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Project Management - QuickStart

Copyright Lark Ritchie 1997.

Overview
This quick-start document is designed to get you started in the definition of your project. It assumes that you have begun with little or information. You can still use this guide if such work has been done by following the steps, adding data and information not complied previously. For each of the steps presented here, detailed instructions are provided there.

Some Preliminary Words
If you have started to plan or define your project without doing some initial discovery and planning work, then you have not provided critical links between this project and organizational goals and objectives.

In some cases, this may be acceptable, but in jumping in without any alignment of this project with what is happening in the overall business, you risk spending time, money and resources on tasks which may not be fully valued and supported by the organization. Ensure your project falls within the overall missions of the organization by identifying how this project fits within the value added activities of the whole. A valuable project seeks to solve one or more specific problems that prevents the organization from meeting its objectives. With a little work up-front work, you can ensure that your project will be supported by its sponsors and others in the organization. You do this with a problem statement. When your work determines that the project is not of value, or is ranked at a lower value that other projects, you have in fact provided benefit to the organization by virtue of cost avoidance.

Clarify the Problem
Surveys by several professional and management groups report that a large majority of projects waste valuable organizational resources. People’s time, the organization’s equipment, and money are tied up in projects that do not solve the real problems of the organization. Prevent such waste by developing a problem statement. Each project should be clearly linked to the organization’s overall objectives, and address a definable problem preventing the attainment of objectives. Produce a problem statement that clearly identifies the organizational problem in terms a barrier preventing attainment of overall organizational mission.

Identify Cost of the Problem
When you have clearly identified a problem, a cost can be formulated to gauge the impact of the problem on the organization. Costs can be things like time or material waste, lost opportunities, loss of customers, etc. Identify each type of cost separately and narrowly. At a narrow focus, each specific cost can be quantified with some level of certainty. The sum of these costs linked with a time period is the cost value of the problem. Eliminating a problem with a selected solution affects this cost, either reducing or eliminating a drain of resources, or re-directing, expanding or acquiring new sources of revenue for the organization.

Identify Solution Benefits
Once the root problems have been identified, describe what outcomes will be in place when the ‘ideal’ solution is complete, ( the effect of the project on the organization - e.g. people will be able to do that which cannot be done now, or stop doing what they have to do now; costs will decrease, other connected problems and symptoms will be eliminated; etc.) These are the benefits of the project.

Quantify Benefits Gain
As with problem costs, identify the specific benefits and derive realistic values in terms of resource cost improvements or new opportunities made possible. This list of benefits can then be ranked according to value so that those with most value become the targets for solution and strategies.

Seek Alternative Solution Strategies
Problems are solved by a solution. A solution may have several components. More than one solution may solve a problem. The difficulties faced by leaders in an organization is not that of selecting the most appropriate solution for the current environment or conditions; it is not having a variety of solutions from which to choose. At different times and conditions, one alternate or another might be selected. Generation of solutions should not be constrained by cost or resources

Calculate Solution Rate of Return
Overall, selected solutions are most valuable when they address reduce or eliminate specific root problems and related costs with a minimum resource investment by the organization.

Different solutions have different costs of implementation in terms of resources. The cost of a solution is considered an investment to attain recovery of the problem identified costs.

The rate of cost recovery or net gain as a result of the solution is called a rate of return. The rate of return (for example $1,000 per month) is used to calculate how long until the investment cost has been recovered as a result gains attributed to the solution. (For example; when the solution costs $10,000 and rate of return is $5,000 per month, then the investment is regained in two months from solution implementation date.

The duration between solution implementation date and the date at which the investment has been recovered through direct savings or net gain is called the payback period. Solutions with higher gains and shorter payback periods are more valuable than those of lesser gain and longer payback time-frames.

For each solution proposed, calculate an overall rate of return.

Value Rank Solutions For Gain
A simple formula may be used to compare and rank alternative solutions for preliminary selection.

Identify a Solution As a Project
A solution elected, selected, or chosen for implementation is called a project. A project is a set of steps carried out to deliver a solution into physical form. The activities ‘project’ into reality, the ideas developed in the solution. Documents, machines, buildings, computer programs and systems are all physical forms that contribute to projecting the solution into reality. These are called project deliverables. Each project activity or step can be associated with, and contributing to one or more deliverable. Steps which cannot be directly linked to a deliverable should be examined closely. We may be doing work that is not required to implement the solution.

Planning Your Projects
A successful project incorporates a plan to ensure a successful project. Do a work breakdown structure of major functions required to meet the objectives. Decide on the formal checkpoints and milestones for progress reviews. Include them in the plan corresponding with project functions and deliverables. Examine project steps that produce more than one deliverable. Such steps may indicate that the processes involved are not well understood, or the activities not defined with the detail required to develop a specification for completion.

Identify the Resources
Projects consume resources. Usually at a more than the anticipated rate. Time spent analyzing realistic resource requirements are more likely to be successful because a more accurate cost can be determined. List those with whom the project will need to be coordinated and or conducted. Identify key interfaces and decision makers. List the resources you may require: time, key decision makers, required skills, space, tools, money, etc. Resources can best be identified at this point by specifying the skills and skill sets required to perform the project tasks. Rather than identifying specific positions, job titles, or people, a skills based resource list can be more effective because tasks can be allocated from resource pools or third party suppliers based strictly on skills. Doing so, in many cases creates a focus on the individual tasks to be completed, and a more specific but broader search for the talent to perform those tasks effectively. A generalized unit cost for skill levels can be used to provide project costing estimates.

When costs are close to accurate, and the project ranked for value against other projects, the organization understands, accepts and supports the cost as an investment towards future benefit.

Projects that do not receive support for required resources indicate that the organization recognizes other projects as more valuable investments for resources, or does not accept or understand the value returning from the project. When this is the case, you might reconsider your problem statement or solution selection. Rewrite your problem and benefits statement if it was not accurate. Assuming that you have developed a clear problem statement, such a project might be better postponed in place of more valued projects.

Resolve Issues Early
Unless you do up-front critical thinking, you may not set directions and targets which, further down the line, allow your project to drift from original goals and intentions accepted by the business when granting the project mandate. In short, it is better to resolve all issues concerning your project by taking the time to discuss the rational for the project, foreseeable problems, and strategies to resolve such problems when they arise. Using such a strategy also allows one to describe the strategies to be implemented when an unforeseeable problem occurs.

Anticipate Problems, Provide Processes
Anticipate the problems that may occur during the project. Identify them and provide scenario strategies to prevent such problems. Consider what measurements can be used to keep the project on track, and to when and how to evaluate project products and deliverables.

Cost The Project
Investment is relative to return over time. For example, Investing $1,000 to return $5,000 per month equates to a five-to-one ratio after a payback period of 1/5 of a month. Calculated over one year, this is a 500% Annual Return on Investment. The higher the Return On Investment (ROI) the more valuable the solution. For solutions requiring extensive resources, more refined calculations may be necessary to account for financing of the funds needed to implement the solution consider risks and change over a long implementation period, and other business factors.

Establish A Database
Build a database that will be used for projects beyond your particular project. Being one of the initial projects has some disadvantages, but each project will become much simpler to outline because of your database entries that you now make. Project definition is much simple when the organization, people, position, and strategic planning information has been recorded previously.

© 1996 Lark Ritchie. Contact me at this address..