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Sustainability: Moving from Common Sense to Common Practice
2016 International Conference
Leesburg, VA - National Conference Center

September 18th - 21st

Universal Projects S&T Tree Based on Goal Impact

Michael Hannan - Founder and Principal Consultant, Fortezza Consulting

Leading definitions of the terms "project” and "project management” fail to capture a key characteristic: that all projects are investments, and thus exist for the purpose of generating a reasonable—or perhaps exceptional—return on investment (ROI). The goal of any project-centric organization, therefore, is to maximize ROI, which in Throughput Accounting (TA) terms, is measured as (T-OE)/I, or "Net Profit per Investment” dollar. For project-centric organizations that do not have profit as their goal, we can apply the same TA concept with slightly different terms: "Goal Units per Investment” dollar, "Mission Impact per Investment” dollar, or simply "Goal Impact.”

It’s clear that Goal Impact for project-centric organizations can be strengthened by improving the reliable throughput of project completions, which is one of the significant benefits of Critical Chain Project Management (CCPM). However, while this should typically result in higher Goal Impact, it is not always clear what the resulting Goal Impact really is, especially for the following situations:

  1. Project portfolios in which low-impact projects have been selected.
  2. Selected high-impact projects that were not baselined with maximum ROI in mind. For example, a given project could be baselined to consume twice as much capacity & resources, but generate four times as much value by either delivering more scope or delivering much earlier (or both).
  3. Selected high-impact projects for which the "impact side” of the equation has changed significantly during project execution. Under this scenario, even when we do baseline projects according to maximum impact, and deliver them fast and reliably, there are times during execution in which we may find that the expected value has simply grown much higher (or shrunk much lower) than what was originally expected. For example, a project funded in 2015 to develop an immunization to the Zika virus might suddenly become much more valuable if we can speed it up significantly—even if it costs significantly more than the original project budget.

These three drivers of Goal Impact - maximum-impact project selection, maximum-impact baselining, and impact-maximizing adjustments during execution - are therefore incorporated into this new S&T Tree.

Michael Hannan is an entrepreneur, best-selling author, professional speaker, and innovator of industry-leading techniques to drive unprecedented improvements in IT project portfolio performance. His career spans a diversity of fields, including software engineering, space systems development, high-performance computing, economic development, and international trade policy.

His background in Project Portfolio Management (PPM) started at NASA in the early 1990s supporting large, complex initiatives such as the International Space Station and High-Performance Computing & Communications (HPCC) programs. He has managed and consulted on $500M+ project portfolios, and is lead author of the recent book, The CIO’s Guide to Breakthrough Project Portfolio Performance.

Mike serves on the board of the Project Management Institute (PMI) Washington DC Chapter, and his company, Fortezza Consulting, is the first Founding Sponsor of the Project Management Day of Service—the largest PM pro-bono event in the history of humankind. He holds Masters degrees in International Affairs and Information Technology, and TOC Jonah and PMP certifications

On the personal side, Mike is a 2015 national champion track & field athlete, and a happily married father of three teenage boys.

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