I. Core Concepts of the Project Management Balanced Scorecard

A. Definition and Purpose

Balanced Scorecard (BSC): A performance management framework developed by Robert S. Kaplan and David P. Norton in the early 1990s. It goes beyond traditional financial metrics to include intangible assets, aiming to provide a comprehensive view of corporate performance.

Project-Based Balanced Scorecard: An adaptation of the BSC for projects, aligning project plans with business objectives, measuring project effectiveness, directing employee efforts, and achieving balanced results across stakeholders.

Key Goals of a Project-Based BSC:Alignment of the project plan with business objectives. Establishment of measures for the project’s effectiveness. Direction of employee efforts toward project objectives. Achievement of balanced results across various stakeholder groups. "Balanced" Aspect: Refers to balancing six goals, the four BSC perspectives (financial, customer, internal business processes, learning and innovation), and long- and short-term objectives, as well as qualitative and quantitative performance measures.

B. The Four Perspectives of the Balanced Scorecard

Financial: How the project looks to shareholders (e.g., cost-benefit analysis, ROI, break-even analysis). Objectives: Long-term corporate profitability, short-term corporate profitability, enhance existing products, expand client-base, improve efficiency and cost-effectiveness, increase ROI, reduce TCO. Metrics: Revenue growth, percentage cost reduction, percentage increase in ROI, percentage reduction of TCO.

Customer: How customers see the project (e.g., customer satisfaction, fulfilling requirements). Objectives: Fulfill project requirements, control cost of the project, satisfy project end users, provide HR information systems that meet Agency needs, deliver all projects for customers in conformance with an acceptable plan. Metrics: Customer satisfaction index, click count, attrition rate, complaints, customer frustration, visibility into government process, efficient use of taxpayer dollars, effective sharing of information, trust, consistent quality of services, compliance with Section 508, partner satisfaction, political image, community awareness, negative/positive publicity.

Internal Business Processes: What the organization must excel at (e.g., process efficiency, quality management). Objectives: Complete M&A transitional processes, establish connectivity, improve quality, eliminate errors and system failures, increase productivity, product and services enhancements, improve response time, improve accuracy of data entry, maintain data accurately, make HRIS available, ensure retrievable data is current, achieve optimal balance between technical and strategic activities, reduce demand for customer service intervention, achieve minimum architecture effective for HRIS, implement HRIS integration strategy, maintain alignment with CIA IS direction. Metrics: Percentage of work completed, percentage of workforce full access to corporate resources, percentage saved on reduced work, percentage reduction of customer complaints, percentage saved on better quality, percentage increase in customer orders, percentage increase in production/employee, number of new products and services introduced, average number of hours to respond to customer.

Learning and Growth (Innovation): How the organization can sustain its ability to change and improve (e.g., staff skills, R&D). Objectives: Development of skills, leadership development and training, innovative products, ensure HRIS learns from past, record/analyze/use lessons learned, develop best practices for HRIS. Metrics: Percentage amount spent on training, percentage staff with professional certificates, number of staff attending colleges, percentage increase in revenue.

C. Key Performance Indicators (KPIs) and Metrics

• Definition: Measurable values that demonstrate how effectively a company is achieving key business objectives. They are derived from characteristics of variables (e.g., quality, time).
• Purpose: To measure the success of the project and its alignment with strategic goals.
• Qualitative vs. Quantitative Measures: BSC encourages a mix. Quantitative provide objectivity and justify resource allocation, while qualitative (perceptions of users, employees) offer important insights.

II. Strategic Alignment and Implementation

A. From Corporate to Project Scorecards

• Cascading Nature: Company goals cascade down to departmental scorecards, and then to individual employee and project scorecards. This provides a "line of sight" from individual work to enterprise strategy.
• Three Levels of Organizational Scorecards: Business (corporate), Departmental, and Project (micro-level). All three should be linked.
• Critical Success Factors (CSFs): Management considerations that can make or break a project (e.g., executive support, user involvement, experienced project manager, clear business objectives, minimized scope, skilled staff, contract negotiation and management, implementation).

B. Establishing a Measurement Program

• Four Steps:Adopt a Measurement Program Model: Identify resources, processes, products, and derive core measurement views (strategic, tactical, application).
• Use a Process Improvement Model (e.g., IDEAL): Establish a baseline, set measurable goals, create an action plan with measures, accomplish actions, analyze results, and leverage improvements.
• Identify a Goal-Question-Metric (GQM) Structure: Link project goals with corporate goals, derive measures from attribute questions, and establish success criteria.
• Develop a Measurement Plan and Case: Define what, why, who, how, and when measurements will be collected and document evidence and analysis results.
• Validation and Verification: Essential processes to ensure the accuracy and completeness of measurement techniques and data. Involves mutually understanding performance measures, knowing data sources, confirming collection methodology, controlling data, and understanding trend analysis.

C. Project Management Office (PMO)

• Role: Defines and maintains process standards, standardizes execution, provides documentation, guidance, and metrics for project management.
• Implementation Steps:Take Inventory: Collect information on all initiatives (sponsors, stakeholders, strategic alignment, costs, benefits).
• Analyze: Form a steering committee to prioritize projects based on criteria (e.g., strategic alignment, cost-benefit ratio). The BSC should be created in this step.
• Manage: Continuously evaluate projects based on changing priorities and market conditions. The BSC is used in this step.
• Standardization: PMOs emphasize standardization, often basing principles on industry methodologies like PMBOK or PRINCE2.

III. Aligning Projects with Specific Objectives

A. Financial Objectives

• Cost-Benefit Analysis: Compares project costs to benefits (tangible and intangible).
• Break-Even Analysis: Determines when project benefits start outweighing costs.
• Return on Investment (ROI): Measures additional earnings after costs are recovered.
• Formula: ROI = (Benefit – Cost) / Cost
• Data: Requires accurate hard data (output, time, quality, costs) and soft data (morale, turnover).
• Earned-Value Management (EVM): Measures the true cost of performance for long-term projects by comparing planned value, earned value, and actual costs.
• Cost Performance Index (CPI): Earned Value / Actual Costs.
• Rapid Economic Justification (REJ): A five-step process: understand the business, understand solutions, understand cost-benefit equation, understand risks, and understand financial metrics.
• Value of Information (VOI): Assigns monetary value to unitary pieces of information, a group exercise involving technology and user groups.
• Intangible Assets Monitor (IAM): A scorecard-like measure to monitor the value of intangible assets.

B. Customer Objectives

• Sources of Differentiation: Product innovation, customer intimacy, operational excellence.
• Customer Desires: Reliability, responsiveness, assurance, empathy.
• Customer Satisfaction Survey: A common method to gather customer feedback. Steps include assembling a team, developing the survey, collecting contact data, selecting a sample, conducting interviewer training, and analyzing results.
• Force Field Analysis: Used to brainstorm and prioritize ideas with end-users by uncovering driving and restraining forces.
• Customer Economy: Customer is in control, focusing on loyalty (retention, satisfaction, growth, increases in spending, rate of defection).
• Quality of Experience (QoE) & Quality of Customer Experience (QCE): Metrics assessing user experience and the impact of company execution on customer loyalty.
• Innovation: Sustaining (something better in defined ways) and disruptive (impairs traditional market approaches, often initially unwanted by users).

C. Business Process Objectives

• Process Definition: Processes are developmental or supportive projects creating value. Strategic art involves excelling at critical few processes important to end-user value.
• Metrics (Unisys): Customer satisfaction, standardization, incident rates, security audit, availability, reliability/quality of service, cycle times, employee satisfaction, root cause analysis, etc.
• Capability Maturity Model (CMM): A framework to increase the maturity level of software engineering practices, adaptable to any business process.
• Five Levels:Initial (Ad hoc): Chaotic, inputs defined, outputs expected.
• Repeatable (Managed): Basic project management processes established.
• Defined: Management activities documented, standardized.
• Managed: Process and product quality quantitatively managed.
• Optimized: Continuous process improvement.
• Organizational Project Management Maturity Model (OPM3): PMI's CMM tailored for projects, assessing and developing capabilities in portfolio, program, and project management.
• Quality and the Balanced Scorecard: Integrates systemic quality (product/process effectiveness and efficiency) into the BSC, linking organizational goals to employee remuneration.

D. Learning and Growth Objectives

• Focus: Project staff excellence, motivation, and development.
• "Liberate Rather than Empower": Managers create an environment where staff take responsibility, work productively in self-managed teams, and solve problems autonomously.
• Peopleware Techniques: Improving hiring practices, providing adequate office space, training, developing managers' performance review skills, and focusing on team dynamics.
• Attributes of a Good Project Manager: Manage expectations, resolve conflict, overcome fears, facilitate meetings, motivate team members.
• Motivating Employees: Understanding manager's own motivations, learning about employees' dreams, generating a positive attitude, shared goals, monitoring progress, and recognizing achievement.
• Team Dynamics: Stages of team development (forming, storming, norming, performing, adjourning) and problems like groupthink. Tools include Nominal Group Technique, Roadblock Identification Analysis, Productivity/Management by Objectives, Force Field Analysis.
• Team Effectiveness Leadership Model: Examines inputs (individual, team, organizational factors), processes (effort, knowledge/skills, strategy, group dynamics), and outputs (stakeholder satisfaction, future capability, individual satisfaction) to identify roadblocks and improve team effectiveness.
• Virtual Teams: Address trust, communication, accountability, conflict management, decision-making, meeting practices, document editing, multicultural integration, brainstorming, and self-management.
• Training: A key to learning and growth, with a direct ROI on productivity.

Project Management Steps and the Balanced Scorecard

A. Project Scope Management

• Scope Creep: Uncontrolled growth of a project's scope.
• Components of Scope Management: Scope planning, scope definition, creating the Work Breakdown Structure (WBS), scope verification, scope control.
• Defining Business Goals: Quantifiable metrics (e.g., increase earnings per share by X%).
• Defining Project Goals: Subsets of business goals.
• Defining Project Scope: Justification, system functionality, revenue generation.
• Constraints: Regulatory, legal, competitive pressures (e.g., timeboxing, budget allocation).
• Requirements: General features, technical requirements (standards like ISO 9000, existing systems, hardware/software, security, scalability, availability, reliability, disaster recovery).
• Feasibility Study: Initial phase of product development to assess viability (financial, technical, operational).

B. Project Scheduling

• Task Network (WBS): Decomposes projects into measurable tasks with interdependencies.
• Estimation Approaches: Stochastic (with variance) and deterministic (average past time).
• Project Management Charts:Gantt Charts: Shows tasks and time, good for visualizing overlap.
• PERT (Program Evaluation and Review Technique) Charts: Network diagrams showing tasks, dependencies, and critical path.
• Critical Path: Longest sequence of tasks, determining project duration.
• Leveling and Resource Allocation: Optimizing human resource allocation by evening out workload and reallocating tasks based on "slack" time.
• Crashing: Shortening activity duration by using different technologies or adding/deleting resources.
• Human Resources Considerations: Experience, education, workload, typical task completion time, teamwork ability.

C. Project Estimation

• Importance of Project Estimation: Provides cost, effort, and time estimates, often using multiple techniques and triangulation.
• WBS as Basis: Breaks down systems into manageable tasks for accurate estimation.
• Human Resource Estimation: Calculating effort (person-months) and adjusting for communication overhead.
• Other Estimation Techniques:Estimating by Analogy: Based on similar past projects.
• Bottom-Up/Grass Roots: Detailed information from low-level tasks.
• Parametric Estimation: Uses mathematical models and parameters (e.g., lines of code).
• Estimating Resources: Human (salaries, benefits) and nonhuman (hardware, software, supplies, training, travel).
• Budgeting: Fixed costs, overhead costs.
• Budget Monitoring: Continuous comparison of actual costs to baseline budget, using techniques like cost-benefit analysis, break-even analysis, ROI, EVM.

D. Project Risk Management

• Proactive Risk Strategy: Identifying and dealing with risks early.
• Risk Probability and Impact: Likelihood of occurrence and consequences.
• Categorizing Risks: Project risks (budgetary, staffing, scheduling), technical risks (design, implementation), business risks (market, management, strategic, budget, sales).
• Risk Analysis (Tan's Method): Exposure Factor (EF), Single Loss Expectancy (SLE), Annualized Rate of Occurrence (ARO), Annualized Loss Expectancy (ALE), Safeguard Cost-Benefit Analysis.
• Types of Risks (Charette): Known, predictable, unpredictable.
• Risk Mitigation, Monitoring, and Management Plan (RMMM): Tool to avoid risks, monitoring activities, and contingency plans.
• Project Quality Management (PQM): IBM's technique for identifying critical success factors and business processes, and prioritizing actions.
• Quantitative Risk Analysis: Technical performance, schedule, and cost risk analysis, using methods like probability distributions, sensitivity analysis (tornado diagrams), analytical methods, and Monte Carlo simulations.
• Risk Checklists: Tools for identifying, addressing, and monitoring risks (e.g., project plan framework, common project-level risks, ongoing monitoring).

E. Procurement Management

• Definition: Acquiring goods and services from outside the organization. Direct financial impact, but also affects other BSC perspectives.
• Outsourcing Phases:Analysis and Evaluation: Identify goals, core competencies, compare in-house vs. outsourced costs.
• Needs Assessment and Vendor Selection: Develop RFP, evaluate vendor proposals (technology, financial stability, track record, support), use Pugh Matrix.
• Implementation and Management: Define task, establish timeframe, monitor and evaluate performance.
• Procurement Planning: Project description (COTS, MOTS, custom), system maintenance strategy, databases/legacy systems used.
• Market Research: Identify vendors, products/services, conduct reference checks, assess vendor stability.
• Acquisition Methodology Steps: Competitive/noncompetitive bid justification, source seeking, procurement steps, key deliverables, evaluation factors and scoring.
• Procurement Risk Management: Methods to protect investment and ensure contractor performance (e.g., performance bonds, financial penalties).
• Contract Management Approach: Specifies tools and processes for managing the contract (issue/action item, problem tracking, status reporting, invoice, deficiency, dispute resolution, deliverable management).

F. Project Termination

• Importance: Determines success/failure, contributes to institutional knowledge.
• Successful Termination Steps: System testing and acceptance, procedure manuals, user training, system turnover to operations, project completion reports, documentation storage, staff reassignment, resource reassignment, system monitoring, maintenance team assignment.
• Termination due to Failure Steps: Preliminary report to management/users, resource reassignment/performance evaluation, contract termination, equipment disposal, financial closeout/audit.
• Project Audit: Formal review to assess project success, identify lessons learned, and determine if termination (or continuation) is appropriate. Covers all four BSC perspectives.
• Change Control: Managing inevitable modifications after system completion due to changing requirements, regulations, technologies, outsourcing, or internal difficulties. Involves change requests, assessment, approval, and controlled updates.