Managing Cost-Reimbursement Contracts. CUR:COU:EN:000 ver Program Management

Transcription

1 Managing Cost-Reimbursement Contracts CUR:COU:EN:000 ver. 0.0 Program Management

2 Program Management PMC:DK4:EN:000 ver. 1.2

3 TwentyEighty Strategy Execution October 2016 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of TwentyEighty Strategy Execution. Strategy Execution grants federal government users "Restricted Rights" (as the term is defined in FAR and DFARS ). Use, reproduction, or disclosure of these materials is subject to the restrictions set forth in the MOBIS, FSS, or contract under which the materials were provided. All material from A Guide to the Project Management Body of Knowledge (PMBOK Guide) is reprinted with permission of the Project Management Institute, 14 Campus Boulevard, Newtown Square, Pennsylvania , USA, a worldwide organization of advancing the state-of-the-art in project management. Phone: (610) , Fax: (610) PMI did not participate in the development of this publication and has not reviewed the content for accuracy. PMI does not endorse or otherwise sponsor this publication and makes no warranty, guarantee, or representation, expressed or implied, as to its accuracy or content. PMI does not have any financial interest in this publication and has not contributed any financial resources. The names of all companies and characters used in these materials are purely fictional. Any resemblance to any existing or no longer existing company or living or dead person is not intended, and is purely coincidental. PMI and PMBOK are registered marks of the Project Management Institute, Inc. TwentyEighty Strategy Execution Arlington, VA USA

4 Module 1: Program Management Key Concepts Module 1 Program Management Key Concepts Program Management Key Concepts Program Management Overview In this introductory module, we will define standard terms related to program management and will present concepts, approaches, and critical success factors that will be explored throughout the course. This module discusses the characteristics of programs and program management and describes the link between programs and strategic goals. It explores the relationship between project management, program management, and portfolio management. We will outline the program life cycle and explain how it can facilitate program management. In addition, we will introduce four critical success factors strategic alignment, benefits management, program governance, and stakeholder management that the program manager must address throughout the program life cycle. What Is a Program? What Is a Program? To properly define a program, it is necessary first to distinguish a project from a program. A project is a temporary undertaking to create a unique product or service. A project has a defined start and end point and specific objectives that, when attained, signify completion." 1 This definition means that a project has a definite beginning and end; is different from other 1 Ward, J. LeRoy. Dictionary of Project Management Terms. 3rd ed. Arlington, Va.: ESI International, 2008, p StrategyExecution PMC:DK4:EN:000 ver

5 Module 1: Program Management Key Concepts products and services; and concludes with the intended output, such as a product, or service. A program, on the other hand, is a group of related projects managed in a coordinated way to obtain benefits not available from managing the projects individually; may include elements of nonproject work such as ongoing activities or tasks that are not within the scope of the individual projects but that contribute to the program's intended benefits. A program concludes upon realization of the desired outcome. Immediately we can see three distinct differences: A program s operations are meant to be durable without regard to the time limits specific to its individual projects. A program s range of oversight is highly complex, encompassing multiple and associated projects simultaneously in an effort to achieve intended objectives and to derive the highest possible benefits to the organization by managing and controlling them more effectively and efficiently to their complete fulfillment. A program is commissioned to create a desired outcome. This outcome is typically one that supports the strategic objectives of the performing organization. Sometimes organizations classify large projects as programs because of their size, when in reality, they are nothing more than a combination of subprojects. However, if a large project can be divided into various connected projects having mutual management requirements, then they become the building blocks to a program and should be designated as such. Some types of programs are mergers and acquisitions, new facilities, new products, major organizational changes, outsourcing initiatives, and geographic change. The key purpose of a program is to drive strategic change and manage the effect of this strategic change on the organization. Types of Programs There are at least five common types of programs. Descriptions of these are found below. Strategic: The focus of the existing standards is largely on the strategic program. This type of program involves an understanding of the organization s strategic objectives and typically involves organizational, cultural, and behavioral change. Organizational change may be the desired outcome of this type of program or it may be a requirement to achieve program outcomes. It is initiated to achieve an organization s strategic objectives. An example of a strategic program is a process reengineering effort. Compliance: Compliance programs are initiated to comply with government standards, regulations, or laws. An example of a compliance program would be environmental regulation compliance. Government: These programs are initiated by the political process to serve public or social needs or requirements. They exist at a higher level than programs covered by the existing standards. Typically, programs of this nature dealt with in this course will be nested within these higher-level programs. Some examples of government programs are military, defense, or public welfare programs. Customer focused: Some organizations perform programs as part of contracts with external customers. The key to these types of efforts being described as a program lies in the relatedness of the project work to be done under the contract. In these cases, the program manager should also have an understanding of the significance of their work from the client s strategic perspective. If the project work being done is not related, it would fall more to the definition of a customer portfolio. They are initiated by a contractual agreement 2 PMC:DK4:EN:000 ver StrategyExecution

6 Module 1: Program Management Key Concepts to develop outcomes that require related project work for an external client. These programs help clients achieve their strategic objectives. Emergent: Emergent, or bottom-up programs exist when an organization realizes the project efforts that were independently initiated are, in fact, related and would benefit from coordinated control. For example, software upgrades to customer support groups may be initiated along with independently initiated training on the introduction of new products and services. If these efforts are related, the organization will be able to optimize benefits and control by managing these in a coordinated fashion, that is, as a program. Components of Programs The projects, subprograms and nonproject work that make up programs are sometimes referred to as components." Additionally, clusters of projects contributing to a particular benefit may be referred to as tranches." The Project Management Institute (PMI) 2 standard generally uses the language of components, and Managing Successful Programmes uses the language of tranches. Rather than have this be a point of confusion, this material will largely use the word project. However, it should be understood that programs are composed of more than projects. Program Complexity in Today s Environment The complexity of the environment in which a program exists also makes its mark on it. Some factors that contribute to this complexity include differences in project management maturity and models, geography and the increasingly global nature of programs, size and scope, number and behaviors of stakeholders, and the goal of organizational change. Another factor (perhaps the largest one) contributing to complexity in programs is lack of resources. What Is Program Management? Amid this complexity, program management s centralized and coordinated control enables accountability. Program management provides accountability for ensuring that the structure and processes exist to enable the organization to achieve a benefits realization program and strategic objectives. The management of the interdependencies between program components (project and nonproject work) and ongoing operations are the responsibility of program management. These responsibilities are performed with the goal of benefits realization and the achievement of desired outcomes. A definitive characteristic of program management includes the alignment of program objectives to strategic objectives. The program s outcomes help to achieve the organization s strategic intent and are central to organizational change, including cultural change. Success is measured by the achievement of the desired outcomes, not just the creation of the planned outputs. Program management is a very iterative process, and while there is a program life cycle, program management is, in practice, nonlinear. Typically, program management is characterized by revisits and refinements of the business case, multiple feasibility studies, and changes to the component definition and execution. 2 PMI is a registered mark of the Project Management Institute, Inc StrategyExecution PMC:DK4:EN:000 ver

7 Module 1: Program Management Key Concepts Characteristics of Program Management Program management involves applying a central focus to the program to achieve the program s strategic benefits and objectives for the organization. As a result, program management can affect strategic change in an organization by focusing on the critical success factors of ensuring the alignment of the program s objectives with the organization s strategic objectives, realizing benefits, effectively managing stakeholders, and providing effective governance. Business change is a readily apparent consequence of successful program management, but cultural change in organizations, such as how staff members interact among themselves and with clients, also may be a by-product. In the end, successful program management produces growth, specific productivity gains, and an improvement in business position. When compared to the project environment, program management possesses the following distinct characteristics. Deliverables have a strategic intent: The objectives of the program directly implement the strategic objectives of the organization. Change is anticipated and proactively addressed: Management of change in the program environment means much more than project change control. It means handling and expecting changes due to strategic shifts in the organization, marketplace pressures, valuation issues, and other issues that are not rejectable changes. Responding to such changes may alter the makeup and direction of the program and its relationship with the sponsoring organization. Cultural change is integrated within the organization: A change in how members of an organization work or interface with one another or their customers will alter the organization s culture, capabilities, or both. This change must happen without disrupting business as usual. Here, we are talking about big changes that is, the types of initiatives that will have a significant impact on organizations and the culture of organizations. Success is measured by outcomes, including growth, productivity gain, and improvement of position in the marketplace: These outcomes are the types of success that programs are trying to achieve. A program s success is not assessed against the traditional triple constraints (of cost, time, and scope) alone. Program objectives may also include objectives for organizational growth, higher productivity, and a larger market share. Programs are iterative and nonlinear: A program is much less linear than a project. A program may not have a specific end date. The business case that preceded program initiation may be revisited and reviewed numerous times during the program s life. Feasibility studies may be initiated at any time during the program to evaluate new opportunities, components schedules may be changed and reoptimized, and the program s life cycle is characterized by progressive elaboration. The Value of Program Management The value of program management is one of focus: focus on the capabilities to be added or improved, benefits to be realized, and the outcomes to be achieved. It provides a systematic approach for achieving solutions in that they fulfill the organization s strategic objectives. It provides the coordination of complex planning activities and optimizes the use of resources, 4 PMC:DK4:EN:000 ver StrategyExecution

8 Module 1: Program Management Key Concepts both human and material. It also provides for an integration of outcomes with ongoing business operations. By providing all this value, it also helps the organization to realize necessary change and create a better future than the current situation. The Relationship Between Projects and Programs The Relationship Between Projects and Programs By their nature, the projects deliverables individually contribute to a program s overall strategic goals and benefits by increasing organizational capabilities. Some deliverables may need to be integrated to provide some or all of the program s benefits. As a result, projects within a program frequently may share resources, often permitting cost and schedules to be optimized and, in the case of staff, to be matrixed. Moreover, it is not unusual for projects within a program to have mutual clients and shared technology as well. The interdependencies in a program environment require an integrated focus and prudent planning, scheduling, executing, monitoring, and controlling of the program s projects. Thus, like projects on a smaller scale, programs become an efficient mechanism for fulfilling an organization s mission. For more distinctions between projects and programs, please review Appendix A: Projects vs. Programs, in this Reference Manual StrategyExecution PMC:DK4:EN:000 ver

9 Module 1: Program Management Key Concepts Benefits of Programs Benefits of Programs Together, projects and programs benefit an organization by contributing to, and enhancing, its general capabilities. They are both instrumental in achieving organizational objectives, such as increasing sales, decreasing operational costs, and reducing organizational waste. Consequently, projects and programs collectively provide utility to an organization s stakeholders and, in turn, sustain investment in the organization s future enterprises. Managing the organizational benefits, however, is the principal distinguishing factor between programs and projects. Although the gains that projects deliver should not be diminished, the temporary duration, focus on outputs, and specific goals of a project prevent the broad realization of their benefits. Rather, it is the program, which inherently manages multiple projects and resources in the context of the organization s strategic plan, that is better positioned to provide the most benefit to all stakeholders and ultimately achieve the outcomes that the organization desires. We will continue to discuss program benefits throughout this course. However, it is only through competent program management that the full realization of benefits can be achieved. Responsibility of Program Managers to Projects Responsibility of Program Managers to Projects The role of program managers is to coordinate and integrate work among the program s projects rather than to manage the projects (which is the role of the project managers). By virtue of their broad oversight, program managers identify, rationalize, monitor, and control their projects interdependencies. In that regard, they must manage issues as they arise among the program s component projects. Thus, program managers can, thereby, track every project s contributions to the program and toward the organization s overall benefits. Program managers Align efforts between projects in the program, but do not manage individual projects Identify, rationalize, monitor, and control project interdependencies to maximize benefits Manage escalated project issues Integrate contributions from individual projects to achieve overall program benefits Select and define the projects within the program Ensure only projects with outputs that contribute to the program's outcomes are implemented 6 PMC:DK4:EN:000 ver StrategyExecution

10 Module 1: Program Management Key Concepts Consequently, an important distinction for program managers versus project managers is the level of detail at which they are involved. Program managers must focus their attention on managing the program as a whole rather than managing a group of projects. Programs and Strategic Objectives Programs and Strategic Objectives Programs are vehicles for implementing the business strategy of an organization. The strategy outlines the business change that the organization desires. Driving the organization from the AS-IS state to the TO-BE state, as outlined in the strategy, is a major program function. This TO-BE state is not mere rhetoric, but it should describe in as much detail as possible the future and how it will be better than the current situation. As discussed previously, one characteristic of program management is achieving strategic intent, which means the objectives of the program directly implement the strategic objectives of the organization. However, there remains yet a more direct link to an organization s strategy than a program, namely a portfolio. Portfolios and Portfolio Management Portfolios and Portfolio Management 2016 StrategyExecution PMC:DK4:EN:000 ver

11 Module 1: Program Management Key Concepts Superior to the program in the organizational hierarchy is the portfolio. Portfolios are ongoing, are larger and more extensive in their scope than programs, and drive investment. Although programs are the vehicles that an organization employs to directly implement its strategic objectives, it is within the portfolio where management s highest decision making occurs. As an aggregate of projects, programs, other work, and, occasionally, other portfolios having similar business intent and objectives, the portfolio is best positioned as the umbrella subdivision to establish and oversee the organization s intent, direction, and progress. The portfolio frames strategic decisions regarding organizational investments, resource allocation, and business advantage. The portfolio is concerned with monitoring program alignment to organizational initiatives and how they relate to its strategy. Thus, it is through portfolio groupings that strategic business goals are most effectively facilitated and managed to maximize benefits. Consisting of various-sized projects and programs all or part of which may be in process concurrently and may not be mutually exclusive the portfolio is critical to the organization s strategic operations. Thus, portfolio management must focus on the interdependencies among programs and projects as well as portfolio and program process interactions, which can be done at multiple levels in an organization. Although control flows from the portfolio to the program, information monitoring travels upward from the program to the portfolio. As an example, an IT department might be managing an IT portfolio, which, in turn, may roll up to a higher level of portfolio management where data on project/program budgets, schedules, and performance reports are overseen. Portfolio management facilitates the alignment of investments in projects and programs with strategy. Portfolio management focuses on establishing priorities and allocating resources (funding and people) for programs and projects. Program Management Standards Program Management Standards There are two internationally recognized and used standards. The Standard for Program Management is currently in its third edition, published in It was developed under the direction of PMI and is popular predominantly in the USA and non-uk- 8 PMC:DK4:EN:000 ver StrategyExecution

12 Module 1: Program Management Key Concepts aligned countries. This version of the PMI standard again shifts focus from life cycle and knowledge areas to domains and supporting process groups, which are listed alphabetically. Again, the names of the program life cycle phases have changed. It includes five Program Management Performance Domains: Strategy Alignment, Benefits Management, Stakeholder Engagement, Governance, and Life Cycle Management. It also discusses nine Supporting Processes Groups: Communications Management, Financial Management, Integration Management, Procurement Management, Quality Management, Resource Management, Risk Management, Schedule Management, and Scope Management. The most recent edition of Managing Successful Programmes (MSP) was published in 2011 and was developed under the direction of the Cabinet Office of the UK. It is popular in the UK and UK-aligned countries (for example, Australia, New Zealand, and Scandanavia), especially within the public sector and other large organizations. This standard's principles include: Descriptions of Successful Programs, Alignment with Corporate Strategy, Leading Change, A Better Future, Benefits Realization Focus, Adding Value, Coherent Capability, and Learning from Experience. Governance themes discussed include: Organization, Vision, Leadership and Stakeholder Engagement, Benefits Management, Blueprint Design and Delivery, Planning and Control, Business Case, and Risk and Quality Management. The Transformational Flow (life cycle) used consists of the following stages: Identify, Define, Manage Tranches, Deliver Capability, Realize Benefits, and Close. Both standards provide guidelines for managing programs within an organization as well as a common vocabulary for effective communication and coordination. They also outline approaches and best practices for successfully managing a program. There is also at least one additional standard: A Guidebook of Project and Program Management for Enterprise Innovation, last published in 2005 under the direction of the Project Management Association of Japan. Its use appears to be limited to Japan, and it does not appear that it is being updated or maintained StrategyExecution PMC:DK4:EN:000 ver

13 Module 1: Program Management Key Concepts Program Life Cycle Program Life Cycle The approach used in this course is to use a generic life cycle. Program activities typically occur within phases, or stages. The names of these phases vary among standards. In fact, the three versions of the PMI standard have all changed the names of the life-cycle phases and even changed the activities performed in various phases. The Managing Successful Programmes standard refers to this grouping of activities as the transformational flow. Each one of these high-level phases will be dealt with in more detail in the following modules. For now, the phases of the life cycle used in this course and associated activities include Program Proposal: Identifying the program need and developing the program proposal Initiation and Approval: Obtaining program approval and funding Program Planning: Developing program and project management plans and governance procedures Delivery of Capabilities and Benefits: Implementing plans to create the outputs and integrating them to achieve the desired outcomes. This phase entails actually "managing" the programs. Program Closure: Operationalizing, transitioning, ending, or continuing the program It is important to note that the program life cycle is not a linear process. In fact, the typical program life cycle is less linear than a project life cycle, because whereas projects have a definite end date, programs may not. For example, the 2008 Beijing Olympics had a definite end date after the closing ceremony and after all financials were closed out. The A-380 Airbus program, however, will not have an end date until the last plane rolls off of the production line. We do not have a way of knowing exactly when that will be. In addition, programs encompass the management of projects and continued management of the operations and maintenance (O/M). Additionally, programs can be injected into the strategic mix at any business juncture. This further introduces a tendency for programs to be nonlinear. 10 PMC:DK4:EN:000 ver StrategyExecution

14 Module 1: Program Management Key Concepts The program life cycle simply helps to provide a framework for managing program activities. This framework would include an identification of decision points or phase gates relative to program approval and continuance. The life cycle also provides a framework for enhancing governance and control, the management of projects and nonproject work, and the realization of benefits. Program Management Critical Success Factors Program Management Critical Success Factors The four critical success factors strategic alignment, program governance, benefits management, and stakeholder management flow through the program life cycle: Strategic alignment: Maintain alignment of program objectives with strategic objectives. Program governance: Develop, communicate, implement, monitor, and assure the policies, procedures, organizational structures, and practices associated with a given program. Benefits management: Define, realize, maximize, and sustain the benefits of the program. Stakeholder management: Manage the expectations and interest of stakeholders to ensure their continued support and appropriate participation in the program. The program manager s job is to maintain alignment with strategic objectives, to recognize the stakeholders interests in the program, and to ensure that benefits and stakeholders are successfully managed throughout the program life cycle. Thus, proper program governance means planned and executed policy, procedures, and processes. Throughout this course, we 2016 StrategyExecution PMC:DK4:EN:000 ver

15 Module 1: Program Management Key Concepts will explore the critical success factors and how each phase of the program life cycle addresses them. Additional Considerations in Program Management Additional Considerations in Program Management It is not too soon for the program manager to think about how the program will end. Programs do not always have a definite end. A program may be focused on a product line or a customer and the objective may be to keep realizing benefits on an ongoing basis. There may be difficulties when the program s outcomes have to be transitioned to operations. Therefore, there is a need for planning the ending, be it the end of a product line, the transition to operations, or the ongoing support of the program s deliverables by the program team. When managing a program, it is necessary to consider two additional areas: O/M and how the product life cycle relates to these areas. Although these aspects will vary from program to program and from organization to organization, there are three general options for managing O/M and the product life cycle. First, a program by extending its life cycle could be responsible for these areas. Second, a program could hand over these responsibilities to an O/M or product support department. And third, the program office and operational management department could work together to manage these areas and then disengage at some later point in the product life cycle. Within any given program, some deliverables and products that are being implemented will continue to be the responsibility of the program, whereas others will be handed to O/M. For 12 PMC:DK4:EN:000 ver StrategyExecution

16 Module 1: Program Management Key Concepts example, the Apple iphone is a program for which a program manager will be responsible until the end of the product s life. We will discuss these options in more detail during the Delivery of Capabilities and Benefits phase. Summary and Next Steps Course Summary and Next Steps Programs are a means to achieving strategic change in an organization. The purpose of a program is to affect strategic change and to realize benefits and strategic objectives. Projects are collectively organized into programs so that their discrete deliverables contribute to the program s benefits. Program managers manage the interdependencies between projects and track the contributions of each project to the program s consolidated benefits. Programs follow a five-phase life cycle that helps to manage outcomes and benefits and to facilitate governance. Portfolio management facilitates the alignment of investments in programs and projects with strategy. A portfolio is a collection of programs and projects that map to an organization s strategy. The critical success factors of strategic alignment, stakeholder management, benefits management, and program governance must be addressed in all five life-cycle phases StrategyExecution PMC:DK4:EN:000 ver

17 Module 2: Program Proposal Module 2 Program Proposal Introduction Overview This module focuses on the first phase of the program life cycle, Program Proposal. It presents the purpose of this phase and its major activities and deliverables. The module will offer an approach for understanding the context in which the program exists and identifying and understanding key program stakeholders, and it will outline the critical elements of the high-level program business case. This module will also discuss the importance of aligning program objectives with organizational strategy and will examine the responsibilities of the program manager as they relate to the activities described. Purpose of Program Proposal The purpose of this phase involves identifying the business need that has to be addressed. Organizations are continuously faced with needs such as improving operations, growing market share, meeting changing customer expectations, and successfully operating in a global environment. Organizations develop strategic objectives to decide which business needs are to be met. This purpose is fulfilled by developing a strong, high-level business case that clearly identifies and describes the program benefits. The high-level business case is then approved by key stakeholders. The strategic planning process identifies business needs that then give rise to the program concept or mandate, including a high-level view of the strategic objectives that the program will accomplish and the benefits that it will deliver. Exactly how this takes place and who is involved will vary from organization to organization. This selection process typically occurs at the highest levels of the organization by senior managers or a steering committee with cross-functional representation. It is important for the program manager to understand the strategic objectives and how the program supports these strategic objectives. The business case will identify the factors to be considered in determining whether a program will be approved, but it will also contain important information on benefits expected and assumptions made not only about those benefits, but also regarding the environment. The program manager must be aware of the context in which the program has been approved, and that context should be provided in the business case StrategyExecution PMC:DK4:EN:000 ver

18 Module 2: Program Proposal Identify Program Context Identify Program Context The consideration of a program is generally triggered by an executive program mandate. The mandate will require addressing two major issues: How will the organization s strategic objectives be realized through the program s objectives? How will the organization s mission, vision, and values inform the program s mission, vision, and values? Strategic objectives are developed within the context of the organization s mission, vision, and values. A program, therefore, must reflect those mission, vision, and values. Strategic objectives must be translated into manageable investment and initiative decision criteria. Also, any program proposal should demonstrate measurable contribution. The organization s mission, vision, and values must be understood and assessed for program impact. The degree of clarity and detail in the program s vision will be a contributing factor to success. The majority of these activities occur before the program manager is assigned. However, the program manager still must understand the activities that occurred here, the rationale for the selection of the program, and the context in which the program is to be managed. Mission, Vision, Values, and Organizational Strategy Mission, Vision, Values, and Organizational Strategy During the Introduction of this course, we learned that programs are strategy implementation vehicles. In fact, organizational strategy should drive programs, and the objectives of the program should, in turn, be aligned with organizational strategy. 16 PMC:DK4:EN:000 ver StrategyExecution

19 Module 2: Program Proposal The strategic objectives that an organization identifies are developed within the context of the mission, vision, and values of that organization. The linkage between the organization s strategic objectives and the program s objectives should be made clear and explicit, and the organization s mission, vision, and values should be reflected clearly in the program s mission, vision, and values. Mission defines the purpose or why the organization exists. The program s mission describes its purpose and what it needs to achieve. Vision is what the end or future state of the organization will look like. The program vision describes how the program will help to achieve this future state. Values are the collection of guiding principles that the organization deems to be correct and desirable regarding business conduct. Organizations are increasingly identifying and making more explicit the values that it considers to be important and then identifying these values as drivers of expected behaviors. Examples of such organizational values are ethical behavior, concern for the natural environment, and collaborative work behaviors. Values are to be identified, understood, and used to drive program team behavior. Thus, as the mission drives the vision, the vision is influenced by the values of the organization. Together, the mission, vision, and values, in turn, create the context for development of the organizational strategy and objectives. Examples of mission, vision, and values from Strategy Execution: Mission: To help the world s leading corporations and government agencies improve their performance by developing their most important assets: their employees. Vision: To differentiate Strategy Execution as the premier provider of learning solutions to organizations across the globe by leveraging knowledge, technology, and innovative learning practices. We will achieve this by delivering unparalleled value to our customers by providing insights into learning best practices based on our years of experience in the design, development, and delivery of our products and strategic services. We will positively impact the performance of our clients organizations by improving how they work StrategyExecution PMC:DK4:EN:000 ver

20 Module 2: Program Proposal Values: Honor the trust of our clients, partners, and employees: Strategy Execution adheres to the highest standards of honesty and integrity, conducting our business with respect for cultures, the rights and dignity of individuals, and the environment everywhere we operate. Deliver impact: Deliver high-quality, innovative learning solutions that are relevant to the needs of our clients, support their strategic goals, and make a positive impact to their organizations. Grow and support our people: Strategy Execution provides a rewarding, performance-based culture that allows our people to prosper, grow, and develop their skills and talents, ensuring success for us and our clients. Organizational Strategy and Business Needs Organizational strategy identifies what business needs the organization must address, and based on the mission, vision, and values, how those needs will be addressed. Typical business needs include improving customer service, increasing market share and expanding product and service offerings, anticipating or responding to changes in customer expectations, improving operations efficiency reacting to major technology shifts, and responding to various and pervasive global challenges. Developing the High-Level Program Business Case Developing the High-Level Program Business Case The high-level program business case is usually developed before the program manager is assigned and is the major deliverable of the Program Proposal phase. It is the program manager s role to thoroughly understand, revisit, and communicate the information necessary to update and validate the business case throughout the life of the program. The business case is a high-level overview of the needs, feasibility, justification, and return on investment (ROI) of the program. Its purpose is to demonstrate why the program is a good expenditure of money or other organizational resources and to serve as an objective decisionmaking tool for judging whether the program is (and remains) desirable, viable, and achievable. The business case links the proposed program to the organization s strategy and describes and quantifies the potential program benefits. (However, the program charter, which is developed later, qualifies and quantifies benefits in much greater detail.) If the business case is approved by the key decision makers, then the program can move into the Program Initiation and Approval phase. Different organizations have different approaches for developing business cases. The business case may be developed within a functional business unit or it may be developed by a crossfunctional task force. In some cases, the business case may be only a high-level financial analysis, and the organization may require another document to establish the proposed 18 PMC:DK4:EN:000 ver StrategyExecution

21 Module 2: Program Proposal program's link with organizational strategy, establish the justification, and so on. The program manager may or may not be involved. In any case, the program manager must fully understand because he or she will need to evaluate the program against the business case throughout the life of the program. Components of the High-Level Program Business Case The business case should outline the following elements: Executive overview Business need/opportunity Alternatives Benefits Costs Financials Assumptions Risks Constraints Market analysis Competitive analysis Organizational considerations Program description Implementation plans Managing the Program Business Case Programs, unlike projects, manage benefits realization as well as costs. Thus, the business case serves as a tool for value management. The level of detail and completeness (or maturity) of the business case will reflect the amount of uncertainty associated with the program. Initially, the business case information will be uncertain, as estimates will be very approximate, with high levels of potential variance. As the program develops and more fixed information is known, the business case will then become more accurate and complete. Review of the Program Business Case Reviewing the business case should provide answers to the following questions: Is the program (still) affordable? Is there sufficient funding? Is the outcome (still) achievable? Is there a realistic assessment of the organization s ability to cope with the scale of change required? 2016 StrategyExecution PMC:DK4:EN:000 ver

22 Module 2: Program Proposal Does the program (still) demonstrate value for money? Are the benefits and the costs of realizing them in the right balance? Have options been considered? Is the program s portfolio (still) the appropriate, or optimum, way of achieving the desired outcome(s)? Are the assumptions underlying costs and benefits clearly documented and understood? Approval of the High-Level Program Business Case and Appointment of Program Manager Typically, it is only after the identified group of decision-makers has approved the program business case that the program manager is assigned. The program manager can then move forward with the program and may help to develop the program charter (to be described during Initiation and Approval activities.) The program manager s role is, therefore, to have a full understanding of the context for the program, including the mission, vision, and values of the organization, and how they have informed the strategic objectives of the organization. The program manager should also have a full understanding of the business case for the program, how it aligns with and supports organizational strategy, the business needs to be addressed, and the desired outcomes and business benefits expected. The program manager should also understand who are some key stakeholders in the program, both from a more internal, who developed it and who approved it perspective and also from a more external "who will be affected perspective. 20 PMC:DK4:EN:000 ver StrategyExecution

23 Module 2: Program Proposal Critical Success Factors During Program Proposal Critical Success Factors During Program Proposal Strategic Alignment Strategic alignment during this phase entails organizationally developing and communicating a clear and explicit understanding of the organization s strategic objectives as well as the context in which they were developed, including their vision, mission, and values. The organization will also identify business needs that have to be addressed and commission the development of a proposal for addressing these via a potential program. The potential program will have to demonstrate how its objectives, vision, mission, and values align with the organization s objectives, vision, mission, and values. This proposed program will be analyzed, described, and documented in a business case. Program Governance Program governance at this phase entails having defined processes for identifying program opportunities and developing and approving the initial high-level program business case. Benefits Management During Program Proposal, initial benefits are qualified and quantified. The business case should provide an initial identification and estimate of the proposed benefits, and the assumptions that led to these estimates of benefits StrategyExecution PMC:DK4:EN:000 ver

24 Module 2: Program Proposal Stakeholder Management During Program Proposal, stakeholder management entails understanding who develops and communicates organizational strategy and who is responsible for the development, review, and approval of the business case. An initial identification of the stakeholders to be involved directly in the program will be provided in the business case. Summary and Next Steps Summary and Next Steps In this module, we ve discussed the critical activities of the Program Proposal phase, which include creating a firm foundation of support and approval for the program by aligning program objectives, mission, vision, and values with organizational strategy and developing the highlevel program business case. Because the business case demonstrates why the program is a good expenditure of organizational resources, it is crucial to have the empowered support of the key decision makers in this phase so that the business case is well developed and ultimately approved. After this occurs, the organization moves the program forward to the Program Initiation and Approval phase. Program Initiation and Approval is the second phase in the program life cycle. 22 PMC:DK4:EN:000 ver StrategyExecution

25 Module 3: Program Initiation and Approval Module 3 Program Initiation and Approval Introduction Overview This module explores the program activities that take place during Program Initiation and Approval, the second phase of the program life cycle. These activities include adding further detail to the information in the business case, developing and obtaining approval for the program charter, identifying the key stakeholders and their roles and responsibilities, and selecting the program manager. Purpose of Program Initiation and Approval Purpose of Program Initiation and Approval Program Initiation and Approval specifically defines the following program elements: Developing and obtaining approval for the program charter Identifying key program personnel, including the program sponsor and program manager Obtaining funding Performing initial stakeholder management analysis Identify the Program Manager Identify the Program Manager The program manager is appointed during Program Initiation and Approval. He or she is selected based on several criteria. The specific selection criteria and key competencies that the program managers will need depend on the nature of the work StrategyExecution PMC:DK4:EN:000 ver

26 Module 3: Program Initiation and Approval Key Program Manager Competencies To manage programs successfully, a program manager must possess very specific skills. These competencies include the following. Big-picture thinking and vision development: Ability to understand the mission, vision, and values of the organization and to translate them to the program; also involves understanding the context, or big picture, in which the program exists Leadership and team building: Ability to build relationships, delegate and empower, mentor and coach program personnel, and collaborate with different functions within in the organization Communication: Ability to communicate competently in writing and verbally, communicate effectively with a wide range of management (governance boards), communicate priorities and constraints, and communicate with stakeholders Politics: influencing and negotiating: Ability to understand and manage the political landscape of the program environment; ability to understand conflicting agendas and negotiate solutions Conflict resolution: Ability to proactively identify and resolve the issues, solve problems, prioritize conflicting objectives, and achieve resolution Stakeholder management: Ability to understand and manage expectations; understand stakeholders desires, needs, and requirements (both explicit and implicit); interview prospective stakeholders and business owners; and collaborate with stakeholders Planning and resource management: Ability to develop various types of plans (risk, cost, and contingency); assess, match, manage, and release resources; align program management plans with strategic program objectives; and organize program artifacts Complexity management: Ability to gather and integrate information; distill and synthesize requirements; and analyze schedule trends, reports, change drivers, requirements, and competition Program/project management tools and techniques: Ability to manage component interdependencies, milestone planning, process mapping, plan and facilitate meetings, change management, statistical quality control, root cause analysis, scenario analysis, brainstorming, scheduling tools operation, and lessons learned As the program is ready to move into Program Planning, it is important to think about the activities that are to be performed and to identify the resources required. Develop the Program Charter Develop the Program Charter The overall purpose of the charter is to Authorize the program and provide authority to the program manager Establish understanding and buy-in from program stakeholders 24 PMC:DK4:EN:000 ver StrategyExecution

27 Module 3: Program Initiation and Approval Serve as a communication tool Provide an announcement to the organization that a program has been approved Overall Purpose The project charter is to provide information to decision makers to enable the approval or rejection of the program and, if approved, to establish understanding and buy-in from program stakeholders. While the approval of the business case is an important event in the program's life cycle, business cases are generally not the document used to announce, organizationally, the approval of a program. The charter also serves as the basis to move to the next phase, Program Planning. To accomplish this, the charter Provides a high-level program scope, objectives, vision, and constraints Outlines the components or projects, the people involved, the funds needed, and the processes to be followed Describes the desired outcomes and benefits, the contributing costs and risks involved in getting there, and provides a high-level road map of actions required Serves as a communication tool to provide stakeholders with an announcement of the program's approval and an understanding of the program In conjunction with program sponsors and other stakeholders, the program manager and the program team develop the program charter and present it for approval. To help ensure success, it is necessary to actively involve these stakeholders in the development of the program charter. It is an iterative process with the stakeholders actively engaged. Program Charter Components The program charter s primary input is the business case. The charter contains the following elements: Justification for the program (description taken from the business case) Vision Strategic alignment Desired outcomes Program scope Expected benefits Initial components Resources required Key stakeholders Governance processes and structure Success criteria Constraints Assumptions 2016 StrategyExecution PMC:DK4:EN:000 ver

28 Module 3: Program Initiation and Approval Risks Initial high-level road map Program milestones Program managers responsibilities and authority Roles and responsibilities One key component of the program charter is the high-level road map. This initial document is basically a milestone chart with expectations of timing for deliverable or component completion, realizations of benefits, and achievement of desired outcomes. This road map will be refined and updated as the program proceeds through its life cycle. As part of the charter s development, the program manager must also begin to consider the various stakeholders, their relative importance, and their attitudes toward the program, and to identify the initial strategies to manage them. This information will be used to develop the stakeholder management plan and will also be a key input to the initial development of the program communication management plan. The program manager should Identify and prioritize key stakeholders Assess stakeholder power, interest, expectations, and concerns Understand key stakeholders and what it takes to win their support for the program business case Key program stakeholders are those individuals and groups whose support is vital for successful program implementation. The following examples of key program stakeholders represent both individuals and organizations whose interests may be affected by the program outcomes, either positively or negatively. 1 Internal Program governance board Program sponsor Functional managers End users External Governmental regulatory agencies Customers Consumer groups Environmental groups These stakeholders play a critical role in the success of any project or program. They can influence programs and can either foster or impede outcomes, depending on the benefits or threats that they perceive. Consequently, the program manager must understand the position stakeholders may take, the way they may exert their influence, and their source of power. Where negative influence is possible, the program manager must ensure that the stakeholders see the benefits a job that corresponds to program promotion and marketing. Thus, it is 1 Project Management Institute. The Standard for Program Management. 3rd ed. Newtown Square, Pa.: Project Management Institute, 2013, p PMC:DK4:EN:000 ver StrategyExecution

29 Module 3: Program Initiation and Approval essential that the program manager correctly determines stakeholders interests and concerns so as to leverage them for business case support. As the program begins to materialize, the program manager will further refine the list of stakeholders associated with each project based on the types of projects and their scope. It is then essential that the program manager consider how best to engage and communicate with these stakeholders. The program manager needs to emphasize the development of the program scope statement and to maintain stakeholder interest in the projects being developed. Effective and frequent communication with stakeholders is vital to obtain and sustain their continued support. For more information on how to identify, prioritize, and understand your stakeholders, please see the Stakeholder Assessment Table Program tool behind the Tools tab of this Reference Manual. Approval of the Program Charter The approval of the program charter authorizes the program and its program manager. It serves as the document used at any gate review for initiation and approval and provides the program manager with the authority to proceed to Program Planning. Critical Success Factors During Program Initiation and Approval Critical Success Factors During Program Initiation and Approval Strategic Alignment During Program Initiation and Approval, the program manager should have a complete understanding of how the program aligns with the organization s strategy, and it should be documented in the charter StrategyExecution PMC:DK4:EN:000 ver

30 Module 3: Program Initiation and Approval Program Governance During Program Initiation and Approval, the appointment of the program sponsor and the program manager will begin to develop the hierarchy of program governance. Initial program governance activities and responsibilities will be outlined in the charter. Benefits Management During Program Initiation and Approval, the program manager should have an understanding of the benefits that the program intends to realize. They should be documented in the charter, and the program manager should develop a high-level road map identifying the expected timing of these benefits. Stakeholder Management During Program Initiation and Approval, the program manager should have an understanding of the key stakeholders, and they should be documented in the charter. The initial stakeholder management plan will be developed and continuously revisited throughout the program life cycle. Summary and Next Steps Summary and Next Steps As the second phase in the program life cycle, Program Initiation and Approval focuses on selecting the program sponsor and program manager and on approving the charter. The Program Planning module will explore the third phase of the program life cycle, Program Planning. In this phase, the program manager and initial program team establishes the plan for the program and for governing the program. 28 PMC:DK4:EN:000 ver StrategyExecution

31 Module 4: Program Planning Module 4 Program Planning Introduction Overview This module explores the next phase of the program life cycle, Program Planning. This phase involves planning the program management and governance activities. The program management plan includes all planning documentation that will be used to implement the work and monitor progress later during the program. The program charter will be progressively elaborated, program management plans developed, a benefits realization plan created, and processes and plans for governing the program will be established. Governance involves defining how the program will be managed, measured, monitored, and controlled. Finally, this module will examine the four critical success factors and how they are addressed during this phase. Purpose of Program Planning Purpose of Program Planning In Initiation and Approval, we described the further development of program details via the creation, elaboration, and approval of the charter. Program Planning, the next phase of the program life cycle, entails the development of the plan for the program so that it can deliver its intended benefits and achieve the desired outcomes. This phase also entails the development of the governance processes and structure as well as infrastructure to provide support for the program. It is during this phase that the program manager and initial team need to develop viable working processes to facilitate program work in parallel with the development of the components and technical infrastructure to achieve desired outcomes StrategyExecution PMC:DK4:EN:000 ver

32 Module 4: Program Planning Program Management Plan Program Management Plan After the development of the program charter, the program manager and the initial program team will begin to create the elements of the program management plan. As previously identified, planning in Program Planning will generally run along two parallel paths: (1) planning the program and its components, and (2) planning the infrastructure and support required for governing the program. In this regard, it is necessary to generate a group of program guidance documents that will be consistent and coherent in directing program execution and program control. This development process must be iterative to accommodate work and resolve competing priorities, assumptions, and constraints to address critical factors such as business objectives, deliverables, benefits, time, and cost. The program management plan is a compilation of many elements rather than a single document. It incorporates details on the scope, benefits, desired outcomes, interdependencies, costs, schedule, and the other processes that are needed to manage the program. The program management plan is the tactical companion to the more strategic business case. Program Scope The planning effort begins with the charter which is then used to develop the program scope. The scope describes the work that is required to deliver the products, services, or benefits with the required features and function. A scope statement is developed that is further refined to identify the program s deliverables and projects. These objectives should describe in more detail what the program is to accomplish and demonstrate alignment with the organization s strategic objectives. Also developed at this point would be the benefits realization plan. That plan clarifies how ongoing benefits will be managed, measured, and supported (and by whom), and how benefits will be sustained when projects, or the program itself, transition to operations and maintenance (O/M). 30 PMC:DK4:EN:000 ver StrategyExecution

33 Module 4: Program Planning Benefits Realization Plan The Benefits Realization Plan Benefits Mapping The benefits realization plan is developed as part of objectives development. It describes the business benefits to be realized from the program, how they are to be achieved, and who is responsible. The business case and the charter will provide significant information regarding these benefits, including their identification and the assumptions made that contributed to the identification of the benefits. Baseline information included in the benefits realization plan includes identification of the benefit, how it is to be measured, identification of the deliverables required, planned and actual dates of the deliverables, planned and actual dates that benefit measurement should start, and the benefit owner. The program manager must understand the business benefits desired and also have a thorough understanding of the assumptions that were made that led to the proposed benefits. One technique that the program manager can use to perform these activities is benefits mapping. The program manager and initial program team can create a visual representation, or map, of the component deliverables, the initial benefits realized, and the benefits that result in achieving the program s objectives. The benefits map takes the individual activities that occur within the program and shows how the outputs from the components map, or contribute, to the achievement of the program objectives and achieve the desired outcome. In the following example of a benefits map for the Tyro Hotel Group, the program objective was to increase revenue and profitability by 20 percent in 18 months. The identified program benefit is the ability to recognize and reward frequent customers. It also mapped to two other benefits, customer perception of the hotel chain s reputation and customer s willingness to pay a higher room rate," which translated into a project to develop a customer loyalty program StrategyExecution PMC:DK4:EN:000 ver

34 Module 4: Program Planning The Benefits Realization Plan tool included in this Reference Manual can assist you in refining your benefits realization plan. Gathering Program Requirements Program Requirements The scope and objectives are then used to gather more specific program requirements. These requirements provide greater detail regarding the specifications for the program and the issues related to such factors as the business, environment, technology, and regulation. The gathering of these requirements also helps to identify the different components (typically projects) of the program and their requirements. Program Work Breakdown Structure and Architecture Program Work Breakdown Structure (PWBS) It is helpful here to draw an analogy with project management activities. Once project managers develop project requirements, they develop the work breakdown structure (WBS), starting with their deliverables and decomposing the work of the project into work packages or tasks. These work packages are then arranged in a network diagram indicating the order in which the work is to be done and the relationship among work packages. The program manager is performing a similar set of activities but at a much higher level. After the requirements for the program are 32 PMC:DK4:EN:000 ver StrategyExecution

35 Module 4: Program Planning identified, the program manger decomposes these requirements down to the deliverable level. The deliverables are then used to create the architecture or the "network" for the program. The program manager is focused on the "network" of deliverables, what the interdependencies are, and how to best stage the deliverables to optimize the benefits. These deliverables then become the starting point for the project managers in their planning activities. The major difference is that the program manager is working down to the deliverable level and the project manager starts working at the deliverable level. Another way to think of it is that the lowest level of the program WBS becomes the highest level of the PWBS. Approach for Developing the Program Architecture The program architecture identifies both the program s structure and how its components fit together. The architecture or architecture baseline provides a more detailed elaboration of the structure of the program components so that the technical relationships and interdependencies between the components are understood and can be managed. This activity is when any external relationships or interdependencies to the program can be identified. The high-level road map is not explicitly an input to the development of the program architecture baseline, but it provides the high-level guidance regarding the key milestone dates and expectations for maximizing benefits and achieving the desired outcomes. The output of this work is the program architecture. The program architecture defines the components (typically projects) within the program as well as the technical relationships and high-level interdependencies that exist among these components. It ensures that the components have been integrated to deliver the expected benefits and also provides the high-level deliverables and milestones that result from the individual projects within the program. The architecture is an enhanced road map or bridge for getting from the AS-IS present state to the TO-BE future state. Although some architecture can be created up front during this phase, this activity is dynamic and continues to be developed in later stages. After the program and component requirements are identified, the program manager and initial program team will develop a baseline for how the requirements are related technically. The initial program team should include the appropriate technical expertise to identify these relationships among the components and the rules that govern those relationships. The identification should include understanding the required component interfaces and the timing of component development. The business rules and constraints that the organization uses to describe operations will also be used in the development of the architecture. What Are Business Rules? Business rules govern the way a business initiates actions and responds to situations under various conditions (for example, normal processing, alternative processing, and exception processing). Business rules may originate inside (corporate policy) or outside (government regulation) the organization and they may take various forms in the organization, such as Regulations Calculation formulas Process rules 2016 StrategyExecution PMC:DK4:EN:000 ver

36 Module 4: Program Planning Information management rules Some sample business rules include the following: All time sheets will be submitted by noon on the Thursday prior to the pay date. If time sheets are turned in after noon on Thursday, they have to be submitted to the Human Resources Director for approval. All submitted insurance claims must have the individual s name, date of incident, and the individual s policy number or the claim will be returned to the individual. A sales tax of 7.5 percent must be added to all purchases, except food and prescription medicines. Program Components Program Components The initial identification of program projects may occur as early as the development of the business case. This work will be expanded during Program Initiation and Approval and Program Planning to help ensure that the projects are selected and designed to create the outputs necessary to achieve the desired outcomes. The following recommendations may be applied to project development (again, it should be remembered that while most of this information deals with the identification of the program's projects, there may well be nonproject work that also has to be addressed): Reduce the program to manageable logical projects or pieces. Create projects with the objective of minimizing handoffs between project teams, organizations, and vendors. Use preexisting resources such as skilled contractors and purchased components. Align with a single or small customer set to control the number of human interface requirements. The process of program project identification is nonlinear, with some projects identified at the start of the program life cycle and some identified well into the program life cycle. The program manager should consider the following factors when developing the program projects: PWBS orientation (task, deliverables, and cost perspective): Consider whether the program is organized into actions (tasks) or deliverables. Projects also can be delineated by discipline, location, and outputs. Resource availability: This pertains to such things as technology, infrastructure, software, and hardware as well as human resources. Geography (for product introduction) 34 PMC:DK4:EN:000 ver StrategyExecution

37 Module 4: Program Planning The business area of the program (such as accounting, human resources, and marketing): In a merger, for example, business areas may drive the process of splitting the program into projects. Organizational change required: Frequently, the deliverables of the program will have value or benefit after employee behavior changes or external customer behavior changes. The organizational change required should be identified to ensure that activities have been planned and implemented to achieve the desired outcomes. Program Management Plan Components Financial Management Plan The financial management plan for the program includes more than project costs. Many factors that contribute to program complexity will also contribute to costs. Such factors as multiple vendors, funding requirements, different geographies, and fluctuating costs will likely affect multiyear programs. Program Master Schedule The program master schedule (sometimes called the integrated master schedule) is developed using the planning work done thus far. This effort starts with the high-level road map developed in the charter. The high-level road map and the architecture baseline provide direction and constraints for the project managers in their individual project planning. The individual component plans and schedules must then be reconciled with the road map and architecture. The program manager takes the program architecture and overlays it on to a time line. The program manager then compares this to the high-level road map to identify the areas where reconciliation is required. This reconciliation will continue further as the individual project managers create their project schedules, and these have to be reconciled with the architecture and high-level road map. The end result of this reconciliation effort will be the program master schedule or integrated master schedule. After they are reconciled, the program manager will manage the program schedule at the deliverable and milestone level, with the desired goal of realizing the benefits and achieving the objectives. The Program Management Plan Additional Plans While these efforts are progressing, additional plans for the program will be initially developed. Such plans include the risk response plan, the resource management plan, the change management plan, the communication management plan, the procurement management plan, the quality management plan, the stakeholder management plan, the financial management plan, and the configuration management/change control plan. We call these plans initial because they describe the program as it stands at this early phase. They must remain flexible, because as other projects emerge during the life of the program, these plans must change to accommodate them StrategyExecution PMC:DK4:EN:000 ver

38 Module 4: Program Planning Now, with the inclusion of these crucial pieces, the process of building an integrated program management plan is well underway. Program Governance and Support Requirements Program Governance and Support Requirements As the program manager and the initial program team are developing the elements of the program management plans, they are also, on a parallel path, developing the governance processes and structure for the program. These efforts will result in a governance plan. This plan may include identifying the administrative support and structure required, identifying what activities will constitute program governance and how they will be managed and by whom, and identifying the other support and infrastructure responsibilities that may exist. Today, many organizations have PMOs. They may be understood to be project management offices or program management offices (as PMO means in this course), and their roles and responsibilities are as various as the organizations that they serve. These offices may be an enterprise-level resource that provides templates, processes, and methodologies for the practice of program or project management or may directly support a specific program or project. When a support group directly supports a program, it is sometimes referred to as a program office vs. a program management office. Regardless of how an organization chooses to organize, what a program manager must address is the governance and support responsibilities required by the program and how they are to be addressed. The program manager must be aware of what types of organizational governance processes and structures already exist so that redundant or, worse, conflicting direction is not provided. Identifying Required Governance Activities From the program manager s perspective, governance can be understood as looking both up and down. That is, looking up to maintain strategic alignment, provide an overall financial assessment of performance, and assess the ongoing benefits and status of deliverables; and then looking down to ensure that tasks are performed in each phase and to establish a process for lessons learned and best practices identification. As a consequence, governance activities span all phases of the program life. Program Planning is the time to identify what activities will be performed as part of program governance. The program manager should clearly understand the role and responsibilities of any existent program management or project management office. The goal is to use what already exists. The program manager must decide what governance activities are to be communicated to the project managers, what governance activities are specific to the program, and what governance activities are required to support organizational expectations. Typical governance activities that are specific to project management address the areas of standards for project management methodology, tools and processes, standards, status reporting, escalation procedures, and documentation requirements. 36 PMC:DK4:EN:000 ver StrategyExecution

39 Module 4: Program Planning Typical governance activities that are program specific address processes and procedures for master schedule and interdependency management, status reporting, resource management, financial management, procurement and vendor management, issue management, configuration management, change management, benefits realization, contingency management, communication and stakeholder management, and transition management. Typical program-specific governance activities that are organizational specific address strategic alignment, an ongoing benefits assessment, overall financial analysis, and deliverable status. Governance Structure The Program Management/ Program Office Governance Structure The Program Management/Program Office The supporting infrastructure for the program typically will be called a program management office or PMO. The PMO is responsible for identifying the policies and procedures for program management, including the program management methodologies, template sets, and standards. The PMO also will have the responsibility for maintaining the activities that are program specific as identified earlier, including managing the master schedule and finances for the program. This office may provide enterprise-wide support or support to a specific program. It will typically consist of the program manager and others assigned to execute governance activities. It is also necessary to continue staffing the program team so that the necessary skills and knowledge are available. The PMO staff may also include the following staff roles: Business analysts from each major area of the organization Technical team members that cross programs and projects Architects Technical writers Process analysts Procurement specialists Financial analysts Project management mentors and persons who directly oversee projects or groups of projects within the program (in a large program that would be second-level project managers) Administrative support 2016 StrategyExecution PMC:DK4:EN:000 ver

40 Module 4: Program Planning The support roles in the PMO vary depending on the needs of the program. For example, some programs might need scheduling experts, whereas others may need process analysts. However, any affected area of the organization must be involved in the program, even across project boundaries. The nature of the PMO can vary depending on the organization and program. Sometimes it serves merely as a support structure, and, on occasion, the program manager might not be part of the program office. Technical disciplines that also cross projects but need not be assigned to any specific project on a full-time basis are candidates for inclusion in the PMO. Business processes will be affected by multiple projects within the program and may also cross functional boundaries within the organization. As such, managing these impacts is an appropriate function for the program office. Program Team Staffing The following tips can assist in effectively staffing a program team: Choose program team members who represent the roles/expertise needed to manage the program. Use a staffing management plan for handling constant change in a program. Programs have constant change: Some projects are ending while others are starting, and some resources are leaving while others are arriving. Consider the functions that need to be performed and how to staff them. For the purposes of this course, we will assume that we are staffing a program in a matrix organization. This requires more effort to define and promote the priority of program efforts. It also involves extensive planning and negotiating, and encourages matrix managers to separate staff members from day-to-day support issues. To secure an expert that the program manager can leverage across the program s projects, the program manager may need to allow the expert initially to work part time for the program and to work part time training a replacement for the role in his or her functional department. Program managers have been known to pay for the training time by agreeing that the expert will be 38 PMC:DK4:EN:000 ver StrategyExecution

41 Module 4: Program Planning dedicated to the program full time after a certain amount of training time for his or her replacement. Organizational Roles in Program Governance Organizational Roles in Program Governance Although the program manager will address the necessary governance issues for a specific program, it must be done with an understanding of the organizational governance structure and decision-making apparatus. The following organizational bodies and individuals can exist within organizations today, and the program manager should understand their roles, responsibilities, and expectations: Program board /steering committee: Represents the interests of the organization and makes business decisions about the program Executive sponsor: Has a primary responsibility to the organization for delivery of benefits and participates with the program board in making business decisions about the program Program director: Has executive ownership of the program; may be the same person as the sponsor The review gates for the program will be established based on organizational need and are opportunities for program governance and decision making, and will likely involve these roles and individuals. The senior-level decision makers determine whether the program is still viable and whether the program can move to the next life-cycle phase. Establishing Program Metrics Best Practices for Program Control Using Metrics Some best practices for program control and measurement via the use of metrics follow: Establish how the organization will measure the success of a strategic initiative. Knowing what to measure and how to calculate the measure is an important factor for program success. Establish frequent interim measurements (expressed in business terms) to ensure that deliverables support strategic objectives and that the program is on the right track as the solutions are developed. Assess and report on the adoption of processes, objectives, and changes that result from the deliverables. This assessment can occur after the end of the program or during the program as the deliverables are being implemented. Measure deliverables at checkpoints during their deployment and initial use StrategyExecution PMC:DK4:EN:000 ver

42 Module 4: Program Planning Use the assumptions in the business case to continually assess the reality of the proposed benefits and the achievement of program and strategic objectives. Use multiple levels of measurements. Measurements are necessary at the project, program, and organizational levels. Three Categories of Metrics The program manager typically manages three types of metrics. Project managers develop and maintain traditional measurements within the program such as technical measurements; traditional tracking; earned value; and the triple constraints of cost, time, and scope. Program managers ensure that an ongoing tie to benefits realization and program objectives exists and that the measurements are in place and updated regularly. These measurements may involve the intermediate realization of benefits as the program progresses. They should periodically revisit the assumptions underlying the business case to reassess their validity. Organizational measurements: The organization as a whole needs to know how it will measure the realization of strategic initiatives. The program needs to demonstrate support for these initiatives. Ensuring that it does so is the job of the program manager, whether these measures will be taken during the program or after transition to an operating environment. Program Governance KPIs and CSFs The program manager should consider the use of key performance indicators (KPIs) to measure trends during the program life cycle. The program manager should also measure critical success factors (CSFs) to ensure the program has delivered the benefits anticipated. 40 PMC:DK4:EN:000 ver StrategyExecution

43 Module 4: Program Planning Determine Other Infrastructure Requirements Determine Other Infrastructure Requirements Other infrastructure requirements may be necessary to support the program, including IT systems and communication technologies with the necessary support arrangements to sustain the program throughout its life cycle. In addition, buildings, tools, facilities, and other required infrastructure to support the program must be identified. Critical Success Factors During Program Planning Critical Success Factors During Program Planning Strategic Alignment During Program Planning, the program manager and the team develop the plans for the program to ensure that the details of the program achieve the desired strategy. Consistency of program objectives with strategic objectives must be maintained. Benefits Management During Program Planning, the program manager establishes the infrastructure for benefits monitoring and revisits the benefits realization plan. Moreover, the program manager determines how benefits realization will be communicated to stakeholders StrategyExecution PMC:DK4:EN:000 ver

44 Module 4: Program Planning Stakeholder Management It is necessary to identify and analyze stakeholders who have authority for program governance. Moreover, tools for communicating with stakeholders should be developed that support the stakeholder management plan. Program Governance Program governance is one of the two main focus areas of this phase. The following governance activities specifically occur during Program Planning: Setting up the program office with the roles/functions needed to support the program Organizing program governance mechanisms for Reporting program status Developing program measurements Assessing benefits delivery Ensuring the alignment of benefits with strategic goals Monitoring program schedule and interdependencies Making program decisions Monitoring and controlling risk Deciding whether the program is ready to proceed to Delivery of Capabilities and Benefits Summary and Next Steps Summary and Next Steps The third phase in the program life cycle, Program Planning, focuses on planning the program and installing structures to support the program and program management. The program management plan and all additional plans are created during Program Planning. This planning work builds on the work done in the business case and the charter. The scope of the program is identified further with the objectives, which leads to the more detailed development of program requirements, the architecture, and the PWBS. This work then will contribute to the planning for the projects. Along a parallel path, the program office and governance mechanisms are created. The activities involved in good program governance include developing metrics, recording deliverables, making program decisions, tracking benefits, and monitoring risks. The necessary infrastructure (such as buildings, technology, facilities, and tools) is set up to support the program and to manage benefits realization and stakeholder communication. Now that we have developed the program management plan and organized these infrastructure and governance requirements, we are ready to implement the program. The next module will 42 PMC:DK4:EN:000 ver StrategyExecution

45 Module 4: Program Planning focus on program implementation by discussing the next phase of the program life cycle, Delivery of Capabilities and Benefits StrategyExecution PMC:DK4:EN:000 ver

46 Module 5: Delivery of Capabilities and Benefits Module 5 Delivery of Capabilities and Benefits Introduction Overview This module explores the fourth phase of the program life cycle, Delivery of Capabilities and Benefits. This phase involves initiating the projects to meet program objectives and realizing the benefits. More specifically, Delivery of Capabilities and Benefits involves initiating the projects or components, monitoring the program, responding to changes, managing program and projectlevel risks, and executing preventive and corrective action procedures for projects and programs. This module will consider the need for coordinating activities, resources, and interdependencies between projects and other programs and any ongoing activities. In addition, managing the transition to the target state and effectively accomplishing organizational change will be explored. Finally, the module will address activities related to the critical success factors of strategic alignment and program governance, together with stakeholder and benefits management, during this phase. Purpose of Delivery of Capabilities and Benefits Purpose of Delivery of Capabilities and Benefits In this phase, the project outcomes are realized as a series of additions, primarily because each part will ultimately combine toward the program s total benefit. The realization of the program s total benefits generally occurs in one of two ways: The benefits are realized at the end of the program (for example, building a bridge or tunnel) or the benefits are realized in stages or increments (for example, a process reengineering program may realize benefits when certain geographies or certain divisions are reengineered). The focus in this phase is initiating components, benefits realization, stakeholder management, monitoring and controlling programs, and dealing with program challenges StrategyExecution PMC:DK4:EN:000 ver

47 Module 5: Delivery of Capabilities and Benefits Implement the Governance Structure to Monitor and Control the Program Components/Projects Implement the Governance Structure to Monitor and Control the Program Components/Projects During Program Planning, the governance activities to be performed by the program manager and team were identified. In this phase, the program manager must ensure that the projectspecific governance activities have been defined and are being implemented. Among those governance activities are ensuring consistency in project management processes and methodology, tools, templates, and status as well as progress reporting. The program manager may seek to encourage rather than enforce adherence. By doing so, he or she is helping the project managers to see the value of putting the right processes in place and following the proper procedures. It is also a good idea for the program manager to partner with the project managers to improve the processes. In addition, program managers need to ensure that project managers adhere to established project management methodologies by Conducting quality assurance activities such as program/project reviews and health checks Determining who performs these activities and how often The quality assurance activities to review processes should be conducted at regular intervals and might include program/project reviews and health checks. The program managers should determine who performs these activities and how often. Initiate and Manage Program Projects to Achieve Program Objectives Initiate and Manage Program Projects to Achieve Program Objectives The program manager is responsible for managing the optimal timing of the deliverables (in relation to other deliverables) to achieve benefits. For example, maximum benefits may be achieved if Deliverable X is no more than three weeks before Deliverable Y and no later than two weeks after. There is no formula for sequencing projects, as every program is different. Guidance and constraints will be provided by the high-level road map, the architecture baseline, and the program master schedule. Consider the following areas to facilitate this activity: Cross-project interdependencies (the relationship among project deliverables) 46 PMC:DK4:EN:000 ver StrategyExecution

48 Module 5: Delivery of Capabilities and Benefits External interdependencies Linkages between projects Resource availabilities Market demand Legal and regulatory requirements Project start-up involves aligning projects with program objectives and the benefits realization plan; outlining key project roles (sponsor and project manager); and developing the project charter, including objectives, scope, and deliverables. The Dynamic Nature of Programs Programs are dynamic and, thus, do not follow a strict, linear pattern. In Program Planning, the program is being planned, which includes defining the projects within it. However, the projects defined in Program Planning are probably only the initial projects in that, as the program proceeds (throughout multiple years, typically), there will be changes, and opportunities will arise that will require other projects to be considered. By Delivery of Capabilities and Benefits, an idea may emerge that needs to be studied from a feasibility perspective. As a result, a project business case then would be developed to determine whether it makes sense to launch this newly conceived project. This scenario becomes more the rule than the exception in the types of strategic and long-term programs under focus in this course. Coordinate and Manage the Program s Projects and Nonproject Work Initiating and managing the projects and nonproject work involves ensuring that common activities and interdependencies between projects are coordinated. It also means that the highlevel road map is revisited, updated, and enhanced with greater detail as the program progresses. Changes to projects also have to be addressed in the context of the architecture baseline to understand how newer projects interface with originally planned projects. The topdown control and coordination of projects is best performed via the use of the program master schedule. Special software can be used to create a program master schedule for the purpose of viewing all project schedules in one high-level view. The main areas to be viewed are benefits 2016 StrategyExecution PMC:DK4:EN:000 ver

49 Module 5: Delivery of Capabilities and Benefits realization milestones, project titles, and major blocks of activities having information on project initiation and benefits delivery. In addition to monitoring and controlling the high-level road map, the architecture baseline and the program master schedule, the program manager should also be monitoring and controlling the progress toward the realization of benefits via the use of benefits realization milestones. These milestones would have been identified in the benefits realization plan. Coordinating the projects also involves coordinating the efficient use of resources across the program and project activities as well as making program and matrix resources available to projects. The intent is to best use available resources based on the program s priorities, not on individual project priorities. It is facilitated by using program management software. Monitor and Analyze Progress Against the Program Management Plan Monitor and Analyze Progress Against the Program Management Plan Analyze progress to the plan using the high-level road map, architecture baseline, master schedule, and financial management plan During Delivery of Capabilities and Benefits, projects are monitored to ensure that the following criteria occur or are maintained: Meeting traditional metrics based on project constraints or earned value management (EVM) Project deliverables meeting requirements Adherence to project schedules Effective identification and management of risks, issues, and assumptions 48 PMC:DK4:EN:000 ver StrategyExecution

50 Module 5: Delivery of Capabilities and Benefits Accuracy of estimates Effective project cost and benefit tracking Sufficient resources Availability and quantity of funding, skills, training, and so on Ongoing assessment of benefits Best practices for monitoring benefits realization include the following: Establish the infrastructure for monitoring benefits. Revisit the benefits realization plan. Include intended interdependencies between benefits being delivered among various projects within a program. Ensure the alignment of benefits with the strategic goals of the organization. Include a schedule for benefits delivery. Include how benefits will be measured (metrics and measurement). Outline who is responsible and accountable for delivery. How to Ensure Project Outputs Meet Requirements Quality control and review activities are geared at ensuring that deliverables meet requirements. These activities may include testing, discovering defects, and defect management. Quality control involves determining whether project and program metrics are being met. It is, therefore, necessary for the program manager to be familiar with both project and program metrics. Project metrics include the traditional metrics based on the project constraints and EVM. Program metrics are based on ROI and the cost-benefit ratio, the initial realization of organizational benefits from the first projects completed, operational performance trending in the desired direction, the assessment of whether expected future benefits are realistic based on the current reality, EVM, and service-level agreements (SLA). Perform Internal and External Environmental Scans Identify and Respond to Internal and External Environmental Changes to Ensure Strategic Alignment Both internal and external environmental changes may affect the program. These changes should be identified and addressed to ensure that the program changes still align with the strategic objectives of the organization. Having well-documented and accessible processes, tools, and job aids in place for program and project management can help reduce the affects of changes to the internal environment StrategyExecution PMC:DK4:EN:000 ver

51 Module 5: Delivery of Capabilities and Benefits There are external factors that lie outside the control of the program manager. These include: regulatory changes, market surges or downturns, economic factors, human or natural disasters, and so on. Manage Resources to Ensure Program Priorities Are Maintained Coordinate and Manage the Program s Resources The program manager is responsible for ensuring the efficient coordination of resources across the program and project activities. The key responsibility here is to ensure that resource assignments are based on program priorities and not individual project priorities. The program manager must also ensure that matrix resources are available to the project as required. The program manager can leverage a higher-level view to identify the most constraining resource(s) and maximize the productivity of those for the overall benefit of the program. The program manager is also concerned with developing the team and cultivating the skills of individual contributors, which is an ongoing process. An example would be providing business analysis training and project analysis training to team members to enhance program performance. Virtual teaming that is, having staff that is physically or geographically dispersed is a common concern in program environments. Scheduling issues and altered team dynamics are some virtual team challenges that the program manager must face during programs. Manage Risks and Contingencies Manage Risks and Contingencies Managing project and program risks is crucial during this phase. Risk management entails monitoring and controlling risks that were identified previously, implementing risk response plans that were previously developed, and being alert and observant of new risks. It is an iterative process. Considerations When Managing Risk When managing risk, include the following considerations: Delegate project risk management to project managers. Seek interdependencies among risks and response strategies. Be aware of large program risks that may impact the projects. 50 PMC:DK4:EN:000 ver StrategyExecution

52 Module 5: Delivery of Capabilities and Benefits Be attentive to project risks that might impact other projects. Consider that risk response strategies may affect other projects. Be conscious that all project-level risks and strategies must be visible at the program level. The reason why it should be emphasized that all project risks must be visible at the program level is because individual projects may not be able to perceive how they can affect other projects or the overall program. At this juncture, decisions may now be made about responding to risk by using contingencies or risk reserves that were included previously in the program budget. Identify Issues and Ensure Preventive or Corrective Actions Are Taken Identify Issues and Ensure Preventive or Corrective Actions Are Taken For a description of typical issues and strategies for solving them, see Appendix C, Pitfalls and Strategies in Program Organization in this Reference Manual. Manage the Transition from the AS-IS to the TO-BE State The program manager must be prepared to deal with issues that arise as the program moves the organization from the AS-IS to the TO-BE state. This activity involves identifying the interim transitions, determining how you will measure and monitor them, and deciding when and how the transitions will occur. The program manager must also understand gap analysis, which studies the space between where you are and where you want to (or should) be and defines the road map for program change StrategyExecution PMC:DK4:EN:000 ver