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In September of 2010, SOMOS Consulting Group Ltd. became the first North American firm to be approved as an Accredited Consulting Organization (ACO).  Achieving this accreditation demonstrates commitment and dedication to supporting successful implementation of best practice in portfolio, programme and project management using experts in specific disciplines.

BACKGROUND

In today's ever changing world, organizations are required to deliver change at a significant rate and as cost effectively as possible. Finding and implementing methods which can support the effective delivery of change can be time consuming and, in many cases, implementation is often by trial and error. Over the past few years a suite of best practice methods has been developed which supports the effective delivery of change through programmes and projects. These support organizations achieve success and deliver business benefits.

BEST PRACTICE METHODS IN DELIVERY OF CHANGE

The suite of guidance has been produced by the UK Cabinet Office (formerly the Office of Government Commerce). The Cabinet Office is responsible for promoting best practice in portfolio, programme and project management. These methods include Management of Portfolios (MoP™), Managing Successful Programmes (MSP^®) and PRINCE2^®. Use of these methods is now becoming common place throughout the world as they are being recognized for the value they bring to support successful delivery of change. Over the past few years more and more organizations have been delivering their projects and programmes utilizing these methods to ensure standardization and consistency in approach. However, where organizations attempt implementation this can often be ad-hoc, expensive, time consuming and delivered through trial and error.

CHALLENGES IN IMPLEMENTING BEST PRACTICE

While training in the method is usually recognized as a prerequisite for implementation, and will improve delivery skills at an individual level, there are a number of questions which are often raised by organizations as they consider implementation:

• How can our organization achieve implementation in, for example PRINCE2, as effectively as possible?
• How can we maximize the use of the method and ensure a consistent implementation across the organization?
• How do we tailor and embed the method to match the needs of our organization?
• How do we maximize our organization's opportunity for success and deliver the maximum benefit to our organization?
• Are there experts we can access who can support us in our implementation in a cost effective, timely way?

WHAT IS AN ACCREDITED CONSULTING ORGANIZATION (ACO)?

To support organizations in achieving successful implementation, APMG (the accreditation body for these best practice methods) has two things: Accredited Organizations and Registered Consultants.

Accreditation is a means of assessing the technical competence and integrity of organizations offering specific services, and brings benefits to stakeholder groups:

• Client organizations can reduce their risk by selecting accredited suppliers and can be confident that accredited products and services have been independently assessed to ensure consistent, high quality services.
• Accredited organizations have objective proof that they comply with best practice.
• Accredited individuals (consultants) can demonstrate recognition of their technical knowledge and experience.
• An ACO is an organization which has undergone assessment by APMG and demonstrates competence both in terms of its consulting capability and its consultants who have the recognized expertise to work with organizations to support implementation in best practice methods.

Registered Consultants, in addition to being practitioners in their specialized areas, have access to a range of tools which can support organizations in delivering maturity in their approach to implementing the required methods e.g.P3M3® Maturity Assessment and P2MM Maturity Assessment.

THE BENEFITS OF USING AN ACCREDITED CONSULTING ORGANIZATION

At a strategic level, many organizations have found that they are in need of external help, particularly with:

Change and strategy management.Becoming programme and project orientated for the first time. Managing strategic risks. External benchmarking and continuous improvement.

An ACO offers consultancy services in those areas where they can offer recognized expertise to support successful implementation and improvement. ACOs and their consultants operate to standards set by the accrediting body; this ensures high quality assignment delivery.

Alvin Gardiner is a programme and project manager with over 30 years' experience in the Public Sector including 15 years in general business management gained whilst working for Registers of Scotland Executive Agency (RoS). He holds an MBA from the Open University. He is an UKAS accredited PRINCE2 Practitioner and Trainer and is an MSP (Managing Successful Programmes) registered Practitioner. Alvin is also a registered PRINCE2 Consultant. Alvin has regularly spoken at Conferences on Programme/Project Management and Business Change with articles published in a number of Project Management Journals. He is a member of the Association for Project Management (MAPM), a member of the Institute of Management Consultants (MIMC) and a Certified Management Consultant (CMC).

PRINCE2 (Projects IN Controlled Environments) is a product-based project management methodology which has been used extensively by the UK Government since 1989 and is widely recognized and used in the private sector, both in the UK and internationally.   PRINCE2 is a structured methodology including roles, responsibilities, templates, pre-defined stages and processes for managing projects; it complements and can incorporate the standards and practices outlined in the PMI PMBOK^® Guide and the IIBA BABOK^® Guide.

So why is PRINCE2, a project management methodology, relevant to business analysts?  Besides the fact that many business analysts often assume the project management role on small scale projects or projects in their discovery stages, the premise of PRINCE2 planning is product-based.  The primary role of the business analyst is to understanding the business requirements as they relate to the product being developed by the project.  Business analysts facilitate the evaluation of product alternatives in order for the business to choose the most effective or efficient direction. 

PRINCE2 methodology is based on seven principles two of which are of particular relevant to the role of the business analyst:  (1) Continued business justification and (2) Focus on products and their quality.

Continued Business Justification

A principle of PRINCE2 methodology is for projects to demonstrate continued business justification through out the project lifecycle.  Projects are the building blocks to realizing strategic plans.  Why else would an organization invest financial and human capital into projects that yield low business results?  And yet it happens.  Organizations with poor project evaluation techniques often allow projects to proceed without strategic justification.  Where there is poor strategic alignment and limited business value, organizations would be better served to avoid or cancel projects.   In PRINCE2 a senior-level business user defines the project’s product; specifies the benefits; and is held accountable to demonstrate the benefits are realized beyond the project lifecycle.   

Project business value is documented in the outline Business Case created during the project start up phase; further refined in more detail during the initiation stage; and updated throughout the project at each stage end.  The Business Case drives project decision making to ensure alignment with business objectives and desired benefits.  Keeping in mind that projects are initially planned in the face of uncertainty, assumptions may later be found to be incorrect and the original business justification therefore may no longer be valid.  Business justification is continually assessed in PRINCE2 projects by updating the Business Case at the end of each project phase.

The primary role of the business analyst is to elicit business requirements and evaluate alternatives that provide the most business value.  This is done by looking at the highest revenue potential or the lowest operational cost or the greatest customer service value, etc.  The ability to analyze the organization’s strategic business needs, understand the product that will deliver the desired business value, and develop the Business Case are fundamental skills for the business analyst. 

To complement the Business Case, a Benefits Review Plan is created during the initiation stage to outline when benefits will be realized and how they will be measured.  As most project teams are disbanded before project benefits are realized, it is important that a senior-level business representative accept responsibility for executing the Benefits Review Plan. 

Focus on products and their quality

If not well managed, projects can easily shift focus on activities or technical accomplishments and forget to focus on the actual product the project was formed to deliver.  The project’s product and the business value it is purported to achieve are the focus for planning and executing a PRINCE2 project. 

Stakeholders can interpret the purpose of the project in varying ways in the absence of a clear and commonly held understanding of the project’s product.  The requirements elicitation effort can often uncover differing stakeholder expectations for a project which, if not recognized and addressed, may result in unwieldy scope and stakeholder management challenges.  PRINCE2 projects describe the project’s product during the start-up phase with a more detailed breakdown of the product done during the subsequent project initiation phase to ensure a clearly defined product scope.

There are several key quality planning and control tools used by PRINCE2 to define and control the project’s product baseline:

 Summary

Projects provide the mechanism by which organizations achieve strategic vision.  While a senior level business user has the responsibility to clearly define the project’s product, identifying the expected benefits and stating the customer quality expectations, the business analyst can play a lead role in eliciting and documenting this information.  Revisiting the Business Case and the Benefits Review Plan at the end of each project stage ensures the project remains justified.  Business analysts who have the skills and experiences to understand strategic business plans and the value projects bring to realizing strategy are well positioned to undertake many of the processes outlined in the PRINCE2 project management methodology.

Roxane Fast, CMA, PMP, Registered PRINCE2 Practitioner

References

International Institute of Business Analysis, 2009: A Guide to the Business Analysis Body of Knowledge® (BABOK® Guide) Version 2.0.  International Institute of Business Analysis, Toronto, Ontario, Canada

PMI, 2008:  A Guide to the Project Management Body of Knowledge (PMBOK^® Guide) Fourth Edition Project Management Institute Inc, Newtown Square, PA

Shenhar, A.J., Milosevic, D, Dvir, D and Thamhain, H, 2007: Linking Project Management to Business Strategy.  Project Management Institute Inc, Newtown Square, PA

TSO, 2009:  Managing Successful Projects with PRINCE2™ The Stationery Office (TSO), Norwich, United Kingdom

There is more to project management than managing the project. As important as it is to bring a project to a successful conclusion, unless the client is happy or at least content with the manner in which the project was executed, they will pick holes in the end result.

The plus side of project management is managing the client’s expectations at each stage of the project from planning through execution to completion. The skills required to do this go beyond the technical aspects of the project and into the human side.

A project manager who stands out has the ability to see the project through the client’s eyes and to understand their underlying concerns.  This is the key to establishing the communications foundation that will uncover potential problems and pitfalls before they grow into sore points that cause the project to bog down. 

Project managers with the “Plus” are not only technically competent, have excellent written skills, but have well-honed listening skills and can speak the client’s language. 

There are lots of good project managers out there. Project Plus managers are less common. Developing the “Plus” factor as a project manager is worth doing as it can cause you to stand out from the crowd and be worth more in the marketplace.

Make Your Claim

Effective January 1, 2009, companies operating a permanent establishment in Alberta are able to claim an additional 10% Scientific Research and Experimental Development (SR&ED) tax credit on qualified work.  This tax credit is in addition to the Federal SR&ED tax credit (which can be up to 35%) already available across Canada, and is a competitive move by the Alberta government to match similar research and innovation tax incentives offered by other provinces. The SR&ED program is the largest single source of federal government support for industrial research and development with over $4 billion per year in funding.

Typical industries in Alberta that should be claiming SR&ED include: oil and gas, oil and gas services, software development, agriculture, chemical, mining, transportation, and pipelines. Often companies in lower technology industries such as food and beverage, transportation, and manufacturing do not think that they are eligible, however, SR&ED-eligible projects are often found in unlikely places.

Alberta’s new SR&ED tax credit program uses the same eligibility requirements as the federal SR&ED program – a broad set of criteria open to businesses in any industry that perform some scientific research or experimental development in Canada.  Most claims involve experimental development, which is performed to create new or improved products, processes, or materials.  Activities that can qualify include support work such as: engineering, design, operations research, mathematical analysis, computer programming, data collection, testing, or psychological research, so long as this work directly supports the experimental development work.

There are three eligibility criteria: (1) scientific or technological advancement, (2) scientific or technological uncertainty, and (3) scientific or technological content.   Surprisingly, though SR&ED projects are technology based, project failure or success is not a determinant of eligibility.

SR&ED investment tax credits can apply on expenditures such a wages, salaries, materials, machinery, equipment, leases, and some overhead and contractor expenses. Qualified expenditures can add up quickly if you are developing new products or processes. 

So, if your company develops new products (including software), creates new processes, performs research, or tackles design challenges using innovative solutions, it may qualify for the program.  If your company has not already applied for an SR&ED tax credit, you are missing out on a very lucrative tax incentive. 

The bottom line:

• The Alberta SR&ED Tax Credit offers qualifying companies a 10% rebate on up to $4,000,000 of approved SR&ED expenditures, for a total possible return of up to $400,000 above the federal tax credits. 
• Alberta’s SR&ED Tax Credit (tax rebate) is fully refundable, meaning that you can receive the full amount even if your company did not pay income tax, or is in a loss position. As a result, start-up and early-stage companies will still benefit from the credit even if they are not yet earning enough income to pay income taxes.  The tax credit is refundable for all companies – small, medium and large.  Even large companies that do not qualify for refundable tax credits at the federal level may qualify for refundable credits at the provincial level. So, if you have been putting off making a SR&ED claim because you don’t need any more non-refundable credits, it may be worthwhile to make a claim for just the provincial refund.
• Qualifications for Alberta’s SR&ED Tax Credit are the same as the broad Federal SR&ED guidelines, meaning that companies in any industry can apply.

Take advantage of Canada’s largest research and development tax incentive program. If you are in business in Alberta and develop new products / procesess or improve existing products / processes, it is only good business practice to ensure you understand this source of R&D funding.

Changing Technologies for the 21st Century Project Manager

(As published in Commerce News, September 2010 - a publication of the Edmonton Chamber of Commerce)

In the century or so since F. W. Taylor (and his associate Henry Gantt) first looked at management as a science, project management has gradually become recognized as a distinct practice.  Along the way, the techniques and technologies that support project management have evolved in fits and starts – the techniques driven primarily by economic factors, and the technologies paced by the broader capability and availability of computers and communications.

An early milestone in the evolution of project management came in the 1950s,  when the Critical Path Method (CPM) and the Program Evaluation and Review Technique (PERT) were developed.  These techniques allowed project managers to develop complex schedules with many concurrent tasks and to optimize them to achieve real efficiencies within their projects.  Though significant computation effort was required to calculate and maintain these schedules, this was also a period of rapid growth of computing power and availability.  Many software vendors jumped in with application programs to help PMs handle bigger and more complex schedules.

This onslaught of technology options for scheduling had an interesting side effect:  over the next few decades “project management software” became the common term to describe “scheduling software” and many people came to think of project management as merely scheduling.  This emphasis on the logistical aspects of planning and control set the stage for the next phase of evolution. 

In the 1980s and 1990s, managers began to more widely accept the need to address human resources management, communications, and service quality.  This period also saw the emergence of professional project management standards and associations, whose growth was partly in response to this neglect of these softer aspects of management.  The Project Management Institute (PMI) collected and catalogued practices, definitions, and techniques, and published the Guide to the Project Management Body of Knowledge (PMBOK).  Over the same period, the UK Office of Government Commerce (OGC) identified the essential best practices for making projects successful.  The OGC developed and refined a comprehensive and powerful yet lean methodology for organizing and managing projects:  the PRINCE2® methodology.  PRINCE2® is firmly established in the UK and Europe, and is now gaining acceptance throughout North America. 

So what is happening with the tools and technologies to support project managers?  The underlying technology enablers over the last two decades are, of course, the immense processing power of computers and the vast infrastructure that allows these computers to communicate simply and instantly – the internet.  These developments have enabled advancements in project management tools in two areas.

Several vendors (as well as the open source industry) now offer platforms or solutions for project team collaboration, stakeholder communication, document management, time and status tracking, issue logs, and change management.  Careful application of these technologies will arm project managers with tools that support rigorous planning and control, yet are accessible and inclusive enough to encourage team participation and achieve top performance.

Powerful computers and the pervasive internet have also enabled faster and more sophisticated collection, processing, analysis, graphical presentation, and distribution of project data and information.  Software developers have incorporated these capabilities into new project management tools to enhance executives’ involvement with projects through program management (centralized management of related initiatives and resources) and portfolio management (analyzing, evaluating, authorizing, and overseeing investments in projects).  Fortunately, today’s technically-savvy project executives are willing to demand the quality of data that will support good decisions.

Project management tools will continue to get faster and more sophisticated.  Despite this, project success will always require that these tools have reliable data and are used by managers who follow good methods and practices for making decisions. 

Alan R. Boyce  B.A.Sc., MBA, P. Eng., PMP, CMC, PRINCE2® Practitioner

Don’t Miss Out Because of Inadequate Supporting Information

Your company solves problems, investigates solutions, and designs innovative ways to overcome challenges.  Your work meets all the mandatory requirements for the Canadian Federal Government’s Scientific Research and Experimental Development (SR&ED) program, but your SR&ED tax credit to recover 35% of your research costs was significantly lower than your application.  How could this happen?

The most challenging aspect of the SR&ED application is the collection of the supporting documentation (e.g., status reports, project schedules, and developer timesheets) necessary to demonstrate and verify all of your eligible SR&ED work.  Long after a project is completed, it may be nearly impossible to recover every detail – and those missing details can mean the difference between a full tax credit and one that has been substantially reduced.  Having an effective Project Management system in place can help your company integrate SR&ED tracking with the way you work, so you can maximize your SR&ED Tax Credit every time.

There are four main challenges to preparing a successful SR&ED claim:

• Too much time can be spent gathering supporting documentation and untangling project complexities after the project is completed, when you are trying to prepare the SR&ED claim.
• Firms are often unprepared for audits from the Canadian Revenue Agency (CRA), and then take up substantial resources to prepare and respond to CRA’s questions.
• Project substantiation may not be accepted. There may be no clear link between the advancements, activities and expenditures.
• Claims may be significantly reduced.

Your company can overcome all of these challenges, as long as you have the right elements in place.  Working with a Project Management consultant who is also a SR&ED expert can help ensure every detail of SR&ED qualifying work is being accurately documented for next year’s claim.  Having a good Project Management system will integrate SR&ED documentation and tracking into the project’s full lifecycle, so qualifying development work can be quickly identified and substantiated when it is time to file a claim.    In addition, an effective Project Management system prepares your company for a potential SR&ED claim audit and helps reduce the chances of having an audit in the first place.

The Benefits of using a Project Management system on SR&ED Projects:

• The cost of filing a SR&ED claim is minimized by reducing the amount of time spent unraveling project complexities – a Project Management system makes it quick and easy.
• In the case of an audit, the time required to prepare and respond to CRA’s questions is significantly reduced because there is accurate and complete supporting documentation for the SR&ED submission.
• Project substantiation is rarely rejected because information is complete, organized and understandable.
• Tax refunds are maximized because every SR&ED qualifying work hour is accounted for.

Recently the Canada Revenue Agency (CRA) made the requirements for project documentation even more onerous in the new T661 SR&ED application form. Avoid CRA reductions to this year’s R&D credit by engaging an expert SR&ED Project Management Consultant today.   Or go one step further and implement a PM system to control project costs, improve management visibility and increase your level of project success, while improving your SR&ED processes.  Together, these two strategies form a winning combination that will benefit your company year after year.

Greg Doucette H.B.A.

When CIOs are asked ‘What are the top things that IT must do in order to be seen as a strategic player in the organization?' two of the answers usually are:

"Be aligned with the organization" and "Run IT like a business."

By definition, IT as an entity is not aligned with the organization if it does not have a business plan that connects to organizational strategy.

Surprisingly, we sometimes hear career-limiting rejections of this observation. The case for IT Strategic Planning can be made, and it can turn a career-limiting perspective into an organization-building and career-enhancing mission.

If any of these arguments sound familiar, then consider our suggestions:

- "We do not have the expertise in IT to do strategic planning."

Strategic planning expertise can be acquired; it is not rocket science. And this expertise should, in the grand scheme of things, be a modest investment. Train and coach your leadership team in the fundamentals of quality strategic planning.

- "The organization does not have a strategic plan, so we have no business objectives against which to map our own plan."

When the organization does not have a strategic plan, the door of opportunity for IT to contribute is wide open. You can build strong relationships with key executives when you present your interpretation of their strategic plan model. Create a straw model of business strategic
objectives. Solicit their input and feedback. Remember, they are being measured on the achievement of their own strategic objectives - so ‘get them where they live.' Become consultants to the organization at large in their own strategic planning.

- "We ‘take orders' so we are in response mode for providing technology and services to the organization."

If you, as CIO, are an ‘order taker', you are either misreading your role, or your business community is underestimating the value IT can bring to the organization. Workshops, executive education events, seminars - these forums can bring new ideas to stakeholders about IT's role in productivity, product differentiation, and profitable exposure to the customer that may
not have been perceived before.

- "The organization does not support a budget in IT that funds an esoteric activity like strategic planning."

Don't take no for an answer when it comes to the funding for strategic planning. Close the disconnects that are the root cause of funding disinterest. How? Host a facilitated workshop with key players. Table the critical success factors for IT. Make the case: IT cannot meet
business expectations without a strategic plan that spells out how IT will help the rest of the organization to meet expectations. These expectations are the IT strategic objectives - the core of any strategic plan.

- "Why do I need a strategic plan for commodity services like desk-top, applications development and support, telecommunications, and a server farm? I run a utility shop."

Take IT to the next level with strategic planning, and become a partner in business profit and profitability. We agree that an important role for IT is to be a utility. Responsiveness, reliability, desk-top functionality, support -- they all need to be there. But these commodity capabilities do
not move the business forward. If the CIO or the business sees IT uniquely as a utility in its contribution to the organization, then the IT-to-Business relationship is terminal.

So if you, as a CIO, have used some combination of the above answers to defend ‘I don't need a strategic plan' reasoning, then it is time to rethink. The benefits of IT strategic planning are many, and if you carry out that planning, IT will make a much greater contribution to your
organization's success.

Lewis Cardin, B. Sc., Principal Consultant - IT Leadership

Defining the WBS

Every project manager uses Work Breakdown Structures (WBS), right? On all projects? And are the Work Breakdown Structures as strong as they could be?

Most times, when we are asked to come in to help out on a project part way through, we have to look pretty hard to find a WBS at all, never mind a good one. We usually are handed a schedule covering some of the work, reflecting phases or activities in a loose hierarchy.

So what is wrong with listing the primary tasks and activities? Well, if the project comes off to the satisfaction of everyone, then nothing is wrong. Many projects have been successful without any sort of written plan or schedule at all, so obviously we can do without a WBS.

But usually someone wants better predictability, better insight into performance, better communications, better use of resources, better results, better return on investment, or just better control. A good WBS can help achieve these.

Making the Base Stronger

The Work Breakdown Structure is the basis of the contract between the project manager and the sponsoring organization. It is the tool that defines the scope or contents or deliverables of the project, and scope drives everything. While problems with schedule, cost, or resources may be self-contained, scope problems usually lead to new problems with cost, schedule, resources, client relationships, team morale, contracts, and profitability. So it makes sense to create the strongest WBS possible, right from the beginning.

1. The first point is to ensure that you have a WBS. Just do it. Every time. Like brushing your teeth or putting on your seatbelt, it will pay off when you most need it. And like seatbelts, if you haven't used one and get into trouble, it will be too late.

2. The second recommendation is to make the WBS comprehensive. Aim to make the WBS exhaustive in its coverage: including everything that will be delivered and nothing that will not be delivered. In this way, no work will be done "off the page" or "under the table" and nothing on the table will be missed. This is a great way to build everyone's confidence that the project is thoroughly understood.

3. The next recommendation is to make the WBS product-oriented. Yes, many standards allow for a process-oriented WBS. And many methodologies instruct the PM to "list the tasks to be performed in a hierarchical work breakdown structure, showing phases..." but this approach is weaker. The project should be about results - the customer wants results from the contractor; the manager wants results from the team; the delivery organization needs successful business results. A product-oriented WBS supports the focus on results and deliverables. Every WBS element becomes a target to be completed and every scope discussion will be about results.

Now, in some cases, the customer is paying for services and no direct results are expected. The US Federal Acquisition Regulations (FAR) distinguishes between contracting for services and for supplies (or products): ‘"Service contract" means a contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply.' For time and effort elements within the WBS, activity- or process-orientation is appropriate.

4. Finally, build a good hierarchy. The high level elements will provide logical groupings of deliverables and products; the organization and architecture of the project will be apparent. As one drills into the hierarchy of the WBS, one sees more detail and more specific and concrete deliverables. A good hierarchy will allow planning to proceed in stages, with high level place-holders where only preliminary planning has been completed, and detailed WBS elements at a low level where more thorough planning has been performed.

Remember the rules of a good hierarchy, too: every element appears only once; elements have only one parent; and the sum of all child elements is the parent element.

Why All This Bother?

The reason for this is clarity. Every planning decision - tasks to perform, durations to allocate, resources to use, budget to reserve, tests to execute - depends on the scope, and everyone needing clarification on scope should be able to get that clarity by referring to the WBS. Now, if you are not seeking clarity, then you may wish to ignore this advice.

Many years ago the world's biggest customer - the US Government - got fed up with projects that ran out of control as a result of elastic scope definitions. They developed the granddaddy Standard for Work Breakdown Structures (MIL-STD-881-B), subsequently revised and updated as the Department Of Defense Handbook On Work Breakdown Structures (MIL-HDBK-881A). It is available from the US Defense Logistics Agency online or for download.

Most US contractors now use this standard as a matter of course, which has probably contributed to the higher average level of PM Maturity that we have observed south of the 49th parallel. This is a best practice; let's use it.

Alan R. Boyce B.A.Sc., MBA, P. Eng., PMP, CMC

Managing Risk During Planning

Several years ago, we received a call from a customer asking if we had any techniques for managing risk on development projects.  We said that yes, we did, but that we wanted to understand their situation better before we suggested any techniques in particular.

This organization was a classic high-technology development organization. It had evolved from a startup to a company with several customers and a revenue stream.  Within the previous year, this customer – along with several other startups – had been acquired by a much larger player in the market.  Their products were now becoming more complex and were demanding a modular, parallel development approach.  To cope with the increasing demands from the new parent company for quality products and on-time delivery, the organization was now looking for a more rigorous process (but not too much).

So far so good.

What they wanted, we were told, were some techniques for measuring the risk that the modules and components would not work when they brought them together at the end of development, and before the product was shipped to the customer.

This was one of those moments when we had to ask to confirm that we were hearing correctly:  “… the risk that the software modules would not work together the first time…?”

So Where is the Risk?

The short version of the story is that we ended up doing some process refinement work and delivered some training to all their managers and senior technical staff on managing software development projects.

The longer version went like this:  this was not a risk problem;  it was a planning problem. For risk management techniques to be of any value, there must be some element of uncertainty.  There is no risk that software modules will not work the first time – it is a certainty. This is like the Ottawa automobile dealer that sold snow tires and offered to refund customers’ money if there was no snow in the area that winter – a pretty safe gamble.

What this organization needed was a good dose of realism in planning their projects, as well as a standard series of integration and testing steps after initial development and before shipping.

Now, there is a role for risk planning here:  while we know with confidence that integration and testing will be necessary, it is uncertain how long these steps will be, or how many attempts it will take to get a successfully integrated system.  Risk management could help us settle on a plan that we can be confident in, both in terms of number of steps and the duration of each.  There are several risk management techniques available to us:

• We could schedule the integration tasks to be very long.  This is a cautious approach, often called padding, buffering, or sandbagging.  A bit of buffer can be good;  too much would divert expensive resources from more important tasks.
• If we have the data, we could look at previous experience with integration and derive activities and durations for our current project. This is learning from experience.
• If we were able to estimate ranges for durations of the tasks – a best case (shortest duration), worst case (longest), and most likely case – we could use PERT (Program Evaluation Review Technique) to estimate the expected duration of each task and of the overall schedule.  These are called “three-point estimates.”
• If three-point estimates are available, another, more sophisticated technique – Monte-Carlo simulation – could be used to predict the likelihood of success of the project.

But all of this is secondary.  The first need is for thorough planning, involving all the participating groups.  Then the plan must be subjected to critical examination to ensure that no self-delusion is involved.

At this point, if the planners perceive that a better plan would result if some uncertainties were investigated and dealt with, then it makes sense to apply more rigorous risk analysis and perform some mitigation activities.

We should first deal with what is known - then worry about the unknowns.


Alan R. Boyce  B.A.Sc., MBA, P. Eng., PMP, CMC