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Project Balanced Scorecard - Applying Business Perspectives to Projects
August 12, 2008 | Author: PM Hut | Filed under: Miscellaneous
Project Balanced Scorecard - Applying Business Perspectives to Projects
By Loïc Hamard
Project Versus Business: Common Goals
Both structures share the same objectives. As a Business, a project seeks for profitability & customer satisfaction through application of proven processes as well as constant improvement though learning skills.
So, why not to use in Project Management the same best practices developed to lead and control a business. Hereafter, you will find how the main business perspectives are applied in a Project environment.
The Finance perspective: Project Cost Overrun (PCO)
In a profit oriented organization, the first objective fixed to a Project Manager is to respect the budget assigned. That means to deliver to the Customer what s/he has paid for, no more. On the down side, s/he has to control on the same way his/er subcontractor and internal resources in order not to exceed the planned cost. Finance perspective should then be focused on the cost control, introducing as Key Performance Indicator (KPI) the PCO: Project Cost Overrun.
The Customer perspective: On Time Delivery (OTD)
The second objective is to keep the customer satisfied, mainly delivering on time (performances and quality are implicit: if they are not met, the delivery will be jeopardized). The Supply Chain Management recommends using the OTD KPI that measures the percentage of delivery milestones achieved in time versus total milestones. In fact, all milestones can be considered delivery ones (internal milestones also deliver something to somebody).
The Process perspective: Resources Planning Accuracy (RPA)
To define this Project Management objective and the related KPI associated to this level of the Balanced Scorecard, you have to analyze the Processes most impacted by the Project Management, in your Business. In a full Project based Business, one of the most critical impacts is the way the rest of the organization is sized to respond to the needs of the Projects. That is why I considered strategic to correctly evaluate the resources requires by each project in each area of competencies.
This objective, as well as for the other perspectives, is not exclusively for the Project Manager, but has to be shared with the Competences Center managers and all the project team members who can improve them.
The Learning perspective: Project Management Quality (PMQ)
What I mean by “Project Management Quality” is the level of deployment of the PM best practices. Best practices in Project Management have been defined by PM experts during the last 30 years:
- Risk analysis and management (All in all, when you analyze project success, you discover that risk management as the common success factor.)
- Customers requirements management
- Schedules updated and known by everyone
- Actions reachable on-line by all team members
Loïc Hamard, Infopreneur at www.visual-bpm.com
L.Hamard is a Senior Engineer with 25 years dedicated to PM, BPM & IS functions and management positions in start-up companies, multinational groups & non governmental organizations. A multi-cultural experience has led him to use analogy techniques to communicate on best process focus management practices offering business templates like the Project Balanced Scorecard.
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