“Lean Agile” for Project and Portfolio Management (PPM...

PM World Journal Lean Agile for Project & Portfolio Management Efficiency Vol. II, Issue XI – November 2013 Sethu Kalyanakrishnan www.pmworldjournal.net Second Edition

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© 2013 Sethu Kalyanakrishnan www.pmworldlibrary.net of 20

“Lean Agile” for Project and Portfolio Management (PPM) Efficiency

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Sethuraman Kalyanakrishnan

Capgemini Financial Services USA Incorporated

Abstract Innovation in today’s fast paced business environment is driven by the critical need to ‘learn’ and ‘respond’ to Customer requirements ‘rapidly’. Organizations continuously try to increase focus on the Customer and Market and stay competitive by exploring and implementing Software development methodologies and principles that deliver continuous ‘value’ and vigorously ‘eliminate’ anything that is not adding value. The new age Software development has been transformed by ‘Agile’ development methods. In Agile methods, instead of building the whole product, a smallest possible useful part is built and given to users in two to four weeks leading to rapid feedback, testing and adjustments. In addition, functional software is available much sooner compared to traditional development cycles. Agile has much similarity with ‘Lean’ which comes from Lean Manufacturing and is a set of principles for achieving quality, speed & customer alignment. Lean says to relentlessly eliminate anything that isn’t adding value and only work on what we absolutely need to be doing at this moment in time. This white paper provides an insight to how we can adapt the Lean and Agile principles successfully to increase the efficiency of Project and Portfolio Management (PPM) processes within the Organization. We discuss the implementation approach, the challenges and the lessons learnt. The paper also provides guidelines and recommendations on the Lean and Agile tools that can be used by organizations to improve their approach to implement IT PPM solutions and enhance their success.

Introduction Innovation in today’s fast paced business environment is driven by the critical need to ‘learn’ and ‘respond’ to Customer requirements ‘rapidly’. Organizations continuously try to increase focus on the Customer and Market and stay competitive by exploring and

1 Second Editions are previously published papers that have continued relevance in today’s project

management world, or which were originally published in conference proceedings or in a language other than English. Original publication acknowledged; authors retain copyright. This paper was originally presented at the 7

th Annual UT Dallas Project Management Symposium in Richardson, Texas, USA in

August 2013. It is republished here with the permission of the author and UT Dallas.

http://www.pmworldjournal.net/

http://www.pmworldlibrary.net/

http://en.wikipedia.org/wiki/Lean_manufacturing


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implementing Software development methodologies and principles that deliver continuous ‘value’ and vigorously ‘eliminate’ anything that is not adding value. The new age Software development has been transformed by ‘Agile’ development methods. In Agile methods, instead of building the whole product, a smallest possible useful part is built and given to users in two to four weeks leading to rapid feedback, testing and adjustments. In addition, functional software is available much sooner compared to traditional development cycles. Agile has much similarity with ‘Lean’ which comes from Lean Manufacturing and is a set of principles for achieving quality, speed & customer alignment. Lean says to relentlessly eliminate anything that isn’t adding value and only work on what we absolutely need to be doing at this moment in time. This white paper provides an insight to how we adapted the Lean Six Sigma and Agile principles successfully to increase the efficiency of Project and Portfolio Management (PPM) processes within the Organization in our case. We discuss the implementation approach, the challenges and the lessons learnt. The paper also provides thoughts and recommendations how the Lean and Agile tools that can be used by organizations to improve their approach to implement IT PPM solutions and enhance their success.

Agile Adoption increases and influences the PPM market The PPM (Project and Portfolio Management) market has been deeply influenced by the adoption of lean governance in support of agile development. Organizational adoption of agile methods has shown an increasing trend in the past few years.

Agile Software Development permanently changes Project Execution and Governance

Over 40% of companies have adopted Agile, but less than 20% have scaled Agile across the Enterprise

Demand for business agility fuels adoption of Agile development techniques that

can deliver differentiating business technology (BT) solutions within accelerated time frames

Traditional PPM tooling is in a stage of change and renewal to support “Agile”

PPM market segmentation has much clearer delineation of ‘above-the-line’ and

‘below-the-line’ PPM, based on changes driven in large part by the adoption of lean governance in support of “Agile” development





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The Agile Manifesto This helps in understanding of the Agile thinking.




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Principles behind the Agile Manifesto

1. Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.

2. Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.

3. Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.

4. Business people and developers must work together daily throughout the project. 5. Build projects around motivated individuals. Give them the environment and

support they need, and trust them to get the job done. 6. The most efficient and effective method of conveying information to and within a

development team is face-to-face conversation. 7. Working software is the primary measure of progress. 8. Agile processes promote sustainable development. The sponsors, developers,

and users should be able to maintain a constant pace indefinitely. 9. Continuous attention to technical excellence and good design enhances agility. 10. Simplicity--the art of maximizing the amount of work not done--is essential. 11. The best architectures, requirements, and designs emerge from self-organizing

teams. 12. At regular intervals, the team reflects on how to become more effective, then

tunes and adjusts its behavior accordingly.

Lean Thinking Lean is a set of thinking principles that focuses on continuous optimization of work and the way of work. Lean (or lean thinking) is the English name—popularized by MIT researchers—to describe the system now known as the ‘Toyota Way’ inside the company that created it. The Lean Thinking House The figure below summarizes the modern Toyota Way in a “lean thinking house” diagram. The following are the major elements of the house.

1. Goal 2. Foundation 3. Pillar – Respect for People 4. Pillar – Continuous Improvement 5. 14 principles 6. Lean product development




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Lean Six Sigma Six Sigma is a set of tools and strategies for process improvement developed by Motorola in the mid 80’s. Though it was initially associated a lot with the manufacturing processes, today it is used across multiple industries. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. Lean Six Sigma is a managerial concept combining Lean and Six Sigma that results in the elimination of wastes and provision of goods and service at the best quality. The Lean Six Sigma projects comprise the Lean's waste elimination projects and the Six Sigma projects based on the critical to quality characteristics. Lean, Six Sigma and Agile can be a powerful combination Scrum as an Agile framework for development of complex products and has distinct practices that match the Lean principles well. We infer that Agile Scrum and Lean complement each other. Six Sigma is a well-known methodology to identify root causes



http://en.wikipedia.org/wiki/Motorola

http://en.wikipedia.org/wiki/Statistical_dispersion

http://en.wikipedia.org/wiki/Manufacturing

http://en.wikipedia.org/wiki/Business_process


http://en.wikipedia.org/wiki/Six_Sigma


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and fix defects. These 3 methods can co-exist to deliver a powerful methodology to implement PPM (Project and Portfolio Management) Solutions.

Background – Our Case PMO was investigating the ability to track Project Financial data for the IT Organization. There is an inability to track near real time Project Financial Forecast vs. Actual Cost data for project and this lead to

Manual effort in data collection Inability to track accurate and real time portfolio/program costs Lack of data driven management decisions

There was a need to streamline project budget, forecast and actual cost tracking process to provide real time project cost visibility. We were tasked with this initiative to streamline the project financial management processes. We believed that adopting a hybrid approach using Lean Six Sigma and Agile Scrum principles would allow us to investigate the process from a holistic perspective rather than focusing our energy on just the need at hand.

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5

9

11

6

10

12




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Hybrid Approach

We developed a high level phased plan based on the decided approach.




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Gathering Voice of the Customer We identified the 30 key individuals from different teams as key stakeholders of the process based on initial knowledge of the as-is process. To facilitate gathering of the Voice of the Customer (VOC) we finalized the use of the following tools.

Individual interviews

Focus interviews

Brainstorming sessions

Affinity Diagrams

Workshops The brainstorming sessions provided key insight on pain areas within key as-is processes and sub-processes. Based on 20 individual interviews, 4 brainstorming sessions, 25 focus interviews and 2 workshops, the key focus areas were identified.




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Key Focus Areas

The next step was mapping the as-is processes using SIPOC based on inputs from the various interviews and brainstorming sessions with the key stakeholders. The as-is




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process maps provided a powerful visual story of the process steps and the key actors involved.

Value Stream Analysis To measure the as-is process and to understand it better we chose to use the value stream map. Value stream mapping is a lean manufacturing technique used to analyze and design the flow of materials and information required to bring a product or service to a consumer. The team defined the data collection questionnaire. We conducted focus interviews with a sample of key stakeholders and available systems to gather data on the as-is process. The value Stream Map for as-is process was developed based on the data collection.

Project Request Process

Se

rvic

e lin

es

IT R

ela

tio

nsh

ip M

gm

tIT

PM

OIT

Le

ad

ers

hip

Pro

ject

Go

ve

rna

nce

Bu

isn

ess

Identification Inception Elaboration

If Needed

If Needed

If Needed

Yes Approved?

Elaborate

High Level

Requirements

Construction

Yes

Estimate

over $100K?

Create

Functional

Requirements

Document

Approved?NoNo

Create

Business

Requirements

Document

10% Over

Approved

Estimate

Notify

Requester

Project Manager

Assigned to

Task

Create New

Clarity

Project

Provide High

Level

Requirements

Close Task in

Planning Project

Complete

Estimate

Template

Review High

Level Estimates

Submit Process

Form to PMO

Engage Service

by Submitting

the Business

Requirements

Document

Approved?Notify

Requester

Submit High Level

Requirements and

Estimate to

Portfolio

Managers

Add Task to

Discretionary

Planning Project

Submit Process

Form to PMO

Yes

Continue to

Construction

Obtain CIO

Approval

Escalation

Process

Notify

Requester

No

Add Task to

Discretionary

Planning Project

No

Refine

Estimate and

Project Scope

as Needed

Submit Project

Request

Review Request

in Workspace

Program

Management

Process

Engage

Business

Project Manager

Assigned to

Task

IT Director

Approves

Cost

Yes

No

Create New

Clarity

Project

Update

Business

Requirements

Document As

Needed

Yes

Provide High

Level Estimates

Fin

ance T

eam

Pro

ject

Manager(

s)

Pro

gra

m

Manager(

s)

Functional

Mana

ger

Busin

ess

Port

folio

Ma

na

ger

Financial Budgeting Consumption Budget Process

Go

No-Go

Prepare First

Pass Budget

Enter Budget

data in the

Planning

Share point

tool

Provide

inputs for

High Level

Estimates

Upload Budget

data into Financial

planning tool

Various tools used:

Excel Spreadsheets

MS Access Database

Review/

Approve

Budget

Enter

Capabilities in

the Planning

Sharepoint

Tool

Provide

inputs for

High Level

Estimates

Send Second

Pass Budget

Data

Send budget

for review

Send First Pass

Budget Data

Provide

inputs for

High Level

Estimates

Identify and

Define

Capabilities

Calculate $

values for SAP

budget by the

Business area

Review First

Pass Budget

Upload Budget

data into SAP

Receive

Request to

provide SAP

budget

Freeze Final

Budget





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The analysis highlighted several pain areas in the overall process and we were able to group them in to the following logical groups.

Ver. 9.0Value Stream Map for Project Financial Mgmt Process

Supplier

Process groups,

Service lines

AS-IS State

CustomerCIO office,

Process groups,

IT Finance,

Business Functions,

Service lines

Process groups,

PM

Estimation

(Capability level)

Process groups,

ESL

IT Portfolio

Planning

Process groups,

IT Finance

IT Portfolio Data

Reporting

OPD – Over Production

OPC – Over Processing

REW – Rework / Defect

PER – Underutilized personnel

Process groups,

ESL, Business

Functions, CIO’s

office

Mgmt Review

Process

PM, Process

groups, ESL,

Business

Functions

Project Initiation

Process

(SAP,Clarity)

PM, ESL

SOW/

Contracting

PM, Process

Groups, IT

Finance

Actuals Tracking

Process Groups,

IT Finance

Variance

Reporting

x: Capability

description

y: Labor hours,

timelines, cost

estimates

Tool: Excel (non-std),

email, phone, word

doc

Waste: WTG, REW

x: Capability level cost

estimates

y:Capex/Opex and

OCM Opex break-up

Tool: SharePoint

Waste: MAW, REW

x: Capability wise cost

estimates

y: Business function

wise totals, Capex/

Opex and OCM opex

break-up

Tool: SharePoint portal

x: Cost estimates,

resource plan,

capability prioritization

y: Prioritized &

approved capabilities

Tool: Meetings.

PowerPoint,

SharePoint reports

Waste: WTG

x: Approved

capabilities, approved

budgets

y: SAP AFE,CIO, SIO,

Clarity Programs /

Projects

Tool: SAP, Clarity

x: Project plan

y: SOW/

Contracts

Tool: Email,

Fax, SOW/

Contract docs

Waste: WTG,

MAW

x: Invoices, PO s,

Timecards

y: Actual costs

(estimated)

Tool: SAP reports

(AFE, CIO), Excel (CIO

Expense reports),

Clarity effort reports

Waste: WTG, MAW

x: Budgeted (AFE) and

actual cost (estimated

& real)

y: Cost variance

Tool: Excel, Clarity

reports, SAP reports

Waste: WTG, MAW,

DEF (%)

Budget calendar, 6 months,

Email

CT – 4 hrs/month CT – 3 Weeks CT – 8 Hrs

LT – 2 Wk

CT – 20 min/run,

10 runs/3 months

LT - 0

CT - 2.5 Wk

LT - 0

Wastes Identifier

TRN – Transport

INV – Inventory

MAW – Movement / Manual Work

WTG – Waiting / Approval Time

LegendCT – Cycle time

LT – Lead time

1. Multiple Approaches for Estimation

a. Cost based on Blended

b. No of hours

c. Cost based on Actual

2.Different templates used

3.Email, Word doc, excel formats used

CIO Office

Mgmt Review request ,3

months, Email Request for

Estimates,

3 months, Email

Process groups,

PM

Estimation

(Project level)

Request for

Estimates,

Daily, Email

Waste: WTG

Approved

Budget, 3

months, Email

PM, ESL

Time

Tracking

x: Labor hours

y: Clarity Effort

Reports

Tool: Clarity

Pain Areas 1.All resources do not track time in Clarity

a.Employees

b.Contractors,

c.Vendors (Fixed Price and T&M)

1.All SOWs do not track # of resource, total effort

required, rate per resource, roles etc

2.Cannot track Fixed Prices vs Time and Material

vs Hybrid projects in Clarity

1.Need task level Capex/Opex categorization

2.Diificult to meet SOP 98 guidelines at a project

task level

3.Need SIO set up guidelines

4.SAP Fin data does not flow back to Clarity.

5.Cannot tie an SAP Fin qualifier back to a project

in Clarity

1.Difficult to track project burn rate

2.Heavy manual work to track actual costs

3.No single source of data or a real time view of plan vs

actuals

4.Project level metrics like CPI, SPI not tracked

1.Project level forecasting is not in place

2.PMs need to included in invoice

verification and approval process

3.Invoice to SAP Fin qualifier to Clarity

project mapping is not readily available

CT – 3 days/month CT – 5 days /month

CT – Tier1,2 à 2 Wk

CT – Tier 3 – 1 day

50 Tier 3 requests

per monthCT – 4 Weeks




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Based on these logical areas, several streams of work were identified to be part of the overall backlog for this initiative. For the purposes of this paper, as an example, we will discuss further on the project financial tracking stream briefly. The data analysis for the stream is shown below. Clearly the process cycle time was well outside the specification limits and needed further analysis.

The significant ‘X’s The analysis uncovered the driving factors that were causing the challenges.

28252219161310741

135

120

105

In

div

idu

al

Va

lue

_X=115.37

UCL=132.79

LCL=97.94

28252219161310741

30

15

0

Mo

vin

g R

an

ge

__MR=6.55

UCL=21.41

LCL=0

3025201510

125

115

105

Observation

Va

lue

s

120100806040200

LSL USL

LSL 1

USL 40

Specifications

130120110100

Within

Overall

Specs

StDev 5.808

C p 1.12

C pk -4.33

PPM 1000000.00

Within

StDev 6.840

Pp 0.95

Ppk -3.67

C pm *

PPM 1000000.00

O v erall

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Cycle Time Process Capability - Six Pack Analysis

I Chart

Moving Range Chart

Last 25 Observations

Capability Histogram

Normal Prob PlotAD: 0.568, P: 0.129

Capability Plot




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SOW/

Contract Creation

HOW MUCH?

Create Project

Financials

in SAP

Project

High Level

Estimates

HOW?

SPECIFICALLY?

Invoices

Reconciliation

Project

Status

Tracking

ACCURATE

EFFORT?

CORRECT

COST CENTER?

ONBUDGET?

ON SCHEDULE?

BURN RATE?

WHEN?

WHAT?

CAPEX/OPEX?

• How do we track Project Burn Rate today?

• Do we have all the resources track time ?

• How can we track Plan vs. Actual Effort ?

• How can we track Estimated Cost vs. Actual Cost?

•

•Could we avoid manual work to summarize Project/Program

Financial status by utilizing a PPM tool?

Challenges

• All resources to enter time in a tool•Employees

•Vendors

•Contractors

• Use a tool to forecast project cost in

$ on monthly basis

• Refine forecasts periodically

• Track plan Vs. actual using a tool

Driving Xs

-

Data

Financial

Time Project

Lack of Real

Methodology

Tool

Resource Rate

Time

tooltrack time in a centralAll resources do not

tracked in a central toolResource rates are not

availableFinancial reporting to PMs not

vs. Actuals is not presentAutomated tracking of Forecast

financialsNo Central tool to track project

processes are not establishedProject financials tracking

central toolProject forecast not tracked in a

establishedProject forecasting processes not

Project Financial Data - Challenges




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Solution Alternatives The potential solutions were brainstormed to evaluate which one would best eliminate the root causes and meet the need. We defined multiple solution selection criteria that included

Ease of use

User Interface

Accuracy of Data

Real time Data

Ease of Reporting There was a weight and scoring scale established for comparing the solution alternatives. (Illustrative example below)

Implementation We used the Agile Scrum methodology for implementation. Based on the selected solution, the product backlog was created and updated with user stories from the various streams. The scrum onsite and offshore teams worked in sync to deliver the releases in 3 week sprint cycles.

Summary:

• Solution 3 –is the best

solution option to address

the root causes and with

the maximum score.

Solution Selection and Prioritization

Project Description

(Project financial) Ease

of use

Use

r In

terf

ace

Acc

ura

cy o

f D

ata

Real t

ime D

ata

Ease

of R

eport

ing

Importance weight>> 10 8 10 6 8

Solution 1 9 1 1 1 3 138

Solution 2 3 3 9 9 3 222

Solution 3 9 9 9 9 3 330




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Effective Change Management: The success of the solution and its adoption depended upon an effective change management strategy. The focus was to Align- People, Process, and Tools to achieve maximized value.

Adopt industry best practices in defining processes

Leverage market leading PPM tool to enable processes

Improve user maturity by providing tool training in line with standard processes




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Multi-Channel Communication Effective Training

User Quick Reference Cards

Rollout and Monitoring The solution was implemented to a pilot group of 400 resources and 500 projects. Key data elements were established and metrics to be tracked were identified. Audit plan was established with weekly tracking on compliance to the new processes. Compliance reports were reviewed weekly with senior management team.

Align

People

Process Tool

• Announcements of Upcoming

Events

• Requested Information

• Major Events

Email

• Meetings, Demos

• Impromptu Conversations

Guided UAT (1 Day, Instructor led and hands on)

End User Training

& On-boarding (½ Day, Instructor led and hands on)

Support center(First 4 weeks post go live)




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Data was gathered to evaluate process capability after the rollout. To-Be Process Goal: Target mean cycle time was to be less than 40 minutes. Final Result: Actual mean cycle time was 8.78 minutes, which was well within the target.

Conclusion The hybrid approach that we used by combining Lean, Six Sigma and Agile thought processes, provided us with an advantage of clearly identifying the broken areas in the as-is processes and investigate them in detail to identify, quantify and eliminate root causes for delay. Once the solution and approach were finalized, we were able to implement the solution in an accelerated timeframe using Agile principles. Organizations are moving towards agile development methodologies to achieve an accelerated time to market, high deliverable quality and increased customer

100% 100%

18%

9%1%

100% 97%

25%

35%

10%

100% 100%

21%

32%

10%

Demand OBS Department OBS SIO Cost Plan Budget Plan

Master Projects27-Apr

2-May

15-May100% 100%

52% 50%46%

99% 99%

63%

53% 50%

99% 99%

64%60%

53%

Demand OBS Department OBS SIO Cost Plan Budget Plan

Sub Projects27-Apr

2-May

15-May

252219161310741

15

10

5

In

div

idu

al

Va

lue

_X=8.78

UCL=14.30

LCL=3.25

252219161310741

5.0

2.5

0.0

Mo

vin

g R

an

ge

__MR=2.077

UCL=6.786

LCL=0

252015105

12

9

6

Observation

Va

lue

s

403530252015105

LSL USL

LSL 1

USL 40

Specifications

12.510.07.55.0

Within

Overall

Specs

StDev 1.841

C p 3.53

C pk 1.41

PPM 11.99

Within

StDev 1.783

Pp 3.65

Ppk 1.45

C pm *

PPM 6.45

O v erall

Cycle Time Process Capability - Six Pack Analysis

I Chart

Moving Range Chart

Last 25 Observations

Capability Histogram

Normal Prob PlotAD: 0.610, P: 0.101

Capability Plot




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participation. Combining Agile methods with Lean and Six Sigma tools can provide a significant advantage. We have seen several challenges with the traditional software development methodologies:

Slow Time to Market Low Software Quality Low visibility into the development progress Slow response to change Poor ability to manage risk and changing priorities End user isolated from the process till the very end

The Agile methodologies offer significant advantages:

High deliverable quality – Business involved throughout the agile process, testing and validating the components.

Accelerated time to market – Multiple deliveries in short increments. Improved project visibility – Daily status meeting and updates to business. Adapts to changing requirements and priorities Increased customer participation – No surprises when the end-product is

released Lean Six Sigma tools like focus interviews, brainstorming, workshops, VOC and SIPOC assisted us in understanding the problem areas and writing user stories. Data gathering, value stream mapping, process capability analysis provide us with a clear insight on the as-is process and identify value added vs. non-value added activities. 5 why analysis, Pareto analysis and Fishbone analysis assist in getting to the driving root causes. Use of the solution selection matrix, future-state process maps, and pilot implementation drives us towards the right solution and minimizes risk. Audit plans with compliance checks, drive user adoption and track ongoing progress. Following the Scrum roles, ceremonies and artifacts is critical to successful Agile implementations.




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Works Cited

The Scrum Guide - http://www.scrum.org

The Lean Primer by Craig Larman and Bas Vodde – http://www.leanprimer.com

Implementing Lean Software Development – Mary and Tom Poppendieck -

http://www.poppendieck.com

The White Papers - - http://www.scrum.org

http://agilemanifesto.org/

White paper - The Blending Philosophies of Lean and Agile – Gunther Verheyen



http://www.scrum.org/

http://www.leanprimer.com/

http://www.poppendieck.com/

http://www.scrum.org/

http://agilemanifesto.org/


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About the Author

Sethu Kalyanakrishnan

USA Sethu Kalyanakrishnan, ASQ Six Sigma Black Belt, Certified Scrum Master, CSQA, ITIL is a Lead Consultant

at Capgemini USA. Sethu has over 14 years of experience in Information Technology serving customers in the Financial, Manufacturing and Energy sectors. Sethu has a Bachelor’s degree in Mechanical Engineering from National Institute of Technology (NIT), India. Sethu is currently an Engagement Manager in the Project and Portfolio Management practice (PPM) of Capgemini, USA. He coaches teams on Lean Six Sigma and Agile methodologies. He also is a process and functional consultant on CA Clarity PPM v13. Contact: +1-847-660-8485; email: [email protected]



mailto:[email protected]

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