PMI Global Conference Chicago

PMI-Global-Conferenc-2017-Circle-Join-Me-OctI will be in Chicago this weekend for the PMI Global Conference. It’s going to be a busy couple of days with a presentation on Saturday chronicling project uncertainty and solutions. Then on Sunday a deep-dive workshop with Jesse Fewell into the new Agile Practice Guide. I’ll also be doing a couple of podcast interviews and helping at the PMI Poster session and the RMC booth.

I am looking forward to the conference and keynotes from Tim Berners-Lee on the Future of Tech. There is also Nicholas Epley presenting on Mindwise: How We Understand What Others Think Believe, Feel, Want. Finally, Mercedes Ramirez-Johnson provides the closing keynote on: Get it Right Today, Not Tomorrow about the need for urgent action and living with intention.

I’d love to chat to anyone who knows me, has used my books, or has questions about the PMI-ACP or the new Agile Practice Guide. Please drop by my sessions or look for me at the RMC booth. Being tucked away in a small Canadian ski town is great for outdoor activities but not so good for networking. So, I am really looking forward to it.


Inverted Classrooms

Inverted Classroom 2My last article on why We Should All be Learners explained how today’s knowledge worker projects are all about learning effectively. This article explains how new technology can deliver a more effective and enjoyable learning experience.  So, whether you are studying for your PMP credential, cramming on blockchain technology, or learning conversational Spanish, blended learning is something you should be aware of.

Blended learning combines online resources with in-person instruction. Both approaches have been available for many years, but their combination has recently given rise to what’s called Inverted Classroom Model that is both new and very effective.

If you have ever experienced painfully slow or incomprehensibly fast lectures, or the problems of trying to coordinate group activities outside of class then blended learning with an inverted classroom model might be just the ticket.  It works like this:

Lecture materials are made available online outside of class time and people consume them at their own pace, whenever they like. If you already know something, just skip it, if its difficult or mind-boggling pause it, repeat it, or access additional resources. You control the delivery speed of lessons, how much time you dedicate to it, and you also control when you consume it. So, if you are an early bird use the mornings, a night owl then use the evenings, it's all up to you.

Then, and here’s the clever part, during class when lectures would normally be delivered, this time is used for assignments and group exercises.  So, you attend lectures at home and do homework in class. It is all reversed – hence the inverted classrooms name.

Inverted Classroom

This brings several advantages. Students move at their own pace, on their own timetable. Also, instead of classes being spent on passive listening, they are now dedicated to active work which is more engaging and enjoyable. Trying or organize group work outside of class when people are busy can be a logistical nightmare, now everyone should be available to take part in group work during the regularly scheduled class times.

In addition, the instructor is available to facilitate group work if needed and shift their focus from getting through the material at the appropriate speed to helping students in the areas they need. It is important that people still get face to face time to interact with peers and the instructor. However, in the inverted classroom model, that time is spent applying knowledge not trying to absorb it at a standardized delivery pace.

The approach is not without its own challenges. The technology for consuming material online must be effective and easy to access. Instructors and students must also buy-in to their new roles. Students are now curators of their own content consumption and need to make sure they have understood the required topics before showing up to the next class, whether it took them 2 hours or 20.

Instructors must also switch roles, moving from narrator of wisdom to facilitator of group activities, troubleshooter, and coach. They also need to make sure the students really are consuming the course materials, not just turning up to class and coasting a free-ride on their peers. Good content management systems can track content consumption and test basic recall with tests and quiz questions.

When the technology is in place and roles understood, blended learning and the inverted classroom model can deliver a very engaging and enjoyable way of learning a new topic. It combines Goldilocks pace (not too slow, not too fast) along with engaging group activities without the logistics issue of scheduling busy learners. So, for that next credential or must-have skill, you may want to investigate a blended learning environment with an inverted classroom model.

[I first wrote this article for ProjectManagement.com under the title Flipped Classrooms here]


We Should All Be Learners

LearnersKnowledge work is learning work.” That was the message delivered by Dianna Larson’s keynote presentation at the Agile on The Beach conference held in Falmouth, England earlier this Summer. Dianna explained that anyone involved in today’s collaborative, problem-solving projects such as new product development need to be learners. We all need to learn how to learn new topics effectively and get used to lifelong learning to stay useful and relevant.

Technology evolution and disruptive business changes are happening at such a high rate now that we can no longer rely on the theories and techniques we gained at university to see us through our professional careers. Instead, we must learn on the job and in our own time to stay current. How much we learn and how quickly we can learn new skills become our competitive advantage.

“Learning is not compulsory… neither is survival.” – W. Edwards Deming

By learning new skills, we increase our adaptability and usefulness in the marketplace. It creates resiliency to becoming obsolete and provides more career options. Like many things, this is not a zero-sum game; it is not just about us learning things faster than other people to stay employed. If we can increase our team’s ability to learn also, it will be more successful and so will our organization.

For on-job learning to occur, we need three attributes:

  1. Courage
  2. Compassion
  3. Confidence

To be effective leaders and help promote learning in our teams and organizations, we must embrace and model these desired behaviors:

1. Courage: It takes courage to be okay with not knowing something. It takes courage to be wrong and fail as we try to gain and apply new skills. It requires a willingness to be curious and a willingness to tolerate the messiness of trial and error that comes from learning. So check your ego at the door, get over yourself and admit what you do not (yet) know.

2. Compassion: We need a safe space to learn. Also (and this is a surprise to some people), the transparency of showing what we do not know is motivating to others. When leaders learn out loud, it creates compassion toward them. So, create a secure place for people to learn on your projects. Provide psychological safety and encourage learning by doing it yourself in public.

Since we learn in the direction we ask questions, we should frame work as a series of learning problems, not execution problems. For example, instead of explaining the task of porting a system from .NET to Android, explain that our success is linked to our ability to learn Xamarin, our selected tool to port .Net to Android. Clearly explaining we want people to learn new skills is often the approval enabler they need to dedicate themselves to being more useful.

3. Confidence: We need confidence to try and we need to understand our confidence levels. When we learn anything new of significance, our confidence will likely move through the stages depicted in the Satir Change Curve. Think about when you learned to drive, play a musical instrument or learn a foreign language. First, our confidence is high at the prospect of gaining independence, becoming a rock star or traveling with ease. This is illustrated by the initial high score of confidence/comfort at point 1 on the graph below:

Satir

Then we start our learning and we quickly realize that driving, playing the guitar or learning Spanish is difficult and we are not as good at it as we are at all the familiar things we do every day. This is the confusion/loss period of the Satir Change Curve shown as point 2. Many adults who have not had to learn significant new skills for many years find this very uncomfortable.

Next, comes the “groan zone” of turmoil and despair, where some days go well and some days go bad and you seem to be moving backwards (point 3). Understanding that this is perfectly normal is a great relief for many learners. It is helpful to just point to the graph and explaining it is okay to feel bad because they are in the turmoil/despair phase of learning a new skill, and it will be followed by growth and confidence if they just stick with it.

Finally, with perseverance and practice, we acquire the new knowledge or skill and our confidence and comfort rises above our original level (point 4) along with our usefulness.

Summary
Learning and the need to learn are not identifiers of a junior employee anymore. They are the hallmarks of the professional knowledge worker. We need to move beyond the stigma of not knowing all the answers and embrace the learning path that comes with not knowing, making mistakes and asking for help.

When leaders model the learning mindset of curiosity and the courage to learn out loud, they pave the way for faster organizational learning and increased competitive advantage.

[I wrote this article first for ProjectManagement.com here]


PMBOK Guide – 6th Edition gets an Agile Appendix + All new Agile Practice Guide

PMBOK v6 CoverNext week the PMI launches the 6th edition of its Guide to the PMBOK. Changes for this edition include an Agile Appendix and Agile Introductions to each of the Knowledge Areas. I hope people find them useful. I co-wrote them with Jesse Fewell around this time last year and we have been waiting for the guide to make its way through the PMI standards publication process that includes translation into 11 languages.

I believe some agile approaches can be used on every project. These include more frequent: communications, validation of solution increments, and review and adaptation of process. However, not everyone shares my view and so the agile coverage in the PMBOK Guide – 6th Edition is focussed in the Appendix and Knowledge Area Introductions, leaving the bulk of the guide unchanged with its coverage of single-pass, iterative and incremental approaches to projects. Yes, the PMBOK Guide already talks about iterative and incremental approaches, if any critics would read it.

Anyway, for people looking for additional agile coverage, the PMI in partnership with the Agile Alliance is also publishing an Agile Practice Guide that is referenced by the new PMBOK Guide. This dedicated book for project practitioners who are implementing agile (quite often in traditional, plan-driven environments) aims to provide additional practical guidance. I was honored when the PMI and Agile Alliance asked me to Chair the author group for writing the new Agile Practice Guide. It’s not often you get an opportunity to lead a group of industry experts in creating a new guide that will be used by thousands of practitioners.

APG Cover

We had a great set of authors including: Jesse Fewel, Becky Hartman, Betsy Kaufman, Stephen Matola, Johanna Rothman, and Horia Slusanschi we also had a very helpful research and guidance team including: Karl Best, Alicia Burke, Edivandro Conforto, Dave Garrett, Roberta Storer, and Stephen Townsend.

From August to December last year we wrote the new Agile Practice Guide as a team. Meeting face-to-face a few times and pairing to write and review each chapter. Collaborative writing like this is slow and sometimes painful as we all have our own styles, pet peeves, and limited availability for volunteering time on unpaid efforts. When you multiply these foibles by the 7 authors and overlay everyone’s time availability to discover little or no common time slots, the challenges of writing anything become clear.

Another challenge was pleasing our sponsoring groups. The Agile Alliance understandably wanted to ensure we did not attempt to document some incremental-waterfall abomination that missed the agile mindset and values. Likewise, the PMI was keen to ensure we did not denigrate plan-driven approaches, contradict elements of their other standards, or define terms differently than the PMI Lexicon of Terms. We also had to align with the upcoming BA Standard and writing style standards. Luckily people could see the potential help such a guide would bring and the credibility of an Agile Alliance and PMI sponsored collaboration. If it was easy it would likely have been done already.

At the end of December 2016, we sent a draft out for Subject Matter Expert review. Around 60 people split equally from the agile community and the project management community reviewed our little book and sent in an unexpectedly high (over 3,000) number of comments. Some were high praise “At last a guide to bridge the divide, great job”, some were not so kind “This section is hippy BS”, most were genuine feedback like “In section 3 you said first consider doing x now in section 5 you are suggesting first doing y”.

We spent several weeks reviewing and applying the feedback comments and the guide improved tremendously as a result. With the handoff date for publication looming we did not have time to apply all the suggested comments so we prioritized them, met and worked through as many as we could up to the ship date, retaining the remainder for the next edition. The Agile Alliance Board of Directors and PMI Management Advisory Board (MAG) reviewed it and gave us the all-clear to release (after a few more tweaks). We had our Minimum Viable Product (MVP).

Not everyone who reviewed the final draft was happy. Some “agile enthusiasts” thought we went too far discussing the application of hybrid approaches. Some “traditional enthusiasts” thought we undermined plan-driven approaches too much. I saw this as validation of us hitting our target market of practitioners just trying to be successful with agile teams in sometimes less-than-agile-friendly traditional environments. Our task was an analog of theirs. When we managed to annoy both ends of the project execution spectrum to about equal degrees we had arrived right where we needed to be!

I am used to having my work criticized. I stopped trying to please everyone years ago and now write my true convictions and they seem to resonate with a few people which is great. I felt bad for the other writers though, especially those that had not published many articles before. Representing the Agile Alliance or PMI and being part of a contentious guide is a daunting task. Publishing something for general use takes courage and exposes your thoughts and work. So, you want your first publication to be accepted not criticized. We had a challenging timeline and set of constraints and am very proud of what everyone produced. It is v1 of the guide and we are looking for volunteers to implement many of the other great suggestions we did not get time to implement and to further the guide with their own suggestions.

The PMBOK Guide - 6th Edition will be available as a free download for PMI members and to purchase in paper form. The new Agile Practice Guide will be available as a free download for Agile Alliance members and PMI members and also to purchase in paper form. Both are available on September 6th.


Agile 2017

17-2480-Agile_Orlando2017_Speaking_300x250_FM (1)I will be speaking at two presentations at the Agile 2017 Conference next week in Orlando. I am looking forward to catching up with old colleagues and meeting new practitioners, it looks set to be a great event.

My first presentation is called “Bridging Mindsets: Creating the PMI Agile Practice Guide” and is an experience report that tells the story of creating the Agile Practice Guide. This is a new book, sponsored by the Agile Alliance and the Project Management Institute that will be published September 6th. I was Chairman of the writers group and along with Vice-Chair Johanna Rothman we will explain the inputs and constraints to the guide along with our iterative, pair-writing process.

Agile Practice Guide Inputs

My second presentation is called “Integral but Insufficient: Why the Future Needs More than Agile to be Successful”. This one is a little more controversial, claiming large complex projects are rarely successful using agile alone. It is based on my 23-year experience of working on successful and not so successful agile projects, particularly one team that won a PMI “Project Of The Year” award.

It introduces some core observations such as good answers are rarely simple, and processes carry weight while knowledge is weightless:

Agile Conference Slides

Along with suggestions for a more cohesive, comprehensive model that will be the focus of my next book. I am looking forward to sharing these ideas with people and hearing their reactions. I hope to see you there.


Agile Consulting

Agile ConsultingApril’s theme at ProjectManagement.com where I write a monthly column was “Consulting” and in this article, I examine the world of Agile Consulting and coaching. I distinguish consulting as providing advice, solutions and information; whereas coaching is more asking (hopefully insightful) questions and leading clients to find their own answers and grow in capability.

Depending on where people are in their careers, their agile adoption and their corporate culture, some people want a consultant, others a coach and sometimes they want a blend. The goal is to add more value than you cost and help organizations be successful by avoiding common pitfalls and accelerating their success.

Getting Started
Personally, I was hesitant to get into agile consulting and coaching. Despite being involved in the creation of DSDM in 1994, the more I read and practised, the more I discovered every organization and every project is very different. It felt like I had much more to learn before declaring myself an expert for hire. As your knowledge increases, so too does your exposure to all the things currently just beyond your proficiency that you do not know yet and should learn next.

What you dont know gets bigger

So, the more I learned, the more I discovered there was so much more to learn! However, there comes a point when you realize that you already know enough to be helping people that are less experienced—and that helps overcome your inertia.

The Work: Helping your Clients
Agile consulting involves instilling and applying a few lean thinking concepts such as:

  • Prioritizing for value
  • Limiting WIP
  • Visualizing the work
  • Minimizing waste
  • Optimizing for throughput and flow, not resource utilization

Each are very simple concepts that only take 5 to 10 minutes to explain. The challenge comes in making them work in large, complex environments that have competing demands. That’s where the bigger set of skills around change management and emotional intelligence that take a lifetime to learn come into play.

Every industry has plenty of people who understand how things should be done in the ideal world. Consultants add value by finding ways to get there, step by step, unpicking knots in process, dismantling barriers to change. They often act as an independent third party to validate a change that groups know they want to make anyway, sometimes playing the role of devil’s advocate, questioning processes that internal staff should/could not ask; sometimes acting as the scapegoat when someone must explain why/who thought this experiment would be a good idea.

Consultants help clients by working with them to bring meaningful improvements. It usually involves working with people who are busy trying to get their jobs done using some process they were told to use rather than had a hand in designing. Growth involves changing how people work and interact. This can be slow going or painful, and usually both. It is almost always people focused, and why the skills of empathy and influence are critical.

Sharpening the Saw: Building Your Skills and Knowledge
In addition to organizational change management, consultants need ready access to credible research that supports their ideas—along with frameworks, training materials and exercises to perform that reinforces this work with a variety of stakeholders.

In the agile consulting domain, many consultants use lean terminology when discussing concepts with executives, terms friendly to A Guide to the Project Management Body of Knowledge (PMBOK® Guide) like progressive elaboration and rolling-wave planning when working with PMOs, and XP and Scrum terminology when working with team members. This is not being duplicitous or manipulative, it is just understanding your stakeholders and using appropriate ideas and terms to explain the same things.

It does mean though that consultants should be familiar with as many layers of agile integration as possible. You could well be answering a CFO’s questions about EBITDA and capitalizing prototype work in one conversation, mapping story points completed to earned value in another with the PMO, and talking to developers about NUnit test code coverage in another. There is always lots to learn, and it keeps on evolving.

Then you change industries and start from square one, learning about a new business domain. As such, consulting is very rewarding for life-long learners. People are always developing innovative ways of describing agile techniques, and we can share the best with our clients. Industries, technologies and approaches are constantly changing, too.

Learning and keeping up to date with these skills takes time and introduces a dilemma: How much time do you send productively working, and how much do you spend actively learning? How to best balance production with building capability? Some people use gaps between engagements to gather and hone new skills; others schedule some of their own time each month for learning and professional development.

Personally, I am lucky to have no interest in Facebook or other social media sites that can consume a lot of time, but a passion in learning about leadership, teams, agility and innovation. I find reading books on these topics interesting and volunteer my spare time on standards and collaboration efforts—all of which I learn from. Others take training courses, and today we have access to great information online such as courses and blogs. There are lots of options; the important thing is to find a way of staying current and bringing valuable information, ideas and resources to your clients.

The End Game
What comes next after being a successful consultant? Does there have to be a “next thing”? Many people consult until they retire and, if you enjoy it, are adding value to your clients (and they appreciate it). What more can you ask for?

Others build consulting practices, hiring associates, admin and sales people. They may continue to consult themselves part-time, or move into account management and consultant management. This is fine, too; just understand the skills and motivation to succeed at building and managing a consulting practice will be different than those you first employed. Instead of fixing issues in large organizations, you will now be responsible for developing an organization, hopefully without its own inherent issues (similar idea but subtly different).

Then, of course, you could join one of the companies you consult with or start a new business entirely. One of the great aspects of consulting is that it exposes you to a wide variety of people and business models. Some might resonate or illustrate the need for something new that you get excited about.

Final Thoughts
Like most things in life, consulting is what you make of it. Approach it with humility, hunger and “people smarts,” and you can create a rewarding career. Approach it as a ticket to making money by replicating a formula, and you will likely be in for a rude awakening.

The concepts you aim to instill will likely be deceptively simple, and you might feel uneasy about making that first leap. However, do not underestimate the work required to change how people think and behave. Focus your effort here; after all, the concepts around healthy eating and exercise are also very simple. Just eat fewer calories than you use, move and exercise more…but we seem to need help with that more than ever.

Agile consultants and agile coaches seem an oxymoron—agile is simple, you should not need a coach to be agile. However, healthy eating coaches exist. Exercise coaches exist, not just at an elite level, but also at a domestic level. To some degree, this is where the real challenges are—making changes with modest budgets, pre-existing conditions, in unsupportive environments. It is not easy, but it does provide a great buzz from solving problems and helping people.

[I first wrote this article for ProjectMenagement.com here]


They are “Lessons to be Learned”, not “Lessons Learned”

The suggestions, observations and ideas we capture at retrospectives are not Lessons Learned. That would imply we have already learned from them and will not make that mistake again. Instead, they are Lessons-to-be-Learned which is subtly different but stresses the most important part, which is we now need to learn something.

Learning involves several steps. David Kolb, an educational theorist, describes a 4-step learning process:

  1. Concrete Experiences (What we already know)
  2. Observation and Reflection (What our retrospectives help us identify)
  3. Abstract Conceptualization (Thinking about the problems and designing potential solutions)
  4. Active Experimentation (Trying something new)

These stages act as part of an experimental learning cycle. The last step, Active Experimentation, creates new concrete experiences and builds on what we already know. Experimental Learning Cycle

It is easy to confuse the retrospective actions of Observation and Reflection (Stage 2) as gathering lessons learned. However, this is not the case, instead it is just one step in the process. We then need to determine a solution (Stage 3) and run experiments to learn from them (Stage 4). Only then might we actually learn something.

To remind us that simply gathering ideas and suggestions for improvements is not the same as learning, I suggest we stop using the term “Lessons Learned” and instead useLessons to be learned”.


New PMI-ACP Workbook

PMI-ACP WorkbookI am pleased to announce the availability of my new PMI-ACP Workbook. This new workbook focusses on a smaller subset of 50 key topics.   My original PMI-ACP Exam Prep book distilled all the relevant content from the 11 books on the PMI-ACP recommended reading list in a common voice. The workbook is also different by providing lots of exercises and many situational questions like you will find in the exam.

So, while my PMI-ACP Exam Prep book covers all the background and theory – ideal for a comprehensive coverage of everything in the exam, the new PMI-ACP Workbook is a practical, hands-on study tool that focusses on the core topics needed to pass the exam. If you already have your CSM credential or 3+ years of agile experience you likely know the agile mindset, values and principles material already. However, you may not have the lean, kanban, and team development knowledge needed to pass the PMI-ACP exam so the workbook can fill those gaps.

To help determine which book is best for you I created the following flowchart:

PMI-ACP Workbook Flowchart

Hands-on learners and people who do not want to read all about how the approaches fit together will find the 50 key topics of the new workbook a simpler way to navigate the material. Also, since the content is arranged by topic alphabetically you can easily jump around and create your own study plan based on just the topics you need.

While the workbook coverage of topics is less than the prep-book, the emphasis on exercises and situational questions is much higher and accounts for the slightly higher page count (457 pages). There is white space for writing notes and the whole thing is spiral bound so it lays flat when you are working in it. The content changes are summarized by these rough page count graphs:

PMI-ACP Book Contents

I think it fills an important need. A workbook for hands-on learners looking to build their own study plan and gain access to high-quality situational questions. It also provides access to a free online quiz. Readers can order and get an early-bird discount from RMC here.

 

 


Tapping the Base of the Talent Triangle for Hidden PDUs

Hidden PDUsWhen it comes to renewing your PMI credentials it can sometimes be a challenge to find the full complement of Professional Development Units (PDUs) you need. Now the PMI Talent Triangle has been introduced, PMP credential holders need 8 PDUs from each of the skill areas. I often hear of people mention that finding 8 PDUs in the “Strategic and Business Management” area at the base of the triangle seems the most difficult.

PMI Talent Triangle

This might be because some training providers struggle to generate content for this category. There are mountains of existing material for “Technical Project Management” and “Leadership”, but “Strategic and Business Management” seems a little more specialized.

However, once you dig into what it contains, not only is it relatively easy to get the minimum requirement of 8 PDUs, but it is also a fertile source for collecting the maximum 19 PDUs in this category. This article examines the “Strategic and Business Management” area and provides some examples and suggestions for work and study that qualifies here.

Let’s start by getting a better understanding of what “Strategic and Business Management” actually means. Put into other words, it means all the business and industry interactions on the boundary of your project. I like to think of it as the zone immediately surrounding the project you are managing.

Strategic and Business Management

Before your project became a project in your organization there was (hopefully) an idea, discussions around opportunities, feasibility, ROI, and maybe competitive analysis. All these models, interactions with sponsors and advisors fall within the PMI realm of “Strategic and Business Management”.

Then, as the project progresses, anything you do to track performance against these models (financial analysis, benefits analysis, competitor product tracking) and all the interactions with the people in your organization (or client) that are involved with this information also fits into this category. During execution, anything to do with regulatory compliance, legal or market place interactions like trade fairs or journals also fall under “Strategic and Business Management”.

A critical principle for maximizing your PDU eligibility in this area is understanding that any training you undertake to learn more about how your industry interacts with strategy or benefits management fits the “industry knowledge” criteria. So, if you are in the medical profession, medical courses that link to strategy and benefits management count towards this category. If you work in the automotive sector, then training that relates to market share and competitive analysis qualifies towards “Industry knowledge”.

Projects deliver benefits to customers so anything relating to customer relationship and customer satisfaction either during or after the project fit right in. So too does benefits management and benefits realization during and after the project.  Once you appreciate that this category spans all the “Why?” we undertake projects and “How?” we assess their viability, performance and benefits, you begin to realize it’s a treasure-trove of PDU opportunities rather than slim-pickings.

Here are some categories of work, published by the PMI as elements of the “Strategic and Business Management” talent triangle, along with suggestions for how to translate them to claiming PDUs:

  • Benefits management and realization – Training courses, reading and discussions around how we identify, categorize, and measure project benefits. This could include financial benefits, regulatory compliance needs, market share growth, and industry reputation.
  • Business acumen – Any courses, reading, discussions, listening to podcasts, etc (here after called “Learning”) about financial or strategic elements of your business or industry.
  • Business models and structures – Learning about how to assess, select, prioritize and track projects in your industry, company or business unit.
  • Competitive analysis – Learning about feature comparisons, products and services, pricing structures, market shares, sales volumes, growth rates, profit ratios. - Perhaps you can get PDUs for attending those monthly sales meetings!
  • Customer relationship and satisfaction – Learning about customer surveys, satisfaction scores, kano analysis, prototype feedback reviews, Niko-Niko charts, etc.
  • Industry knowledge and standards – Learning by attending industry conferences with strategy content. Site visits, and field work also improve your industry knowledge and exposure to standards.
  • Operational functions (finance, marketing) – Learning about interacting with these business units and functions in your company. Taking internal courses about them and expanding your skills.
  • Strategic planning, analysis, alignment – Learning about these processes and tools in your company and industry.
  • Market awareness and conditions – Learning about trends, markets, new technologies and opportunities.

When you tap into industry knowledge and market awareness you soon realize that training does not have to be about just project management. How projects add value and contribute to a company’s success and strategic vision also counts. You become more useful and valuable as a project manager when you better understand your industry. The PMI knows this and recognizes many forms of professional development in your domain of work.

This is the key to unlocking the base of the talent triangle, the “Strategic and Business Management” component. You just need to connect your training for work with the “Industry Knowledge” and “Market Awareness” hooks in the base of the talent triangle.

Everyone with a PMI credential (except CAPM) must maintain their credential through participation in the Continuing Certification Requirements (CCR) program. Now you know that the “Strategic and Business Management” portion of the talent triangle allows for a wide range of learning opportunities the whole process should get much easier.

 

(I first published this article on projectmanagement.com here)


PMI EMEA – Rome – PMI’s Agile Future

Emea17_rome_badge_800x400_v2I will be presenting at the PMI EMEA Congress May 1-3 in Rome on “PMI’s Agile Future”.

2017 marks an important year for embracing agile approaches by the PMI. The PMBOK® v6 Guide, set to be released in Q3 will have agile accommodation guidance for each of its Knowledge Areas and an Agile Appendix. I wrote these sections with Jesse Fewell and hope they enable practitioners to see how techniques can be tailored for agile environments.

Synchronized for release with the PMBOK® V6 Guide is the new Agile Practice Guide. A collaboration between the Agile Alliance and the PMI to create a guide for project practitioners working in the “messy middle-ground“ of agile teams and plan-driven environments.

I am chair of the author team for this book and just returned from our final meeting to edit the first draft of the guide. We had a huge number of comments from our SME reviewers. Some agile enthusiasts believed it was too lenient to tolerate hybrid approaches as a temporary stepping-stone to fully agile approaches. Some plan-driven enthusiasts believe it was too dismissive of plan-driven approaches to be endorsed by the PMI.

I think if we can equally upset “enthusiasts” at both ends of the agile and plan-driven scale we have probably found the sweet-spot for pragmatic practitioners looking to navigate the very real in-between world we often occupy.

Also, out this year is the BA Standard and BA Guide, similarly with agile coverage. I am grateful to Joy Beatty, chair of the BA Standard and Cyndi Dionisio, chair of the PMBOK® v6 Guide for the support they provided at the Agile Practice Guide - Development Workshop we ran at the PMI Global Congress in San Diego last September.

My “PMI’s Agile Future” presentation for Rome is not just a list of PMI agile products. Instead I will be telling the story of how people have managed uncertainty and complexity through history. I hope to dispel some myths around phase-gates, PERT, Gantt charts and waterfall lifecycles and introduce some unsung heroes of adaptive planning.  Then, to stay on track, I will introduce PMI’s agile developments and link them to the future trends indicating the importance of being able to manage uncertainty and complexity.

I am really looking forward to the event and particularly enjoy talking to people afterwards. Please bring your questions and I’ll see you there.


Boosting PMO's with Lean Thinking

Applying Lean Thinking to PMOLean Thinking, described and popularized in the book “Lean Thinking” by James Womack and Daniel Jones, is summarized as: “focusing on delivering the most value from a customer perspective, while reducing waste and fully utilizing the skills and knowledge of those doing the work”. These are all relevant goals for today’s Project Management Office (PMO) and the reason that increasingly organizations are using Lean Thinking to boost value and reduce waste in the PMO. 

Lean Thinking embodies a wide range of principles and techniques. I like to think of it as a philosophy plus a toolbox of techniques. For this article, we will focus on applying some basic principles for delivering value and identifying wastes to avoid within the PMO.

It’s about people first.

Unlike some other project management approaches, lean is human-centered not process-centered. Two overarching themes prevail over all the practices: 

  • Involve everyone – Always make sure everyone involved, impacted and perceived to be impacted is consulted and engaged in the process. This does not mean every font change of a Project Charter template needs CFO approval, but it does mean that all plans, initiatives and work are open and available for contribution or comment to anyone who is interested. Basically, be open and transparent, you never know who might have a great insight or spot a flaw before it impacts performance.
  • The Customer Defines Value – Rather than automatically acting to minimize costs or reduce time to market, lean specifically adds the step of asking the customer to define what value means to them. Some groups may focus more on quality at the expense of time or costs, others may value time-to-market and happily sacrifice some scope or cost over runs to get there. It sounds like common-sense, but all too often people get disappointed with a group because of mismatched values. Adding the “customer defines value” step helps avoid those mismatches before the can occur. 

Lean Thinking Principles and the PMO

Lean Thinking suggests five principles as starting points for a continuous cycle of delivery and improvement. Let’s review them one-by-one and see how a PMO can embody the concepts they represent: 

  • Specify what creates value from the customer – This principle takes the “Customer Defines Value” theme we just talked about and bakes it right into the first step of the process. PMO’s understand they serve multiple customers, typically including their sponsoring group who pays to put PMO’s in place. 

Value for the PMO sponsoring group likely includes helping projects be successful, ensuring good practices are followed, providing objective evaluation of performance and risk signs, providing help/training where required, etc. Another group of customers is the project teams and team leads / managers. These customers typically want low overheads for PMO compliance and timely responses to requests for support, training, etc. Both of these groups (and any others that apply) must be canvassed to determine what value means to them. 

  • Identify all steps - value adding and non-value adding across the whole value stream that bring a product or service to the customer – This is the process of analyzing how things actually operate to get work done. Some activities are necessary value-adding tasks, such as performing a review, while others will be non-value adding activities, like waiting for feedback. 

Lean thinking provides tools such as Value-Stream-Mapping to analyze processes and categorize value-adding and non-value-adding tasks. It also allows us to calculate metrics like cycle time and process efficiency. Using these tools to look at the current-state and future-states of PMO processes, groups can analyze and optimize how to best deliver value. 

  • Establish flow – The continuous movement of products, services and information from end to end through the process. Moving large batches of anything, whether its requirements in a specification document or artifact templates to a standards library creates consumption and improvement problems. 

It is better to move smaller batches more frequently. That way there is not a large delay while things are consumed and processed, also if defects or areas for improvement are found in an early batch the information can be sent back to the producing group and the issue addressed in later versions. Establishing flow improves efficiency, quality and the ability to manage changes. PMO’s can support this by encouraging the small batch flow of user stories and retrospectives vs specification documents and project lessons learned reports. 

  • Implement Pull – The idea that nothing is done by the upstream process until the downstream, customer signals the need. Stock piling products or service offerings ready for consumption or in-hope that they are consumed is wasteful. It consumes time and energy with in-progress work that has not yet delivered value and often people will want something slightly different. 

A preferable approach is to spend this effort on getting good at rapidly delivering what is asked for. Then establishing signaling mechanisms so that the need (or imminent need) for a product or service triggers its creation. With a stock pile of zero the next item you get is perfectly made for you rather than the next available.  PMO’s can embrace this principle by providing just in time reviews rather than standard readiness assessments. They can also create, say, charter templates based on project characteristics not boilerplate, also Steering Committee updates based on current questions not standard templates. 

  • Work to perfection – The goal is the complete elimination of waste so that all activities create value for the customer by continuous improvement. While perfection may be unreachable, the goal of this principle is to instill the idea that improvement is an ongoing process that does not stop. People should always be looking (and encouraged) to improve the delivery of value.

PMO’s can embrace and model this continuous improvement principle by highlighting their ongoing work in a “What’s New” section of their intranet site. They can help projects and teams by attending project reviews and retrospectives to endorse these activities, provide support and distribute the outcomes to a wider audience. Anything that promotes and encourages the continual pursuit of improvement. 

 

Eliminating DOWNTIME - The Common Forms of Waste

Lean thinking identifies 8 common sources of waste in an organization. Groups, including PMOs should be on the lookout for these forms of waste and avoid or reduce them wherever possible. This is not a one-off activity like a yearly Spring-clean of processes. Instead, it is an ongoing vigilance like work-site safety or maintaining a respectful workplace. People are encouraged to always be looking for forms of waste and then eliminating them if possible. 

Lean thinking has its roots in lean manufacturing and so several of the common forms of waste have titles that are associated with physical production, such as Over Production, Inventory and Transportation. However, versions of these wastes also occur in knowledge worker projects that are more commonly associated with manipulating ideas and information rather than physical goods. Listed below are the 8 common sources of waste and a description of how they apply to knowledge work projects along with advice on how PMOs can help reduce them. The forms of waste can be remembered by the relevant mnemonic DOWNTIME that stands for: 

  1. DOWNTIME 8 forms of wasteDefects
  2. Overproduction
  3. Waiting
  4. Non-Utilized Talent
  5. Transportation
  6. Inventory Excess
  7. Motion waste
  8. Extra processing  

Let’s look at each in a knowledge worker setting and see what PMO’s can do to help. 

  1. Defects – Flaws in deliverables that create work to correct information. PMOs help project teams get things right the first time to avoid making defects. They can also help by providing extra tools and support when defects are found. Since Waste = Impact-of-defect X Time-defect-lies-undetected the timely resolution of defects is in everyone’s best interest. 

PMOs can also help address excessive defects by providing standards and quality control guidance and training.

 

  1. Overproduction – Extra features or extra process that do not add sufficient value. We should always be asking “where is the next best dollar spent?” in other words, what should we do next to best add value.

PMO’s should reinforce this view by reminding people to ask: “Where is the next best dollar spent?” and avoid producing features or processes that are unlikely to be widely used or never completed. Likewise building things that are cool (resume architecture) or “might be needed” are forms of overproduction also.

 

  1. Waiting – Delays for approvals, waiting for projects to start or resources to become available are all forms of waste. They cause people to task-switch which is inefficient and a contributor to defects. 

PMO’s should see if they can reduce waiting by scheduling a better alignment of project authorizations and start-up activities. Also, rather than waiting for team to form, consider bringing new projects to existing high-performing teams. Waiting delays strain learning loops as things get forgotten and it is better to seek out feedback early and apply it as soon as possible. 

  1. Non-Utilized Talent – the waste caused by underutilizing people’s skills, talent and knowledge. Assigning staff to the wrong sort of tasks for their skills and experience results in a lack of engagement. PMOs should work closely with teams to determine not only what experience and skills people have, but also what they would like to try. Then working with projects leads to find a way to give people exposure to these new roles. 

Timeboxed iterations provide a great risk-limited approach for trying new roles and building new skills. If the new roles work out then great do some more, if it does not work out then we learned something and should now try something else. 

  1. Transportation – In knowledge work projects unnecessary handoffs are like transportation waste. They create delays and slow down value delivery. Handoffs also always result in the loss of tacit knowledge. Like the Telephone game, when a message such as “Jon picked an apple from a tree” becomes “Joan licked Adam by the sea” after a few handoffs; details become lost in translation. 

PMOs can reduce transportation waste by eliminating unnecessary handoffs and ensuring information is gathered at source, not relayed through different groups. 

  1. Inventory excess – This is partially done work that represents effort invested with no return yet. Generally, we should try to minimize work in progress (WIP) since managing that status of work and keeping it up to date gets in the way of doing other work. 

PMO’s can help by encouraging and supporting the transition from large batch flow (a single large specification document for a project) and a large analysis and design deliverables to small batch flow, for example just the requirements for the next two-week iteration. 

  1. Motion waste – this unnecessary movement in the knowledge worker world often presents itself as task-switching. It occurs whenever we ask someone to stop what they are doing and work on something else. Team members working on multiple projects must task switch frequently. Each time they have to finish and mentally park what they are working on, move to the other project and reorient and then restart the activities they were doing there. Studies show a significant reduction in productivity and a dramatic increase in defect rates. 

PMO’s can eliminate task switching motion waste by first demonstrating the desired behavior within the PMO. Instead of having a dozen initiatives on the go at once with people splitting their time between them, prioritize and execute them sequentially. Having firsthand experience of increased productivity the group can more credibly help spread the word to project teams and into the portfolio and program planning activities that spawn so many simultaneous projects in the first place. 

  1. Extra-Processing – This waste on knowledge work projects often takes the form of relearning. Poor knowledge capture leads to people having to go through the same pains and rediscovery rather than asking people who know. Other instances stem from poor instructions, and reassigning people too frequently. Finally, extra-processing can also take the form of overengineering a solution or demanding too high of a quality for the use of the product at hand. 

PMO’s can help by looking at the common questions they get asked or the common omissions they see on projects and then providing information and materials to address those shortcomings in future. Using the “Where is the next best dollar spent?” question can also help diagnose where overengineering and too high quality investments are being made. When you consider all the things we need to fix and where we are trying to get to, should we really be spending more time on X or working on some other initiative? These techniques and questions can help PMOs avoid Extra-processing wastes.

  

Take Aways

Lean thinking focusses on serving customers by adding value and eliminating waste, which is well aligned with PMO goals also. PMO’s can learn lots from applying lean thinking principles to not only increase the value of the projects they support, but also increase the value of the group itself.

 


Agile DNA Webinar

Agile DNA 2This post is a follow-up to my Agile DNA webinar I hosted a couple of weeks ago. This was my first webinar for RMC and we had a great attendance with over 2,000 people registering for the event. The recording is available now,  see below for details of how to access it.

The webinar was entitled “Agile DNA, the People and Process Elements of Successful Agile Projects” and the DNA theme came from the twin strands of People and Process guidance that run through all agile approaches and make agile uniquely what it is.

Agile DNA 1

In case you have not noticed it before, Agile approaches weave people elements and process elements together through the agile mindset, values and principles. For simplicity of understanding we pull these elements apart to talk about them individually, but in reality, they are inextricably linked and self-supporting.

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“When Will This Software Project Ever Be Done?”

NoProjects imageDoes this question sound familiar? If you get asked it regularly then you may be part of the mainstream transformation from software projects to products. It’s coming and it's going to turn many roles, certifications and in some cases entire companies on their heads.

 

The last couple of software projects I worked on were large, multi-year endeavors to build in-house systems that add competitive advantage for the sponsoring business group. It did not take multiple years to build the initial product, instead after delivery the business wanted more functionality, more integration, more automation.

The “When will you be done?” issue

The success and reliance on the new system bred further investment. The fact that business sponsors wanted to continue development was a good endorsement for the value being delivered. Yet there was a conflict at the steering committee level and PMO level. “When are you people going to be finished?” was the common question.

Answers like “never” or “when the business unit stops innovating and enters a decay phase” are generally not acceptable. Things are made worse by the teams being staffed, in large part, by expensive contractors. To the CFO or VP who does not use or see the benefits the system delivers these successful in-house products seem like make-work exercises or country-clubs for development teams that have become all too familiar with the business units they are embedded in.

This is not a problem, this is the future

However, we are not witnessing a problem, we are witnessing the future. Software is becoming more critical to business and projects are ending (or will never end) as we take more of a product vs project view of software.

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The Business Analyst and the Product Owner


BA and PO rolesIn my last article we talked about the role of the BA on agile projects, reviewing what stays the same and what changes from traditional approaches. In this article, we will review the contentious topic of how the role of the BA varies and overlaps with the Product Owner (PO). We cover the similarities and differences including danger signs such as “BA as PO Go-Between” and positive patterns such as “BA as PO Supporter”.

 

The Product Owner (PO)

First, let’s make sure we understand the role of the Product Owner (PO). It originated in Scrum but is often also used beyond Scrum in other agile approaches and hybrid approaches. The Scrum definition of the role is the person responsible for maximizing the value of the product and the work of the development team. This includes being responsible for managing the Product Backlog. Extreme Programming (XP) has a similar “Customer” role, DSDM has one or more “Business Ambassadors” depending on the scale of the project. They all play a similar role in stewardship of the backlog, including:

 

  • Ensuring that the product backlog is visible, transparent, and clear to all, showing what the team will work on next
  • Ensuring the team understands items in the product backlog to the level needed
  • Clearly expressing the product backlog items
  • Ordering the items in the product backlog to best achieve goals and outcomes
  • Optimizing the value of the work the team performs

 

Benefits Beyond Backlog Management

In addition to this backlog focused work, the Product Owner is often the primary interface to other business stakeholders. They help teams gain access to business subject matter experts for insights on topics where the Product Owner may not have all the answers. They also often act as a gateway to funding, making the business case for additional funding requests, or as a powerful ally when asking for roadblocks to be removed. Playing the “Business is asking for X” card is typically stronger than the “Team is asking for X” card when asking for an exemption from process, or to expedite an issue.

 

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BA's on Agile Projects?

Team EffectivenessThe role of the business Analyst (BA) on agile projects in some ways parallels the role of the project manager (PM). In that, some people believe these roles are not needed at all! The Scrum Guide, for instance, that outlines the Scrum approach describes only three roles: Scrum Master, Product Owner, and Development Team. Even when you look deeper into the Scrum Guide’s description for The Development Team role, it does not mention analysts or analysis work. However, most organizations agree, good BAs are great assets for any team, be it plan-driven, agile or hybrid.

This article examines what BAs really do, looking at what stays the same on an agile project and what changes. The quick version is that the What and the Why fundamentals stay the same, but all the How, When, Where and With Whom details change dramatically.

Let’s start with What business analysts are supposed to do. (I say supposed to do rather than actually do because yours might watch cat videos most of their time and that is not what they are supposed to do!) Anyway, Business Analysts elicit, analyze, communicate, manage and validate requirements. They also help understand the business and make sure the solutions fit the business. In addition, they help translate technical issues to the business and facilitate stakeholder communications.

Why they do these things should be fairly obvious. To help ensure the project builds the right product, and requirements are not missed or misunderstood. They are also valuable to help facilitate and bridge communications between client, customer and technical groups.

The good news is that all these functions, roles, needs or whatever you want to call them still exist on agile projects. Also, to some extent, because agile timelines are often compressed, these functions become more critical for teams to remain productive and so good BAs are extra valuable.

Now for what changes; let’s start with the How? Agile teams typically do not create large, detailed requirements documents that get reviewed and signed-off before development begins in earnest. Instead, requirements may be captured as user-stories, or on index cards that act as reminders to go and have a conversation with the relevant subject matter expert prior to development. They are typically smaller in terms of how much scope they cover and depth of description. More like micro-requirements for attention deficit readers who only want small, bite-sized components.

 

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New Role with RMC Learning Solutions

RMCLS LogoI have taken on an exciting new part-time role with RMC Learning Solutions as their Agile Practice Lead. I worked with RMC to create my PMI-ACP Exam Prep book and their ACP training offerings. So, I am really looking forward to working with them further. Previously, as a one-person company with a full-time contract job, I had more ideas for books, web sites and articles than I ever had time to develop. Working with RMC who have dedicated production staff, web developers and editors, I hope to get a lot more content available for a larger audience.

For the last 16 years, I have been pursuing my agile writing in my “free” time. I moved to Canmore a few years ago, and love the location, but the commute to Calgary further ate into that time. Working 50% of the time for RMC from home will free up more time for writing and occasional training and consulting. My challenge will be to stay focused and not use all the extra time for biking, running and skiing.

For RMC, my year kicks off with an introduction to agile webinar called “Agile DNA”, sign-up here. Then an e-learning course and a new book I have been working on will be announced with more to follow. Stay tuned for updates and more articles; heck I might even upgrade my LeadingAnswers.com website to be responsive and searchable – or go fat biking.


Agile DNA Webinar

Agile_dna_webinarI am excited to announce a free webinar with RMC Learning Solutions entitled “Agile DNA: The People and Process Elements of Successful Agile Projects” that will be taking place on January 11th 2017 at 12:00pm Central Time.

This is an introductory level presentation about agile approaches that qualifies participants for 1 PDU. The “Agile DNA” title comes from the twin strands of People and Process that are woven into agile approaches and uniquely define what they are. Please join me for this review of agile through the twin lens of People and Process to get a deeper understanding of the building blocks of agile.

Register now for this event here.


The True Cost of Free Exam Prep. Questions

Free QuestionsMost people taking a project management certification exam use sample tests. Whether it is a PMP exam, ScrumMaster, CAPM, PMI-ACP, PgMP or many others, there are plenty of online options for getting familiar with the format and determining if you are ready to sit the exam proper.

Unfortunately, like all things found online, the quality and relevance varies considerably. If we are just looking for funny cat videos, the occasional shaky video filmed in portrait mode is annoying--but easily skipped and not the end of the world. However, bad exam simulators can give a false sense of security--or a false sense of insecurity--and generally do not prepare you at all for what the actual exam will really be like.

Before getting trained and involved in question writing for PMI and professional training companies, I had no idea about the science behind good multiple choice questions. Now, I cannot help but notice poorly written questions. Even if the test is free, if it tests material not in the exam, it can generate unnecessary anxiety for people studying--and so is bad value. More frequently, people get used to poorly written questions (because these exams are free, they consume a lot of them), and then find the real exam very different--and fail.

So how do you ensure you are taking good, quality sample exams? The simplest and most effective way is to only trust questions from a reputable training company. They have writers that have been trained in how to create questions that meet ISO/IEC 17204 requirements. This is the standard that PMI and many other reputable certification bodies use, such as doctors and teachers.

Ask yourself how much your study time is worth, what are you giving up to get this certification? Given the sacrifices made so far to study, investing in an exam simulation from a reputable source makes good economic sense. However, I understand not everyone can afford or justify paid content, so let’s at least understand how to assess questions to make a judgment call on if the exam simulation is useful or a dud.

Multiple Choice Questions: A Primer
First, a primer on exam question design. This is useful information for everyone taking a test. Understanding how questions are designed helps you answer them more successfully. We will also uncover why you might be good at acing free online tests, but then trip up on the real deal. It all comes down to your online question writers often not knowing this theory.

Multiple choice questions (MCQ) are deceptively simple, so people underestimate them. It seems pretty easy--there is one right answer and three wrong answers. As a test taker, you just pick the right one; as a test creator, you just write the questions and think up a few wrong answers to catch out the guessers.

Let’s start by examining the anatomy of a question and learn the lingo. First of all, questions--along with their correct answer and incorrect options--are called “items”:

 

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Agile Risk Management

Risk Action in BacklogThis article aims to dispel the myth that agile projects somehow magical manage risks for us, and outlines a couple of practical tools that can be used to start improving risk management approaches. 

Agile is Not a Risk Management Approach

Some people believe agile approaches with their short cycles and regular feedback have a risk management approach naturally built into the process. It is easy to see why, the building blocks and attachment points for plugging in an effective risk management process are certainly present, but unfortunately just building something iteratively or incrementally does not ensure risks are managed. 

It is all too easy to develop iteratively missing opportunities to actively address threats or exploit opportunities. Many agile teams also fail to actively look for risks, discuss and decide on appropriate actions, undertake those actions and reassess the risks and evaluate if the risk management process is even working. 

It is a shame because in many ways agile methods provide an ideal framework for introducing effective risk management practices. They have short timeframes, active reprioritization of work, frequent review points, high team member and business engagement in planning, etc. However, similar to having a group of people to help you find something, a beach-party is not the same as a search-party. We need a conscious effort, coordination and cooperation to make it effective.

 

Consciously Adding Risk Management to Agile Approaches

The good news is, that when organizations and their participating teams decide to layer risk management onto agile approaches there are many self-reinforcing cycles and mechanisms to make use of. For instance, the frequent consideration of change requests and reprioritization of work in the backlog makes the insertion risk avoidance or risk mitigation tasks an easier process to handle. 

Likewise, the regular retrospectives that review progress and process are great points to examine the effectiveness of risk management strategies and take corrective actions. Daily standup meetings that surface issues and blockers can also act as early warnings for potential new risks, etc. 

For anyone interested in linking agile approaches to risk management steps, here’s a White Paper on Collaborative Games for Risk Management that was presented at the 2012 Agile conference and PMI Global Congress. These ideas and their development more into Opportunity Management were explored at this 2015 Agile Conference Session. However, the mechanics of doing the work and linking it into an agile lifecycle are the easy parts, getting people to take a risk-based view to project work is where the real work is needed.

 

Thinking about Risk Management

Education and acceptance are the keys to successfully adding risk management to agile practices. We need to get people engaged in the process and instill a common understanding of threats as the possibility of negative value. Once people understand this they can answer the question “Where is the next best dollar spent?” more effectively. It might not be on building the next feature from the backlog, but instead avoiding a risk or exploiting an opportunity. 

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When Outsourcing Makes Sense

When to Outsource GridDisclaimer: This article is based on my personal experience of software project development work over a 25 year period running a mixture of local projects, outsourced projects and hybrid models. The data is my own and subjective, but supported by 1,000’s of industry peers I question while delivering training courses for the PMI. I do not work for a local based or outsourcing based company, I have nothing to gain from favoring either approach, but I hope these thoughts are useful for determining some of the pro’s, con’s, true costs and circumstances when outsourcing is better or worse than local development.

To the uninitiated, outsourcing seems like a great idea. Software engineers are expensive in many countries but much cheaper in other parts of the world. So, since software requirements and completed software can be shipped free of charge via email and web sites, why not get it developed where labor rates are much lower?

Coding vs Collaboration Costs

The flaw in this plan comes in the execution of it when it becomes apparent that software development projects typically entail more than just the development of software. Writing code is certainly part of it, but understanding the problem, agreeing on a design, discovering and solving unforeseen issues, making smart decisions and compromises to optimize value and schedule are big parts of it too. This is the collaboration effort part of a project. Also, while the coding part might represent 30-50% of the overall project costs, these shrink to 20-30% when a 3-year ownership cost view is considered that includes support, maintenance and enhancements.

Sticking with just development costs for now, let’s examine a scenario. The business case pitched to executives by outsourcing companies initially seems very compelling: Project Alpha needs 9 months of software development by a team of 5 people. If you work in an expensive labor market, like North America, we can assume fully-loaded hourly rates of $100 per hour, yet highly qualified consultants from our fictional outsourcing country of TechLand cost only $25 per hour. So, the project for 9 months x 160 hours per month x 5 people at $100 per hour in an expensive market costs $720,000. For a TechLand team this would cost 9mths x 160hrs x 5pl x $25hr = $180,000, that’s a cool $540,00 saving, right?

Let’s revisit this scenario based on the acknowledgment that the actual software writing part of a project is closer to a 30-50% of the total effort. This leaves the remaining 50-70% of the work as the communications heavy collaboration part. It should come as no surprise that separating people via distance, time zones, and potentially language and cultural barriers increase communications effort and propagates issues up the cost-of-change-curve

So, when 50-70% of the communication-heavy collaboration work takes longer, how do we quantify that? Agile methods recommend Face-to-Face communications because it is the quickest, conveys body-language and provides an opportunity for immediate Q&A only for the issues that need it. Switching from Face-to-Face to video, conference call, email or paper create barriers and adds significant time and opportunity for confusion. A 2-3 X increase in effort likely downplays the true impact when considering the costs of fixing things that go awry because of inevitable misunderstandings, but let’s use that number.

Redoing our project Alpha costs with, say, 40% as the actual coding effort and 60% effort communications heavy collaboration work that takes 2.5 X as much effort we get: 9mths x 160hrs x 5pl x $25 hr x 40% = $72K Coding + 9mths x 160hrs x 5pl x $25 hr x 60% x 2.5 = $270K Collaboration giving $342,000 in total. However, this is less than half the costs of the $720,000 locally developed project so we are still good, right?

The Compounding Costs of Delay

An error in the logic applied so far is that this 2.5 X communication and collaboration penalty on 60% of the work can somehow be magically absorbed into the same 9 month timeline. In reality these outsourced projects take longer because of the increased communication and collaboration effort and 2.5 x 60% = 1.5 X as long is consistent with my experience from 25 years of mixed local and outsourced projects.

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