Page 1

Synergy

PMI North India Chapter

Collaborating Project Management for High Performance Business Insight

April-June 2012 Newsletter

Issue 5

this issue Managing Complex Business… P2 Cash Flow Management…P3 Organizational Change… P7 Quiz…P9 Rigidity to Agility...P12 Project Management Office…P16 Best Practice Quality Assurance…P18 Past Events…P21 Authors… P22 Editorial Team…P23

Work life balance, critically yours…

From the Editor’s Desk

First Anniversary Issue

It is a proud moment for entire community as our SYNERGY turns 1 year old. I, along with my entire Editorial team, take pride in releasing the fifth edition as a First “Anniversary Issue”. Successful and timely releases of SYNERGY reflect the involvement and commitment of entire Project Management fraternity. Timely releases of SYNERGY would not have been possible without your support. I, on behalf of Chapter board, eulogize all the authors in the last 1 year who have devoted their valuable time for nurturing SYNERGY despite their other professional and personal commitments. 21st June is longest day of the year since sunlight is for longer duration of the day in Northern Hemisphere. We aim to take this cue from nature and spread the light of knowledge and experience using SYNERGY as a medium for many more years. We have symbolically chosen 21st June to release our SYNERGY Anniversary Issue as a source of inspiration towards continuous growth and awareness of Project Management. I am also grateful for Editorial team's efforts comprising of committed individuals who have zealously worked as a team in reviewing all inputs and feedback to ensure that a well packaged SYNERGY is released every quarter. Our entire editorial team is a classic example of executing project using a virtual team. This is due to the fact that our editorial team has never had a single face to face meeting since the time SYNERGY was conceived! We take pride that we have released every edition of SYNERGY on the announced date without any schedule overrun. I urge fellow professionals to read SYNERGY and we always look forward to your critical review that will help SYNERGY to become a mature adult. Happy Reading! Regards Piyush Govil PMP® Vice –President – Communications PMI North India Chapter

P1


Managing Complex Business Deliverables in Projects Business Case – Telecom Industry By – Ritesh Arora

In

today’s dynamic futuristic world the role of a business analyst is focused on the risk analysis of the business vision and project opportunities. The technology is changing fast, in the times of recession there is a huge pressure on the margins and the customer wants the best at

the

cheapest

rates.

opportunities various

Further

in

case

of

global

legal, geographic specific risk,

political risks need to be assessed.

Project management key essentials Managers:

Technical architect and commercial architect of the business /project opportunity will have to take project oriented approach. Analyze the risks and suggest multiple scenarios to the customer as well as to the management and will have to create a balance between customers requirement and organizations goals of profitability before coming up with an optimum techno-commercial solution.

Key Inherent Risks for Working Project Managers:

It is a trend and most of the organizations today are hence using teams to analyze these risks and suggest

Inherent risks in markets (systematic risks)

Specific risks (non systematic risks) which can be classified as: Market Risk (Market price fluctuations, FX etc)

mitigations and come up with scenarios with technical, commercial and legal background. Right project management approach in these kinds of teams is not currently used to an optimum level at least

Case Study – Telecom Industry Managers:

in Indian companies and a lot can/ needs be done to

A business customer has a requirement which can be served by a global MPLS based VPN but the customer has a limited

introduce

the

concept

and

principles

of

project

management in such teams.

budget and also wants the solution to run for seven years

Project management techniques specially those of

without impacting its real time requirements.

analyzing

Techno commercial risks are:

frameworks, risk registers etc are the essential need of

Hardware obsolete.

requirement

-suggested

may

become

Technical obsolesce and Capex limitations

mitigating

risks

like

creating

risks

business managers/analysts/bid managers in today’s global volatile business environment.

Take Away Managers:

Current

Geo political risks are:

&

telecom

market

business

atmosphere

with

uncertainty and project delivery limitations can be best

Regulatory constraints in the different global locations

managed by a balanced careful approach for project

may impose different challenges like censorship on the

managers/BA’s/Procurement teams to plan and analyze

content and risks which needs to be mitigated by

potential risks event with mitigation plan for seamless

proper contracting.

delivery and satisfied end customer expectations.

About Author

Mr. Ritesh Arora Senior Manager-Central Bid team, HCL Infosystems Ltd, Noida Save Earth, Go Green

Ritesh has close to 10 years of Management Consulting, and Industry wide experience across multiple sectors - Telecom, IT, Oil & Gas, Government ( e-Governance), BFSI . His key competencies are: Project & program management, Commercial & bid management, procurement & vendor management, business development, relationship and stakeholder for transition & change management and provide thought leadership. He has worked with various clients in India & Middle East. He is BE in Computers Science and Engineering from DIT in year 1998-2002 and MBA from FMS (part-time). P2


Cash Flow Management in Large Infrastructure Projects By – Asim Prasad

P

roject Cash Flow Management involves estimating costs of different packages, predict the timing of cash outflow, arrange funds, monitor the actual cash outflow,

Sl.

Total Cost TCi

Cost head

identify deviations with respect to plan and modify the

1.

Procurement packages (P1,P2….Pj)

TC1

baseline plan as the project progresses so that the actual

2.

Work Packages(W1,W2….Wk)

TC2

cash outflow is within permissible deviation limits. This is a

3.

Owners Management Expenses

TC3

continuous and intricate process as it involves thorough

4.

Contingency

TC4

5.

Inflation

TC4

6.

Interest on Debt , Margin Money for Working Capital

TC5

knowledge of the commercial order conditions for raising bills, timing of the bills raised, payments cycle, physical progress

made

against

each

package

etc.

Large

infrastructure projects are capital intensive and require

Project Approved Cost(Baseline-0 at Time T0) Table 1

funds during the project execution. The source of these funds may be either debt or equity. Managing the funds and its efficient outflow synchronizing with the actual

TACB0

2 Estimating cost for each item under the cost head Managers:

progress made is a complicated task due to the fact that a

During the project investment approval, costs are allocated

track of the incremental physical progress is required to be

against each item under the cost head based on market

kept on real time basis. Efficient Management of funds is

estimates and in-house cost database. Applicable taxes and

essential to optimize the interest cost and at the same

duties if any are also indicated. If required, cost of some of

time ensure that sufficient funds are available to release

the items under the cost head are estimated in foreign

payments

currency assuming that such items would be imported.

against

the

bills

being

received,

without

Thereafter the total cost estimate is derived. Tolerance

annoying the vendors and contractors.

limit in estimated cost of +/- 20 % at the time of seeking

Steps in Cash Flow Management Managers:

investment approval is considered accurate.

Cash flow management is an integral part of Project Management. It’s a systematic long drawn continuous process which starts immediately after the project capital

Mathematically, TACB0 =

i

where i=1 to n; n= total number of cost heads

cost estimates has been prepared. Estimating the net cash

The total approved cost=TAC, is a function of time and is

flow over the economic life of the project with accuracy is

dependent on market forces.

important as it affects the wealth creation of the

3 Calculate the Cash Outflow based on estimated cost

shareholders. Based on my experience of executing cross country natural gas pipeline projects the steps required to be followed for efficient cash flow management for large

Large infrastructure projects are completed in three to five years time depending on the project complexity and size. At

infrastructure projects are as under:

the time of investment approval, considering the estimated

1 Identification of cost heads

are forecasted based on project schedule, past experience

project schedule, the cash outflows against each cost head

Cost heads are identified with the decomposition of the

and market estimates. Thereafter the total outflow against

project

Large

each month is calculated.

heads

Further the percentage monthly cash outflow is also

at

infrastructure

the

time

projects

investment involves

approval.

various

cost

comprising direct and indirect cost, hard and soft costs as

calculated based on estimated costs. Refer Table 2

detailed herein. The project cost estimated at the time of project investment approval forms the basis for ascertaining the project cost overrun at the time of project completion.

Food for thought Work life balance, are we really serious? or buzz words… Served by – Piyush Govil

Save Earth, Go Green

P3


Sl.

Total Cost: TCi

Month -1

Month -2

1

Procurement packages (P1,P2….Pj)

Cost head

TC1

TC11

TC12

Month-(N-1)

Month-N

2

Work Packages(W1,W2….Wk)

TC2

TC21

TC22

3

Owners Management Expenses

TC3

TC31

TC32

4

Contingency

TC4

TC41

TC42

5

Inflation

TC5

TC51

TC52

6

Interest on Debt , Margin Money for Working Capital

TC6

TC61

TC62

Total [Basaeline-0]

TACB0

TCM1

TCM2

TCM (N-1)

TCM-N

% Cash Outflow [Basaeline-0]

-

TCM1/ TACB0

TCM2/ TACB0

TCM(N-1)/ TACB0

TCM-N/ TACB0

Table 2

Mathematically,

where m=1 to N; N= total number of months for cash outflow

The cash outflow so calculated is the baseline-0 cost outflow based on estimated cost.

4

The actual expenditure under cost heads like Owners Management Expenses, Contingency, Inflation, Interest on Debt, Margin Money for Working Capital are calculated after the project completion during capitalization. However,

Calculate the Cash Outflow based on actual ordered cost and scheduled progress [Baseline-1]

during execution certain values are estimated based on past

In large infrastructure projects, awarding contracts to vendors and contractors for procurement and works is a

experience and indicated under total cost head. The steps are repeated till all orders are placed. Refer Table 3

lengthy process as high value procurement involves several

Further the percentage monthly cash outflow is also

intricate steps for which standard transparent procedures

calculated based on ordered costs.

and guidelines are followed. This process also involves different categories of stakeholders who interact with each other and are influential enough to alter the decision process. Considering all this, as and when the orders are

Mathematically, months for cash outflow

placed, the actual order value is recorded. Based on the

The cash outflow so calculated is the baseline-1 cost outflow

execution schedule for the particular order considering the commercial conditions, the cash flow is determined.

based on ordered cost.

Sl.

Cost head

Table 3

Total Cost: TCi

Total Order Cost: TCi

Month:

Month:

Month:

N-m

N-2

(N-1)

Month:N

1

Procurement packages (P1,P2….Pj)

TC1

TOC1

2

Work Packages(W1,W2….Wk)

TC2

TOC2

3

Owners Management Expenses

TC3

TOC3

4

Contingency

TC4

TOC4

5

Inflation

TC5

TOC5

Interest on Debt , Margin Money for Working Capital

TC6

TOC6

Total [Basaeline-1]

TACB0

TOCB1

TOCM (N-m)

TOCM (N-2)

TOCM (N-1)

TOCM(N)

% Cash Outflow [Basaeline-1]

-

-

TOCM(Nm)/ TOCB1

TOCM(N2)/ TOCB1

TOCM(N1)/ TOCB1

TOCM(N)/ TOCB1

6

Save Earth, Go Green

P4


5

At the time of project execution, recalculate the cash outflow based on balance expenditure to be made and actual progress made [Baseline-2] Z=X-Y=

X=Total Order Cost: TCi

Y=Cumulative Expenditure Made till previous month

Balance Expenditure till previous month

Procurement packages (P1,P2….Pj)

TOC1

TCE1

Z1=TOC1-TCE1

2

Work Packages(W1,W2….Wk)

TOC2

TCE2

Z2=TOC2-TCE2

3

Owners Management Expenses

TOC3

TCE3

Z3=TOC3-TCE3

4

Contingency

TOC4

TCE4

Z4=TOC4-TCE4

5

Inflation

TOC5

TCE5

Z5=TOC5-TCE5

6

Interest on Debt (Indirect Cost)

Sl. 1

Cost head

TOC6

TCE6

Z6=TOC6-TCE6

Total [Basaeline-2]

TOCB1

TCE

Z=TOCB1 -TCE

% Cash Outflow [Basaeline-2]

-

TCE/TOCB1

(TOCB1 –TCE)/ TOCB1

Table 4

Further the percentage monthly cash outflow is also

7

calculated based on balance expenditure. The cash outflow so calculated is the baseline-2 cost outflow based on balance expenditure. As the project progress, on month to month basis the balance expenditure and revised cash flow are calculated. This continuous process improves the

accuracy

level

of

prediction

w.r.t.

anticipated

expenditure required in subsequent months. Refer Table 4

6

Prepare contingency plan to minimize the deviation

Once the reasons for deviations under different WBS element are identified, contingency plans are prepared to minimize deviations. Implementation of the contingency plan in true spirit ensures that the project is still on the scheduled path. Some contingency plans may involve usage of resource like time, cost and heavy equipment. However, due to scarcity in resources, it is not always possible to implement contingency

Identify the deviations with reasons between the

plans due to which projects are delayed. This may result in

cash outflow derived in step 4 and step 5

cost overrun also.

The project manager may therefore

The project execution involves uncertainties and often it is

conduct a decision tree analysis along with a cost benefit

difficult to precisely predict the risk and its outcomes. Risk

analysis before proceeding ahead.

may be known-known or known-unknown. This affects the

Monitor the actual cash outflow

cash flow during actual execution. Mostly it happens that the

8

actual physical progress is in variance with the planned

Cash outflow is required to be monitored on continuous basis

progress. Therefore it becomes important to identify the reasons for deviations and the corresponding variation in cash outflow. Once such deviations are identified, the planned cash outflow can be prepared with higher levels of accuracy. Accuracy levels in prediction of cash flow on month to month basis of 95 % are considered good.

The

periodicity of such a detailed analysis for ascertaining deviation is one month.

with the release of payments against running bills. This being a real time process, some system needs to be designed that will monitor the progress electronically and provide a snapshot information to the project manager on aspects like balance payment against each cost head, look ahead plan for succeeding months, percentage financial progress made in each cost head along with overall percentage financial progress. The percentage progress is measured considering the overall approved project cost in the denominator.

Project Management – lighter side The more innocuous the modification appears to be, the further its influence will extend and the more plans will have to be redrawn. Overhead by -Kumar Saurabh, PMP® Save Earth, Go Green

P5


Take Away Managers:

The above methodology has been applied in execution of

expenditure in the successor month is borrowed on month to

cross country natural gas pipeline projects with high

month basis. The above exercise also helps to prepare budget

degree of success in predicting cash outflows with

estimates for the financial years during the lifecycle of the

accuracy within permissible limits. Considering the fact

project completion. If the company is executing number of

that debt financing is also involved in large infrastructure

different

projects, it becomes very important to precisely predict

complexity, it helps to ascertain the cash flow of the entire

the future cash outflows on monthly basis for project

project portfolio at the organizational level.

infrastructure

projects

of

varying

size

and

completion so that only the portion of amount required for

About Author Mr. Asim Prasad is a graduate in Mechanical Engineering from IIT Kanpur and working as Chief Manager

at GAIL(India) Limited,

New Delhi. He has varied rich experience of the natural gas value chain comprising Operation & Maintenance of Cross Country Natural Gas Pipelines, Project Management of Cross Country Natural Gas Pipelines and Natural Gas Marketing. During the course of his professional career he completed Post Graduate Diploma Mr. Asim Prasad Chief Manager GAIL (India) Limited, New Delhi

Save Earth, Go Green

in

Project

Management,

Advanced

Diploma

in

Management and Executive Diploma in Project Management. He is a member of PMI USA, ASME USA; Life Member IIGE Kolkotta and Member IEI Kolkotta.

P6


Organizational Change – What’s in it for me? By – Anju Agarwal

C

hange is a necessary part of growth and it is accelerating at an increasing rate. Factors, such as

Top reasons and remedies for employee dissatisfaction during an organizational change:

globalization, new technologies, mergers & acquisitions, shifting markets, structural changes and outsourcing, force

1 Lack of a shared vision

businesses to respond effectively in order to survive. Every organization must change - not only to survive, but also to

Employees fail to see the reason for the change. It is natural

retain its relevance in a world of intense competition,

for employees to view change, first from the perspective of

constant scientific progress, and rapid communication.

their own job security, and then from the needs of the

Though it is very clear that change is necessary, one

organization. Employee’s concern zone is limited to their

question why change efforts fail to achieve the desired

projects or working teams, and thus they fail to connect to

results, or why employees feel totally lost and frustrated

the big picture that the senior management is able to

during and after a change, or why the attrition rate

envision.

skyrockets during these organizational changes.

Managers need to define the change for the employee in as much detail and as

It is very important that change is identified by the

early

employees as a stimulator

Updates should also be

of

their

growth.

as

provided

One

possible. as

things

and

become

cannot drive and motivate

develop

an employee for long, by

clearer. The reason or

providing figures of future

rationale

benefits of organizational

must

changes. requires

Every an

be

for

change

passed

to

every single employee

change

constantly

adjustment

and

and it is very difficult to

consistently.

get a buy in from an

Employees should be able to see the clear

employee without framing

objectives

the change as a “What’s in

achieved

it for me? (WIFM)”.

reason for the change. Buy-in is also about personal benefit, and if employees don’t believe that they shall receive a certain level of individual benefit from the change, getting buy-in will always be a challenge.

by

be the

company wide changes.

To embrace change, people need to feel comfortable about the change; they need to understand and appreciate the

to

2 Lack of support, training and guidance Along with the change, comes the team alignment shifts. Employees may have new managers, new leadership, team members, policies, processes, locations or alterations of working hours.

This paper explores why employees are left unappreciated

Implementing change in an organization forces people to alter

and undervalued during corporate change programs and

how they relate to one another. Not only do their goals,

offers

can

processes and equipments change but the way they deal with

a

others in the organization changes. It causes anxiety, which

some

institutionalize

ideas

as

change

to

how

management

constantly evolving success story.

Save Earth, Go Green

a

corporation to

become

leads to resistance to the change.

P7


One way to counter this is through communication and ownership in the process. Involvement in formulating the education. The top management should instil the need of proposals to implement change as well as participation in the change with frequent and early communication to the task forces reduces the fear of the unknown and leads to employees. Managers should minimize uncertainties by commitment. addressing the employee’s needs and talk about any fears or concerns with the employees. They should educate their

5 Disengagement

employees to be “change-ready” as it serves two broad

Employees need to know what is expected of them. They need

purposes. First, it enhances employee’s understanding of

to believe that their needs are important and their value is

the organization’s business so that they comprehend both

acknowledged. They need to know how to contribute and

where and why change is necessary. Second, education

remain involved in organization.

provides employees with the necessary skills to implement change.

Organizations cannot afford to lose their skilled employees by causing them to disengage from the organizational changes.

3 Loss of direction

Managers should do their part in keeping their employees

Often during a change, there is chaos and uncertainty regarding the to-be policies and new processes. Old policies may need to be replaced, while the new policies and process are still not developed. This can cause confusion in the mind of employees and they feel that nobody is caring for them with respect to their self growth,

engaged and they should find projects which justify their skill set and experience. Employees should not feel that their skills and abilities have been devalued by the organization and managers should provide meaningful work to all employees.

6 Weak leadership To drive organizational change, one needs a very skilled and

both in monetary and professional terms. If senior managers can put these processes and new structures into place early in the change process, the rest of the change implementation will proceed more smoothly. As a direct manager, it is important to empathize and

matured set of leadership. Often it seems that people are promoted on a criterion not at all related to the skills needed to drive this change. This can be a serious mistake and can jeopardize the organizational change efforts.

listen to your people so that you understand their fears and

Serious consideration and thoughts should be given to the

work to address them.

drivers of these changes – the top management. They should either have had extensive experience in handling such

4 Lack of employee participation Often

after

the

initial

announcement

changes or must have previously shown their capabilities in of

a

big

organizational change, the senior management often delays to present the ancillary plans. They might take a long time

such situations.

7 Indifference to the change and loss of productivity

to create a final structure which they think is more

When people are forced to embrace change or do not see any

appropriate for sharing with the employees. But a

benefits for them in the change, the quality of human capital

prolonged roll-out can also exacerbate staff uncertainty

deteriorates. Highly energized employees start to lose their

about the future; heighten anxiety, and lower morale. This

passion and stop applying themselves to the process. They

leads to a communication gap between them and the

become distracted and lose interest in their current work

employees, who feel that they do not have any say or

responsibilities. Hence a very motivated employee becomes

inputs in the supporting decisions. Faced with forced

an indifferent employee. In the worst-case scenario, the

change, many employees feel threatened and believe that

valued employees leave the organization.

they will lose power, prestige, competence, and security. They feel that the situation is beyond their control and they fear the process.

A rewards and awards programme is an important binder for the

change

drive.

An

organization

should

properly

acknowledge and appreciate its people for their support for

Here, employee participation is necessary to keep them

change and constantly encourage them for their inputs in the

engaged

process and make sure that their voices are heard by the

with

the

changes.

Employees

should

be

encouraged to participate, as this will give them a sense of

Save Earth, Go Green

senior management.

P8


It’s not only the change that people resist, but the

As a manager, you also have a choice. You can either be blind

method of the organization’s change management.

to the various employee-perspective challenges that any form

Leaders need to identify the business imperative,

of change management brings or alienate your employees, or

communicate the vision, establish the parameters, and

you may acknowledge and work together these human

create a supportive environment with the employees so

components of the corporation to build a healthy and

they understand what is coming and what it means for

profitable enterprise that best survives and flourishes in the

them.

ambiguity of change.

As an employee, you have a choice. You can lie back and have it thrust upon you, whether you like it or not, or

References:

you can try to participate in that change and therefore

Joanne Mowat, The Herridge Group – Managing Organizational Change F. John Reh – Managing Change: Managing People’s Fear

have an input into its design and outcomes, to move the organization towards the goal. About Author

Anju has 13+ years of experience in IT. She has worked in various domains like Insurance Sector, Media Industry, Fleet Tracking and Medical Industry etc. Currently she is working as a Project Manager, responsible for designing and developing end to end IT solutions. She had worked in the technical role for more than 10 years and still cannot resist the temptation to fix errors in a team member’s code.

Ms. Anju Agarwal Project Manager Stryker, New Delhi

She is an MCA and a certified PMP. She is a passionate Project Manager, who would love to see a world where people acknowledge the work of PM's and would fully understand the significance of this role.

Quiz By – Abhijit Bharatkumar Answers to quiz – SYNERGY 4th Edition - http://www.pminorthindia.org/Synergy/Issue04/ 1-b, 2-b, 3-d, 4-d, 5-d

3

No winner for fourth edition

First correct entries will win a prize

To generate interest and increase the readership along with participation of members, Quiz has been designed based on the articles published in this edition. To attempt and Win a prize, please read all articles carefully. Do send your entries (pminicmag@pminorthindia.org), support your SNERGY…

Save Earth, Go Green

P9


5th Edition Quiz

Managing Complex Business Deliverables in Projects

Question 1 Which of the following activities can be considered project management? I – Quality control of an automobile manufacturing plant II – Budget setting for the next financial year of a venture capital firm. III – Construction of a new tower for a cellular communications company

A. B. C. D.

I only I and II only I, II and III II and III only

Question 2 Which of the following statements are true in regards to Risk Management? I – The risk register is the detail documentation of all risks associated to a particular project II – Risks always have a negative impact and not a positive one III – Risk Management is an active part in overall project management

A. B. C. D.

I only I and II only I, II and III II and III only

Organizational Change – What’s in it for me?

Question 3

Which of the following is NOT a part of emotional intelligence?

Question 4

According to article, which of the following is NOT a reason for employee dissatisfaction during organizational change?

A. B. C. D.

Understanding employee emotions Facility with words and languages Motivating employees and executing employee engagement Recognizing emotions in team members

A. B. C. D.

Lack of a Shared Vision Lack of infrastructure Lack of Support, Training and Guidance Indifference to the change and Loss of Productivity

Project Management Office – An Integrative Approach

Question 5 Which of the following is usually NOT a function of the Project Management Office (PMO)?

Question6 According to the article, which of the following is NOT a step that helped CDAC, Noida to achieve Capability Maturity Model Integration Level 5 index rating?

Save Earth, Go Green

A. B. C. D.

A. B. C. D.

Appointing the chief executive officer for the organization Providing expert judgement when required Act as a hub of central co-ordination of all projects Can also be responsible for direct management of a project

Appointing the chief executive officer for the organization Providing expert judgement when required Act as a hub of central co-ordination of all projects Can also be responsible for direct management of a project

P10


Cash Flow Management in large Infrastructure Projects

Question 7 Which of the following is NOT an element of Cash Flow Management according to the article?

A. B. C. D.

Estimating costs of different packages Predicting the timing of cash outflow Generate product sales for required cash generation Monitor the actual cash outflow

Question 8 Accordingly to the article, some of the processes required for efficient management of funds are listed below. Please suggest the correct order. I - Identification of cost heads II - Calculate the Cash Outflow based on estimated cost III - Calculate the Cash Outflow based on actual ordered cost and scheduled progress IV - Prepare contingency plan to minimize the deviation V - Monitor the actual cash outflow

A. B. C. D.

I – II – III – IV – V I – II – V – IV – III II – I – V – IV – III II – I – III – IV – V

A. B. C. D.

357,000 412,000 288,000 734,000

Rigidity to Agility - A Case Study

Question 9 Which qualities one should imbibe to adopt Agile?

A. B. C. D.

Transparency, Centre of Importance Truth, Honesty & Trust Being bossy, Me & Myself over team Lies, Dishonest & Distrust

Question 10 How many dollars did we save by saving man-hours in transforming to Agile?

About Author Abhijit is trained as a mechanical engineer from NIT, Bhopal and works as an Executive in Siemens, specializing in Piping & Plant design for the world's most efficient natural gas based power-plant projects. He has worked on projects in Germany, Oman and South Korea, as well as several standardized power plants for Siemens and has worked in India and Germany. Apart from Project Management, his other interests include finance and Mr. Abhijit Bharatkumar travelling. Siemens, India

Food for Thought It’s easy to stand in the crowd but it takes courage to stand alone. By - Father of Nation -Mahatma Gandhi Save Earth, Go Green

P11


Rigidity to Agility - A Case Study By – Prashant Malhotra

A

s the world grows leveraging the power of technology, which is expanding multi-fold, there is always

The product team had been working in waterfall methodology for a century or so. From

a threat from new or existing competitors in the market.

application

architects,

Customer loyalty may start shifting and they would think

database administrators to

twice on buying your products if they get better bargains.

application

How does one survive in such an environment where you

testers

need to produce better, faster & cheaper products?

engineers;

Companies till now had formulated strategies to meet at

played a critical role at

least one end of this triangle i.e. either by producing

various

cheaper products through mass production or outsourcing,

project lifecycle.

developers, &

support everyone

phases

of

the

producing better products by investing in vendors & employees etc. or by being ‘The First One’ to market. For past couple of years, companies have been revisiting their strategies as they could easily see the scope of meeting at least two corners of the better-faster-cheaper triangle. And with this, we saw the emergence of Agile In IT world, everybody nowadays is talking about Agile. In current scenario, if you don’t know Agile; people would see you as if you have just arrived from 18th century. Agile has many avatars and had been surviving in this world since 1950s. As this was the buzz word, we too wanted to be AGILE by snapping of our fingers in our organization but this was not sufficient. In order to transform ourselves into agile, we first went through white pages, articles & blogs by Agile Gurus. Then, to get a good grasp of the real potential & contribution of Agile, we attended multiple conferences, webinars too. Our immediate manager showcased the potential of agile to management and finally our management agreed upon to do a pilot run. Below is a case study wherein, we would like to present some facts as how our transformation to agile improved our results.

Journey The biggest task for anyone in adopting Agile was, is & will be “Changing of Attitude from I, me & myself to We & Ours”. Truth, Honesty & Trust are valued very high instead of hiding key facts to remain center of importance or Mavericks. With agile coming in, the focus was to equip all team members with attitude as “Jack of All, Master of Some”. Resources

were

encouraged

to

share

the

knowledge

overcoming their false loss of importance to product; as transparency

was

the

most

important

aspect.

Fault

acceptance attitude was given more importance instead of blame games. Walls were covered with Whiteboards that also acted as status-boards to give a clear picture to everyone on the progress & hurdles from letting the team move forward. Each & every Enhancement Request that spanned across multiple months was broken down to multiple tasks that could be covered in least possible time. The bridge of trust was built from both sides (Management & Team) as being a product team and estimations were taken from team members directly. The team members automatically turned personally responsible & accountable for delivery. There were separate tasks opened up for R & D which were earlier part of a feature

History The product roll-out used to happen once a year. Then as competition grew; there arose a need to deliver the product frequently and yet meeting the quality. The below

request. Buffer time which was one big culprit in any project would now no longer exist either at management’s end or at team’s end.

project management triangle always plays a role, no matter what methodology you follow.

Project Management – lighter side

If you perceive that there are four possible ways in which a procedure can go wrong, and circumvent these, then a fifth way will promptly develop. Overhead by -Kumar Saurabh, PMP® Save Earth, Go Green

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Below depicting an old work flow using a waterfall method. So, no matter what you do, how good you do & even if it’s best for you, your team or company; nothing counts or matters if

Old work flow

the results cannot be quantified. So, in order to measure as what’s done now versus what’s done earlier; we started analyzing data from our bug tracking software. Results

RootCause 23%

Coding Error Non Coding Error 77%

Earlier With agile coming into practice; the above cycle saw a change. With newer approach, we broke the big features &

Current

RootCause

phases to smaller ones. As the deliverables became smaller, quality team involvement commenced from understanding the requirement till delivery. Many implicit requirements that slipped through the cracks during design

Coding Error

42% 58%

& development phase were caught right up front and were explicitly made part of overall scope. Below is the diagram that depicts a smaller cycle as compared to the entire phase.

New work flow

Non Coding Error

The above diagram clearly shows that there has been a noticeable change between ‘Coding’ & ‘Non-Coding’ errors. Non-Coding errors have increased by about 17%. When we went deeper, we found that Requirements & Design errors had increased quite a bit (as seen in the below diagram).

7%

Results

RootCause

Coding Error

11%

Enhancement Requests

5%

Design Error 77%

Requirements

Earlier Current

Root Cause

Results & Measure – 17% Good or excellent are qualitative attributes to a result of task performed but these can be interpreted in different scale & style from person to person as each has his or her own definition or perspective. But if you show numbers such as 3 out of 5, or let’s say if 4 out 5; people can easily understand as good or excellent respectively.

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21% 4%

58%

Coding Error Enhancement Request Design Error Requirements

This made us curious to understand the real root cause of such a change in numbers.

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Upon analyzing, we came across that introduction of quality

For this, we took numbers reported by bug tracking software

/quality team member right in the beginning transformed

and approx cost of fixing a defect in various stages of SDLC.

implicit requirements to explicit ones. Their way of looking

To ease our calculations, below is the table that we can use

upon the functionality & technicality of a piece with the

as reference point –

entire system in background made the product owners & designers

revisit their work to incorporate every aspect

before handing over to the team to start off construction or

SDLC Phase Requirements

Cost of Fixing ($) 100

task.

Design

200

The above results were something that we noticed in our

Development & Testing

300

product delivery cycle in a one year period. The results may depend & vary from product to product & service to service.

Let’s assume that there total 100 bugs (earlier cycle &

After the results were quantified, transforming these

newer cycle), so cost of fixing would come out to be –

numbers for management to comprehend was the next big

Old cycle

step. So, we thought of two ways through which we could SDLC Phase

collate results in dollar value –

1 Saving of man hours to deliver workable software We calculated & compared costs incurred in delivering the software and we saved approximately 24% of man hours on yearly-product cycle basis.

Requirements Design Development & Testing Grand Total ($)

# of Bugs

Cost ($)

7 16 77

100 200 300

Total Cost ($) 700 3200 23100 27000

Converting man hours into

dollars were put to management. In our case, we were around 20 resources across the globe and if average

New cycle

resource is $30 an hour; we saved approximately $288K for

SDLC Phase

this year.

Requirements Design Development & Testing Grand Total ($)

2 Reducing the cost of fixing a bug It is a well known fact that cost of fixing a defect at an early stage is always lesser than at later stage as depicted

# of Bugs 17 25 58

Cost ($) 100 200 300

Total Cost ($) 1700 5000 17400 24100

From above calculations, its turns out that we saved approx

in the below diagram.

$2900 for every 100 bugs; the real figures would definitely be on higher side in a highly evolving product cycle.

500 450

3 Time to market

400 Customer

350 Test

$ dollars

300 Development

250 200 150

Design

dollar value but was easily accepted by our management. Turning agile gave advantage to change our direction on the fly based on market sentiments. We could now easily maneuver to meet the ongoing changes in expectations of

Requirement

100 0

Market growth is something we couldn’t really put into

customers. Customers were happy and ready to shell in extra dollars as we helped them remain in competition by

Time

using our fast evolving product.

Food for Thought Work is a means of living, it is not life itself. By - Father of Nation -Mahatma Gandhi Save Earth, Go Green

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The management saw the benefit and praised us and is This product has more number of centers of development across now buying in arguments easily on being agile, but we still the globe as compared to current one. feel we have a long way to go as, still some features of With customized or hybrid approach, we have achieved such an ours expand over months as partly delivered features improvement; so the bigger question is, should we move doesn’t add value to base product. forward to pure agile? If yes, how much scope of improvisation And obviously the other part is Reward. We got rewarded should we expect? Should we jump onto second product or by another product transformation which is bigger, should we first transform the first product fully? Any input, comment or response is more than welcome.

complicated.

About Author Prashant has 12+ yrs of work experience in IT, having cross functional experience in domain of CRM & CEM, HR (401K), and Consultancy &Membership lifecycle. In addition to an MBA from IIM Kozhikode in Finance & Operations, he is an MCA; and currently working as a Project Manager delivering end to end solutions. Building self propelled effective & Mr. Prashant Malhotra efficient teams is one of his mottos of life. Project Manager Aspire Systems

Project Management Office --- An Integrative Approach By – Shalu Gupta & R.T. Sundari

P

roject Management Office (PMO) is the central nerve of the any organization. Any project starts and ends with PMO. In projects like infrastructure or product development the right material used at the right time constitute 70% of the project execution, where as in IT projects Human resource utilization is the major that helps the project delivery in time and within the budget. This

Control Tower. It is therefore important to consult entire stakeholders to implement

PMO

effectively within the

organization. Integrative approach of PMO The objective of the restructuring of PMO is to improve project delivery in terms of schedule, budget and quality. To achieve the objective we have selected the cross breed of Weather

article highlights effective implementation and integrated Station and Control Tower. approach to PMO in organizations, by taking reference to such practice adopted in CDAC, Noida.

1 Merge QA with PMO:

PMO is constituted to help the project group to plan and

The first step taken was to merge the Quality Assurance (QA)

manage the project. The role of PMO should have an

with PMO. While PMO sets the process and method for project

integrated approach based on the nature of projects

execution, QA becomes the watch dog in process adherence.

running in the organization, be it, Weather Station or

QA has dual responsibility of the project and process audit.

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Project performance data and reports are collected by QA using various innovative tools and submitted to PMO, who manage the resource allocation and priority issues with the help of data.

2

1

Centralized Repository

The Centralized Repository of all project documents and codes was created with PMO having an administrative control. The baseline documents were uploaded in project

Stakeholder in Projects

repository for the stakeholders to use. This enabled the

The turf wars between PMO and project manager that usually arise when the Control Tower PMO is implemented. To minimize conflicting roles, the Program Managers are

project managers to monitor the activity systematically. The centralized repository helps in reducing the non-availability of project related documents.

brought into PMO fold to head the different project groups.

The Functional Organogram

PMO become one of the stakeholders in all projects. The existing structure consisted of groups organized around technical groups like Health Informatics, e-Governance,

•SRS •Client CR

•HLD •LLD

Language Technology and Embedded Systems. Project teams were formed within these groups, who were responsible

for

design,

development,

testing

and

Implementation

Design

Testing

Development

implementation. This resulted in more emphasis on coding and little importance was given to design, testing and documentation. A root cause analysis of the above problem brought out that it can be solved only with the proper restructuring of the existing system. How we did it…

•System Integration Testing

•Code •Unit Testing

Implementation Team: Responsible for interaction with the customers for understanding and freezing the requirements. They prepare the Software Requirement Specification (SRS) and submit it to the Design Team for designing. Design Team: Responsible for creating High Level Design (HLD) and Low Level Design (LLD) and their review by the Review Committee before they are handed over to the Development Team. Development Team: Responsible for Coding and Unit Accordingly a restructuring strategy was adopted by which

Testing and generating Test Reports.

the existing groups were demolished paving way to creation

Testing Team: Responsible for System Integration testing

of four verticals viz. Implementation, Design, Development

and generating Test Reports.

and Testing.

Due to this structure, the documentation has

become a MUST. It became a deliverable from one vertical to the other.

Food for Thought There is more to life than simply increasing its speed. By - Father of Nation -Mahatma Gandhi Save Earth, Go Green

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2

Benefits achieved

Coordination and Communication

Coordination

and

Communication

between

different

functional units were routed through PMO. Based on the functional area, the new and existing projects got registered in PMO after filling the project registration form.

The vertical functional group and horizontal project team of matrix helped us to speed up our journey towards CMMI Level 5 and finally achieving it..!! Some

3

the

benefits

obtained

by

restructuring

and

implementation of PMO include:

Schedule and Cost Estimation

The projects schedule and cost were estimated based on functional area and timeliness. As per estimation of resources projects cost were segregated among different functional areas. This helps PMO in monitoring the projects by each functional area in terms of schedule, cost and resource utilization.

4

of

Improvement of project management practices in the organization. Reduction in cost and schedule overrun by accurate evaluation of the schedule and cost estimates. Improved utilization of resources by centralized allocation of manpower and resources. Improved historical data collection for future projects by better documentation processes.

Monitoring and Control

Increased customer satisfaction through quality and timely

The processes carried out in the organization were

delivery of the projects.

mentored by experts and trainings were provided to functional

area

team

members

leading

to

effective

implementation of processes in the organization. PMO could track and control all deliverables of projects.

About Author Ms. Shalu Gupta, is working as Sr. Technical Officer ’in C-DAC Noida. She is PMP certified. She has nine years of experience in software development. She has worked in the field of NMS, SNMP, Optical comm., DSLAM OCR and Quality Assurance. She has worked in various companies like C-DoT, Wipro

Technology

and

Flextronics

Software

Systems.

Currently she is associated with the Quality Assurance Group. She has published 9 international and national research Ms. Shalu Gupta Senior Technical Officer C-DAC,Noida

papers. Her area of interest includes Software Quality Assurance and Software Metrics. About Author

R.T.Sundari is working as a consultant in C-DAC Noida. She has a post graduation in management and more than 30 years of experience in designing, development, testing and quality assurance. She has published 5 national research papers. She is currently heading the PMO and Quality assurance division.

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Ms.R. T. Sundari Consultant C-DAC,Noida

P17


Best Practice – Quality Assurance Maturity By – Chetan Mathur

Q

uality Management is often considered an overhead, but indispensable component of Project Management.

Increased go to production time performing additional

Essentially comprising of three vital components, quality

Fewer adherences to quality assurance process, thereby

management flows top-down within an organization’s

releasing products with defects in testing / control

hierarchy. This approach helps project managers understand

stage.

customer’s requirements precisely and consistently deliver

Defect seepage data is neither maintained nor managed.

the key results that stakeholders expect.

Increased Cost – Cost of Non Conformance.

Let’s look at the three vital areas of quality management: Defining the organization’s vision in terms of delivering quality – Quality Policy. Process

definition

implementation deliveries

testing to conform to quality standards.

Common Root Cause Analysis for Defect Seepage Inadequate base lined standards being followed

and

to

ensure

meet

their

objectives – Quality Assurance Make sure the results of what has been developed are what was

expected

Quality

Control. Clearly

visible,

the

key

differentiator between QA and QC is that while QA is process oriented, QC is product oriented. It is not an uncommon scenario whereby delivery

Unit / Component Development Standards

organizations are recalling their products from the markets

Development / Production best practices

months after they have been delivered, now at a huge cost

Performance Productivity Baselines

incur – The reason

-

They failed to implement Quality

Management as a matured process in its essence and failed

Unstructured Change Management Procedure

to capture and correct the defects internally.

Unstructured Reviews being performed

Common scenarios in Quality Management – Defect Seepage Approximate 60-70% of the defects are being captured

Work In Progress Reviews Document Reviews – Including Requirements Work plan, Requirements Analysis Documents, Enterprise Analysis, Design, Test Plan & Logs

at QC stage or even after release.

Review checklists not base lined across the Enterprise

Only 30-40% of defects are being captured internally.

and made available as Organizational process Assets.

Food for Thought Satisfaction lies in the effort, not in the attainment. Full effort is full victory. By - Father of Nation -Mahatma Gandhi Save Earth, Go Green

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Inadequate / Unstructured Testing performed:

Best practices for QA maturity

Product Level unit testing Integration testing

Development standards to be a derivative of best practices and industry standards.

Regression / Negative testing System Level Testing

Development standards should be base lined either across enterprise or for a customer or across a vertical. This should

Black / White Box Testing

be done in order to.

Un-available / Un-structured Test Data. Lack of detailed project planning

Avoid conflicts during implementation. Create

Project Reviews not defined / estimated.

synchronization

Project re-work based upon reviews not defined / estimated.

Optimum utilization of man-power.

Others

Save duplicate work / repetition cost.

Lack of organized team structure

reviewer

and

Same resources shared across development &

Formalize Change Management Procedure and make the customer / Delivery teams / Vendor / Partner aware of the

testing teams.

same.

Other than peer reviews, no cross team /

Formally Release Change Management procedure.

functional reviews performed

Conduct training sessions across stakeholder groups for

Others

change management. Track and report changes and change parameters.

Lack of documentation

Do Not Gold-Plate.

Project Plans not being developed, reviewed, approved and base lined.

Structure & Formalize Reviews

Test Plans, Test Cases, Test Logs and Test Data

Formally Release Review checklists for Component /

not developed, reviewed, approved and base

Unit and Document Reviews – Including Requirements

lined.

Work

Configuration

Management

not

plan,

Requirements

Documents,

Conduct training sessions across stakeholder groups for necessity and usability of the checklists.

Defect Level Pareto Chart

Track and report checklist compliance across projects. Review teams to be

Percentage Wise Pareto Analysis 16

15

Analysis

Enterprise Analysis, Design, Test Plan & Logs

implemented

across the projects.

18 16 14 12 10 8 6 4 2 0

between

developer.

structured

separately

than the development teams.

12

Reviews

12 9

10

10 8

&

associated

Re-work to be estimated

8

and workforce managed separately Percentage Wise Pareto Analysis

from

development. Stages of reviews to be planned including Peer, Functional,

Cross

Functional, Quality just to name a few. Have a “Review” Center of Excellence in place.

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P19


Structure & Formalize Testing Requirement

Traceability

across

all

Conclusion

testing

stages to be maintained.

Quality assurance (QA) consists of a means of monitoring the

Test Plans, Test Cases, Test Data and Test Logs

engineering processes and methods used to ensure quality.

to be reviewed and review logs maintained.

The purpose of Quality Assurance is to define and implement

Automation testing tools to be used as far as

the techniques, procedures, and methodologies that will be

possible.

used to assure timely delivery of the application / product

Testing teams to be structured separately than

that meets specified requirements within project resources.

the development teams. Testing to be estimated and workforce managed separately from development. Have a “Testing� Center of Excellence in place. Implement Release, Management.

Problem

and

Configuration

With a focus on improved Customer Satisfaction and enhanced business opportunities, a matured QA process aims at controlling defect seepage and enhancing the percentage of defects detected internally before being released to production to close to 80-90%.

Develop Requirements Work Plan – Make sure no

An un-matured QA Process

requirements fall through the cracks. Maintain Requirement Traceability across the life cycle of the project. 35% A matured QA Process 65% Defected detected before being released to Production

15%

Defected detected before being released to Production Defects detected post Release

Defects detected post Release 85%

About Author Chetan has rich 16 years of experience in End to End Program Delivery. He is a certified PMP and is also certified on ITIL and eTOM best practices and a member of IIBA and is a nominated Champion by PMI India. He has managed and delivered various end to end projects and programs from RFP, Discovery, Due-diligence, Transition (KT, Shadowing, and Reverse Shadowing), Transformation (Analysis, Design, Development, Testing & Implementation) to Application Support & Maintenance phases. Mr. Chetan Mathur Asst. Director - IT Sistema Shyam Teleservices Limited (MTS India)

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Chetan has been managing large teams and multiple projects, ensuring deliveries are completed on time & within budget and in strict compliance with quality systems/procedures in an onsite offshore model.

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Past Events: Chapter Networking / Knowledge Sharing Event at Jaipur, Rajasthan 25th March’2012

“4” PDUs

Rajasthan Chamber of Commerce & Industry Sukhadia Bhawan, M.I. Road, Jaipur

On 25 March, the chapter held “Project Management: Infrastructure and IT Projects” in Jaipur, Rajasthan. In an

Chief Guest Welcome

effort to conduct effective discussions on infrastructure projects, the chapter invited senior officials of the Rajasthan government. Mr. Vinod Garg, managing director, PROMAC, commenced the event, followed by an address by Mr. Manoj Gupta, president, PMI North India Chapter. Mr. Rakesh Verma, IAS, principle secretary, Planning Department, Rajasthan Government, was the chief guest and Mr. Atmaram Gupta, chairman, Federation of Rajasthan Trade and Industries, was the guest of honor. Highly experienced Subject Matter Experts participated in a panel discussion on “The Importance of Standard Practices for Efficient

and

Effective

Completion

of

Infrastructure

Projects.” The panelists were Mr. Mukund Joshi, chief engineer, Central Public Works Department – North Zone - III; Brig.

Balbir

Singh,

additional

command

chief

engineer,

Headquarters, South Western Command – Indian Army; Mr. Puneet Mittal, managing director and CEO, Pratham Software; Mr. Alok Ranjan, chairman, Indian Institute of Architects, Jaipur Chapter; Mr. Tushar Sogani, secretary, Indian Institute of Architects, Jaipur Chapter; and Dr. Vanita Ahuja, assistant professor, Gautam Buddha University, Greater Noida. Mr

Panel Discussion

Hemant Seigell shared Risk Management Best Practices.

13th – 15th April

PMI Agile Certification Training Workshop

“21” PDUs

The two and a half day training, conducted by Mr. Hiren Doshi, trainer, Practice Agile, served as a primer for those involved in teams adopting agile techniques or those planning to take the PMI Agile Certified Practitioner (ACP) examination. Watch out this space for upcoming events. Be involved

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Past One Year, Authors Felicitation

We are grateful to you to nurture SYNERGY to 1 year old…

SYNERGY First Edition

SYNERGY Second Edition

Mr. G Ravi Mr. Kumar Saurabh Mr. Nirmallya Kar Mr. Amit Tambi Mr. Maneesh Dutt Mr. Navin Das Ms. Archana Sharma Mr. Hemant Seigell Mr. Piyush Govil

Mr. G Ravi Mr. Kumar Saurabh Mr. Nirmallya Kar Mr. Maneesh Dutt Ms. Pauline Jacqueline Mr. Prabhu Jha Mr. Tathagat Varma Mr. Hemant Seigell Mr. Piyush Govil

SYNERGY Third Edition

SYNERGY Fourth Edition

Ms. Vidhi Singh Mr. Vikas Dua Mr. Chetan Mathur Mr. Hemant Seigell Ms. Pauline Jacqueline Mr. Suhail Qadir Mr. Anshul Chetal Mr. Kumar Saurabh Mr. Piyush Govil

Mr. Prashant Malhotra Mr. Vikas Dua Mr. Chetan Mathur Mr. Asim Prasad Mr. Arun Gupta Mr. Abhijit Bharatkumar Ms. Vanita Ahuja Mr. Kumar Saurabh Mr. Piyush Govil

Special thanks to Mr. Pritam Gautam – VP Technology - PMINIC for publishing every edition on Chapter Website. http://www.pminorthindia.org/Synergy/Issue04/ Previous Editions

http://www.pminorthindia.org/Synergy/Issue03/ http://www.pminorthindia.org/Synergy/Issue02/ http://www.pminorthindia.org/Synergy/Issue01/

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Renew your membership today visit chapter website Editorial Team

http://www.pminorthindia.org

Piyush Govil

Manoj Gupta

Kumar Saurabh

Felix George

Pooja Kapoor

Nitin M Singh Prashant Malhotra

Abhijit B Kumar Hemant Seigell

Nirmallya Kar

Jitin Bindlish

Editorial Team welcomes Articles, Case Studies, White Papers, etc. for their ongoing endeavor. We always welcome suggestions or ideas for improvement. Kindly submit at piyush.govil@pminorthindia.org pminicmag@pminorthindia.org

PMI North India Chapter http://www.pminorthindia.org pminicmag@pminorthindia.org Save Earth, Go Green

Synergy Issue 05  

PMI North India Chapter Quarterly e-Magazine Issue 05

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