The importance of good Projects in the Development of Norway

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Patricia Riley
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1 The importance of good Projects in the Development of Norway PMI Norway Chapter's Annual Conference 2017 Halvard S. Kilde, CEO Metier 25th of September 2017

CONTENT OF MY PRESENTATION An outside view on the project portfolio in Norway - opportunities and challenges What characterizes the best project

2 CONTENT OF MY PRESENTATION An outside view on the project portfolio in Norway - opportunities and challenges What characterizes the best project driven companies those who represent best practice The potential in improving the project performance in Norway Summary of to days conference Q&A

3 The project portfolio in Norway has never been larger CONSTRUCTION ON SHORE ICT & DIGITALISATION OIL & GAS Project portfolio run in Norway in 2017: ~500 Mrd NOK ~35% of our total labour force works in projects 3

Benefit realisation Project investment management how

4 And the projects are the link between community needs and the benefit realisation Community needs Projects Benefit realisation Project investment management how we could optimise the ROI should be focused even more

The challenge and the opportunity One out of two contruction projects do not succeed Two out of three ICT projects do not succeed Norway is among the most

5 The challenge and the opportunity One out of two contruction projects do not succeed Two out of three ICT projects do not succeed Norway is among the most project mature nations in the world We represent in some areas the best there is within project management, but we experience a too big spread in project performance

6 When it goes wrong, what happens? Some mistakes based on experience Front-end planning and concept evaluation (starting «wrong project») Incorrect project strategy and execution model Underestimated size and complexity Planning. Unclear organisation, roles and responsibilities Lack of progress control (earned value management) Cost Estimate at Completion (EAC) Progress reported Project risk management Budget Variance Accumulated Budget or Planned Value (PV) Budget at Completion (BAC) Planned Value t 1 (PV) Actual Cost t 1 (AC) Project governance Cost Variance Earned Value t 1 (EV) = BAC x %complete Time Variance t 0 t 1

7 Project optimisation - the potential in better front-end planning

Challenge for Norway Ltd we must succeed even better with our projects to be competitive and to deliver a productive nation to the coming generations The

8 Challenge for Norway Ltd we must succeed even better with our projects to be competitive and to deliver a productive nation to the coming generations The best way to make this happen is to improve the project management maturity in important sectors And the recipe for doing this is well defined ( benchmark ) 8

9 CONTENT OF MY PRESENTATION An outside view on the project portfolio in Norway - opportunities and challenges What characterizes the best project driven companies those who represent best practice The potential in improving the project performance in Norway Ltd Summary of to days conference Q&A

10 What characterizes the best project driven companies They are more independent of the best and most experienced project managers and project resources High productivity and very few project overruns Leading the development within their core business

They define and clearly communicate the management s responsibility in project governance 4.

11 And those who are best in class, what do they do? 1. They build project competence systematically in the entire organisation 2. They implement a company project life cycle adapted to different project categories 3. They define and clearly communicate the management s responsibility in project governance 4. They empower project management and define a project management career path 5. They implement a modern project management system/project portal where all management information needed for the different roles are accessible in one place 6. They focus on continuous improvement anchored in today s maturity and they have implemented a framework for doing this professionally

12 And the good thing project management best practice is well defined and ready for implementation P3M3*

THE PROJECT MANAGEMENT COMPETENCE FRAMEWORK IS WELL DEFINED Project Governance

Management Project Cost Management Project Quality Management Project Resource

approximate Project Communications Management Project Risk Management Project

13 THE PROJECT MANAGEMENT COMPETENCE FRAMEWORK IS WELL DEFINED Project Governance Project Integration Management Project Scope Management Project Schedule Management Project Cost Management Project Quality Management Project Resource Management But - within this area of expertise, too many companies are to approximate Project Communications Management Project Risk Management Project Procurement Management Project Stakeholder Management Financial management HSE management Page 13

14 We know why the project life cycle is so important for project driven companies It gives consistency in how we do projects It ensures that we repeat the success factors and avoid pitfalls It ensures control and predictability until a successful delivery It is a prerequisite for professional project governance Page 14

15 We have the best project management systems «on the shelf» PORTFOLIO OVERVIEW WITH HEALTH STATUS PROJECT ROOM FOR COLLABORATION INTERNALLY AND EXTERNALLY AVAILABILITY AND MAINTANANCE OF METHODOLOGY MY PAGE ACROSS PROJECTS

16 We have very good frameworks for running continious improvement programs Project management maturity as of June 2016 Project management maturity as of June 2017

17 SO WHY ARE WE NOT DOING IT ALL THE WAY? 18

18 CONTENT OF MY PRESENTATION An outside view on the project portfolio in Norway - opportunities and challenges What characterizes the best project driven companies those who represent best practice The potential in improving the project performance in Norway Ltd Summary of to days conference Q&A

19 WHAT IS THE POTENTIAL, AND HOW IMPORTANT IS IT TO IMPROVE? Right project Right solution Well executed Right project Right solution Well executed Improved «time to market»

20 The nation of tomorrow relies very much on good/better projects some examples Infrastructure roads and railways Urban development Health sector Power The digitalisation Public services it self

VALUE PROPOSITION Improved early phase processes (front-end planning) will ensure that we repetitively launch the right projects for Norway Ltd and that bad / wrong projects are stopped.

21 VALUE PROPOSITION Improved early phase processes (front-end planning) will ensure that we repetitively launch the right projects for Norway Ltd and that bad / wrong projects are stopped. The cost effectiveness of the implementation of the project portfolio can be improved by 10-12%? «Time to market» will be significantly improved with an accelerated benefit realisation THE VALUE OF THIS IS SIGNIFICANTLY GREATER THAN THE EXPECTED RETURN ON THE PENSION FUND!

22 BUSINESS CASE Simple example 24

0.5% HIGHER PRODUCTIVITY IN PUBLIC SERVICE PRODUCTION WILL BE SUFFICIENT TO COVER THE ENTIRE ESTIMATED TIGHTENING REQUIREMENT UNTIL 2060 Norge har hatt historisk lav produktivitetsvekst etter 2005,

23 0.5% HIGHER PRODUCTIVITY IN PUBLIC SERVICE PRODUCTION WILL BE SUFFICIENT TO COVER THE ENTIRE ESTIMATED TIGHTENING REQUIREMENT UNTIL 2060 Norge har hatt historisk lav produktivitetsvekst etter 2005, fra et snitt på 3 % til 0,8 % frem til Uten høyere produktivitetsvekst kan vi få stagnerende levestandard og store offentlige underskudd. Bygg og anlegg og offentlig forvaltning kommer dårligst ut blant norske næringer. Den årlige volumveksten i BNP per innbygger var 2,4 % per år i perioden NOU 2016:3 viser at den tilsvarende veksten i gjennomsnitt blir 0,3 % i perioden Norges BNP i 2015 var 3150 mrd. NOK. Internasjonale sammenlikninger viser betydelig potensial for bedre offentlig ressursbruk 0,5 % høyere produktivitet i offentlig sektor er beregnet til å kunne utgjøre 10 % lavere offentlig sysselsetting innen 2060.

NORWAY SIMPLIFIED BC Number of inhabitants in Norway: 5 260 000 Number of persons employed in Norway: 2 600 000 (15-74 years) Number of employees in the public sector: 824 000 2017- Can we do the

24 NORWAY SIMPLIFIED BC Number of inhabitants in Norway: Number of persons employed in Norway: (15-74 years) Number of employees in the public sector: Can we do the same job we do today with 88% of the labor force? If yes, we can release about 100,000 good heads for other valuecreating purposes The value of 100,000 heads - about 4% of GDP GDP is 3200 Mrd NOK (2016) An important key to this is the digitization with its modernization programs.. where the main success factor is the management and governance of the programs and projects (MSP)

SUMMARY AND SOME ADVICE:) Define clear competence Implement the company s main requirements for project processes for project and important roles programme

25 SUMMARY AND SOME ADVICE:) Define clear competence Implement the company s main requirements for project processes for project and important roles programme management ( your best practice) Use the P3M3 framework for continuous improvement programs Perform clear and proactive management through professional project governance

26 SUMMARY OF THE CONFERENCE The project management profession is more important than ever We experience a rapid development within our field of expertice We need new competence to succeed even better Is the PMO dead?:) The project driven company is the future PMI is a corner stone in the national and international PM environment and developemt 28

27 THE FUTURE IS BRIGHT FOR NORWAY! Thank you for listening Page 29

28 Metier + OEC = RPS Norway

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