Project Performance Management Scorecard

Abstract

With companies pushed to continuous improve in project management, process efficiency and performance there is a need for providing processes that can give guides. The project performance management scorecard is used to increase a projects performance and give overview of potential obstacles. The project performance can be measured as the outcome of the different project in a company. The project performance management scorecard incorporates theory from the Balanced scorecard with a slide adjustment to work with a project point of view. It also used parts from the Project life cycle theory to provide a process. 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 a framework, can provide help to a projects performance.

Theory

Balanced Scorecard

The idea of developing the tool came from, according to Robert Kaplan and David Norton, that it is impossible to measure efficiency with a narrow number of indicators. At the same time a company shouldn't have a large number and complex indicators. It will lead to a lack of overview and give a high possibility of indicators misused or not be used at all.

The Balanced Scorecard (BSC) is then used to help companies put their cooperate strategy into more comprehensive objects and Key performance indicators(KPI's). It will also help the company avoid a short sighted perspective. It will provide companies a robust measurement and management system for them to use. The first edition consists of fire elements:

• Financial

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

• Customer

Here the company must identify what is important for the customers so it could be delivery on time???

• Internal business process

A company should look at what do it excel at. Is it the quality, cycle time or low price.

• Learning and Growth

This is the most qualitative part where company tries to look into the future on where they what to go. With 3 elements that have a measurable indicators: Financial, Customer and Internal business, and at the same time a more soft type of indicators in the ability to learn and Growth.

But it was build for a non-divisional organisation and was hard to implement in a more complex structure companies as well as the public sector and a non-profit organisation. This lead to the tool being quickly abandoned by organisations . The next generation gave a new measurement where they where 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 for define indicators is the "lead" and the "lack" indicators. "Lag indicators are the after-the event indicators like production, accident and more. They are useful for measure the progress both for a project på the company as well 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 is process and predictive indicators. the hard part of the lead indicators is to be able to determine them in comparison to the lag indicators. As the lead indicators tries to predict the future it leaves a chance of being wrong and hard to choose the right ones.

Adjusted Balanced Scorecard

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) will look at the stakeholders for the project. The new four key points are:

• Financial
• Stakeholders
• Internal Business
• Learning and Growth

To go away from a strategic point of view with the "lag" focused indicators being in focus, the "Lead" indicators will be used more to give some warning signals and actions to help meet the strategy. It can all in all be described as "Project performance management scorecard". It tries to achive succes by going after at set of objectives:

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

Project life cycle

The project life cycle 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 five step:

1. Initiation
2. Planing
3. Execution
4. Control
5. Closure

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

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 diffent phase of the project Indsæt table??????

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 . Picture?????

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: 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: 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

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