Best practices for managing projects

July 24, 2003
Templates for ensuring repeatable processes and cross-project trade-offs are two of the latest techniques for managing projects.


   Senior Editor

The bubble chart from Windchill ProjectLink in PTC's PLM system displays project information based on inputs from project participants. The chart and related information helps guide managers and executives on which projects they should push ahead and which they should ax.


Accolade from Sopheon Corp., includes an Idea Management module that lets users gather, organize, and grade hundreds of ideas, collaboratively evaluate their potential, and develop the best into commercial winners.


ActiveProject from Framework Technologies Inc., Burlington, Mass., shows a project along with deliverables and metrics. This one of several templates also synchronizes information and communications among distributed product introduction teams. Another template, Portfolio Planning, links corporate objectives to projects.

There is little good news for those of you managing projects. By one count, over 46% of new products fail in development or shortly after reaching the market. It's even worse for those in the food industry. Statistics cited by Sopheon Corp., (www.sopheon .com) a software-development company in Minneapolis, say an average of 78% of new food products are doomed to fail. And IT projects have even less hope. The Standish Group Report (Chaos, 2000) says over 83% of them were delivered late or over budget. What in the world is going on?

What's going on is that suppliers don't deliver on time, companies build the wrong products, try doing too many things at once, and tasks that look easy on paper turn out to need Herculean efforts. To further complicate matters, the world is moving so fast in the Internet era that tastes change and targets move before projects finish.

The good news is that a lot of research has looked into what makes some companies successful and others just survivors. Much of it has been encapsulated into product-life-cycle-management (PLM) software. It has done a good job tracking the mountains of information generated by engineering teams during projects. It finds technical data faster than ever before and lets teams get online to swap drawings, data, and models with suppliers .

But there is an unsung portion of PLM that doesn't get much attention by bench-level engineers. It's the stuff that gets used at the beginning of a program when managers are sorting out which of several proposed projects they should push ahead. When asked for suggestions, traditional metrics and ambitious suppliers might look over the proposed list and say, "Lets do 'em all." That's probably a mistake because resources are limited in any company, and from the previous stats, product success is not guaranteed.

This is where best practices in project and portfolio management come in. These are both part of PLM. "One way to think about project and portfolio management," says Steve Morandi, vice president of Windchill ProjectLink for PTC, Needham, Mass. (, "is that portfolio management selects the right projects, and project management does the projects right."

Best practices

There is no shortage of ideas on how to manage projects. An Internet search on Google comes up with hundreds of sites. So with this much help, how can anyone go wrong? It's easy. Although all projects have some similarities, there are tasks and issues unique to each industry that could confuse general-purpose software. For illumination, we asked several experts to highlight a few best practices in managing projects.

Portfolio planning comes from the financial world but works well in project management because it "lets managers view several projects that could draw on the same resources," says Morandi. "A manager overseeing 10 projects, for instance, should understand how they are interrelated and where there may be resource constraints," he adds. Unfortunately, most project-management tools let managers plan and start as many projects as they can conceive. Some companies use separate tools for portfolio planning and project management. "A best practice uses a unified software tool that integrates both the current project execution and portfolio planning data," he says.

"A lot of horse trading goes on between different projects when managers realize they've stretched their resources too thin," says Kevin O'Leary, spokesman for Framework Technologies, Boston ( "Should three or four projects need the same resources at the same time, one or more will have to slip." This happens when project planning is ignored or given short shrift. Proper analysis tools look at anticipated financial returns, timing, adjusting bottlenecks and requirements, and assisting with related decisions," he adds.

A project charter, another best practice, should compliment portfolio-management software. The charter states in detail the company goals, its principles, and what it's working toward. Company projects should contribute to the project goals. "Goals should be clearly stated in a charter," says Framework's O'Leary. "Part of a good charter asks managers questions such as: What industry are you in? Is cost savings a goal? And so on. Then top-level managers can compare their responses to company objectives and decide what should be done."

A project-success evaluation gives managers indications of whether a project will succeed or fail. "An executive should be able to see, for example, that there are 15 products in the pipeline and how they rank in terms of economic advantages," says Andy Michuda, CEO of Sopheon. An effective evaluator, he adds, should also tell how the projects improve the company's competitive situation.

Every company has pet projects that get support and funding for the wrong reasons. For example, groups in NASA building planetary rovers and robots might view big-dollar missions that put people in space as pet projects because robots can do the same exploration work without subjecting humans to danger.

Evaluation tools can help weed them out. Evaluators from several sources manipulate inputs from a team of judges who evaluate a company's projects and return a percentage of likely success.

Impose stage gates into a project. This best practice is a list of conditions, forms, and check-offs that must complete before a project proceeds to a next stage. The gates are becoming the preferred method for examining project goals before releasing projects to a next stage. There should be several stage gates throughout a project. "Projects usually start with an concept phase and a gate at its end," says PTC's Morandi. "The gate is a review that prescribes what information is required along with who needs to review and approve the data before the project moves to the next phase.

An idea bank comes from the curious statistic that says it takes nearly 3,000 raw ideas to formulate a successful product. "Ideas abound in every organization," says Sopheon's Michuda. "But they get lost in day-to-day business. Most companies have no way to efficiently collect and organize ideas, or to filter out the critical few that might make a difference to the bottom line. So it makes sense to have a single location for employees to store ideas that might be useful to the company at a later time." Idea banks should also organize and manage ideas, and then screen and prioritize those with the greatest commercial promise.

Templates help a company maintain repeatability and consistency in project operations. Templates also keep the myriad of project details from falling though the cracks. Each type of project has processes that should be repeated. "Web-based templates can initialize projects of a certain type and nail down schedules with milestones, deliverables, activities, and resources," says PTC's Morandi. These templates may also contain a folder hierarchy with document templates that provide consistent use of a company's current forms, and describe specifics in expected deliverables. This prescribed approach and definitions help avoid disruption that comes from using different formats and ad hoc project-tracking systems.

Recognize the difference between planning and execution. Planning programs have at least one flaw: They often handle only one project at a time. "What's more, planning programs often don't take into consideration that team members might be geographically dispersed and need to update and view the plan in real time once a project starts," says PTC's Morandi. Team members are always swapping data and updating documents, and project managers get frustrated trying to see who's updated what. And it's good for the rest of the team to see what being done, particularly when there are dependencies and relationships from project to project. Workers in downstream activities may not want to be notified to act on something until all of the precedent tasks are resolved. This kind of automatic coordination takes a burden off the project manager.

Employ a knowledge network as a place to turn when the immediate staff does not have answers to pressing questions. It's usually a database of people, internal and external to the organization, their expertise, and previously answered questions. "Problem-solving support and effective decision-making are central to successful execution during product development", says Sopheon's Michuda. The available expertise grows as new people are added and the bank of answered questions expands. Such growth also increases the challenge and importance of efficiently organizing, accessing, and gaining insight from the network.

SG Selector, a module in Sopheon's Accolade, is based on the research of Cooper and Edgett. After several users grade different aspects of a project, a database in the software compares those inputs to historical profiles on more than 2,500 new-product projects with known commercial outcomes. The bubble chart is one example of the analytical output produced by the tool.

Nine critical factors to project success

Nine factors are critical to a project's success, according to Robert Cooper and Scott Edgett, cofounders of the Product Development Institute Inc. ( Cooper and Edgett's research on product development best practices is the heart of the success-evaluation tool mentioned earlier.

The factors are:

  • Product superiority and quality - Does the product provide more benefits than competing products, or solve a problem customers are having with competitive offerings?
  • Economic advantage to users - If you build a great mousetrap, but it gives customers no economic advantage, you might not sell any.
  • Overall company or project fit - Is the project similar to previous successful efforts? Is it based on the core competencies of the organization?
  • Technology compatibility - It's the ability and confidence of a company to build technology into a product. "This is the comfort zone in R&D-based companies," says Sopheon's Michuda. "Engineers in these firms rank technology high because it's low risk. The engineers know they can build the proposed thing. But should they is another question. Product-development teams are generally weak in defining and gauging the overall value proposition of a prospective new product to the commercial market.
  • Familiarity to firm - What level of experience does the company have with the customers, the competitors, and all aspects of the product from design through distribution?
  • Market need, growth, and size - Will the market perceive a need for the product? Will the market grow?
  • Competitive situation - How easy will it be, from a competitive standpoint, to penetrate the target market?
  • Defined opportunity - Does the product fit a well-defined category and established market, or does it break new ground?
  • Project definition - Is the product sufficiently defined?

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