THE PROJECT LEADERSHIP ACADEMY THE PROJECT LEADERSHIP ACADEMY

Transcription

1 PSP 0 0

2 Course Outline Strategic Planning Cost of Money Project Cash Flow Program / Company Purchasing Avoiding Claims Client Development 1 1

3 Strategic Planning Strategic Planning is high level, conceptual planning. It is NOT turn by turn directions. 2 2

4 Strategic Planning For Project Management Would wehave a Strategic Plan for each project? Probably not, the better question is doesthis project fit within our Strategic Plan? Use StrategicPlanning to determine key markets, clients, mergers / acquisitions, products and services 3 3

5 Strategic Planning For Project Management Would wehave a Strategic Plan for each project? Strategic Planning techniques are helpfulon the project for the Executive or Summary Schedules, Project Execution Plans, Budget Even then, this is more implementation strategy than strategic planning. 4 4

6 Strategic Planning Common Pitfalls 1. Creating To Do Lists 2. Not Anticipating Change 3. Lack of Ability to Execute 4. Lack of Buy In 5 5

7 Strategic Planning Steps Position Analysis Destination Analysis Gap Analysis Prioritization Strategic Plan 6 6

8 Strategic Planning Steps Position Analysis Determine where you are. Market Company Lifecycle KPIs 7 7

9 Strategic Planning Steps Destination Analysis Determine where you want to be. Mission and Vision Statements Market Company Lifecycle KPIs 8 8

10 Strategic Planning Steps Gap Analysis What will it take to get there? Market Company Lifecycle Resources Capital 9 9

11 Strategic Planning Steps Prioritization You can t do everything at once! What is the right order and sequence? What will set up the next piece? 10 10

12 Strategic Planning Steps Strategic Plan Putting It All Together Final Form 11 11

13 Strategic Planning Tools Visioning / Brainstorming Key Performance Indicators (KPI) SWOT Analysis Commonality Study (Dating Service) Interrelationship Diagram Strategic Plan 12 12

14 Strategic Planning Tools Visioning / Brainstorming 13 13

15 Strategic Planning Tools Key Performance Indicators (KPI) 14 14

16 Strategic Planning Tools SWOT Analysis Strengths Weaknesses Opportunities Threats 15 15

17 Strategic Planning Tools Commonality Study What are the needs, challenges, or opportunities in your organization that share common traits? 16 16

18 Strategic Planning Tools Interrelationship Diagram Determine which efforts and tasks have essential sequencing versus preferred sequencing 17 17

19 Strategic Planning Tools Strategic Plan Put it all together into one cohesive document that details where you are, where you are going, what it will take to get there, and an overall plan with time phased goals

20 Implementation Strategy Predetermined Departments / Functions Predetermined Budgets Predetermined Schedule (5 year plan) Predetermined Boundaries Submittal of Implementation Plans Acceptance of Implementation Plans Monitoring of Implementation Plans 19 19

21 Cost of Money Interest Rates Currency Exchange Performance Incentives Performance Penalties Insurance / Bonds Taxes Escalation / Depreciation Legal Costs 20 20

22 Types of Costs Direct Costs Direct costs can be defined as costs which can be accurately traced to a cost object with little effort Indirect Costs Costs which cannot be accurately attributed to specific cost objects are called indirect costs. These typically benefit multiple cost objects 21 21

23 Direct Costs Project specific labor Materials Subcontractors Types of Costs Indirect Costs Computers used by multiple projects Executive /Administrative Support Home Office Rent and Utilities 22 22

24 Project Cash Flow Say Yes to the S Rules of Credit Earned Value Front Loading Contingency Wrap Up Peak Production Ramp Up 23 23

25 Project Cash Flow Rules of Credit A predetermined earning milestone. This is usually attached to some deliverable or activity where progress can be demonstrated Chart Title 30% 30% 60% 60% 90% 90% 100% 100% Some systems allow billing between the control points, and some allow billing only on the control points

26 Project Cash Flow Earned Value True Earned Value (especially a certified EVMS program) is a complex structure of accounts and account managers. Still some basic principles of Earned Value can be applied informally as a means of tracking performance. Scaled to WBS Tracks Cost Tracks Schedule Provides Accountability Fixed Rules of Credit Planned/Actual/ Forecast 25 25

27 Earned Value Typical Formulas 26 26

28 Earned Value Hours Earned compared to Hours Spent produces a Performance Factor. Activity Budget = 500 manhours Percent Complete = 10% Budget Hours Earned=50 manhours Actual Hours Spent = 100 manhours Earned / Actual = Performance Factor 50 hours / 100 hours = 0.5 Performance Factor (PF) 27 27

29 Earned Value Tracking PF and Setting Expectations PF above 1.0 means you are making money PF below 1.0 means you are losing money PF at 1.0 means you are exactly on budget Don t try to track PF at the activity level. Roll this up to some common characteristic to better see trends and issues

30 Earned Value Typical Formulas 29 29

31 Earned Value Typical Formulas 30 30

32 Earned Value Typical Formulas 31 31

33 Project Cash Flow Front Loading Activities with early completion Break Activities to claim early work Stored Material Mobilization Ramp Up Wrap Up Peak Production 32 32

34 Project Cash Flow Contingency Minimum Budget The amounts of cost that can be attributed to specified work items. Contingency The amount of resources available to cover costs not anticipated or identified in the budget 33 33

35 Project Schedule Contingency Minimum Schedule The amounts of time that can be attributed to specified work items. Contingency The amount of time available to cover delays not anticipated or identified in the schedule 34 34

36 Project Schedule Contingency Too Leisurely Too Aggressive Balanced Approach 35 35

37 Program / Company Purchasing It s Cheaper in Bulk Coordinating Production Times Staffing to Manage Logistics Buying Raw Materials Vendor Loyalty 36 36

38 Case Study The Project Manager wants to substitute Flow Fill, an engineered product in lieu of stockpiled dirt as the backfill material for electrical and piping trenches. Required use of stockpiled dirt above the Flow Fill Required use of Flow Fill to the top elevation of the piping 37 37

39 Case Study Volume of stockpiled dirt backfill 750 Cubic Yards Material Cost of Flow Fill Material Cost of Dirt Labor Cost of Flow Fill Labor Cost of Compacted Dirt Equipment Cost of Compacted Dirt Equipment Cost of Flow Fill $18/CY $0 /CY $25/CY $40/CY $58/CY $41/CY 38 38

40 Avoiding Claims The Best Claims Avoidance Techniques How Many Good Projects for One Bad Project? Cost of Settlement, ADR, and Litigation What is Your Reputation Worth? Who Really Wins? 39 39

41 Risk Management Identifying Risks Quantifying Risks Tracking and Monitoring Risks 40 40

42 Avoiding Claims The Best Claims Avoidance Techniques Good Performance Good Relationships +Good Attitude Good Outcome 41 41

43 Avoiding Claims How Many Good Projects for One Bad Project? On average it takes good projects to make up for one bad project. Profit margin for each project at 2%-5% $1,000,000 = $20,000- $50,000 If one project loses $500,000 it takes projects at 5% to recover the loss

44 Avoiding Claims Cost of Settlement, ADR, and Litigation Forms of ADR Negotiation Mediation Arbitration (Binding vs Non Binding) 43 43

45 Avoiding Claims Cost of Settlement, ADR, and Litigation Costs of litigation: Attorney Time (In House) Attorney Fees (Outside) Expert Witnesses Court Fees Lost Productivity Counter Claims Judgements Reputation 44 44

46 Avoiding Claims Who Really Wins? The lawyers and expert witnesses are the only parties to a claim that actually make money. On average, a judgement will recover % of the actual money spent on a claim

47 Client Development Everything you produce is Client Satisfaction Keep Your Client s Best Interests Communication Builds Trust Change of Contracting Styles = Higher Fees Getting Repeat Work 46 46

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49 For help setting up your strategic planning program, please feel free to contact us for a consultation. If you need any specific training, we are happy to arrange that for you, even if we don t provide the training ourselves. We have a strong network of other trainers for various subjects and certifications. For more information on this presentation, the concepts, or the tools, please contact Heath at (301) or at heath@theprojectleadershipacademy.com You can also connect with me on Social Media 48 48