1.6 Performance Reporting

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Project performance reporting involves documenting the project's performance against the plan. This reporting addresses a variety of audiences (and levels of responsibility), both internal and external to the project. The objective of performance reporting is to provide consistent and regular reports that recognize progress made or lost in the project. Another objective is to provide the project team with early warnings of potential problems. This type of reporting will also provide senior management with information that can be used to keep the project operating smoothly and enable adequate communication among key parties.

Benefits of performance reporting include providing a means to ensure that the project makes orderly progress toward key milestones by charting progress metrics. The reports tie performance reports and project financials together for a consolidated picture of the overall status of a project. These reports are designed to capture all project information regarding scope, schedule, cost, and quality. These reports will recognize and target multiple audiences and tailor the information to each audience. The SPMO implements and executes performance reporting.

The five components of performance reporting are:

I. Establish program standards

II. Request and collect data

III. Consolidate information

IV. Reporting development and continuous improvement

V. Reporting Communications

Performance reporting is a means used to formally establish project standards. Project standards should define the reporting and communications process and team organization, the personnel roles, including participation in project management, and the project reporting frequency. Performance reporting effectively communicates the information produced in the course of project execution to the entire organization.

In order for a report to be meaningful, it must contain relevant, timely data. The SPMO uses various reports to collect and disseminate this data from multiple sources in an organization. The SPMO is likely to collect data from Project Progress Reports (which are weekly recurring reports) and from the Project Plan (usually maintained in a software product used for project management). The SPMO can determine and track overall project scope and cost using project status reporting. Any new or significant issues and problems can be gleaned from Project Status Reports and the Project Issues Database. The SPMO can track vendor costs and performance by reviewing vendor invoices and Status Reports.

Reports should consolidate information and summarize project data, targeting it to the appropriate audience in the organization. Reports that are sent to members of the Core Team often become attached as status updates to the Core Team members' report to their business leaders. Performance reports should focus only on the project level, and they should be quite specific in nature. It should always be assumed that a report leaving the SPMO will be used publicly within the company. This assumption may seem overly cautious, but it is better to be safe than sorry. There have been instances where reports have circulated back to a company CEO before a business leader could meet and brief the CEO on the project. Imagine the embarrassment the Sponsor must have felt in this particular circumstance! Projects have even been canceled in such circumstances.

Report development and Continuous Process Improvement (CPI) require that the Core Team members take some time in planning the reports, devising a method where they can continuously monitor project progress and periodically improve on the report structure, format, and content. At the same time, the Core Team should always ensure that any report meets the following criteria:

  • Targets a specific audience

  • Is accurate in all regards

  • Is consistent with other project data

  • Is understandable and not filled with jargon

  • Is usable-it must serve a purpose to the recipient

  • Is analyzable and timely in nature

  • Enables prediction of project performance

  • Identifies potential problems (and propose solutions if possible)

  • Is approved by and useful to all project stakeholders

  • Is published and distributed to all interested parties

An example format of the required elements of a project performance report includes the following:

  • Scope of deliverables: Planned, actual, and projected

  • Cost: Planned, actual, earned, and estimated at completion

  • Schedule: Planned, actual, and estimated

  • Quality: Planned, actual, and projected achievement

  • Risk: Planned, actual, and projected reduction

  • Benefits: Planned and achieved

  • Issues: Defined, corrective actions taken, status, management actions required

Communications reporting involves effective communication to the organization. The objective is to ensure the delivery of the right message, sent by the appropriate party, to the necessary audience(s), through appropriate channels. Successful implementation of communications reporting positively affects the work environment and relationships with sponsoring organizations, employees, and other stakeholders.

1.6.1 Financial Management

Financial management involves control and management of the program's budget and other finance, as well as providing financial reporting for the project. Objectives of sound financial management should ensure that all costs relating to the progress of the project are planned and tracked, including operating expenses, capital expenditures, and man-days. Financial management involves reporting on the status of projects related to, but not under, Core Team control, such as those activities that affect the overall project (e.g., infrastructure development). Financial management should allow a team to quantify, support, and maintain all financial aspects of the business case for the project. The SPMO generally performs performs or assists the Project Manager in performing the financial management functions needed for any given project.

NOTE: This section documents only the critical components of projectrelated financial management and reporting. It does not address financial reporting typically required for companies (i.e., general and subsidiary ledgers, balance sheet, income and expense statements).

Financial management establishes financial guidelines for projects underway in the SPMO. It enables the SPMO to compile budgets using Cost Estimate Worksheets. The SPMO can then periodically quantify and maintain the financial aspect of the business case and conduct periodic financial analysis. The SPMO can maintain financial control of the project and oversee the results. With sound financial management, the SPMO can assist in estimating realistic project budgets and establish and maintain a project chart of accounts, which logically categorizes the financial activities of a project. To properly perform project-related financial management, the SPMO must collect data from the various affected units of the organization, prime and subcontractors, and suppliers, to name but a few.

In order to create and maintain the costing and budgeting elements for a project, the SPMO must determine if the cost is in line with the business and project requirements and decide on an approach for handling project costs. This includes determining the most likely types and sources of project costs. Types of costs include direct labor and materials (i.e., direct charges to project accounts) and indirect costs (i.e., allocations of costs to project accounts) incurred during the course of project execution. The SPMO must determine all sources of cost, including those of the sponsoring organizational unit, the prime contractor (if one is involved), subcontractors, and suppliers. The SPMO must also determine an estimating approach and decide which factors will force inclusion or exclusion of various cost elements into the overall project scope.

Project initiation requires the SPMO to work closely with the Project Manager and Core Team members to define detailed estimates and obtain budget authorization. The SPMO will set up a cost-control mechanism to initiate the project and begin tracking actual expenditures. Once the project has been initiated, the SPMO will establish a project baseline and begin to solicit estimates from the project management team on projectrelated payroll and other expenses (usually by headcount or hours tracked). Project Sponsors are tasked to ensure proper assignment of budget by having the finance representative on the Core Team work with the finance organization to set up a cost center and allocate funds for the project to the new project cost center.

The SPMO is chartered to monitor and control project costs. To accomplish this task, the SPMO must receive all invoices requested for payment, implement an invoice approval process, collect all invoices in a repository, and track the invoices against projected budgets. The SPMO is responsible for tracking payment authorizations and verifying that payments have been made in a timely manner. Finally, the SPMO will report the results of all projects' financial status.

In order for the SPMO to report financial results properly, it must prepare financial reports on a monthly recurring basis. It must gather data from project accounting reports and input actuals into the reports. A summary of the financials by project is sent to the various Project Managers for review. The Project Managers are expected to determine variances and provide explanations for significant deviations from the plan. It may require the SPMO to reforecast financials based on new data obtained from the Project Manager. Finally, the SPMO will consolidate the data into a ' rollup report' to senior management.

1.6.2 Vendor Management

Vendor management involves assisting Project Managers with the selection and management of resources obtained from outside the organization. This may include consultants, suppliers, or contractors. It can also include products and services that are part of the business capability (such as software or physical assets) or tangibles used to create a business capability (such as office space or temporary workers). The goal of vendor management is to achieve the project's objectives by assisting in the selection of vendors and establishing a business relationship with them in order to purchase appropriate technologies, products, and services. Vendor management should establish contracts and manage any changes to the contract, assist in the management of vendor personnel, and efficiently use internal resources and skills by identifying opportunities to supplement internal capabilities with qualified vendors.

The benefits of effective vendor management are cost savings obtained by working closely to obtain quality products and services, development of relationships and partnering alliances with vendors, and development of standards for vendor quality, metrics, reporting, pricing, and billing. These standards ensure that all vendors in compliance, and, as software program management matures, all units in the company will expect such standards to be enforced. Vendor management staff in the SPMO should work with the legal department to create standard wording (boilerplates) for common contract clauses. They should identify and establish priorities for vendor selection criteria.

It is very important for the vendor management team to fully understand the business arrangements between the sponsoring organization and the vendor (and any business partners). There may be larger issues at stake outside the scope of a single project. The SPMO vendor management staff must gain efficiency in internal resources and skills by identifying opportunities to supplement internal capabilities with qualified vendors. This can only be done when standards to measure performance are in place.

The SPMO facilitates vendor management with the Project Manager, the Core Team, and all other stakeholders. Generally, it is best if only the SPMO representatives deal directly with vendors because SPMO staff nearly always have special training to help them deal with vendors in situations that create ethical problems, conflicts, or otherwise can lead to legal complications. There are five key components of vendor management:

I. Planning

II. Selection Assistance

III. Establishment of Contract Terms and Conditions

IV. Monitoring

V. Contract Closure

1.6.3 Vendor Planning

In vendor planning, the SPMO needs to identify all products and services required for the project. Sometimes this takes quite a long time and requires many meetings with business units and various members of the Core Team. This is especially true for very large projects ($20 million or more in scope). Next, the SPMO must identify the available budget and involve all groups affected by the use of each product or service. The vendor team is responsible for each product or service area (e.g., facilities, network, package) that must be identified. This must be communicated to the interested parties through the Core Team and through various reporting vehicles used by the SPMO.

During the selection process, the vendor team will work with the Project Manager to identify vendor candidates by developing a Request for Information (RFI) document that is to be sent to the candidate vendors. The vendors selected at this point are usually the best known or best referenced you can find. The vendor team will also define the selection criteria to be used to determine which candidates are chosen for the project. An important consideration is to ensure that before the RFI is sent out to vendors, all input to the process is included. It is not fair to the vendors to have multiple revisions of an RFI out to various competitors and to have each vendor responding to differing or altered requirements. Any changes subsequent to initial release should be change-managed and communicated through a formal RFI update process. If vendors feel you are wasting their time with frivolous changes, your credibility is likely to take a hit and responses will generally be hard to obtain in the future. It is also important for the vendor selection team to understand when they send RFIs out to vendors that their request is generally only one of many those vendors often receive.

1.6.4 Vendor Selection

The selection process for a vendor generally requires that the SPMO prepare and issue a Request for Proposal (RFP). The SPMO must also identify a vendor team member as the single point of contact to clarify issues. The final selection will be based on how well the vendor has met defined selection criteria, cost, and so on. One criteria that selection teams often overlook is how the vendor product strategy will play out with your specific enterprise needs 12 to 18 months down the road. It is important to know if you are buying a product that will likely be discontinued in three months, for example. The process of evaluating vendor proposals can be time-consuming and tedious, but it should not be taken lightly. As soon as possible, the SPMO should notify and remove candidates do not satisfy the criteria stated in the RFP. The final selection should be made by the consensus of the Core Team. Once the Core Team has made a selection, it should formally notify the legal department about the upcoming contract review.

1.6.5 Establishing Contract Terms and Conditions

At a minimum, the contract should define the commitment between the company and the vendor. The SPMO should work with the selected vendor and the organization's legal department to reach an agreement regarding the precise content and wording of the contract. The contract should stipulate a price and define how billing will be accomplished (include frequency of billing and to whom the bills should be sent). After the legal department has completed work on the contract, the SPMO should schedule a contract review meeting with the selected vendor to evaluate any new vendor alternatives and assess their impacts on the organization. Any changes to the contract must be taken back to the legal department and another review should be scheduled when legal has finished making the new changes.

During the course of this sometimes protracted process, it is common for the Project Manager to concurrently seek and obtain funding approval from the Executive Sponsor.

1.6.6 Monitoring the Vendor

Once contracts are signed and everyone has agreed to what will be done by whom, it is the SPMO's responsibility to monitor the vendor to ensure that everything proceeds as planned. The SPMO should be ready to identify variances, report and track issues, process changes, resolve contract disputes, and ensure that timely and proper billing occurs with the vendor. When bills are received from the vendor, the SPMO should prepare and clear such billings with the Project Manager. If there are changes to the original contract-and there almost always are-the SPMO coordinates those contract changes in accordance with the project change-control process. SPMOs ensure that project teams assess the vendor performance and validate whether on not the vendor has satisfied the contractual requirements of the project. Any instances of noncompliance should be documented and raised as an issue with the Project Manager. If the Project Manager cannot get the issue addressed with the vendor, the SPMO will facilitate handing the matter over to the corporate legal department for resolution.

1.6.7 Contract Closure

The SPMO is tasked to ensure that the vendor has met all contract obligations and the project has met its commitments to the company. The SPMO must verify that project users perform an acceptance review to validate whether the product or service delivered has met all expectations and commitments. Finally, the SPMO should verify that the Project Manager has notified the purchasing department after a successful completion of the acceptance review in order to release final payments to the vendor.



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Managing Software Deliverables. A Software Development Management Methodology
Managing Software Deliverables: A Software Development Management Methodology
ISBN: 155558313X
EAN: 2147483647
Year: 2003
Pages: 226

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