Now there is a word to conjure with, its very pronunciation implies something unpleasant. Risk as a concept can have very negative connotations. Risk is something that a lot of us actively seek to avoid as it will invariably represent something unpleasant and potentially stressful.

It is however something we cannot avoid, embarking upon projects entails a degree of risk and as such we should be prepared for it and if anything actively seek to embrace it.

Risks are the flipside to opportunities, I learnt this many years ago in a fascinating presentation on Project Risk Management given by Doctor David Hillson who will be a guest contributor in a future edition of PM News. In his presentation he canvassed the audience as to their attitude towards risk, did the audience regard Risk with positive or negative feelings. Unsurprisingly the consensus was that Risk is bad. His inversion of this attitude by making the association of Risks with Opportunities proved to be an enlightening moment and from that point onwards I have tended to regard risks as a positive and to be far more amenable to the proposition of risk.

Invariably Projects are introduced to realise benefits and as a result there will be inherent risk.

So how can Project Server support a more robust approach to Project Risk? Three ways spring to mind.

Firstly there is the native functionality of Risk logs in Project Sites. This feature allows for the identification and assessment of risk and has the added benefit of being incorporated by default into the reporting capabilities of Project Server. If you find the default categorizing and scoring of Risk counter to your established metrics you can quite easily alter existing Risk attributes as well as adding additional Risk criteria. The default lists for the Risk log provide you with a quick and easy way to view and monitor Risks in a Project. The facility to both link Risks to Project tasks and assign Risks to individuals makes this feature invaluable to the process of Risk Management.

The second way to manage Risk is provided by the “inactive task” feature available within Project Professional. This feature allows you to include contingency tasks in your schedule, this can both serve to illustrate that potential Risks have been considered and also demonstrate the likely impact of Risks should they manifest themselves.

The third way in which Project Server can be used to manage Risk in a more sophisticated manner is through the use of custom fields at either the task or Project level. Risk fields can range from simple classification using defined drop down lists to more complex Risk values that are determined by calculations that you specify. If you employ custom fields for Risk Management they are available to be used either in views in PWA or in the extensive reporting capabilities afforded by Project Server.

In my next article I will be delving deeper into the opportunities to customize SharePoint Risk lists to support more specific and sophisticated Risk Management.

In my last two articles I have focused upon the budgeting and accounting capabilities of Project Server, this article, the conclusion of my focus on finance covers the notion of charging in Projects and the value to be derived from maintaining this information as part of your project discipline.

The budget for a project provides an indication as to likely cost and a target to work within. The budget can be compiled using a top down approach based upon historical data and then validated by a bottom up approach where individual tasks in a schedule have costs associated with them.

With your budget signed off and your project ready to roll the next step is to maintain a record of costs incurred in progressing the project.

Resources completing tasks in the project can be shown to have incurred costs provided that you have cost rates assigned to your Enterprise Resources. Any variance against the schedule in terms of effort expended will be reflected as a cost variance at the same time. This therefore requires a reasonable degree of rigour in recording progress in order to avoid misrepresenting costs to the project.

Similarly any external partners engaged in the project need to have their costs accurately reflected. There may be occasions where an external partners input is based upon a fixed price rather than an agreed day rate, in such cases knowing what they have cost so far and what there is left to spend against their agreed fee should be recorded. Here you may have a challenge as Microsoft Project calculates costs for in progress tasks using the accrual method associated with a resource; this means you cannot edit the actual cost to date.

The example here shows a task being recorded as 50% complete and the assigned resource has their accrual method set to pro-rated. There are two other options for resource cost accrual, start and end – whilst these can be of some benefit in calculating cash flow they each represent a challenge in allowing for accruals. Setting the accrual method to Start means all the costs associated with the assigned resource are incurred on day one which may overstate costs to date. The alternative End accrual method means that costs can be understated as they are not accrued until the task is completed.

In order to have some insight in to the true cost status of the project recording actual and remaining work can result in the Cost for the assignment being recalculated by Microsoft Project which will result in a cost variance on the task.

In the example above the actual and remaining work values have been calculated as a result of updating the task as being 50% complete with the task costing £3200.00.

In the example above the actual and remaining work values have been entered and as a result there are 4 hours more work scheduled and the task is shown costing £3600.00, an extra £400.00 incurred as a result of the additional effort recorded.

A potential obstacle to recording costs using resources is that in progress tasks cannot have their actual costs edited. Once a task is completed you can edit the actual cost figure to be whatever you deem appropriate.
An alternative approach would be to define any external resources as being Cost Resources and to simply update what they have cost to date

Cost resources can have their actual costs updated whilst tasks are in progress. The downside is that such resources do not represent any work, however as such resources are likely to be outside of your direct control measuring and monitoring their workload and availability is not your concern, they will have contracted to meet your requirements for a price, how they achieve this is down to them.

With your project in progress you are in a position to monitor actual costs and remaining costs and to identify any variances.

In all probability cost information from an up to date schedule will be available well in advance of any costing reports from your finance function as invariably they rely upon the submission of invoices and any other charges in order to produce meaningful reports. As a consequence you may well find that cost information from your schedule is a leading indicator as to the information that will be produced by your finance function. Apart from anything else having the facility to compare what Microsoft Project reports with what your finance function reports can serve to identify potential anomalies such as the incorrect charging of costs to projects.

Maintaining a watchful eye on the cost status of your project can serve to alert you to potential problems before they become major issues.

Managing contingency is also a discipline that can be supported by the use of custom cost fields in Microsoft Project Server. Employing a blanket % figure to the cost of a project has traditionally been an accepted approach; however this can in some cases distort things and may result in an inappropriate contingency allocation for the project.

By assigning contingency sums to individual tasks in the project with risk exposure being a determining factor in identifying appropriate contingency allowances you can arrive at a more informed contingency figure for the entire project. There may be some tasks where contingency is deemed unnecessary and others where they need a high proportion of contingency allocated. Monitoring the contingency budget over the lifecycle of the project can also more effectively manage this element of finance. Completed tasks need no longer have contingency allocated to them and in some cases you may wish to re-assess the contingency sum assigned to tasks as they become more imminent.

Monitoring the cost and contingency status of your project across its lifecycle can also allow you to make informed decisions that influence the outcome of your project. Completing the project way under budget may earn you the respect of the finance function but this may be of little consequence if quality has suffered as a result. Through careful monitoring of your actual and remaining costs to date you can be in a position where you can re-allocate savings on completed elements of the project to remaining parts and as a result improve their quality and the perceived success of the project.

One final benefit of maintaining a record of charges incurred in a project is to provide comparatives against the original baseline and to provide data which may in turn be used for estimating future projects to a higher degree of accuracy as a result of your having captured accurate and detailed cost information as a function of managing your project.

Accounting is a core business function and as such needs to be acknowledged and ideally informed and updated with relevant information generated by Projects. Spending valuable time compiling reports for your accounting function is probably not top of your list of priorities so how can Project Server be employed to lighten your burden?

In my previous article I focused upon Project Budgeting, both top down and bottom up. Thankfully as part of compiling a budget we can also generate information of value to the accounting function if we make use of the facility to assign codes to resources, tasks and projects.

Cost centres are a well-established accounting concept, expenditure can be neatly categorised and accounted for using such measures. Project Server provides you with the facility to assign codes to Projects, Resources and Tasks for accounting purposes.

Projects can have cost centre or cost code values assigned to them to allocate spend to the appropriate accounting category. A lot of organisations operate “Cost Centres” and as such will be keen to allocate costs and expenditure to the appropriate cost centre. Identifying the type of spending on projects through cost codes can also benefit the accounting function in knowing how much spending is being directed to capital versus operational budgets.

Resources are ideally suited to having cost codes assigned to them. Projects can frequently involve people who reside elsewhere within the organisation. If they are engaged in a project they will not be contributing to their “home” area and as such an element of their cost will need to be assigned outside of this cost centre. Investing your resources with this information can allow for appropriate cross charging of peoples time ensuring that the accounts function correctly represent the true cost of delivering a project and just as importantly does not allocate too much of the resources costs to their “home”  within the organisation.

Resources need not necessarily be just people. The 3 resource types available in Microsoft Project, work material and cost provide for reasonably discrete apportionment of resource to tasks in a project plan.

Work resources need not be limited to just human resources, a work resource can be regarded as any resource that is used to make things happen in a project. As a result you could consider facilities and equipment to be resources that can both be assigned to projects and then have their costs tracked.

Investing in capital equipment can sometimes be a major headache as the business will see the cost but not necessarily the benefit. Assigning a cost and cost code to equipment resources will give the organisation the facility to allocate the true cost of using the equipment to a project and the facility to recover these costs and allocate them to the appropriate reserve account.

From my time spent working in the construction industry I became very familiar with the benefits of both allocating a budget for equipment used in a project, monitoring the amount spent compared to the budget and also ensuring that the charges levied reflected the true lifetime cost of the asset.

These lifetime costs would be not just the purchase price but the cost of capital over the lifetime of the asset, the cost of maintenance and parts required depreciation and capital allowances. Knowing all these figures and estimating the likely use of the equipment over its lifetime it was possible to calculate a charge rate per day for equipment. It was then interesting to monitor if equipment was paying for itself or in some cases contributing to profitability through being used for a greater amount of time than was anticipated at the time of acquisition.

A further benefit of such charging being made is that it can focus people on both getting maximum use of such resources and ensuring that they are re-allocated when not required to both avoid unnecessary charges to the project and to also make such valuable resource available for deployment elsewhere in the organisation – have you ever been delayed waiting for equipment that is allegedly in use elsewhere only to find it is standing idle whilst your project is desperate for it?

If your project incurs charges for goods or services provided by external partners you will also want to keep track of such expenditure and also ensure that what they are charging your organisation matches what you anticipate. Some unscrupulous operators will seek to overcharge for what they have provided and assume that there is little or no connection between the parties procuring their services, those using their services and finally those paying for their services. Cost codes and custom fields can be employed to identify such costs to the project and to report them accordingly.

A further benefit of identifying charges for externally provided goods or services is in identifying cash outflows from the organisation and when they are likely to occur; this can be of benefit to financial management who have a responsibility for managing the cash flow of the organisation. Providing information as to when such outflows will occur can allow an organisation to more effectively manage its finances. In the current climate securing debt finance can be a challenge, making sure such finance is utilised efficiently is ever more important.

In all probability assigning cost codes to individual tasks may be a step too far as this association can be established at the project level, however there may be sound reasons as to why you wish to differentiate at the task level. For example there may be some activities which are tax exempt as they are research and development undertakings.

Project Server can be configured to deliver reports that meet the need of your accounting function as a matter of course. Identifying what information they need and in what format should be a consideration for any deployment of Project Server as invariably there will have been an investment decision behind its adoption. Delivering this information to the finance function will provide them with a testament to the fact that the investment in Project Server was worthwhile and is paying dividends.

There are three components to project financial management:

       1. Project Budgeting
       2. Project Accounting
       3. Charging

Employing all three components in a consistent and repeatable fashion should in theory deliver insight and consequent business value. In this the first of three articles I am going to focus upon Project Budgeting.

Project Budgeting can be performed in two ways, top down and bottom up. Top down budgeting is typically employed at the outset of a project and provides a ballpark overall budget figure for the project based upon data derived from previous experience. At this point some of you may ask where is our data for this approach – if you haven’t maintained and updated progress in your project plans then it is going to be difficult to obtain any reliable data and you are likely to be reduced to some rudimentary FITA (Finger in the Air) estimating.

For those of you with some level of historical data the top down budgeting approach is going to be a bit easier but at best the top down approach is far from exact.  However it can be useful  in helping you arrive at a “Ballpark” budget figure. For example a new project is similar to but different from two projects we completed in the past year, looking at those two projects and their outcomes our top down estimate would suggest that this project will cost @ 20% more than the average cost of those two projects.

Top down budgeting will typically be employed at an early stage in the project lifecycle and can be used as part of the initial business case development.

Once a project has been approved we can start to put some meat on the bones and plan our project in more detail. It is at this point that the potential of Microsoft Project to provide cost insights begins to be of value.

Each and every task in a Microsoft Project plan can have costs associated with it. The total cost of a task can be the composite of several factors, the cost of the work resource assigned to the task (work resources can be inanimate objects such as plant, machinery or facilities in addition to people), any material resources consumed in completing the task, any cost resources assigned to the task (a great feature and perfect for tracking how much you spend in total on a project for items such as travel, hotels and other incidental expenditure items) and any fixed cost that may have been applied to the task.

Looking at this capability in detail let us consider each cost factor.

The cost of the work resource assigned to the task – Microsoft Project provides you with the facility to assign a cost to a work resource, in fact you can employ five different cost rates for the same resource as well as having costs change over time. The typical approach is to show someone with a cost of so much per hour, sometimes referred to as FTE or Full Time Equivalent costing. The FTE figure being derived from the cost of employing a resource over the period of a calendar year divided by their potential work hours per year and not what they actually receive in pay. Typically the FTE rate for employing a resource will be double what they actually receive in their pay-packet. As you can no doubt appreciate the costs associated with resources can start ramping up pretty quick. The figures can also be distorted if the allocation of resources is done in a crude and insufficiently granular fashion.

A work resource need not be limited to identifying just people, equipment and facilities can also be defined as work resources. For example we are going to have a project board meeting in the conference room for 2 hours with colleagues dialling in using video conferencing – in such a case the room and perhaps even the video conference equipment could be resources with costs associated with them that are employed in the project. You may feel this is getting a bit too granular but without these resources could your project happen? If there is an internal charge to your project by the finance function is it truly representative of the overheads your project is consuming or is your project being saddled with costs that make it a significant contributor to operational budgets?

The cost of any material resources – to be brutal Material Resources can quickly get out of hand if you are involved in projects with a high level of material consumption. If you were running a construction project the potential permutations of unique materials would be phenomenal, bricks, timber and even concrete all come in many forms and specifications. However if you run projects that use a discrete, manageable and repeatable schedule of materials then defining them in Microsoft Project may be appropriate to your needs. The assumption with Material resources in Microsoft Project is that there is no limit on supply or availability which can sometimes catch people out.

Cost resources are a nice relatively new feature in Microsoft Project and can be used to record the cost of the same thing incurred many times in a project. For example you can have a Travel “Cost Resource” that can be assigned to numerous tasks in a project, Microsoft Project can then show you how much you are spending on Travel in that particular project. There are no limits to the number of cost resources you can define in Microsoft Project. However try to avoid being ultra-granular in how you define such resources. Differentiating between a licenced taxi and a minicab is possible but do you really need that level of detail when “Taxi Fares” would cover both instances.

Fixed costs, to some extent this feature has been superseded by the arrival of Cost Resources, however it is still possible to assign a fixed cost figure to a task the only problem being there is no obvious indication as to what this figure represents.

If you want to incorporate some kind of “uplift” or addition for profit this can be achieved through custom fields, which is a whole other blog post for some time in the future.

Assuming you have built a reasonably detailed plan and assigned resources to tasks in your project you will have a total cost figure for the entire project. This can be seen by using the Cost Table:

 
And also having the Project Summary Task displayed.

 
The figure shown in the Total Cost cell for the Project Summary Task will be the total cost of the project; in effect this represents the “bottom up” approach to cost estimating as every task in the project has its costs “rolled up” in to the overall cost of the project.

The big question now is how the “Total Cost” figure displayed in the project compares with the top down figure used at the start of the project. Hopefully the two figures are reasonably close to one another, however if the “bottom up” approach delivers a figure way in excess of the top down figure you may need to  revisit the project and consider your options. If your bottom up figure is way under the top down figure is there something vital that you have missed out in your planning?

To address excessive bottom up costs do you de-scope the project which may have an impact on quality and the perceived success of the project or do you argue for an increased budget? Other alternatives might be using cheaper but less proficient resources to work on certain elements of the project, sourcing alternative supplies or negotiating better prices from suppliers or vendors.

Hopefully the total cost figure furnished by Microsoft Project will be acceptable and as such, once the schedule has been approved you should set the Baseline for the project. This will provide you with the opportunity to record progress and to compare actuals against what was planned in terms of start and finish dates, duration taken, effort expended and of course the costs incurred.

In the next article in this series I intend to focus upon Project Accounting and how Project Server can be used to support this important element of effective project management.

Well it is that time of year, the chance to reflect on the year that has passed and to look forward to the challenges and opportunities of the one ahead.

We live in interesting times as the Chinese would say, however it need not be the reason to hunker down and simply hope to weather the storm, far better to set an ambitious course and resolve to work towards achieving new objectives.

The New Year invariably gives us the opportunity to consider and embrace changes in our personal lives, why not the same for our working professional life too?

So how can exploiting the potential of Project Server help us to change for the better? Here are five suggestions as to how.

1. Transparency and Accountability
Bbeing able to demonstrate progress and status is a persistent issue and in the current climate an ever more pressing requirement. Project Server can both automate the process and provide information in suitable formats to varying audiences on demand and in real time. This facility alleviates the Project Manager from the persistent chore of having to produce a plethora of management reports in a variety of formats. Recipients can be assured that what they are viewing is current and not out of date information and that it suits their information needs.

2. Consistency
Common contributors to project failure are poor planning and unrealistic timelines – by leveraging the facility of Enterprise Project Types (EPT’s) in Project Server project plans be created more swiftly and consistently and can be assured of employing “best practise” approaches to planning and scheduling as determined by the organisation. Maturing as a project organisation can be a slow process, EPT’s can help support this process by providing a more mature and proven approach to planning and managing projects.

3. Benchmarking
Being able to quickly easily and consistently compare performance across projects on a series of established metrics can allow you to identify those Project Managers who are under or out performing their peers, this can be an early indicator of issues or an opportunity to share expertise and knowledge amongst Project Managers to the benefit of the entire organisation. Project Management has continuous improvement as one of its key cornerstones, why not be more pro-active in identifying areas for improvement sooner rather than later.

4. Estimating performance
How good are you at estimating, is it something you try to avoid or don’t fully understand? Is it an area where you could improve? How do you go about compiling estimates and what exactly do you estimate when it comes to planning a project? A whole pile of questions for you there. Most people are intimidated by estimating, they can feel that they are being asked to commit to something that they do not fully appreciate or understand and that any estimate they provide will be used as a stick to beat them with. Estimating is not and never will be an exact science; there are invariably too many variables in any project for the prospect of estimating to 100% accuracy to be realistic. You can however aspire to improving your margin of error on estimates, this will require you to have an estimate in the first place and to then record actuals and compare them against the original estimate or baseline. If you perform this discipline for any sustained period of time you are likely to unearth some trends or obvious anomalies that can quickly be addressed and will hopefully contribute to more successful or realistic projects in future.

5. Budget setting and monitoring.
This is a particular area of interest to me as a result of my career experience in being involved in managing significant capital projects. If you are not already tracking costs and performance against budget you can be missing a trick and in all probability you will find yourself being required to do so before too long. In the current economic climate and with senior management being held ever more accountable for their decisions being able to display prudent allocation and management of valuable financial resources is likely to become a more common requirement. Project Server can help you assign costs to your projects, primarily reflecting the costs of human resources deployed in your projects and to then monitor expenditure compared to budget, highlighting any variances that may arise.

If you adopt one, some or all of these approaches you will probably realise improved performance from your projects. Hopefully such changes will be for the better and will contribute to your own continuous improvement and that of your organisation.

There are many questions about resource management that probably keep you awake all night.  Ok, maybe you can sleep just fine, but perhaps there are questions that perplex you during the day.  There might be dozens of questions that you have but here is a small sample that you (or maybe management) might be wondering about.

• Who is working on what projects?
• What tasks are they doing on those projects?
• When are they doing those tasks?
• How many hours of work are assigned for those tasks?
• What is the capacity of each person?
• Who is scheduled to their capacity or over-capacity?

Of course, the way to get the answer to each of these is very simple.  All you have to do is walk around, talk to each person individually and ask them.  You can write their answers down (assuming they all tell you the correct information) and then combine your notes and it will be totally valid!  And, when management surprise you with a request for this information for a meeting they are having in a few hours you just have to walk around faster.

Or, maybe there is an easier way!  An easier method would be to click on a link and get a report that gives you the answer to one or more of those questions.  Just think of all the walking time that you will save!

Project Server 2010 can provide you this information quite easily.  To get this information doesn’t require meticulous hours spent entering every possible detail from the first day you start using Project Server.  At some point in the future you may want to add more detail, like skill sets, but it is easy to start gaining valuable information right away with Project Server 2010. (Even if you don’t use Project Server, it is possible to use Project Professional to get this information.  I won’t go into more detail here about how you can get this information without Project Server but it is covered in my new book “Mastering Resource Management Using Microsoft Project and Project Server 2010”.) 

Let’s briefly look at the first three questions – ‘Who is working on what projects?’ ‘What tasks are they doing on those projects?’ and ‘When are they doing those tasks?’.  The easiest way to obtain this information is to assign a Resource to each task on your projects (when applicable) and provide a Start Date and Finish Date for those tasks.  This action will give us the ability to see in one combined report who is working on which tasks, on which projects, and when they are working on them.  You can see this information from the Resource’s perspective or by Project.  For example, this screenshot shows how this might look when viewing a single Project:

The view shows us that Shelly Smith is one of the Resources assigned tasks.  Now let’s look at the information from the perspective of Shelly Smith for this same time period as the screenshot above.  When we dive into the information for one single resource we will also get the information that answers the others questions posed at the beginning of this article.  How many hours are assigned?  What is the resources capacity?  And, who is over capacity? 

For Shelly Smith, for the time period as shown in the screenshot above from the project perspective, we can see that she normally has a capacity of 40 hours a week.  And, based on her current assignments, she has work assigned to her of about 40 hours per week.  There are two exceptions in this data – the first and last weeks of this time period.  During the week of 11/1/2011 she is assigned 64 hours on the schedule called “Sample” and with a capacity of 32 hours, she is 32 hours OVER capacity.  The week of 12/26/2011 she is 36 hours over capacity.

Sometimes, pictures are worth a 1000 points of data in a grid.  Here is that same information represented in a graph.  The black line represents Shelly’s weekly capacity and the blue bars represent the amount of work assigned to her for that week.

You might be thinking that this is nice for ONE resource and ONE project but when you walk around and ask resources what they are assigned to now they have multiple assignments on multiple projects and it overlaps.  No problem!  Stay tuned for next month’s installment when we show how this information rolls together from multiple projects for multiple resources.

NOTE:  The information provided by these views depends upon some of the business decisions and corresponding setup of Project Server.  These examples are using the Standard Calendar and Fixed Duration tasks.  You can get more detailed information by using different calendars and different task types.  Even if you are using Fixed Duration for task assignments, you can still get a useful perspective of the amount of work being assigned to a Resource!   (For a deeper explanation of task types see http://pmpspecialists.com/WhitePapers/PMP_Specialists_Task_Types.pdf ) 

Now, we need to look at a time period where Shelly is assigned to many different schedules.  Since the picture view might be more easily understood, we will review that one first.  The black line represents Shelly’s capacity – at 40 hours a week.  The blue bar represents the amount of work assigned.  We can easily see that she is way over capacity! 

Now we can review which projects are causing these problems by reviewing the data view.  (We review this in image form at the end of this article.)  We can see that she is over capacity by between 24 and 104 hours for January.  Be able to review this information allows you to go to the various Resource Managers or Project Managers (or the resource) and discuss what the priorities are and what tasks can be moved to other resources or other time periods.  From this chart, we can determine that the Resource Managers for both the “Infrastructure Plan” and the “Residential Construction” schedules think they have 100% of Shelly’s time for the week of 1/9/12.

If one of the potential results of seeing a view like this is to determine if we can move work to other resources we need to be able to see those resources for the same time period.  We can look at each resource individually as we have done or we can see all the resources that we want to during this time period.  For this example, I have chosen to include two more resources, Ryan and Jessica.  I now have a new black line that represents the capacity of all three individuals and I can see the work assigned for the three of them combined.  Note that Shelly is now the yellow and that Ryan is green but Jessica is Blue and she is seriously UNDER capacity.  In one quick look we know who can get some of Shelly’s work.  And, we have also discovered that Ryan is over capacity.

These last few images were from the resource’s perspective but we can also view the work from the schedule perspective.  Earlier, while we were concentrating on Shelly, we looked at which projects were assigning her the most work.  But, we can view how many hours of work are being assigned to resources based on the perspective of projects. 

In this chart we are still only looking at three resources but this time by project – that is why the black line representing capacity is still at 120 hours a week (40 hours each per week).  But on the right hand side the names of the projects are all color coded.  Just by reviewing the chart we can determine that the “Commercial Construction” project is taking the most time for the most weeks.

There is another really positive aspect to all of this – it is in real time.  If you are looking at this chart and a Project Manager changes the dates on a schedule and then published that schedule, as soon as you hit refresh the data changes!  Also, you can deselect projects or resources or change the date range and hit the “Apply” button and the graph changes to your new parameters. 

These examples just touch on the amount of information that Project Server 2010 can provide.  There are numerous other views and reports and ways to get data that is meaningful to your specific situation.

Want to see a video on Resource Management in Microsoft® Project Server? Click here.

Author Bio:

Collin Quiring has worked in the area of Project Management for over 15 years.  He has implemented Project Management Office’s for two separate companies during that time and has worked with clients across industries and of various sizes. 

During his career, he has developed a passion for helping organizations better understand their Project and Resource Management needs and the methodologies to obtain and maintain that information.  His focus is on aligning an organization’s strategic objectives with the business and technology processes required to demonstrate effective results.

Collin authored the book “Mastering Resource Management using Microsoft Project and Project Server 2010.”  He is a Project Manager, Consultant, Trainer and Speaker for Project Management and Microsoft Project Server.  He is a managing partner with PMP Specialists and holds PMP, MCTS, MCP and CIRM certifications along with an MBA.

Read Collin’s blog at  www.PMPSpecialists.com/blog 

Visit PMP Specialists at www.PMPSpecialists.com

The “Edit Page” option is available in the Assignment Details Page but does not include options for changing the “Work” units as this is controlled by an option on the Tasks Ribbon. Whilst you can change the units for work, duration and date in the “My Assignments” page changing these values does not “pass over” to the details as displayed in the Assignment Details Page.

The values displayed in the “General Details” of the Assignment Details Page are determined in the view settings which can be accessed from Server Settings>Look and Feel>Manage Views>Assignment Details Page.

Even here the options are distinctly limited and relate only to the information displayed within the “Task Properties” section within the “General Details” section of the Assignment Details Page.

The information displayed in the upper “Task Progress” section of the “General Details” section of the Assignment Details Page will be determined by the task update method employed. The three options available are:
1. % complete
2. Actual Work and Remaining Work
3. Actual Work per Time Period

There is also the option for an organisation to lock down or enforce one of these update methods removing choice from the Project Manager.

In addition if you have “Single Entry Mode” enabled this only allows updates to be carried out in the Timesheet and whilst you can edit the “Remaining Work” value as displayed in the tabular elements of both the Timesheet and My Tasks pages which if changed results in both the % complete and finish date changing.

I thought that perhaps making a change in the Schedule Properties for the project in the Project Professional Scheduling client might help but sadly no, the default option is for work to be shown in hours.

So there you have it I am afraid, there is no obvious route to getting work showing in hours rather than days when it comes to the Assignment Details page.

In my last article I touched upon cross charging, capital or revenue considerations and the correlation between budget size and the probability of failure. The correlation between increased costs and increased chances of failure suggests that having a better grasp on the finances would probably result in a reduction in the number of failing projects.

Knowing what you are spending, how it is accounted for and the inherent risk represented by budget size it is now appropriate to consider how this information can be exploited for reporting and governance purposes.

In his article on Project Financial Intelligence Mike Gruia of UMT Consulting observed “A flood of corporate scandals combined with the recent harsh economic downturn have served to undermine the confidence in current management systems and controls. Despite the fact that information assets represent more than half of capital spending, most companies lack effective financial governance.”

So I guess the big question is, do you want to be in the majority of organisations that are missing out on the competitive advantage that currently a minority of organisations enjoy?

The Project Server 2010 solution incorporates Portfolio Analysis and within this element of the solution cost metrics are employed as a primary constraint. In lay terms it means we can use cost information as one of the parameters to both compare potential projects and to select appropriate projects in a portfolio. For more sophisticated analysis it is possible to incorporate additional cost metrics in the cost limits constraint analysis. Any project level cost fields can be employed in this analysis. Here are a few suggestions you might wish to consider.

Viability – at inception a project may appear to be a “dead cert” the benefits to be realised represent a good return on the investment made by the project. However over time it may be that the cost of the project escalates and the forecast benefits shrink. At what point does the project become unviable? Having a leading indicator for this information can be of significant benefit when conducting stage reviews, does the project continue as planned, change direction due to changed circumstances or in extremis stop at this point as it is no longer viable?

Having a RAG indicator for the forecast ROI that uses objective criteria would be of benefit in such circumstances, however it would still be reliant upon a realistic view on benefits which can sometimes be proven with hindsight to have been overly optimistic.

Does your organisation track benefits and compare actual benefits with forecast benefits? Are there any patterns evident, for example do forecasts from one area of the business consistently overstate forecast benefits?

Having this information to hand at initiation would serve to ensure that more realistic benefits forecasts are employed from the outset. With forecast benefits established at the outset of a project re-assessing them and reworking the cost/benefit calculations using these revised figures and more accurate cost figures (actual to date and forecast to complete) at appropriate decision points throughout the project lifecycle may provide further indicators as to when it is appropriate to stop a project, I only wish such discipline had been in place with the UK IT Programme for the National Health Service whose scrapping at a cost of £Billions was recently announced!

Ratios and other metrics, whilst not cost values themselves, can be derived from project financials and again provide impartial assessment of the financial health and viability of your project.

• ROI
• Payback Period
• Revenue Growth
• Strategic Scoring
• Cost Containment

You may well be able to suggest more measures for gauging the financial viability of your projects and portfolios, if you have examples we would be happy to hear from you and perhaps even run a case study on the benefits you enjoy as a result.

For more information on how Project Server can help you with your Project Financial management feel free to download their factsheet.

In my next article I intend to continue the theme of Project Financial Management and how Project Server 2010 can help you apply this increasingly important management discipline to your projects, programmes and portfolios.

Resources belong somewhere and so do their costs.
In this day and age “matrix management” provides flexibility for project teams and can mean that people are deployed across projects and are responsible to different managers other than their normal “line manager”. Costs associated with resources assigned to projects need to be allocated to where they are incurred which may not necessarily be where the resource normally resides. This infers some form of internal “cross charging” mechanism to be operable. If you have costed resources assigned to tasks in your project you have the opportunity to identify such cross charge information which can be used by your finance function to allocate costs correctly to the correct accounting records.

Having access to accounting information can also provide Project Managers with the assurance that the costs of their projects are being properly recorded and that their projects are not having inappropriate costs allocated to them by reconciling accounting records with their own project cost reporting.

Capital or Revenue?
Capital or Revenue which classification applies to your project?

If your project is classified as a Capital Project it represents an investment in an asset of some kind or other that will hopefully enhance the ability for your organisation to generate greater revenues in the future.

A Revenue project on the other hand represents expenditure directed towards maintaining existing assets and their capacity to generate revenues.

Not being an accountant by qualification I have struggled with the nuance of these terms in the past, an easy way of appreciating the difference is that Capital projects can represent the acquisition of new assets whereas Revenue projects can represent the maintenance of existing assets. You may not regard this information as important but any organisation will have a limited source of funding to apportion to projects and deciding the appropriate allocation of these funds can be vitally important to the on-going viability of the organisation. There may also be the option to offset Capital expenditure against revenues for the purposes of mitigating tax liabilities on profits so your finance or accounting function will have a keen interest in this seemingly insignificant classification.

With project server differentiating these types of projects is elegantly achieved through the device of an Enterprise Custom field with an associated look up table.

Spend to Date and Accruals
If your project spans across more than one financial year how will its budget and spending be treated? A project plan can not only serve to provide a good indication as to the cost of a project but it can also be used to plot when the spending will occur, giving the organisation an indication as to cash outflows.

Once a project is up and running it is important to keep track of what has been spent so far, what is left to be spent and how you are performing against budget. If your project is showing an overspend against budget at the end of a fiscal period can you be assured that continued funding will be approved?

Furthermore how does your expenditure compare to what you planned to spend so far, if your finance function report a lower cost to date than what was planned this does not necessarily indicate that savings are being made, your project could be behind schedule with less effort and expenditure having been expended so far.

Forecasting the cost to complete should serve to keep your finance function aware of future liabilities and the need to honour these commitments.

How big is your budget?
Bigger is not always better, a large budget will reflect significant resource commitment and probably complexity as well. The Standish Group in their Chaos Report of 2009 observed that IT projects with a budget of between $1M and $3M had a 38% chance of success whereas projects costing $10M or more had only a 2% chance of success. This suggests that the lower the budget is the higher the chances of project success are! This is not however an invitation to undertake projects with no budget!

These statistics are alarming but also insightful, you would imagine that a large investment would attract significant governance and control whereas the facts suggest that things spiral out of control as the budget grows. Consequently a large budget can in itself be an indicator of risk for the organisation.

Costs will invariably reflect both resource spend and time, the longer a project lasts the more likely its costs are to rise. For a lot of IT projects extended durations are a pretty reliable indicator as to the chances of failure.

Opportunity Cost
In previous articles I have mentioned benefits in relation to costs. If your project’s deliverable is a revenue generating opportunity how has the revenue been determined? What is the value of revenue to be realised and does it defray over time? Are you entering an existing market, evolving an existing offering or trying to create a totally new niche or market opportunity?

Whatever the opportunity it is likely that missing a target “go-live” date will result in lost opportunities and consequently lost revenues. Are you fully aware of the cost of delay? If your business case has identified the cost of delay in achieving your “go-live” date have you thought about modelling this in your project plans? Through a relatively simple approach (ask me how!) you can model the cost of delay which in turn may have negative impact on the viability of your project.

How else can we use financial metrics in our project environments? In my next article I propose to explore some of the options available and how Project Server can be employed to exploit this information for effective approval, monitoring and control of your valuable projects.

Gartner, the leading provider of independent research and analysis on the information technology industry has just published (13th June 2011) MarketScope for Project and Portfolio Management Applications.

This in-depth research rates PPM software solutions (Strong Negative, Caution, Promising, Positive, Strong Positive).  Microsoft Project Server 2010 received the highest Strong Positive rating and the message from Gartner is:

Customers:
Continue with planned investments.

Potential customers:
Consider this vendor (Microsoft) a strong choice for strategic investments.

“The inclusion of SharePoint 2010 as part of Project Server 2010, more seamless integration with the portfolio management capabilities of the product, the cost-competitive pricing, and advancements in native project creation capabilities independent from Project Professional earn Microsoft a Strong Positive rating.”

Microsoft Project Server 2010 provides a complete project lifecycle management solution, from proposal assessment & portfolio analysis through to team collaboration, dashboard reporting, resource and time management.

“Microsoft Project Server 2010 is a landmark release for Microsoft”

Gartner recognise that organisations can struggle with the many challenges of project and work management, including:

• Choosing the right projects & executing them in the right way
• Balancing supply of resource (people & budgets) with demand
• Visibility of project status
• Pro-actively addressing emergencies on projects
• Addressing changes to the pipeline given shifts in strategy / priority

Microsoft Project Server 2010 addresses these needs. 

Key drivers for most organisations are (i) cost effectiveness and (ii) speed of deployment.  Gartner recognise the importance of these factors:

 “From a license fee perspective, Microsoft Project Server 2010 can be one of the more cost-effective on-premises and/or hosted PPM systems.”

Microsoft Project Server 2010 was the only product available as either SaaS or as a local installation that received the Strong Positive rating.

As a lead Microsoft Partner holding the Project & Portfolio Management Specialisation we, Wellingtone Project Management, offer a fixed price, pre-built & enhanced Project Server 2010 solution; PPM in a Box™. 

The PPM in a Box™ service package includes installation, requirements workshops, configuration, administrator & user training for £9,950.  Our clients can have a fully functional PPM solution within 10 days. 

Sign up for one of our regular free Project Server webinars, visit our web site or contact us today to found out more and discover for yourself why Gartner rate Microsoft Project Server 2010 so highly.

——-

To get access to the full Gartner MarketScope report please click here.

——-