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1.0.2 Scope
This project applies to all Information Technology Projects that currently participate in the Monthly
Performance Review Process. Specifically, any IT investment that is "developmental" in nature must
comply with the Earned Value Management System standards. Those standards related to actual
costs are not currently met and must be addressed.
Brief
4. Establish performance standards for
each Project
CTQ.
Plan
Cost Data Integrity Project
Analyze
8. Identify the causes behind errors and defects through testing.
9. Apply specific techniques such as FMEA
Improve
10. Develop and evaluate solutions.
11. Design a To Be Process and Test Pilot.
12. Submit Full Scale Improvement Plan.
Control
13. Design a Control Plan
14. Summarize and Communicate Best Practices.
15. Develop Operating Procedures and Training Modules.
16. Create a Project Summary Document
2. What is the real problem? No well defined process and business rules are in place to make
project accounting a reality.
3. Whose problem is it? Each Project Manager is responsible for making sure they capture and
report actual costs correctly. The Project Management Office provides oversight and is seen
indirectly responsible for this problem.
4. Where does the problem come from? Incomplete and inaccurate data in the Project Management
Cost Data Integrity Project
System. This is the source data for various Earned Value Management Reports and the EVM
measurements reported in the Monthly Performance Reviews.
5. Why do we want to solve the problem? Currently, no-one can properly evaluate cost performance
using Earned Value Management since the numbers have no real validity. It is not unlike "Enron" the numbers are very suspect.
6. Who is affected? Everyone who relies on cost performance data from the Project Management
System. This would include Project Managers and their teams. This would also include any
customer that receives and reviews performance information, such as the Chief Information Officer,
Directors, and other senior leaders within the agency.
7. How will you proceed? Need to form a rapid process improvement team to look at the causes
behind this problem and implement some solutions to turn it around. This could involve
enhancements to the Project Management System, new procedures, organizational changes, and a
wide range of options to fix the overall problem.
8. What work products or results do you expect? Probably enforcement of certain manual
procedures and enhancements to "error proof" the Project Management System.
9. Who needs to be involved? Project Managers and team members who are responsible for
entering cost data into the Project Management System.
10. When do you need to get this done? Within four months, a set of solutions need to be ready to
go across the entire portfolio of IT projects that are using Earned Value Management.
Benefits of this Project:
Address fundamental control weaknesses within the overall Project Management System.
Much higher level of confidence in the reported cost information
Proper evaluation and reviews of IT investments within the agency
Meet compliance issues with an Earned Value Management System
Higher levels of accountability with how money is invested and spent for information technology
Impacts of Doing Nothing:
Ineffective management of IT investments
Lack of control over budgets
Monthly Performance Review process continues to be a non-value added exercise to the agency
Outside agencies that rely on the information may challenge the reported information as misleading
Major Deliverables or Outputs of this Project:
Project Charter
Thought Process Map
Critical to Quality Defined
SIPOC Diagram
Pareto Chart
Attribute Measurement System Analysis
Baseline Sigma Level (DPMO)
Statistical Process Control Chart
Root Cause Analysis
FMEA
Establish Performance Standards
Proposed Solutions
Solutions Implementation Plan
Project Summary Report (Close Out)
Major Activities:
1. Form a team that has Subject Matter Expertise with the Project Management System and project
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cost accounting.
2. Interview project personnel and examine current reports within the Project Management System
to assess the extent of the problem.
& Refinement
Assumptions/Dependencies:
The Chief Information Officer (CIO) initially requested that the project team look at only three
projects. However, this may not be sufficient to fully understand the scope of this problem.
Additionally, the CIO wanted preliminary results within 60 to 90 days. This project may require more
time to fully address all of the control weaknesses with the current process. The Project
Management Office currently works with the CIO and others to meet leadership needs, such as
oversight over the Monthly Performance Reviews and full-scale implementation of an Earned Value
Management System. Finally, there is a basic assumption that the results of this project will be
supported by leadership and adopted by Project Managers. In the past, new policies and changes
have not been widely successful since Project Managers have resisted changes to the status quo.
Major Quality Assurance Reviews and Roles:
The agency currently uses a milestone review process at each phase of the project. The CIO
Council conducts these milestone reviews to evaluate if the project is really ready to move to the
next phase. Certain exit criteria must be met. This project will follow this same approach and submit
to the CIO Council specific work products and deliverables at the end of each phase. For example,
the Define Phase should have a CTQ Diagram and SIPOC Diagram. Additionally, this project will
have a fully loaded resource schedule maintained in Microsoft Project. Weekly progress meetings
are held in accordance with the project schedule.
Risks and Contingency Plans to Cover Them:
Some of the critical risks facing this project include:
1. Complexity and Staffing - This project will look at all root causes behind why actual costs are not
accurate. This could range from simple problems to complex
4 related system issues. The project staff
will need to be highly skilled with problem solving from an accounting perspective. Most team
members have an overall project management background with little or no accounting experience.
This may hinder the effectiveness of the project team. In order to mitigate this risk, the Team Lead
The agency currently uses a milestone review process at each phase of the project. The CIO
Council conducts these milestone reviews to evaluate if the project is really ready to move to the
next phase. Certain exit criteria must be met. This project will follow this same approach and submit
to the CIO Council specific work products and deliverables at the end of each phase. For example,
the Define Phase should have a CTQ Diagram and SIPOC Diagram. Additionally, this project will
have a fully loaded resource schedule maintained in Microsoft Project. Weekly progress meetings
are held in accordance with the project schedule.
1. Complexity and Staffing - This project will look at all root causes behind why actual costs are not
accurate. This could range from simple problems to complex related system issues. The project staff
will need to be highly skilled with problem solving from an accounting perspective. Most team
members have an overall project management background with little or no accounting experience.
This may hinder the effectiveness of the project team. In order to mitigate this risk, the Team Lead
will be a licensed Certified Public Accountant with extensive experience in both accounting and
process improvement.
2. Access to Project Management System - This project will need to analyze accounting transaction
data that resides in the Project Management System. The project requires detail knowledge of how
PMS processes data. The Team Lead has no experience with PMS. In order to mitigate this risk, at
least two team members must be highly experienced with PMS and at least one team member must
be a Senior System Administrator with PMS.
3. Overall Team Resources - This project has four members assigned for approximately four months.
The project could take longer or may require more staff support. In order to mitigate against this risk,
the Project Team will leverage the staff of targeted projects that are the subject of this project. This
could take the form of issuing Request for Information to Project Analyst or other personnel who are
directly responsible for the integrity of cost data for that respective project.
4. Scope Changes - The root causes of problems could force the project to expand the scope of its
work, such as looking at new requirements for the Project Management System. In order to properly
manage project scope, the Project Charter will include clear goals and objectives for the project.
Where practical, a set of life cycle work products will be defined to help ensure that the project stays
within scope.
5. Bad Data - This project is data intensive, relying on a good stream of reliable data. The source
data from PMS may not be reliable. In order to protect against bad data, the Project Team will trace
and test samples of data back to source documents to make sure the data has merit.
6. Difficult to Implement Solutions - The project will design and develop solutions to address root
causes behind the integrity of cost data. Some of these solutions may be difficult to implement, such
as strong resistance from Project Managers within the agency. In order to provide some emphasis
behind the proposed solutions, a formal report will be issued by the PMO to the CIO and the Project
Team will schedule a formal briefing to senior leadership. This will help put some force behind the
proposed solutions.
In order to protect against changes to this project, a 10% contingency reserve will be maintained as
part of the budget. This reserve will help manage any unknown risks that my come up.
Estimated Costs:
Labor: Four team members assigned to work more than 80% of their time on this project. Project
should take approximately 18 weeks to complete. Rough estimated labor costs:
Team Leader . . . . . . . . . . . . $ 185 / hr x 800 hours = $ 148,000
Subject Matter Expert IV . . . $ 170 / hr x 580 hours = $ 98,600
Subject Matter Expert III . . . . $ 162 / hr x 580 hours = $ 93,960
Subject Matter Expert III . . . . $ 162 / hr x 580 hours = $ 93,960
System Administrator . . . . . $ 150 / hr x 580 hours = $ 87,000
TOTAL ESTIMATED BASE COST . . . . . . . . . . . . . . $ 521,520
Interdependencies with Other Projects or Functions:
This project will impact the monthly EVM validation process. It may also impact the budget change
control process. These processes use cost data from the Project Management System and any
changes to how cost are managed per the results of this project
may impact these processes. For
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example, System Administrators look at Timesheet Approval Reports to validate monthly costs within
the Project Management System. This project will most likely evaluate this control procedure and
may result in changes to improve the current process.
Cost Data
Integrity Project
Interdependencies with Other Projects
or Functions:
This project will impact the monthly EVM validation process. It may also impact the budget change
control process. These processes use cost data from the Project Management System and any
changes to how cost are managed per the results of this project may impact these processes. For
example, System Administrators look at Timesheet Approval Reports to validate monthly costs within
the Project Management System. This project will most likely evaluate this control procedure and
may result in changes to improve the current process.
Project Staffing and Time Commitments:
Four team members from the Project Managegment Office (PMO) will be assigned to work on this
project. Two of the team members work permanently for the PMO and two others will be outside
contractors with expertise in process improvement and cost management. The Team Leader will
devote full-time to this project while the three remaining team members will devote approximately
80% of their time to this project.
Project Organization:
The Project Team will reporrt to the Director of the Project Management Office (PMO) on a weekly
basis. The Director of the PMO will report to the CIO and other senior leaders. Project team
members will be responsible for executing the project plan and schedule. This includes all work
products and deliverables during the Define-Measure-Analyze-Improve-Control life cycle of the
project.
Project Management Approach (or Strategy):
Approach: Follow a Six Sigma approach to improving processes associated with actual costs
within the Project Management System. Team members will be trained and skilled in the application
of Six Sigma with direct oversight by the CIO Council which includes Six Sigma Master Black Belts.
Decisions made at each phase must pass through a milestone review process with the CIO Council,
including exit criteria that are rooted in Six Sigma work products for each phase.
Status or Progress Reporting Plan: Weekly meetings with the PMO Director and weekly meetings
each Monday with the core team to plan and execute the work.
Change Management Approach:
Changes to the project scope and deliverables will be managed by the Team Lead. Changes must
be approved by the PMO Director who sponsors the project.