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Risk Management – Is this really necessary?

Risk ManagementArticle Written by Gwen Miller, PMP 

Anyone who has been on a project team should be aware of what risk management is and why it is needed.  If we understand the intent for managing project risks, then why does it seem that risk management is the least practiced knowledge area in project management? 

Purpose of Risk Management 

Decreasing the likelihood and impact of negative events or increasing the likelihood and impact of positive events is the purpose for risk management processes.  But I find that many projects tend to focus on the negative characteristics of risk.  Could this be a clue leading us to the reason or reasons that risk management processes seem to be nonessential? 

Don’t Shoot the Messenger! 

Going to leadership and owning up to risk events occurring on the project could be confused with negativity because of the focus on negative events.  I have experienced, first hand, environments where the C-level executives would advise the project managers, that s/he only wanted to hear ‘good news’.  And they would emphasize the GOOD NEWS part. 

You get the drift.  The flip side of the coin, bring bad news and be prepared.  Shooting the messenger never solved the problem.  In this organization, the culture of ‘only good news’ deterred project team members from bringing impending risks to the attention of leadership. 

Differing Views of Risk Management 

Risk management processes are perceived to be extra work, additional cost to the project, and inhibit creativity.  Or that facilitating scheduled risk review meetings create a ‘negative vibe’ with those associated with the project because the focus is on reasons that the project might fail. 

As project managers, we need to demonstrate that effective risk management is the best tool, and when used can increase the likelihood of project success.  We need to provide the evidence that supports the claim.  Walk the talk. 

Risk Attitude Adjustment 

One way to garner buy-in and support for risk management from project sponsors, C-level executives or leadership is to clarify the benefits of integrating risk planning, analysis and response efforts into the project plan.  This will result in sufficient resources being assigned to deal with issues caused by risk events when, and if, they occur.  The results should be fewer surprises, the team feels prepared, and the project should be delivered within agreed upon parameters.  

The project should deliver the full ROI for which it was undertaken.  This is the benefit derived from delivering the project on time, on budget, and to specifications.  The proof that will show those who think that risk management only focuses on the ‘negative’ and is nothing more than a prediction of doom and gloom, can and does have a positive impact on project results. 

Does the leadership in your organization need a risk attitude adjustment?  Show them the benefits!! 

 

© 2011  Gwen Miller  All Rights Reserved.

What is the difference between Portfolio Management and the PMO?

Article Written by Gwen Miller, PMP


You may look at the question and say ‘duh, anyone can tell the difference between Portfolio Management and the PMO’.  Could the PMO be a Portfolio Management Office that is responsible for Portfolio Management? Or could it be two separate and distinct items in the Project Management world.  Let’s take a closer look.

Portfolio Management

Portfolio Management is a group of processes used to manage the portfolio of project and programs for an organization.  Those processes include identifying, selecting, prioritizing, monitoring and reporting.  While the portfolios can big or small, they are aligned with strategic business goals to attain business value.  This could be increased market share, improvement in cash flow, etc.  There is some ‘benefit’ obtained by the components of the portfolio that have a direct effect on the bottom line of the organization and the monitoring and reporting provide the insight into whether that benefit will/will not be obtained.

 

PMO – Which one is your flavor?

The PMO is a group or department in the organization.  It could be a Portfolio Management Office, Program Management Office, or a Project Management Office. This department could report to the CIO, CFO, CTO, or even the CEO.

 

The Portfolio Management Office

The Portfolio Management Office is a strategic group or department that works closely with executive leadership to focus organizational resources on those initiatives that align with corporate strategy. This group executes and refines the processes that were defined in Portfolio Management above.  In some organizations this is called a Project Portfolio Management Office (PPMO) so its function and focus is not confused with the Project Management Office (PMO).

 

The Program Management Office

The Program Management Office (PgMO) unlike the Portfolio Management or Project Management Office can be temporary in nature and only exists as long as the program for which it was established continues.  Once the program completes the Program Management Office can be dismantled.  Most organizations would have established more than one program and the Program Office would live on.  The focus of this department is the methodology, tool and techniques to realize the efficiencies of managing the constituent projects of the program as a whole rather than individually.  The Program Manager manages the interdependencies of the program as a whole and in doing so, has increased the probability that the organization will successfully derive the benefits that the program was intended to deliver.

 

The Project Management Office

The Project Management Office (PMO) is the department that usually defines and refines the standardized project management processes.  By instituting standard processes, which are consistently used by all departments for managing projects, the organization should reap the benefits of better managed projects with more predictable results.  The PMO is a resource for project management documentation, governance, and project metrics.  This group reviews their processes to continually improve project delivery.

 

A portfolio of projects and programs can be administered in a Project Management Office and/or a Portfolio Management Office.  The organization’s leadership will determine the name of the department and the services that it will provide.  There are many different configurations with different names that deliver relatively similar services.

Just remember that Portfolio Management is a process and the PMO is a department where that process is executed.  Who said this stuff was boring?

 

© 2011 Gwen Miller.  All Rights Reserved.

 

PMP Exam Prep versus Project Management Training

Article Written by Gwen Miller, PMP

I think there is some confusion regarding preparing for the PMP Exam and Project Management Training.  Let’s try to get some clarity to understand what to expect and why.

These are the requirements to apply to write the PMP exam; you must have either:

 

  • A 4 year degree (bachelor’s or global equivalent), 3 years of project management experience (accumulated at least 4500 hours leading and directing projects) and 35 hours of project management training.

OR

  • A secondary diploma (high school or global equivalent), 5 years project management experience (accumulated at least 7500 hours leading and directing projects) and 35 hours of project management training.

 

PMP Exam Prep

 

PMP Exam prep classes are just that, Exam Prep.  The focus is on mastering a passing grade on the exam.  The exam is 200 multiple choice questions that you are provided 4 hours to complete.  There are 25 pre-test questions on the test so to pass you must get 106 out of 175 questions (61%) correct to pass.

 

The classes should actually be called PMP Exam Taking Approach and Practice.  Why?  Because that is what you will be doing.  Discussing exam taking tactics to ensure you have enough time to answer all 200 questions and completing practice tests to validate the approach.

 

The 200 questions are based on key concepts, inputs, outputs, tools and techniques used in managing projects as laid out in the PMBOK 4th Edition (Project Management Body of Knowledge).  You will need to know how the 5 process groups (Initiating, Planning, Executing, Monitoring and Controlling, and Closing) and the 42 logically grouped processes are integrated and applied in a project situation.

 

The class facilitator assumes the students have the requisite amount of project management experience and therefore, the knowledge to answer the test questions.  This is NOT project management training, even though the number of hours of ‘training’ received for the exam prep can be used to meet the 35 hours of training requirement.

 

Project Management Training

Project Management Training concentrates on gaining knowledge about project management best practices and processes as detailed in the PMBOK.  Project Management training can focus on one knowledge area such as Scope, Communications, or Quality.  Each knowledge area’s processes are discussed in detail as well as how they interact with the processes of the other knowledge areas.

 

Key terms, concepts, formulas, tools and techniques, inputs and outputs are covered through practical exercises meant to assist the student in acquiring, developing and applying the essential knowledge in a simulated project environment.  Although the knowledge areas are studied as discrete components, training addresses where the overlap and integration points occur with the other areas.

 

This training delivers a well rounded approach to understanding all the nuances of the 42 processes and how all can be used within the 5 high level process groups.  By the end of this type project management training program, you will know ‘everything you ever wanted to know about project management but were afraid to ask’.

 

There are other project management training programs that focus on some of the higher level functions of project management, such as programs, portfolios and PMO’s and developing soft skills such as leadership, conflict management and team building to name a few.  Some training programs concentrate on one of the 5 high level process groups like Project Planning.  This high level process group (planning) can make or break your project if not done correctly, or not done at all.  Definitely one to put on your list for a future training opportunity.

 

Do you see the difference?

 

© 2011  Gwen Miller, PMP

 

 

So is this a Project, Program, or Portfolio? Can you tell the difference?

Article Written by Gwen Miller, PMP

Project Managers and project management in general has its own lexicon.  Acronyms abound when we speak PM.  And we tend to mix terms causing further confusion.  Programs are projects, projects are programs and then we add project portfolio to the mix.  YIKES!!  Can we have a cheat sheet, please??

Portfolios contain the projects and programs that are linked to strategic business objectives.  These objectives are defined by the organization’s strategic plan.  An organization can have more than one portfolio, each addressing distinct business areas (like marketing) or objectives (introducing products into a new market).

The portfolios exhibit the investments (projects and programs) planned or made by the organization.  If projects or programs do not align with strategic objectives, it most likely will not become a part of the portfolio.  Also, changes to the strategic business objectives will require a re-alignment of the portfolio.

Programs consist of multiple projects.  The projects are related by virtue of common results or collective capability that the program will deliver.  There is a benefit that will be derived when the program concludes.  A good example of a program is Extreme Home Makeover.

To build the house, numerous discrete projects execute simultaneously, but are coordinated to obtain benefits (the completed house) and control of the end result that would not be possible if managed individually.  There are programs where projects deliver benefits incrementally, before the program completes. An example of this is a process improvement program that consists of multiple projects in the program.

Last, but not least, projects.  Projects are tactical in nature whereas programs and portfolios are more strategic.  Now don’t get me wrong, a project should be linked to a strategy.  The company is making an investment for a reason.  It is a part of achieving a strategic objective, and does not have to be a part of a program to be in the portfolio.  It can be a lone wolf.  But a project can be undertaken for other reasons, such as implementing new regulations.

So to sum it all up:

  • · Portfolios consist of projects and programs
  • Must align with strategic objectives
  • · Active for a very long time
  • · Reviewed and revised if strategic objectives change
  • · Programs consist of projects
  • · Active until all components are delivered
  • · Projects within the program can deliver their benefits incrementally or when all the projects of the program are  finished.  Then the program is retired
  • · Projects are more tactical in nature, a temporary initiative, with a defined start and end date, undertaken to meet unique goals and objectives, to bring about beneficial change or business value.

Can you tell the difference now?

 

© 2011  Gwen Miller, PMP