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Project Management the Siemens way
F i t f o r p r o j e c t s –
f i t f o r s u c c e s s
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((U2))
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C o m
m i t m
e n t
Commitment
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Introduction
Dr. Heinrich von Pierer
“We are close”
Here at Siemens we see professional project management as a crucial factor
in our success. Projects make up the bulk of our business. This is why the
Corporate Executive Committee is stressing the ongoing development of
project management to ensure that project managers are optimally qualified.
With the PM@Siemens Initiative, we have devised an effective tool enabling
us to handle projects more profitably than was frequently the case in the
past. We are on the right track with our initiative so far – the goals are clearly
formulated, measures have been defined, and roll-out in the Regions means
that we are close to arriving at our objective of a uniform project manager
culture. Now it is up to you to lead the PM@Siemens Initiative to success
through committed Best Practice Sharing, resolute actions and the poolingof our strengths, both at Group headquarters and in the Regions.
Dr. Heinrich v. Pierer
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As an important contribution to improving profitability at Siemens, we
started the Siemens Project Management Initiative PM@Siemens in fiscal
00/01, initially with 8 Groups (PG, I&S, ICM, ICN, TS, SD, SBS and PTD).
Our aim is to improve project management throughout Siemens, by means
of Best Practice Sharing, and to put into practice a range of standard
approaches, tools and control variables in all groups.
We are proud to say that since then we have achieved results which are
taking visible effect throughout Siemens. The SV and SBT Groups joined the
Initiative a good six months ago while the A&D and Med Groups also decid-
ed recently that they would participate. Roll-out in the Regions as well as in
the USA is under way.
This updated PM Guide is a good example of our Best Practice Sharing at
Siemens, as it already incorporates the learning curve from our experience
with the “old” guide:
a an uniform defined project process throughout Siemens
a 7 enhanced modules
a 5 new modules (Processes/Roles, Operative QM, Knowledge Management,
Project Purchasing, Small Projects)
All the obligatory and optional measures must now be implemented rigorous-
ly in your Group. This is where everything depends on you: Do not re-invent
the wheel, but instead put the recommended Best Practice to use. In doing so,
you will be supported by a committed team led by Dr. Schloss, who heads thisInitiative.
To track your progress use a proven most effective tool: project management
assessments (self assessment as well as CT SE conducted assessment). The in-
dividual Groups will keep me regularly updated on progress, on assessments
(PMA and CT SE) and on the quality of results yielded by the projects.
I wish you every success.
Edward G. Krubasik
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Dr. Jürgen Schloss, PTD
”Fit for projects – fit for success“ means for me a global approach on the part
of our Project Managers. We want our Project Managers to never lose sight
of their objectives and to manage our projects professionally and efficiently.
We want our customers to come back to us with their future business as well;
we want them to be satisfied and to be successful with our systems andequipment. I believe this collection of examples and recommendations for
our project management offers a sound basis for long-term success in our
projects and processes. With the roll-out in the Regions our ultimate aim is a
worldwide project culture throughout all the Groups. It is precisely in the in-
ternational implementation of projects that a great deal of potential lies.
Our commitment toproject management
Joachim Möller, I&S
One of the crucial factors responsible for the success of our systems business
is that our project management has become something we can take for
granted.
It is very important to me that our Project Managers are among the best in
their respective areas of responsibility or that they are on their way to attain-
ing that status.
I will personally focus more on Project Controlling and will participate in the
process.
Alfred Ötsch, A&D
Profitable solutions business is conditional on professional project manage-
ment, and professional project management means satisfied customers who
come back to us with their future orders.
This is what the PM@Siemens Initiative is all about.
Learning from others and Siemens-wide Best Practice Sharing are the key
levers that will give us a competitive edge and ensure the sustained profita-
bility of our solutions business.
We at A&D are glad to be taking part in this worldwide Siemens Initiative.
The success of our products business is both an incentive and a guide for oursolutions business.
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Lothar Pauly, ICM
In ICM Networks, we see the Project Manager as an entrepreneur. We have
therefore established an organization in Sales/Project Management whereby
the Project Manager is given the necessary room to move. We support the
PM@Siemens Initiative in order to provide our Project Managers with
extensive tools for handling their projects successfully.
Anton Hendrik Schaaf, ICN
Based on the proven methods of PM@Siemens, ICN has made significant
progress in project management – the PM Improvement Program has taken
effect. Methods proven in the other Groups have helped us a great deal.
The task facing us now is to further put our findings into practice quickly and
rigorously, so that we can gain a profitable position in the telecommuni-cations market.
Goetz Steinhardt, Med
Our customers expect us at Medical Solutions to understand their workflows
from start to finish; they want us to optimize the procedures involved in
terms of both efficiency and effectiveness.
Quality up, Cost down is what we strive for.
Just like the projects we handle for our customers, our internal processesmust be equally up to the mark.
Project management is a core competence at Med.
PM@Siemens is yet another opportunity to strengthen this competence.
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Norbert König, PG
Project management is one of our core disciplines, ensuring sustained high
profitability and a determined reduction of non-conformance costs (NCCs).
An effective continuous improvement process is therefore the vital key for
driving the quality of project processing to excellence throughout the com-
pany.Learning better solutions (Best Practice Exchange) from other Siemens
Groups and introducing them is an effective and smart way of improving our
processing quality and consequently our profitability.
Jürgen Frischmuth, SBS
On-schedule and customer-specific project management must be second
nature to us. The finalizing of complex customer projects with effective
deployment of resources and clear value added for our customers is crucial
to our success. This is why professional project management is the central
lever in a sustained improvement of our results and in setting ourselves
apart from our competitors.
Dr. Peter Drexel, SD
Our objective in systems business is to achieve profitability and customer
satisfaction on the basis of convincing quality. Best Practice Sharing in thecontext of the Siemens Project Management Initiative grants SD access to all
the Siemens project management know-how – a great advantage for our
young enterprise.
We are making good use of this opportunity in our PM@SD Group project
and have introduced uniform minimum PM standards and principles
throughout SD. This is already bearing fruit: an improvement in process
quality resulting from higher margins in new orders and reduced cost
overruns during processing are already evident at this early stage. The long-lasting effect is ensured by stringent controlling.
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Oskar Ronner, SBT
In Autumn 2002, SBT resolved to standardize and harmonize worldwide the
core processes of our three Solutions Divisions for Sales, Project Execution
and Service. Only this way can we arrive at the necessary Excellence in Oper-
ations. Roll-out in the various countries is under way and is scheduled for
completion by the end of 2004. Although SBT's average project volume
amounts to around EURO 30,000 and thus is significantly below the figures
of other Groups, our local entrepreneurs who execute these projects world-
wide in 500 branches face the same challenges as do those dealing with the
larger-scale projects. Consequently, we are now dedicating a great deal of ef-fort to the new module, ”Small Projects“.
Günter Hauptmann, SV
Well-handled projects make an essential contribution to profitable business.
Top-class project management as a success factor reduces cycle times and
improves quality in a global context.
In this process, the PM@Siemens Initiative creates added value through
knowledge sharing/Best Practice Exchange, providing further acceleration
on our way towards Project Management Excellence.
Hans-Dieter Bott, TS
Successful projects are an essential feature of the Transportation System
Group's business success. Continuous improvement of systematic project
management promotes the professional processing and successful comple-
tion of all projects.
Mutual exchange of Best Practice with other Groups is a vital element in en-suring that project management is standardized at the highest quality level
throughout Siemens as a whole. TS enthusiastically welcomed the career
model for Project Managers, as this model recognizes the great significance
of the Project Manager function and provides career prospects for all project
staff.
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Overview
O v e r v
i e w
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Fit for projects – fit for success
“Fit for projects – fit for success” is the motto
of the PM@Siemens Initiative. These words
signal primarily that we have achieved mea-
surable success since the Initiative got going
and secondly that we have come a lot closer
to our ultimate objective of a uniform
project culture. It is precisely in times oftough predatory competition and cautious
customer decisions that projects business is
only attractive if it is handled successfully –
in terms of both customer satisfaction and
positive results. We can move the goalposts
on both issues: optimized processes make us
reliable and calculable for our customers;
they also improve our EBIT, irrespective of
whether large or small-scale projects are con-
cerned.
This is why we have dedicated a separate
chapter to the topic of “Small Projects”.
“Small” may denote the volume or complexi-
ty of a project, but not necessarily its signifi-
cance for us.
Project Managers – our future success is in
your hands. With your know-how, your com-
mitment and your will to use the resources
at your disposal and establish them in your
teams, we will meet our targets in project,
system and service business.
Dr. Jürgen Schloß, PTD Joachim Fischer, PTD
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On the home stretch
Customer requirements are shifting, the mar-
ket is changing continuously, technological
leaps are enormous – this is why ongoing
training and learning are vital for successful
project management. You, the ProjectManager, must rise to this challenge. The
PM@Siemens Initiative will provide the re-
sources and training facilities. Here the
PM@Siemens Academy will play a particular-
ly important role in offering career and quali-
fication concepts that have meanwhile es-
tablished themselves throughout Siemens.
The first Project Managers have already
been certified.This PM@Siemens Guide provides informa-
tion on the current status of the
PM@Siemens Initiative.
Consolidating what has beenachieved so far – meeting futuretargets
The PM@Siemens Initiative was introducedto the Groups last fiscal year as a significant
means of improving profitability, with the
aim of giving Siemens a clear edge over the
competition through a standardized scale of
qualifications for its Project Managers. In ad-
dition to the first Groups to join (PG, I&S,
ICM, ICN, TS, SD, SBS and PTD), SV, SBT, A&D
and Med have since adopted parts of theInitiative. No small measure of success has
been recorded:
a 53 recommendations have meanwhile
been drawn up. Group-specific implemen-
tation thereof is now complete, including
Scorecard Controlling.
a A career model applicable throughout
Siemens has been devised, in close coop-
eration with CP. This model comprises
uniformly organized qualification stages:
Team Member, Project Manager, Senior
Project Manager, Project Director.
a The PM@Siemens Academy is firmly
established and already offers the stan-
dard course program PM4 to PM1, which
will in the future be organized and run
by the Learning Campus.
a All Groups apply standard assessment
procedures to measure the level of
maturity in processes and projects.
a The PM@Siemens Portal – a joint venture
project with CIO – is in course of develop-
ment and is setting new standards for
communication and international cooper-
ation in project teams.
a A standard auditing module for project
management has been devised jointly
with CD A and is already being applied.
a Rollout has taken place in 20 Regional
Companies and in the US.
The positive response to the PM@Siemens
Initiative and the committed cooperation ofall Groups demonstrate not only the para-
mount importance of such activities but also
the strong will to succeed.
With all this, we have taken a further signifi-
cant step on the road towards a uniform
project culture, an aim which is vital to our
success.
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Our commitment toproject management
Success is feasible
When the Initiative kicked off, the founda-
tions were laid for managing success like a
project and for managing projects with suc-
cess. Thanks to cross-Group efforts and the
active support of all involved, we have estab-
lished a solid and enduring “house” within
Siemens AG in just a few short months.
Comprehensive success in projects business
essentially depends on the personal apti-
tudes and qualifications of all Project Man-
agers and staff – be it in the coordination of
local development departments or in the
context of large-scale international projects.
The aim is always to manage projects suchthat they are completed successfully. Pro-
ject management is thus more than just a
methodological approach. It is instead a lead-
ership concept which we must resolutely
apply.
We expect the same commitment to project
management from all our executive staff.
Each and every one of you is responsible for
ensuring that all business coordinators and
project staff are aware of the need to contin-
uously improve project management. You
will have support in the form of detailed andpractical recommendations provided by
Project Management. To avoid mistakes and
minimize risks, you must likewise ensure
that any experience gained is subsequently
incorporated into projects and processes. As
a result, in your capacity as a leader and a
Project Manager, you exert considerable in-
fluence on the quality of project manage-
ment in our company, and consequently onthe quality of project results.
Active Best Practice Sharing will provide us
with valuable synergy effects, which will be
of great benefit to everybody.
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O r g a n i z a t i o n
o f t h e I n i
t i a t i v e
The Siemens way
Group Coordinators:
Steering Committee:
ICM
Pauly
Kurfer
ICN
Schaaf
Bamberger
I&S
Möller
Schott
PG
König
Eckert
SD
Dr. Drexel
Husemeier
PTD
Dr. Schloss
Dr. Schlegel
SBS
Frischmuth
Piegsa
SBT
Ronner
Kessler
SV
Hauptmann
B. David
TS
Bott
Dr. May
Chairman: Dr. Schloss, PTD CEC
Coordination: Fischer, PTD QM
Initiator: Dr. Krubasik
Med
Steinhardt
Dr. Viethen
A&D
Ötsch
Jung
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Small Projects
PM Assessment
Knowledge Management
PM Portal
Personnel Management
Contract Management
Project Procurement
Processes, Transfer and Implementation
Operative Quality Management
Qualification
Project Controlling
Processes and Roles
T h e
m ai n t o pi c s
Project Management the Siemens way
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Processes
and Roles
R o l e s
a n
d
P r o
c e
s s e
s
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In order to achieve our objective, i.e. to ar-
rive at “Siemens-wide project management
standards”, it is essential that the processes
relevant for project handling be defined in a
uniform fashion and integrated into the
Siemens Process House.
This creates the basis for implementing pro-cess improvements into practice throughout
Siemens, through the application of uniform
procedures, methods and roles in project
handling.
The planned further detailing will also reveal
cross-Group synergies for IT tools.
The generic project phase model was de-
vised as a first but crucial step involving pre-
cise milestones. It forms the basis for further
detailing and introduces a uniform process-
ing language.
Processes and Roles
PM010AcquisitionGo/No Go
decision
PM020Bid
decision
PM050Bid
approval
PM070Project
won/lost
PM080Start project
PM100Entryorder
clarified
PM200Approval
of detailed
planning
The PM@Siemens project phase model formsthe basis for further work.
Pre-acquisition
Projectacquisition
Bidpreparation
Contractnegotiation
Projecthandover
Projectopening andclarification
Detailedplanning
Einkauf &Herstellung Versand Errichtung
Inbetrieb-setzung
Abnahme-Messung
Garantie-Phase
Purchasing &manufacture Dispatch
ErectionInstallation
Commis-sioning
AcceptanceWarranty-phase
PM300Dispatchapproval
PM400Material
and resourcesat site
PM550Erection
completed
PM600Commissioning
completed
PM650Provisionalcustomer
acceptance
PM700Final
customeracceptance
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The individual process operations are stag-
gered in a practical fashion, on the basis of
the integrated project schedule; hence this
linear process approach also makes sense
for projects business.
To record the completion of a process step,
each milestone is accorded mandatory re-sults. This provides the basis for introducing
Key Performance Indicators, allowing the
quality of project processing as well as on-
time performance to be measured.
Mandatory results for each project milestone
Depending on the type of business, some
project phases may be inapplicable (e.g.
component delivery order).
The representation of a complex handling
process as a linear phase model entails the
seemingly insuperable, system-inherent
problem that the real process passesthrough the described phases several times.
The process representation with its mile-
stones is still valid, however – for each com-
ponent as well as for the system – and is
thus a valuable tool.
PM020Bid
decision
PM050Bid
approval
PM070Project
won/lost
PM080Start project
PM100Entryorder
clarified
PM200Approval
of detailedplanning
1 Investment approval for defined sales resources
2 Outline description of customer and business context
3 Outline description of the identified expected order(scope of supply and anticipated sales)
PM010AcquisitionGo/No Godecision
Bidpreparation
Contractnegotiation
Projecthandover
Projectopening andclarification
Detailedplanning
Pre-acquisition
Projectacquisition
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1 Investment approval for defined bid preparation resources
2 Supplemented expected order document
3 Documented customer inquiry
4 Analysis of context (strengths, weaknesses, opportunities, and risks)
5 Rough risk and cost estimate
6 Planned project/service share and volume, expected profit
7 Resources for the bid team, project schedule and planned bid costs
Bidpreparation
Contractnegotiation
Projecthandover
Projectopening andclarification
Detailedplanning
Pre-acquisition
Projectacquisition
PM020Bid
decision
PM050Bid
approval
PM070Project
won/lost
PM080Start project
PM100Entryorder
clarified
PM200Approval
of detailedplanning
PM010AcquisitionGo/No Godecision
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1 Detailed project description (project plan and solutions)
2 Detailed project cost calculation (sales, EVA)
3 Completed bid documentation
4 Approval by all organizations involved
5 Current risk assessment
6 Current project classification
7 Approval for submission of bid to customer
8Signed bid approval
9 Defined negotiation framework
Mandatory results for each project milestone
PM020Bid
decision
PM050Bid
approval
PM070Project
won/lost
PM080Start project
PM100Entryorder
clarified
PM200Approval
of detailedplanning
PM010AcquisitionGo/No Godecision
Bidpreparation
Contractnegotiation
Projecthandover
Projectopening andclarification
Detailedplanning
Pre-acquisition
Projectacquisition
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PM010AcquisitionGo/No Godecision
Pre-acquisition
PM020Bid
decision
PM050Bid
approval
PM070Project
won/lost
PM080Start project
PM100Entryorder
clarified
PM200Approval
of detailedplanning
1 Signed acknowledgement of order
2 Final contract documentation
3 Described changes to the bid(resources, legal aspects, solutions, etc.)
4 Revised risk evaluation incl. risk assessment, likelihood of occurrenceand actions to reduce risk
5 Approval by risk Review Board in charge
6 Adapted escalation level
Projectacquisition
Bidpreparation
Contractnegotiation
Projecthandover
Projectopening andclarification
Detailedplanning
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PM020Bid
decision
PM050Bid
approval
PM070Project
won/lost
PM080Start project
PM100Entryorder
clarified
PM200Approval
of detailedplanning
1 Project Manager and Commercial Project Manager appointed
2 Complete contract and bid documents handed over to Project Manager
3 Changes between contract and bid documented
4 Scope of delivery and cost calculation adapted
5 Risk analysis and adjustment of actions to reduce risk
6 Final dialog held with Bid Manager
Bidpreparation
Contractnegotiation
Projecthandover
Projectopening andclarification
Detailedplanning
PM010AcquisitionGo/No Godecision
Pre-acquisition
Projectacquisition
Mandatory results for each project milestone
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PM010AcquisitionGo/No Godecision
Pre-acquisition
PM020Bid
decision
PM050Bid
approval
PM070Project
won/lost
PM080Start project
PM100Entryorder
clarified
PM200Approval
of detailedplanning
1 Project organization completed
2 Detailed agreement with customer on scope of deliveries/services and specifications
3 Change and claim strategy completed
4 Contract structures adapted
5 Target agreements drawn up
6 Project structure created
7 As sold cost calculation finalized
Projectacquisition
Bidpreparation
Contractnegotiation
Projecthandover
Projectopening andclarification
Detailedplanning
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PM010AcquisitionGo/No Godecision
1 Approved documents for erection
2 Approved documents for purchasing
3 Selected suppliers/service providers
Pre-acquisition
Projectacquisition
Bidpreparation
Contractnegotiation
Projecthandover
Projectopening andclarification
Detailedplanning
Mandatory results for each project milestone
4Completed service concept
PM020Bid
decision
PM050Bid
approval
PM070Project
won/lost
PM080Start project
PM100Entryorder
clarified
PM200Approval
of detailedplanning
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PM300Dispatchapproval
1 Notification of completion ready
2 Packing list with current weights anddimensions of packing units
3 Export declarations prepared
4 Pro-forma invoice for customs clearance
5 Packaging and dispatch information
6 Notification of readiness for erection
Purchasing &manufacture Dispatch
ErectionInstallation
Commis-sioning
Acceptance Warranty-phase
PM400Material
and resourcesat site
PM550Erection
completed
PM600Commissioning
completed
PM650Provisionalcustomer
acceptance
PM700Final customer
acceptance
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PM300Dispatchapproval
1 Goods received and incorporated in inventories
2 Site ready for erection
3 Resources available
Mandatory results for each project milestone
Purchasing &manufacture Dispatch
ErectionInstallation
Commis-sioning
Acceptance Warranty-phase
PM400Material
and resourcesat site
PM550Erection
completed
PM600Commissioning
completed
PM650Provisionalcustomer
acceptance
PM700Final customer
acceptance
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PM300Dispatchapproval
1 Erection completed
2 Erection reports prepared
3 Handover of all documents to commissioning
4 Commissioning instructions prepared
5 Site ready for commissioning
Purchasing &manufacture Dispatch
ErectionInstallation
Commis-sioning
Acceptance Warranty-phase
PM400Material
and resourcesat site
PM550Erection
completed
PM600Commissioning
completed
PM650Provisionalcustomer
acceptance
PM700Final customer
acceptance
32
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PM300Dispatchapproval
1 Commissioning completed
2 Documented list of open points
3 Documented commissioning results/tests
4 Updated execution documents prepared
Mandatory results for each project milestone
Purchasing &manufacture Dispatch
ErectionInstallation
Commis-sioning
Acceptance Warranty-phase
PM400Material
and resourcesat site
PM550Erection
completed
PM600Commissioning
completed
PM650Provisionalcustomer
acceptance
PM700Final customer
acceptance
33
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PM300Dispatchapproval
1 Provisional customer acceptance signed
2 List of open points adopted together with customer
3 Acceptance test documentation completed
4 Provisional customer documentation drawn up
Purchasing &manufacture Dispatch
ErectionInstallation
Commis-sioning
Acceptance Warranty-phase
PM400Material
and resourcesat site
PM550Erection
completed
PM600Commissioning
completed
PM650Provisionalcustomer
acceptance
PM700Final customer
acceptance
34
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PM300Dispatchapproval
1 Final customer acceptance signed
2 Bank bonds obtained
3 Final customer documentation prepared
4 Final project report prepared
Depending on the relevant business, all mile-
stone results may also be attained in an earli-
er project phase but must be achieved in theindicated project phase at the latest, in order
to ensure a trouble-free process.
Furthermore, each project phase has been
subdivided into project steps:
Purchasing &manufacture Dispatch
ErectionInstallation
Commis-sioning
Acceptance Warranty-phase
PM400Material
and resourcesat site
PM550Erection
completed
PM600Commissioning
completed
PM650Provisionalcustomer
acceptance
PM700Final customer
acceptance
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Analyze inquiry/identify expectedbusiness
Identify internalbusinesscoordinators
Create/adaptbusiness plan andassess expectedbusiness
Information forproduct portfolioprocess
Record pre-acquisition andproject data
PM@Siemens View
PM020Bid
decision
PM050Bid
approval
PM070Project
won/lost
PM080Start project
PM100Entry
order clarified
PM200Approval of
detailedplanning
Projectacquisition
Bidpreparation
Contractnegotiation
Projecthandover
Projectopening and
clarification
Detailedplanning
RPH View
Evaluateexpectedbusiness
Set upbid project
Hand overbid to customer
Allocate over-all and com-mercial ProjectManagers
Set up projectorganization incl.roles and respon-sibilities
Determinetechnical basis,solutions andimplementation
of approval
Level 0
Level 1
Level 2
Level 3
to
Level 4
Level n
Analyzeand structurecustomer re-quirements
Analyzecustomer’sbusiness field
Developrough financingconcept
Define bidscope and deter-mine respon-sibilities
Angebots-budgetFreigabeeinholen
Createbid parts
Analyzeand supple-ment riskassessment
Review and
confirmproject classi-fication
Preparebid approval(LOA docu-ments)
Prepareand realizecustomerpresentation
Processcustomerfeedback andchange bid
Developnegotiationstrategy
Organize andconduct contractnegotiations
Obtainapproval forcontractsigning
Updateproject data
Hand overproject docu-mentation
Analyzewon/lostorders
Open aproject accountand projectstructure
Performdetailedsite check
Clarify con-
tract in legaland commercialterms
Create projectstructure andcomplete as-soldcost calculation
Change andclaim strategydocumented
Performdetaileddesign
Create andrelease detailedspecifications
Freeze basicschedule
Completesourcingconcept
Completequality plan,risk analysis
T h e pr o j e c t s t e p s d ef i n
e d b yP M @ S i em en s f or m t h e
b a s i s f or t h el i nk t o t h eR P H
Obtainbid budgetapproval
Pre-acquisition
Perform aprojectassessment(PMA)
Performrough riskassessment
PM010Acquisition
Go/No Go decision
3
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PM300
Dispatchapproval
Manufactureown products
Place orders
Trace/Expeditemanufacture
Perform worksacceptance
PM@Siemens View
PM400
Material andresources at site
PM550
Erectioncompleted
PM600
Commissioning completed
PM650
Provisionalcustomer
acceptance
PM700
Finalcustomer
acceptance
Dispatch Erection
InstallationCommis-sioning
Acceptance Warranty-phase
Enabler
Obtain approvalfor dispatch
Installplant/system
Commissionplant/system
Plan andprepare accep-tance test
Reduceoutstandingpoints
Level 0
Level 1
Level 2
Level 3
to
Level 4
Level n
Purchasing &manufacture
Planand monitordispatch
Organizeinfrastructure(tools, approvalsetc.)
Plan assign-ment of internaland externalresources
Preparecommissioning
Performinternalsystem/planttests
Create finalexecution docu-mentation
Performacceptance test
Createprovisionalcustomer docu-mentation
Create finalcustomer docu-mentation
Archiveproject
Create finalproject report
Dissolveproject organi-zation
Concludewarranty
Request FAC
Riskmanage-ment
Change/claim manage-ment
Qualitymanage-ment
PMAssessment
Scheduling
Cost andassetcontrolling
Request PAC
Hold final
dialog withcustomer
Organize
customertraining
Inspect
dispatch goodsfor damage
RPH View
Projectreporting
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Purchasingand manu-facture
DispatchErection
Installation
Commis-
sioningAcceptance Warranty-
phase
The project phases defined by PM@Siemensform the basis for the link-up to the RPH.
Outlook for further work
In the next steps, the project phase model
will be aligned to the Reference Process
House (CRM, SCM, PLM), in close coordina-
tion with process standardization activities
at CIO. An integrated project view of the
RPH is thus created.
Bidpreparation
Contractnegotiation
Projecthandover
Projectopening andclarification
Detailedplanning
Pre-acquisition
Projectacquisition
Project view RPH
Level 0
Level 1
Level 2
Level 3
Alignment
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Recommendationsof the module:
Recommendation 1:
Introduction of theproject phases using thedescribed milestone system
Recommendation 2:
Introduction of the mandatoryresults for milestones
Recommendation 3:
Introduction of project roles
Recommendation 4:
Introduction of the project steps
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Contract Management
C o n t r a c t
M a n a g e
m e n t
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C M
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Especially in the bid phase, the integration
of the Contract Manager into the organiza-
tion should be close to the operative busi-
ness concerned; however, he/she should be
sufficiently independent so as to be
able to bring matters before the relevant
Divisional or Subdivisional management in
the event of any conflicts.
The introduction of the bid/no bid and bid
approval procedure (graded according to
project and risk categories) is still recom-
mended as an important precondition for im-
plementing the Contract Management con-
cept in the Groups. For the highest risk
categories, Group Executive Management
must be consulted.
Using this structured approach, non-confor-
mance costs (liquidated damages, additional
costs) can be reduced significantly, thereby
achieving a sustained improvement in pro-
ject results. Further considerable savings
can be achieved by way of a more focused
project selection (bid/no bid; improved hit
rate; see recommendation 3).
Introduction/Management Summary
Contract Management plays a crucial role
during order execution but is even more im-
portant in the bidding phase. It begins with
preparation of the bid, proceeds to the stage
where the contract is signed and continuesinto the implementation phase, where the
focus is on Claim and Change Order Manage-
ment.
The Contract Management team of experts
within the context of PM@Siemens recom-
mends that a global concept be implement-
ed for the Siemens Groups as well as for all
project and risk categories throughout theterm of a project. Additionally, there are rec-
ommendations for Contract Management
Tools, Communication & Training, Roll-Out
and Feedback.
In this area, Contract Management provides
expert support in drafting or commenting
on and negotiating the commercial terms &
conditions of a bid, supply and service con-
tracts and also cooperation agreements,
along with support (in terms of contract
law) during the implementation phase.
It is recommended, at least for the highest
risk projects (e.g. A projects), that a full time
Contract Manager be assigned to the Project.
For this purpose, experts must be appointed
and trained in the Groups. Contract Man-
agers perform their duties in close coopera-tion with Legal Services but act neither as le-
gal advisors nor as legal counsel to the
Groups.
Contract Management
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The recommendations issued within the
scope of the PM@Siemens roll-out in March
2001 were revised and adapted by a team of
experts in April 2003. We no longer differen-
tiate between the mandatory and optional
introduction of the individual recommenda-
tions, as all of the recommendations should
be adopted without exception.
Recommendation framework
The recommendation framework developed
by the team of experts consists of the follow-
ing:
A. Concept for Contract Management
B. Standard Contract Management Tools
C. Communication & Training
D. Roll-Out and Feedback
Overview of recommendations
A. Concept for Contract Management
at Siemens1. Independent Contract Management
function
2. Provision of full-time Contract Managers
in the bid and negotiation phases for pro-
jects of the highest project/risk category
3. Documented bid/no bid procedure/
approval for preparing a bid
4. Implementation of a bid approval proce-
dure with project and risk categories uni-
form for all Groups
5. Final bid approval by a Review Board, in
the highest project or risk category jointly
with Group Executive Management
6. Provision of full-time Contract Managers
for the implementation of projects of thehighest project/risk category
B. Standard Contract Management Tools
7. Mandatory observance of “unacceptable
regulations”8. Mandatory specification of a Group policy
for Group projects business
9. Intensive use of available standards and
tools
C. Communication and Training
10. Mandatory training in Contract Law andClaim Management for Sales & Marketing
and Project Management (technical/com-
mercial)
D. Roll-Out and Feedback
11. Continuation of the Siemens Contract
Management Community, which was estab-lished in October 2002
12. Implementation of the recommenda-
tions issued by PM@Siemens in the form of
a defined Group project
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Concept for Contract Management
Standard Contract Management Tools
Communication/Training
Roll-Out/Feedback
11 12
9
1
3
5
10
7 8
2
4
6
Mandatory observance of “unacceptable
regulations”
Mandatory training in Contract Law and Claim Management for Sales & Marketing and
Project Management staff (technical/commercial)
Independent Contract Management
function
Intensive use of available standards
and tools
Mandatory specification of a Group policy
for Group projects business
Continuation of the Siemens Contract
Management Community, established in
October 2002
Implementation of the recommendations
issued by PM@Siemens in the form of a
defined Group project
Documented bid/no bid procedure/approval
for preparing a bid
Final bid approval by a Review Board, inhighest project or risk category jointly with
Group Executive Management
Provision of full-time Contract Managersfor the implementation of projects of the
highest project/risk category
Implementation of a bid approval procedure
with project and risk categories uniform for
all Groups
Provision of full-time Contract Managers in
the bid and negotiation phases for projects
of the highest project/risk category
Contract Management in the
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Contract Management in theproject phases
Business
acquisition
phase
Bid/no biddecision
Bid
phase
Negotiation
phase
Warranty
phase
Project
implementation
Bidapproval
Signingof contract
Provisionalacceptance
Finalacceptance
Contract Management up tocontract signature
a Contract analysis, commenting,
revising of supply and service contracts
and cooperation agreements
a Negotiation support up to final contract
draft and contract signing
a Risk management within the project
team concerning terms and conditions
C o n t r a c t M a n a g e r p r o f i l e
M a i n r e s p o n s i b i l i t i e s
a Commercial and/or contractualbackground
a Experience in sales and/or project
implementation
a Comprehensive know-how in project
business, negotiation skills
a Technical or business administration
background, possibly as quantity
surveyor
a Training and experience in Contract
Law and Claim Management
a Comprehensive know-how in projects
business
Contract Management aftercontract signature
a Contract analysis in terms of oppor-
tunities and risks, claim potential
and the procedures to be applied
a Drafting and controlling of subcon-
tractor agreements
a Analysis of contract and issues for claim
risks and opportunities
a Implementation of the claim concept/
claim strategy in the project
A Concept for Contract Management
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A. Concept for Contract Management
1. Up to contract signature
Recommendation 1:
Independent Contract Manage-ment function
The independent activity of a Contract
Manager covers mainly the project phase up
to the stage where the contract is signed.It is his/her responsibility to provide expert
support in drafting or commenting on and
negotiating the commerical terms and condi-
tions of a bid, supply and service contracts
as well as a cooperation agreement (legal ad-
vice is provided by Legal Services). In this
context, Contract Management plays an im-
portant role in risk management by ensur-
ing that the identified technical, financial,customer and country risks are taken into
account in the contract, and creates the con-
Recommendation 2:
Involvement of full-time ContractManagers in the bid and negotia-tion phases for projects of the high-est project/risk category
At least in the highest project and risk cate-
gory, the function described under Re-
commendation 1 must be performed by a
named full-time Contract Manager appoint-
ed for the project, but Contract Managermay be involved in several projects. In organ-
izational terms the Contract Manager should
be incorporated such that he/she is entitled
or even sometimes in some cases obliged to
bring matters before the relevant Divisional
or Subdivisional general management in the
event of conflict.
tractual basis for Change Order and Claim
Management. Contract Management is also
responsible for ensuring compliance withbusiness principles and procedures in the
bid process, as well as for ensuring involve-
ment of the specialist departments (Legal
Services, VVK etc.), where applicable.
A Contract Manager should have sales &
marketing and project experience, business
administration knowledge, sound experi-
ence in contract law/preparation of
contracts, negotiation skills and a goodknowledge of business principles and
processes.
Recommendation 3:
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On the basis of a Group-specific procedure,
the responsible sales unit submits the pro-
ject using in standardized presentation docu-
ments to the relevant management team for
the latter’s decision in a meeting in which
the management of the necessary specialist
units take part. The Group-specific determi-
nation of the decision-maker level dependson the risk or project category.
Within the context of risk management, this
meeting is very important for identifying
and dealing with opportunities and risks at
an early stage.
Recommendation 3:
Documented bid/no bid proce-dure/approval for preparing a bid
On that basis, the meeting serves to discuss
the bid strategy, the factors involved in suc-
cess and the prospects thereof, the unit’s
own competitive position (if applicable, its
unique characteristics) etc., and the extent
to which the project reflects the core busi-
ness policy of the unit. The budget for prepa-
ration of the bid should also be approved inthis meeting.
In case an addendum is required, it must al-
so be presented to the same decision group.
Depending on the business requirements,
risk categories are identified for the projects.
In particular, the criteria include:
a Business volume and result
a Financial risks (payment, production and
export risks, implementation risk, financ-
ing risk etc.)
a Contractual risks (liability, acceptance,
warranty, liquidated damages for delay
and non-achievement of performance
guarantees, applicable law etc.)
Recommendation 4:
Implementation of a bid approvalprocedure with project and riskcategories uniform for all Groups
a Technical and schedule risks (innovation,
“exotic” solutions, critical performance
guarantees, non-Siemens products etc.)and
a Organizational or process risks (consortial
cooperation, involvement of Regional
Company, internal resources etc.).
For the individual risk categories, the rele-
vant approval processes and decision-
making levels should be defined Group-
specifically.
The bid approval procedure should include
three elements
a Technical LoA
a Commercial LoA
a Cost/price LoA.
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The technical part of the bid is approved by
the responsible technical units in accord-
ance with a stipulated risk classification.
To this end, the technical units must pro-
duce binding commitments, incl. perform-
ance characteristics.
In a parallel process, the units responsiblefor calculating costs submit their binding es-
timates which are taken into consideration
in the total cost and price calculation.
The essential contractual contents (liability,
warranty, liquidated damages etc.) are also
to be approved in a standardized fashion
that is to say in accordance with Terms &
Conditions. Limits of Authority Guidelines or
corporable procedures issued by the Group
or Division.
Recommendation 5:
Final bid approval by a ReviewBoard, in the highest project or riskcategory jointly with GroupExecutive Management
The Review Board approves the bid on the
basis of a standardized brief project presen-tation which, in addition to pricing/costing,
points out significant technical and contrac-
tual risks as well as other possible frame-
work conditions of importance for the deci-
sion. Approval is given in a meeting, maybe
in a video conference. At least one member
of Group Executive Management and of
management of the sales or business unit
affected must take part in this meeting if thehighest project/risk category is concerned.
At least the manager(s) of the technical
units responsible for significant perform-
ance characteristics and for the scope of sup-
ply and service, the technical and business-administration project management and the
Contract Manager must also attend this
meeting.
Composition of the Review Board can vary,
depending on the project/risk category.
2. After contract signature
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In view of the importance of claim manage-
ment and the effects of any deviations from
a contract, the appointment of a full-time
Contract Manager to assume the aforemen-
tioned duties is recommended in the high-
est project/risk categories. Depending on
project size and complexity, a Contract
Manager may be involved in one or more
projects. For large-scale project business
comprising installation and commissioning,
a Contract Manager is required at the site.
Recommendation 6:
Provision of full-time ContractManagers for the implementationof projects of the highest project/risk category
Proof for defending, incoming claims and ex-
plaining and substantiating outgoing claims
must be recorded.
Consequently, the requirements to be met
by Contract Management during contract im-
plementation differ substantially from those
during the bid phase. In the implementationphase, the main emphasis lies not on draft-
ing the contract and analyzing the risk poten-
tial inherent in the terms and conditions of
request for tender. The primary goal in the
implementation phase is to identify causal
links in such areas as deviations from agreed
deadlines and quantities, obstacles, other
contract problems and the various interfaces
to subcontractors/consortium members. Theskill profile in this phase therefore calls for a
technically trained Claim Manager who not
only knows how to analyze schedules and to
portray complex subject matters briefly and
in a form illustrating causal relationships,
but is also sufficiently experienced in interna-
tional contract law.
From the time the contract is signed, the
main focus of Contract Management lies on
pro-active Claim Management (including
Change Order Management). By analogy
with Contract Management prior to signing
of the contract, Claim Management plays an
important role in risk management as it anal-
yses the opportunities and risks inherent inthe customer contract (including the techni-
cal sections), identifies the potential for
changes and claims and defines the proce-
dural rules that have to be observed. Apart
from that, the second main task of Contract
Management is to support the drafting and
administration of subcontractor agreements,
for the purpose of risk transfer and defend-
ing or enforcing claims.
Contract implementation (customer, consor-
tium and subcontractor agreements), also in-
volves identifying out events relevant to the
contract and assessing them in terms of
claim risks (incoming claims) and claim op-
portunities (outgoing claims). Such inci-
dents must be documented and the conse-
quences thereof (costs and time) note.
B. Standard Contract Management Tools
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make them available to their sales units and
Contract Managers via their Intranet.
We also recommend that Group-specific
tools and regulations be made accessible to
other Groups via a central Intranet platform.
Recommendation 9:
Intensive use of availablestandards and tools
As a central provider for the Groups, Legal
Services (LS) devises and updates both
standard contracts for the Groups as well as
the LS Legal Manual (which is standard
throughout Siemens). In addition, the
Groups can formulate Group-specific stand-
ard contracts in agreement with LS and
Recommendation 8:
Mandatory specification of aGroup policy for Group projectsbusinesss
The Group-specific project policy is defined
in a binding manner by Group Executive
Management. Obligatory elements, key fig-
ures (mandatory) and optional elements for
Recommendation 7:
Mandatory observance of“unacceptable regulations”
“Unacceptable regulations” must be integrat-
ed by each Group into its catalog of criteria,
for the project approval procedure.
the liability concept, warranty, liquidated
damages etc. are defined and specified in
this project policy.
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Recommendation 10:
Mandatory training in ContractLaw and Claim Management forSales & Marketing and ProjectManagement staff (technical/commercial)
We recommend that staff in Sales &
Marketing and Project Management
undergo mandatory modules in order toacquire further knowledge of Contract Law
and Claim Management. For this purpose,
the existing courses offered by LC (Learning
Campus) are being integrated into module 5
“Qualification Programs for Project Manage-
ment” and further developed.
Group-specific training courses (e.g. busi-
ness-oriented Claim Management) shouldbe devised and offered in cooperation with
LC and LS.
Recommendation 11:
Continuation of the SiemensContract Management Communityestablished in October 2002
It is recommended that the existing Siemens
Contract Management Community be con-
tinued within the scope of a PM@Siemens
Community.
D. Roll-Out & Feedback
Recommendation 12:
Implementation of the recom-mendations of PM@Siemens in theform of a defined Group project
Unless already done, it is recommended that
the Contract Management project be de-fined as a Group project in the Divisions and
Regions or Regional Companies, with partic-
ular regard to the organization and process.
Only this way will the relevant modules get
through to the Groups and be uniform.
Implementation should be assisted by a
sponsor in Group Executive Management,
and if applicable by a sponsor at DivisionVice President (Business Administration)
level, as well as by a Contract Management
Community in the Group.
C. Communication &Training
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Project Controlling
C o n t r
o l l i n g
P r o
j e c t
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Project Controlling
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These questions were the key topics in the
Project Controlling module. Project Control-
ling is sufficiently regulated in all Groups.
The standard variables for Project Control-
ling related to the business management da-
ta and risk management are based on CF
specifications for all Groups according to USGAAP (US Generally Accepted Accounting
Principles) and according to the KonTraG law
on risk management.
Other key variables not related to financial
aspects such as
a Technical controlling
a Milestone and project progress
controlling
a Change order and business opportunity
management
a Resource management
a Customer and employee satisfaction
are stipulated in a business-specific manner
in the individual Groups.
Various Good Practices related to these
areas were taken from all Groups and
analyzed by the evaluation team.
Project Controlling is a significant tool for
handling projects successfully. Ultimately,
the success of a project is measured in terms
of profits and customer satisfaction.
a Which key variables must be recorded in
the context of Project Controlling so as to
permit a reliable forecast of the profits atthe end of the project?
a How risks can be determined at the right
time and minimized by taking appropri-
ate action?
a How can Project Controlling, which in-
cludes project reporting, be integrated
uniformly and systematically in the busi-
ness processes of the Groups?
General recommendationsfor successful Project Con-
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In summary, the following recommenda-
tions can be made for successful Project Con-
trolling.
Recommendation 1:
Project-driven organization
for successful Project Controlling
Establish a project-driven organization, and
assign project teams (with clearly defined
authorities and responsibility in the hands of
the Project Manager as entrepreneur).
Modern Project Controlling that points out
problem areas at the right time to its Project
Manager and its own management must beintegrated in a consistent project handling
process that is characterized by a free flow
of communication between the hierarchic
levels concerned. However, Project Control-
ling can contribute to improving the results
of the project only if clearly defined overall
responsibility and authorities are assigned to
the Project Manager. As a result, integration
of projects in a project-driven organization
becomes a matter of course.
Empirical data shows that 60% to 70% of all
non-conformance costs are identified during
the handling of a project, but the causes of
these costs lie in the bid phase of a project.
For this reason, the Project Controlling pro-
cess must be performed continuously, all
the way from the bid through to the end of
all obligations entailed in a project.
Modern Project Controlling supports the
management of risks/opportunities, claims
and change orders as an integral part of the
project process and lies within the Project
Manager’s sphere of responsibility.
Recommendation 2:
Consistent Project Controlling pro-
cess from the bid/no bid decisionthrough to finalization of theproject, in particular integratedrisks, change order/opportunitiesand claim management
Recommendation 3:
Mandatory milestones in the
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Best PracticerecommendationsBest Practice examples of standardized
methods and processes from the Siemens
Groups are available on the homepagehttp://projectmanagement.siemens.com,
under the heading, “Regions/Groups”.
Mandatory milestones in theproject process
Recommendation 4:
Regular management-drivenproject meetings on the basis ofstandardized reporting
Standardized and regular reporting takes
place at Group level; associated controllingparameters are defined in a business-
oriented fashion.
The main tasks of Project Controlling are to
ensure that the project activities of all organi-
zational units involved in the project are
clear, and that support is provided for com-
mercial project processing.
The result-oriented processing of projects
requires current and up-to-date controllingof business administration, technical and
contractual parameters.
The controlling process, in dialog with man-
agement, is supported by standardized
project meetings.
A project must be implemented consistently
in accordance with defined rules and deci-
sion levels as early as in the bid phase. Man-
datory milestones and associated documen-
tation of the results have thus been
introduced as a basis.
The milestones of the project process are de-
fined in module 1 (Organization and Process-
es). In the project process, the mandatory
milestones play an important role in the
success of project activities.
Best Practice examples of standard-ized methods and processes from theSi G il bl th
Best Practice recommendations:
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TS info onproject reporting:
http://topplus-in.ts.siemens.de/controlling/controlling.cfm
SD info onproject reporting:
http://intranet.sd.siemens.com/Arbeitsmittel/Projektmanagement/
PM_SD/PMSiemensDematic.jsp (--> Project Controlling)
PTD info on
project reporting:
ICM N info onproject reporting:
https://mchh9w1a.mchh.siemens.de (à PCS)
ICN info onproject reporting:
http://intranet.icn.siemens.de/scb/pmn/ (à Project Controlling)
I&S info on
Claim Management:
http://fpinfo.erlm.siemens.de/atd/gemeinsam/cm/de/pm/rl/
SBS info onrisk management:
http://risk-management.sbs.de/html/index.asp
http://regiond.sbs.de/commerce/risk.htm
PG W info on planningand reporting:
http://www-i1.kwu.erl.siemens.de/f/w5/de/
Platohandbuch_Entwurf.ppt
http://info.ev.siemens.de/ev_ga/pm-ptd/de/Quellen/home-quellen-tools-
vorlagen_scorecards.htm?PIdent=1144&SIdent=1150&TIdent=1151
Siemens Groups are available on thehomepage.
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Personnel Management
M a n a g e m e n t
P e r s o n n e l
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Personnel Management
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But what does the term “project
entrepreneurship” mean? What tangible
results in this area are already available in
Siemens AG? And which of these solutions
can be recommended for implementation in
all Groups?
In order to answer these questions, the
panel of experts on Personnel Management
focused on three main areas:
“A project should be managed like a
company” – this guiding principle defined
by the Corporate Executive Committee has
a very decisive influence on the entire
PM@Siemens Initiative, particularly on Per-
sonnel Management.
A c t i o n s
O b j e c
t i v e
Project Manager as entrepreneur
Reward &
recognition
PM Training and Qualification
Letter of Empowerment
Target Agreements
Salaryand
Project Incentives
PM Career Model
Adequate Placement
Responsibility
Delegating and
Assuming
Empowerment
Ensuring
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Recommendation 1:
Introduction of PM Career Model
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Management of B/C projects
Management of A projects,large-scale projects,
general contractor projects
Management ofC projects
Project assignmentTeam leadershipChange of tasksor functions
M a n a g e m e n t l e v e l s
( w i t h p r o f i t / l o s s
r e s p o n s i b i l i t y )
T e c h
n i c a l l e v e l s
( w i t h o u t p r o f i t / l o s s
r e s p
o n s i b i l i t y )
Approximately1–2* years professional
experience
Approximately2–3* years professional
experience
*Guide values
Qualification levelswith confirmation
Project Director (PDir)Cross-Group or
external certification
Basic training
Embarkingon processing/assembly/commissioning/engineeringor sales
Project categories
Senior Project Manager (SPM)Internal certification
at Group level
Project Manager (PM)Internal certification
at Divisional level
Personnel development in projectmanagement
Personnel development in project manage-
ment is divided into two main levels: the
technical level without profit/loss responsibil-
ity and, based on this, the three manage-
ment levels with profit/loss responsibility.Embarking on a career in project manage-
ment calls for 2–3 years experience in a tech-
nical field or in sales. The next 1–2 year
stage includes project work with a variety of
tasks. Throughout these years, the would-be
PM receives basic project manager training
(PM4) and qualifies as a future Project Man-
ager by assuming the role of a technical
team leader.
The essence of the management levels is
based upon responsibility for results. The dif-
ferentiation stems from the entrepreneurial
leadership of projects in the three categories,
A, B and C. For each of the three manage-
ment levels, requirements profiles (see
graphics) have been drawn up as a qualifica-
tion guide. These profiles contain a descrip-
tion with examples of the areas of responsi-
bility involved in project management and
the relevant knowledge, experience and
skills expected in the Siemens competence
model.
Requirements profilesfor project management
*Recommendation
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*Recommendation
* Group-specific adaptation necessary
** supporting qualification through the PM4 to PM1
modules provided by the PM@Siemens Academy
Job profile
Project Manager
Job profile
Senior Project Manager
Job profile
Project Director
Project
categoryC B A
Areas of
responsibility
Responsibility for results, customer, partner, finance and employee management,
business development in the ongoing project, proposal management, contactmanagement, planning, Project Controlling and reporting, risk management, project
completion, corporate networking, personal development
PM3** PM2** PM1**
≥ 1 year responsible workin projects,
≥ 1 year technical
responsibility for employees
≥ 2 years responsibleleadership of C projects
≥ 2 years leadership of
project teams
≥ 6 years responsibleleadership of B projects
≥ 6 years leadership of
project teams
Knowledge Methods/tools: Project, contract, claim and risk management (etc.)
Expertise: Procedures and practice in the context of projects, contract and labor law,
Group-specific languages, knowledge of sectors and customers
Experiences
Skills Assertiveness – motivation and inspiration – organization and quality orientation –
results orientation – customer focus – decision-making – communication skills
The career model enables a candidate inter-
ested in a PM career to align his/her profes-
sional ideas to the expertise and responsibili-
ties shown in the development roadmap,
and thus provides him/her with a guide for
his/her professional development.
It also provides the decisive reference param-
eter for an ongoing status determination,
for future assignments and also for systemat-
ic qualification planning. Project success de-
pends heavily on the selection of a well-
qualified Project Manager. The career modelcreates the clarity necessary for efficient re-
source management.
Certification ofProject Managers
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Internal certification at Siemens is proof of a
Project Manager’s competence and profes-
sionalism. A voluntary procedure, it takes
place at the end of the competence manage-
ment and PM qualification process and
lies within the responsibility of individual
Siemens Groups.
The aim of certification is to review project
management (PM) expertise on the basis of
the job profile of the appropriate level and al-
location to the Project Manager, Senior
Project Manager and Project Director levels.
Required and existing skills of a Project
Manager as well as the PM levels Project
Manager, Senior Project Manager and
Project Director should be rated by a superi-or preferably within the staff dialogue
process. The SPM and PDir levels might be
additionally dealt with at a staff dialogue
round table as a best practice (as per the
EFA process).
Essentially, for an assessment of a Project
Manager’s competence and professionalism,
project experience defined in the require-ments profile will be decisive. This project ex-
perience is shaped by the relevant project as-
signments which have been completed. The
target agreement (see recommendation 3)
and project outcome will be compared to
ensure continuous evidence of successful
leadership of A, B and C projects and hence
of maintaining a Project Manager’s quality
standard.
A PM’s technical knowledge is verified by
way of a qualification certificate from the
PM@Siemens Academy, issued after the
Project Manager’s participation in the Learn-
ing Programs 4–1 or his/her attendance at
selected seminars from the curriculum, in
addition to a successful knowledge test
(optional). At the Project Practitioner (PP)
level, competence is established withoutcertification.
The 5 modules of the staff dialogue are well
suited to bring in the previous PM experi-
ence, to receive feedback regarding person-
al performance and to discuss specific meas-
ures for the future PM career. Additional
documents may be helpful here, such as a
technical CV, a project list, project report etc.
The superior checks whether all conditions
are met for a certificate to be issued.
The PM@Siemens Certification
Process
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Group
Competenceanalysis,
qualificationrequirementsin staff dialogue(EFA)
Gaining experiencein projects inaccordance withthe PM@Siemens job profile
Inpute.g. and/or
a Qualification
certificatea Proof of experience
through technical CVand project list
a Project report orproject study
Output:
a Documentation
in the appropriate HR tool
Verification of thequalification level
within staff dia-logue (roundtable)EFA/Assessment
PM@SiemensAcademy
Qualification
a PM LearningProgram
a PM@SiemensCurriculum(selected
seminars) +knowledge test(optional)
CertificationHandover of
certificate
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Once the scope of the PM’s experience and
responsibility, along with the skills relevant
for project management (in accordance withthe Siemens competence model) have been
confirmed at the appropriate level and it has
been verified that the Project Manager also
possesses the required technical knowledge,
the Siemens certificate is issued and present-
ed to the Project Manager.
Group-specific solutions (such as assess-
ment procedures or self-assessments forstaff dialogue/EFA preparation, or individual
determining of qualification requirements)
remain.
Experts for the certification ofProject Directors
The certification process for Project Directors
is supported by a team of qualified Project Di-
rectors who act as cross-Group experts. They
provide advice to managers in the context of
certification. Their statements are included
in the staff dialogue/EFA process, if required.
The aim of involving these experts is to im-
prove the quality and standardized nature of
the Project Director certification process
throughout Siemens. In addition, the ex-
perts promote an exchange of technical is-
sues between the Groups and reinforce the
common project management culture. They
meet once or twice yearly to exchangeviews and prepare procedures for Siemens
as a whole.
They must be qualified as follows:
a Broad project experience (PDir or superior
responsible for Project Managers)
a Management experience
a Social skills
a Communicative competence
a Seniority
Project managers are Siemensmanagers
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Project managers think and act as entrepre-
neurs and with that assume the commensu-
rate responsibility. On this basis, both line
managers and Project Managers are on a par;
the Project Manager career is thus a part of
a management development landscape.
As before, a Project Manager can change to
line management; however, he/she shouldnot do this for career reasons alone.
New additional structure of project
management functions
Once he/she takes over a project, the Project
Manager bears responsibility for leading the
project staff; he/she is authorized to make
decisions within the scope of competencies
allocated to him/her (see Letter of Empower-
ment). With the management of projects
comes recognition of services, through an
appropriate distinguished status in the or-ganization as well as in the form of ade-
quate income.
Management development roadmap
R e s p
o n s i b i l i t y / q u a l i f i c a t i o n l e v e l
Division Manager President
Subdiv. Manager Vice President
Segment Manager Director
Department
Manager
Senior Manager
Management ofprograms
(cross-process
general management)
ProgramDirector
D e f i n e d v i a M P M @ S i e m e
n s Management of A
projects
Project
Director
Management of B/C
projects
Senior Project
Manager
Management of C
projects
Project
Manager
Already performs valid
management functions
Recommendation 2:
Letter of Empowerment
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The Letter of Empowerment assigns respon-
sibility and authorities to the Project Manag-
er and makes them clearly visible in the cor-
porate organization.
The panel of experts recommends inclusion
of the following in the Letter of Empower-
ment:
a Project designation and period of validity
of the Letter of Empowerment
a Assignment of authorities and obligations
for handling of the project in conformity
with the contract (also worded precisely
in the enclosed target agreement)
a Assignment of responsibility for results;
customer and employee satisfaction mustalso be included
a Reference to the valid project manage-
ment method (process manual)
a Provision of resources by the responsible
and supporting offices (if required, en-
close as appendix)
a Right and duty to submit reports (regular
controlling, special incidents)
Recommendation 3:
Target Agreement
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Recommendation 4:
Incorporation of project targets inthe annual bonus and individual
special payments
In Divisions with heterogeneous and com-
plex projects, it is crucial not to define the
targets on the basis of a fixed system but in-
dividually and in a customer/project-related
manner. This is not only important for
achieving business success but also for the
personal further development of the Project
Manager.
The individual special payment method
should be applied in such cases as it allows
you to remunerate the PM for his/her excel-
lent results individually and on a perfor-
mance basis. The amount of special remu-neration must always be agreed with the
Group’s Human Resources office.
Specific target agreements are the basis for
a clear, target-oriented incentive ruling. The
panel of experts recommends that you take
the following criteria into account when de-
fining the content of the target agreements
(project goals):
a EBIT (Economic Value Added)
a Deadlines (milestones)
a New orders and sales (for programs)
a Costs
a Strategic goals (for programs)
a Quality targets
a Customer satisfaction
The target agreement forms part of the staff
dialogue (EFA). The project targets achieved
serve as a basis for a PM’s further develop-
ment (functional level, potential, salary,
SMR) and also for determining variable ele-
ments of salary. In addition, the experts
recommend the use of balanced scorecards
which should also be considered in the staffdialogue (EFA).
The recommended time scale is:
a For programs: fiscal year basis (end-of-
fiscal forecast)
a For projects: completion of the project.
In A projects, control based on Percent-
age of Completion (PoC).
Recommendation 5:
Project incentive system
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Key points of the project incentive system
Project incentive systems are one method of
recognizing the performance of Project Man-
agers as entrepreneurs. The aim of giving
the Project Managers a share in the success
of “their” projects is to continuously improve
project results and to create a link between
performance and recognition of such per-
formance (close to the time it is attained).In addition, incentive systems offer the
Project Managers an attractive way of im-
proving their salaries.
The Personnel Management panel of ex-
perts analyzed Best Practice examples from
the SBS, TS and PTD Groups which were
agreed with the Joint Employees’ Council.
On the basis of the results of this study, the
panel recommends adoption of the key
points specified in the table below in the
context of a Group-specific solution.This provides significant support for the vari-
ous types of business. Experience with exist-
ing incentive systems furthermore shows that
any necessary adaptations of the model to
Group-specific circumstances are made easier.
a Key points of a project incentive system
– On-top solution
– Agreeing an incentive regulation at the beginning of a project
– Assessment criteria: absolute improvement in staff dialogue (EFA) or absolute
improvement of sales margin
– Taking business development and change requests into consideration
– Only customer projects of the categories A, B and C (in systems business)
– Target staff: project management, and, if required, subproject management,without Senior Management (PTD); all staff involved in a project, but not from
other companies (SBS)
– The basis for payment is a percentage of an improvement in the project results
exceeding those targets agreed at the beginning of the project
– Amount of payment depends on number of hours of personal work,
with reduction for any quality deficits (SBS)
– Fixing upper limits, for instance via percentage of annual salary
– Accounting/payment time with milestone reference
a Motivation for ensuring project success can be achieved through:
– Clear presentation of targets
– Clearly defined measurement criteria (key financial figures in the project)
– Immediate share in the success of the project on the basis of an agreement
a The content of the project incentive systems must clearly reflect the type of business,
hence the recommendation to devise Group-specific solutions
a PTD, SBS and TS can be contacted for Best Practice examples
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Qualification
Q
u a l i f i c a t i o n
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Qualification
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PM@Siemens Initiative and is controlled by
representatives of the Groups and the
Learning Campus. The Academy’s work is
described in Rules of internal Procedure.
As the Siemens know-how center for project
management qualification and coaching,
the PM@Siemens Academy has the task of
enhancing project management and of en-suring that project management standards
are put into practice throughout Siemens via
appropriate qualification programs. The
PM@Siemens Academy supports shorter
innovation cycles, ensures a standard level
of training quality throughout Siemens and
thus sharpens Siemens' competitive edge.
“Training costs less than having to learn the
hard way in a project”. Here at the Academy
we ensure that you are trained well.
We incorporate Best Practices into all our
training programs. We hope to see more of
you and your team members at the
Academy in the future.”
Quote from the presentation given byProf. Krubasik at the PM@Siemens Initiative
forum on November 22, 2002.
PM@Siemens Academy
In addition to the technological expertise of