Posted by: Gilad Lev-Shamur | May 3, 2017

The 5 blocks model – Managing Projects in Service Organizations

Project managers in different organizations share tools, procedures and best known methods. The advancement we see in the project management profession in the last years, position the project manager as a specialist with a unique skill set and capabilities.

Nevertheless, different industries and organizations require specific modification of the common tools and procedures, to allow their organization to compete in the current environment. This post will suggest the basic model for managing projects in an internal service organization (Operation – construction, IT…). Future posts will give additional details on each subject.

Service organizations have several unique characteristic that any project model need to work with:

  • All customers are internal customers
  • Close and ongoing relationships (for long period) between the organization and the customers.
  • Technical knowledge on operation and maintenance that not always exist in regular projects teams
  • Imitated resources – part time PMs, not enough full-time PMs
  • Project control limitations when it comes to large projects
  • Internal conflicts when it comes to cost control – PMO: centralized or not?

A model that will include the service organizations characteristic and will enable proper project should include:

  • People skills
  • Structure – R&R, who report to who
  • Procedures
  • Network
  • Business model

 

Model

 

If we are going one level down, the model should include these items:

 

Model2

  • Hybrid PMO- each organization need to create a hybrid PMO which include 1-2 professional project managers which will manage the more complex projects and in parallel will monitor other projects and train their project managers.
  • Mix of technical/ PM skills – PMs need to be with good technical skills relevant to the organization they are working with (operation, IT…). Project management knowledge is not enough for these kind of projects.
  • Flexible procedures – the PMO should have the possibility to change / adjust its project management procedures, templates per project scale, location,….
  • On going connection – the projects managers (PMO and full time) should maintain their connection with the customers even  between projects. These relationship  will enable to build trust and get early signs for new (and urgent requests).
  • Strategic partnership – due to the lack of resources in the majority of the organizations, an agreement with a strategic partner to outsource the majority of the project management tasks is the desired solution. Following this recommendation will enable the organization to focus on strategy and monitoring instead of tactical project managment.

This is a high level model which describe the necessary foundations for succesful management of projects in a service organization. Additional data will come in future posts.

Good luck!

 

Gilad

 

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Posted by: Gilad Lev-Shamur | February 12, 2017

How to Outsource right your project management services?

No matter what is the reason your company choose to outsource your project management services. It should be done right.

New article I wrote in the PM network (Feb’ issue) will give you more data on this hot topic:

Outsourcing Done Right

Gilad

Posted by: Gilad Lev-Shamur | October 29, 2016

The end users (PMs) and not top management should define the PMS 

Garbage in , garbage out. This is the case with most project management systems. You can define amazing  set of indicators , amazing graphs and wonderful reports that will make sure you will get an upgrade almost immediately . But unless you keep the quality of your data, it is just garbage…

The problem is that such systems build for top management. The people that build them, try to satisfy the management requests and supply them the amazing indicators and reports. But without the quality ,you can not trust what you see. Very shortly , every one understand the system is not reliable and the search for new system begin …

You need to think differently . Build your system for the end user. The PM. Build a system that will cause him to log in every day. That will help him with his work and will not be just a reporting system.

Make sure he will be able to do everything through it. That he will want to log in and manage his projects. Updating the data will be just a secondary for this.

By doing that you will make sure data is correct , PMs are happy and top management got what they want (and it is not a garbage this time …).

If you have other idea how to improve the data quality of a PMS, I will be happy to hear.

Good luck !
Gilad

Posted by: Gilad Lev-Shamur | January 30, 2014

You cannot manage what you do not measure

I read this interesting article in the PMI – Voices on Project Management:

Careful — What You Measure Is What You Get 

It’s remind me my first article in this blog in which I talked on:

What are the 5 basic rules of project management?

One of the things I mentioned in this post is the principle of:  You cannot manage what you do not measure.

The PMI article describes additional side of the equation:  it is not just important to measure.

It is also important what you measure…

Gilad

Posted by: Gilad Lev-Shamur | January 30, 2014

Soft skills Vs Technical skills

Lately we see a growing interest in the soft skills field. As most experienced PMs already understood, it  has the same level of importance as all the other technical skills.

Here you have two links with additional material about this topic:

A Balance of hard and soft skills

Five Soft Skills to Aid Your Project Management Career

Gilad

Posted by: Gilad Lev-Shamur | December 13, 2012

Every one love good stories. Even project managers.

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Everyone loves good stories. Whether it is romance, fiction or historic, a good story can be remembered for a long time.

This is why we can use it as a learning tool.

I remember one time, I was sick at home during my elementary schools days. I was watching a TV show for kids about exponentiation ( I wonder what today kids see…). It was not boring like learning at school. It was built around a really interesting story which helped me remember the topic long after I come back to school.

Stories really help us to learn new ideas.

From a survey made by the PMI (PMI Publication (2007)- Survey results from : Post projects review to gain effective lessons learned) we can take this number * which present the amount of PMs thinks that Lesson Learned get to root causes of projects outcomes :

Learning precentage

Not good at all…

Most of the projects managers use regular Lesson Learned techniques like collecting the high, low and things to improve from the project team members and customers. Similar techniques have basic drawbacks:

  • Projects are dynamic and transient. Regular learning techniques can not catch it.
  • We have tacit knowledge hidden in projects. Not just the explicit one.
  • They do not captures he experience of the project manager/ member
  • Actual project usually progress in a different way than the company procedures.

Projects are complex

So what can we do?

We can use story telling as a learning technique (see the survey above or The “learning through stories” project : how the best project leaders in Defense, NASA, and across government make things happen for example).

It could be written or verbally, it could be done by a single man or collected from a group of people. It does not matter. We can use the story telling technique to capture additional knowledge on projects.

Story Telling

The story telling technique should not be implemented alone. But it is an additional tool project managers can use to achieve better learning and knowledge transfer.

* The number was taken from a graph so it might be +/- the presented number but the direction is clear.

Good luck!

Gilad

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I’ll open this post with a question: How can you define and identify who is a good project manager?
You might start to think about criteria which will help you to measure who is a good project manager but I believe the answer is much more simple: A good project manager is the one who surround himself with professional people in each one of the important functions – Procurement, safety, inspection and of course finance.
If the project manager got the right people in the right positions, doing their job well, then he rest assured that his project will run smoothly and his interference will be required only in special cases.
By the way, this is true for almost all managerial positions and not just for projects management.

One of the most critical functions for the project’s success is finance. Why finance is so important?
First of all, because by the end of the day the business purpose is to make profits. That why we are all here. And as you all know- profits equals money equals finance.
However, this is just a secondary reason. The main reason is that the finance analysts usually holds knowledge and instruments in economics disciplines which are not accessible for the operations. Finance are able to understand financial aspects and perform calculations which can hardly done without the appropriate education. A great example for that can be taken from a research done by prof. Annamaria Lusardi from Dartmouth College. In her research, done in 2007, Lusardi performed a survey among educated people in the U.S , asking a simple question: “Lets say you have 100 dollars in a saving account. The account earns 10% interest per year. How much would you have in the account in the end of 2 years?”
The answer is of course 121 dollars. Unfortunateley, only 18% of the participants provided correct answer although it was pretty simple question. What about more complex calculations like NPV, ROI, hedging or exchange rate impacts? This illustrate the need for a good finance support which will be able to handle this.

So, how can finance maximize his support for the project manager? I’ll provide 3 tips on that:

1)Take out the headache of finance calculations from your project manager – do it for him. Don’t bother your operations with your calculations, just provide them the bottom line.

2)Make sure your project manager sleeps well at night – by knowing that if something might go wrong from financial perspective, you will be there to give heads up soon enough before it will occur. If finance is able to raise the flag on time, it will provide flexibility to the operations to adjust their strategy to the new situation. Do that in professional way and the project manager will greatly trust you on other aspects as well.

3) Understand your project manager needs – when you truly understand your operation’s needs, first you are able to budget and forecast it in appropriate manner. Second, you are able to influence the decision makers to adjust their needs to the budget restriction by prioritize them.

These tips are just extra to the trivial things required from finance like analytical skills, forecast abilities etc., however they will help you to maximize the support you provide to your project manager.

yours,

Nir.

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Posted by: Gilad Lev-Shamur | February 20, 2012

Project Management Book Club by the PM Coach

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Thomas Kennedy (The PM Coach)  initiate this great club – The Project Management Book Club. I am sure you will find it valuable and interesting:  

Do you read books about project management? Do you want a way to study project management books online with other project managers and project team members? Then the Project Management Book Club might be for you!

”Project

The Project Management Book Club is the online book club for project managers and project teams. But it isn’t just another online book club. The Project Management Book Club is different in two ways:

First, as the title implies, the Project Management Book Club focuses on studying books about project management to help project managers and project teams study and discuss project management topics.

Second, the authors of project management books directly participate in the online book studies and discussions! That’s right… you get to study WITH the book authors and ask them questions to further expand your knowledge about the project management topic of study.

So how does it work?

The process is simple. In collaboration with its members, the Project Management Book Club picks a project management book to study, they set a starting date, they purchase the book, and then they discuss the book in the members only online forum. In addition, all previous book studies are captured and archived so members can go back at any time to review discussions about project management books studied in the past.

However, quite possibly the best part of the Project Management Book Club is the connections you will make with other project managers and project team members. The Project Management Book Club brings together people from around the globe to study and discuss books about project management.

To learn more, visit the Project Management Book Club.


Thomas Kennedy
PMBookClub.com | LinkedIn | Facebook | Twitter
The Online Book Club for Project Managers and Project Teams

Posted by: Gilad Lev-Shamur | February 19, 2012

Blogloving

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Finance has a critical role in the success of construction projects. His main roles are funding, supporting and controlling.

Funding refers to finance’s responsibility of requesting the money for the project from the firm’s management while justifying rentability. This usually requires good analyzing and benchmarking skills.
Supporting refers to the financially assist that should be provided to the project manager. Finance should provide the project’s management ongoing information about the status of the project’s budget, cost risks and opportunities . He/She should alert the project manager in advance when he predicts that the desired scope of the project cannot be done in the current budget restriction. This requires good forecasting skills as the timing of the warning can be critical.

What about the controlling role?  How can finance cost control the project?
Usually if you’ll ask a new finance analyst what does it mean to have a good cost control on the project he will answer something like – “making sure the project is cheap and that we lower the cost as much as possible”.
This is amateurish answer. Making project as cheap as possible will probably cost you in other factors like quality or schedule as there is a tradeoff between the three. A professional analyst will just say that a good control on the project means to take care that things will be done efficiently.

Efficiency means either to minimize the cost of the project while maintaining all other factors fixed (scope, quality, schedule, safety etc.) or to maximize all those factors in a fixed cost. It also means to invest funds in scope that will yield good rate of return to the company and shareholders. In simple words – the scope of the project should worth its cost.

This means that in a budget challenged projects, the scope with the highest marginal benefit for the firm should be preferred upon a scope with a lower marginal benefit.
In a superfluous budget projects, a scope should be done only if its marginal output is larger than its marginal cost.
I bet some of you will find the above two sentences a bit fuzzy so in order to understand this principle i will give a very simple example: 
Imagine that you have endless budget in your project and that you need to decide if to invest in specific scope. The cost of that scope is one dollar (i.e. marginal cost). If you’ll execute it, it will increase the firm’s income by five dollars next year (i.e. marginal output). In this case , this scope is profitable as it yields profit of four dollars or rate of return of 500%. If the marginal cost is larger than the marginal output, then you shouldn’t invest money in that scope. If it’s equal, you are indifferent. It reminds me that every time someone ask me to describe what I learned in my Economics B.A I shortly answer – “marginal equals marginal”.

I will end this post with a fresh case that demonstrate what I just wrote – recently we had a fit up project in a floor of one of our campuses. The project ended with extra budget and the project manager wanted to invest the surplus funds in renovating the restrooms in the floor. The cost of the renovation was pretty small – around $70K. In one of my visits to this campus I took the opportunity to take a look on the restrooms and I found it to be in a good conditions. I talked to the project manager and he explained that he wants to renovate it to a very high standard restrooms so he can provide a “wow” effect to his customers. This is a typical thinking of the operations – they naturally wants to provide the best project to their customers, with the best quality and in relatively short time. However, this was a clear case of wasting money – the benefit of renovating those restroom was pretty low. After small discussion, a decision was made not to renovate those restroom and to give back the funds to the corporate so it can be invested in more beneficial projects.

So, what about my question in the title of the post? Can finance significantly impact the cost results of the project? It depends on him. If he can influence the project team to follow the above principles, then the answer is yes.

Yours,

Nir.

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