2010 Dialogue Series
What is Success?
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What is Project Success?
Success may be
defined differently
depending on the
audience
(On time, on budget, within scope)
Adapted from The Four Levels of Project Success: The Project Management Maturity Matrix
By Duncan Haughey, PMP
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In theory, there is no difference between theory and practice. In practice, there is. ~ Yogi Bera
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Dimensions of Project Success
y The Triple Constraint y Customer Satisfaction
y Increased Capacity and Efficiency
y Financial Returns
y New Learning: Market Knowledge, Best Practices, or Lessons Learned
y Project Value
y New Business
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The Triple Constraint Cost
Scope
Schedule
• Projects involve compromise between/among the constraints
• Success is often seen in the context of successful compromises
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Scope, Schedule, Budget and Quality
y How important is the “Triple Constraint?”
y Is there a need for a new model?
y How do we go beyond the “triangle”?
y Consider the definition of success in today’s business environment. What factors will affect the definition of success in the future?
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Customer Satisfaction
y The achievement of the desired deliverables
y Customers who willingly pay for the product or service delivered
y The customer believes that the problem is solved
y High quality relationship established among stakeholders (a level of trust has been established)
y Customer learns to address analogous problems ‐ can apply knowledge to other areas of the business
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The Customer Supplier Model
In a project, the customer is the next person in the
process
Supplier
Customer Supplier
Customer Supplier
Customer Supplier
• Set Expectations intentionally
• Define Deliverables
• Establish Acceptance Criteria (for each C/S interface)
Increased Capacity and Efficiency
Letts, Ryan and Grossman (1998) suggest that the three overall outcomes of capacity building include: 1. helping the organization to do what it already does, but better; 2. improving its ability to grow; and 3. improving its ability to change.
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If you are not keeping score, it is just practice.
~ Vince Lombardi
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Financial Measures
y Return on Investment y Internal Rate of Return
y Net Present Value
y Total Cost of Ownership
y Criteria for Financial Measures
y Tangible Benefits
y Intangible Benefits
y Sustainability
y Often act as key factors in project selection
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Measures of Value
y Tangible Values
• Cash flow
• Payback period
• Profitability
• Market share
• Earned Value
y Intangible values
• Stockholder satisfaction
• Stakeholder satisfaction
• Customer satisfaction
• Employee retention
• Brand loyalty
• Time-to-market
• Business relationships
• Safety
• Reliability
• Reputation
• Goodwill
• Image
Source: Value Driven Project Management – Kerzner, Saladis, John Wiley and Sons & IIL Inc
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ROI Is Easy . . . Right?
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ROI Is Easy . . . Right?
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The Learning Model
Strategic Decisions
Resources
PM Practices
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Lessons Learned
Project(s)
Project(s)
Project(s)
Output
Outcome
Success
Lessons Learned
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Enhancing Project Management Intelligence
y How we are getting smarter
y Today, success is measured by factors beyond the triple constraint
y Project management, program management, and portfolio management are becoming business norms
y Best practices are abundant
y Value driven project management is becoming a major factor in:
y Project selection y Resource management
y Customer relationship management
y Go and no go decisions
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A Look At Failure
y How is failure determined?
y What are the major factors that contribute to project failure?
y If a project achieves all objectives and the customer is dissatisfied who is responsible for the failure?
y Is failure always bad?
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Sydney Opera House
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Case Study:
The Sydney Australia Opera House
Plan
Selected
Phase 1
Construction
Begins
Phase 1
Completed: the
podium
Phase 2
Completed: the
exterior shells
Jan 1957
Mar 1959
Feb 1963
Jan1967
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Mar 1966
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Phase 3
Opening
Completed: the
Public
concert halls Performance
Sept 1973
Oct1973
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Sydney Opera House:
Outputs Spelled Failure
y
y
y
y
Original cost: $7 million (Australian $)
Final cost: $100 million (Australian $)
Major leadership changes throughout
Several major unforeseen scope changes, both technical and product
y Funding shortfalls caused major delays
y Stakeholder discord was felt across project
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Sydney Opera House:
Outcomes Were Successful
It stands by itself as one of the indisputable masterpieces of human
creativity, not only in the 20th century but in the history of humankind.
- Expert evaluation report to the UNESCO World Heritage Committee, 2007
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Stakeholders
Opening Day
Five Years Later
Organizational
Failure
Success
Product/Market
Success
Success
Capital Markets
Failure
Success
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Price is what you pay, value is what you get. Warren Buffet
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Improving Competitive Position
For Whom?
How?
Project management is a differentiator for many companies.
For
Product Oriented Organizations
Construction and IT firms in particular must demonstrate effective PM practices to prospective customers
Project management field is full of independent players – independent consultants or small businesses who deliver PM services
For Project Management Delivery Organizations Success is often defined by the referral process ‐
to continued employment and new jobs for project managers
Orienting A Project Toward Success 9 Define success early
9 Project constraints may indicate areas for success
9 Success criteria should be explicit and easy to understand
9 Project success should address multiple dimensions
9 Formal scope changes may redefine success
Other Observations?
“As of this second quit doing less than
excellent work!”
Tom Peters
Thank You!
Looking Back
y How was this presentation? Looking Forward
y Next 2010 Dialog Series: asapm President Stacy Goff
August 5, 2010 3:00PM EDT
Contact Us at: Dialogue@asapm.org
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Please Visit:
asapm Dialog Series Gold Sponsor
Real-Life Projects,
Inc.
Alex S. Brown, CEO
www.alexsbrown.com
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