- Project, Programme and Portfolio Management
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You might have seen this image before; it illustrates the triple constraints of project management, which therefore comprise the obvious measures of project performance. But does your organisation have a mechanism to measure these (or any other parameters) in order to maintain an understanding of how well projects are being delivered?
In order to do so efficiently requires some level of standardised project reporting, driven by a standardised project management process that includes formally capturing at least one snapshot (or baseline) of the project. The prime baseline should be a realistic view of how the project is expected to perform, which is agreed early in the project lifecycle and prior to the delivery phase. In fact, some organisations attempt to estimate the optimistic and pessimistic views of expected performance as well as the realistic view.
It is important that the realistic view of project performance is indeed realistic. Within your organisation (if you measure project performance), do you find that the most common stated reason for projects under-achieving (i.e. exceeding timing and/or cost estimates or producing poor quality deliverables) is that the initial estimates were unrealistic?
The key to achieving more stable estimating is risk assessment. Risks should always be considered in relation to a project plan. Any plan will have some level of assumed risk within the estimates of duration and cost. Project managers should, however, include risk based contingencies within schedules and cost estimates. These should then be included within ‘forecast to complete’ data on an ongoing basis.
Generally, of course, the contingencies should reduce as the project progresses, but this will not be the case if significant new risks are added after the project is initiated. It is therefore important to be rigorous about assessing risks when initiating a project.
The organisation should include such a mechanism for including contingencies within ‘forecast to complete’ data within its framework of processes, tools and templates. This can include maintaining a set of standard risks, based on corporate past experience, to help ensure rigorous risk assessments are carried out. The framework should then drive efficient automated reporting that compares the current view of the plan and its risks with that of the prime baseline, in terms of schedule and cost.
It is surprising how many organisations rely on delivering numerous projects to bring new products to market or to bring about organisational changes, on an ongoing basis, yet do not have a mechanism to measure project performance or have great difficulties in doing so, when it can, in fact, be simple to achieve.