How do you select right projects for investments?

Every LOB managers line up a series of projects during annual budget cycle. Ideas coming from all departments are great but given the budget constraints, organizations can only execute so many ideas. So, how does one go about selecting projects for investments?

Some projects like regulatory, compliance, safety/security, etc., have to be implemented whether they meet business case or not. For most projects, Project Selection & Prioritization Process includes the following basic steps –


  • Does the project align well with company vision, goals/objectives and strategies?

If it doesn’t, drop the idea right here.


Financial metrics are important to ensure that the investment you are proposing will provide a required return with appropriate risk exposure. Top 5 metrics that I have always seen in business cases include –

  • Net Present Value (NPV) – NPV is used to analyze projects’ profitability. A positive NPV indicates that the projected earnings generated by a project or investment exceeds the anticipated costs.
  • Payback Period  – The payback period is the length of time required to recover the cost of an investment. Shorter payback period desirable
  • Internal Rate of Return (IRR) – IRR is used to evaluate the attractiveness of a project or investment. Higher the IRR, the better.
  • Opportunity Costs (the opportunity cost of a resource is the value of the net cash flow that could be derived from it if it were put to its best alternative use)
  • Return on Investment (ROI) – a gauge of investments profitability

value vs. riskA plotting of project on Value / Risk scale. Value could be NPV or any other metrics that organizations uses to value projects.




Project Prioritization is required to rank projects for execution. The criteria for ranking them is highly subjective e.g. some firms many value financial metrics more and may have higher weightage, others may value investment types more, etc. Each organization will have a different model for how its projects create value and, therefore, will want to use different metrics. There is no one set of project metrics that works for every organization.

project investments types

Another factor to keep in mind: Sr. Management very often have a good idea in terms of how much investments should go for innovation vs. maintenance, etc. So, picking a right mix of “strategic investments”(Growth, Innovation) and “operational investments” (Maintenance, Productivity) is critical.

E.g. For 2017, mix could be 75% productivity; 10% maintenance; 10% growth; 5% innovation
……….. moving to ……
2018, mix could be 70% productivity; 10% maintenance; 15% growth; 10% innovation
………..  moving to …..
2019, mix could be 55% productivity; 10% maintenance; 25% growth; 15% innovation, etc.
In this example, focus is on cost reduction (i.e. with productivity gains), with progressive elaboration on innovation and growth.

The following diagram shows an example of a weighted attribute project selection process.

project scoring criteria

….. and plotted on scale again. Note that size of bubble indicates the total investments and color indicates the investment type. This chart can then be used to guide decisions.

prioritized projects


Formally document the project approval process via project charter, which is provides the basis for project execution. The Project Charter is a key document and communication tool that describes the customers, problem, goal, scope, business case, milestones, budget allocated and team composition.

So, what can be done to improve the process further?

Managing investments and project portfolio is critical. Few questions to ask –

  1. Does your organization have a rigorous process for investing in right projects as part of PPM methodology?
  2. Does your organization involve Program Manager and PMs during project selection process?
  3. Does your organization feed the output from project selection in writing project charters? In other words, does business case translate to project charter?
  4. How often do leaders meet to review projects and investments? (Hint: Moving from annual to bi-annual review process helps bring innovative ideas faster to market and helps kill projects that are adding no value)
  5. What is the target investment mix for your organization today? How does that fare to competitors or disruptors?

Its time to start asking right questions and select projects that further the organizations goals.


How to organize and write effective Business Requirements

47% of unsuccessful projects fail to meet goals due to poor requirements management. (Source: PMI)

Only half of organizations (49 percent) report that they have the necessary resources in place to properly perform requirements management, leaving the other half of organizations lacking resources (Source: PMI)

One in six IT projects have an average cost overrun of 200% and a schedule overrun of 70%. (Source: Harvard Business Review)

Mind boggling statistics.  Poor requirements analysis causes many of these failures, meaning projects are doomed right from the start. Yet, companies are not paying enough attention to one of the most important areas of project – requirements management!

How do you effectively write business requirements?

First, Identify/review few key projects artifacts

Writing effective business requirements is a CSF on a project. There are several considerations for BA at the onset of requirements gathering –

1.IDENTIFY STAKEHOLDERS – Clearly identify audience and stakeholders for requirements gathering – a proper representation across LOBs like Business, IT, Marketing, Operations, QA should be included from the onset. Use RACI Chart

2.REVIEW PROJECT CHARTER – Review business case, project vision, high-level scope, timelines, budget, risks and assumptions (Project Charter should provide this information)

3.DEFINE PROCESS – Define requirements managements process i.e. how requirements will be gathered, documented, reviewed and signed-off. Discuss tools that will be leveraged. Define and implement change control process.

Next, Start developing requirements

4.USE STAKEHOLDER TERMINOLOGY – Develop glossary of terms

5.START WITH BIG PICTURE – Start with big picture view, in other words, a birds-eye view of business processes, functional areas and technical scope.

effective business requirements approach

6.ORGANIZE REQUIREMENTS – by categories and sub-categories

7.PRIORITIZE REQUIREMENTS – Not all requirements are created equal. Develop a methodology to prioritize requirements, something along the lines of –

  • Business Priority – Critical / must-have / good-to-have
  • Technical Feasibility – Very complex to implement/ Moderate / Easy to implement

That’s it. I hope this provides a good guidance for BA’s to write effective requirements which will later be consumed by technology team for design and development..

Have I missed anything? Please chime in with your comments.

Digital Customer Experience: Holistic way to engage new-age customers

Digital Customer Experience

This is age of customer. All organizations know that great customer experience attracts customers in turn builds brand, enhances loyalty and drives revenue. This is all the more important with online interactions (vs. physical stores). Customers have very little patience when pages don’t load fast, when they don’t find relevant content, when they find differing content across channels, when the interaction on desktop is different compared to customer service, when they are not able to search, when certain actions takes more than a few clicks to fulfill their goals, on and on — any of these is just enough reason for customer to jump to competitors.

Customers, especially on digital channels, are looking for seamless experiences. The challenge for companies today is how to deliver a consistent brand at every point where they touch their potential ‘omni-channel’ customers.

Stats tell stories and predict where the market is headed –

By 2018, more than 50% of organizations will redirect their investments to customer experience innovations. (Source: Gartner)

Emerging technology plays a big role in firms’ profitability and their customers’ digital experiences. Yet enterprises struggle with the speed of new technology delivery.(Source: Forrester)

82% view the customer experience as a competitive differentiator, and view accuracy and quality of information provided (82%), as well as ease of interaction (73%), as the most important attributes of a quality customer experience..(Source: Deloitte Survey)

Organizations’ top 3 innovation projects planned for 2015 involve customer experience, product & marketing technology. (Source: CMO Spend Survey 2015 by Laura McLellan, Gartner, October 2014)

All of these are telling on the importance of great digital customer experience. Customer demands are high and competition is fierce.

Functional Elements of Digital Experience

In general, Digital Customer Experience entails supporting following functionalities, all necessary to support customer journey lifecycle.

  • Content Management (including Digital Asset Management)
  • Video Management
  • Commerce
  • Personalization
  • Web Analytics
  • Segmentation
  • Visualization
  • Market Automation like email marketing, lead management, social marketing, lead nurturing/scoring
  • CRM integration
  • Social Media integration
  • Campaign Management
  • Advertising
  • Mobile App
  • A/B testing
  • Customer Data Management

Where do you start?

Step 1: Like any major initiatives, identify business objectives and goals, and overarching strategy.

Step 2: Define “Customer Journeys” – understanding customer goals, motivations, needs, wants, interactions across channels is very important. Content, Context, Personalization are important considerations.

Step 3: Then select a DiEx platform that not just meets the needs of present, but platform that can sustain innovative changes in next 3-5 years. Integration with external systems/applications is key factor too.

Step 4: Collect data across all customer touch-points and analyse. Don’t think of DiEx as one off project, rather it is a journeys which would need constant experimentation and tweaking.

Create a long-term Roadmap for your Digital Journey: Create a roadmap to build features onto platform. E.g. If you already have Content Management / eCommerce site, then consider building Personalization, RWD or mobile experience, and Customer Self-Service across user segments. Measure using analytics. Then, integrate other features as per business need.

Point is not to boil the ocean, rather gain short-term wins first, learn, and embark on next investment priority.

Digital Experience Platform Vendors 

DiEx is a software used to create and manage omni-channel customer experiences across all phases of customer life cycle.  These platforms are an outgrowth of traditional Content Management vendors, eCommerce vendors, enterprise vendors. Broadly, divided into 3 market segments –

  1. Content Management centric platforms: Adobe Marketing Cloud, SDL Customer Experience Cloud, Sitecore Experience Platform, Acquia
  2. eCommerce-centric platforms: Demandware Commerce Cloud, Hybris/SAP, Digital River Global Commerce, Magento
  3. Enterprise centric platforms: IBM Digital Experience Suite, Oracle CX Cloud, Salesforce Customer Success Platform, SAP Hana

The capabilities across these vendors vary. Many of above DiEx platforms serve and support all digital customer experiences across the customer journey.  The deployment model varies – on-premise, SaaS, PaaS or hosted.

Adobe is DiEx leader, per Forrester. If you want to dig deeper from Architecture perspective, read Forrester’s take on DiEx platform.


In this age of connected or always-on consumer, firms must optimize the use of digital tools and technologies to provide beautiful, seamless and meaningful (goal oriented) customer experience. It’s a new business imperative.

Firms must also treat the creation and execution of digital customer experiences as strategic, vs. delegating it to marketing department.

Lastly, investments in digital customer experience technology is a must to delivering exceptional experiences.

Get used to DiEx is happening now and here to stay !

Common used Frameworks for delivering great products/services and ongoing operations

IT FrameworksThere are a number of frameworks for managing Programs, projects and IT related initiatives. With so many methodologies available, which one is right for your project? There is no right answer, truly depends on industry, mind-set and skill set of people and several other factors. One way to look at these frameworks is, for example, if you want to build a competency around Performance and Quality management, then shore up Six Sigma, TQM frameworks.

I have seen only a handful of these frameworks in use time and time again across industries. Iam listing some of these below.

Frameworks for Program/Project Management

Framework Usage / What it is?
PMBOK – Project Management Body of Knowledge Used for: Portfolio Management Program Management, Project Management, Risk Management, PMO

Describes the set of best practices around program/project management, developed by PMI – has 5 process groups (Initiate -> Plan -> Execute -> Monitor/Control -> Close) and 10 knowledge areas (Integration, scope, time, cost, quality, HR, communications, risk, procurement, stakeholders).

The state of PMI is well described in this infographic.

OPM3 – Organizational Project Management Maturity Model


Used for: Used to assess maturity of the Organization’s portfolio, programme and project processes and drive improvements.

Maturity curve –

  • Level 1: Adhoc (no PM processes, projects on heroic effort)
  • Level 2: Abbreviated (some PM processes, project success unpredeictable)
  • Level 3: Organized (standardized PM processes with predicatable outcome)
  • Level 4: Managed (mature processes and project metrics leveraged by management in decision making)
  • Level 5: Optimized (enables continuous improvement and innovation)
IT Balanced Scorecard Used for: Program Management

Planning and management tool used to align business activities to organization vision and strategic objectives, along 4 perspectives –

  • Financial
  • Customers
  • Internal processes
  • People (Learning & Growth)

Frameworks for Software Development Lifecycle

Framework What it is?
Agile Used for: Iterative Development

Agile is a time boxed, iterative approach to software delivery that builds software incrementally from the start of the project, instead of trying to deliver it all at once near the end.

Agile breaks down big chunk of functionalities called “epics” into features and user stories. The user stories are then prioritized to delivered in time boxed 2-4 week iterations.

Waterfall Used for: Development

It is a traditional method of managing projects in sequential way. In other words, moving through the phases – Define, Design, Implement, Test and Deliver – sequentially.

DevOps – Development + Operations


Used for: Iterative Development

A practice of development engineers (all ppl involved in development of product like developers, product managers, etc) and operations engineers (systems engineers, system administrators, operations staff, release engineers, DBAs, network engineers, etc) working through the course of SDLC

Frameworks for Quality Management

Framework What it is?
Lean/Sig Sigma (sometimes also called “DMAIC”) Used for: Quality Management, Waste Reduction

Lean Six Sigma is a process improvement programme that combines two ideas: Lean – a collection of techniques for reducing the time needed to provide products or services, and Six Sigma -a collection of techniques for improving the quality of products and services. Six Sigma equates to 3.4 defects per million.

Primarily used in manufacturing industries but gaining prominence across other industries as well. Also, Six Sigma is normally used in conjunction with ITIL framework to reduce waste and improve quality.

DMAIC (Define/Measure/Analyze/Improve/Control) improvement cycle is the core tool used to drive Six Sigma projects.

TQM – Total Quality Management


Used for: Quality Management

Total quality is a description of the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company’s operations, with processes being done right the first time and defects and waste eradicated from operations.

To be successful implementing TQM, an organization must concentrate on the eight key elements:

  • Ethics
  • Integrity
  • Trust
  • Training
  • Teamwork
  • Leadership
  • Recognition
  • Communication

Frameworks for Governance, Risk, Service and Application Management

Framework What it is?
CMM – Capability Maturity Model Used for: Service Delivery, Service Management

CMM) is a five-level scale which allows Organizations to measure and improve their IT service delivery capabilities.

Most of the offshore vendors executing IT work have CMM Level 5 certification.

ITIL – The IT Infrastructure Library


Used for: Service Delivery, Service Management, System Support and Administration

ITIL is a set of practices for IT service management (ITSM) that focuses on aligning IT services with the needs of business – primarily applied to IT Development, IT Operations.

ITIl v3 has 5 disciplines or lifecycle phase

  1. Service Strategy – focusing on understanding customer needs, directions, requirements, helping improve IT over time
  2. Service Design – focusing on turning strategies for services into a detailed Service description, not just the technology.
  3. Service Transition – focusing on building, validating, and delivering new and changed services to customers
  4. Service Operations – focusing on the day-to-day care and feeding of services
  5. Continual Service Improvement – focusing on identifying and managing incremental improvements to services
COBIT – Control Objectives for Information and Related Technology Used for: Governance

COBIT is an IT governance framework which helps Organizations meet business challenges in the areas of regulatory compliance, risk management and aligning IT strategy with Organizational goals.

What other frameworks are you leveraging in your organization? Pls chime in with your thoughts.

Framework for managing portfolio of projects to create business value

Business today remain under tremendous pressure to innovate, improve top line growth, reduce bottom-line costs, and grow by successfully executing their business strategies. As businesses gear up for growth, many find they are hobbled by inadequate portfolio management practices and resources.

So, what are the typical portfolio challenges?

  • Business continue to maintain old legacy systems with maintenance costs super-ceding benefits with little to no agility
  • Business continue to invest in year long projects that do not align well with overall business or corporate objectives.
  • Many organizations require lot of upfront effort to justify business need for project (which is good) but once the project takes off, they are unable to assess their overall portfolio (benefits measurement is lacking after projects go-live).
  • Lack of common framework to prioritize portfolio of projects, especially for organizations spread across geographies and executing projects across geographies

Enter “Portfolio Management”…..

It is much more than managing programs or projects, rather it is management of entire project portfolio to maximize the business value to organization.

Portfolio Management is a strategic framework and dynamic decision-making process to assess value, prioritize projects and allocate resources to meet key business objectives.

project outcomes by overall portfolio mgmt maturityOrganizations with strong portfolio management capability tend to achieve greater project success (per PMI).

Please note that portfolio management does not involve executing projects, rather choosing which projects to funds, best ways to execute and continuous evaluation of projects that are live to determine if they are still adding value and taking appropriate measures.


Framework for Portfolio Management

Although there is no set framework for portfolio management, many large organizations follow a high-level 3 step process as below.

  • 1: Investment Management– Strategic visioning, planning and identifying where to invest be evaluating several factors like risks, benefits achieved, alignment with business objectives, competitors offerings, etc. (Doing Right Things). This is basically selections of projects/initiatives.
  • 2: Project Portfolio Management – Build and implement identified portfolio of projects using well-defined program/project best practices, rigorous planning and following standard development methodologies, etc. (Doing Things Right). Constitutes Program Management and Project Management — focused on delivery of business benefits.
  • 3: Application Portfolio Management – Maintenance of projects after go-live. Inventory applications, analyze along business, tech, financial, operational and risk perspectives, conduct cost-benefit analysis, evaluate tech risks and develop a management strategy for continued investments to maximize value over applications lifetime (Application Rationalization)
portfolio management
Lifecycle of project investment


Although I have indicated a few sub-processes within each step, note that these may vary depending on organization standards.

This framework is not just for IT projects, it is equally applicable for projects across marketing, creative, branding and such.

It is not just enough to have Portfolio Management process in place, organizations need strong sponsorship, leadership, support and a good governance model for success. The portfolio management process is typically executed every quarter.

How does Portfolio Management help Executives?

  1. Provides better visibility on project portfolio
  2. Align investments with business objectives
  3. Help prioritize which projects to execute first over another
  4. Helps optimize application portfolio (e.g. eliminate applications or systems that are no longer adding value to business)

At the end of the day, a well managed portfolio helps organizations successful execute it’s strategy and deliver shareholder value.

Asset Management and Robo Advisors

robo-advisorLately, we have been hearing a lot about robotics, Artificial Intelligence (AI), virtual reality and few other technologies soon taking over our lives in near future. Although few industries are way ahead in robotics, financial services is catching up.

Wealth and Asset management industry is experiencing “robotic revolution” — in the form of robo-advisors.

Asset Management is a team within a financial firm that is dedicated to managing the assets (cash, investments etc.) of clients. Wealth and Asset management is over $74 trillion dollar industry globally and is well guarded. Firm’s dedicated portfolio managers make fat checks for the well-researched, fact-based advise that they are providing for retail and institutional investors — all at steep cost!

Enter Robo-Advisors …

They are algorithm based financial advisors providing investment advise to investors. They are marketed as a less-expensive alternative to human financial advisors.

Here’s how it works: An investor fills out a questionnaire (risk profile, income, age, etc), and based off certain algorithms robo-advisor recommends certain products with right allocation of asset classes and funds. They are fast, cost-effective and efficient and more importantly puts customer in control.

Who are the key players?

Betterment, Wealthfront, FutureAdvisor, Wisebanyon, Bloom, Motif to name a few. Also, incumbents like BofA, Charles Schwab, Vanguard are also either building in-house capabilities or acquiring niche players to bolster their offerings.

Great Customer Experience is what attracts customers to robo-advisors

If you look at any of players listed above, there is one common trait – BEST IN CLASS USER EXPERIENCE!

# Underpinnings Guiding Principles
1 Great Customer Experience
  • “Minimalist Design”;
  • Intuitive, simple navigation
  • Simple, easy to understand, bold text (no legal jargons)
  • Guided navigation
  • Clear CTA
  • Easy signup
2 Engaging Technology
  • Engaging interactive Visualization tools (sometimes 3D)
  • Comparison tools
  • Real-time support i.e. Online chat and help center
  • Business tools like “retirement calc”, “what-if analysis”, etc
3 Great Content
  • Blogs
  • Transparency in pricing (TRUST factor)
  • Useful materials like whitepapers, POVs
4 Social Media Engagement
  • Good social presence in terms of engagement, applause, conversation, engagement,  across Twitter, Facebook notably, and other platforms
  • SEO friendly

I believe this is just a beginning of a major disruption. With tech advancements, not only would the investments space change dramatically, but we could potentially see robots managing entire financial aspects of life (how we spend, how we invest, etc) and make us all a bit more disciplined.

What do you think?

Combine KPIs with regular project metrics to engage Management

KPI_imageMany program managers collect vast amount of program/project related data (lagging indicators) and report to senior management as part of weekly status reporting. In general, they include – what was accomplished last week, what is planned ahead, milestones met, where is the project on overall plan, issues/risks, RYG indicator, etc. While useful, senior management is not just interested in current performance but wants to know more on future performance. Hence it’s important to discuss leading indicators to provide more holistic view of business.

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. They are measurements that define and track specific business goals and objectives.

So, what KPIs should we be measuring and reporting to engage Sr. management? In general, KPIs should cover 4 perspectives. The key thing to remember is to pick and chose KPIs that match your strategy, industry and business objectives/goals. Some example KPIs listed below, no way comprehensive, and includes both leading and lagging indicators.

Category Sample KPIs
  • NPS (how likely will your customer recommend your product to others?)
  • Customer Acquisition Cost
  • Customer retention cost
  • Lead generation rate
  • Customer Conversion rate
  • Market share (you vs. competitors)
  • Customer Satisfaction Surveys (CSAT) (efficient way to seek customer feedback)
  • # of Customers
  • Customer Lifetime Value (CLV)
  • Customer Satisfaction
  • Brand recognition
  • Revenue
  • Profit (net, gross, operational)
  • ROI
Internal Processes
  • # of new innovations
  • Earned Value Management (EVM)
  • Cycle time to fulfill and order
  • Process downtime (how much time is wasted due to downtime, staff/tech issues, etc)
  • Quality (issues, defects, rework, customer support tickets)
Employees (focuses on intangible assets of organization i.e. internal skills/capabilities required to support internal processes)
  • 360 feedback
  • Employee feedback (on project management, quality, team, working environment, gauge employee satisfaction, and such)


If KPIs can be illustrated graphically (bar graph, line chart, areas chart, etc alongside some historical data), the better! Consider using Visual Project Dashboards to highlight key KPIs. No more than 4-6 KPIs should be developed at executive level.

An example of KPIs across Financial Planning Firm is here.


Reporting KPIs is a model for effective communication with Sr. Management. Program Managers should consider augmenting above KPI on top of regular project status reports to engage senior business leadership for a successful outcome.

Which KPIs are you reporting? and which ones has made the most impact to Business? Please chime in with your thoughts.

How do you measure Business value for Agile Projects?

Many organizations are transitioning from waterfall to agile for getter products out faster and meet customers’ expectations. But they tend to use same metrics to measure project performance.

We are all familiar with common project management metrics focused on Scope/Time/Cost – traditional/waterfall KPIs – where we answer q’s like ones below –

  • Scope: Is the project’s scope in line with business expectations? Are the requirements changing? (# of CRs, KLOC, etc.)
  • Time: Are we falling behind schedule? (Schedule Variance (SV))
  • Cost: Are we leveraging ppl to maximum extent? (Resource over utilized, under utilized, overtime hours worked, Cost Variance (CV))
  • Quality: How is the testing progressing? How are the problems identifies, reviewed and fixed? (#total defects, #defects/testing cycle, defects fix rate, etc)
  • Project Performance: Have we delivered value for the amount spent? (think Earned Value Management)
  • Risk: What new risks (qualitative, quantitative) have we identified? How are we mitigating risks?

Traditional project metrics never measure value delivered to customer. Also, the focus in traditional metrics is measuring activities, GANTT chart, % complete, etc.

How is Agile metrics different?

Agile metrics are empirical i.e. measurable. Either the story is done or not done unlike traditional project metric like 50% complete! Please note that in Agile there is no credit for partial completion – either it is done or not done (0% or 100%). With Agile, value is delivered incrementally to customer. The stories that deliver highest value to customer is delivered before others.

Basic measures for Agile projects

These basic metrics are primarily for the team to report on regular basis.

  1. Velocity = # of story points / sprint
  2. Actual stories planned vs. done
  3. Testing/QA Reports – Indicates quality of product. e.g. if the quality is bad with many defects, management can decide to augment more resources
  4. Technical Debt – code that is not fixe e.g. bugs, workarounds, etc.
  5. Burn down chart – rate at which work is being completed. Create two charts – Sprint Burn down chart & Release Burn down chart
  6. Resource utilization – helps answer the type and cost of resources utilized, and projected need for future sprints

Agile builds quality in definition of “doneness” (is the acceptance criteria met?), and sprint review (customer and stakeholder feedback).


Sr. Management is more interested in the Business Value of Project being delivered

How do you assess that and report that?

Agile should be assessed against KPIs which are outcome focused i.e. tied to objective (or business goals) of the project and target based. These must be forward-looking indicators to provide meaningful data to business from value accrued to date, financials, customer growth, customer acquisitions, etc. Agile project scorecard should be broadly report on 5 key areas.

Agile project scorecard
Executive level Reporting Dashboard for Agile Project


1. Product/Service Value

Let me illustrate this with an example. Say, you have a business goal to “Increase customer acquisition”, which represents 40% of your business case.

  • “User Registration” epic represents 60% of business value
  • “Register via LinkedIn” user story realizes 30% of epic value
  • Therefore, % product value delivered would be = .4 * .6 * .3 = 7.2% to date
Business value of project
Business value of project


How? using traditional EVM calculations. Earned Value Management has been a recognized project management technique, standardized by  Project Management Institute’s (PMI). EVM integrates the areas of technical performance, schedule and actual cost to provide metrics for work actually accomplished. Just like traditional EVM, we need agile inputs to set the baseline prior to measuring performance –

  • # of planned iterations in a release;
  • total number of planned story points in a release;
  • planned budget for the release

Let’s measure EVM with an example – let’s say, project has completed iteration 1 out of 5 iterations. Planned budget = $300K

Feature Estimate (story points) Completed (story points) Actual Cost ($K)
Home page 10 10 15
Landing page 20 20 30
Product Detail page 10 10 20
Login 20    
Registration 20    
My Account 10    
Cart 30    
Check-out Process 20    
Invoice Calculation 10    
Credit Card Verification 10    
Payment Handling 20    
Order Confirmation Email 20    
Totals 200 40 65

EVM calculations – 

  • Planned % complete = Iteration # / total iterations = 1/4 =25%
  • Actual % complete = Points delivered / total points = 40/200 = 20%
  • Planned Value = Planned % complete * budget at completion = 25% * $300K = $75K
  • Earned Value (EV) = Actual % complete * budget at completion = 20% * $300K = $60K
  • Cost Performance Index (CPI) = Earned Value / Actual Cost = $60K / $65K = 0.92
  • Schedule Performance Index (SPI) = Earned Value / Planned Value = $60K / $75K =  0.8
  • Estimate at Completion (EAC) = budget at completion / CPI = $300k / .92 = $326K ($26K over budget)
  • Estimated Completion = Planned iterations / SPI = 4 / .8 = 5 iterations

Reviewing these metrics tell you that project is in trouble because (a) EV < PV;  (b) CPI <1, i.e. over budget, indicating you are not efficiently spending your dollars; (c) SPI < 1, i.e. behind schedule. $26K over budget.

When we planned, we said 4 iterations, now we will need another iteration!

In a portfolio of projects (i.e. programs), you can roll up Earned Value calculations for each project –

Program Total Budget Planned Value Earned Value Actual Cost CPI SPI EAC
Project 1 $300K $75K $60K $65K 0.92 0.80 $325K
Project 2 $150K $50K $35K $80K 0.44 0.70 $343K
Project 3 $2100K $700K $680K $720K 0.94 0.97 $2224K
Total $2550K $825K $775K $865K 0.90 0.94 $2846K

Looking at the overall program, this is in trouble too – over budget and behind schedule!

For additional information, refer to Lean & Agile Earned Value Management – David F. Rico

3. Customer KPIs

  1. # of leads generated
  2. # of new customers
  3. Customer Satisfaction Survey results
  4. Customer Retention
  5. # of visitors to site
  6. # of awards

4. Financial KPIs

  1. Cash Flow
  2. Net Present Value (NPV)

5. Business Change indicators

  1. Team Morale – can be measured through surveys, seeking 1:1 feedback
  2. User adoption
  3. Stakeholder engagement


Defining proper KPIs is crucial for project success and team should work collaboratively with business to jointly define “what constitutes success?”. Once defined, KPIs allow team members and stakeholders to work towards a common goal, no second guessing about what defines the project “success”.

Reporting  in business language like project scorecard above, for example, will have business paying attention and engaged. Think of this as a way to bring business on board with agile way of working.

How do you measure the business value of agile adoption? Please chime in with your thoughts.

Where is Project Management headed?


A transformation is taking place in the project management domain with advances in technology and digital disruption.

Project management will not just be about managing projects to scope/time/$$, rather things like – how to infuse innovation, work with millennial and Gen Z who think differently, exactly meet customers’ expectations, at the same time compete with upcoming startups, etc., will call for new ways to manage projects. A structured, disciplined project management is still required to deliver great business outcomes but ways PMs manage project is bound to change to a large degree over upcoming years. Here are a few trends that I see reshaping project management in future.

1. Faster Execution (More Agile, less Waterfall):

Gone are days of year-long release cycles. For companies to just stay above water, they need to innovate, iterate and deliver products faster. This  means agile – shorter cycles from “Ideation” to Production. Customer involvement through the duration of project will become an imperative.

  • It’s not just enough to have business case on paper. Proving that the idea or business case works with quick prototypes in 1-2 weeks, testing with customers for feedback, and readjusting business case is a must. No ROI at the end of prototype testing, no project!
  • Release cycles in the form of beta/soft launch with limited high-priority features in the first 2-3 months, and then iterating based off customer feedback for final/hard launch will be new norm. Think 2-4 months to release major product/service.

With well-discussed strategy and Agile approach, most projects will be structured to succeed as customer is looped in all the way. Zero project failure in future.

2. Global PMing (Think Global, Act Global):

How do you work in Agile fashion when the team is not co-located, doesn’t necessarily speak the same language — is the challenge that companies need to solve.  Even though technologies like Google Hangout, Skye, Lync, Webex conference, etc., have solved managing and leading a globally dispersed team to a large degree, some challenges still remain. What this means to PM is that, he/she needs to be talking to team members across globe at varying time zones. The work time for PM will be redefined – extreme flexibility and potentially redefining weekends schedules might be called for.

Additionally, the trend of more contractors and freelancers on project teams is going to increase in years to come – much-needed to infuse new ideas, scale up, etc. How PMs manage IP while at the same time manage freelancers will be very important for project success.

According to Intuit, 40% of the American workforce will be freelancers, contractors, and/or temporary employees by 2020.

Managing Diversity and leveraging employee strengths will be crucial to build and brand a stronger team environment.

3. PMs with play active role across all phases of project (Not just managing, but leading and executing):

Every PM will be required to have following basic hard-skills or expertise:

  • Customer Experience: What does it take to delight customers? What features are important to customer? We all need to be thinking about how to create an experience like Apple products. (When my kid was 3 yrs old, he did not even need a training to use/explore iPhone. That’s the beauty of Apple!)
  • Technology: PM will be required to come-in from a technology background having sound architecture skills, design skills and great understanding of SDLC methodologies. Staying ahead of the curve in disruptive technologies and brainstorming that with the team. Change is constant, so, PM (and every stakeholder on a project) should be thinking about how to best leverage changes in disruptive technologies and business models.
  • Business Consulting skills including research, data analysis, analytics, and such. Mobile and cloud will be must-have skills as most of the companies have defined or are defining strategies focused on mobile and cloud
  • Creative domain: Ability to understand Creative domain and able to actively contribute to areas like user journeys personas, information architecture, user experience, visual design, content strategy, taxonomy, etc.

I am not saying that PM will need to be an expert across all these areas, but someone having worked through variety of such projects will be better positioned to put the puzzle together to deliver great products/services. Also, PMs must know where to draw the line on their responsibilities and how to work together with relevant team members on above areas. To sum it up, PMs will have greater role in project deliverables.

4. More Cloud, More Mobile, Less desktop

Work will shift from desktop to cloud for better collaboration, to provide more visibility to teams, and for faster, efficient reporting. With millennials and Gen Z hooked onto mobile, a lot of future development will be ‘mobile first’ or ‘mobile only’.

5. Everyone associated to project will be Accountable and Customer is a Stakeholder!

Gone are the days of status report every Monday. Executive stakeholders and management are demanding real-time reporting and visibility of project. There will be accountability on every stakeholder to ensure project success. Customers wants to continually participate and help shape the outcome.

It’s good to see disruptive technology shaping up project management but don’t lose sight on human side of things. It’s a fine balance. Remember, it is all about people. People make great things!

What are your thoughts? What other areas will have profound impact on project management and what should the PMs do to succeed? Please pen your comments.

Best book for running Workshops (and solving big problems)

I recently ran across a book called SPRINT, written by kids at Google Ventures. By far, one of the best books I’ve read in recent time. The authors discuss an approach on how to run workshops to align and solve big problems.

sprint book







For all of you in consulting space, this is a must read. It is very unique methodology with practical advice. This book will surely make you better consultant and ensure great business outcomes.