Chapter 5: Product Conceptualization and Definition James R. Burns You have been assigned the following HW Burns EX. 1-8, 1-10, 1-12, p. 28 Schwalbe Ex 2-1, EX 2-3 Burns EX. 2-19, 2-20, p. 27 Burns EX 3-4, 3-5, 3-6 Burns Ch. Five, do Ex. 5-5, 5-19, 5-20, at the end of Chapter 5, pp. 34-39 Requirements Scrubbing Spreadsheet Burns 6-10, 6-11, pg. 27-28 Homework: Due February 11, 2016 One week from today Turn-in Hardcopy in class Plan for Today Recitation THE FIVE PHASES OF THE PM LIFECYCLE REVIEW: Functions/Tasks/Competencies/Skills of… Project Manager Chapter 5—Burns Strategy & Portfolio Management PMBOK’s five phases 1. 2. Initiating Planning 1. Part 1: Product Conceptualization and Definition 2. Part 2: Project Planning and Budgeting 3. 4. 5. Executing Monitoring and Controlling Closing Product Conceptualization and Definition is about… SCOPE As determined by.. • The requirements doc • The WBS – Work Breakdown Structure Functions, Tasks, Expectations of the IT Project Manager (coach, mentor, leader, negotiator, assessor, informer, motivator, delegator) Selects Project leader, team leader, subordinates Works hardest during the initiating and planning stages Assesses progress during execution and reports on that Negotiates with line managers for required human resources 3/11/2016 Texas Tech University -- J. R. Burns 7 Expectations of the IT Project Manager Interfaces with customer, upper management on behalf of team Negotiates with upper management and customer Keeps everybody informed 3/11/2016 Texas Tech University -- J. R. Burns 8 More Expectations of the IT Project Manager Is a positive leader, motivator, coach Knows how to use PM software Knows the technologies employed well Must re-plan the remainder of the project after the completion of each deliverable, each phase 3/11/2016 Texas Tech University -- J. R. Burns 9 Skills, Competencies of the PM Leadership—articulate the vision and hold everyone accountable to it Delegation Competencies An ability to develop people Communication competencies Interpersonal competencies Able to handle stress Problem solving skills Time management skills Negotiation skills 3/11/2016 Texas Tech University -- J. R. Burns 10 Recall the Large Project Hierarchy Project Manager Project Leader Team Leader 1 Team Leader 2 Developer 1 Developer 2 Developer 3 Developer 4 Developer 5 Developer 6 Developer 7 Developer 8 Developer N 3/11/2016 Texas Tech University -- J. R. Burns 11 Chapter 5 Outline Project Portfolio Management The First Part Using a SOW Defining Project Boundaries/Scope Why getting this right is so important The use of surveys and interviews Definition of Deliverables and Due Dates Managing stakeholder expectations Benefits of Project Portfolio Management Builds discipline into the project selection process. Links project selection to strategic metrics. Prioritizes project proposals across a common set of criteria, rather than on politics or emotion. Allocates resources to projects that align with strategic direction. Balances risk across all projects. Justifies killing projects that do not support strategy. Improves communication and supports agreement on project goals. 2–14 EXHIBIT 2.2 A Portfolio Management System Design of a project portfolio system: • Classification of a project • Selection criteria depending upon classification • Sources of proposals • Evaluating proposals • Managing the portfolio of projects. 2–15 Portfolio of Projects by Type 2–16 FIGURE 2.2 A Portfolio Management System Selection Criteria • Financial: payback, net present value (NPV), internal rate of return (IRR) • Non-financial: projects of strategic importance to the firm. Multi-Weighted Scoring Models • Use several weighted selection criteria to evaluate project proposals. 2–17 Financial Models The Payback Model • Measures the time the project will take to recover the project investment. • Uses more desirable shorter paybacks. • Emphasizes cash flows, a key factor in business. Limitations of Payback: • Ignores the time value of money. • Assumes cash inflows for the investment period (and not beyond). 2–18 • Does not consider profitability. Financial Models (cont’d) The Net Present Value (NPV) model • Uses management’s minimum desired rate-ofreturn (discount rate) to compute the present value of all net cash inflows. – Positive NPV: project meets minimum desired rate of return and is eligible for further consideration. – Negative NPV: project is rejected. 2–19 Example Comparing Two Projects Using Payback Method 2–20 EXHIBIT 2.3a Example Comparing Two Projects Using Net Present Value Method 2–21 EXHIBIT 2.3b Nonfinancial Strategic Criteria To capture larger market share To make it difficult for competitors to enter the market To develop an enabler product, which by its introduction will increase sales in more profitable products To develop core technology that will be used in nextgeneration products To reduce dependency on unreliable suppliers To prevent government intervention and regulation 2–22 Multi-Criteria Selection Models Checklist Model • Uses a list of questions to review potential projects and to determine their acceptance or rejection. • Fails to answer the relative importance or value of a potential project and doesn’t to allow for comparison with other potential projects. Multi-Weighted Scoring Model 2–23 • Uses several weighted qualitative and/or quantitative selection criteria to evaluate Sample Selection Questions Used in Practice Topic Question Strategy/alignment What specific strategy does this project align with? Driver What business problem does the project solve? Success metrics How will we measure success? Sponsorship Who is the project sponsor? Risk What is the impact of not doing this project? Risk What is the project risk to our organization? Risk Where does the proposed project fit in our risk profile? Benefits, value, ROI What is the value of the project to this organization? Benefits, value, ROI When will the project show results? Objectives What are the project objectives? 2–24 EXHIBIT 2.4 Sample Selection Questions Used in Practice Topic Question Organization culture Is our organization culture right for this type of project? Resources Will internal resources be available for this project? Approach Will we build or buy? Schedule How long will this project take? Schedule Is the time line realistic? Training/resources Will staff training be required? Finance/portfolio What is the estimated cost of the project? Portfolio Is this a new initiative or part of an existing initiative? Portfolio How does this project interact with current projects? Technology Is the technology available or new? 2–25 EXHIBIT 2.4 cont’d Project Screening Matrix 2–26 FIGURE 2.3 Applying a Selection Model Project Classification • Deciding how well a strategic or operations project fits the organization’s strategy. Selecting a Model • Applying a weighted scoring model to bring projects to closer with the organization’s strategic goals. – Reduces the number of wasteful projects – Helps identify proper goals for projects 2–27 – Helps everyone involved understand how and why a project is selected Project Proposals Sources and Solicitation of Project Proposals • Within the organization • Request for proposal (RFP) from external sources (contractors and vendors) Ranking Proposals and Selection of Projects • Prioritizing requires discipline, accountability, responsibility, constraints, reduced flexibility, and loss of power. Managing the Portfolio 2–28 • Senior management input A Proposal Form for an Automatic vehicular tracking (AVL) Public Transportation Project 2–29 FIGURE 2.4A The PLANNING Phase Analogous to a missile or rocket If the launch is “bad,” the project may have to be killed • Just as a rocket that misfires must be detonated Deliverables of this stage Project stakeholders -- Project charter Project deliverables, what these will be Requirements document (the main deliverable) Project team members Project stakeholders This group must be molded into one in which there is a lot of cohesion If you can’t get cohesion, then you may have to settle for a plurality or majority rule If is most important that everyone knows up front what this project is about Stakeholders who don’t get what they want from the project need to know this up front Cohesion and Consensus You’ve got to have this prior to execution or you’ll never get it later on Requirements document What the problem is What functionality is needed What outputs What inputs What performance What reliability What kind of meeting is appropriate to begin discussions? A Joint Requirements Definition Session, also known as a JAD Session To create a strongly held shared vision of what the project is all about To hammer out a DOCUMENT REQUIREMENTS JAD and JRD Sessions They commit top executives to the software planning process They shorten the requirements-specification phase They eliminate features of questionable value They help to get requirements right the first time They help to get the user interface right the first time They reduce organizational infighting Project Charter Template appears in Chapter 5 Advantage here is that the rules are made explicit from the outset Helps remind the PM and team what the goals/objectives are ANNOUNCES THE PROJECT What does the Project Charter announce? Project Project manager Project stakeholders Project scope Project deliverables Project assumptions Project rules/processes Project governance Methodology for Facilitation of a Requirements Planning Session How to determine requirements SWOT Analysis/Brainstorming/Brain- writing Quality Function Deployment • You should have seen this in your ISQS 3344 class. Goldratt Thinking Process Importance House of Quality 5 Trade-off matrix 3 Design characteristics 1 4 2 Customer requirements Relationship matrix Competitive assessment 6 Figure 3.7 Target values House of Quality Figure 3.8 Competitive Assessment Easy and safe to use Irons well Customer Requirements 1 2 3 B A 4 Presses quickly 9 Removes wrinkles 8 AB X Doesn’t stick to fabric 6 X BA Provides enough steam 8 AB Doesn’t spot fabric 6 X AB Doesn’t scorch fabric 9 A XB Heats quickly 6 Automatic shut-off 3 Quick cool-down 3 X Doesn’t break when dropped 5 AB Doesn’t burn when touched 5 AB X Not too heavy 8 X X 5 X B X A ABX A B X A B Irons well Presses quickly - Removes wrinkles + Doesn’t stick to fabric - Provides enough steam + + + + - - + - + + - Automatic shut-off + Quick cool-down Doesn’t break when dropped - - + + + + Doesn’t burn when touched Not too heavy Automatic shutoff + + + + + + - Protective cover for soleplate + + + + Heats quickly Time to go from 450º to 100º - + Doesn’t scorch fabric Time required to reach 450º F Flow of water from holes Size of holes Number of holes - + + + Doesn’t spot fabric Easy and safe to use Material used in soleplate Thickness of soleplate Size of soleplate Customer Requirements Weight of iron Figure 3.9 Energy needed to press House of Quality + + - - - + + + + + + - Automatic shutoff Protective cover for soleplate Time to go from 450º to 100º Time required to reach 450º + Flow of water from holes - Size of holes - Number of holes Material used in soleplate Thickness of soleplate Size of soleplate Weight of iron Energy needed to press House of Quality Figure 3.10 + + in. cm ty ea 3 1.4 8x4 2 SS 27 15 0.5 45 500 N Y 4 1.2 8x4 1 MG 27 15 0.3 35 350 N Y 2 1.7 9x5 4 T 35 15 0.7 50 600 N Y 3 4 4 4 5 4 3 2 5 5 3 0 3 3 3 3 4 3 3 3 4 4 5 2 1.2 8x5 3 SS 30 30 500 * * * * * * * Automatic shutoff Number of holes Protective cover for soleplate Material used in soleplate Time to go from 450º to 100º Thickness of soleplate lb Flow of water from holes Size of soleplate ft-lb Size of holes Weight of iron Objective measures Units of measure Iron A Iron B Our Iron (X) Estimated impact Estimated cost Targets Design changes Energy needed to press Figure 3.11 Time required to reach 450º House of Quality mm oz/s sec sec Y/N Y/N House of Quality Figure 3.12 Goldratt Thinking Process— three steps What to Change What to Change to How to Cause the Change What to Change Let’s talk about the problems with mainframe/glass house architecture Data were isolated/non integrated • Corporate visibility was impossible Centralized MIS shop had long lead times • Like 36 months for maintenance work on legacy apps MIPS on mainframes were expensive and very much in demand MIPS in PC were dirt cheap and idle most of the time We will build a tree Called a current reality tree Begin by identifying the UNDESIRABLE EFFECTS the stakeholders are experiencing The basic tree relationship: IF {box a is true}, then {box b}. Sales cannot see what is happening in accounts receivable Sales cannot track customer orders through the manufacturing/distribution process Information visibility across the enterprise is impossible Independent data pools are created that cannot be integrated or accessed Islands of automation are created End users develop their own independent applications that then run on departmental PC’s Centralized mainframes are computing bottlenecks Centralized MIS shops have lead times of 36 months or longer Mainframes were computational bottlenecks Centralized MIS shop backlogs were extending out to 36 months Only the centralized MIS shop could do maintenance and new development work Many new applications were being built Each application had to reside entirely on the mainframe Budgets for MIS shops were stretched to their limits Change requests for existing apps were frequent and increasing Competitive and customer environments are changing rapidly What to change to An architecture in which the data are totally integrated An architecture in which most of the processing is not done on mainframes Decentralization of MIS What architecture was this??? How to cause the change ERP implementation Solves the problems identified above Feasibility Assessment Process Identify Dependencies with other projects Assess overall risk Test alignment with/impact on strategies and plans Test resource availability Submit Stage one deliverables for a quality gate inspection MAKE GO/NO GO Decision Making Decisions amongst Projects _________________________________________________________________ efficiency frontier G R A D E 9 8 4 5 3 7 2 6 1 _________________________________________________________cost__________ Figure 5.8. Plot for Relating Proposal Cost to Grade Multi-attribute Tree for Grading Projects Solution Linear Programming (optimization) PROJECT NAME ABBREVIATION BENEFIT SCORE (0-100) COST Customer Relationship Management CRM 85 1.5M Data Warehouse Facility DWF 95 1.3M Scrubbing of Marketing Data SMD 55 .5M Supply Chain Management SCM 80 1M Supply chain data Prep SCD 50 .4M CAD/CAM System CAD 75 .8M Finite Capacity Scheduling System FCS 30 .2M Process Flow Analysis PFA 35 .01M Manufacturing Costing Analysis MCA 30 .01M Process Charting System PCS 30 .01M Value Stream Mapping VSM 40 .01M Collaborative Product Commerce CPC 85 1M MAX 85*CRM + 95*DWF + 55*SMD + 80*SCM + 50*SCD + 75*CAD + 30*FCS + 35*PFA + 30*PCS + 40*VSM + 85*CPC s.t. 1.5*CRM + 1.3*DWF + .5*SMD + .1*SCM + .4*SCD + .8*CAD + .2FCS + .01*PFA + .01*PCS + .01*VSM + 1*CPC <= 6 CRM – DWF >= 0 DWF – SMD >= 0 2SCM – DWF – SCD >= 0 FCS – SCM >= 0 CAD + PFA + MCA + PCS + VSM >= 2 CPC – SCM >= 0 More process steps Obtain funding Review alternative approaches Obtain necessary signatures Move to next stage A Caveat If possible, avoid making quick and dirty estimates of duration and cost in this stage If your superiors insist, make your estimates high and insist that there could be 75% variability in the estimate Educate your superiors to the effect that you cannot give a definitive estimate until a welldefined product for the project emerges. Summary The Planning phase is most important There is a lot of PM involvement PM must • • • • Lead communicate Negotiate Decide A most important focus: • Build Consensus