Real Earned Value

Professor Peter Morris

University College London

June, 2015

Real Learnéd Value

Professor Peter Morris

University College London

June, 2015

EVA:

Earning Value

• Developed in 1962• A control philosophy

– Awkward– Very limited theoretical base

But times have moved on!!

4

• Integration

• Time

• Cost

• Scope

• Risk

• Human Resources

• Communications

• Quality

• Procurement

Initiate Plan Execute Control Close Out

•Time

•Budget

•Scope“given” “delivered”

PROJECT MANAGEMENT:

“On time, in budget, to scope” execution/ delivery

PMBOK: execution management: misses the front-end entirely

What should be the scope/the aim of Project Management?

• Morris & Hough (1987) The Anatomy of Major Projects– Front-end; externalities

• Morris (1994) The Management of Projects– The project, defined by its product development life

cycle, as the unit of analysis

6

• Integration

• Time

• Cost

• Scope

• Risk

• Human Resources

• Communications

• Quality

• Procurement

Initiate Plan Execute Control Close Out

• Time

• Budget

• Scope “delivered”Project Definition

Project Delivery

• Strategy & finance

• Technology (requirements, design, make, test)

• Commercial (supply chain, procurement, etc.)

• Organizational (structure & people)

Interaction with the business and general environment

Concept Feasibility Definition ExecutionClose-out/ Operations

Paradigm shift!

What should be the aim of Project Management?

• Morris & Hough (1987)– Front-end; externalities

• Miller & Lessard (2000)– Efficiency v. effectiveness; Front-End; Sponsor

Wheelwright & Clark (1990)Wheelwright and Clark (1992): where is project management?

• Contingency approach• Stage-gate process• Strategy, Innovation• Program management (platform

management)• Concurrent Engineering

Wheelwright & Clark (1990)

• Contingency approach• Stage-gate process• Strategy, Innovation• Program management (platform management)• Concurrent Engineering• Project management – execution or also front end?

Wheelwright and Clark (1992): where is project management?

Shusha – heavyweight project team

Project Management – Execution

Morris (2013) Reconstructing Project Management

• Belief: there is a discipline for manging projects• Originally delivery focussed, it now includes shaping the

project definition. Specific challenges include:– Focussing on adding value for the sponsor– Influencing context– Building competence in our people, capability in our institutions

Adding sponsor value

1. Develop the project strategy (in line with Stakeholders’ objectives and goals.

2. Establish the scope of the project.

3. Plan the schedule (if not in detail then in outline or progressive detail).

4. Allocate resources. 5. Allow for risks. 6. Allocate contingencies; agree

the budget. 7. Monitor and Control that the

project keeps to these planned targets.

1. Establish the business case for the project and the proposed strategy for its development and delivery to marry into this.

2. Establish the scope of the project, plan the schedule (if not in detail then in outline or progressive detail); allocate resources; allow for risk, allocate contingencies; agree the budget.

3. Manage the work on the emerging project definition (a major piece of which will be the pre-sanction product definition) and on preparing for downstream implementation.

4. Establish the commercial platform upon which the project work will be done.

5. Enhance performance; build value, harvest benefits, manage risk, control performance and drive progress.

6. Do all this remembering that projects are done by, with and through (and for) people- that is, manage the people involved in the project.

7. Learn and improve.

MONITORING & CONTROL

ADDING VALUE

Adding sponsor value

• Governance and strategy• Stakeholders• Requirements and innovation• Commercial platform• Leadership• Time• Budgets and costs• Benefits and opex

Japanese approach to p.m.

Kaikaku Project Management (KPM):

•Profile the project in terms of its mission. The mission may have implicit meanings as well as explicit ones.•Propose the best strategy option within the scope envelope that meets the program mission.•Design the ‘structural’, functional, and behavioural ‘architecture’ for the program within the limitations of the ‘scheme’ business plan, systems context, and Operations and Maintenance service requirements.•Design the human operating environment (Ba) to perform and deliver as required – active, knowledge-oriented, supportive, good communications.•Make decisions in synch with external market, internal enterprise, and embedded program and project drivers. Concurrent engineering is recommended.•Perform multi-dimensional value management.

The three levels of m.o.p.1: tactical

The three levels of m.o.p.2: strategic

The three levels of m.o.p.3: institutional – a) external context

The three levels of m.o.p.3: institutional – b) parent organisation

Shaping context

• A key responsibility of those managing projects– A political, social, and engineering [scientific]

endeavour, operating at Levels 2 and 3

• [Semi-]independent variables: – Sponsor’s strategic intent, requirements, environment

• Dependent variables– Funding, solutions development, contracting and

procurement, planning and controlling

And never has the need been greater

• Carrying-capacity of Earth exceeded several-fold. CO₂ emissions.• Demographics: 6 going 9 billion; tripling of ‘oldies’• Energy shortages• Huge infrastructure needs [U$40 tr.]• Sea rise [Greenland Glaciers]; water shortages• Storms – flooding, food damage

Climate Change

• A task of considerable value: technically difficult; urgent; affecting the lives of millions and the living of billions. Yet we seem to be putting negligible effort into managing its consequences.

• Why? What does this tell us about our discipline?

Climate Change: nature of the challenge

• Unpopular• Diffuse• Many layered• Unclear• Many headed• International

Nature of the management responce

• Unpopular• Diffuse• Many layered• International• Unpopular• Many layered

• Multiple owners• With conflicting views

and goals• Front-end difficult to

grasp and shape• Many overlapping and

interacting initiatives• Tools poorly understood

Climate change management context

• Complex, unaligned governance– Clashing ministerial policies– No-one in overall charge

• Yet begs an holistic view and a systemic response• Needs alignment

– Front-end strategy and shaping critical

• Required management style:– Less big stick; more management influencing, more sophisticated

competencies– Value, context and impact all critical

Management of projects - 2015

• Complex, unaligned governance– Clashing ministerial policies– No-one in overall charge

• Yet begs an holistic view and a systemic response• Needs alignment

– Front-end strategy and shaping critical

• Required management style:– Less big stick; more management influencing, more sophisticated

competencies– Value, context and impact all critical

Where does p.m., as a discipline, a profession, stand re all of this?•Reactive/proactive?•Sponsor value-focused/execution-only oriented?•Effective/efficient?•Inward looking/relevant?