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An Integrated Project Management blog post within the category of Potfolio Management used to increase competitive advantage.

Subcategories from this category:

Capacity Planning, Workflow Management, Portfolio Management

Take the Portfolio Management Leap

“If I wait to deploy portfolio management practices until the organization is using more mature Program and Project practices, then it will be easier to adopt portfolio management, but we won’t be able to leverage the capability of portfolio management to help mature other PM practices as well.”

Following Project Portfolio principles within your organization, regardless of your job title enables and strengthens many of today’s best-practices. Typically, before focusing on Project Portfolio practices, a higher level of Project and Program maturity must be achieved. Within Integrated PM, these practices are integrated, and seen as a single system happening simultaneously.

Given this system, the following capabilities are developed using Integrated PM. An iterative spiral of increased process maturity develops, due to the reinforcing feedback loop of your portfolios, that you may or may not even be aware of. This structure increases PM process maturity, which then increases portfolio management capabilities, which then enables better practices, which increases process maturity.

The message here is DON’T WAIT, start now, and your process will begin to mature, slowly at first, and more rapidly as capabilities grow. Focus your efforts in the following areas for the biggest initial benefit.

Organizational Change Management

Rapid changes in the economy, markets, technology, and regulations are forcing organizations to formulate new strategies or fine-tune the current ones more frequently than ever. As these strategies are translated into new initiatives supported by new programs and projects, portfolio management offers a framework to manage the change effectively. It helps you make the right investment decisions to generate value for stakeholders. It provides you with the right tools to rapidly alter the course of action in response to fast changes in the environment. As Portfolio Management policies and practices are used, opportunities to strengthen change management practices will increase.

Clear Alignment

A well-designed and managed formal portfolio management process ensures that projects are aligned with the organizational strategy and goals at all times. New project ideas are evaluated for their alignment with the strategy and goals, and no projects are funded unless there is clear alignment. In addition, the degree of alignment is continuously monitored as the selected projects go through their individual life cycles. If an ongoing project no longer shows strong alignment, it may be terminated and the resources allocated to other higher priority projects. As Portfolio Management policies and practices are used, opportunities to strengthen strategic alignment practices will increase.

Value Creation

Portfolio management helps you deliver value to your stakeholders by managing project investments through a structured and disciplined process. The justification for the projects is clearly identified by quantifying the expected benefits (both tangible and intangible) and costs. Only those projects that promise high-value and rank high against the competing ones throughout their life cycles are funded. Portfolio management gives you a bigger bang for your investment buck in the long run because you are managing the investments in a systematic fashion. As Portfolio Management policies and practices are used, opportunities to strengthen value creation practices will increase.

Value Balancing

For a profit-driven company, the organizational goal may be to generate the maximum financial returns possible for the owners or shareholders. But if the projects selected for investment are based solely on financial value generation potential, interests of other key stakeholders may be compromised. PPM will help you create a balance among the projects to deliver not only financial value but other value forms as well. As Portfolio Management policies and practices are used, opportunities to strengthen value balancing practices will increase.

Long-Term Risk Management

When projects are initiated and implemented without the portfolio framework, project sponsors and managers typically focus on the short-term risks related to the completion of the project and do not pay enough attention to the long-term risks and rewards. Furthermore, they are oblivious to the collective risk profile of the project investments. Under a portfolio structure, the risk-reward equation is examined for projects individually as well as collectively in the context of the overall business. By diversifying the investments and balancing the portfolio, you are able to create a proper mix of projects of different risk profiles and manage the risks more effectively. As Portfolio Management policies and practices are used, opportunities to strengthen long-term risk management practices will increase.

Termination of Projects

Just because a project initially shows a strong business case does not nec-essarily mean it should continue to receive funding through its completion. Projects that no longer hold a strong business case as they go through their life cycles should be terminated. This helps you focus on those projects that will generate value and kill others, thereby maximizing the value of the portfolio as a whole. In most organizations, once a project receives authorization and enters into the implementation phase, it will most likely continue to receive funding until its completion. Terminating projects is a taboo in most organizations. It is a highly political and emotional issue for many decision makers and executives. Portfolio management helps make the project termination decisions more objective and less political or emotional. As Portfolio Management policies and practices are used, opportunities to strengthen project end-of-life practices will increase.

Better and Faster Decision Making

Portfolio management brings more focus to the decision-making process, making it faster and more effective. An integral part of PPM, portfolio and project governance provides a formal structure and process for making go/ no-go project investment decisions. It places the responsibility of decision making in the hands of independent parties-rather than the project sponsors with possible self-interest that can evaluate competing projects more objectively using the same measurements, metrics, and standards. As Portfolio Management policies and practices are used, opportunities to strengthen decision making practices will increase.

Reducing Redundancies

It is not uncommon in relatively large organizations to face a situation where the "left hand doesn't know what the right is doing." Organizational resources are sometimes wasted on different projects trying to produce the same output. The PPM process helps you eliminate or reduce redundancy yielding significant savings to the organization. When the portfolio management process is standardized across the whole enterprise, projects become more transparent and adequate checks and balances can help you detect redundancies early. As Portfolio Management policies and practices are used, opportunities to strengthen redundancy-identification practices will increase.

Better Communications and Roadmapping

Many organizations have "silos" around each function that block effective communication, a critical ingredient of success for cross-functional projects. PPM is a mechanism that opens the channels of communication for people from various business and technical functions. Silos also undermine innovation that is critical to organizational success in today's hypercompetitive environment. PPM breaks the silo barriers creating opportunities for people to learn new insights from each other and become more innovative. As Portfolio Management policies and practices are used, opportunities to strengthen communications and roadmapping practices will increase.

Efficient Resource Allocation

One of the biggest challenges for any organization is the efficient allocation of resources-both monetary and human. While every manager claims that she would like to see the biggest bang for her buck, only a few organizations have proper systems in place to prioritize her projects based on their return on investment. Allocation of the right people to the right projects at the right time is an even bigger challenge. You can rarely find a detailed inventory of the human resources vs. the project needs, that is, supply vs. demand. The situation becomes even worse when the project resources also have ad-ministrative and other operational responsibilities. One of the advantages of portfolio management is that it provides the structure and tools for efficient advance planning, needs prioritization, and resource allocation. As Portfolio Management policies and practices are used, opportunities to strengthen resource allocation practices will increase.

Consistent Performance and Growth over Time

One of the key portfolio management processes is the evaluation of projects for their financial value-generating merit. This involves forecasting the future cash flows of every project and its outputs over its life cycle. Cash flow analysis for the entire portfolio over future time increments enables you to estimate any investment gaps and corresponding projects to match the growth targets of the organization. The portfolio thus can offer consistent long-term growth and performance for the organization. As Portfolio Management policies and practices are used, opportunities to strengthen performance and growth practices will increase. .

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Project Portfolios and the GOSPEL of Integrated PM.

"If I use the principles of project portfolio management, then I can drive increased value through projects, but our project management and program management practices aren’t mature enough for portfolio management."

The Project Portfolio G.O.S.P.E.L.

I tell my clients that I have one of the best jobs in the World; I go all over the world teaching the GOSPEL. That is, the GOSPEL of Integrated PM. This is a common acronym used to teach project strategic planning, and project portfolio management. These two disciplines are tightly coordinated within Integrated PM. Below I’ll quickly explain the acronym. They represent the fundamental capabilities required for a successful portfolio management process.

GOAL

This represents the long-term purpose of your organization. A change here would require major structural reorganization, and seldom happens. Your goal in the GOSPEL, represents your organization’s mission. Many times, the goal of the organization isn’t even measured. Of course, this needs to change, as the Goal drives all other activity within the organization, and the activities of Integrated PM. Every system must have a single purpose, each sub-system within the system must also have a single purpose or ‘Goal. Every portfolio (or sub-portfolio) requires a goal.

OBJECTIVES

During strategic planning the Goal is segmented into the Key Strategic Areas which your organization must be successful in for the Goal to be achieved. Normally there are three to six Key Strategic Areas. If you can’t identify enough Key Strategic Ares, go down a level in abstraction. If you identify too many Key Strategic Areas, the combine some and go up a level in abstraction. Success in these Key Strategic Areas is not an option, failure in one is failure in the organization as a system. They therefore, all have the same priority. These Key Strategic Areas are called objectives for ease.

In Integrated PM, Objectives join to achieve the organizational goal. Think of them as separate components within the same system. Objective measures are critical to portfolio value decisions, and balancing.

STRATEGY

Because each of the organization’s objectives are so critical to your organizational success, you typically want to develop multiple strategies for accomplishing each objective which reduces the risk of failure. The strategy defines the operational concept, or technical approach to the objective. Strategies are typically controlled with guidelines, constraints, capabilities, and practical limitations.

PLANS

Our project plans should be linked to one strategy. Of course, typically multiple projects and programs are normally linked to a single strategy, but where it makes sense, a single project might support multiple strategies. This is referred to as a many-to-many relationship. The best-practice here is to focus more on authority and responsibility than on links. The links are used for reporting, alignment scoring models, finance and resource balancing, and shouldn’t become structural constraints.

EXECUTION

This is where the ‘rubber hits the road’ so to say. Your projects should cause strategic change when done right, but nothing can happen if resources aren’t available. Project ranking and prioritization enables limited resources to be applied where the most value can be produced. Once the portfolio management question can be answered, “Out of all the things that could be done, what should be done, given the limited resources?”, execution becomes paramount. The capacity plan kicks in at this point, and optimally places the right resources, at the right project, at the right time.

LEARNING

Now remember this, the entire purpose of this activity to drive change in the value indicators. There are six ways that projects can impact organizational value. Some of these value drivers cause change to the organization’s perceived value. While other drivers cause change to operational cost. At the end of the day, they all drive changes which increase the organization’s competitive advantage.

The question is, “How well did the project meet expectations?” Can we learn from the past, by measuring the present, to improve the future? This is the challenge of every Integrated PM team. To address this challenge, we use systems thinking and a measure framework that helps improve project portfolio decisions, resulting in improved project performance.

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Portfolio Management Fast-Service™ Package

“If we select the pmNERDS' Fast-Service™ package, then we get rapid performance improvement, but we’ll need to answer questions and provide feedback.”

We all occasionally get major hankerings, it’s usually something that we can’t wait for and need within a very short period of time. For us it is usually food related, the Fast Food Industry utilizes the notion of standardization to produce food at minimal cost and preparation time while maximizing value within their business constraints. The question is can they make a compelling product while being profitable?

At pmNERDS, that’s our goal with these Fast-Service™ packages. Using product templates, standardized processes, and focused training we’re able to deliver consulting products faster than our clients and competitors, with sustainable margins.

Very few of us look forward to overly complex Portfolio Management processes. We want it to be easier and faster, so process performance in this area looks rather attractive, but what area should be addressed first?

Using some rapid assessment techniques, the Performance Measure Framework, and our performance constraint analysis tool, we help you identify that practice that is holding you back. Then we will propose modifications or creation of a new practice that addresses your specific constraint. This is not about investing lots of time to do it yourself, or just going without, we are offering a third choice…

Our clients hire us do some of the data collection, constraint analysis, process documentation, and change management activities that are part of effective Portfolio Management performance improvement practices. With only a total of 8 hrs. of your time, spread out in 8 sessions over 4 weeks, we complete the analysis and build the necessary deliverables to adopt a new practice, that will improve your Portfolio Management performance. All of this is accomplished within 20 business days.

We’re experts in performance improvement and Portfolio Management practices, you know your business and organization. By using our Fast-Service™ package, you can leave the specialized practices to us, and focus on running your business.

Below is a set of Fast-Service™ package deliverables used to improve your Portfolio Management performance.

SELF-ASSESSMENT REPORT- This is an Excel spreadsheet and chart that is used to identify the major problem areas and bottlenecks of the organizations’ innovation process. The Self-Assessment contains a series of questions related to current practices for gathering ideas, converting ideas into business opportunities, and finally diffusing ideas throughout organization and to market. Using the self-assessment, we can quickly identify the perceived system constraints, and dive deeper into specific process areas that could be causing bottlenecks.

CONSTRAINT ANALYSIS REPORT- This is a set of Power Point diagrams used to identify key system constraints. We use Sufficient Cause diagrams to look at effects and potential causes from the perspective of Resources, Inputs, Controls, and Processes. These diagrams are used to verify effects, validate relationships between causes and effects, and look for additional effects to gain a clear understanding of the current system constraints.

PERFORMANCE MEASURE FRAMEWORK- This is a set of Excel spreadsheets and Power Point diagrams used to manage process improvement. Focusing on 1 of the 16 domains, we will load the selected practice into the Performance Measure Framework. By adding your standardized plans and information assets, such as process diagrams and performance thresholds, into the framework, you can do trade-offs and make process improvement decisions.

PROPOSED PRACTICE EFBD- This is a set of Power Point diagrams used to establish a process definition. The EFBD (Enhanced Function Block Diagram) Illustrates control logic, information flow, and process steps. We build this by looking at past project plans and documenting the current state. Based on constraint analysis, we can make modifications to the EFBD of the practice. We do this with things such as review gates, control activities, additional input screening, and resources inputs. This EFBD standardizes the practice and makes the proposed practice easier to understand, adopt, as well as improve over time.

NEW PRACTICE POLICIES & PROCEDURES- This is a set of Word documents that are used to outline process policies and procedures that enable standardization and improvement. Policies and procedures establish a standard set of minimum expectations and guidelines that are expected to be followed by anyone performing the practice. We create a new baseline of process performance, based on the constraint analysis and EFBD process analysis, by adding policies, process steps or procedural guidelines. This information is used to train people on new process, and monitor process execution and performance.

BUSINESS CASE- This is an Excel spreadsheet that is used to analyze, establish and communicate the business case of implementing the proposed practice change. When change is desired, the value delivered through the change must outweigh the negative impacts, cost, and natural friction that change will cause. All business cases derive from the ability to impact one of the six business drivers: Revenue, Efficiency, Sustainability, Endorsement, Cost and Risk. We will then define the type of value proposition that the new practice will deliver: uniqueness, familiarity, or economy of scale. Lastly, we determine the Cost/Value combination. This process will achieve same value for less cost, or more value for less cost, etc. The business case is used to overcome change hurdles and help people to quickly adopted the proposed change. 

PERFORMANCE SCORECARD- This is an Excel spreadsheet that is used to measure practice performance and drive improvement. The performance scorecard is built from information captured in the Performance Measure Framework. Using the five key performance measures, you can diagnose causes of performance constraints and identify process adjustments to address them. The Performance Scorecard will keep people focused on the key measures that impact overall performance, making improvement efforts more effective.

STRATEGY DIAGRAM- This is a Power Point diagram that is used to communicate the strategic intent of the performance improvement initiative.  The strategy diagram sets a common vision and outlines how different teams/roles work together to perform the key activities needed to deliver the value of the initiative. The strategy diagram helps team members to understand their role, adopt the proposed changes, and buy-in to the initiative solution vision.

COMMUNICATION PLAN- This is an Excel spreadsheet that is used to communicate to and engage all stakeholders and team members of a project. A Communication Plan will identify the target personas and actions that you want them to take, anticipate potential objections, and provide a message that addresses the objections and provokes action. We will develop a communication plan that identifies target stakeholders, develops compelling messages that engage them to act towards the achievement of project objectives.

ROLE BASED TRAINING DIAGRAM- This is a set of Power Point diagrams that are used to identify training needs of job roles. These roles based training diagrams provide standardized capabilities, job role expectations, and training demand analysis by process. These diagrams are used to create training and adoption activities for each role as part of the new practice deployment. Each Role can clearly understand their roles & responsibilities regarding the new practice. This means the activities will get done more efficiently with better performance results. 

PERFORMANCE IMPROVEMENT MILESTONE ROADMAP- This is a Power Point diagram that is used to communicate the performance improvement efforts of the organization over time. Based on the performance constraints, this roadmap identifies the sequence of performance improvements as well as the target process areas. The Performance Improvement Milestone Roadmap will align team members, resources, and efforts to provide the most rapid performance improvement for the organization.

 Want to learn more? Contact us either through email or phone.

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Portfolio Management with ‘PURSE’ Process-Service™

“Portfolio Management with PURSE is a Process-Service™ offering of pmNERDS. This offering provides a process umbrella of PURSE, and then line-items of an S.O.W. that can be chosen a la carte.”

Have you ever been on a project that ran out of steam; not enough resources, not enough budget, not enough time, or stakeholder interest? At times like this you just want to scream,#^*%$. Portfolio management control projects at a high -level by the purse strings. Projects are turned on and off with resource and budget allocations. However, you don’t have to leave your people high and dry when it’s time to cut them off. There is a right way and wrong way to control the purse strings of a portfolio. We can help.

During our process consultancy, we address:

Partition- Along with the physical properties, portfolios can be partitioned using many different themes. When we partition, we analyze the different parts to gain an understand of relationships, dependencies, and cohesiveness of the portfolio. We gain insight into the portfolio’s strengths & weaknesses. Sub-portfolios, inclusion rules, and Bias are the critical activities of partitioning.

Unequivocal Criteria- Unequivocal means to leave no doubt. Use criteria that is capable of only one interpretation; unambiguous. Unequivocal criteria require our criteria to be orthogonal, meaning there is no redundancy in the criteria.

Rank- The unique priority of each project based on a published scoring model produces meaningful comparisons, sorting, and scheduling. Without proper weighting and metrics portfolio visualizations can’t have actionable meaning.

Standardization- To receive all the benefits of standardization you need

  1. Repeatable, maintainable and defendable portfolio processes
  2. Flexible thresholds not invariant targets
  3. An understanding of the portfolio's relative value.

Economy- The administration of the concerns and resources of any portfolio or set of sub-portfolios, with a view to orderly conduct and productiveness. The portfolio economy is based on balancing constraints and objectives with resources and assets, while keeping the project end-of-life in sight. Prevent end-of-life sludge.

The pmNERDS process consultancy provides a standard Portfolio Management capability described by the acronym above. This is an umbrella capability needed regardless of any additional practices selected from our a la carte practice menu.

Portfolio Management practices available for selection from the a la carte S.O.W. include ECV Scoring Model, Financial Scoring Model, Portfolio Partitioning, Segmentation, Alignment Scorecard, Business Canvas Model, Risk Management, Options Pricing Theory, Dynamic Rank-Order Listing, Paired Comparisons, Portfolio Balancing, Strategic Buckets, Targeted Spending Levels, Selection Criteria, Benchmarking, Estimating Probabilities of Success, Portfolio TOC, Estimating Resource Requirements, Sensitivity Analysis, Earned Value Analysis, and Portfolio Reviews.

Organizations that depend on projects to create value and increase process efficiencies, as seen in business units such as IT, Marketing, and NPD, should talk with us if they’re interested in increasing project performance.

After a quick discussion, we can direct you to the best process offering and a la carte practices based on your process improvement goals. By putting together a service package that addresses your key performance constraint, our sales team can help you get the quickest time-to-value, while minimizing risk and cost.

Want to learn more? Contact us either through email or phone.

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Portfolio Management Performance-Service™

“If we engage pmNERDS’ Performance-Service™ for Portfolio Management, then we’ll increase the organization’s competitive advantage, realize higher value from projects, and complete projects more efficiently, but it will require change leadership.”

Our performance improvement consulting practice for Portfolio Management, begins with gathering information about your organization and engagement goals. We conduct a quick gap analysis to construct an engagement roadmap.

Once approved, we will build this roadmap out into a complete project plan and review it with our clients going over roles and responsibilities. We schedule weekly meetings to review the project and discuss relevant decisions. Depending of the length of engagement, steering committee meetings are also scheduled.

Daily scrums are scheduled to address issues and schedule any needed ad hoc meetings. Performance Improvement Consulting involves a great deal of planning and communicating. Underlying each practice is an element of process improvement and use of a standard performance measure framework.

The above diagram helps place portfolio management activities in context of the organization’s goals and strategies. During our engagement, we will need to access and align the principle organizational Goal, Key Strategic Areas, and Strategic Initiatives that drive proposed projects.

This is illustrated as concern number 1 in the above diagram. Some clients use our Strategic Planning Services in conjunction with this Portfolio Management service preparatory for our Capacity Planning services. The results of this stage are defined relationships and a list of potential projects.

Our next concern is illustrated in the diagram as concern number 2. The activities of this stage involve to writing down and publishing the selection criteria used to select projects. Number 3 is closely tied to number 2, but not published. Number 3 defines weights for each criterion used in the project selection process. It’s through the weighting of criteria that you control projects in response to changing priorities in the organization.

In concern number 4, we establish portfolio measures and thresholds. Capacity planning can be a source of this information along with sensitivity analysis. There are many methods used, and it’s as much a matter of culture, available information, and leadership as it is in determining the level of future-orientation is desired, the level of accuracy needed, resource-efficiency concerns, the level of objectivity needed, result usefulness, and decision timeliness.

If you don’t have available resources, you needn’t have worried about your decisions. For portfolio management to generate any value, your capability of determining resource availability is critical. This is concern number 5 in the diagram above.

By leveraging our experience, you can reach expected benefits quicker and with less false starts while being assured that you won’t paint yourself into a ‘process’ corner, and isolate information asset flow to downstream processes. Our performance improvement consulting practice requires a discussion to determine goals, scope of effort, consultant alignment, and the development of a business proposal. We deliver an analysis of current portfolio management process performance and constraints, a roadmap to performance improvement, process design, process exercise, process enablement, deployment, and measurement.

When these concerns are addressed, the power of portfolio management can be unleashed. A large part of this effort is process training, skills mentoring, and performance coaching. Depending on the engagement, technology configuration or deployment may or may not be part of this effort.

You can discover more about this service offering by clicking the icon (email or phone) in the top right corner of our website. We’d love to discuss this Performance-Service™ offering and answer any questions you might have.

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Capacity Planning Fast-Service™ Package

“If we select the pmNERDS' Fast-Servicepackage, then we get rapid performance improvement, but we’ll need to answer questions and provide feedback.”

We all occasionally get major hankerings, it’s usually something that we can’t wait for and need within a very short period of time. For us it is usually food related, the Fast Food Industry utilizes the notion of standardization to produce food at minimal cost and preparation time while maximizing value within their business constraints. The question is can they make a compelling product while being profitable?

At pmNERDS, that’s our goal with these Fast-Service™ packages. Using product templates, standardized processes, and focused training we’re able to deliver consulting products faster than our clients and competitors, with sustainable margins.

Very few of us look forward to overly complex Capacity Planning processes. We want it to be easier and faster, so process performance in this area looks rather attractive, but what area should be addressed first?

Using some rapid assessment techniques, the Performance Measure Framework, and our performance constraint analysis tool, we help you identify that practice that is holding you back. Then we will propose modifications or creation of a new practice that addresses your specific constraint. This is not about investing lots of time to do it yourself, or just going without, we are offering a third choice…

Our clients hire us do some of the data collection, constraint analysis, process documentation, and change management activities that are part of effective Capacity Planning performance improvement practices. With only a total of 8 hrs. of your time, spread out in 8 sessions over 4 weeks, we complete the analysis and build the necessary deliverables to adopt a new practice, that will improve your Capacity Planning performance. All of this is accomplished within 20 business days.

We’re experts in performance improvement and Capacity Planning practices, you know your business and organization. By using our Fast-Service™ package, you can leave the specialized practices to us, and focus on running your business.

Below is a set of Fast-Service™ package deliverables used to improve your Capacity Planning performance.

SELF-ASSESSMENT REPORTThis is an Excel spreadsheet and chart that is used to identify the major problem areas and bottlenecks of the organizations’ innovation process. The Self-Assessment contains a series of questions related to current practices for gathering ideas, converting ideas into business opportunities, and finally diffusing ideas throughout

This is an Excel spreadsheet and chart that is used to identify the major problem areas and bottlenecks of the organizations’ innovation process. The Self-Assessment contains a series of questions related to current practices for gathering ideas, converting ideas into business opportunities, and finally diffusing ideas throughout organization and to market. Using the self-assessment, we can quickly identify the perceived system constraints, and dive deeper into specific process areas that could be causing bottlenecks.

CONSTRAINT ANALYSIS REPORTThis is a set of Power Point diagrams used to identify key system constraints. We use Sufficient Cause diagrams to look at effects and potential causes from the perspective of Resources, Inputs, Controls, and Processes. These diagrams are used to verify effects, validate relationships between causes and effects, and look for additional effects to gain a clear understanding of the current system constraints.

PERFORMANCE MEASURE FRAMEWORK- This is a set of Excel spreadsheets and Power Point diagrams used to manage process improvement. Focusing on 1 of the 16 domains, we will load the selected practice into the Performance Measure Framework. By adding your standardized plans and information assets, such as process diagrams and performance thresholds, into the framework, you can do trade-offs and make process improvement decisions.

PROPOSED PRACTICE EFBDThis is a set of Power Point diagrams used to establish a process definition. The EFBD (Enhanced Function Block Diagram) Illustrates control logic, information flow, and process steps. We build this by looking at past project plans and documenting the current state. Based on constraint analysis, we can make modifications to the EFBD of the practice. We do this with things such as review gates, control activities, additional input screening, and resources inputs. This EFBD standardizes the practice and makes the proposed practice easier to understand, adopt, as well as improve over time.

NEW PRACTICE POLICIES & PROCEDURESThis is a set of Word documents that are used to outline process policies and procedures that enable standardization and improvement. Policies and procedures establish a standard set of minimum expectations and guidelines that are expected to be followed by anyone performing the practice. We create a new baseline of process performance, based on the constraint analysis and EFBD process analysis, by adding policies, process steps or procedural guidelines. This information is used to train people on new process, and monitor process execution and performance.

BUSINESS CASEThis is an Excel spreadsheet that is used to analyze, establish and communicate the business case of implementing the proposed practice change. When change is desired, the value delivered through the change must outweigh the negative impacts, cost, and natural friction that change will cause. All business cases derive from the ability to impact one of the six business drivers: Revenue, Efficiency, Sustainability, Endorsement, Cost and Risk. We will then define the type of value proposition that the new practice will deliver: uniqueness, familiarity, or economy of scale. Lastly, we determine the Cost/Value combination. This process will achieve same value for less cost, or more value for less cost, etc. The business case is used to overcome change hurdles and help people to quickly adopted the proposed change. 

PERFORMANCE SCORECARDThis is an Excel spreadsheet that is used to measure practice performance and drive improvement. The performance scorecard is built from information captured in the Performance Measure Framework. Using the five key performance measures, you can diagnose causes of performance constraints and identify process adjustments to address them. The Performance Scorecard will keep people focused on the key measures that impact overall performance, making improvement efforts more effective.

STRATEGY DIAGRAMThis is a PowerPoint diagram that is used to communicate the strategic intent of the performance improvement initiative.  The strategy diagram sets a common vision and outlines how different teams/roles work together to perform the key activities needed to deliver the value of the initiative. The strategy diagram helps team members to understand their role, adopt the proposed changes, and buy-in to the initiative solution vision.

COMMUNICATION PLANThis is an Excel spreadsheet that is used to communicate to and engage all stakeholders and team members of a project. A Communication Plan will identify the target personas and actions that you want them to take, anticipate potential objections, and provide a message that addresses the objections and provokes action. We will develop a communication plan that identifies target stakeholders, develops compelling messages that engage them to act towards the achievement of project objectives.

ROLE-BASED TRAINING DIAGRAMThis is a set of PowerPoint diagrams that are used to identify training needs of job roles. These roles based training diagrams provide standardized capabilities, job role expectations, and training demand analysis by process. These diagrams are used to create training and adoption activities for each role as part of the new practice deployment. Each Role can clearly understand their roles & responsibilities regarding the new practice. This means the activities will get done more efficiently with better performance results. 

PERFORMANCE IMPROVEMENT MILESTONE ROADMAPThis is a PowerPoint diagram that is used to communicate the performance improvement efforts of the organization over time. Based on the performance constraints, this roadmap identifies the sequence of performance improvements as well as the target process areas. The Performance Improvement Milestone Roadmap will align team members, resources, and efforts to provide the most rapid performance improvement for the organization.

Want to learn more? Contact us either by email or phone.

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Capacity Planning with ‘PATHS’ Process-Service™

"Capacity Planning with PATHS is a Process-Services™ offering of pmNERDS. This offering provides a process umbrella of PATHS, and then line-items of an S.O.W. that can be chosen a la carte.”

Capacity Planning provides actual paths to choose from. It’s with choices that we have agency and power. Too many times we’re given choices with only one possible answer. Well not with PATHS. With capacity planning we create real alternatives, conduct ‘What-if’ analysis, and optimally coordinate project start dates. What more God-like characteristic is there than to peer into potential futures and make decisions based on the most optimal outcome.

During our process consultancy, we address:

Portfolio– The portfolio manager provides portfolio constraints, thresholds, and strategic alignment to facilitate the project segmentation and stratification used by capacity planners. The portfolio gives projects prioritization used to control project spending over time.

Availability- This gives power to capacity planning choices. It doesn’t matter what projects are called for, if there is no one available to do the work. Insight into resource availability is critical to capacity planning. Throughput- So what are you doing capacity planning for? To increase throughput, which is competitive advantage. Use capacity planning to maximize throughput, which is the competitive advantage produced by projects.

Heuristic- This is a systematic approach to capacity planning, problem solving, learning, and discovery that promotes a ‘hands-on’ and interactive practical approach not guaranteed to be optimal or perfect, but sufficient for your immediate goals.

Structure- Remember to create a project structure that accommodates not only the ‘big rocks’, but the smaller ones as well. The structure must support insertion of new opportunities throughout the year, and shifts in strategic intent. The structure must be repeatable, defendable, and maintainable.

The pmNERDS process consultancy provides a standard Capacity Planning capability described by the acronym above. This is an umbrella capability needed regardless of any additional practices selected from our a la carte practice menu.

Capacity Planning Practices available for selection from the a la carte S.O.W. include Stratification, Resource Budgeting, Resource Estimation, Resource Scenarios, Scoring Models, Infinite Demand-Fixed Resources, Infinite Resources-Fixed Demand, Fixed Demand and Resources, Current Environment Assessment, The Problem Workload, Sensitivity Analysis, Failure Mode Analysis, Workload Forecasting, Probabilistically Modeling, Performance Models, Operational Analysis, Input Parameters, Calibration and Validation.

Organizations that depend on projects to create value and increase process efficiencies, as seen in business units such as IT, Marketing, and NPD, should talk with us if they’re interested in increasing project performance.

After a quick discussion, we can direct you to the best process offering and a la carte practices based on your process improvement goals. By putting together a service package that addresses your key performance constraint, our sales team can help you get the quickest time-to-value, while minimizing risk and cost.

Want to learn more? Contact us either through email or phone.

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Capacity Planning Performance-Service™

“If we engage in pmNERDS’ Performance-Service™ offering for Capacity Planning, then we’ll increase the organization’s competitive advantage, realize higher value from projects, and complete projects more efficiently, but it will require change leadership.”

Our performance improvement consulting begins with gathering information about your organization and engagement goals. We conduct a quick gap analysis to construct an engagement roadmap.

Once approved, we will build this roadmap out into a complete project plan and review it with our clients going over roles and responsibilities. We schedule weekly meetings to review the project and discuss relevant decisions. Depending of the length of engagement, steering committee meetings are also scheduled.

Daily scrums are scheduled to address issues and schedule any needed ad hoc meetings. Our performance improvement consulting involves a great deal of planning and communicating. Underlying each practice is an element of process improvement and the use of a standard performance measure framework.

Capacity Planning is about ensuring you have the capacity to complete project commitments, either by providing needed resources or by not making the project commitments.

A Capacity Planner makes an explicit promise to the organization that, barring any catastrophes, the projects committed to have the needed resources required. How can anyone make such a promise?

The Doctrine of Uniformity is the assumption, that the same natural laws and processes that operate in the universe now have always operated in the universe in the past, will continue in the future, and apply everywhere. It refers to invariance in the principles underpinning science. Though an unproveable postulate that cannot be verified using the scientific method, uniformitarianism has been a key first principle of virtually all fields of science, including capacity planning.

Capacity Planning is a top-down function, using predictive measures and is sometimes confused with the bottom-up approach of utilization measures. Capacity planning never gets to the detail of individual resource utilization rates. It is used to determine optimal start times of projects based on resource availability and project loads.

The pmNERDS Capacity Planning consultant uses the invariant principles of predictive performance modeling to address and optimize solutions for the two fundamental capacity planning questions below:

“Given a fixed demand, what is the optimal project scheduling, with unlimited resources?” and “How much work can be completed, with an optimal project scheduling, given a fixed amount of resources?”

Of course, the third capacity planning question must also be addressed, that is, “Given a Capacity Plan, how do I add newly proposed projects, and conduct change impact analysis?”

From the capacity plan, utilization rates of resource types can be predicted. As projects are further defined, and specific resources are identified on the project, utilization rates may be forecasted for specific named resources. This isn’t possible without a start date assigned by the capacity planner.

We should mention at this point that all projects aren’t scheduled by the capacity planner. Normally only the most strategic projects are managed this way. Thresholds of other project types are modeled with homogenous buckets which create demand, but don’t go through this approval and scheduling process. Utilization rates are directly computed, because there is no choice as to when the project will start.

We will work with your team to find optimal solutions to these three questions, identify assumptions, conduct sensitivity analysis, and scenario risk assessments. Many times our engagements include utilization forecasting and capacity planning.

By leveraging our experience, you can reach expected benefits quicker and with less false starts while being assured that you won’t paint yourself into a ‘process’ corner, and isolate information asset flow to downstream processes. Our Performance-Service™ practice requires a discussion to determine goals, scope of effort, consultant alignment, and the development of a business proposal. We deliver an analysis of current capacity planning process performance and constraints, a roadmap to performance improvement, process design, process exercise, process enablement, deployment, and measurement.

A large part of this effort is process training, skills mentoring, and performance coaching. Depending on the engagement, technology configuration or deployment may or may not be part of this effort. You can discover more about this service offering by clicking the icon (email or phone) in the top right corner of our website. We’d love to further discuss our Performance-Service™ offering, and answer any questions you might have.

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A Capacity Planner: How Many Can You Lift?

“If I am a capacity planner, then I am always looking for optimal functionality, but really, what do I do?”

 

Who is a capacity planner? A capacity planner gathers performance data and measures the output to determine optimal fit within the production scheduling. A person in this position is normally at the business unit level, but there are enterprise level capacity planners that look at the whole organization, such as Resource Forecasters or Resource Estimators. A business unit capacity planner may be called a Performance Manager or a Performance Engineer among other titles, but who are they really? Every job is more than just a title.

In previous posts, I have determined the best way to describe a project manager to a child is to classify them as a superhero, like Batman. So, if a project manager is Batman, then a capacity planner is a lot like Alfred, Batman’s butler. Don’t be mistaken, Alfred was way more than Batman’s routine servant. He pretty much raised him. If Bruce was being foolish, then Alfred efficiently reprimanded him. In the background, he never stopped guiding him in the right direction. This is a capacity planner.

A capacity planner can go by many different names, but at the end of the day, the goals are still the same. As a capacity planner, you are here to understand the priorities, the resources available, the true cash flow, as well as the intricacies of the time frame. Alfred understood Batman’s true priorities. Batman wanted to destroy all his foes and save every single maiden, but it took Alfred to continuously remind him that he is only one man. As one man, he only has so much capacity. This inevitably led to the introduction of Robin and later Batgirl. Batman increased his capacity to match the increasing demand.

It might seem trivial to say that the capacity planner needs to understand priority, the cash flow, the time frame and everything else, but it is more complex than you think. It is a balance of continuously fixing the past, adjusting the present actions, and planning for future growth. Planning for growth could entail adding more physical locations, adding personnel, or capital to raise for any given expansion. This plan is always a factor in determining how many transformational/major change projects you can accomplish in a year. How many projects can you really afford given the resources as well as the budget? Sure, you could run yourself and your team down, but as Alfred understood, you still must eat and sleep, even if you're a superhero. In capacity planning, you can’t invoke only major change if you have requests for maintenance/utility or compliance mandate projects.

Your business unit and organization needs a continuous spectrum of projects. If you can do three transformational projects given your organizational constraints than you would need to sufficiently space them across the next few quarters. In between these major projects, you always have a spot for last minute projects or required maintenance projects. A capacity planner is working to design an optimal project schedule by weighing the risk, priority, cash flow, and organizational capacity.

Capacity planning involves looking at what resources are being utilized and making sure these are being allocated correctly for optimal functionality. Managers with this mission are leading their Batmans’ in the direction that means success and growth of the organization by considering the priority, resource availability, and the fluctuating cash flow within a given time frame. Alfred is the only real father figure Batman has in his life. The one force that Bruce Wayne knows will always have his back in any situation. He is the man behind the man. He is the capacity planner.

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Capacity Planning: How Much Can You Lift?

“If I invest significant resources to capacity planning, then I understand the production capacity needed to meet the changing demands, but I am not sure what capacity planning really entails.”

My morning is never complete without a cup of coffee. So, when I first came across the term “capacity planning,” I automatically went to my regular morning struggle, how much coffee can I put into this travel mug without burning myself? This might seem trivial, but it is a delicate process. How big is the mug? Do I want to leave room for cream? How much cream? If your calculation is even slightly off you burn yourself at some point, have a subpar cup of joe, or you managed to cheat yourself out of some coffee.

After some research, I now understand that capacity planning is slightly more complex than filling up a cup of coffee. Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its product or services. The goal of capacity planning is to understand the capacity of the organization, and the demand of the customer, to minimize a discrepancy between the two forces.

If only it was as easy as filling your travel mug in the morning, but really, most of capacity planning comes down to two questions. Given the resources I have, how many projects can I do? Given my projects, how much resources do I need?

You might be reading those two questions and think it is that easy, but just like pouring coffee, there are lots of variables involved. The cream to coffee ratio and the size of the travel mug, turns into skill sets, number of projects, strategic plans, as well as the number of resources. If the path to high performance is a pipe, then each of these variables are something blocking the flow.

The key to successful capacity planning is identifying the biggest blockage. You could have a reasonable number of employees and projects, but have a gap in the job roles that can be filled by your resources. Alternatively, you could have resources that are being severely overworked. You have too many projects and not enough resources, in which case, you can reevaluate the number of future projects that can be attempted. The first step to unplugging the pipe or filling that mug is to understand what you have, and what you can do with it, and that is capacity planning.

The luckiest of us out there no longer need to worry about filling up our coffee mugs to the appropriate level. We have Starbucks or an automatic machine that fills our cups to that perfect full, but not too full point. If only real world capacity planning were the same way. The more you understand the more you can plan for at your organization. Capacity planning ensures the long and short term success of key business initiatives at a reduced cost, and who doesn’t want that?

 

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Capacity Planning: How Long Can You Lift it?

“If you want to determine the production capacity and the plan necessary to meet the changing demands for its products and services, then you have done sufficient capacity planning, but what strategy and steps were taken to develop your plans?”

It should be self-evident as to why an organization should care about capacity planning. No one wants to be in the situation where they have tons of people with nothing to do or to have too many projects and not enough people. As work piles up you are unable to become more efficient or grow as a company. You are unable to do much more than fight the fires. A company that has done sufficient capacity planning understands their priorities, the resource availability, the cash flow, as well as the intricacies of their time frame. Every project matters!

The repercussions of a poorly planned product launch are not just some unplanned operational costs, but a battlefield of ruthless customer reviews as well as negative impacts on the company’s image. The goal of capacity planning is to reduce that possibility, by minimizing the discrepancy, and provide satisfactory service levels in a cost-efficient manner. In other words, you are checking the system, and determining if you have the roles and skills needed before scheduling the work. Regardless of the situation, capacity planning involves three basic steps:

  1. Determine Capacity Requirements: Understand what will need to be supported.
  2. Analyze Current Capacity: Determine if it is meeting the organizational requirements.
  3. Plan for Future Capacity: Forecast future business activities and requirements.

There is lots more that can be said about each of these steps, but to begin you must understand your limits. After that is determined, you can start to understand your organizational constraints, the true project priority, and further speculate on production holdup. Companies use one of four general strategies to determine the production capacity, and produced the plans necessary to meet the changing demands for its products and services:

  1. Lead Strategy: Loading the system in anticipation of an increase in demand. The Lead strategy has the goal of luring customers from your competitor by improving service level. You are ensuring that the organization has adequate capacity to meet all demands even during high growth periods.
  2. Lag Strategy: Add the capacity after demand has increased beyond existing capacity. This strategy decreases the risk of overbuilding, greater productivity due to higher utilization levels, and the ability to put off large investments, but it may result in the loss of possible customers due to the product being out of stock or low service levels.
  3. Match Strategy: Add the capacity incrementally in response to changes in demand. This is a more moderate approach to reach the same advantages as in the lag strategy.
  4. Adjustment Strategy: Add or reduce the capacity in small or large amounts due to the consumer’s demand, or do major changes to product, or to the organization.

You made the resources available to really look at the capacity and demand in your organization. You even allowed others to adjust a few of the associated variables such as hiring a new copywriter and adjusted a few projects. So… you’re done with capacity planning? Right? Not so much.

We live in a fast paced world were nothing ever stays the same for too long. The capacity is defined as the maximum amount or number that can be received or contained. This could be about the amount of data on a hard drive, or the maximum amount of work that an organization can complete in each amount of time. It is important to know those numbers, but it is more important to know that capacity requirements can fluctuate between peak and limited demand. You might not require the same number of resources in normal operations as you do in peak demand. You are only human, to ensure the success of business initiatives and reduced cost, capacity planning should be actively done semi-annually, but with this concept, should be continuously in the back of your mind as things change!

 

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Project Planning: Coordinate Workflow

“If I establish a coordinated workflow, then my project team is operating effectively, but I am not sure how to prevent a tactical error in the execution phase.”

I am not much of a football fan and that’s a possible understatement, but I do remember the total devastation of the people in 2006, when Tony Romo fumbled the ball as he tried to catch the snap and set the ball down, in the game against Seattle. Romo was so close, it was 21-20 in favor of Seattle, and a field goal could have won the game for the Cowboys, but it wasn’t to be. He messed up the handoff and any amount of scrambling couldn’t have saved the game.

Fumbling is not limited to sports, it sometimes happens in the middle of projects too. The plan can be in place and the instructions clear, but the ball still dropped in the handoff between team members. So, why do such things happen?

In football, there are a million moving parts, there are all the tactical variables on the field as well as so many more present before the game even starts. The same can be said for project planning and project management, so it is important to go in with an understanding that you can do everything right, but sometimes the project still fails. This is because there are so many pieces, and there are only so many opportunities where you can ensure that the ball is in play, but this reality doesn’t mean you can’t increase your chances for success…

A couple of the most noted reasons for project failure are over allocated resources and unreliable estimates. This is the tactical side to creating a project plan. On a project plan, estimates are very often guesstimates on how long it took or cost me to do this last time. Having a completely inaccurate estimate can lead to a flawed schedule, increased risk, or an inevitable likelihood of overshooting the budget. To accurately estimate how long or how much a project takes requires a little research as well as capacity planning. In other words, understand the skills available to you and the effective resource limits of the organization.

You need to know how many projects your team can be working on at any given time, before the duration time taken to complete the task, needs to be increased. At the same time, this should give you a better idea for when to increase your contingency time or project risk budget. This process should also shed some light on understanding who should be given this task- who has the time and skills to complete this task?

No one ever said a touchdown is easy every time. Understanding your team’s capacity takes lots of effort to understand, so having access to good historical data on previous projects is a major bonus. When making estimates you should be trying to gather as many points of reference as possible, before putting pen to paper. Simply having your team members guess is never going to be as accurate as reviewing similar projects, understanding the capacity of your team, as well as having them give you a number.

So, we agree? It is important to build a coherent, accurate, and logical plan. Yet, all that can still be for nothing if you don’t have good leadership and management practices. This is the more strategic, pregame preparation, to being a leader. It is you, the customer, and the sponsor gathering project information, creating a charter, and strategically aligning the project. Defining the final deliverable in these processes is integral to accurately creating your budget and schedule, but your team should be part of the preparation too. They should be right next to you as you are building your project plan, because it creates genuine ownership, motivation, and understanding.

As you empower your team, consensus becomes more and more valuable. Reaching a point where everyone agrees, means that you not only have a higher chance of getting the job done, but that any fumble in the process with be avoided that much more.

Having coordinated workflow, where people understand the process as well as know the project was planned correctly, means that your team and your business unit is operating efficiently. This translates to fewer project failures, more opportunities to be innovative, and who doesn’t want that? Now, let’s pass that ball and get a touchdown!

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The Scientific Approach to Innovation

Doing performance modeling as a consultant, the biggest problem we had wasn't building the model, the devil was always in the model's validation. How do you know that the model is connected to reality? This issue was such a common occurrence that I named it the Excel Syndrome. I don't know if you've noticed, but Excel spreadsheets are this way. You may have all the formulas right, but those who haven't built it, or reviewed it in every detail, have little faith in the results. All modeling is this way, even fun simulators with fancy animations.The Excel Syndrome is such a basic truth that it extends way beyond modeling.

Let's take a look at The Scientific Approach to Innovation!

To turn your innovation initiatives into a science, the organization must go through three distinct stages:

1) Categorization–Creating boundaries around what is being included and what is not. Yes, you mathematicians will recognize this as stating the domain and range. I'm not very good at English, maybe this is setting the theses of a paper. Perhaps others will call it defining you name space, or the scope of the experiment. In the case of social targeting from Beth's post, this categorization was required before any random sample could be taken, before any hypothesis made, and before any targeting could happen. She says that Ghani called them, those who were useful to the campaign team. You can be sure that the selection criteria for those people was well known. It always surprises me how many people trying to improve their innovation practices shy away from this task. Well, OK, not really, it's a big job. But I am surprised at how many try to proceed without it. This cripples the next step, correlation.

2) Correlation–Which is about understanding the relationships between what was categorized in the previous step. Let me call these things elements. In Beth's posting, these elements were people useful to the campaign team. A certain amount of experimentation took place discern those relationships she mentions, including email frequency, and dollars requested. Sensitivity analysis on the parameters of the model is a prerequisite for all performance modeling. You certainly don't want to build a model with a parameter for everything the universe has to offer. The beauty of a performance model is in its simplicity. 

3)Effect-Cause-Effect Thinking–Now with stages one and two in place, we're in a position to hypothesize, and test that hypothesis through observation using well defined experimentation methods. Observe an effect, hypothesize about its cause, and look for other effects that should be present if your hypothesized cause was correct. With experimentation like this, we take the guess work out of process improvement, turning innovation into a science.

In the case of innovation, systems thinking is extremely useful if the elements in the last step have been strategically selected to be information assets. If, we further use the categorization provided freely by the Seven Pillars which is a Knowledge Management Architecture. We end-up with a system-of-systems model, which has been well studied, and keeps the management and improvement task simple.

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Stakeholder Analysis

This is not optional! I know, many product management teams today think it is, and pay the price for ignoring it down stream. Do yourself, your team, and your product a favor, conduct at least a little stakeholder analysis with each iteration of market sensing. A lot of product management teams have thought this was optional, leading to derailment of the effort because of failure to address the issues of a key stakeholder. Has anyone had their roadmap turned upside-down by a stakeholder who's issues weren't being addressed? I'm sure they get to you right at the start, before any real commitments have been made, just to make life easy for you. Am I right?

Stakeholder analysis is designed to identify key players who have a stake in product management so that they can be addressed appropriately. In rudimentary stakeholder analysis, individuals who have a stake in a product initiative are identified, then their issues are captured and addressed. I advocate taking stakeholder analysis a bit further. While product management might have its roots in features and product, people are critical to its success. Key stakeholders must be identified and their support secured. To do this, however, the personal benefits to them must be identified, associated with the product initiative, and subsequently communicated to them to secure their involvement and support.

This is a continuous process. Just because you told them you loved them once, doesn't mean you can quit telling them. Now, stakeholders are generally identified as those with formal or informal power. Formal power can often be associated with funding ability. Informal power relates to the ability to influence others. (often those with funding ability). Stakeholder groups can also be identified. For example, the product-line team might be considered a stakeholder group. If your product initiative impacts a product-line, or product-line metrics, then the product-line stake holder issues must be addressed.

Once key stakeholders are identified, their attributes must be collected. Often, these attributes are qualitative or even educated guesses. The minimum attributes about each stakeholder (or stakeholder group) that should be collected are shown in this table.


Often, stakeholders make their issues and opportunities known. These become the objectives of their subordinates and are included in internal communications. Stakeholder analysis will enable extremely effective communications and can make the difference between success and failure. Stakeholder analysis is generally considered to be a unpublished document. It should almost never be published or discussed outside the core product management team, but should be referred to when developing the communication plan for the product initiative.

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