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Calculating PM’s ROICalculating PM’s ROI
元智大學 資訊管理學系 第二組
941617 黃若靜 941619 蔣榆君 941629 范文婷 941649 游馥慈941656 鄭文雅 941658 鄭詩樺941707 蘇峻德 941725 劉得準
指導教授:吳思佩 老師
Abstract
• PM benchmarking procedure• 5-level Berkeley PM process maturity
941656 鄭文雅
Research Methodology
• PM processes & PM Knowledge Areas
941656 鄭文雅
Research Hypothesis
• Berkeley PM Process Maturity Model
變形蟲時期
計畫時期
管理時期
整合時期
持續時期
941649 游馥慈
Level 1 Ad-hoc Stage
• No formal procedures or plans to execute a project
• Processes are unpredictable and poorly controlled
• PM-related data collection and analysis are not conducted in a systematic manner
941649 游馥慈
Level 2 Planned Stage• Informal and incomplete processes are used
to manage a project
• Processes are partially recognized and controlled by project managers
• PM-related data collection and analysis are informally conducted but not documented
• Strength is in doing similar and repeatable work
941649 游馥慈
Level 3 Managed Stage• Processes become more robust and
demonstrate both systematic planning and control characteristic
• PM-related data are collected across the organization for project planning and control
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Level 4 Integrated Stage• Organization can plan ,manage ,integrate ,and control multiple projects efficiently
• Processes are formal, with information and processes being documented
• Data are standardized, collected, and stored in a database to evaluate and analyze the process effectively
941649 游馥慈
Level 5 Sustained Stage• Continuously improve their PM processes
using
• PM data are collected automatically to identify the weakest process elements
• Innovative ideas are also vigorously pursued, tested, and organized to improve processes
941649 游馥慈
Research Hypothesis
• Berkeley PM Process Maturity Model
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Benchmarking Tool
• Develop a rigorous and comprehensive PM benchmarking methodology
• Benchmarking questionnaire
• Benchmarking methodology (The three-part PM benchmarking tool )
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The three-part PM benchmarking tool• Part1:included organizational information
such as its size, product focus, and years of PM practice.
• Part2: consisted of 148 multiple-choice questions.
• Part3:Project cost and schedule data collected
941707 蘇峻德
Example of Part 2 Multiple-Choice Process Maturity Questions
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Benchmarking Overall PM Maturity
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PM Maturity of the Six Processes
PM Processes E-C IMM IS HTM All Companies
Initiating Maturity
3.6 3.3 3.6 3.6 3.4
Planning Maturity
3.6 3.5 3.4 3.6 3.5
Executing Maturity
3.3 3.3 2.9 3.3 3.2
Controlling Maturity
3.6 3.3 3.0 3.3 3.3
Closing Maturity 3.3 3.4 2.9 3.1 3.2Project-driven Org Environment Maturity
3.1 3.0 2.7 3.3 3.0
Overall Average PM Processes Maturity
3.4 3.3 3.1 3.3 3.3941707 蘇峻德
Performance Definition
• Project cost is divided into two parts : direct and indirect costs.– Direct
• cost of resources required to conduct a project
– Indirect• amortization of the overhead costs associated
with completing a project
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•Original budget and actual cost was used to calculate the cost index (CI)
•Note that!– CI≠CPI– SI≠SPI
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Performance Definition ( cont.)
• Not all 38 participating organizations provided useful project performance data– treat it confidential– do not collect and store schedule and cost
information in the form that was requested for this study
– do not maintain an archive for such information
• The small sample size impeded the data analysis
941617 黃若靜
Performance Definition ( cont.)
Bias
• Companies maybe select projects that reflect well on their performance
• Stressed to these companies that the study would only be as good as the data that they provided
• We believe that the data provided is good data
941617 黃若靜
Regression Analysis
• Best-fit line
• Functions linear, logarithmic, power, and exponential
• R2
0.00≦R2 1.00≦
941617 黃若靜
PM Maturity V.S. CI and V.S. SI
941658 鄭詩樺
PM Maturity V.S. CI and V.S. SI ( cont.)
941658 鄭詩樺
• There are some positive tendencies between higher PM maturity levels and better CI or better SI.
• Higher levels of PM maturity are associated with better cost and schedule performance on projects.
• The nonlinearity of the functions indicates that there are diminishing returns on higher levels of PM maturity.
• After exclude two outliers -Figure 4. still nonlinear and downward. -Figure 5. leads to regression fit that essentially
overlaps the horizontal axis of the figure. 941658 鄭詩樺
PM Maturity V.S. CI and V.S. SI ( cont.)
PM/ROI Calculation
• 1. First identifies CI current 、 P% current 、 PM
maturity.• 2. Select a target PM maturity level.• 3. Identify what CI forecast might be realized.• 4. Calculate a new estimated project profit
return.
P% predicted =
CI current x P% current
CI forecast
941619 蔣榆君
PM/ROI Calculation ( cont.)
Figure.Figure. CI Versus Project Profit(%) CI Versus Project Profit(%)
941619 蔣榆君
PM/ROI Calculation ( cont.)• 5. Forecast the annual PM/ROI.
• Time driven vs. Cost driven
PM/ROI =
(P% predicted – P% current) x Annual Project Revenues
Annualized PM Expenditures
941619 蔣榆君
A Case Study for PM/ROI Calculations
941725 劉得準
Case Study
•This section provides a step-by-step scenario for calculating an order-of-magnitude PM/ROI estimate
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•The PM/ROI realized by upgrading from PM current to PM desired is shown in Equation 6.
Equation 6
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Case Study ( cont.)
• As a starting point, the following checklist is suggested for the types of costs that might be included in such a computation:– Salaries and benefits of PM personnel– PM consultant expenses– PM systems, procedures, and tools on an
annualized basis– Computer hardware and software acquisition,
maintenance and upgrade costs on an annualized basis
– Support staff, such as clerical, administrative, and technical personnel
– PM training on an annualized basis, whether provided by in -house staff or consultants
941725 劉得準
– Certification expenses, such as PMP® and ISO– Recruitment and hiring expenses– Travel, meeting, and coordination expenses
–Supplies and material costs – Rent and other facility management expenses – Telephone, fax, and networking expenses – Moving and storage costs and temporary office
expenses – Utility expenses
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Caveats
• Profit and profit margins are difficult to associate with project-related operations for many organizations.
• Annualized PM expenditures are difficult to calculate
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•Another caveat is what is meant by the definition of “profit.”
•Any PM/ROI computations should reflect that management may be just as concerned about cost savings as profit generation.
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Caveats ( cont.)
•A focus on the project’s CI use its budget, as was the case in this study may really be secondary
•Using the CI as a measure for the ROI on a project is not always the best measure, but there was no other option in the case of this research project
941725 劉得準
Conclusions
• Insufficiencies with this study : → Small sample size → Lack of statistically significant results
• View this study positively and as a step toward better understanding PM’s value.
941629 范文婷
Research has found that:• The Quantitative PM Maturity Process Benchmarking
Model that was developed for this study works. → provides a means for identifying and
measuring different PM maturity levels.
• An organization’s PM maturity level and actual project cost and schedule performance data were correlated based on the collected information from participating companies.
• These relationships can be used to predict a PM/ROI that is characteristic to the individual organization.
941629 范文婷
Recommendations
• An impartial organization should conduct this benchmarking, so that the PM/ROI and other important data can be reported to the PM community at large.
• An “Excellence in Project Management Practices Award” should be established and awarded on an annual basis.
941629 范文婷
Q&A
Thanks For Your Listening☺