A DSS BASED METHODOLOGY FOR PROGRAMME MANAGEMENT

Transcription

1 A DSS BASED METHODOLOGY FOR PROGRAMME MANAGEMENT P. G. IPSILANDIS, K. SIRAKOULIS, S. POLYZOS, V. GEROGIANNIS [DEPT. OF PROJECT MANAGEMENT, TECHNOLOGICAL EDUCATION INSTITUTE OF LARISSA, GREECE] ABSTRACT Although project management methodologies receive wide attention in the literature, the same is not true with programme management. This paper presents the design and development of a decision support system for the management of the Regional Operating Programme of Thessalia, Greece under the 3 rd Community Support Framework (CSF). The total budget of almost 1 billion euros of the ROP of Thessalia, funded jointly by EU and national funds, is allocated to a large number of projects, which must be completed over an inelastic time framework. The proper management of the ROP is important because it ensures that programme funds are allocated to projects based on their performance so that potential project failures are avoided and the overall programme's impact on regional development is maximized. The DSS helps programme managers to collect analyse and evaluate information concerning the administration and progress of each project over the fixed time framework of the programme in order to predict possible deviations from the overall programme schedule and provide proper input to programme managers for budget reallocations and project restructuring. Key words: programme management, EU programmes, regional operating programme, decision support systems. 1. INTRODUCTION Following the origins of the project management discipline, a great amount of published work has been related to practical and theoretical developments concerning the management of single projects considered in isolation [1], as compared to the case of multiple project management. Project oriented organizations however are facing issues and problems arising from the complexities relating to the management of multiple projects. As a consequence there is an increasing awareness on the management of a group of projects, which has quite distinct characteristics and requirements from those applied to a single project [1]. A programme is defined by Turner [2] as a temporary organization in which a group of projects are managed together to deliver higher order strategic objectives not delivered by any of the projects in their own. A programme is quite different than a project portfolio, which according to the same author is an organization, (temporary or permanent) in which a group of projects are managed together to coordinate interfaces and prioritise resources between them and thereby reduce uncertainty. The main objective in a programme is the delivery of the strategic objective, while that of the project portfolio is the efficient management of resources and risk ([1], [3], [4]). Programmes themselves do not deliver individual project objectives. They create benefit through better project organization (i.e. improved coordination, effective knowledge transfer and resource utilization) and better alignment of the projects with the requirements, goals and culture of the master organization ([1], [5]). This paper describes a proposed methodology to solve some of the managerial problems in a newly formed public organization charged with the management of a European Union (EU) programme. EU policies and actions during the last decades and especially the Community Support Frameworks (CSF) stimulated the establishment of many programme management organizations in the member countries. According to the strategic objective they serve, EU programmes are characterized as regional programmes (aiming in regional development), area programmes (i.e. education, transportation etc.) or special actions. Certain of these programmes include a small number of highly focused large-scale projects, very important in terms of their impact in creating infrastructures (airports, roads, railways, bridges, information and communication networks, public administration structures etc.), in providing employment, and obviously their contribution to GNP growth. The management of such projects is performed by project management organizations staffed with professionally qualified project managers applying PM methodologies and tools, with the proper support of information systems. Because of their magnitude, projects of this size and importance are under continuous public scrutiny regarding their performance in terms of meeting time and cost objectives and the quantity and quality of their deliverables.

2 On the other hand there are programmes which contain a large number of smaller scale soft 1 projects are implemented by permanent or temporary organizations operating within the framework of an existing parent organization or in a network of collaborating organizations. In this case, the project s managerial team consists of people who are most likely subject experts but have little or no experience and training in project management. In addition because of the temporary nature of the project organization, there is limited information systems support for the project s planning and control. Nevertheless this is the managerial model suggested by the EU, the policies of which support the establishment of non-permanent and transient management structures. Public and private sector organizations could therefore be involved in many different projects, managing a portfolio of diverse projects. Figure 1, illustrates the relationships between an EU programme, its projects, the programme organization, the project portfolio organizations, and the project management organizations. It also shows that the flow of information from the project organization (mainly related to work progress) to the project portfolio organization (where financial data are added) to the regulatory agencies and the programme organization. PROGRAMME A PROGRAMME B PROGRAMME X Project & Programme historical information Programme Management Project A1 Project A2 Project Bi Project Xi 3rd CSF MIS Work Schedule Work Progress Budget Expenses Project Management Work Schedule Work Progress Monthly & Quarterly Reports Project Portfolio Beneficiary Organization X Project Portfolio Beneficiary Organization Y Flow of Information Project Portfolio Figure 1 Data Flow between Projects, Project Portfolios and Programmes 2. THE CASE OF THE REGIONAL OPERATING PROGRAMME OF THESSALIA (ROP-TH) The Regional Operating Programme of Thessalia (ROP-Th) is one of the 24 operational programmes (13 regional and 11 area specific) funded by the 3rd Community Support Framework (CSF) the aim of which is to reduce the gap in economic development between Greece and the other member states of the European Union. Its priorities focus on investment in natural, human and knowledge resources. While the main priorities of this development programme were defined in cooperation with the Commission, the selection of projects and their management are solely the responsibility of the Greek national and regional authorities. Selected projects are financed from both community and national (public and private) funds. According to the implementation provisions, a programme managing authority (PMA) has been designated and operates at each region, which is responsible for informing potential beneficiaries, select the projects and generally monitor implementation. The ROP-Th has a total budget of almost 1 billion euros for the period and it is divided into 5 subprogrammes representing main axes of action, which are further divided into a total of 37 sub-sub-programmes 1 The term "soft" is used to describe projects in areas like education and training, business innovation and reorganization, culture etc where the deliverables or parts of them are non-tangible as in construction and other technical projects.

3 (measures). The PMA is responsible for managing the operational programme, the implementation of the operation inclusion procedures, and the on-going evaluation of projects. Potential beneficiaries of each programme, both in the public and private sector of the economy submit their proposals, following a public call for expression of interest. Projects are approved by the PMA after a selection and evaluation process. During the first two years of the programme operation 378 projects were selected and are currently at different stages of progress. PMA operations are currently supported by information provided by OPS 2, an integrated information system, dedicated to the information requirements of the 3 rd CSF, which was developed by the ministry of Economy & Finance to fulfil a requirement imposed by the European commission to each member country benefited by the CSF. OPS provides information at different levels of detail extending from aggregate national figures down to sub-project level. Although OPS is very well structured, and it holds a vast amount of information, accessed easily by project and programme managers its design conforms to the typical characteristics of a management information system rather than a decision support system ([6], [7]). With regard to the information needed for management decisions at the PMA the main weaknesses of OPS are first, that it provides only historical information on project progress and costs as it is reported by the different project organizations without any validation or crosscheck between financial information against the progress of a project and second, that there is no forecasting capacity about possible cost and time deviations. Business Requirements 3. PROPOSED METHODOLOGY The PMA needs in addition to OPS a flexible, easily adaptable Decision Support System which will complement OPS in supporting its two main operating : a) Being able to identify the current status of each project, so that corrective action can be taken promptly. Unlike the case of some area specific operational programmes (i.e. transport) that include few large scale projects which are run by competent project management organizations; in the case of ROPs it is not easy to apply conventional project management tools like the S curve for two main reasons. First, because of the large number of projects and subprojects contained in each measure and the disparities among them. Second and perhaps most important because of the low level of organizational project management maturity and expertise both in the project and programme organizations. Therefore it is essential to devise an alternative approach based on PM methodologies which is simpler to implement and operate. b) Forecast future cash flows of public expenditures. Depending on the forecasted progress of each project, the PMA can schedule payments to beneficiaries, act early to shift funds between projects, measures and actions and provide more accurate estimates to the national and European authorities. From project management to programme management: Data Standardization One of the key elements of the proposed methodology is the standardization of data, which is necessary because of the large number of projects considered at any given time. Project related data that are currently provided to the PMA by the beneficiary project organizations are not in any standard form and in many cases do not contain exploitable data, thus useless. To a certain extent, this can be attributed to the large diversity of the nature of the funded projects, and to the different level of PM maturity at the project organizations running CSF projects. The lack of guidelines and guidance that the programme organization could have provided to the beneficiary organization does also contribute to the poor quality of data. Often this weakness reflects the confusion that exists in the programme organization in distinguishing between data and information requirements for programme management vs. those of project management. The proposed approach is based on establishing a standard set of data that can be provided easily with as little ambiguity as possible by the project organizations on a regular basis. The standard set of data refers to the two main dimensions for each project time and cost and includes: 1. The work breakdown structure (WBS), the time schedule and the work progress for the physical part of the work (i.e. Subprojects, Work packages, Task groups, and so on) at a much more aggregate level than the analysis used for project management level and according to some standardizations rules per project type. We use the term programme-wbs to characterize the aggregate WBS used for programme management purposes. 2 OPS is the acronym of the words Integrated Information System in Greek

4 2. The financial data (i.e. budget and actual spending) at a level higher than the accounting level of detail defined in such a way that can be cross checked with the level of the work detail as it is analysed at the programme-wbs. The data standardization is based at the classification of the projects according to their nature and the kind of deliverables. For each type of project two templates containing i) a standard programme WBS and ii) a standard guide of appropriate budget lines is developed. The project organization, depending on the specific project, can adapt the templates wholly or partly. This approach creates efficiency because programme managers at the PMA have a standard tool to work with, while project organizations receive proper guidance and guidelines. It also ensures that proper and relevant information is collected and comparable results are produced and finally it is easy to apply as it will be described below. The data model The standardization approach described above results in forming a typical structure for a programme oriented WBS for each type of project, which is defined by a potential set of n sub-projects, work-packages, task groups: WBS = {w i } i=1 to n. For each project k the project organization in cooperation with the programme organization can select a subset of the WBS which fits the specific projects needs WBS k = {w i* } i*=1 to n* Similarly, the project and programme organizations agree on a subset B k = {b j* } j*=1 to m* of budget lines from the set B={b j } j=1 to m. of potential budget lines included in the template for the specific project type. The set of n* task groups and the m* budget lines must be selected in such a way that allows the budgeted cost for each task group to be analysed according to the selected budget lines. Thus, the budgeted cost for each task group can be viewed as an assignment of a certain amount of each budget line to the specific task roup, which can be represented by an assignment matrix A={a i*j* } i*=1 to n*, j*=1 to m*. One of the advantages of the above data model is that it is compatible with the data models used by commercial project management software. For the purpose of programme management the budget can be seen as the only resource to be monitored. Therefore the familiar data model of tasks-resources-assignments found in almost all PM software can be used to represent the taskgroup-budget-cost data model in programme management. Data collection and reporting Because of the temporary nature of projects, there are no established, well respected, organizational-wide rules regarding the flow of data to the corresponding PM information systems. The problem becomes more severe in programme management where three different types of organizations are involved (figure 1.). A way to facilitate the data collection process and ensure the timely flow and the quality of information is to ask project organizations to submit all project relevant data in a predefined format. This is especially convenient in the case of data referring to the progress of work. While most project organizations of ROP-Th provide financial data in the proper format, most of the work progress data is almost useless (i.e. not related to task groups in the established schedule, not quantifiable, limited to not started / in progress / finished, etc.). The proposed methodology suggests that each project organisation is given a form containing the list of all task groups included in the agreed schedule with a list of check boxes next to it corresponding to the percentage of the work completed. Thus the project organization needs only to check the appropriate boxes, which for the majority of the projects do not exceed the length of an A4 page. Computing Tools Decision Support Systems, unlike MIS which support well structured decision problems, are computer based tools designed to support decisions for unstructured or semi-structured business problems [8]. The proposed DSS is by no means a fully integrated packaged computer system but rather a set of methodologies supported by computer tools. Although there was no technical difficulty to develop a packaged system that incorporates the proposed methodology, it was a matter of choice to use standard computing tools such as the MS Project and the MS Excel for the data analysis needs. This choice results in increased human involvement and interaction in the data analysis process which creates certain advantages, namely: a) increases the level of awareness about project management techniques methodologies and tools among the group of programme managers in the management authority of ROP-Thessalia, b) gives programme managers flexibility in data analysis and manipulation with the use of familiar tools, c) promotes the philosophy of the do-it-yourself management support information systems, which can long term result in increased organizational efficiency, d) maintains a substantial level of managerial judgement.

5 Data Analysis and Results The MS Project software although it is not designed for programme management can be easily tailored to the information needs of the ROP-Thessalia programme managers. The key points in this process are: Each project is described by a list of activities that corresponds to the task groups included in the template programme oriented-wbs for the specific project type, which can be further grouped into work packages, and sub-projects. Each budget line of the agreed upon budget analysis is considered as a project resource the units of which correspond to the associated cost. The budgeted cost of each task group is calculated as the sum of the cost produced by the assignments of budget lines (resources) to task groups (activities). Different patterns of spending can be defined for each combination of task group and budget line (i.e. uniform through the duration, triangular, back loaded etc.) Payments to project organizations can be modelled as a separate activity that runs through the entire project duration (payments can be entered as a negative actual cost, to facilitate cost accounting calculations) The proposed DSS can provide PMA managers with the following information Comparison between project payments and actual spending for any given project, for any project organization, and for an entire measure, action and programme Comparisons between the scheduled budgeted costs and actual costs over time so that potential delays in projects are identifiable. Assessment of deviations between budgeted and actual cost for work performed in order to get early signs of potential over spending Forecast about future cash flows at project, measure, action level, which are required to support the ongoing project activities 4. CONCLUSIONS Many programme management organizations have not achieved yet the desired level of organizational project management maturity. Since programme management operations and objectives are quite distinct from those of project management, existing PM methodologies and techniques do not address their information needs of decision making problems. The large number of projects included in EU programmes creates a need for a data model that is based on prototyping and standardization of data per project type. Simple decision support systems that are based on standard PM and office software, could be very effective, provide programme managers with flexibility and allow managerial judgement to be incorporated in the decision making process. Future research in identifying and standardizing patterns of expenditure allocation over the project cycle will be valuable in enhancing the forecasting capacity of systems like the one described in this paper. References 1. Lycett, M. et al. Programme Management: A critical Review, International Journal of Project Management, 2004 (in press) 2. Turner, R. J., Muller R. On the nature of the project as a temporary organization, International Journal of Project Management, Vol. 21 (2003) Thiry, M. For DAD : a programme management life cycle approach, International Journal of Project Management, Vol. 22 (2004) Kasvi, J. J.J. Managing knowledge and knowledge competence in projects and projects organisations, International Journal of Project Management, Vol. 21 (2003) Pellegrini S. Programme Management: organising project based change, International Journal of Project Management, Vol. 15(3) (1997) Sprague R.H.Jr., Carlson E.D. Building Effective Decision Support Systems, Prentice Hall, 1982, Turban, E. Decision Support Systems and Expert Systems, Prentice Hall International 4th Ed., 1995, Alter, A. A taxonomy of Decision Support Systems, Management Review, 1997, Vol.19, n.1, p