FINANCIALLY CHALLENGED PROJECTSPROJECTS

MANAGINGfinancially challenged projects using Agile project management. Is Agile project management the panacea to handling financially challenged projects? What do you do when project funding dries-up?

Our discussion this week focusses on projects which are financially constrained and challenged. Projects which become orphaned along the way as a result of no funding availability. Projects which become abandoned and no one claims ownership.

What is a financially constrained project? A financially constrained project has various limitations and risks that need to be taken into account and addressed to ensure the project’s ultimate success. Financial risks need to be proactively management and contingencies built in the project budget so as to mitigate the effects should financial resources become unavailable.

What are challenged projects? Completed and approved projects which are late, over budget, and have fewer features and functions than originally specified. The degree of challenge depends on the way constraints are applied and interpreted within the organisation. Others include partially successful completed and approved projects which are late, over budget, and have fewer features and functions than originally specified. The degree of challenge depends on the way constraints are applied and interpreted within the organisation and the priorities and tolerance available in any particular area.

This is indeed a daunting task for project managers to salvage projects which are subjected to financial underfunding. Of course one way of dealing with this risk and issue is to de-scope the project and execute only the deliverables which can be funded by available funds. The project approach should be able to take into consideration the project high financial funding risks from past lessons and mitigate that by recommending Agile project management approach. This is really where the concept of agile ways of project delivery would help deliver value. An Agile project approach involves delivering project deliverable incrementally and delivering value. Agile uses a product and sprint backlog. A backlog is simply a list of prioritised features or requirements and functions the project is envisaged to deliver.

Each feature would then have an assigned value on the premise that not every project feature has the same value in the eyes of key stakeholders, and in this case the customer who is the ultimate user of the project benefits derived from the project.

One of the techniques we use in the prioritization of project features is abbreviated and known as MoSCoW. ( This name has nothing to do with the capital city of Russia). Where M stands for features which are Must have’s (It is essential to have), S stands for project features which the project Should have (Meaning it is important to have), C stands for Could have (Meaning it is nice to have) and lastly W stands for Won’t have for now. This technique is used in PRINCE2® project management methodology. A simple example to illustrate this would be for example a project to deliver a family house: Foundation – M, Roof trusses – M, Roofing sheets – M, Windows – S, Swimming pool – C, Landscaping – C, Wall fence – C, Approach road

– W. This technique works better when done in collaboration with project key stakeholders and amongst them is a customer or final product user. The project team in consultation with key stakeholders can elevate or degrade a priority of a feature depending on circumstances obtaining at the time during the project. A project would be deemed as delivered successful if all the M, and S are delivered, therefore it is important to keep a good balance between M’s and S’.

What does the above techniques have to do with project funding risks and issues? Well the prioritisation technique can help in project de-scoping. This means that we can de-scope all C’s for example. If project funding is very small, we can degrade some S’s to C’s and de-scope the project so that with available funding we can still deliver all project M’s. Project manager and architect should also ensure that dependencies are resolved before the delivery of the features.

Agile project management uses this technique when de-scoping the project and also ensuring that during project execution we keep delivering value as opposed to outputs. Contractor’s contracts are also tied to value delivered. The project would survive funding dry spells if Agile is used because delivery of deliverables would be tied to high value prioritised features delivering value. The value derived from the features delivered can also be used to fund later stages of the project thereby realizing a project self-funding ecosystem. Estate developers are already using agile approach where they develop a block of flats, put them on rent, and use the rental revenue to fund the development of other blocks of flats in the same project.

Final thoughts: Agile project delivery considers prioritized de-scoping with the view that it is better to deliver few deliverables of high quality and value than to deliver everything of poor quality. However project de-scoping may have implications on contractors whose contracts are based on fixed terms and pricing. This will mean that they will have to make changes to the contract and thus may not always be possible under certain circumstances. A solution to this predicament would be to build

and structure supplier contracts in this context to be agile friendly and allow project de-scoping and tie supplier payment to value delivered rather than just outputs.

This article was written by Dr Laban Mwansa, MSP®, PMP®, PRINCE2® Practitioner, Agile®, Laban is a consultant and trainer in project management and specifically trainer/coach in PMP®, PRINCE2® Practitioner, and PRINCE2 Agile® in Zambia, South Africa and Europe for many years. He was in the executive committee of ICTAZ as technical chair. He is also the managing partner of Betaways Innovation Systems and can be reached at: Laban. Mwansa@ betaways- innovations.com, +260975280392 or WhatsApp +27817029669. He is also a professional member of PMSA and PMI-USA.

Agile project management uses this technique when de- scoping the project and also ensuring that during project execution we keep delivering value as opposed to outputs. Contractor’s contracts are also tied to value delivered.