9 Steps How to Start a New Project

9 Steps How to Start a New Project

This blog post is about a situation that is common for many projects and project managers especially in the construction industry. An organization signed a contract for fulfilling a client’s need and engages a project manager to deliver the project. This project manager was not necessarily involved in the project initiation phase. Sometimes the project manager is even entirely new to the contractor’s organization. In order to succeed, the project manager has to prepare himself/herself and has to follow 9 Steps How to Start a New Project.

Primarily the below considerations focus on the contractor and its organization, not necessarily on the client in the first place.

It is important for the new project manager to understand the contractor’s organization, existing standards and procedures prior to engaging further in the project. It is also important for him or her to get access to a complete set of documents and to evaluate them as far as possible.

The project manager schedules an internal kick-off meeting at the earliest after his/her document review. He shares the agenda in advance to give participants a fair chance to prepare and understand expectations.

List of 9 Steps How to Start a New Project

  1. Project Charter
  2. Scope of Work (scope baseline)
  3. Business Case
  4. Resource and Duration Estimates (schedule baseline)
  5. Budget (cost baseline)
  6. Team Structure
  7. Technologies Needed
  8. Initial Risk Register
  9. Current Status

Project Charter1. Project Charter

The most important one out of the 9 Steps How to Start a New Project is in my opinion to sign a project charter as early as possible. Find a template HERE. The project charter nominates the project manager and gives him or her authority. It also provides clarity to the structure of the team.

2. Business Case

Sometimes company leaders can not give clear answers to the following questions:

  • Why did we sign this contract?
  • Why did the client choose us over others?
  • What went well and what did not go so well in previous projects for the same client?
  • What are the success factors?
  • Who are nominated project partners?

The whole project team needs to know exactly why a project contract was signed.

3. Scope of Work Statement (Scope Baseline)

Someone with involvement in pre-contractual communications explains the scope of works. He emphasizes on scope inclusions and specific scope exclusions. He also explains assumptions, which are not yet finalized.

The team members review the deliverable list and decompose them into smaller better manageable packages and further into activities and tasks. The result is the work breakdown structure document. Often a work breakdown structure is provided by the client to fit into their planning. In that case it must be checked if it is complete and reasonably detailed. Other documents and structures such as the time schedule and, ideally, the budget are based on it.

Experiences from previous comparable projects serve as lessons learned.

Gantt Chart4. Resource and Duration Estimates (Schedule Baseline)

The company committed to deliver a certain product or service within a certain time limit. The time limit estimate is based on factors such as resources and duration estimates. The planner who has prepared this initial planning explains his estimation approach and based on which considerations he came to his conclusion.

  • Were public holidays, leave entitlements and seasonal influences sufficiently accounted for?
  • How solid is the plan?
  • Are the resources readily available or shared with other projects?
  • What other inter-project dependencies exist?
  • What is the commencement date and milestones?

The project manager works out a detailed schedule with his team soonest possible.

Cost Baseline5. Budget Breakdown (Cost Baseline)

I wrote about cost control in my previous post. Unfortunately, many only have cost control in mind. I’m certainly not against cost control, but the better approach is focusing on cost management, keeping in mind that other management areas are equally important.

The organization has committed itself to delivery a product or service at a certain price. The estimator, who calculated this price, explains his calculations in detail and the budget preparation methodology. Because here’s the catch. As described, the contract is signed, the basic planning is done with more or less care and the project manager – you – mainly only carries out the work and monitors and controls it. On the cost calculation and the resulting budget, he has virtually no more influence.

The estimator therefore shares his estimation sheet with the project manager and explains the used:

  • Estimation methods,
  • Resource loading,
  • Duration estimates,
  • Considered overheads and risk contingencies.

What are the funding requirements and what is the expected return of the investment?

Organization6. Team Structure

The project manager considers the preparation of the project organization chart as a high priority. During the internal kick-off meeting all key players and functions are geared towards the same common goal. Therefore through their participation in the meeting, colleagues understand that they belong to the team. The project manager observes the level of influence and relationships among colleagues and watches out for internal politics.

He also uses the meeting to clarify reporting structures. There will be colleagues who only work a certain part of their time for the particular project. For this proportion of time they are answerable to the project manager. Therefore the project manager ensures to make everybody aware of this.

7. Technologies Needed

I talked about resources above. Those resources are primarily human resources, machinery and tools, as well as material. Because construction projects are usually not done from the main office, in most cases a construction site office with communication and other facilities is needed. Data access and data backup is a topic in this context. The establishment of such a bureau is often insufficiently considered in the pricing, if this is not expressly mentioned in the deliverables.

Risk Register8. Initial Risk Register

The estimator must introduce the initial risk register, which he or she had taken into account in the pricing. This is actually very important, but often neglected. The risk contingency instead is often only assumed as a certain percentage. I am convinced that poor risk management will cost some companies their ISO 9001 certification this year. But that is not up for debate here.

In many cases, the only risk considered is a possible price increase for steel or cement.

Feel free to download my risk register HERE. It already includes many common construction related risks to give you an idea to start with.

9. Current Status

The project manager and large parts of the team are only hired after the organization having signed a contract with the client. As much as this is understandable, the disadvantage is that this easily and quickly leads to an initial time delay. Thereby the team and the company lose precious time for mobilization and kicking-off the works. That’s why it’s important to evaluate the current progress and status of the project.

Questions that are urgent to answer:

  • What are the works enablers?
  • Is the notice to proceed received?
  • Is the design complete and approved?
  • Are licenses and permits in place?
  • What is the mobilization status?
  • Are urgent materials and other resources ordered or organized?

The team agrees on an action list and a short-term planning for the transitional period, to get out of the current situation.

A remark at the end. Action lists are for some a bit outdated and unfortunately often a document that snoozes in the email inbox until 5 minutes before the next meeting. Consider dividing a large whiteboard into a parking-like structure. Assign a parking space to every individual and post tasks in it as sticky notes. Everyone moves notes from their parking space towards the exit upon task completion. Tasks than exit the parking after review during the next meeting.

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Cost featured

4 Steps How to Manage Project Cost the Right Way

Controlling costs surely is a very important process in project management and one of the first responses when asking people’s opinion about a project manager’s role.

Cost control certainly indeed is very important, but cost control is only a part of cost management – that should not be confused -,  and cost management will never succeed if other management areas are not taken equally care of.

In reality, cost management includes the following processes:

  1. Planning cost management,
  2. Estimating project cost,
  3. Determine project budget, and
  4. Controlling project cost.
Management Area Percentage

People’s response what a Project Manager is engaged with

What else a Project Manager has to take care about is shown in the image. The percentages are a result of a small assessment among a group of colleagues, website visitors and friends. It is difficult to classify whether cost management really is the most important part of project management. The number of different processes, which ultimately make up project management as a whole, is too great and the individual processes are too closely linked together to make such a classification.

For clarification, when I write, “The project manager does ABC,” does not mean that he does it all himself, but he is responsible for it.

A problem in the construction industry is that many companies are getting the project manager on board too late. From the point of view of a construction company awarded with a contract for a certain project, the planning phase across all areas, whether cost, schedule, quality or whatever area, is often too much neglected or done incomplete or wrong. Also read my blog article about common problems in construction projects.

Companies that quote for certain projects are very much focused on making an offer and securing a contract. Such offers are often based on

  • Mountains of assumptions,
  • Historical and/or unverified data from previous projects, and
  • Missing project detail knowledge.

In this way, an offer can never come about, which in relation to the cost estimate even comes close to the later actual costs.

Project Manager in Triangle

Project manager as a prisoner in a triangle

Project managers are almost always prisoners in a triangle of scope, time and cost. This symbolization makes it clear that all management areas are fundamentally related and cannot function individually. Neither side of the triangle can be changed without affecting the others. This symbolization, however, also illustrates the importance of treating all management areas equally important.

According to own observations and exchange of experiences among colleagues, the actual cause of cost overruns are often

  1. The scope of works is elaborated insufficiently, which may include quality and other requirements,
  2. The schedule is not created thorough enough and not according to best practices, and
  3. Resource estimates are skimmed over and are incorrect.

Please share your experience and leave a comment below.

1. Planning Project Cost Management

Many project managers create a schedule and look at it as their project management plan. Guys, that is insufficient. A project manager has to cover 10+ management areas, depending on the industry, and each area must be well planned and described in a document. This of course also applies to the area of cost management.

Planning cost management is therefore mainly concerned with

  • Setting the framework for each of the cost management processes so that performance of the processes will be efficient and coordinated, and
  • Describing the processes in the project cost management plan, which becomes a component of the overall project management plan.

These plans do not necessarily have to be prepared over and over again for each project from scratch and so I cannot accept a common project manager’s answer, that there would be more important things to do and that there is no time for that right now. There is no question that such a plan is reusable, but of course requires a revision during the early planning phase of each project. So, use your plan from your last project, or wasn’t there enough time? In that case check out this link, I share my templates with you for free!

2. Estimating Project Cost

Cost

No way to get cost right if ignoring the rest

Many construction companies are very much focused on pricing a particular project. Other processes such as:

  • Collecting and understanding stakeholder requirements,
  • Decomposing scope into manageable packages,
  • Estimating resources,
  • Estimating durations, and
  • Evaluating risks

Will either not be considered or will be addressed much later. But how can you get the cost right, if you miss out those important processes? If you get this wrong, there is little to control later. Maybe only frustration…

Something that you hear over and over again on construction projects are statements like “The crazy HSE officers are hindering us and cost us too much time and money with their overblown requirements.” Well, it could be that I have made similar remarks in the past – sorry guys -, but that was of course something completely different. 😉  The point is that these requirements usually arose long before the offer was submitted and the contractor should have known and taken into account.

Another mistake, which often leads to cost overrun, is that time components and resources are not sufficiently considered.

Often pricing is done according to the formula:

Finish concrete wall = x m3 reinforced concrete + y m2 plaster + y m2 wall paint.

This initially looks relatively logical even so I did not include formworks. However, it must be remembered that between concreting and plastering, as well as between plastering and painting up to 28 days have to pass to allow for curing. Curing by the way is an activity and requires resources. But if you price a bill of quantities (BoQ) you will usually not find this item. In other words, without decomposing the scope into manageable packages, estimating resources for each and every activity and task, and estimating their durations, there is great possibility of forgetting it.

I hope that sounds logic, right? I can tell you, the reality is often different.

Please share your point of view below.

3. Determine the Project Budget

The real situation in many construction companies is often that the company signed a contract, the project cost is estimated by someone and shall be X. The project manager is engaged after the contract being signed and thus commitments being made that can’t change easily anymore, and then he or she is challenged to commit himself or herself to something that is calculated as X-Y%, and that is considered being the budget.

Wait, before you comment below that it would be the responsibility of the project manager to prepare the budget, and I totally agree with you, the problem is as mentioned above, the project manager is very often only hired after a contract has been signed and X weeks time are lost already.

That means in summary his or her starting position is as follows:

  • Budget

    Budget Preparation

    X weeks time delay at the time of engagement,

  • Scope and requirements possibly not evaluated thoroughly,
  • Time and resources possibly estimated wrongly or incomplete,
  • A so-called budget is grabbed out of thin air and is a “done deal”.

What could be the likelihood that this project will finally become a success? I’m looking forward to your comments.

The more correct and far more promising way would be:

  • Estimate thoroughly the cost per each activity bottom-up,
  • Aggregate the activity costs to figure out the cost per work package and consequently for each deliverable,
  • Add the risk contingency.

4. Control Project Cost

As long as the above processes are not done correctly, there is not much left to do in cost control.

Otherwise controlling cost is about:

  • Ensuring that no money is expensed without the budget owner’s approval,
  • Preventing that expenditure exceed the individual budget per activity, work-package, and deliverable without authorization,
  • Monitoring cost and work performance and analyzing variances,
  • Managing overruns and ensure that overall project budget is maintained,
  • Influencing factors (such as scope changes etc.) that may result in a change to approved baselines,
  • Updating the budget to accommodate approved changes and keep budget changes within acceptable limits.

 

Please feel free to share your opinion with me. I would be very happy if you prove me wrong.

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Construction Management Problems Kenya

9 Reasons Why Construction Projects in Kenya Fail

Small and medium sized construction companies in Kenya seem to have a few problems that appear to be quite common and put them and the projects undertaken by them at risk.

The following is based on personal observations and discussions with fellow construction project managers.

One of these observations is that often, even for significant construction works, there is not enough time to thoroughly prepare and submit quotations and related proposal documents. The time, which is given for the preparation and submission of extensive offers, can often be significantly less than a week.

  1. Superficial Tender Analysis Resulting in Inaccurate Costing,
  2. Wrong Assumptions
  3. Analogous Estimating
  4. Neglecting Important Documents and Information
  5. No Time for Risk Evaluation
  6. Underestimated Client Expectations
  7. Schedules are Not Prepared Following Common Good Practice
  8. Too Late Staff Employment
  9. False Promises

1. Superficial Tender Analysis Resulting in Inaccurate Costing

Due to the time pressure the contractor does not familiarize himself sufficiently with the specification details, which easily can be several hundred pages long for certain construction projects.

Here is the Risk:

The biggest risk is that the contractor is left with unanticipated costs, for example because he has assumed to use a common material type while the specifications require a particular one. For instance the contractor expected to install a normal cable instead while the specifications call for a specific fire rated cable.

As these details were generally known before the offer was made but were not sufficiently taken into account, it is likely that the contractor will end up paying the costs.

2. Wrong Assumptions

The contractor simply assumes that the execution of certain tasks will be similar to the execution of activities during previous projects, without estimating resources and durations thoroughly. Factors that may impact production rates are not well enough evaluated or known.

Here is the Risk:

The risk is that, on the one hand, the contractor commits himself to unrealistic time schedules for the works execution, and on the other hand, possible time delays and additional resources will in any case incur additional costs.

Unless there are two absolutely identical projects in exactly the same place, at the same time, for the same client, with the same amount of work, the same specifications and quality features, etc., all projects are unique. This is at least true for the project product, while the project management processes remain  the same, but may be weighted differently depending on the client.

3. Analogous Estimating

Because detailed cost estimates are not possible in the shortness of the time given, the contractor relies on figures based on historical date from previous projects.

Here is the Risk:

The use of historical data always carries the risk that it is out of date and moreover does not apply because it is based on different fundamentals. Consequently, this can result in additional unforeseen cost.

Therefore, it is very risky to simply take the details of a previous project and assume that the same result will be achieved under different circumstances.

4. Neglecting Important Documents and Information

Due the described time constraint the calculation of the offer price is almost exclusively based on filling the bill of quantities (BOQ), which is a document produced and provided by the client.

Here is the Risk:

The main risks are that certain features and deliverables may exist in the scope of works statement, in drawings or other tender documents, but may have been overlooked and not included in the BOQ and consequently aren’t priced. Secondly, the quantities to be finally executed are almost always deviant from the BOQ quantities. Both certainly have cost impact. Depending on the type of the contract it may be favorable to the contractor if quantities increase, but if quantities decrease the entire price calculation for the item may become wrong.

Once the contract including the scope of works statement has been signed, it is very difficult to agree changes with the client in this regard, as long as this information was known before the contract was signed.

Quantity deviations outside of a certain percentage often can lead to re-negotiations. It is important to notify the client in good time if quantities are likely to change significantly. The percentage may vary from country to country.

5. No Time for Risk Evaluation

No Problem

Risk evaluation and planning is not given sufficient attention. Risk reserves, if any at all, are taken into account only by instinct and roughly.

Here is the Risk:

As long as risk reserves are not properly calculated and known, it is fundamentally uncertain whether they will be sufficient in the end.

I think one can say that every business is risky to some extent, and that’s especially true for the construction industry. With this knowledge in mind it is very incomprehensible that this important aspect is so often neglected or superficially treated.

6. Underestimated Client Expectations

More and more not only product quality, but also process quality, as well as health, safety and environmental considerations, play an important role and are often not sufficiently taken into account.

Here is the Risk:

This factors can quickly have a significant impact on cost and schedule if they are not sufficiently considered. Here, it seems as if construction companies are experiencing a terrific awakening, when projects are to be carried out for international clients, or when projects are funded by the African Development Bank or the International Finance Corporation.

The stakeholders mentioned above have a valid interest that what they finance makes sense, that the money is well spend, that no one is harmed or more than necessary impeded or inconvenienced, etc. It is the contractor’s responsibility to take these things into consideration and, of course, they are associated with effort and consequently cost.

7. Schedules are Not Prepared Following Common Good Practice

Resources and durations are not thoroughly estimated, the linkage of activities is not well enough realized and the entire time schedule does not follow international standards or common good practices, and seems to be geared towards creating a document that confirms that certain work will be completed by the given date.

Here is the Risk:

One of the biggest risks of missed project goals seems to be the problem described above. Any time delay automatically also affects the costs baseline, and any additional resource surely costs money.

Again and again it can be observed how little attention is paid to the preparation and the subsequent monitoring of a detailed time schedule. I believe it can be said that the better this is worked out, the greater the likelihood that project success will eventually materialize. Otherwise, material is ordered when the previous material is nearly used up, and everyone does as much as he or she are comfortable with and only too late it is observed that the resources and the required daily performance are in imbalance.

The schedule is simply a colorful document that is given no further value.

8. Too Late Staff Employment

Very often the project manager and team members will be hired only after the construction contract is finally signed. This hiring process can easily take a few weeks or even a month time. Often, the intended people are no longer available and people are hired who are known only from their resume and interview.

Here is the Risk:

Although the procedure is fundamentally understandable, it still has significant drawbacks, as the project manager and the core team’s late employment has a substantial impact on the detailed planning. Without or too late detailed planning, the entire project becomes a venture with an uncertain outcome with regards to cost and time.

Project Phases

Project Phases

Due to this problem projects are often delayed shortly after signing the contract and it is very difficult to make up for this initial delay. Not to mention lost customer confidence. Unfortunately the situation is such that the very late engagement of the project manager to some extent limits him or her initially to become the administrator of the current situation and his or her skills are only used to make the best out of it, until the planning deficits are reasonably worked up and corrected. The time span between points A and B is often lost immediately.

 

9. False Promises

In order to secure the contract, promises and commitments are made that may be hard or impossible to fulfill. These commitments almost always have a financial or a schedule background.

Here is the Risk:

False Promise

False Promise

Unless it was considered from the beginning that the client will ask for a discount or for a quicker execution, such commitments are always made to the detriment of profits or contingencies, which as described above are anyway often not evaluated in details.

It is clear that almost nowhere in the world without negotiations and concessions, a contract is concluded. However, it is important to ensure that a contract is not signed at just any price. In the end, nobody benefits if promises are made that cannot be kept.

 

Many of the above problems and resulting risks can be avoided by just giving enough time for the perusal of the tender documents and engaging the right people in the right number and at the right time.

Let me know your experiences.

 

Also read about outsourcing project management services.

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How to Start Later and Finish Sooner

According to a survey among German project managers and sponsors, as well as observations in daily project life, an inadequate project initialization phase is often devastating the outcome of many projects. This is confirmed by a study conducted by the two German management consultants Bernd Friedrich and Daniel Schaetzler. In the course of this survey, the largest project time-wasters were identified, most of which could have been avoided or significantly reduced in the project initiation phase.

Their motivation to examine this phase of a project and its impact on the success of the project result comes from their experience as managers and consultants.

Again and again they came across projects that should never exist the way they did. Even so external partners often had been consulted, these projects were in remarkably poor conditions.

They present the following three issues that seem to be very common:

  1. No clear objectives combined with minimal management support even after several month into the project life cycle had a tremendous impact on the motivation of the project team.
  2. Absence of a clear project management approach and no IT support for scheduling, cost, risk and other planning and controlling activities.
  3. Absence of sufficient resource planning and consequently of course no commitment by responsible providing departments. However, the project had already used up 50% of the budget and 80% of the originally expected duration. It was most confusing that the project was still reported as green-yellow, as there was no baseline against which the actual project progress could have been measured.

They asked experienced project managers as well as clients for their top three of the biggest time wasters in projects.

The result according to a survey on time wasters in projects (source: http://sups.pro, 2017) is summarized hereafter:

Biggest Project Time Wasters

Biggest Project Time Wasters

The Foundation for a Successful Project is Laid at the Beginning of the Project

Although this statement is intuitively clear to everyone, even today many projects start very unprepared: without a clear goal, without the right project manager without the necessary internal resources.

One wonders why? Although there are many reasons, in their experience two of them stand out:

  1. The management is under enormous pressure to handle and implement topics quickly. This often leads to pure actionism, and this costs a lot of money in the course of the project life cycle.
  2. The organization is not yet ready for the project. There are no clear objectives and conditions, and neither a suitable project manager nor a project team with sufficient know-how and capacities are availed to the project. The project management approach and IT support are still unclear and will only be determined during the course of the project. These factors often lead to frustration and work overload in the project team. However, the worst consequence is that the project team is demotivated already before the project really kicks off.

Let’s take a closer look at three of the typical time-wasters and discuss ways to eliminate them during the project start-up phase. (For more time wasters, see www.sups.pro/zeitfresser – sorry, page in German…)

Time waster: Ambiguous Project Goals and Project Approach

The inadequate definition of the project goals before the start of the project is extremely typical in project management.

Often enough, goals are not based on “SMART” criteria (SMART = Specific, Measurable, Achievable, Time-bound). Although it is intuitively clear to everyone that goals should be well-defined, the question arises as to why this is not consistently implemented in practice. Rather than consistently giving “SMART” targets, unrealistic or non-specific goals are defined. They are either not achievable or not measurable and in anyway cause frustration. The typical response is “We cannot do that anyway, everybody knows that”.

For example, a renowned international top management consultancy advises its clients to set project goals at just 200% and build up great pressure. If than half of the 200% is done, this is still “good”. The reality, however, is that fear builds up before the start of the project and, in the end, frustration combined with a loss of client confidence. In the case of very little ambitious goals, however, the team might think: “We have enough time, let’s get other things right first”. The project is put aside – and not given priority anymore.

The solution: A Project Charter

A project charter coordinated with the future project manager and the line management is the prerequisite for a successful project. In addition to specifying the goals, the project management approach must also be specified. The project phase and milestones must be fixed and requirements in regards to scheduling, reporting, risk management, scope etc. must be collected and agreed in advance and trained where necessary.

Time Waster: Insufficient Risk Management

Unpredictable events throw over the entire project schedule or even jeopardize the project in its entirety. Friedrich and Schaetzler are convinced that, with the exception of approx. 5% of the so-called “Unknown Unknowns”, all risks of a project can be identified in advance. In a big company they both used to work for, they say “Project Management is Risk Management”. The difference between normal line activity and project work is that surely there are far more risks in projects. Projects are by definition something unique, create something new and run outside the normal line organization.

Despite its high importance for a project, apparently risk management is among the most neglected activities. In their experience obviously many employees struggle dealing with uncertainties and assumptions. And yet, the process of identifying project risks and creating a conscious way of dealing with them is not that difficult:

In a brainstorming session, the team develops what can go wrong in the project along line. In the next step, the probabilities and the impacts on time, cost and scope are evaluated. At the latest at this point, most of the team members are reluctant to commit to specific values. However, this assessment is the basic condition for focusing attention on the most important risks and for defining corresponding response strategies.

If the risk owners are identified and named in the next step and the value of the risks are considered in the project schedule and cost baselines (deadlines, costs), the basis for a successful project is definitively improved.

Finally, risk monitoring and controlling during the entire project life cycle, and until a specific risk stops existing, ensures that the success probability of a project increases and remains stable over the life cycle of the project. These include in particular the following activities:

  • Identification of new risks,
  • Updating the probability and impact of risks that still may occur,
  • Closing the risks that have occurred or are no longer relevant,
  • Monitoring the risk mitigation or other response processes,
  • And consequently updating the schedule and the budget.

Time Waster: Insufficient availability of resources

Detailed planning of the required resources to carry out individual work packages is essential to the project success. In the end, a task cannot be fulfilled if the resources are not available. If the resources are not available in sufficient numbers, a task can probably still be carried out, but it will perhaps take much more time. Basically, you can do a specific task with one excavator in 2 months or with 2 excavators in one month. The number of excavator hours remains the same in the end. If the schedule allows two months to complete the task, one excavator should be sufficient in principal. If you only have one month and you are trying with one excavator, you are likely to experience 1 month of delay and related costs. The extra cost will probably exceed the cost of another excavator for a month.

It is important to further ensure that shared resources are available to the project to the agreed extent. In case of conflicts, it is necessary to agree on priorities from the beginning.

Conclusion

To make a project successful, one needs to invest time and money in the project initiation.

During the initiation, the focus should be on the following topics (in addition to the general feasibility of the project goals):

  • Clear scope definition (what is part of the project and what is not),
  • Clear definition of SMART targets,
  • Clear commitment of the organization to provide the necessary resources,
  • Rough deadline, budget and resource plans,
  • Appropriate risk analysis,
  • Qualified project manager and project team,
  • Appropriate PM methodology and IT support.

If these topics are clearly defined and accepted by all, nothing stands in the way of the success of the project.

Are you in a similar situation? See here how to get help…

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Doors

How to Make Good Decisions

Many books articles and other guidelines have been written about the decision making process. We are taking decisions probably every single minute during the day. But the process of making decisions still seems to be often difficult and intuitive, especially when all alternatives have a catch. Below methods can help to make the right decision – in your project as well as in private.

Collecting All Facts

One does not need more than a sheet of paper and a pencil to write down everything that may be relevant to a decision – that’s why the method is also called Consider All Facts (CAF). List all influencing factors in one column. In a second column, sort all factors into three groups according to their meaning with the most important ones on top of the list. Another column is for notes and ideas. The method provides an overview of open questions, however, does not give usually answers.

Pro and Cons List

The list of pros and cons can also be created as a table with three columns. In the first column everything that speaks in favor of a decision is listed up, in the second column are the counter-arguments, and in the third column ideas and questions can be arranged.

Decision Matrix

The easiest way to compare alternatives is again a tabular overview. Provide a separate column for each alternative. Then determine evaluation criteria for the options. Then note points or grades in the columns that show how well each criterion is met. Aggregating all values gives an overall grade for each decision alternative.

Cost-Benefit Analysis

This analysis is a decision matrix in which a weighting is given to the individual evaluation criteria – depending on their importance. Criteria that must be met are listed at the top of the list. If a single disqualifier criterion is not met by one option, such option shall be eliminated. The other criteria are weighted with percentages. Then multiply the points by the weight and sum them for each alternative.

Decision Tree

With a classic decision tree the results of different decision alternatives can be evaluated according to their statistical probability. The basic question is always: what happens if …?

One can also create a set of questions that have to be answered “yes” or “no” for each individual option with. As soon as one “no” is recorded, the specific option is ruled out.

Scenario Analysis

The scenario analysis attempts to forecast future developments. At first the best and the worst case scenarios are developed. In between, a small number further scenarios with average values make sense. In this way, a picture of the future can be developed quite well.

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