synergy between BSC and Project / organisation's dynamics

1. 03-23-05
December 2012
BVBA
Project management : BSC & dynamic organisations
Presented by Jan Biets
Jan_biets@hotmail.com +32(0)477 32 90 11 Mechelen - Belgium
page 1 • BSC & Dynamics

2. Project management dynamics
An approach, together with BSC (balanced
scorecards), metrics, and (graphical) reporting, to improve the
outcome and quality of your strategic projects/programs.
Project management Dynamics December 2012
BVBA

3. Project, a dynamic organisation
Projects do have a balance, with several dynamic factors
interfering on each other;
• Cause and effects;
• Enforcing factors
• On a positive manner
• On a negative manner
• Are managed by stakeholders: (according applicability:)
project organisation, owner, Customer, management
• Focus on ultimate target / purpose of the organisation
• In this case: „margin%‟ [ %]
• Identify all factors having impact on :” margin % “:
• Learning, people, growth
• Internal business processes
• External / Customer
• financial
• Balanced scorecards (Kaplan)
• System Dynamics (Senge) December 2012
Project management Dynamics
BVBA

4. margin % new Customer (revenues)
cost overrun
satisfaction policy/SLA
cost prediction (sales) efficiency PM method policy
KISS innovation processes roles&responsabilities
improve performance (staff) template project management
product mgt
training staff PM skills innovation
engineers
employee satisfaction EVA
Project management Dynamics December 2012
BVBA

5. Project management Dynamics December 2012
BVBA

6. FINANCIAL cost
perspective
new customer
margin % (revenues)
overrun
policy /
CUSTOMER‟s
satisfaction
SLA
perspective
QA
PM project
processes methodology management policy
business&process
KISS
+
roles &
responsibility
+
efficiency
tools product
perspective
Think-
Internal
management
tank
cost
prediction performance re-use /
(improvement)
template innovation
People,learning,
perspective
training PM
growth
Employee
satisfaction innovation EVA
Project management Dynamics
staff skills 2012
December
BVBA

7. Project BSC , KPI & KGI’s
Project management Dynamics December 2012
BVBA

8. Project KPI, KGI
Measurement is knowledge…
Identify all factors having impact on the – pre set – result / goals
•Project related metrics
•Organisation related metrics
•Performance related metrics
•Finance related metrics
•Quality related metrics
Project management Dynamics December 2012
BVBA

9. actual
internal business process "what , why , when , who , how"
project
measure after each project the
variances between budget
cost prediction define workmethod based on experiences and best practices compositions % red
lack of profit, due to low pre-cost calculations learn , adapt next pre-calculation % green
lack of project management improve output % yellow
lack of design phase gate process (applied) design phase is not finished lessons learned
no proper process
keep on changing the layout
excellence delivery (even without feedback of
installation customer)
use of template, or set of instructions/process
set baseline of budget
respect the authority of functional leads within Company
efficiently produce & deliver project
review cycle's of pre-cost calculations
leasson's learned
re-calculate after finishing project na
identify overrun items, and
reason's behind
cost follow up during project
correct information , correct expectation mgt
clear definition what, how , measure the number of non-
policy define project execution policy who will execute the project conformities after audit % red
description of project
publish policy execution (project charter) % green
maintain policy % yellow
organise internal audit
review policy
measure the number of non-
processes define PM execution processes conformities after audit % red
publish processes % green
maintain processes % yellow
organise internal audit
review processe
measure the number of non-
PM method implement PM method conformities after audit % red
publish PM method % green
train PM % yellow
organise internal audit
review PM method
measure the number of non-
template identify templates (based on process desciption) conformities after audit % red
publish templates % green
train the use of templates % yellow
organise internal audit
review & life cycle templates
based on selected tools, improve efficiency of Company's
efficiency output (project delivery) decrease overrun of budget
decrease overrun of timed
training of staff schedule
selecting templates, methods, processes,… decrease rework
decrease number of late
effectively apply set of measures & objectives (closed) issues
decrease number of risks
guard the application of above (points) in time
margin (customer's satisfaction) will be know in advance decrease number of non-
(predictability) conformities (audit results)
do things right, the first time
customer satisfaction (tbd)
Project management Dynamics December 2012
BVBA

10. consider re-use of existing
KISS apply KISS principle equipment/work
publish KISS principle always
KISS is not opposite of innovation
timely discovering of mal-
quality process review of engineering work&solutions functioning engineering
create & establish state of the
peer to peer art solutions
eases/enable re-use of
guru approach solutions
avoid rework (in late project phase)
due to time constraint, ME-
drawings are sent to supplier,
avoid rework (in late project phase) without proper quality review
establish baselines (enable
phase gate approach scope change mgt) [€]
metrics
SPI , baseline , collecting spent
project management manage planning hours, …
predictability of project
deliverables % on time
assign the right skills, at the
manage resources right moment
scope management, introduce
manage scope scope change management
define work, outcome and
manage quality results (scope, urs, testing)
risks value should decrease (in
manage risk time)
number of issues should
decrease, not too late open (not
manage issues solved)
define clear (customer)
manage expectations expectations, quantify & qualify
budget management, overrun,
manage budget re-work, scope change mgt,…
manage EV milestones met on time
milestones met EV
product mgt output / productivity) kg/hr
(part of URS) innovation
PIR
evolutive mgt
requirement performance
solution should 100% satisfy
output the requirements
switch from one recept to another (within expected/set time)
number of scope changes per
scope management phase
number of scope changes per
user-friendly project
resources planning resources planning accuracy
Project management Dynamics December 2012
BVBA

11. learning , staff , growth training staff & engineers
% project results (based on
malfunctioning / underachieving
(project related only) define roles & responsabilities improve efficiency resource)
% turnover of employees
define clear function description improve performance (specific project , reasons)
define assessment tool improve loyalty
innovate, improve and learn
define HR policy decrease turnover employees
identify gaps (employee skills vs job description) improve compentencies
define training plan (per employee) na
execute trainng plan na
evaluate employee's performances (skills based) na
PM skills select & assign PM improve efficiency
technology leadership training improve performance
product & solution focus see 'training staff & engineers) decrease project risk
PM select PM methodology improve outcome & quality of project
lower risk of margin decrease
within 1 year, all PM are
PM certified (Prince2, or other methodology) certified not certified
training staff&engineers
engineering degrees education & training courses (potentially, degrees,or certificates)
innovation
empower employees to innovate
motivate to innovate
create incentive to enable innovation (initiatives)
sustainable success is virtuous cycle: financial success allows
EVA Company to invest in its future (growth)
Project management Dynamics December 2012
BVBA

12. best added value to Vertex
customer's perspective
product/service/installation is according URS. Both tangible
satisfaction as in-tangible number of matching URS
user friendly number of non-qualifications (after testing) / FAT
output is according contract (kg/hr)
operationability
versatibility
added value to Vertex
policy / SLA project management policy is known and 'respected';
policy is aligned to Collette's policy
clear description of communication lines
swift response on mutual questions (for approval / for
information)
on time delivery delivery as promised/planned, and stick to it number of milestones/deliverable on time (%)
(quality and performances are IMPLICIT) (both internal , as external)
internal customers are also customers
Project management Dynamics December 2012
BVBA

13. financial perspective
margin % profit %
by all sub-linked objectives, margin % is kept
business leadership &
say no more profitability remains, as pre-calculated
due to positive response
(project success) , other
customers create revenu
revenu growth new customers growth
(sales / customer's satisfaction)
profit
cost overrun defined project cost/budget must be respected
Project management Dynamics December 2012
BVBA

14. Think -
tank
• Initiate approach on a thorough manner;
• All concerned topics: project, innovation, processes, and solutions, product
management (high level);
• Output:
– Recommandations (with solid pros & cons!);
• Members:
– „Business‟-Guru‟s, sales, R&D, PM, engineers, The Company‟s management;
• Pittfall :
– >< project Steering Committee !
Project management Dynamics December 2012
BVBA

15. engineering & solutions : solutions provider
product /
application
management
• Product life cycle management
– R&D effort and solution driven approach
– Buy or make assessment of components;
• Based on well thought assessment to reduce risks, and uplift the margin
• Market competition;
– The Company should be “engineered solutions provider”, or will not be;
Project management Dynamics December 2012
BVBA

16. People, learning, and growth
Employee
satisfaction
– Assessment to „measure‟ employee satisfaction;
– Will increase performance (1th degree)
– Training
– Courses, provide & share information , involvement in company‟s
management, feel good programme, pleasant working environment,…
Project management Dynamics December 2012
BVBA

17. People, learning, and growth
trainin
g staff
• Training staff:
– Assessment/identify of needed / required skills to perform specific role
– Will increase performance, and efficiency (1th degree);
– Secondly, will improve drastically the motivation of the staff member, with will
improve the performance, and efficiency; the result is a more motivated staff
– Compose individual training / career path;
• CAD , management , technical skills, depending on career path
• Self-education, company organised training.
“training staff‟ is typically a “self- enforcing‟ dynamic
Project management Dynamics December 2012
BVBA

18. People, learning, and growth
PM
skills
• PM skills:
– Could be part of „training staff‟, but in project driven environment, can be specifically
threatened;
– Assessment/identify of needed / required skills to perform PM role, based on individual profile;
– Will increase performance, and application of PM methodology within the project (1th degree);
– Secondly, a PM is functionally a managing director of a SME, having attention for all aspects of
managing a project (incl soft-skills)
– Compose individual training / career path;
• Output must be certification in a acknowledged project methodology (Prince
2, PMI/PMP), management , technical skills, depending on career path, and previous
experience;
• Self-education, company organised training.
“PM Skills‟ is typically a “self- enforcing‟ wheel/dynamic
Project management Dynamics December 2012
BVBA

19. Internal business&process
efficiency
• Efficiency:
– Core of project organisation, with multiple elements supporting efficiency, or at
least having impact on;
– Re-enforcing circles:
1. processes, kiss, tools, performance
2. Innovation, re-use, product management
3. Project methodology, project management, roles and responsibility
– Efficiency has direct impact on MARGIN %
• Less „efficiency‟ costs margin%;
– Focus and management of the re-enforcing circles to manage and improve
„efficiency‟;
Project management Dynamics December 2012
BVBA

20. Internal business&process
Product / service
management
• Product / service management:
– Important to compose engineered solutions:
• Product life cycle management, or
• Purchased product / applications
– Sign strategic contracts with suppliers (incl. SLA), or;
– Competition on market;
• Assess and balance which to make, and what to buy;
– Define cost of ownership (TCO) for each product / application
– Product life cycle:
• List all applications;
• Define (-end of-) life cycle;
• Prepare „next generation” (by Engineering‟s management, R&D, and sales)
– Assign budget, and timing (incl. testing);
– In general, projection of life cycle is possible;
Most important for Company is to enable strategic advantage
Project management Dynamics December 2012
BVBA