Budgeting in an Agile Environment

/in /by

Photo By Leon from Unsplash

In one of my recent LinkedIn Live broadcasts, an attendee asked about budgeting in an agile environment. Here are the steps for building and maintaining a sound budget for an agile project. 

Step 1. Determine your Minimum Viable Product (MVP). The MVP is the smallest possible product that will satisfy the most important business needs. To deliver value to your business as soon as possible, building the MVP (and nothing more) in your initial release is sensible. That way, you deliver the product faster with the smallest budget. As the MVP is used and more is understood, the business can fund development of additional functionality as needed.

Step 2. Build your estimate around people and time. With the MVP identified, the team can estimate how many people and sprints will be required to build and test those functions. This is an easy way to build an estimate. If you plan to have three developers for 12 two-week sprints, your initial estimate is the cost for 72 person-weeks (3*12*2) plus overhead costs needed in your organization.

Step 3. Adjust the number of people and sprints as you learn. Like any project, your initial estimate involves guesswork. As you build features and work through your backlog, you will probably need to adjust your budget. The team should proactively agree to when to re-evaluate the budget. After three to five sprints is a good rule of thumb. Like your original budget, the adjusted budget can be built based on the number of people and sprints, and the length of the sprints.

Step 4. Augment the budget for specific features. The priorities and needs of the business can change during your project.  In addition, discoveries or new ideas for features can surface. As a result, the business may decide to add or delete features and increase/decrease the budget accordingly. While this creates a bit of a moving feast with your project and budget, the changes are made to accommodate the needs of your product owner. 

Step 5. Keep stakeholders in the loop. Ensure your stakeholders are aware of the status of your budget. This is relatively easy with the agile approach. Whenever there are changes to the backlog (when scope is added or deleted,) you communicate those changes and the corresponding budgetary adjustment. By sharing the approved scope changes, you proactively answer any questions about why the budget has changed.

Managing your budget in an agile environment is a straightforward process as long as the agile team manages backlog features in conjunction with the product owner. Follow these steps and worrying about budget management will be a thing of the past! 

For more about agile projects, check out Doug Rose’s Agile Foundations course.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

 

Pre-requisite Skills for Project Managers

/in /by

In a LinkedIn Live session with Bob McGannon, someone asked, “What pre-requisite skills are needed to qualify for consideration as a project manager?” While there are many valid answers, here are skills Bob and I look for in project management candidates.

  • Great communication. Project managers constantly communicate, verbally and in writing. Effective communication skills are paramount for project management.
  • Relationship building. Project management is a relationship business. Although tools and processes help a project manager, they require working with people. From team members to senior leaders, members of the public to members of the Board, project managers need to leverage positive relationships to be effective. 
  • Highly organized. Project management requires coordination among numerous tasks, people, strategic and operational objectives, finances, and communication expectations, to name a few. A project manager’s days are varied and full of challenges and queries from management. Project managers need to keep things organized to respond to the day-to-day demands of the job.
  • Keen intuition. Keeping track of everything that a project manager needs to understand can be a monumental challenge. Although tools and exception management help, having a “nose for trouble” can be invaluable. Tools don’t always expose issues early enough to identify the ideal response. Individuals who can sense issues with team members or project tasks possess an invaluable skill for project management. 
  • Juggling capability. Good project managers resemble parents who can conduct a conversation on the telephone, respond to one of their children’s needs, and make dinner at the same time. Although multi-tasking isn’t ideal for productivity, jugglers can focus their attention on multiple things and respond when needed. Given the myriad demands placed upon project managers, good juggling skills are helpful.
  • Appreciation for detail AND the big picture. Effective project managers understand the required level of detail needed to deliver their projects. They also understand how their project’s requirements and outcomes fit into the overall business. An appreciation for building (or working with others to build) everything from a detailed project task list and schedule to a high-level business case abstract is vital for success.

Have we missed something in this list? Add a comment to share the skills you feel are required for project managers and let’s get a discussion going.

For more about project skills, check out my Project Management Foundations course.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

Dealing with Opponents to your Project

/in /by

Sometimes you must deal with someone who opposes your project. Here are tips to handle this uncomfortable and quite common situation:

Don’t ignore it. This issue isn’t going away. It’s crucial to fully understand the opposition to your project and address it. Otherwise, the opposition will intensify and become more difficult to manage. If you need help doing that, ask your sponsor for support. Keep dialogue open with your opposing stakeholder and representatives of their organization, so you can learn as much as you can to resolve their concerns.

Focus on business benefits and risks.  Project opposition often comes from misunderstandings or fear of change. Compare the opposition to your project against the benefits. Treat concerns as risks and work on mitigation strategies. Include people who both support and oppose the project as you derive risk and risk response strategies. As your project progresses, ensure your status reports provide detail to inform both project supporters and opponents. Project opponents who aren’t informed are likely to escalate their concerns with your project – so keep the status reports flowing to all interested parties.

Build a solid business case.  Ensure the business case provides a view of the benefits for the overall business. Leverage supportive stakeholders to help highlight your business case.  Items that benefit some stakeholders can create concerns for others. Ensure your sponsor is aware of any concerns so they can help counter roadblocks created by skeptical stakeholders.

Seek opportunities to support your concerned stakeholder. Understanding your stakeholder’s concerns can surface ideas for future projects that will provide benefits. Helping them build a business case for a follow-on project will help you preserve your relationship and further advance your business. It also demonstrates your ability to see the big picture in your business environment.

For more about managing stakeholders, check out my Project Management Foundations course.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

Dealing with Pre-Determined Deadlines

/in /by

Receiving a project assignment with a pre-determined deadline happens a lot in the business world. Bob McGannon has these tips for addressing this uncomfortable situation as a project manager.

Understand the source of the deadline. Government regulations, once-a-year marketing events, and other circumstances can necessitate deadlines. The best place to start is to understand the need for the deadline and what scope flexibility may exist. The deadline may represent a manager’s internal commitment or hope. A trade show or conference is a hard deadline that can’t be adjusted.

To support fact-based conversations about the project deadline, first investigate what it will take to deliver the requested scope. As project manager, ask your sponsors to treat you like their auto mechanics. You wouldn’t take your car to the mechanic and say, “You’ll charge me $120 and have the car ready by 2pm.” You ask about the likely charges and when it can be ready. Take the same approach with assigning projects; accept management’s aspirations but ask for the opportunity to validate them to determine if they are reasonable.

Perform your duty as a project manager. It’s irresponsible to say “I’ll do it” before you determine if the triple constraints of cost, scope and time are reasonable.  Although pushing back on unreasonable constraints is difficult, it’s easier than later justifying why you missed commitments.

A sponsoring manager may not be aware of the challenges your project team will face. Sharing those challenges and the pros and cons of addressing them can help you craft achievable project objectives. Responsible project management involves putting facts on the table and conducting conversations about what can be delivered and the circumstances in which you can perform that delivery. 

Conduct the proper research. While you may have a gut feel that a project deadline is unreasonable, management decisions are rarely made without facts. Look to prior projects for timeframes and the level of effort required to produce deliverables. Track the typical time your managers require to make project-related decisions.  Determine the staff you have available. Your most talented staff members might not be available, which could mean more risks will surface and/or your project will take longer to deliver. Use that data to explain why committing to the current project deadline may be high risk. 

Be prepared to negotiate. Forecasting project completion is a bit of an art. The science develops as the project progresses and you learn more. Discuss elements that can help you meet the target deadline, such as getting the best team members, hiring skilled contractors, or cutting scope items that may be difficult to produce. Discuss milestones in the project timeline where you can re-evaluate the project completion date and be prepared to share what will be required to bring that date forward.

For more about project constraints, check out my Project Management Foundations course.

The topic for this post came from a question asked in one of my LinkedIn Live sessions. If you have a question, post it as a comment. It could become the topic for a future post.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

Choosing Project Team Leaders

/in /by

The right team leaders can help make your project a success. Here are sound strategies for assigning team leaders to your project. 

Add strength to your project leadership. Look for people who compliment and expand your skills. Be realistic about your own skills and how others can augment them. Tell your team leaders how their strengths can support you and the project. 

Increase visibility. Team leaders with visibility to critical stakeholders can help you promote your project in addition to providing critical skills. Shrewd project managers leverage relationships between team leaders and key stakeholders to review potential project priorities and directions. Team leaders can also obtain early opinions and impressions on project deliverables as they are being produced.

Instil confidence. People who are widely trusted add value as team leaders, because the organization is likely to follow their lead regarding changes or decisions. These confidence-building team leads might act as part-time deliverable reviewers. Their reviewer role provides a valuable quality check and can also boost stakeholder confidence. 

A Reality check – team leaders are often chosen for you. Managers often assign team leaders to your project. Therefore, it is important to develop good relationships with the managers who provide resources. Use the tips provided here as rationale when negotiating to get the best people assigned to your project. If your preferred resources aren’t made available, seek to have them assigned on “stand by” for risk mitigation purposes in the event you run into project issues. 

For more about resource management, check out Chris Croft’s Managing Resources Across Project Teams course.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

Managing Variances

/in /by

Managing the variance from your project baseline is sound PM practice. Here are tips to determine acceptable triple constraint variances (scope, time, and cost) for your project:

Examine your company’s behavior. Your business is likely to have common approaches for managing scope, time, and costs. Your project should conform to those norms for tolerating scope changes, schedule slippage, or budget overruns. While some businesses focus on maintaining a tight budget and schedule, others, due to intense competition in the marketplace, may focus on fulfilling scope, even if it means going over budget or behind schedule. In other business environments, schedule is critical. Government laws that go into effect on a certain date must have supporting systems and processes ready to go when a law is enacted.

Scheduled events will affect acceptable variance. Many businesses work on marketing release schedules, so products need to be ready for demonstration at key trade shows or other marketing events. Little to no schedule slippage is tolerable in these instances. There may be some tolerance for scope reduction however, if the product still meets market expectations.

Cost savings as a project outcome will affect your variance targets. There is likely to be little to no tolerance for budget overruns when cost savings is the project justification. However, if the cost savings come from improved processes or low-cost product production, scope may be the constraint where variances are unacceptable. Process changes that form the project scope may need to be unchanged to fulfill the cost savings objectives. In some cases, increasing the budget may be acceptable to ensure the long-term cost savings are achieved.

As you approach the end of your project, acceptable schedule variance tends to be tightened. This is because you have less time to recover from any delays. Budget constraints may tighten as well. If you are under budget, however, your ability to accept cost overruns for specific tasks may improve toward the end of your project. Be careful however – just because you are under budget doesn’t mean you can overspend on a given item – management may be counting on the excess allocated funds to apply to another project.

For more about managing variances, check out my Project Management Foundations course.

 

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

SMART Requirements are Agile

/in /by

SMART guidelines are used to assess requirements in waterfall projects. They apply to agile projects as well:

Specific. In Agile, it doesn’t exist initially. Specific relates to the final product. Requirements are captured during development, not documented in advance. However, the end result typically goes beyond the detail and specificity of traditional requirements. When broad  requirements aren’t specific, they are typically broken down into several features in Agile, each of which provides specific functionality and can be more easily produced.

Measurable. The construction and evaluation of each feature focuses on measuring effectiveness. One of the most significant benefits of Agile is that performance and suitability measurement reviews are built into the development process. With a mindset towards prototyping, Agile features can be evaluated by users prior to implementation. When that cannot be done directly, for example, when a totally new business process is being created, the user-developer partnership used to build features in Agile reduces the risk of items failing to meet measurable business objectives.

Achievable. Feature sizing and prioritization ensures that achievability is regularly assessed. Features are examined for their integrity and ability to be produced during a sprint. Larger features are broken down into pieces that are more easily created, enhancing achievability. When the features can’t be broken down into manageable pieces, that’s a sign that they aren’t achievable. The developers and users can examine these features in real time to determine how critical they are and explore other ways to address the corresponding business need.

Realistic. In Agile, features are developed and accepted iteratively and in real time, versus weeks or months after requirements are documented in the traditional approach.  Agile lends itself to realistic outcomes and can accommodate the latest changes to business needs. The nature of Agile means the team learns about features and their capabilities more deeply, allowing users to make features more business-friendly. Feature capabilities have greater integrity and support better business processes.

Time-constrained. The sprint schedule is ideal for ensuring time constraints are placed on feature creation. In addition, there is the added value of being able to easily change timeframes when business priorities change. Reprioritization and re-stacking of features for each sprint provide an ongoing focus on development timeframes. While this time management approach isn’t perfect, features that require more time than anticipated to develop are re-evaluated and assigned to subsequent sprints as agreed by the Agile team.

 

For more about Agile, check out Doug Rose’s Agile Foundations course.

Why You Should Identify Risks Early

/in /by

Identifying risks early in a project is a best practice. Here are some benefits of this great approach.

Obtain critical information for project approval.  Without identifying risks early, an inappropriate project could be launched, wasting money and valuable stakeholder time. Instead, understanding the risks provides a balanced view of the value of project outcomes. The expected outcomes could be prioritized or enhanced based on the risks presented by the project team, making the project more viable. Or the project could be deemed inappropriate due to those risks.

Make your initial plans more realistic.  Project overviews, including high-level plans, provide context that helps drive project approval. Those initial plans must consider project risks to be valid. With risks identified, the team can define mitigation actions and include them in the plans. Risk information helps the management team make go/no-go project decisions in the best interest of the business. In addition increasing the integrity of the approval decision, it also proactively sets key stakeholders’ expectations.

Set a reasonable project budget.  Risk management often requires additional funds to cover the costs of actions or contracts needed to manage risk. And these can be expensive. Considering these costs early in project planning helps the sponsor set a reasonable project budget with greater likelihood of meeting business expectations.

Determine early staffing requirements. Addressing risks typically includes staffing considerations. Expensive, contracted specialized skills could be required to manage technical risks.  Alternatively, you could make sure internal technical team leaders work on your project. (However, internal team leaders’ time may be limited, which can extend your project schedule.)

Capturing risks early in your project allows for better and more comprehensive decision-making. Because decisions are good and management is more informed when approving projects,the likelihood of implementing business goals and strategies successfully increases.

For more about risk management, check out Bob McGannon’s course Project Management Foundations: Risk.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

Staffing Your Project Team

/in /by

Great project managers always seem the get the best people for their projects. What’s their secret? Establishing relationships with management works best:

You sell your project directly. With a good relationship, you can discuss in detail the benefits and drawbacks of the project as well as the development opportunities for having the manager’s employees work on your project. The manager also gets an opportunity to talk about specific objectives they have for their employee, which you can support via the task assignments and guidance you provide.

You can perform part of the managers’ work. Giving support and feedback to your team members along with periodic appraisals of their work as the project progresses is very useful to assigning manager. You can make their job easier, especially if you write performance evaluations in the context of the manager’s growth objectives for their employees. Managers who feel confident you do this well will work with you more readily when you seek project team members.

You can ask for a favor. If you need in-demand skills, a good relationship with assigning managers significantly increases the chances you’ll get the in-demand resources you need. Trust-based relationships make it easier for managers to take a risk and assign the most in-demand staff members to your project, even in instances where it is helpful but not necessary.

You can change resources more readily. If you have issues with a resource, the assigning manager is more likely to listen to you and support replacing your team member. At the very least, they are more likely to work with you to help improve your team member’s performance.

The team members you get make or break your projects. Getting to know the managers who assign employees to your projects is the best way to ensure you get the people you need to successfully deliver expected outcomes.

For more about working with team members, check out Chris Croft’s Managing Resources Across Project Teams course.

The Missing Charter Element: Sponsor Responsibilities

/in /by

A project charter details the project manager’s responsibilities, but typically not the sponsor’s. Here’s why you should document sponsor responsibilities, too.

Identify who manages senior stakeholder relationships. Sometimes, senior project stakeholders don’t know the sponsor. For project success, key stakeholders need to understand and trust the sponsor and his or her motives.  The charter should define how those stakeholders will be engaged. For example, the responsibility could lie with the sponsor, a sponsorship committee, or it could be delegated to the project manager. By including high-level responsibility for stakeholder engagement in the charter, you can ensure that someone manages these crucial stakeholder relationships.

Identify how project funds are acquired. Sponsors may not have the authority to release project funds, even from their own budgets when expenses exceed a certain threshold. It’s important to understand and agree in advance on how project funds are released. You might need to work with financial managers to identify the process and specific data needed to release funds. To ensure that money is available when needed, in the project charter, document this information and process as part of the responsibilities of the sponsor and the financial managers.

Technical decisions may require consultation. Decisions regarding technical considerations may require expertise the sponsor doesn’t have. In that case, the sponsor would need to consult with technical managers to ensure the integrity of those decisions. The project charter can specify the sponsor’s and technical managers’ responsibilities revolving around those consultations.

Sponsor’s time constraints may require delegation to others. Sponsorship often falls to a high-level manager. While that gives them sweeping authority to make decisions, they might not have the time to execute all of their responsibilities. In that case, some sponsorship authority may be delegated to other managers. These delegations should be clearly stated in the project charter.  In addition, the sponsor’s level of time commitment to the project should be documented.  As a project manager, you need access to your sponsor or the sponsor’s delegates to ensure decisions can be made in a timely fashion.

For more about sponsorship, check out my Project Management Foundations course.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.