Project Management Guideline - NSW Government

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Project Management GuidelineVersion 1.2Thursday, June 30, 2011

Project Management GuidelineDocument Ownership InformationDocument OwnerICT Policy BranchDocument PreparationDocument ConfidentialityDocument Name and Version Control(Circulated versions only)Document Name & e29 June 2010Changes IncludedFirst release based on drafts and feedbackfrom reviewers.(First Release)1.123 March 20111D AnspalUpdated template and removed GCIOreferences1.230 June 2011D AnspalChanged contact detailsDepartment of Finance and Servicesi

Project Management GuidelineTable of ContentsTable of Contents . i1. Introduction . 12. Objectives and Scope of Guideline . 22.1 Concepts . 22.2 Key Issues . 32.3 Aspects . 43. Management Planning . 53.1 Management Plan . 53.2 Project scope. 63.3 Project Structure. 74. Project Management . 94.1 Work Planning . 94.2 Resource Management . 104.3 Project Control. 114.4 Reporting and Communication . 115. Project Completion.136. Quality, Change and Project Risk Management .146.1 Quality Management . 146.2 Change Management . 146.3 Project Risk Management. 156.4 Benefits Realisation . 15Department of Finance and Servicesii

Project Management Guideline1.IntroductionThis Guideline was developed to promote an understanding of the key requirements for thesuccessful management of a project. While the concepts and issues discussed in thisGuideline are primarily intended to promote improved management of information andcommunications technology (ICT) projects, they can equally be applied to other projects.ICT Projects may involve applications, infrastructure, supporting technologies, informationmanagement, and telecommunications projects, including the acquisition and/ormaintenance of telephone, radio and network infrastructure. A project is a discrete initiativethat is undertaken by an organisation to meet a business need. Projects are typicallycomplex and have a number of different, but inter-related activities.This Guideline should be read in conjunction with the Government Strategic Planning andrelated Guidelines, particularly NSW Treasury’s Business Case Guideline, BenefitsRealisation, Change Management and Project Risk Management.Department of Finance and Services1

Project Management Guideline2.Objectives and Scope of GuidelineEach year organisations, including Government agencies, invest significant funds onprojects. Well-managed projects are most likely to be successful and not experience delaysand budget overruns.Senior management is ultimately accountable for all expenditure within an agency, includingexpenditure on projects. However, management does not always have a full appreciation ofthe issues related to a project and relies on professionals for advice and guidance.This Guideline does not attempt to define the elements of the project lifecycle or to provide aproject management methodology, but it does provide guidance on best practice in themanagement aspects of projects. It describes what senior management should expect tooccur on a project, regardless of its size, and the questions to ask at each stage of theproject.The life cycle for a project begins with the development of a concept for investment in ICT. Itconcludes with a Post Implementation Review to assess whether the expected BusinessBenefits of the project were realised. The scope of this Guideline is best practice in projectmanagement from the initiation of the project through to the completion of the implementationof all planned components.This guideline also outlines best practice in Quality, Change and Project Risk Managementwithin a project.2.1ConceptsProject management is the process used to deliver a project's end product on time, withinbudget, according to specification and at a level of quality that meets professional standardsand management expectations. Project management must be effectively applied to a projectfrom the day it starts.Management of a project involves a different set of issues and requires a different skill set tothe management of the daily operations of an agency's services. A project is normally lesspredictable, more subject to change and has a longer planning horizon than the delivery ofdaily ICT services.To be successful, a project must have:A Clearly Defined Business Objective: The business objective must be defined inthe project's Business Case and be formally approved by senior management.Expected benefits must be clearly specified and broken down into identifiable andmeasurable elements in a detailed Benefits Realisation Register.A Partnership Approach: A project is a partnership between the business unit thatrequests the project and the ICT staff assigned to the project. Projects should beconsidered to be business initiative with an element of ICT rather than ICT initiativesthat will support the business.A Project Sponsor: Ownership of, and accountability for, a project must rest with theProject Sponsor. The Project Sponsor is the owner and "champion" of the project andshould be the individual with the greatest vested interest in the outcome of theproject.The Support of Senior Management: The role of senior management on a projectwill vary according to its scale and complexity. Senior management will normallymonitor progress in projects that are fundamental to the operations of the agency orwhich require significant levels of investment.Department of Finance and Services2

Project Management GuidelineRegular Progress Reporting: Reports on a project's progress should be availablefor senior management and other interested parties, on a regular basis. Normally thisreporting occurs at least monthly, however, in critical project phases this frequencymay be increased to weekly. The progress reports must provide management with aworking understanding of the overall project plan and the progress made against it.Consistent Progress Reporting: The project reporting format within an agencyshould remain consistent across all projects undertaken by an agency.A Proven Project Management Methodology: An agency should have a preferredproject management methodology that provides detailed practices and procedures forthe implementation of best practice as described in this Guideline. Use of a singlemethodology by an agency should provide consistency across its projects in areassuch as management approach, documentation standards, quality management andproject reporting.Benefits Realisation: Planning and organising for the delivery of benefits must startas early as possible in the project life cycle. (See NSW Treasury’s Business CaseGuidelines and Benefits Realisation Guideline)2.2Key IssuesIf internal or external influences make it clear that a project will not meet its businessobjectives, or if it becomes apparent that a project will significantly exceed its time orcost estimates, it is the responsibility of senior management to reassess the project.The business case for the project will need to be reviewed and revised by its sponsor.If insufficient justification is found for the project to continue, it should be stopped.The concepts and issues set out in this Guideline are applicable to all projectsregardless of their size or complexity.Given the current rate of technological change and the potential rate at which anagency's business environment can alter, it is not advisable to initiate a large scaleproject that runs for many years and has one major deliverable. Large projects shouldbe undertaken on a phased or modular basis, with manageable deliverables at theconclusion of each phase or module.Successful projects typically have high levels of user participation throughmeasures such as membership of the project team or user focus groups.Projects must have a well defined structure with the roles and responsibilities of allparticipants clearly documented. In particular, the project's sponsor must be identifiedand this individual must assume ownership of, and ultimate accountability for theproject.The business objectives of a project with an extended duration should beperiodically reviewed and formally reconfirmed with the project's sponsor.Contracting can be an effective approach for providing an agency with the resourcesit requires to complete a project successfully. This includes obtaining projectmanagement skills and experience. However, the agency must retain overallresponsibility for and control over the project.Use of a project management methodology does not guarantee that a project willbe well managed. The methodology must be applied by experienced projectmanagers and the project team members must be adequately trained in its use.Department of Finance and Services3

Project Management GuidelineA project's level of risk will quickly grow as the percentage of custom developmentof hardware or software increases. Management should ensure that a compellingargument exists for a development approach in preference to the acquisition of apackaged solution before approving the project.Any abnormally high levels of project team turnover should be monitored closely,particularly if it occurs at senior levels within the project team.It is essential that appropriate and business resources are assigned to, and retainedby, a project throughout its life cycle.2.3AspectsThere are seven major aspects of project management:Management Planning. When the project is initiated, Management Planning isconducted to develop a Management Plan, define the Project's Scope, and define theStructure of the Project.Project Management. Throughout the course of the project, the key projectmanagement activities of work planning, resource management, project control,project reporting and communication are conducted.Project Completion. The project has a pre-defined and easily identified end pointwhere the components move from implementation phase to live operations.Quality Management. A formal Quality Plan is developed and used to guide theimplementation of an independent quality assurance framework that monitors thequality of all project deliverables and assists in ensuring that the project's expectedbenefits are realised.Project Risk Management. The initial project risks are identified and action tomanage those risks is documented in the Project Risk Management Plan. The ProjectRisk Management Plan also documents the mechanisms that will be used to identifyand address other risks as they arise throughout the course of the project. (SeeProject Risk Management Guideline)Change Management. A Change Management Plan is developed to manage theorganisational change that is associated with the project. The plan is based oneffective marketing of the project and the building of a partnership between theproject team and the user community. (See Change Management Guideline)Benefits Realisation. A Benefits Realisation plan or register is first developed in thebusiness case. The plan is based on the need to identify benefits early, the need toget commitment from the business sponsors to the potential benefits, and the need toprovide a structured approach to benefits realisation that can be followed in parallelwith the system acquisition and implementation. (See Benefits Realisation Guideline).The objectives and nature of each of these aspects of project management are discussedindividually in the following sections.Department of Finance and Services4

Project Management Guideline3.Management PlanningThe initiation of a project is a critical point. Clearly defining the project's scope and adequateplanning are critical to the successful delivery of any project.Management planning involves selecting the most appropriate options for setting up theproject. When evaluating these options constraints such as resource availability, timing,organisational capabilities and cost should be considered. The project's Business Caseshould broadly identify th