WHEN YOUR PROJECT MANAGERS START TALKING…
- Do your eyes glaze over?
- Do you smile and nod, hoping to pick out a familiar business term?
- Do phrases like Monte Carlo analysis, work breakdown structure and cost performance index all merge together into one nebulous exotic language that you simply don’t understand?
You are not alone.
Most executives and team members advance through the ranks of management and have little education in the philosophy and language of project management.
Most technical, non-technical and commercial team members deal with project managers who have very little understanding of project management terms.
When project managers start talking about their work, they speak in a specialized lingo that could be confusing for anyone who hasn’t had many hours of project leadership experience
“Project managers speak their own language when executives just want a high-level overview of the project and how it impacts the bottom line.”
As a result, executives and project team members often fail to understand. They don’t need to understand all of the details of the project management profession, but it serves them well if they understand the high-level objectives of consistent processes because a lot of them translate into bottom-line impact.
This “most dangerous” category of project management terms results in two people having a conversation about two entirely different subjects. A lot of these terms may sound familiar, but in the world of project management, they can have vastly different meanings.
Familiar Terms You May Don’t Really Know:
Project Plan
■ This simple term is given far less credit than it deserves by non-project managers.
■ “A lot of people think it means ‘project schedule,’ but a project plan is so much more robust,”
■ A project plan is part of the project manager’s toolbox that ensures effective control of time and cost/budget overtime is managed within the project environment.
■ This formal, approved document guides both project execution and project control. The project plan is primarily used to document planning assumptions and decisions, facilitate communication among stakeholders, and document approved scope, cost and schedule baselines.
■ A project plan may be summarized or detailed. By understanding the details in the project plan, executives and the team can choose which are important for regular reporting. “If executives and team take the time to read and be involved in the project plan, they can define how they want that communication to happen,”
■ This can be a part of a Project Execution Plan (PEP), Project Management Plan (PMP) or Project Controls Plan (PCP)
Project Schedule
■ The project schedule is the planned dates for performing scheduled activities and the planned dates for meeting scheduled milestones.
■ As part of the project plan, the project schedule is not just a timeline for the project; it delineates what tasks will be accomplished when and by whom.
■ A good project schedule gives executives a bird’s eye view of the project, showing them at a glance what already should be accomplished and what will happen next and giving a detailed view to the team.
■ In addition to detailing progress, the project schedule gives executives and the team a way to identify the root of delays and missed milestones.
Resources
■ Commonly mistaken as the budget or financial aspect of the project, the term “resources” has a much more specific definition.
■ It includes all of the skilled human resources in specific disciplines, either individually or in crews or teams; as well as the equipment, services, supplies, commodities, materials, budgets and funds.
■ “You can have a well-funded project, but if you don’t have the resources to complete it, you can’t get the project done”.
Risks and Issues
■ These two terms refer to quite different things but often are confused
■ A risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives.
■ While an issue is a point or matter in question or in the dispute or a point or matter that is not settled and is under discussion or over which there are opposing views or disagreements.
■ A risk is a contingent event, which may or may not happen and has an impact on the project in terms of delay, additional costs or quality being lower or not quite to spec.
■ Issues, however, are project problems that have occurred and, if left unresolved, can become a project risk.
Stakeholder
■ Executives and teams often don’t realize how many people and groups are referred to in the term ‘stakeholders. Stakeholders for a project go beyond management and key people.
■ The stakeholders include the people and organizations, such as customers, sponsors, performing organizations and the public, that are actively involved in the project, or whose interests may be positively or negatively affected by the execution or completion of the project.
■ They may also exert influence over the project and its deliverables.
■ By not understanding this term, the executives and the team will not be able to understand the structure and methodology of major projects and the components that need to be addressed.
■ When you recognize who the real stakeholders are, you have a better handle on who is impacted and who is responsible when things go wrong.
Terms That Save Money
Scope and Budget
■ In the world of operations, the scope and budget is the financial plan defined by the CFO and usually is based on the previous year’s budget. In project management, however, the scope goes much further.
■ It includes the sum of the products, services and results to be provided as a project, including all the deliverables and associated tasks, defining what the project team will accomplish with the allotted budget, as well as what it won’t.
■ The project budget is based on scope, and its financial projections are anchored on far more concrete strategies than adjusted annual expenditures.
■ A scope statement should be appealing to executives and the team because it offers, in rich and tangible detail, a plan for where the money will go and what stakeholders will get for their investment.
■ Project scope requires careful management to ensure that it does not expand without proper justification and approval.
Earned Value
■ In simple terms, Earned Value (EV) is the value of work performed expressed in terms of the approved budget assigned to that work for a schedule activity or work breakdown structure component.
■ It is also referred to as the budgeted cost of work performed (BCWP).
■ Project managers use EV management as a forecasting method to predict how much the project will cost, and how long it will take to complete based on current project performance.,
■ For example, the project may have expended 50 percent of the budget, but that doesn’t mean it’s 50 percent complete. After adding in the factor of time spent against the project compared to budget, it may turn out that 50 percent of the project budget has been spent, but only 25 percent of the work or scope has been completed.
■ The project is really behind schedule and will likely run over budget.
■ EV management information can help the project manager and executive management to correctly interpret true project performance.
■ [Calculating] this earlier in the project rather than at the end provides project managers and executive management a chance to remediate the situation.
Work Breakdown Structure (WBS)
■ One of the most important documents in a project, the WBS is the project manager’s road map toward successful project completion.
■ It is the hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required internal and external deliverables.
■ Broken down into work packages, it organizes and defines the total scope of the project. Each descending level represents an increasingly detailed definition of the project work.
■ When reviewing a WBS, executives and the team should pay attention to the milestones that will show whether the work is getting done on time, within budget and the quality constraints.
Milestones
■ Defined as the significant points or events in the project, regular quantifiable milestones allow executive sponsors and the team to follow a project’s progress, such as “the foundation for the building will be poured by 15 April.”
■ Executives and project teams should not agree to milestones that are ambiguous or unverifiable, such as a section of code will be written by a particular date, as there’s no easy way to prove that.
■ Milestones also should be scattered regularly throughout the project.
■ If a project manager tells you that all the key milestones will be at the end of the project, that should raise a red flag.
Critical Path
■ People grossly misuse this term, Most people think the critical path refers to all of the important tasks on a project, but in fact, it refers only to the inflexible tasks on a project.
■ The critical path is generally the sequence of schedule activities that determines the duration of the project. It is usually the longest path through the project, however, a critical path can end, as an example, on a milestone that is in the middle of the project schedule and that has a finish-no-later-than imposed schedule constraint.
■ Everything on the critical path is important, but not everything that’s important is on the critical path.
■ This small but important distinction can have a huge impact on cost and completion dates, because when inflexible tasks change, the entire project will be delayed.
■ For example, in a clinical trial for a new drug, the protocol must be written before the trials can begin—it’s a critical path task.
■ Conversely, the database in a clinical trial must be validated, but this can be done at any time during the project, which makes it flexible. Delaying validation doesn’t delay the project.
Change Control
■ Popular with Total Quality gurus, this term refers to the identification, documentation, approval or rejection, and controls changes to the project baseline that impact time, cost or quality.
■ As the project gatekeepers, executives and project managers must give their approval and make decisions before any of these changes can happen.
■ The power to oversee changes should not be delegated because when you give that power to someone else, you lose the ability to accurately gauge time and cost.
Reserve
■ The reserve is a provision in the project management plan to mitigate cost and schedule risk.
■ It is typically used with a modifier (such as management reserve, and contingency reserve) to provide further detail on what types of risk are meant to be mitigated.
■ The specific meaning of the modified term varies by industry or discipline area.
■ Often management thinks of this as a ‘fat’ to be trimmed, but in reality, the reserve is needed to cater to an anticipated event if it happens.
■ If it’s not used, it may be saved and forms part of the bottom line, for instance, project profit (i.e. Management reserve can be saved as profit but not the contingency).
A Little Goes a Long Way
■ No one expects everyone to study project management or spend hours poring over work breakdown structures and other project documents, but it does help if they understand enough to ask questions and follow along.
■ Project management can definitely overwhelm executives and some team members. But by learning these terms, they can more quickly get a handle on a project’s progress and results, and that translates to more success and a lot less confusion.
■ Focus on risk and rewards, tradeoffs, impact and probability, purpose and expected outcome.
■ When you stick to facts and figures that show trends and indexes, you should improve communication.
Any thoughts?
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