Project Performance Management Scorecard

Revision as of 14:09, 29 September 2017

Abstract

With companies pushed to continuous improve in project management, process efficiency and performance management there is a need to provide processes that can give guides to project managers. The project performance management scorecard is used to increase a projects performance and give an overview of potential obstacles. The projects performance can be measured as the outcome of the different project. The project performance management scorecard incorporates theory from the Balanced scorecard with a slide adjustment, in order to make work with a project point of view. It also used parts from the Project life cycle theory to provide a process of the project life cycles phases. It can help project managers keep track of the complex inter-dependencies factors like project phases, stakeholders and "cause and-effect" inside the project. This paper will show how a strategics organizations tool as the balanced scorecard can be used, in combination with the project lie cycle theory and with a specially developed framework, can provide help to the project manager.

Theory

As the Project performance management scorecard is a combination of different tool as theory there is a need to explain them to fully understand the end idea.

Balanced Scorecard

The idea of developing the balanced scorecard came from, according to Robert Kaplan and David Norton^[1], that it is impossible for organizations to effective measure efficiency with a narrow number of indicators. At the same time a organization shouldn't have a to large number and complex indicators as it will lead to a lack of overview and give a high possibility of indicators either being misused or not be used at all.

The Balanced Scorecard (BSC) is then used to help organizations put their cooperate strategy into some more comprehensive objects and Key Performance Indicators(KPI's). It will also help the organization avoid a short sighted perspective and loose focus on the long term view. It will provide companies a robust measurement and management system for them. The first edition consisted of fire elements:

• Financial

The focus here are the identification of financial measurement. Is the classic organisations measurement like cash flow, income, return and more like it.

• Customer

Here the organization must identify what is important for the customers and their needs. It could be quality, on time delivery or similar.

• Internal business process

A organization should also look at what do it what to excel at. It can the quality, cycle time or low price.

• Learning and Growth

This is the most qualitative part where organizations tries to look into the future on where they want to go.

3 elements have the most measurable indicators: Financial, Customer and Internal business. But and at the same time a more soft type of indicators in the ability to learn and Growth.

the first edition was build for a non-divisional organisation and was hard to implement in a more complex structured company as well as the public sector and a non-profit organisation. This lead to the tool quickly being abandoned by organisations ^[2]. The next generation gave a new measurement that was based on strategic objective that could be linked together as a cause and-effect chain. This is done be linking the different KPI's, in the different areas, together. A Concept used in the BSC is to define indicators as "lead" and "lack" indicators^[3]. "Lag" indicators are the after event indicators like production, accident and more. They are useful for measuring the progress of a project in the company but can't be used to influence the future. The "Lead" indicators are useful in trying to change something or predict the future. It can be described as in-process and predictive indicators. The hard part of the lead indicators is to be able to determine them, as they try to say something about the future, as in comparison to the lag indicators that says something about the present. As the lead indicators tries to predict the future it leaves a chance of being wrong and it is hard to choose the right ones.

Adjusted Balanced Scorecard

As mentioned in the previous section the BSC is a strategic organizational tool, in order to make the BSC more useful for Project perspective a change in view is needed. So instead looking at customers the Adjusted balanced Scorecard (ABSC)^[4] will look at the stakeholders for the project. It will also use the 3 other aspect in a more project orientated view like financial being used as the projects cost. The new four key points are:

• Financial
• Stakeholders
• Internal Business
• Learning and Growth

To help go away from the strategic point of view with the "Lag" indicators being in focus, the "Lead" indicators will be used more, to give some warning signals and actions to help meet the strategy.

Project life cycle

The project life cycle^[5] also know as the project management life cycle, is a tool that help project managers narrow the focus, align objects and ensure the project finish on time. The tool consists of the following steps:

• Initiation

During this the first phase, called the initiation phase, the projects objectives are fund. It could be in the form of problem or opportunity. there is need to develop the right action to take and are planed as a business case that consist of the appropriate solution the the given problems/opportunity. Each option is the considered to find the right solution to the issues and tested in feasibility and justification. Ones the best solution have been chosen, a project manager is appointed to initiate the project. Milestones and group members are fund and shaped into a project team. then the project manager seeks approval to move the project into the next phase, the Planing phase.

• Planning

In this phase the project i investigate in as much detail as possible and the necessary action required to meet the projects objective is identified and planned. It consistent of three main parts. The needed project task and resources is fund and steps to meet them are planned. This can also be called "scope management". Project plan is the created that contain the activities, tasks, dependencies and time frames of the project. With the the parts complete the project manager must also identify the risk for the project. This part is also known as "risk management". Here the project manager most identify potential "high-treat" problems and what actions there must be taking to counter them. It can be done by either lower the risk of the problems happen or lower the impact it can have on the project. The stakeholders must also be identified and a plan to communicate to the different stakeholders. The stakeholder map is a good tool to use here. At the end a quality plan must also be made. Here the quality targets, control measurement and a list of customer requirement for them to accept. With all these parts done the project manager is ready to move the project into the Execution phase.

• Execution

The execution phase or also known as the implementation phase is where the project plan is put into action. The main idea here for the project manager is to monitor and adjust if the project varies from the plan. Team meetings is a good tool for a project manager to keep a finger on the pulse. if a project starts to diviate from the project plan the project manager need to take action in order to move to project back on the right path. if that is not possible the project team should record the change and modify the plan to fit this new way. Key stakeholders and project sponsors should be informed throughout the process. As the project moves along each of the agreed milestone must be reviewed to check the for quality and if the measurement meets to demands. With all the milestone complete and the customer as approved the solution, the project can move into the final phase of closing

• Closure

The finale phase is the closure of the project. All products and documents must be handed over to the customer. The last part the project manager have to do is do make at lessons-learned to see what went well and not so well to improve for the next project. This is both the individual project manager but also the project organization to improve future projects.

Framework

To make the ensure the succes of using the the tool a series of implementations steps are required. These steps is used to enhance the learning process form the tool.

1. Make the Project objectives and the link to Project life cycle(PLC) if possible.
2. Establish the project management KPI's as defined as "Lag" indicators
3. Develop KPI's and PLC objects for "Lead" indicators
4. Use cause and effect when implementing the KPI's and specify the impact analysis framework
5. Keep watch to improve the project management process

It can all in all be described as "Project performance management scorecard". It tries to achieve success by going after at set of objectives:

• Project strategy and objectives
• Project life cycle(PLC) objectives
• Project Management objectives
• Balanced Scorecard practices

Applications

Step 1: Make the Project objectives and the link to Project life cycle(PLC) if possible

Here the objective for the project must be stated. The list of object should be highlevel qualitavice statements but can be in some cases quatitanvie. After the list of object have been identifeid the project manager must find the key stakeholders using different tool. it could be stakeholder maps or other. then make the objects into more specifict KPI*s that can be used troughout the project phases.

A simple table is used to keep track of object and the indicators throughout the different phase of the project

note that not all objects are directly linked to a specific phase. To then to help identify the fish bone diagram could be used. It could be a enterprise resource planning system or ERP system. By just installing the system won't guarantee a result to the object of increase sales.

Step 2: Establish the project management KPI's as defined as "Lag" indicators

With the objects fund the "lag" indicators is identified and put into the ABSC model.

Then to make keep an overview of the "Lag" indicators and the target measurement a table is used:

Step 3: Develop KPI's and PLC objects for "Lead" indicators

Here the main oint to identify the "lead" indicators in the project. the targets and who has the resposibillity of makeing these targets. The three point can be seen as a series of steps done by the Project Manager with the team members of the project and key stakeholds.

Step 3.1: Identify the different indicators

The team must now find the different performance "Lead" indicators that will be usefull in the project. It could be view from a project life cycle point of view as the "Requirments gathering" phase.

Step 3.2: Set targets for mesauring

As the indicators are fund there is a need to make targets for the indicators for measuring the success.

Step 3.3: Assign responsibilities

for each of the different target a team member must be assigned. This team member then have the responsibility of keeping track of the performance and monitor the progress. This is especially important during the implementation/execution phase as there is a need of monitor the progress status. To give and overview of theses 3 step the "Lead" indicators, target and the responsibilities is combine in a table:

Step 3.4: Add the "Lead" indicators in ABSC

With the "Lead" indicators identified it can now be put into the ABSC. this is done to later create the cause and-effect properties.

Step 4:Use cause and effect when implementing the KPI's and specify the impact analysis framework

Now the project manager must identify the cause and effect between the two indicators.

Step 4.1: Combine

With the "Lead" and "Lag" indicators identified in the previous steps it should now be combined into a single ABSC.

Step 4.2: identify Cause and effect

The project manager must now take one indicator at the time and see what cause and effect it will have one the other indicators and there measurement done previous.

Step 4.3: High impact, High risk

Different "Lead" indicators have different important. a way to see which are the most important is to make a diagram with high-low impact on one axis and high-low risk on the other. When the most high risk high indicators(cause) have been fund the "Lag" indicators that will be impacted(effect) must be fund as well. This leads back to the object that therefore also will be impacted. summarized in this table:

Step 5: Keep watch to improve the project management process

Now the whole process is complete and the project manager can use the ABSC to keep track of the projects performance. Here it is important the the Project manager plans project review meetings to make sure he/she gets the right status of the project to monitor possible problems.

This process helps the project manager identify key projects measurement and KPI's and the link between them. With this a projects chance of succeeding will increase and keep track of stakeholders and their interest in the project.

Limitations

This Framework is new and not very wildly used so there is a leak of test and understanding. This leads to uncertainty as there not experience in the field. It also tries to use the balanced scorecard that as mentioned earlier is a strategic tool and use it as a project tool where it wasn't designed to use. Some problems with this process is linked to the "Lead" indicators as the determination of these are critical and hard to get right. If the wrong "Lead" indicators are chosen a project manager will loose focus on potentially problems for the project.

Annotated Bibliography

References

1. ↑ [Conceptual Foundations of the Balanced Scorecard] http://www.hbs.edu/faculty/Publication%20Files/10-074.pdf
2. ↑ [Balanced Scorecard] https://en.wikipedia.org/wiki/Balanced_scorecard
3. ↑ [Lead and lag indicators ] https://www.intrafocus.com/lead-and-lag-indicators/
4. ↑ [Project performance mangement using balanced scorecard(BSC) approach] http://sarasconsulting.com/downloadfiles/Manage%20project%20performance%20using%20balanced%20scorecard.pdf
5. ↑ [Project life cycle phases] https://opentextbc.ca/projectmanagement/chapter/chapter-3-the-project-life-cycle-phases-project-management/