle of the project a part of time should be foreseen to review the schedule and the dependencies of the various activities.

This allows you to check if the project plans are still on track, what is working and what is not.

The schedule of a project is composed of sequenced activities, milestones and goals that must be delivered within a given deadline.

Having a project schedule means knowing exactly what needs to be delivered and in what order.

Moreover, with the right planning techniques, it is possible to regulate the activities in the case that the project is late or if any changes to its scope occur.

The time schedule: how to structure the project planning routine

schedule and project manager

There are two routines to follow for the planning of the project:

1. Planning of the weekly project

Set a time once a week to analyze the schedule and the project plan, determine the results achieved in the past week, and define the goals for the current week.

This time must also be used to be sure that all resources are aligned to ensure the execution and achievement of the goals.

2. Planning of the daily project

Plan at least 30 minutes a day to reflect on the day and / or review the schedule for the next day.

This moment can occur at the beginning or at the end of the day, depending on the preference of the project manager and the most efficient technique.

Here is a brief example of what daily project planning can look like for a project manager:

  • Review the program and update the Gantt chart, if necessary.
  • Ensure that the meetings scheduled for the next day are properly planned and confirmed.
  • Plan the next day based on whatever deliverables are expected. If necessary, the project manager will block a part of his agenda to work quietly on this.

How to obtain a schedule

The process that allows to obtain a schedule is composed of four phases:

  • Create a model of how the work will be performed;
  • Estimate the duration of activities;
  • Calculate times for activities;
  • Present the results.

Every aspect of the process is taken into account by the team, using experts in the field, when necessary.

In fact, a program agreed with the team is more likely to succeed than one imposed from the board of directors.

Estimation of activity durations must take into account many factors, such as effort required, resource efficiency, physical constraints, etc.

Regarding the third point, the simplest form of calculation is the critical analysis of the path. This uses a duration estimate that includes all the factors.

The final results are usually presented as a Gantt chart.

The main advantage of this model is that it can be updated frequently with new information and quickly recalculated.

This is a continuous process throughout the project life cycle and uses the information on actual progress to predict the end date of the project.

Most of the project planning is normally performed with the help of a specific project management software.

In the past, printed calendars or spreadsheets shared by e-mail were the method used to keep an eye on the project schedule.

But today, most teams and organizations implement project management tools with the appropriate features.

These can simplify the creation of timelines and save them online, making the planning of activities and teams much easier.

Because projects have so many moving parts and change frequently, project planning software automatically updates tasks that depend on each other when a scheduled task is not completed in time.

With some software, it is also possible to have the advantage of setting milestones, linking activities, and seeing the actual or planned progress of the schedule update dynamically.

What are the benefits of using a time schedule?

There are many advantages that a well-made project schedule ensures to project managers, the team, and the organization in general:

  • Managers, team members, and stakeholders can monitor progress, set and manage expectations, communicate and collaborate clearly.
  • Tasks and results can be monitored and controlled to ensure timely delivery of the output – and if delays occur, it is possible to easily assess their impact and make the necessary changes.
  • Increase profitability.
  • The communication of clear and better details about the project helps the organization in the distribution of resources where they are most needed, helping to achieve the goals of the project.

Following these steps ensures the project manager to always work efficiently on any project and to be able to predict and mitigate the risks before they turn into big obstacles.

 

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costs analysis

Analysis of the costs of a project

The analysis of the costs (and benefits) of a project, among all the possible techniques, is perhaps the most important for a Project Manager. Let’s try to see why.

When managing a project, it is necessary to make many important decisions.

Because of the high stakes involved, good project managers do not simply make decisions based on instinct. They prefer to minimize risk and act only when there is more certainty than uncertainty.

But how is this possible in a world with a myriad of variables and a constantly changing economy?

The answer is:

rigidly consult the data collected with reporting tools, graphs, and spreadsheets.

Project managers can then use this data to evaluate their decisions with a process called cost-benefit analysis of a project.

Smart use of cost-benefit analysis will help minimize risks and maximize profits for both the project and the organization in general.

What is a project cost analysis?

The cost analysis in project management was designed to assess the cost compared to the benefits in the project proposal.

This process begins with a list, which includes all the expenses of the project together with the benefits that will derive from it once the project will be successfully completed.

From this, it is possible to calculate the return on investment (ROI), the internal rate of return (IRR), the net present value (NPV) and the amortization period.

The difference between the cost and the benefits will determine whether the action is worth it or not.

In most cases, if the cost is 50% of the benefits and the amortization period is not more than one year, it is worth taking action.

A cost-benefit analysis is a process that allows organizations to analyze decisions, systems, or processes or determine a value for intangible assets.

The model is built by identifying the benefits of an action and the costs associated with it and subtracting the costs from the benefits.

Once completed, a cost-benefit analysis will produce concrete results that can be used to develop reasonable conclusions about the feasibility and / or opportunity that represents a specific decision or situation.
the costs analysis

The purpose of the cost-benefit analysis

The purpose of the cost-benefit analysis is to have a systemic approach in order to understand the advantages and disadvantages of various solutions through a project, including transactions, activities, business requirements, and investments.

Cost-benefit analysis offers options and is the best approach to achieve a goal while saving on investment.

There are two main purposes for using a cost-benefit analysis for a project:

  • To determine if the project is valid, justifiable and feasible, verifying if its benefits exceed the costs.
  • It offers a reference base for comparing projects by determining which project benefits are greater than its costs.

The cost-benefit analysis process: 10 key steps

The process of cost-benefit analysis of a project is composed of 10 steps through which the convenience of the project can be established. Let’s see what they are:

  • What are the goals of the project? Before you can decide if a project is worth, you need to have a clear and precise idea of ​​what it must accomplish.
  • What are the alternatives? Before you can know if the project is the right one, you need to compare it with other projects and see which is the best one to follow.
  • Who are the interested parties? List all project stakeholders.
  • What measures will you use? You need to decide the metrics you will use to measure all costs and benefits.
  • What is the outcome of costs and benefits? You need to know what the costs and benefits of the project are and map them over a significant period of time.
  • What is the common currency? Here, we take all the costs and benefits and convert them into the same currency in order to make a real comparison.
  • What discount rate will be applied? This will express the amount of interest as a percentage of the balance at the end of a certain period.
  • How is the net present value of the project options? This is a measure of profit that is calculated by subtracting the current values ​​of the cash outflows from the current values ​​of incoming cash flows over a given period of time.
  • Sensitivity analysis? This is a study of how the uncertainty of the output can be divided into different sources of uncertainty in its inputs.
  • Final decision? The final step, after collecting all these data, is to make the most recommended choice according to the analysis.

Are there limitations to cost-benefit analysis?

Of course, there is always a risk inherent in any business, and the risk and uncertainty must be considered when evaluating the cost-benefit analysis of a project.

It is possible to calculate this with the probability theory. Uncertainty is different from risk, but can be assessed using a sensitivity analysis in order to illustrate how the results respond to parameter changes.

Overall the use of cost-benefit analysis is a crucial step in determining whether it is worth pursuing any project.

For projects involving small to medium capital expenditures and from short to intermediate (in terms of completion time), a thorough cost-benefit analysis may be sufficient to make a rational and well-informed decision.

For large projects with a long-term time horizon, cost-benefit analysis typically fails to justify important financial concerns such as inflation, interest rates, variable cash flows, and the present value of money.

Alternative methods of analyzing initial capital, including the net present value or internal rate of return, are more appropriate for these situations.

Unless you are extremely lucky, it will never be possible to get all the information needed to complete a cost-benefit analysis.

There will in fact always be gaps in information.

Cost analysis: the hypothesis method

One way to try to overcome these shortcomings is to use hypotheses about the missing information.

However, for the inexperienced project manager, hypothesis creation is one of the most terrifying aspects of cost-benefit analysis.

Here is an example: a cost-benefit analysis is conducted for a real estate investment project. There may be a case of not knowing what the maintenance costs will be in the future. What is known, however, are the types of maintenance fees that have been paid for similar properties in the past. You can then use some of those numbers to make an assumption.

In any case, care must be taken when using hypotheses. Factors do not always follow trends and even the smallest change in the hypothesis can produce totally different results.

In conclusion, cost-benefit analysis is a data-driven process and very often requires a sufficiently robust project management software to handle and distribute information. If you haven’t tried TwProject yet, do it now! You will discover how simple it is to organize information and complete a cost-benefit analysis.

In Twproject cost monitoring is a relevant aspect of project management

Portfolio management: some suggestions for managing the project portfolio

Project Portfolio Management is the continuous process of selection and management of project-oriented initiatives that offer the best in terms of business value or return on investment.

It is a dynamic decision-making process that allows the management to reach a consensus on the best use of resources in order to focus on projects that can be implemented and strategically aligned with the business goals.

The gathering of essential information for the portfolio management process

The basis for the portfolio management process is a database that collects all information related to initiatives of the project.

This database allows:

  • Maintaining visibility of all project information within the company
  • Collaborating using consistent information to reach a consensus on the alignment of projects with respect to company goals
  • Providing quick access to all relevant information, horizontally as well as vertically, within the organization, enabling to make objective decisions about project priorities, future investments, and resource utilization
  • Creating a link between corporate strategy, project selection, and their execution.

Bad management of Portfolio Management is the result of a disconnection between the information and the processes used to support the strategic and operational planning of the project.

The Portfolio Management process

The portfolio management process has four phases.

The first is the inventory phase, which includes the collection of project and organizational data in order to support the second phase, the evaluation phase.

In the evaluation phase the previously collected data are analyzed and reviewed.

The third phase, the alignment phase, makes it possible to establish metrics and balances of the portfolio of projects.

The last step, the management phase, means the efficient coordination of the various projects.

Let’s have a look at the individual phases in more detail.

Portfolio Management: The inventory phase

Project information can be acquired from any valid source including the tools used within the organization or simply by interviewing project managers and project participants.

This phase begins by collecting all the main information about ongoing projects and on the organization in general.

In this way, the project categories are determined.

Moreover, here the strategic goals of the organization are identified and the initiatives for each project are determined.
portfolio management suggestions

Portfolio Management: The evaluation phase

The evaluation phase assesses the strengths and weaknesses of the project portfolio.

There are many types of analysis that can be done simply starting from the inventory data.

For example:

  • A simple order for project justification can reveal different projects that attempt to solve identical or similar problems. These projects could be more efficient if combined, or perhaps it would be better if some of them were canceled.
  • An order based on the category of resources can reveal any future deficiencies in time in order to allow to have a look at possible solution options: staff increase, use of external resources, such as freelancers, or cancellation of some projects.
  • A departmental order could show that the customer service department will soon be overwhelmed by the contemporary release of three new applications.

Once this phase is completed, it is possible to have a clear understanding of the entire project portfolio model.

Portfolio Management: The alignment phase

The alignment phase results in a “new” project portfolio.

This means that each project in the portfolio is reclassified.

The decisions taken during this phase are made in order to achieve the delicate balance between what is desired and what can be achieved, between the ideal n theory and the reality. Here, the Project manager decides which projects can be delayed or even cancelled.

Obviously, with a project portfolio the decision is more complex tan with a single project as the different stakeholders could have different perceived values.

During the alignment phase, the portfolios of alternative projects are evaluated on the base of different “what-if” scenarios.

The key challenge of the alignment phase is therefore to make the project portfolio more optimal.

Portfolio Management: The management phase

This is the phase in which the true “Portfolio Management” is verified, in which the projects are aligned with the corporate goals and where it is possible to identify the structure in terms of business.

The challenge now is how to communicate horizontally and vertically within the organization.

This is where automation, through specific project portfolio management tools, can help manage priorities, planning, budget, and resources of a project.

The success of an organization can therefore depend heavily on its ability to effectively manage the project portfolio and ensure that business goals are respected over time and within budget.

The importance of managing project portfolios should therefore be taken quite seriously.

Here are some final best practices to help the project manager manage Portfolio Management:

  • Select and prioritize the right projects. Not all projects have the same urgency. It is therefore important to recognize the hierarchy between them based on organizational goals.
  • Predict the cost of delivering the project portfolio. Since profitability is the key of a successful organization, it is important to keep track of project portfolio costs and monitor them. It is necessary to have general visibility in order to determine if a particular project must be canceled based on the costs that exceed the benefits.
  • Provide real-time status reports for executives. Managers are often the ones who make business decisions and it is important for them to have real-time visibility for project statuses in order to make the best decisions.

Get a complete view of all projects. It is important that organizations, when it comes to the status of various projects, have a single version of the truth.  This eliminates questions and doubts and helps establish the correct priorities.

We have the tools, we have the culture.

the project sponsor

Managing a project sponsor

One of the critical success factors for any project is the presence and participation of an effective project sponsor.

Often the project sponsor  is someone holding a senior position within the organization and is responsible for initiating and approving the project and supporting the project manager during execution.

The project sponsor identifies the business needs of the project, helps the project manager keep the work on track, and ensures that the organization obtains benefits from the the final results.

The key attributes of a project sponsor

The project sponsor must have a strong appreciation of the organization’s strategic goals, must understand the role as a sponsor and exert influence and it would be an advantage, if it had direct experience in project management.

Some key attributes for a project sponsor are:

  • Strategic and innovative mentality
  • Emotional intelligence
  • Excellent communication skills, including negotiation and conflict management
  • Strong decision making processes

Roles and responsibilities of project sponsors

Unlike the project manager, who oversees the team and the daily execution of key tasks, the sponsor helps create the right environment to support the project manager.

This support can take a variety of forms such as:

  • Aligning the project with the corporate strategy.
  • Participating in project planning.
  • Ensuring that the proposed solution solves the agreed problem and the requirements.
  • Assistance in resource management.
  • Ensuring that the project is started and executed in accordance with established standards and best practices.
  • Monitoring project progress and helping in taking corrective action if necessary.
  • Cultivating buy-in and stakeholder engagement.
  • Providing timely and informed information on key project decisions.
  • Solving problems and conflicts outside the scope of project manager authority.
  • Evaluating the success of the project at its end.
  • Celebrating and rewarding success.
  • Project manager mentoring when and as needed.

With so many responsibilities and an active role, the project sponsor is one of the real owners of the project.

No wonder then, if a sponsor can make or break a project.

Challenges in working with a project sponsor

Developing a beneficial relationship with the project sponsor is complicated for different reasons.

Typically, project sponsors are assigned to a project before work begins, which means that project managers rarely have the opportunity to choose it.

Moreover, an individual who has no project management experience but who is going to fill the role due to – for example – his seniority within the organization could take the project sponsor role.

Project sponsors are people who are also generally involved in other activities, outside the project, and may not have sufficient time to provide useful advice and support in case of difficulty.

Project managers who work with inefficient or useless sponsors have two choices: go ahead in the best way or “manage” and help the project sponsor play their role.

 Four key steps to work with the project sponsor

Here are the four steps that can help you work with the project sponsor:

1. Set expectations

Before starting a new project, it is essential to meet the project sponsor to decide how to collaborate. This step is particularly important, if the project manager has never worked with the sponsor or if the sponsor is taking on this role for the first time.

It is good practice to hold this meeting even if the two parties have already worked together previously and even if the sponsor is an expert. Each project is indeed different and requires alignment from the beginning.

Use the meeting to establish roles and responsibilities, identify the resources required and establish a communication plan, review and refine the project plan, identifying the main milestones.

2. Preliminary meeting

Ask the project sponsor to participate in the preliminary meeting with the team in order to share the vision of the project and the desired result.

In this way, also the project team will have clearer ideas about all project stakeholders.
project sponsor

3. Communication

 As the project progresses, keep the sponsor busy and informed. The communication channels include status meetings, automated reports and dashboards using, for example, a project management software.

It is also important to examine the communication style and preferences of the sponsor and adapt them as needed.

4. Keep the sponsor involved (h3)

 In addition to updates and status reports, the project manager must periodically ask the sponsor for information and directions. It is important to look for their input when it comes to problems and difficulties or when alternative approaches need to be compared.

A valid project sponsor, in fact, should care for and support the project manager and has a vast knowledge to share. Involving a project sponsor helps building a rewarding relationship for all.

The relationship with the sponsor and the end of project document

At the end of a project, a project manager must always proceed to an analysis concerning the relationship with the project sponsor.

This can help improve the commitment of the sponsors and the management of any future projects.

  • What worked and what did not?
  • What challenges have been encountered in the relationship with the project sponsor?
  • Are there specific tools or processes when working with sponsors within the organization?

These and other questions serve to collect experiences. They are the key to establishing best practices in order to have an efficient relationship between project managers and project sponsors.

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