This is the first article in a series on developing and using a Balanced Scorecard (BSC) to monitor the status of a project and optimize project management to achieve planned results.
Various moments of project evaluation
Next, we will discuss the key points at which the project is evaluated, the levels of indicators against which the evaluation takes place, the main stakeholders in these evaluations, and the use of various evaluations to manage the project.
By evaluation, we understand not only the simplest and most common form of assessment - financial and quantitative, but also often, no less important, non-financial assessment, which allows you to assess the health of the project from various angles and identify risks and potential problems in advance.
The following assessments are used during the project life cycle and its use:
1. Assessment of expectations from the project to the start of the project;
2. Evaluation of the execution of processes during the project;
3. Evaluation of the implementation of plans during the project;
4. Evaluation of the implementation of plans at the time of project closure;
5. Evaluation of the fulfillment of expectations from the project after the completion of the project;
Next, in detail, we will consider what and by what indicators is evaluated in each of the listed moments, who makes the assessment and what benefits can be obtained for project management.
Assessment of expectations from the project to the start of the project
At this stage, the potential benefits of the project and their value for business are assessed from the point of view of all beneficiaries of the project. The assessment of key benefits is fixed in the business case of the project and the benefit management plan.
Indicators are evaluated and planned that allow you to combine the strategic goals of the company and the business with the results of the project - such as net discounted income (NPV), internal rate of return (IRR), payback period (PP). In addition to quantitative indicators, qualitative indicators can be applied, for example, improving production safety.
The fixed targets are used after the completion of the project to assess its results. Also, they can be used during the project, to determine whether the project meets the main goals for which it was initiated.
In terms of assessing the state of the project, expectation indicators are final and lagging far behind. Their values are determined when the fact has already come and the goal is achieved or not achieved. Such metrics can help you make baseline and final decisions, such as completing a project or making a major change in content.
The key participant and consumer of this process are the sponsor and the Customer of the project. The project manager may or may not be involved in the development of expectation indicators, since, formally, at this point the project has not yet been launched and the project manager has not been appointed.
Evaluation of process execution during the project
During the execution of the project, it is important that the work is not only performed, but most importantly, performed correctly. Proper execution of work and compliance with standards significantly increases the likelihood of achieving project goals.
Evaluation of the correctness of the executed processes, first of all, is carried out by the project manager and the project management team. Methodologists from the project management office or third-party auditors may be involved.
The assessment can be made within the following domains:
- Compliance with standards (e.g. PMI, ISO);
- Management processes used (e.g. risk management and knowledge management);
- Project documents used (e.g. open matter log and risk register);
- The presence and frequency of key events (for example, risk reassessment meetings);
- Other domains that depend on the specifics and complexity of the project (for example, the number of requirements and the proportion of stakeholders who submitted requirements).
Performance indicators of processes during the implementation of the project allow:
1. Determine how correctly the project is managed;
2. Determine how effectively the work on the project is performed;
3. Identify and eliminate sources of risk in advance;
4. Help to properly organize work and place accents;
Process execution indicators are ahead in terms of project management and project results, and allow you to properly organize the work on the project, minimize possible risks and help the team properly organize its work. These indicators directly indicate which processes and how should be implemented and which documents should be used.
The key stakeholders in the evaluation of processes are the project manager and the project team.
Evaluation of the implementation of plans during the project
During the implementation of the project, it is important to quickly monitor how much the current implementation corresponds to the previously developed plans. At the same time, the achieved productivity is compared with the plan, the analysis of deviations is carried out and corrective actions are developed.
One of the main methods of performance control is the Earned Value Method (EVM) or its various alternatives. The simplest option is to compare the plan with the fact, analyze deviations, identify possible causes and develop corrective measures. The more often and accurately the plan is compared with the fact during the implementation of the project, the earlier possible deviations and risk events can be identified and the damage from them minimized. Basically, quantitative and specific indicators of the implementation of the plan and deviations from the plan in terms of content, timing, cost are used.
From the point of view of the time of control and the impact on the result, the indicators of the implementation of plans are lagging or final, as they state and show a fact that has already come. Even if they reveal the negative dynamics of the indicator, then the event has already occurred. In addition, they record the consequences, but do not identify the causes and do not give recommendations on how to work and what needs to be changed in order to adjust the result.
The key participants and consumers of the evaluation of the implementation of plans are the project manager and the project sponsor. Based on the implementation of the indicators of the plan, basically, there is an assessment of the quality of project management.
Evaluation of the implementation of plans at the time of project closure
Evaluation of the implementation of plans during the closure of the project shows how much the project has fulfilled the goals set in the charter, business case. An assessment is made of the benefits recorded in the benefit management plan, which can be assessed at the moment.
Basically, the assessment of the implementation of plans at the time of completion is fixed on comparing plans with the fact and achieving or not achieving the planned indicators. Plans are compared with the fact in terms of content, timing, cost, quality, resources, the satisfaction of stakeholders is assessed. Quantitative and specific indicators are used for evaluation, non-financial indicators, for example, stakeholder satisfaction, can be used.
From the point of view of project management, the assessment at the time of closure is final and lagging, since all events that could have happened have already occurred. The information obtained is valuable only for fixing the lessons learned, for subsequent projects.
The main stakeholders of the closing evaluation are the project manager, the project sponsor and the Customer. Based on the final assessment, the quality of project management is assessed and subsequent conclusions regarding the project manager are made.
Evaluation of the implementation of expectations from the project after the completion of the project
Often, a project produces a product whose benefits can be assessed much later than the completion of the project, during the operation of the product. Therefore, strictly speaking, these indicators do not relate to project management, but to the life cycle of the product. Such indicators as the payback period, profit margin, profit margin, market share, customer satisfaction are used.
From the point of view of project execution and management, the benefits of the product received after the completion of the project are not very informative, since the product may or may not bring the planned benefits, regardless of the correctness of the project implementation. In projects related to the development of new promising products, a situation may arise when the project ended in failure, and the product turned out to be so successful that it covered all the costs incurred. The reverse situation, when a successfully completed project gave rise to a non-successful product, is also possible.
The main stakeholders in the post-completion evaluation of the project are the project sponsor and the Customers. The project manager, as a rule, is no longer involved.
Conclusion
From the point of view of linking the project to the company's strategy and evaluating the product of the project, it is valuable to compare the assessment of expectations from the project to the start of the project and the assessment of expectations from the project at the end of the project. These assessments help to understand at the top level what we planned and what we ended up with.
From the point of view of the evaluation of the project itself, the quality of management and the project manager, the most valuable is the assessment of the implementation of plans at the time of project closure. This assessment gives a retrospective and allows you to understand how correctly we managed the project.
From the point of view of project management and process organization, the greatest value is brought by the assessments of the execution of processes and the execution of the plan, directly during the project. These assessments allow you to properly organize processes, prevent deviations and identify risks in advance. Simply put, they allow you to make a prompt diagnosis of the health of the project and show what needs to be done to return the project to normal, if deviations occur.
No comments:
Post a Comment