PMI’s 2013 ‘Pulse of the Profession’ Survey

PMI’s 2013 ‘Pulse of the Profession’ Survey makes interesting reading, particularly given most of the world is in or near recession. PMI predicts that between 2010 and 2020, 15.7 million new project management roles will be created globally across seven project-intensive industries. China and India will lead the growth in project management, generating approximately 8.1 million and 4 million project management roles through 2020, respectively.

Along with job growth, there will be a significant increase in the economic footprint of the project management profession which is expected to grow by USD$6.61 trillion. This enormous anticipated growth, along with higher-than average salaries, will make the next seven years an opportune time for professionals and job-seekers to build project management skills.

The squeeze on talent has already started! PMI’s Pulse of the Profession shows that high-performing organizations don’t just emphasise strategy and improve efficiency. They cultivate talent resources to deliver successful projects and programs. With that talent, they can reduce risk, increase stability, improve growth and build a strong competitive advantage.

In contrast, poorly performing organisations that don’t see talent as part of the success equation – they believe the job market is a bottomless pit of skilled people that can be bought in as needed. This puts their projects and their organizations at risk! Whilst more and more successful organisations have adopted talent management as a core competency, many others fail to invest in skilled project management talent and talent development initiatives, and this shows in their performance.

The contrast is stark – high performing organisations are likely to find some $20 million at risk for every 1$billion invested in projects, whereas low performing organisations place $280 million at risk, over 10 time the amount.

The low-performing organizations – those which complete 60% or fewer projects on time, on budget and within scope – are significantly less likely to provide a defined career path for project managers, a process to develop project management competency, and / or training on project management tools and techniques. Poaching talent is a zero sum game that simply drives up costs for everyone.

As a result of this lack of investment, a talent gap exists in project management. A large number of skilled practitioners are reaching retirement age, organisations that train staff hold onto staff and the rest are going to find recruitment becoming increasingly difficult. Talent simply does not grow on trees – skills need developing and nurturing within the organisations that need them.

The reason this matters is that at a time when project success rates are declining and risks are increasing, organisational leadership needs to fill an anticipated 15.7 million new project management roles worldwide by 2020. If they don’t, $344.08 billion in GDP will be at risk – and that’s not even counting the $135 million that organizations already risk for every $1 billion spent on projects.

The ‘high performers’ achieve their results through a combination of good governance and good management. They see project, program and portfolio management as strategic capabilities needed to invest in their organisation’s future. They recognise process improvement and talent management are the two key elements that need investment to deliver outcomes. And they use well proven governance and management processes such as requiring active sponsors (79% of project have active sponsors in high performing organisations -v- 43% in low performing organisations).

Talent management needs investments in selection, training, mentoring and coaching; ideally from internal resources but when necessary using external help to kick-start the development of the internal capabilities. (see more on mentoring and training)

Are you and your team ready to make talent management a strategic priority? Download:
PMI’s Pulse of the Profession™ In-Depth Report: Talent Management,  and
PMI’s Project Management Skills Gap Report, and see how you can build your organization’s success – one project manager at a time. To help PMI have developed a sophisticated career framework, see: http://www.mosaicprojects.com.au/Training-PMI_Framework.html#CareerCentral

Earned Schedule comes of Age

2013 is the 10th anniversary of the publication in The Measurable News (March & Summer 2003) of Walt Lipke’s seminal paper Schedule is Different, introducing the concept of Earned Schedule (ES) to the world. This milestone was celebrated at the inaugural Governance and Controls Symposium held in Canberra earlier this month.

One of the notable features around ES has been the amount of hostility towards the concept generated by traditional Earned Value advocates (for an overview of ES see: http://www.earnedschedule.com/).

Everyone who understands EV recognises traditional EV is a very useful cost predictor and also recognises that the traditional SPI and SV calculations lose relevance later in the life of a project and fail completely if the project overruns time (ie, in approximately 80% of projects SPI and SV are less then optimal). To resolve this problem, the traditionalists suggest ‘looking to the CPM schedule’ for answers and decry ES.

Unfortunately, whilst a reliable and accurate CPM schedule is a critical underpinning of any competent EV system, CPM itself is a ‘wildly optimistic process’, see: http://www.mosaicprojects.com.au/Resources_Papers_117.html

One step towards eliminating this destructive debate was achieved this month – at last there is definitive research that validates ES as a technique. A research thesis from the AFIT (US Air Force Institute of Technology) Masters student, Capt Kevin Crumrine compares EVM and Earned Schedule indicators on US DoD ACAT 1 programs (for non-military types – ‘big’ programs). The thesis documents a series of five descriptive statistical tests conducted on the Earned Value data for 64 Acquisition Category (ACAT) I MDAP’s. The research found that Earned Schedule was a more timely predictor of schedule overages than Earned Value Management.

Unfortunately the statistical data did not compare ES with the CPM predictions. The thesis notes ‘One shortcoming to this research is the inability to map the Earned Schedule data to the critical path, but we consider Earned Schedule to be a strong tool for schedule prediction at the summary/contract level.’ The stated reason was ‘Our example produced earned value data no deeper than the Work Breakdown Schedule (WBS) level 3 (ex: WBS Element 1.2.3). The Critical Path data is collected much deeper, as detailed as WBS level 7 (ex: WBS Element 1.2.3.4.5.6.7). This disconnect prevented us from conducting a detailed analysis’

My feeling is the detailed nature of Capt Crumrine’s analysis meant the researcher could not see the ‘wood for the trees’. The only date that really matters on most projects/programs is the completion date! The level the data is collected at does not matter; neither does the activity/work package that that actually drives the final completion. What matters is the end date!!! The fact ES is a better predictor then EV should be 100% accepted and proved by now, and if not this detailed thesis should remove any residual doubts.

What is not proved is does ES provide a more reliable end date than CPM? My assessment outlined in Why Critical Path Scheduling (CPM) is Wildly Optimistic is that ES should be more accurate. Given the mass of data collected by Capt Crumrine it would be a pity if this last step is not applied by a future researcher.

The key role of CPM is (or should be) making the best use of the currently available resources on a project – this is the antitheses of predicting outcomes based on current trends in the way ES does. All that’s needed is another Masters candidate!!

Capt Kevin Crumrine’s thesis, ‘A Comparison of Earned Value Management and Earned Schedule as Schedule Predictors on DoD ACAT I Programs’ is now in the CPM electronic library at http://www.evmlibrary.org/library/Crumrine%20Final%20Thesis.pdf. If you are into analysis it is well worth the read.

Project Governance and Controls Symposium

Canberra hosted the inaugural Governance and Controls Symposium this week – it was a relatively small event packed with highlights.

The first PTMC (Project Time Management Certificate) workshop to be held in Australia – based on feedback from the attendees, this will grow to become a very popular training.

A free networking evening looking at the future of ‘project controls’ in Australasia. During the meeting the final wind-up of the Australian Performance Management Association was completed.

The main symposium included three outstanding key note addresses supported by stream papers and an engaging panel session.

The two days of concentrated learning and discussion were finished with animated networking sessions. All together an intense and enjoyable two days for both project controls professionals, and the executive managers responsible for governing this area of an organisation’s business. Two of the key outcomes from the Symposium were:

• Gary Troop, the President of the newly independent College of Performance Management (CPM) and symposium key note speaker announced a limited time offer to anyone in Australia to join the for US$25.  The CPM was a part of PMI from 1999 to 2012 but has reverted to an independent status to better serve the needs of the Earned Value community.  The College has a major on-line library of EV publications and plans to develop its conferences and webinars on a global basis – there is even talk of establishing an Australian Chapter – to be part of the exciting new development visit www.mycpm.org/aus and become part of the worlds leading EV community.
  
• The project controls professionals present in Canberra expresses a strong desire to see a network established to link all of the various ‘controls focused’ components within professional associations such as AIPM and PMI, independent bodies such as CPM and Planning Planet and individual controls professionals to help raise the profile of project controls, amplify the message from any one component member, and through the network assist in career development and finding the ‘right person’ for work when needed.

To help with this initiative, PM Global are starting to plan the second Symposium to be held in Canberra at around the same time in 2014 and discussions are underway to frame a proposal for a ‘no cost’ network designed to meet the needs of the ‘controls community’.

There’s a lot to do to maximise the gains made this week – watch this space……

In the meantime, if EV and /or ES is your ‘thing’ the US$25 offer is limited and needs prompt attention!  And to understand the link between controls and project governance see: http://www.mosaicprojects.com.au/Resources_Papers_172.html

PMBOK 5 – Some final thoughts

We are now well into the process of updating materials and writing new questions based on the PMBOK® Guide 5th Edition – From being something new, the book is now becoming increasingly familiar:

• Our daily PMP question has had a 5th Edition reference for the last 3 months, you can follow the questions on Twitter: see today’s question (the questions are good for PMP, CAPM and PMI-SP)
• Updates to our CAPM, PMP and PMI-SP courses are planned and under development – our new Mentored Email™ courses will start in late April.
• Our last classroom course based on the 4th Edition will be at the end of May 
• The PMI examination date changes are:
  - CAPM 1st July
  - PMP 1st August
  - PMI-SP 1st September
• The initial rush of people interested in buying the 5th Edition has subsided and we are effectively out of stock of the 4th Edition. 

Overall as we become more familiar with the 5th Edition we are finding it to be a significant improvement. There are certainly a few issues and problems highlighted in earlier posts in this series (view the full series) but the enhancements significantly outweigh the odd regression.

One of the minor but important improvements is he ranges for cost estimates are back to the industry standards of -25% to +75% for ROM and -5% to +10% for detailed estimates. This pessimistic shift in the ranges more accurately reflects reality.

The rearrangement of the first three chapters is also significant and is aligned with the standards for Program and Portfolio management:

• Chapter 1 sets the scene with:
  - definitions of a project and project management,
  - discussion of the relationships between project, program and portfolio management, in the context of organizational project management,- Discussions of the relationship between project management, operations management, strategy and business value
  - the role of the project manager.
• Chapter 2 focuses on organisational influences including the influence of project stakeholders and governance on the project team and the overall project lifecycle.
• Chapter 3 looks at project management processes and the structure of the rest of the PMBOK.

The reorganisation of this front section, facilitated in part by the move of the ANSI standard to Annex A1 is probably the quiet achievement in the standard. The section flows far more sensibly and logically than in previous editions.

In conclusion – the quality of the PMBOK® Guide 5th Edition has been enhanced by hundreds of small changes that make the work of transitioning our course materials hard work and will certainly require some hard work from anyone who has to update their exam preparation.

So a word of warning: If you are trained for the current exam make sure you sit before the change over dates – PMI do not have any flexibility in the timing of the system changes!! This includes re-sits. After the change over date, all new exams are based on the new standards.

But once through these changes we certainly have a better book for the next 4 years and the development team deserve congratulations for a job well done.

The Standard for Program Management—Third Edition

The most noticeable thing about the new Standard for Program Management - Third Edition is that is has gone on a major diet! The 2nd Edition was 271 page long (plus appendix), the 3rd Edition is less than half the size at 106 pages plus appendix. Unfortunately the price has not moved in the same direction.

The Standard still provides a detailed understanding of program management and promotes efficient and effective communication and coordination among various project management groups. The major updates include:

• Program Life Cycle has been assigned its own chapter for the third edition to provide the details of the unique set of elements that makes up the program management phase.
• The third edition highlights the full scope of program management and clarifies the supporting processes that complete the delivery of programs in the organizational setting.
• A more detailed definition of program management within an organization is provided, including the fundamental differences between project management and program management.

The major focus of the revision seems to be removing a lot of the ‘project management’ information that is found in the PMBOK® Guide and focusing on the role of program management in organisations, the unique characteristics of program management work and the role of the program manager. A shift from process to principle, that is aligned with the Program Management Role Delineation Study that forms the basis for the PgMP examination.

The framework in the Third Edition is:

• Introduction
• Program Management Performance Domains
• Program Strategy Alignment
• Program Benefits Management
• Program Stakeholder Engagement
• Program Governance
• Program Life Cycle Management
• Program Management Supporting Processes

The relationship between the Program Management Performance Domains that makes up the bulk of the standard is illustrated below.

In addition to the core standard, Appendix X4 on Program Management Competencies, and X5 on Program Management Artefacts are very succinct and useful.

A couple of shortcomings in this version of the standard are firstly the limited recognition of the different type of program that organisations run. The PMI standard is very much centred on the ‘strategic program’ defined in the GAPPS typology discussed in our White Paper Defining Program Types. In particular the GAPPS ‘Operational Program’ typology has been largely ignored in the PMI standard.

The other is the classic confusion between the Enterprise level executive management responsibilities that are critical for the support and oversight of the work of the Program Manager and Organisational Governance, typical of documentation produced by working managers. What the standard describes as ‘governance’ is the critical management responsibilities of senior executives to adequately support oversight and manage the process of ‘program management’. Governance is the process of oversighting the whole management system, that is performed by the ‘governing body’ which is the Board of Directors in most commercial organisations and their equivalent in other types of organisation – governors govern, managers manage! For more on this critical distinction see: WP1084 Governance Systems & Management Systems. The contents of the ‘governance’ section are good, just miss-labelled.

Summary
Overall this is a significantly improved standard – a lot of duplication and redundancy has been removed, and the key functions and processes of program management and what organisations need to do at the enterprise level to support programs are well though through and laid out. This new standard is available in Australia from: http://www.mosaicprojects.com.au/Books.html#PMI

PERT – What’s in a name?

I could choose to call the image at the top of this page a tennis ball – it is about the right shape and is a bright colour, but if I chose to do so all that results is confusion! The name we call things matters because it communicates what we are talking about to our audience.

Over the last week we have been dragged into a number of Linked-In discussions focused on questions such as ‘Do you use PERT?’ Partly as a result of our latest blog on the PMBOK 5th Edition  and also because Mosaic Project Services (and particularly Patrick) has a high profile writing about scheduling history.

The overriding conclusion from the debates we’ve witnessed is no-one knows for sure who is saying what. Each user of the term PERT may be referring to a Network Diagram, a Monte Carlo simulation, some other simulation or the actual PERT technique developed in the 1950s. If the basic premise of the debate is not clearly defined the net result is a lot of noise and no possibility of reaching a conclusion of consensus – in exactly the same way as playing tennis using the ‘ball’ pictured above, all you end up with is a mess.

I’m not sure why so many organisations and people chose to use names that have a very specific meaning completely out of context but it seems increasingly commonplace:

• it may simply be a lack of awareness, assisted by seeing many similar incorrect usages of the name;
• it may be a desire to look clever by using technical jargon, which of course backfires big-time as soon as someone who knows hears the misuse;
• it may be an overt commercial move to trade off a well know ‘brand’ to make a tool or offering seem better than it is.

What is important to consider though, is apart from the first option none of the other factors are ethical behaviour and all of the factors destroy effective communication.

To help bring some level of knowledge into the discussions around PERT, we have published a White Paper today on ‘Understanding PERT’.  This paper outlines exactly what PERT is and was, identifies the shortcomings in the technique and delineates what PERT ‘is not’ and the reasons why. After everyone has understood what PERT is and is not, let the debates continue but this time with the effective communication of ideas between the protagonists, ie, a communication in which the receiver actually understand what the sender is meaning.

The alternative was effectively described by Robert McCloskey, a US State Department Spokesman several years ago ‘I know that you believe that you understood what you think I said, but I am not sure you realise that what you heard is not what I meant!’  Effective communication needs a mutual understanding of the terms used.

Download the White Paper

PMBOK® Guide 5th Edition – Some Technical Differences

We are busily working through the PMBOK® Guide 5th Edition updating Mosaic’s PMI training courses ready for the scheduled examination changes. Three of the more technical changes we have discovered (out of many) are:

The Good:
Quality management has been tidied up. The seven basic tools of quality management are now dealt with in on place, once, in 8.1.2.3 and referenced through the rest of the chapter. The ‘magnificent 7’ are: Cause and Effect Diagrams, Flow charts, Checksheets (checklist), Pareto Diagrams, histograms, control charts and scatter diagrams. Other specific techniques are discussed in the appropriate process. There is also an attempt to relate the different project/quality cycles including the basic process groups, the ‘Plan-Do-Check-Act cycle, the cost of quality and quality assurance and control.

The Bad:
Monte Carlo is missing from Time Management and Cost Management! One area that needs a major update in the 6th Edition are the aspects of time and cost management focused on three point estimates and variability. Monte Carlo has been moved out of these sections into the Risk chapter, and is defined as the source of ‘contingencies’ and as a means of ‘simulating’ schedule outcomes. Very little is included about the ways simulation through Monte Carlo are developed or used. In particular, there is no discussion of how different distributions should be chosen based on the available data. Understanding the range of potential outcomes is a critical time and cost management process as is the interactions between time and cost. The treatment in the Risk chapter is not bad, just in the wrong place, hopefully in the 6th Edition the consideration of modelling outcomes will move back into the Time and Cost chapters Or there will be far clearer links drawn between the development of the raw data and its use in cost and time management.

The Ugly:
For some reason PMI keeps bringing PERT back into consideration, ensuring the unfortunate confusion around PERT will persist for another 4 years at least! The completely inaccurate reference to ‘PERT Cost’ that crept into the 4th Edition has been killed off but the concept has reappeared in Duration Estimating (6.5.2.4), Quality Assurance (8.2.2.1) and the glossary.

There is nothing wrong with PERT being in the PMBOK if the technique is defined properly. PERT is a simplistic technique that applies a modified beta distribution and an approximation of the calculation for Standard Deviation (a polite term for inaccurate), to the activities on the critical path in a single calculation to determine the mean completion date (p50) and the effect of adding 1 Standard Deviation to approximate the p80 completion (ie, the date with an 80% probability of being achieved or bettered). PERT is prone to errors including the ‘PERT Merge Bias’ which describes the effect of a nominally sub-critical path finishing later than the critical path.

However, PERT is not synonymous with three point estimating despite a number of software vendors making the same mistake and using a ‘cute name’ to make their uncertainty calculations sound sexy. Any computation that involves simulation, different distribution options or calculating the whole network is not PERT.

PERT has an important place in history and is a useful teaching tool because you can do the calculations manually. But confusing this venerable technique with simulation and three point estimating helps no one and creates a significant communication problem – when a planner says he has done a PERT analysis you have no idea if this means a full Monte Carlo simulation, a manual PERT calculation described above or something in between. As a professional body PMI has let everyone down perpetuating this confusion.

The End:
Overall the PMBOK® Guide 5th Edition is still a significant improvement; our earlier posts have highlighted many of these changes:

To read our earlier comments:
http://mosaicprojects.wordpress.com/category/training/pmbok5/

To see more on the book:
- In Australia: http://www.mosaicprojects.com.au/Books.html#PMI
- Other places: http://marketplace.pmi.org/Pages/Default.aspx

PMI’s Standard for Portfolio Management

The publication of the third edition of PMIs Standard for Portfolio Management represents a significant step forward in linking the performance of project and programs to the achievement of the organisations vision, mission and strategy.

One of the key additions is the introduction of the ‘Portfolio Strategic Management’ process group. The standard’s fundamental proposition is that efficient portfolio management is integral to the implementation of the organization’s overall strategic plan. While project and program management focus on doing the work right, the purpose of portfolio management is to ensure the organisation is investing its limited resources in doing the right work.

As with any portfolio the optimum return is achieved through an appropriate diversification of risk. Short term, low risk, low return projects will not build the organisation of the future, investments to maintain and expand current capabilities need to be off-set by some future focused, high risk high reward projects to develop new capabilities, products or services. The challenge is developing a balanced portfolio that maximises stakeholder value overall, and this needs a practical strategic plan as the basis for developing the portfolio strategy.

The challenge facing most organisations is developing systems to efficiently link innovation, strategy, portfolio management, project execution, organisational change management and the realisation of value. Any weak point in this ‘value chain’ will reduce the return on its investment in projects and programs achieved by the organisation. Establishing systems to achieve this linkage is a key management challenge, ensuring they are in place is a key governance responsibility. We have posted on this topic several times:

- Linking Innovation to Value

- The failure of strategic planning

- Who Manages Benefits?

- Benefits and Value (White Paper)

The updated Standard for Portfolio Management provides an authoritative resource to assist organisations in the overall development of an effective value delivery capability.

One of the elements we really like if that PMI have separated the management of the portfolio (effectively investment decisions and oversight) from the need for organisations to manage their project delivery capability. The ‘enterprise project management’ system that develops and nurtures project delivery capability (see: PCD White Paper) should be quite separate from the portfolio investment decision making process. There is a fundamental conflict of interest created if the same management body is responsible for decisions to ‘kill’ projects that are no longer viable whilst at the same time supporting and nurturing the project team to help them remain viable. PMI have not fallen into this trap!!

Stocks of the PMI Standard for Portfolio Management Third Edition are available world-wide. Australian readers can buy from: http://www.mosaicprojects.com.au/shop/shopexd.asp?id=37&bc=no

For other PMI standards see: http://www.mosaicprojects.com.au/Books.html#PMI

PMBOK #5 standardises its approach to planning

The PMBOK® Guide has always been designed for large projects, and assumes intelligent project teams will scale back the processes appropriately for smaller projects. The 5th Edition keeps this focus and introduces a standard process to ‘plan the planning’ at the start of each knowledge area. This concept has been embedded in earlier editions of the PMBOK, it’s made explicit in the 5th Edition.

Why plan the planning?

As a starting point, on larger projects there will be a significant team of experts involved in developing various aspects of the project plan, on $ multi-billion project frequently more than 100 people so their work needs planning and controlling the same as any other aspect of the project. With a budget of several $ millions and the success of the rest of the project dependent on the quality of the project planning this is important work.

But planning the planning and developing an effective strategy for the accomplishment of the project’s objectives is critically important on every project. If you simply do what you’ve always done there is very little likelihood of improvement. Spend a little time overtly thinking about what needs to be done to first develop the best project plan and then to manage the project effectively can pay huge dividends.

The overriding consideration in developing the plan is Juran’s quality principle of ‘fit for purpose’ you need a plan that is useful and usable that has been developed for the lowest expenditure of time and effort.

To facilitate this, the PMBOK now has process to ‘plan the management’ of: Scope, Time, Cost, Quality, HR, Communication, Risk, Procurement and Stakeholders. These planning processes develop outputs that are integrated within the overall project management plan and describe how each of the specialist areas will be managed. The management plans include the policies, procedures and documentation required for the planning, developing, managing and controlling of each discipline.

Less well developed are two key aspects that can contribute significantly to project success:

• Within the ‘PMBOK’ there is a real need to coordinate and integrate different aspects of the planning. Decisions in one area frequently impose constraints on other disciplines and managing these constraints across multiple sub-teams is vital if the objective of a coordinated and integrated project plan is to be achieved. The project core team need to set parameters for the specialists to work within, possibly at a ‘planning kick-off meeting’ and then manage issues as they arise.
• On a more general level, and applicable to projects of all sizes, there is a need to formulate the project delivery strategy before any realistic planning is possible. Answering the question ‘what’s the best way to achieve our objectives?’ frames the project planning and later the delivery. In software development choosing ‘agile’ over ‘waterfall’ as the delivery strategy changes everything else (for more on managing Agile see: Thoughts on Agile). The project objective of functioning software can be achieved either way, which strategy is best depends on the specific circumstances of the project (See our earlier post on project delivery strategy)

Certainly asking the team to think about what is needed to optimally plan, develop and deliver each knowledge area, will contribute to project success. Maybe the 6th Edition will take the integration of these processes forward.

See our other posts on the PMBOK® Guide 5th Edition.

To buy a copy in Australia see: http://www.mosaicprojects.com.au/Book_Sales.html#PMI

Construction CPM Conference 2013

The Construction CPM conference is over for another year but will remain in our memories for a very long time to come! Combining a high quality conference – probably the best CPM / Scheduling conference in the world, with New Orleans during Mardi Gras was an inspired idea even if it means several weeks of exercise and dieting…..

Our thanks to Fred and Kim Plotnick for organising and hosting the conference and we look forward to coming back in the future. A few of our highlights were:

Seeing a real swamp with alligators and a top tour guide http://www.torresswamptours.net/ ….

The jazz, Preservation Hall, buskers and Bourbon Street…. Plus the food, the locals and the delegates at the conference. Not to mention papers and insights from many of the worlds leading practitioners and developers of CPM software,

Feeling jealous? Plans for the conference include:
2014: Disney World Florida.
2015: West Cost possibly San Diageo.
2016: New Orleans again.

Stay in touch and plan your attendance at: http://www.constructioncpm.com/

PS: We were there for work as well as fun, see: Our previous post