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Why are benefits management and baseline performance tracking important on a programme?

Why are benefits management and baseline performance tracking important on a programme?

Programme Management for Owner Teams authors Freek van Heerden, Jurie Steyn and Davida van der Walt explain why programme benefits management is so important.  

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Benefits management means that the desired business objectives and targeted benefits are fully satisfied at completion of the programme.  Benefits management and baseline tracking challenges:

  • A great deal of time normally elapses between the time that a programme is started and its eventual completion.
  • Things can change along the way as market conditions change, scope creep occurs and your key equipment deliveries are delayed.
  • Small shifts in process design and project execution can affect the timing and quality of the benefits realised.

In reality we have found that there is a risk that the benefits of a programme may be lost if there is a weak link between the programme deliverables and the business needs, or if the needs are not well understood by the programme management team.  This risk is exacerbated if the programme team does not form part of the owner organisation.

So what can we do differently to ensure effective benefits realisation on programmes?

It is essential to establish a clear business case for the programme, so that you can make sure that the deliverables meet expectations and give the organisation the benefits it requires and expects.

  1. The first task is to establish the baseline performance of each of the business objectives before any changes are implemented.  This has to be done by accurate measurement of the actual performance of the existing facilities at a specific point in time or over a predetermined period.
  2. It’s important to focus on the programme’s benefits, and not just its timeous completion.
  3. For the purposes of benefits management, the baseline performance of the parameters being addressed by the programme must be determined.  Baseline performance can be measured for any of the business parameters, including:
    1. Production volumes of specific products;
    2. Product quality as determined from spot checks, customer complaints or returns;
    3. Sales volumes of specific products;
    4. Stock holding and turnover;
    5. Financial measures such as production cost, profit margin and labour cost;
    6. Unscheduled equipment down-time, and;
    7. Environmental footprint.

 

For more practical lessons on programme management, please take a look at our book on the subject Programme Management for Owner Teams available on Amazon.

Setting up a programme office – a daunting task?

Setting up a programme office – a daunting task?

Programme Management for Owner Teams authors Freek van Heerden, Jurie Steyn and Davida van der Walt explains how a good owner programme office and infrastructure can enable sound owner control and governance on your programme. 

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Programme office infrastructure challenges:

  • Owner teams are not set up to represent the owner effectively
  • Programme teams are logistically dispersed

 

In reality we have found that owners tend to leave the office infrastructure to engineering contractors or managing contractors to plan and execute.  In practice, the owner programme team has to integrate the services of many functions to create a programme that meets the business objectives of the organisation.

This integration role cannot be performed by outside contractors for a number of reasons, namely:

  • Contractors have almost no knowledge of operations;
  • Contractors do not understand the business of the companies they serve, and;
  • Contractors work for their own shareholders and not those of the owner organisation.

So what can we do differently in setting up and structuring the owner programme office?

The programme management team must direct the individual project teams towards the programme goals rather than control the individual projects on a day-to-day basis.  All the functionalities normally required on a project team must also be represented on a programme management team.

In addition, it is possible to set the organisation structure such that common resources across all projects form part of the central programme team and provide their services to all the projects within the programme on an as-required basis.

For megaprojects and programmes, it is essential to set up a programme office. It normally becomes clear very soon after establishing a programme office that real benefits are gained in locating the core team (programme staff (e.g. the programme director and support staff)) together.  Various projects or parts of project lifecycles, like detail design work, will be executed in locations around the world.  This implies that any programme will also have a ‘virtual office’ component in order to interact with all the different activities happening on the programme.  However, the core leadership team should be able to work together effectively.

 

For more practical lessons on programme management, please take a look at our book on the subject Programme Management for Owner Teams available on Amazon.

Programme planning and assumptions – the missing link

Programme planning and assumptions – the missing link

Programme Management for Owner Teams authors Freek van Heerden, Jurie Steyn and Davida van der Walt explains how assumptions underlying your programme planning can impact the validity of your plan.

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Planning challenges on programmes:

Project teams are often very reluctant to tackle the somewhat tedious process of defining (writing down) the scope of facilities and getting it approved.  It is seen as a somewhat unnecessary step since everyone knows what is intended.  Neglecting the formal definition of the scope of a programme is a very dangerous and often fatal approach that leads to misunderstanding, rework and serious clashes between stakeholders, project team members and contractors. As we know, the scope forms the basis for all planning to follow.

In reality we have found that initial poor planning causes a lot of head ache later in the programme. The missing link is that assumptions underlying the planning is not well understood and can bite you when you least expect it.

So what can we do differently to ensure improved planning on a programme?

  1. The specific schedule assumptions should be agreed for each of the projects.
  2. Then a more detailed ‘target’ schedule can be developed showing the expected duration of each project phase, the interdependencies and total programme schedule.
  3. Capturing these assumptions from the start and keeping track of their validity during the course of the programme is a key success factor.

Understanding your scope and understanding the assumptions underlying the scope and the schedule, and tracking it rigorously for validity during the programme life cycle can make all the difference you need.

 

For more practical lessons on programme management, please take a look at our book on the subject Programme Management for Owner Teams available on Amazon.

Want to know how you can set your programme up for success?

Want to know how you can set your programme up for success?

Programme Management for Owner Teams authors Freek van Heerden, Jurie Steyn and Davida van der Walt explains how effective initiation and shaping of your programme can set you up for success.

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Shaping challenges on programmes

  • Owner organisations play a very important role in any project or programme.  They will own and use the results of the projects and programmes they initiate.  Successful projects and programmes will benefit them and their stakeholders directly.

In reality we have found that programme owner teams do not spend enough time to understand the charter and true objectives of the programme.  They also do not always involve all the right key stakeholders upfront.

So what can we do differently to ensure improved shaping on a programme?

A programme charter needs to be set at the start of the shaping process and although the business objectives should remain firm, the details normally evolve in the first year or two from initiation of the programme.  The charter firms up as the team gains more certainty on exactly what will have to be done to achieve the overall business objectives.

Shaping a programme is significantly different from that of a single project in that it requires the creation of a framework in which sequential commitments can be made and options exercised as you move forward.

Hence, a programme requires the development of a clear framework plan and tracking of progress in order to ensure that one remains on course towards the end objectives at all times.  If issues outside the control of the programme manager changes, it may even be necessary to stop, accelerate or even develop new projects in order to still meet the overall business intent.

Setting up a well-defined charter, agreed by all key stakeholders, sets the basis for effective management and tracking of a programme.

 

For more practical lessons on programme management, take a look at our book on the subject Programme Management for Owner Teams

A model for managing programmes

A model for managing programmes

This is a special Insight Article to highlight the launch of our book Programme Management for Owner Teams – a practical guide to what you need to know on the 1st of July 2015.

 

What is a programme?

The concept of programmes has emerged over the past fifteen years. Many large- and megaprojects today are managed as programmes, rather than as projects. Managing people and organisational issues is at the centre of programme management. The ultimate measure of success is whether the business achieves its objective, whereas each project within the programme has a very specific deliverable against a timeline and cost. Programme management is thus more concerned with managing the bigger picture. This picture is often unclear and develops over time in contrast to project management that has greater definition and is implemented over a shorter time span.
We define programme management as the co-ordinated organisation, direction and implementation of a group of related projects and activities that together achieve a specific outcome and realise benefits that are of strategic importance.

Programme Management Model

Many readers will be familiar with the classic management model of Louis Allen that categorises management activities in four categories (LA, 2013), namely leading, planning, organising and controlling.

We have applied the principles of the Louis Allen management model in the context of programme management, adapted and expanded it to suit the specific requirements of a complex programme with a time span of several years. The specific point of view was from the perspective of an owner organisation for which the programme was being done. Our revised programme management model is shown in Figure 1.

As can be seen from Figure 1, the model essentially comprises six phases depicted as a six-bladed propeller, superimposed on a series of concentric rings (a target) covering what we refer to as the programme life-cycle essentials.

Focusing firstly on the six-bladed propeller shape, this covers the programme management processes of shaping, planning, organising, controlling, launching and reviewing. Each of these has a full chapter devoted to it in the book, but is described very briefly below:

Shaping: The first step in the model is shaping the programme. This implies developing a clear business intent which provides the programme of projects with a common goal, as well a definition of a scope that could achieve the business intent;

Planning: Planning is done to ensure the right things are done at the right time by the right resources;

Organising: Set up the programme management team and assign responsibilities to develop and execute the plan;

Controlling: Control mechanisms are put in place which includes lagging and leading indicators which will highlight any deviation from plan to allow for corrective action to be taken to ensure that programme objectives are met;

Launching: Sub-projects comprising the programme need to be sequentially launched in such a manner that the overall deliverables of the programme are met, and;

Reviewing: Programme review is a process that is initiated when managers and other stakeholders pause to assess how a programme has performed during a given period of time. A programme review is an integral part of the programme cycle and helps ensure continual improvement in the programme management process.

Programme management model

 

Figure 1:  A Programme Management Model for Owner Teams

In contrast to a single project, even a megaproject, where the project phases are discrete and have clearly defined deliverables and gate criteria, the phases of a programme only depict the progression from idea to a fully-fledged programme and eventual closing off. Programme phases tend to overlap, for example: programme shaping can still be attended to while the planning work is started in earnest. As soon as planning has progressed reasonably far, the organising activities can start, followed shortly thereafter by control mechanisms. Control mechanisms need to be in place because the early projects need to be launched.

The work associated with a programme is also non-linear in nature: planning can lead to updates required in the programme shaping, or as more detail is developed during the organising phase, planning is developed further that may again lead to organising updates. This interactivity between the phases makes the management of a programme more complex, requiring both good leadership and good management from the programme leadership team. However, focus still needs to be kept on each of the phases to develop the phase fully and drive the activities to completion. The shaping phase should be closed off when the programme is sufficiently developed to meet the business objectives as stated. If this is not actively attended to, the programme could develop a life of its own, with more and more business objectives and projects being added indiscriminately.

The concentric rings of the programme management model cover the life-cycle essentials such as leadership, nurturing, alignment and stakeholder engagement, all within a well-defined governance framework. Again, each of these has a full chapter devoted to it in the book, but is described very briefly below:

Leading: Clear leadership is essential, embodied by an executive programme sponsor who has to ensure at all times that the programme is heading in the right business direction;

Nurturing: Because programmes are typically executed over an extended timeline, nurturing of people working on the programme and team wellness become critical focus areas. This includes planning for rotation and ensuring that the long-term careers of team members are catered for;

Stakeholder engagement: Continuous sharing of information in such a complex system is a non-negotiable to all interested and affected parties. Communication is an essential part of team interaction. A sound communication plan and reporting system should be developed;

Aligning: Even though much effort goes into initial alignment of the programme team, team alignment is a process which continues throughout the life-cycle of the programme, and;

Governance framework: An owner organisation would typically have a formal ethics policy and governance procedures in place. This should be extended to also cover governance of the project environment to ensure that all dealings and interactions are such that it would not negatively impact on the reputation of the organisation.

The model is deliberately shown to be a continuous process as can be seen by the cyclical nature thereof. As the programme progresses, new business requirements may affect the programme shape, re-alignment will be required, leadership needs to ensure that everyone understands the changes and rationale behind the changes, plans need to be adjusted, resourcing needs to be reviewed, and control mechanisms confirmed. Throughout this process, communication is an essential part of team interaction. Care should be taken to ensure team wellness through nurturing of the team members.

The Role of the Programme Manager

A programme requires a programme director whose major responsibility is to ensure that the work effort achieves the outcome specified in the business strategy through proper integration of the individual projects. This person spends more time and effort on integration activities, negotiating changes in plans, and communicating than on the other project management activities we described (Hanford, 2004).

The project manager is judged on the triple constraint of schedule, cost and quality (the three cornerstones of the scope of the project). The programme manager also is judged on these three elements but at a level that is cumulative for all the projects and operations within the programme. This aggregation of responsibilities for a variety of projects and operations means the programme manager must make frequent trade-offs between business targets and project/operational performance.

Programme management decisions are both tactical and strategic in nature. The strategy aspects of these decisions must consider multidimensional impacts beyond the near-term delivery dates of the project. Conversely, the project manager is expected to deliver projects within the boundaries and framework established by the programme manager. Typically, the project manager should be more delivery and execution focused whereas the programme manager has to also be concerned with the overall health, effectiveness and strategic focus of the programme over the long term.

Major challenges on programmes

The following six issues are regarded as the major challenges of programmes:

Managing the programme scope
On a large programme, which extends over a long time period, the tendency is often to keep on adding new business objectives to the programme scope, resulting in ever moving targets, costs and timelines.

Structuring an effective owner programme management team
An owner organisation wishing to implement a programme is well advised to mobilise a strong owner team, consisting of the owner’s own personnel. It is often said that the owner does not have sufficient competent personnel to staff an owner team for a large programme. The fall-back position is then to appoint a managing contractor to manage the programme on behalf of the owner. It has been shown that this approach very rarely results in a successful programme.

Ensuring focus on business objectives
It is often difficult to demonstrate that a programme has met its objectives at the end of the programme lifecycle. During the life of a programme, the affected business units are normally implementing various other initiatives that might affect the baseline performance. The original baseline is used at the end of the programme to measure the impact thereof, but because this baseline has moved, the outcome is normally unclear. Effective baseline tracking, supported by rigorous benefits management, is a necessity on a programme.

Keeping internal stakeholders aligned and informed
Internal stakeholders sometimes become disillusioned and start interfering directly in the management of a programme. Lack of transparency causes unease and therefore the need to intervene (often unnecessarily or too late). Developing an effective monitoring system that tracks progress against the programme and business objectives, coupled with a detailed stakeholder management and communication plan, helps alleviate the concerns of stakeholders. It also enables them to provide pro-active input and guidance on an informed basis.

Keeping the programme team motivated and engaged
Employees are assigned to a programme for an extended duration and then ‘forgotten’ in terms of personal development. In addition, a programme is a stressful environment, leading to exhaustion and burn-out. These problems can be overcome by effective leadership combined with good management practices. This coupled with team health monitoring and support, goes a long way towards keeping the team motivated.

Ensuring effective programme governance
A company cannot be sustainable without effective governance. Similarly, a programme must also be subject to governance under the accountability of the programme sponsor. However, governance can be overcomplicated, leading to bureaucracy and long decision making chains. A simple, yet focused approach is required on a programme.

 

Summary

There seems to be no stopping the tendency for project size and complexity to increase significantly. Megaprojects are fairly common and, in recent years, even gigaprojects are tackled on occasion. The overriding concern is that projects become so big, complex and interrelated that it is very difficult to grasp the overall picture. The result is that only about 25% of megaprojects are successfully completed (Merrow, 2011). Statistics for gigaprojects are not available, but the assumption is that their success rate will be even lower.

The team of a megaproject or programme has a unique opportunity to manage the programme in such a way that there is visibility on each sub-project rather than just a big amorphous ‘programme’.

 

References

Hanford, M.F., 2004, Program management: different from project management. PDF file downloaded on 28 February 2015 from IBM developerWorks site: atabkamprofessionalservices.vpweb.ca

LA (Louis Allen Southern Africa), 2013, Effective Management Leadership In Practice Brochure.  Pdf file downloaded from http://louisallen.co.za/brochures/ on 25 July 2015.

Merrow, E.W., 2011, Industrial megaprojects: concepts, strategies, and practices for success., John Wiley & Sons, Inc., Hoboken, New Jersey.

 

Look out for the September Insight Article for a discussion on value engineering, and more specifically, the concept of standardisation in the process industries.

If you have any comments or suggestions on how to improve the article, please feel free to contact the author or leave your comment below.

Should a programme have an owner team in the first place?

Should a programme have an owner team in the first place?

Programme Management for Owner Teams authors Freek van Heerden, Jurie Steyn and Davida van der Walt explain how having an owner team on board with the right skills and experience can ensure that your programme is set up for success.

What is the role of an owner team on a programme?

  • Owner organisations play a very important role in any project or programme.  They will own and use the results of the projects and programmes they initiate.  Successful projects and programmes will benefit them and their stakeholders directly.

In reality we have found that programme owner teams rarely maintain the power to control the outcome of their projects and programmes, and readily give that power away to their engineering and managing contractors.by owner teams.

So what can we do differently to ensure ownership and owner control on a programme?

Research on large project outcomes is very clear on the crucial role played by strong, fully staffed owner project management teams.  The role of the owner team is to bring all facets of the owner organisation’s requirements to the table, especially during the scope development phase.

Owner organisations have to:

  • Have a long-term, strategic view;
  • Distinguish what it is about their particular company that generates unique competitive advantage;
  • Understand the total organisational supply chain from raw material supply to the actual production operations as well as final product distribution, and;
  • Translate their business understanding into a productive asset, not just a ‘good project’.

Setting up a strong owner team who truly represents the owner will save you a lot of heart ache and pro-actively ensures that the owner retains control of the programme.

For more practical lessons on programme management, take a look at our book on the subject Programme Management for Owner Teams