The company has more than 150 project management roles supporting numerous program initiatives around the world. These individuals represent the backbone of the client’s business as they strive to deliver the highest quality products and services to their valued customers. The nature of the client’s projects demands strict on-time delivery, and careful attention to budgetary parameters.

Project Solutions Group was engaged by the client as an unbiased third-party expert to conduct a program assessment of a multimillion-dollar program. It was obvious to internal program managers that the program was seriously behind schedule and significantly over budget. Management had mandated that a recovery plan be developed and implemented to ensure that the program was completed profitably. The client looked to Project Solutions Group to conduct a detailed program assessment, defining and documenting the current state of the program, including current risks and underlying sources of risk, and to develop a recovery strategy and plan.

Why Project Solutions Group? 

Project Solutions Group has a proven methodology that identifies project gaps and provides immediate resolution. Our Certified Project Management Professionals (PMPs) have developed specific tools that can be universally applied to expedite the recovery of issue-laden projects. From the client’s perspective, bringing in objective experts to assist in increasing the efficiency of one of their programs would help that program proceed more smoothly and be completed successfully. Project Solutions Group’s track record for successfully auditing and recovering troubled large-scale programs, while at the same time transferring vital knowledge and skills to our clients’ internal resources, was extremely important. The client wanted to ensure that their resources were sufficiently skilled to avoid similar pitfalls on future programs.

The Pain:
 

At a mid-program executive management review meeting, the program manager alerted the executive team that the program was severely behind schedule and over budget, and therefore it was going to come in at a loss. At the scheduled halfway point, management realized they were already 66 percent behind schedule. Because the program had been bid to the customer as a firm fixed-price engagement, over budget meant lower margins. On top of everything else, they had no mechanism for forecasting how much over budget, and subsequently how low the margins would be in the end. Management gave the program manager six weeks to come up with a plan to recover the program and make it profitable.

Some of the specific pains the program managers faced included:

• Lack of firm, technical requirements between the client and their customer. This led to ongoing disputes and strain between the two parties regarding whether technical demands were within the agreed-upon project scope.
  
• The schedule was based on a chronological calendar, rather than on actual work performed. This made it impossible to predict the impact that slippage of specific tasks would have on the future schedule.
  
• They were not using a single tool for capturing project data on costs, schedule, resources and scope. Therefore, they were not able to accurately measure project performance, nor were they able to forecast resource needs for staffing purposes.
  
• They had already missed $40 million in milestone payments as a result of schedule slippage and failing to produce deliverables on predefined dates. Additionally, they had lost $2 million in discounted cash flows associated with missing these milestone payments.
  
• Neither the budget nor the schedule had any risk management plan or contingency built in. So as the project continually slipped, there was no mechanism in place to buffer the effect of those slips and to help the project team to get the project back on track.
  
• In order to win the business, the client’s management had unilaterally cut the original project cost estimates by 10 percent before the project even began. Right from the outset, the scope of the program was not in line with the budgeted costs.
  
• According to the contract with the customer, the client was working under a firm, fixed-price contract. However, their subcontractors were all working under time-and-materials contracts. Additionally, poor schedule management forced the client to award contracts without going through a competitive bid process. This situation imposed two added elements of risk that significantly challenged the client program managers.

Goals and Expectations:

The program manager was still managing the ongoing program, so he engaged Project Solutions Group and charged us with developing and managing a recovery plan that would bring it back to profitability. The following goals and expectations were established:

Step 1: Conduct a project audit. We were expected to gain a deep understanding of all the problems, issues and risks, and to document our findings.

Step 2: Identify the magnitude of the cost and schedule overruns, and to pinpoint the drivers of the overruns.

Step 3: Develop a set of recommendations and next steps for the recovery of the program. Specifically, we were expected to recommend ways to create efficiencies that would result in cost and schedule savings.

Step 4: Facilitate the program team through a re-planning effort including: re-baselining the program based on actual data to date; revising estimates to complete and implementing the use of a single tool to estimate scope, cost and schedule performance.

The Solution:

In order to successfully achieve these goals and expectations, Project Solutions Group provided the client with a small consulting team that possessed extensive project management experience, specifically in auditing and recovering large-scale programs, as well as with other programs involving the defense industry. The Project Solutions Group team completed the following activities and provided the deliverables described below:

• We conducted an extensive program audit and documented all of our findings in a document. Specifically highlighted were the problematic areas of the program and those causing the greatest risk.
  
• We then used that data to develop a recovery plan. This plan was the blueprint used by the program manager in his follow-up presentation to the executive management team.
  
• Due to the positive response the Project Solutions Group team received from management and the program team, as well as internal resource constraints, the client requested that Project Solutions Group facilitate the re-planning and re-baselining effort as outlined in the recovery plan. We then created a performance management baseline for the program, allowing performance metrics to be measured.
  
• Subsequent to the re-planning and re-baselining activities, Project Solutions Group conducted program-specific, on-the-job training on project management processes, tools and techniques for various groups within the program team as needed.
  
• Additionally, we reconfigured Microsoft Project 2000 to meet the custom needs of the program team, and we also developed a tool for requirements traceability.

The Results:

Project Solutions Group had developed a plan that would save the program over $8 million by establishing a requirements baseline with traceability between requirements and the scope of work. Results of the project are summarized below:

• The client has an improved relationship with the customer because program requirements have been clarified and agreement has been reached on a number of them. This has reduced some of the conflicts between themselves and the customer.
  
• Through training and facilitated planning efforts, the entire program team is now using consistent techniques, tools and methodologies in managing the program, which has led to enormous gains in efficiency.
  
• They can now accurately forecast what their resource requirements will be over the remainder of the program.
  
• They have created an accurate schedule with real dates and milestones. Now they can accurately plan and work backwards to submit RFPs for subcontracted pieces of work that will provide competitive bids and thus lower subcontracted costs. They also can now show actual progress against the schedule.
  
• They now have one single repository/tool that allows them to track, measure, forecast and analyze project performance, and simulate the impact of changes to the baseline.
  
• Most importantly, they can now meet all milestone payments, which translate into a reduction of losses, and overall program profitability.