Wednesday, March 28, 2018

Risk Management in Projects

In projects, things often pan out differently than expected. Sometimes the unexpected works in favor of the project team but often the opposite is the case. To anticipate these events or keep them in check a proactive stance is needed. Risk management refers to the universe of activities and measures aimed at dealing with risks in order to keep a project under control.

What is Risk? 
Risk is defined as "The possibility of suffering harm or loss; danger." Even if we're not familiar with the formal definition, most of us have an innate sense of risk. We are aware of the potential dangers that permeate even simple daily activities, from getting injured when crossing the street to having a heart attack because our cholesterol level is too high. Although we prefer not to dwell on the myriad of hazards that surround us, these risks shape many of our behaviors. Experience (or a parent) has taught us to look both ways before stepping off the curb and most of us at least think twice before ordering a steak. Indeed, we manage personal risks every day.

Risk management helps the uninterrupted flow of activities in a project by hedging against undesirable events. This in turn creates confidence in the project, in third parties affected by the project and in the project team itself. Risk management activities require information; therefore they promote communication within the project and improve effectiveness of team efforts. Finally, risk management improves decision making in the project.


There are two types of unexpected events in the course of a project

  • Known risks: these are identified potential problems such as the possibility of a strike when labor contracts expire. The exact consequences are unknown but the potential to harm project outcomes is evident.
  • Unknown risks: these are problems arising unexpectedly but seasoned project managers do expect them.

Risk Management Techniques
  • Identify Weaknesses: Risk analysis begins with identifying all potential weaknesses. Weaknesses are internal. One example is a product or service that does not meet the needs of the customer. Other examples include staffing shortages, unreliable employees and ineffective leadership. After an organization examines these and other areas for potential weaknesses, it can examine more closely different parts of the organization such as systems, finances, and human resources . Communication with other people may also bring to light some potential weaknesses within the organization.

  • Identify Threats : Threats are external factors that can negatively affect an organization. Identify all potential threats by looking into the parent company, the organization itself and the industry. Determine how threatening each could be to the organization and how vulnerable the organization is to an attack from competitors. Other examples of external threats include natural disasters, war, disclosure, hackers, theft, errors in data entry and changes in the economy.
  • Estimate Risks : After each threat and weakness has been identified, the next step is to determine how damaging they are or could be. These threats and weaknesses may or may not negatively impact the organization. To calculate the value of one of these risks, take the probability of the threat taking place and multiply it by the cost of fixing the damage caused by the threat.
  • Manage Risks:  An organization must manage the risks once it knows the value of each risk. To be cost-effective, spend less money eliminating a risk than the amount it would cost to resolve the aftermath if the event occurs. If the event occurs, and it will not cost much to resolve, it may not even be worth the time and money spent eliminating it. Managing risks can be done by using existing assets to improve methods, transfer responsibilities or improve internal controls. In addition, a contingency plan can manage risks by creating a plan that will reduce the effect of the risk, should it occur. Investing in new resources is another way to manage risks.
  • Critical Path : The critical path refers to specific tasks in a project that are necessary for the successful completion of the project. The tasks are displayed in flow chart or diagram along with the amount of time it should take to complete each one. The tasks must be completed in the correct order; if one task does not get complete, it could hold up the entire project and risk missing the completion date. Manage the risk by ensuring the tasks get completed in order and on time, and prepare a contingency plan.


The risk management framework comprises four processes:

  1. Identify risks: Risk management starts with identifying potential problems in the course of the project. Since "all possible problems" can be a large number, it is necessary to prioritize and focus on the most disruptive ones.
  2. Develop response plans: Every risk response attempts to reduce the probability and/or the impact of risks. The outcome of this phase is a risk log. A risk log is the full list of risks the project team will actively manage and the tasks associated with managing each risk.
  3. Establish reserves: Usually a project budget contains some reserves for dealing with risks. With detailed risk planning done, a much more accurate assessment of how much money to allocate for known risks and unknown risks can be done.
  4. Continuous risk management: Continuous risk management is the conscious repetition of risk identification, response development and risk planning. At regular intervals known risks are reassessed and the team searches for new risks

Risk management is not a separate function in the project management process; it complements all management functions: definition, planning and control. The first risks surface in the project definition phase. Tackling risks requires reserves, hence risk management has an important feed into the planning function. The control function tries to keep the project on track, therefore risks that can disrupt the flow of activities are of prime concern.

Despite the benefits of risk management, it is not used in every project. First, the project team may not be familiar with risk management and its associated benefits. Second, some people do not relish acknowledging the existence of risks because of the ostrich mentality. Also some mangers think if risks turn up in their project, it would be considered a sign of their poor management. Third, risk management is costly and its yield is not easy to determine. Fourth, some companies claim they do not have the time and capacity to indulge in risk management.

Ensuring Customer Satisfaction

There are four main questions that your CEO could ask you about a very visible or critical project you may be managing. You better be ready to answer these questions and back them up with proof.

The questions are:

  • Is the project on Budget?
  • Is the project on time?
  • Is the customer satisfied?
  • Is the project going to deliver a usable solution?

Let us discuss the ‘Customer Satisfaction’ issue.

Always Keep the Customer in the communication Loop.

Sometimes we feel that we have to solve problems before we discuss them with the customer. If the solution is easy and quick, that may be the case. But in general, the customer is much happier if they are made aware of issues by you in a timely manner rather than hear about them after the fact (when they are fixed) or through some other channel or when they become critical emergencies.

That does not mean that we should keep the customer informed on each issue, but at least on the issues, they may be sensitive. Always contact the customer with your alternate solutions with merits & de-merits as you perceived. Try to sell the solution you feel the best. But be open to listen to what the customer says. Give him opportunity to suggest an innovative solution.

Be Consistent

The customer sees you as the delivery person and the individual who is responsible for making sure that their million dollars is well spent on the project. You wouldn’t want an erratic or inconsistent individual as your financial planner and I’m certain that the customer doesn’t want that for their project manager either.

Deliver status reports when you say you will. Conduct status meetings regularly, deliver error-free documents, provide accurate project schedules, and always do your best to ensure your team hits the big deadlines. Consistency shows leadership and breeds confidence.

Keep the Project Moving Forward

Make sure everyone knows what they’re responsible for at any given time. They won’t be looking at down time due to uncertainty and your resources will

remain engaged and working on your tasks. Let them know, exactly what is expected from them, when & how (e.g. templates of deliverables).

Likewise, keep on top of the schedule and the resource forecasts so you know when you need to engage new resources to keep the new tasks on target as well. The goal is to not let the project stall. If it stalls for customer funding, you can’t do much about that. But don’t let it stall because of you or your team or lack of resources. Customer satisfaction can drop like a rock in those cases and all momentum can be lost quickly. SAP resources are difficult to get in the market. Plan for the resources in advance.

Monitor Scope Closely

Creeping of scope is the most dangerous factor working against customer satisfaction, timeline as well as budget. Do not allow to creep the scope out of your control. Raise signal whenever you feel that you are loosing control on the scope. In terms of customer satisfaction, it will ensure that the right tasks are getting done in the right timeframe.

Delivering a usable solution

There are four main questions that your CEO could ask you about a very visible or critical project you may be managing. You better be ready to answer these questions and back them up with proof.

The questions are:

  • Is the project on Budget?
  • Is the project on time?
  • Is the customer satisfied?
  • Is the project going to deliver a usable solution?
  • Let us discuss how to deliver a usable solution.

Never Assume the Customer Knows What They Want

We need to satisfy customer, and all we have to do is build to their requirements, right? Wrong! Be sure to ask the right questions up front and don’t be afraid to ask the customer to go back to their end users and SMEs and make sure that they understand what the final solution really needs to be.

The best way to implement ERP is ‘One organization – One way of working’. But over the years, different departments of the customer organization have developed in different directions. They might be using different stand-alone softwares. With introduction of an ERP (e.g. SAP), they need to change their style of working. They may not be ready for the same & the trouble starts. You must be firm on the strategy you decided before starting the project.

Many times though don’t truly know that when the engagement starts. If that is the case, one of two things happens:

It becomes apparent part way through the engagement and then the customer is faced with change orders, a stretched out timeline, budget overruns due to rework, and a lot of frustration for both teams.
It doesn’t become apparent until deployment when the end user finally gets their hands on it and it’s not what everyone dreamed it would be. Sure, you built to the customer specs, but the lasting legacy is that the customer has an unusable solution and the finger often gets pointed at you and the delivery team.
Assemble a Skilled Delivery Team

As with any engagement, the more applicable skills your team has for delivering on the engagement, the better chance you have for success. In case of SAP, it is difficult to get exactly matched skill sets. Try to get external help, if the skills not available with your organization.

Track Requirements

During requirement analysis and Design, map out the customer requirements well and manage those requirements closely. Keep track of where those requirements are implemented in the final solution. Missed requirements mean a solution that doesn’t match your customers documented needs.

Test and Re-Test

Have the customer build their own test cases and also use those during your own system tests prior to UAT along with your own test cases. Make sure the customer has solid, knowledgeable resources engaged for the User Acceptance Testing. Ensure that the end-client gets enough time to complete the UAT.

(UAT) sessions and definitely get their signoff on UAT once it’s completed.

A well-tested system goes along way in ensuring that the delivered system will work for the customer.

Get All Signoffs

Sign-off requirements, prototype design, UAT and all other documents. Do not rush to start next phase of the project unless previous phase is signed off by the customer. Ensure that the signing customer is authorized by their management.

Keeping budget under control

There are four main questions that your CEO could ask you about a very visible or critical project you may be managing. You better be ready to answer these questions and back them up with proof.

The questions are:

  • Is the project on Budget?
  • Is the project on time?
  • Is the customer satisfied?
  • Is the project going to deliver a usable solution?

Keep watch on Scope
Scope of the project is the foundation document of your project. Understand thoroughly the meaning of the scope defined & make it clear before starting the project. Spilling of the scope is the first enemy of your budget.

Forecast resources carefully
Resources are expensive. Decide the skill-set required. Choose the resources carefully. Communicate the deliverables clearly.

Perform Project Budget Analysis on weekly basis
Identifying issues early can help in correcting the issues before they become ‘Problem’.
Inform customer, if necessary.

Applying Critical Chain Project Management to Deliver More Improvements

Critical Chain Project Management Goldratt Theory

Critical Chain Project Management: An Introduction, Part 2 of 2

Introduction to Critical Chain Project Management, Part 1

1 - Project Management Activities

Project Manager of any project has to complete a number of activities during lifetime of the peoject. The subsequent articles give the list of activities - What, how & when.

Phases of Project Lifecycle

  1. Project Initiation
  2. Project Planning
  3. Project Execution
  4. Project Closure

This section is based on

2 - Project Initiation Activities

The following activities must be carried out before project kick-off.

  1. Develop a Business Case
  2. Conduct Feasibility Study
  3. Create Project Charter
  4. Create Job Descriptions
  5. Set up Project Office
  6. Develop Phase Review template

3-Project Planning Activities

Project manager needs to complete the following activities for smooth running of the project.

  1. Project Plan
  2. Resource Plan
  3. Financial Plan
  4. Quality Plan
  5. Risk Plan
  6. Acceptance Plan
  7. Communications Plan
  8. Procurement Plan
  9. Tender Management Process
  10. Statement of Work
  11. Request for Information
  12. Request for Proposal
  13. Supplier Contract

4-Project Plan

What : A Project Plan sets out the phases, activities and tasks needed to deliver a project. The timeframes required to deliver the project, along with the resources and milestones are also shown in the Project Plan. Using this Project Plan Template, you can quickly and easily create a comprehensive Project Management Plan for your project, as it already lists the commonly used tasks needed to complete projects from start to finish.

The Project Plan is the most important document in the project, as it provides the Project Manager with a roadmap ahead, and it tells them during the journey whether they are on-track.

When : A Project Plan is created every time you wish to embark on a new project. A summarized Project Plan is usually created early in the life cycle, with a detailed Project Plan being created later the planning phase. The Project Plan is referred to constantly throughout the project. Every day, the Project Manager will review actual progress against that stated in the Project Plan, to ensure they are still on track. The Project Plan is therefore the most critical tool a Manager can have to successfully deliver projects.

Project Plan should cover

  • Identification of all of the phases, activities and tasks
  • Summing up the effort needed to complete those tasks
  • Documentation all of the project inter-dependencies
  • List of all planning assumptions and constraints
  • Detailed project planning schedule
Project Plan will also help you to:
  • Define the project scope & milestones
  • Identify the Work Breakdown Structure
  • Set and agree the target delivery dates
  • Monitor and control the allocation of resource
  • Report on the progress of the project, to the sponsor

5-Resource Plan

What : A Resource Plan summarizes the level of resources needed to complete a project. A properly documented Resource Plan will specify the exact quantities of labor, equipment and materials needed to complete your project. Resource Planning document also helps you gain approval from your Sponsor, ensuring their buy-in.

When : A Resource Plan is created during the Resource Planning phase of the project. Anyone responsible for Project Resource Management will need to create a comprehensive Resource Plan, to ensure that all of the resources needed to complete the project are identified. By implementing proper Resource Planning practices, it also helps you with budgeting and forecasting project expenditure.

This Resource Planning document should identify the:

  • Types of labor required for the project
  • Roles and key responsibilities for each labor type
  • Number of people required to fill each role
  • Items of equipment to be used and their purposes
  • Types and quantities of equipment needed
  • Total amount of materials needed
Resource Plan document will also help you to:

  • Plan the dates for using or consuming these resources
  • Identify the amount of resource required per project activity
  • Create a detailed resource utilization schedule

6-Financial Plan

What : A Financial Plan identifies the Project Finance (i.e. money) needed to meet specific objectives. The Financial Plan defines all of the various types of expenses that a project will incur (labor, equipment, materials and administration costs) along with an estimation of the value of each expense. The Financial Plan also summarizes the total expense to be incurred across the project and this total expense becomes the project budget. As part of the Financial Planning exercise, a schedule is provided which states the amount of money needed during each stage of the project.

A Financial Plan enables you to set a "budget", against which you measure your expenditure. To deliver you project "within budget", you need to produce the project deliverables at a total cost which does not exceed that stated in the budget.

When : Whenever you need to ask for money, you need a sound Financial Plan showing how it will be consumed. For a Project Manager, getting Project Finance is one of the most critical tasks in the project. Therefore, sound Financial Planning principles must be followed to ensure a positive outcome. A detailed Financial Plan for your project will help you get the Project Finance needed to successfully deliver your project on time.

In Financial Plan you must identify the:

  • Types of labor costs to be incurred during the project
  • Items of equipment needed to deliver the project
  • Various materials needed by the project
  • Unit costs for labor, equipment and materials
  • Other costs types such as administration
  • Amount of contingency needed

You can then use the Financial Plan to create a budget by:
  • Calculating the total cost involved in completing the project
  • Identifying the total cost of each project activity
  • Creating a schedule of expenses

7-Quality Plan

What : A Quality Plan helps you schedule all of the tasks needed to make sure that your project meets the needs of your customer. It comprises two parts; the Quality Assurance Plan lists the independent reviews needed and the Quality Control Plan lists the internal reviews needed to meet your quality targets. By using Quality Assurance and Quality Control techniques, you can create a comprehensive Quality Management Plan for your project.

It will help you to set quality targets for your project to ensure that the deliverables produced, meet the needs of your customer.

When : Creating a Quality Plan is essential if you want to provide the customer with confidence that you will produce a solution that meets their needs. The Quality Plan states everything you’re going to do, to ensure the quality of your solution. The first section defines the Quality targets. The second section sets out a Quality Assurance Plan. And the third section defines a Quality Control Plan. By using Quality Planning document, you can create a Quality Management Plan that gives your customer a high degree of confidence that you will succeed.

You can use Quality Plan to set quality targets by:

  • Identifying the customers requirements
  • Listing the project deliverables to be produced
  • Setting quality criteria for these deliverables
  • Defining quality standards for the deliverables
  • Gaining your customers agreement with the targets set
You can then use Quality Plan to monitor and control quality by:

  • Identifying the quality control tasks needed to control quality
  • Creating a Quality Control Plan, by scheduling the control activities
  • Listing the quality assurance activities required to assure quality
  • Building a Quality Assurance Plan, by creating an activity schedule

Critical Chain Project Management Overview

8-Risk Management Plan

What : A Risk Plan helps you to foresee risks, identify actions to prevent them from occurring and reduce their impact should they eventuate. The Risk Management Plan is created as part of the Risk Planning process. It lists of all foreseeable risks, their ranking and priority, the preventative and contingent actions, along with a process for tracking them. This Risk Plan template will help you perform these steps quickly and easily.

It helps you do this, by giving you a complete risk management plan, showing you how to take action to reduce risk in your project.

When : A Risk Plan should be used anytime that risks need to be carefully managed. For instance, during the start up of a project a Risk Plan is created to identify and manage the risk involved with the project delivery. The Risk Plan is referred to frequently throughout the project, to ensure that all risks are mitigated as quickly as possible. The Risk Plan template helps you identify and manage your risks, boosting your chances of success.

While creating Risk Plan, you should :
  • Identify risks within your project
  • Categorize and prioritize each risk
  • Determine the likelihood of the risks occurring
  • Identify the impact on the project if risk does occur

You can then use this Risk Plan to:

  • Identify preventative actions to prevent the risk from occurring
  • List contingent actions to reduce the impact, should the risk occur
  • Schedule these actions within an acceptable timeframe
  • Monitor the status of each risk throughout the project

Critical Chain Project Management

9-Acceptance Plan

What is an Acceptance Plan? : An Acceptance Plan (also known as an "Acceptance Test Plan") is a schedule of tasks that are required to gain the customer’s acceptance that what you have produced is satisfactory. It is more than just a task list though. An Acceptance Plan is in fact an agreement between you and the customer, stating the acceptance tasks that will be undertaken at the end of the project to get their final approval. The Acceptance Plan includes a list of the deliverable, the acceptance test activities, the criteria and standards to be met, and the plan for their completion.

Creating an Acceptance Plan (or 'Acceptance Test Plan') is an important part of any project, as it allows the customer to accept the deliverable you have produced for them. By creating an Acceptance Plan for your projects, you'll boost your chances of success - as you will constantly produce deliverable which meet your customer’s requirements.

When do to use an Acceptance Plan? : You should create an Acceptance Plan every time you need to produce a set of deliverable that require the customer's approval before completion. If the customer needs to approve anything, then you should agree upfront what actions will be taken to get their approval when the deliverable are complete. By creating an Acceptance Plan at the start of a project, it will save you time and hassle at the end, as the acceptance test actions will already have been pre-completed by the customer.

You can create an Acceptance Plan, by:
  • Identifying the acceptance test methods
  • Allocating acceptance test resources
  • Scheduling acceptance reviews with your customer
  • Gaining your final acceptance of your deliverable.

Acceptance Plan will help you gain acceptance, by:

  • Creating a full list of all project deliverables
  • Listing the criteria for gaining customer acceptance
  • Putting in place, acceptance standards to be met

10-Communications Plan

What is a Communication Plan? : A Communication Plan (or Communications Plan) describes how you intend to communicate the right messages to the right people at the right time. Within a Communication Plan, the communication goals, stakeholders and strategies, activities and timeframes are described. A Communication Plan helps you keep everyone informed so that you can communicate a consistent message to your target audience.

It will also help you create a schedule of communications events to ensure that your stakeholders are always kept properly informed, ensuring their continued buy-in and support.

When to use a Communication Plan?

Whenever you have a variety of staff, external suppliers, customers and stakeholders to communicate with, then you should record your communications formally in a Communication Plan. A clear Communications Plan is vital to the success of an organization. It is also critical to the success of projects, as it ensures that all of the staff and stakeholders are kept properly informed of the progress of a project. The best time to perform Communication Planning is during the start up phase of a project. This will ensure your Communication Plan includes the tasks needed to communicate effectively throughout the entire project life cycle.

You can build your Communication Plan by:

  • Listing your communications stakeholders
  • Defining each stakeholders communication needs
  • Identifying the required communications events
  • Determining the method and frequency of each event
  • Allocating resource to communications events
  • Building a communication event schedule

You can then use this Communication Plan for :

  • Monitoring the communications events completed
  • Gaining feedback on communications events
  • Improving communications processes

11-Procurement Plan

What is a Procurement Plan? : A Procurement Plan defines the products and services that you will obtain from external suppliers. A good Procurement Plan will go one step further by describing the process you will go through to appoint those suppliers contractually. Whether you are embarking on a project procurement or organizational procurement planning exercise, the steps will be the same. First, define the items you need to procure. Next, define the process for acquiring those items. And finally, schedule the timeframes for delivery.

When to use a Procurement Plan? It is advisable to create a Procurement Plan whenever you want to purchase items from suppliers. Using the Procurement Plan, you can define the procurement requirements, identify potential suppliers, contract those suppliers and manage them to ensure delivery. Project Procurement Planning is critical to the success of any project.

While developing Procurement Plan :

  • Define your procurement requirements
  • Identify all of the items you need to procure
  • Create a sound financial justification for procuring them

The procurement plan will help to :

  • List all of the tasks involved in procuring your products
  • Schedule those tasks by allocating timeframes and resources

12-Tender Management Process

What is a Tender Management Process? : A Tender Management Process (or "Invitation to Tender" process) is a method by which suppliers are selected for the provision of products and services to an organization. The process involves creating a suite of Tender Documents to manage the supplier selection process. The Tender Documents help the organization to select the best possible supplier available, and include documents such as the "Statement of Work", "Request for information" and "Request for Proposal".

When do I use a Tender Process? : If you want to appoint an external supplier, then you need to document a formal Invitation to Tender Process. By using a formal tender process, you can show that the preferred supplier was selected fairly. This Tender Process includes all of the steps needed to select and contract external suppliers, quickly and efficiently.

The Tender Management Process will also help you to:

  • Define the roles of staff involved in the Invitation to Tender
  • Evaluate and prioritize the supplier's proposals
  • Monitor and control supplier relationships

Project Management : Managing Time

13-Statement of Work

What is a Statement of Work? : A Statement of Work or SOW, defines 'what it is that you need' from an external supplier. It is a statement of the work to be completed by a supplier. The Statement of Work also describes the materials and equipment to be provided, within a defined timeframe. This Statement of

Work Template saves you time, because all of the sections have been pre-completed for you.

When do I use a Statement of Work? : Every time you need to request work from an external supplier, you need to issue a Statement of Work. It helps you clarify what it is that you want from your supplier and the timeframes in which to complete it.

Create Statement of Work by:

  • Defining the type of supplier that you wish to appoint
  • Describing the materials and equipment you need
  • Specifying the deliverables to be provided by the supplier
  • Stating your terms and conditions for payment

14-Request for Information

What is a Request for Information?: A Request for Information (or "RFI") is a document which is issued to potential suppliers to allow them to take part in an "Invitation to Tender" process. It is a request for information from the supplier, to help you decide whether or not to appoint them.

When do I use a Request for Information?: You need to issue a Request for Information whenever you want to contract an external supplier to your business. The document will explain to your supplier, the information you need, to help you with your supplier selection.

You can create Request for Information by :

  • Defining your supplier needs
  • Informing supplier of your procurement process
  • Specifying the rules and timeframes for engaging with suppliers
  • Selecting suppliers for your business

15-Request for Proposal

What is a Request for Proposal? : A Request for Proposal (RFP) is a document that is issued to suppliers to help them provide the information needed to make a preferred supplier decision.

When do I use a Request for Proposal? : You need to create a Request for Proposal whenever you want to request a proposal from external suppliers. The Request for Proposal describes the nature of the proposal you’re seeking from them and the timeframes for delivering it. The Request for Proposal also includes key terms and conditions you intend to include in a supplier agreement.

Your Request for Proposal should :

  • Tell suppliers about your purchasing needs
  • Inform suppliers of the information that you need from them
  • Help you to Make preferred supplier decision

16-Supplier Contract

What is a Supplier Contract? : A Supplier Contract or "Supply Contract" is an agreement between a business and an external supplier for the delivery of a defined set of products and services. A Supplier Contract is a legal agreement and is used as the basis upon which to measure the supplier’s performance. In addition to listing the items to be supplied, the Supply Contract states the timeframes, responsibilities, pricing and payment clauses needed to administer the relationship. By putting a Supply Contract in place, it helps you to get the most out of the supplier relationship.

When do I use a Supplier Contract? : A Supplier Contract should be used whenever you need to purchase products or services from an external supplier. By documenting a supply contract, your external suppliers will treat the relationship more seriously. The Supply Contract defines the delivery milestones and therefore the criteria for making payments. So by using a Supply Contract, it will make it easier to manage your suppliers today.

A supply contract should specify :
  • Deliverables to be provided by the supplier
  • Training, documentation and support to be provided
  • Responsibilities of both parties
  • Performance criteria and review process
  • Pricing schedule and invoicing process
  • Contractual terms and conditions

10-The Power, Legitimacy and Urgency Model

The Power, Legitimacy and Urgency Model
Maps stakeholder behaviour according to its balance of three characteristics:
Power: Of the stakeholder to influence the organisation
Legitimacy: of the relationship in terms of desirability or appropriateness
Urgency: The expectations of the stakeholder in terms of criticality and time-sensitivity

The Power, Legitimacy and Urgency Model
Maps stakeholder behavior according to its balance of three characteristics:
  • Power: Of the stakeholder to influence the organisation
  • Legitimacy: of the relationship in terms of desirability or appropriateness
  • Urgency: The expectations of the stakeholder in terms of criticality and time-sensitivity

17-Planning Phase Review

What is a Project Phase Review? :A Project Phase Review is completed at the end of each project phase. During this project management review, the reviewer completes a Phase Review Form describing the progress of the project to date and recommending whether or not it should continue to the next project phase. If approved, the next project phase can be commenced.

When do I use a Project Phase Review? : A Project Phase Review should be undertaken at the end of each project phase. The project review may be conducted by the Team Manager or an independent person to the project. During the project management review, any risks and issues should also be recorded. The Project Phase Review Form (already created in Project initiation phase) is then completed, documenting the outcome of the review, for approval.

Project Phase Review document must state whether the:

  • Project is under schedule and within budget
  • Deliverables have been produced and approved
  • Risks have been controlled and mitigated
  • Issues have been resolved
  • Project is on track

18-Project Execution Activities

  1. Time Management
  2. Cost Management
  3. Quality Management
  4. Deliverables Management
  5. Change Management
  6. Risk Management
  7. Issue Management
  8. Procurement Management
  9. Acceptance Management
  10. Communications Management
  11. Execution Phase Review

9-Why stakeholder analysis is important

Decision makers / Project Managers have been required to work more inclusively with a wide range of stakeholders. Stack holder’s values, political concerns and ability to influence the top management many times shadow the purely technical viewpoints. We must bring stake holder’s values into the risk assessment. Stakeholders are no longer satisfied with the “Three-‘I’ Model’: ‘inform, invite, and ignore.’” It is acknowledged that the results of a decision-making process have a better chance of being viewed as fair and credible when stakeholders have participated in the deliberation process.

It can be summarized as

  • Identify the stakeholders likely to be affected by or influence the activities of the organisation
  • Assess how those stakeholders could be impacted or impact upon the organisation
  • Anticipate the consequences of any change in the organisation’s activities
  • Identify stakeholders’ ‘success criteria’
  • Assure a successful outcome for the organisation by developing co-operation with stakeholders

19-Time Management Execution Process

What is Time Management execution process? Project Time Management execution process is all about recording the time spent by people on a project. To record time spent, the team implement a Project Time Management Process (or "Time Process"). This time process involves recording the time spent on tasks, using Timesheets. The time process helps the manager know which tasks has been worked on, when and for how long.

When do I use a Time Management execution Process? : The best way to see if your project is on track is to record time actually spent vs. time planned to be spent. The process is called Project Time Management, and it is by far the most effective way to monitor project progress. The time process allows you to see for every task, whether is has been completed on time. This time process also allows you to control time spent by implementing a timesheet approval process.

Project Time Management execution process will help you to:

  • Put in place a process for recording time within projects
  • Use Timesheets to monitor the time spent by staff
  • Identify and resolve time management issues
  • Keep your Project Plan up-to-date at all times
The time management execution process must :

  • List the key steps taken to manage time within a project
  • Include a process diagram, showing when those steps are taken
  • Describe each of the roles and responsibilities involved

20-Cost Management

What is a Cost Management Execution Process? Costs (or "expenses") are recorded by team members, using Expense Forms. These forms are reviewed and approved by the Project Manager, prior to the expense items being purchased.

A Cost Management execution Process helps you control expenses within an organization. By executing the Project Cost Management , you can ensure that all expenses are approved before they are paid. Using this project Cost Management process, you can ensure that your project is delivered within budget.

When do I use a Cost Management Execution Process? : If you want to control the way that expenses are incurred, then you need to implement a Cost Management. It will help you to control project expenses, ensuring that only expenses which have been approved, may take place. Using this Cost Management process, you can also keep your project plan up-to-date with the latest expense information available.

This project cost management execution process will help you to:

  • Identify each of the costs within your project
  • Ensure that expenses are approved before purchasing
  • Keep a central record of all costs incurred
  • Control the overall cost of your project
  • Determine whether your expenses were adequately budgeted
  • Monitor and control instances of over-spending
  • Gain special approvals for extra-ordinary expenses
  • Schedule expense payments and invoice approvals
  • Keep your project and financial plans up-to-date

8-Advantages and disadvantages of Stakeholder Analysis

Advantages of Stakeholder Analysis

  • Get to know stakeholders better:
    • Relative importance, power and interests 
    • Better managed relationships
    • Risks identified 
  • Make better strategies and decisions
  • Greater acceptance of organisation actions by stakeholders

Disadvantages of Stakeholder Analysis

  • Best done on continuous basis
  • Assessment of analysis may be subjective
  • Maybe not all stakeholder interests can be met at the same time
    • Focus on most important stakeholder
    • Balance & reconcile all interests according to importance or urgency

21-Quality Management Execution Process

What is a Quality Management Execution Process? A Quality Management Process is a set of procedures that are followed to ensure that the deliverable produced by a team are "fit for purpose". The start of the Quality Management Process involves setting quality targets, which are agreed with the customer. A "Quality Assurance Process" and

"Quality Control Process" are then undertaken, to measure and report the actual quality of deliverables. As part of the Quality Management Process, any quality issues are identified and resolved quickly.

When do I use a Quality Management Execution Process? You should implement a Quality Management Execution Process any time that you want to improve the quality of your work. Whether you are producing deliverable as part of a project or operational team, an effective quality management and quality assurance process will be beneficial. By implementing Quality Management Execution Process, you can ensure that your team’s outputs meet the expectations of your customer.

Quality Management Execution will help you to:

  • Set Quality Targets to be met by your team
  • Define how those quality targets will be measured
  • Take the actions needed to measure quality
  • Identify quality issues and improvements
  • Report on the overall level of quality achieved

22-Deliverable Quality Management

Deliverables Register, otherwise known as a Quality Log or Project Log, helps you to record the current quality of deliverables within your team. By recording the current status of each deliverables produced by your team, you can monitor and control the actual levels of quality achieved. This register is a core tool used in Total Quality Management, as it allows you to keep an eye on the quality achieved, and implement quality improvement actions as needed.

The Deliverables Register allows you to record:

  • The current status of your teams deliverables
  • All of the Quality Targets to be achieved
  • Quality Standards and Quality Criteria to be met

It will help you to monitor deliverable quality by listing the:

  • Quality Assurance Reviews undertaken
  • Quality Control Reviews completed
  • Outcomes of all reviews and quality actions taken
  • Current status of quality within your project
  • By using this quality log to record the status of your deliverables, you can identify quality issues early and boost your changes of meeting the quality targets set.

7-Steps in Stakeholder Management

Steps in Stakeholder Management

  • Identify
  • Analyze
  • Engage
  • Manage

23-Change Management Execution

Change Management Execution Process, is a set of procedures that help teams to control change effectively. It’s not that you have to prevent change from happening; it's how you manage change once it occurs that really matters. This is where a Change Management Execution Process is invaluable. The Change Management Execution Process allows you to record change requests, and review and approve those requests, before implementing them. This Change Execution Process makes change management easy.

When do I use a Change Management Execution Process? If you work in a team that is subject to change, then you need a Change Management Execution Process. By implementing a Change Management Execution Process, you can track change as it occurs and control the effect it has on your team. A Change Management Execution Process helps you monitor the impact of change on the business, to ensure that each change has the desired outcome.

By using this Change Management Execution Process, you can:

  • Identify requests for change
  • Confirm the feasibility of each change
  • Control the way that change is undertaken
  • Manage the approval of change
  • Provide a template for managing change
  • Fully describe every step in the change process
  • Include a change process diagram, showing you the steps
  • Define the responsibilities of change managers
  • Describe the change review and approval process

24-Risk Management

What is a Risk Management?
A Risk Management, or Risk Management Process, describes the steps you need to take to identify, monitor and control risk. Within the Risk Management Process, a risk is defined as any future event that may prevent you to meet your team goals. A Risk Management Process allows you to identify each risk, quantify the impact and take action now to prevent it from occurring and reduce the impact should it eventuate.
When to go for Risk Management Process?
You use a Risk Management Process whenever your ability to meet your objectives is at risk. Most teams face risks on a regular basis. By putting in place Risk Management Process, you can monitor and control risks, removing all uncertainty. The Risk Management Process involves running risk reviews to identify and quantify risks. The risks are then documented and the Risk Management Process helps you take action to reduce the likelihood of them occurring. This Risk Management Process helps you put in place the right processes for managing risk today. By using Risk Management Process to monitor and control risk, you can ensure you meet your team objectives.
Risk Management Process helps you: 

  • Identify critical and non-critical risks
  • Document each risk in depth by completing Risk Forms
  • Log all risks and notify management of their severity
  • Take action to reduce the likelihood of risks occurring
  • Reduce the impact on your business, should risk eventuate

Most teams are subject to constant risk of meeting their objectives. The key to success lies in how you manage risks, by putting in place a clear Risk Management Process. This process help you to meet your team goals more easily.

Risk assessment form is one of the tools for Risk Management. It helps you document and raise risks to an organization. The Risk Form includes all of the content needed to help you describe the risk in depth, as well as rank its likelihood and impact. This form enables you to identify actions that prevent the risk from occurring, as well as actions that minimize the impact should it eventuate. This form can be completed by any member of your team, and is usually reviewed by management.

The Risk Management Form must contain

  • Part of the business or project that has identified the risk
  • Nature of the risk and who is likely to be affected
  • Likelihood of the risk occurring
  • Impact of the risk should it eventuate

Alternatively, you may maintain a Risk register, which contain details of all the risks identified.

25-Issue Management

What is an Issue Management?
An Issue Management, is a set of procedures that help you manage issues as they occur. Whether you're part of a project or operational team, issues will occur on a regular basis affecting the ability to meet your team goals. That’s when an Issue Process is invaluable. An Issue Process helps you record each issue and identify the actions needed to resolve it. As part of the Issue Process, an approval step is included to ensure that the right actions are taken, at the right time. Using Issue Management techniques, you can identify and resolve issues quickly, before they have an undesirable impact. The Issue Management Process can be used for issues regarding staffing, supplier, equipment or other issues for their speedy resolution.
Your ability to identify and resolve issues as quickly as possible will directly affect the success of your team.
When do I use an Issue Management?
You follow an Issue Management when you encounter issues that need to be resolved quickly. Examples of issues that can be resolved through an Issue Management Process include; lack of funding, insufficient resources and tight deadlines. Regardless of the circumstance, Issue Management Process helps you get approval to take action to resolve it immediately

In Issue Management, one should: 

  • Identify and record issues clearly
  • Use Issue Forms to document issues properly
  • Determine the impact of each issue
  • Prioritize issues and report on their status
  • Review all issues and decide on a course of action
  • Take the steps needed to resolve issues quickly

Issue Management should be used for:

  • Assigning actions to staff to resolve issues
  • Monitoring the outcome of the actions taken
  • Assigning roles and responsibilities for managing issues
  • Reporting on the status of issues to management

Issue form may be used to report a single issue. Issue register can be maintained to keep track of all issues throughout a project life cycle.

6-Categorize Stakeholders

Categorize Stakeholders

  • Internal and External Stakeholders
    • Internal stakeholders are those who are  ‘members’ of the business organization. E.g. Owners and shareholders, Managers, Staff and employees
    • External stakeholders are not part of the firm. e.g. government & trade associations, Suppliers, Customers
    • Some groups can be both internal and external stakeholders, such as staff or shareholders who are also local residents

  • Primary, Secondary & Key Stakeholders
    • Directly affected: e.g. employees & stockholders
    • Indirectly affected: e.g government & media
    • Most significantly affected: those with the most influence from either group

26-Procurement Execution

Procurement Management
A Procurement Management, is a method by which items are purchased from external suppliers. The procurement management process involves managing the ordering, receipt, review and approval of items from suppliers. A procurement process also specifies how the supplier relationships will be managed, to ensure a high level of service is received. This is a critical task in Procurement Management. In essence, the procurement process helps you "get what you have paid for".

When do I use a Procurement Management?
You need to implement a Procurement Process any time you want to buy items from external suppliers. By using this Procurement Management, you can ensure that the items provided meet your need. It also helps you manage the supplier relationship, ensuring that any issues are resolved quickly. By implementing a Procurement Process, you can ensure you get the maximum value from your supplier relationship

In the Procurement Management, you will: 
  • Identify the goods and services to procure
  • Complete Purchase Orders and issue to suppliers
  • Agree on delivery timeframes and methods
  • Receive goods and services from suppliers
  • Review and accept the items procured
  • Approve supplier payments

Procurement Management will enable you to: 

  • Identify supplier contract milestones
  • Review supplier performance against contract
  • Identify and resolve supplier performance issues
  • Communicate the status to management

Procuring goods and services from external suppliers can be a critical path for many projects. Often, the performance of the supplier will reflect on the performance of the overall project team. It's therefore crucial that you manage your suppliers performance carefully, to ensure that they produce deliverables which meet your expectations.
Procurement register allows you to keep a record of all goods and services purchased from suppliers, throughout the project life cycle. By recording your project procurement information in one place, you can easily identify and report the status of your project procurement at any time.

27-Acceptance Management

By using Acceptance Management, you can ensure that every deliverable produced by your team, fully meets the needs of your customer. An acceptance process helps you to achieve this, through rigorous user acceptance testing. During the user acceptance testing process, each deliverable is reviewed by your customer and formally "accepted" as meeting their needs.

An Accespance Management is a series of steps that you take to complete User Acceptance Testing. When a project is nearly complete, one of the final steps is to perform User Acceptance Testing with the customer. As part of the User Acceptance Testing process, the customer will be asked to review the project deliverables and confirm that they are "fit for purpose". By using this User Acceptance Testing process, you can confirm that your customer is happy and sign off the project as complete.

Acceptance Management helps you: 

  • Perform proper user acceptance testing
  • Use acceptance forms to document the results
  • Request your customer's final acceptance
  • Communicate the acceptance testing results

When do I use an Acceptance Process?
You should use an Acceptance Process to perform User acceptance Testing you're your customer. Before you can close a project officially, you need to show your Project Sponsor that you have completed User Acceptance Testing and that your customer has signed off the deliverables as being 100 per cent complete. Only when User Acceptance Testing is complete, should you proceed with closing the project. You can complete User Acceptance Testing quickly and efficiently, using this Accespance Management.

In Acceptance Management, you must: 

  • Identify when acceptance tests need to be undertaken
  • Plan each acceptance test and deciding on the participants
  • Complete each acceptance test with your customer
  • Determine whether the results meet your acceptance criteria
  • Decide whether the results are up to standard
  • Gain your customers final sign-off

Although delivering your project on time and within budget is important, it is critical that the deliverables produced, actually meet the needs of your customer. For this reason, Acceptance Management is a project-critical activity.

Acceptance forms & registers may be maintained.

5-Characteristics of Stakeholders

Characteristics of Stakeholders

1. Owners and Shareholders

  • The number of owners and the roles they carry out differ according to the size of the firm
  • In small businesses there may be only one owner (sole trader) or perhaps a small number of partners (partnership)
  • In large firms there are often thousands of shareholders, who each own a small part of the business

2. Managers:

  • organise
  • make decisions
  • plan
  • control
  • are accountable to the owner(s)

3. Employees or Staff:

  • A business needs staff or employees to carry out its activities
  • Employees agree to work a certain number of hours in return for a wage or salary
  • Pay levels vary with skills, qualifications, age, location, types of work and industry and other factors

4. Customers:

  • Customers buy the goods or services produced by firms
  • They may be individuals or other businesses
  • Firms must understand and meet the needs of their customers, otherwise they will fail to make a profit or, indeed, survive

5. Suppliers:
  • Firms get the resources they need to produce goods and services from suppliers
  • Businesses should have effective relationships with their suppliers in order to get quality resources at reasonable prices
  • This is a two-way process, as suppliers depend on the firms they supply

6. Community:

  • Firms and the communities they exist in are also in a two-way relationship
  • The local community may often provide many of the firm’s staff and customers
  • The business often supplies goods and services vital to the local area
  • But at times the community can feel aggrieved by some aspects of what a firm does

7. Government:

  • Economic policies affect firms’ costs (through taxation and interest rates)
  • Legislation regulates what business can do in areas such as the environment and occupational safety and health
  • Successful firms are good for governments as they create wealth and employment

28-Communication Execution

Communications Execution, is a set of steps that are taken every time formal communications are undertaken in an organization. A Communication is undertaken as part of Communications Management and helps to ensure that your stakeholders are kept regularly informed. For example as part of the project life cycle, the team implement a Communications Management to make sure that the entire team is kept informed of the status of the project.

When do I use a Communication Execution?
A Communication Process should be used when you wish to communicate formally within an organization. By using the Communication Process, you can ensure that no miscommunication occurs. As part of the Communication Process, you can also receive feedback on the communications which have taken place to date and ensure that future communications are improved. Communications Management is a fundamental part of any organization and needs to be treated with care. Using Communication Management, you can communicate effectively at all times.

In communications Execution, you must

  • Clearly identify your project stakeholders
  • Identify your stakeholders communications needs
  • Run any type of communications event to send out your message
  • Ensure the right people receive the right information at the right time

The Communications execution help you in 

  • Identify the messages that need to be sent
  • Determine your target audience for communication
  • Decide on your message format and timing
  • Draft your message and gain approval where required
  • Communicate your message, through communications events
  • Gather feedback and improve your communication processes

Keeping your stakeholders regularly informed is a critical activity for any team. Whether it's through status reports, regular meetings or informal email, you can ensure that the right messages are distributed about the progress of your project. This will help your project team and external stakeholders to remain focused on delivery and to provide you with all of the support you need to deliver your project successfully

29-Project Closure Activities

This Project Closure article will help you take the steps needed to close your project quickly and efficiently. The 'Project Closure Report' will help you handover the deliverables and documentation to the customer, terminate supplier contracts and release resources back to the business. The 'Post Implementation Review' will help you to determine the level of project success and identify lessons learned for future projects.
  1. Project Closure Report
  2. Post Implementation Review

Project Closure Report
Closing a project is not as easy as it seems.
  1. First ensure that the project closure criteria have been fully satisfied and that there are no outstanding items remaining. 
  2. Identify a release plan for the project deliverables, documentation, supplier contracts and resources.
  3. Initiate a communication plan to inform all project stakeholders that the project has now been closed.
Post Implementation Review
Review overall success by undertaking a Post Implementation Review.
This review helps you to determine

  • whether the project delivered the business benefits,
  • met the customer's requirements and
  • remained within scope and budget.
  • whether the project conformed to the management processes identified, such as Change Management and Quality Management.

4-The Stakeholder Analysis process

The Stakeholder Analysis process

  1. Identify all stakeholders (Brainstorming)
  2. Identify stakeholder needs & interests
  3. Classify groups of interests (Stakeholder Mapping)
  4. Identify areas of conflict: Organisation v Stakeholder, Stakeholder v Stakeholder
  5. Prioritise, reconcile and balance stakeholders
  6. Align significant stakeholder needs with organisation’s strategies and actions

Remember : The stakeholder attributes used for Stakeholder analysis are subjective & can depend on who is mapping. Also the attributes are not steady, but can change over the time. E.g. A powerful stake holder may loose his power over the time.

Stakeholder Mapping

  • Several techniques for categorising stakeholders
  • Helps identify which stakeholders may support or oppose change / organisation’s actions
  • Which stakeholders are the most powerful, have most influence
  • Help decision makers formalise / prioritise strategies

3-The Power / Dynamism Matrix

The Power / Dynamism Matrix

  • Classifies stakeholders in relation to the power they hold and their aptitude for action (dynamism)
  • Can be used to indicate where political effort should be made before instigating change

  • Stakeholders in groups A & B: are the easiest to deal with.
  • Stakeholders in group C: are important because thy are powerful. But low dynamism means their reaction is predictable and expectations can be managed.
  • Stakeholders in section D: Need most management attention because they are powerful and reaction is difficult to predict. May need to ‘trial’ new strategies with them.

2-The Power / Interest Matrix

The Power / Interest Matrix
  • Classifies stakeholders in relation to their power and the extent to which they are likely to show interest in the actions of the organisation.
  • Can be used to indicate the nature of the relationship which should be adopted with each group

  • Stakeholders in group A: Need only minimum effort an monitoring
  • Stakeholders in group B: Should be kept informed as they may be able to influence more powerful stakeholders
  • Stakeholders in group C: Are powerful, but level of interest is low. Generally expected to be passive, but may move into group D on an issue of particular interest
  • Stakeholders in group D: Are both powerful and interested. Their co-operation is of key importance for new strategies

1-What is Stakeholder Management

The term ‘Stakeholder’ refers to persons, groups, or organizations that must somehow be taken into account by leaders, managers, and front-line staff. W. Edward Freeman, in now classic text Strategic Management: A Stakeholder Approach(1984), defined a stakeholder as “any group or individual who can affect or is affected by the achievement of the organization’s objectives”.
For some authors, (for profit organizations) stakeholders can only be people or groups who have the power to directly affect the organization’s future; absent that power, they are not stakeholders.
Any person or organisation who can be positively or negatively impacted by, or cause an impact on the actions of a company. (Freeman, 1984)
The individuals and constituencies that contribute, either voluntarily or involuntarily, to its wealth-creating capacity and activities, and are therefore its potential beneficiaries and / or risk bearers. (Post, Preston & Sachs, 2002)
For Government & non-profit organizations, the definition differs a little. Typical definitions of stakeholder from the public and nonprofit sector literatures include the following variants:

  • “All parties who will be affected by or will affect [the organization’s] strategy (Nutt and Backoff 1992: 439)
  • “Any person group or organization that can place a claim on the organization’s attention, resources, or output, or is affected by that output” (Bryson 1995: 27)
  • “People or small groups with the power to respond to, negotiate with, and change the strategic future of the organization” (Eden and Ackermann 1998: 117)
  • “Those individuals or groups who depend on the organization to fulfill their own goals and on whom, in turn, the organization depends” (Johnson and Scholes 2002: 206)

While specific stakeholder definitions vary, this paper takes into account the need for stakeholder support to create and sustain winning coalitions and to ensure long-term viability of organizations, as well as policies, plans, and programs. Key stakeholders must be satisfied, at least minimally, or public policies, organizations, communities, or even countries and civilizations will fail.

A typical list of Stakeholders

  • Owners, stockholders & investors
  • Banks and creditors
  • Partners & suppliers
  • Buyers, customers & prospects
  • Management
  • Employees, unions, works councils
  • Competitors
  • Government & regulators: local, national, international
  • Professional and industry associations
  • Media: local, national, trade, financial
  • NGOs
  • Communities & other interest groups

11-Contemporary Issues

10-Global Project Management

9-Performance Management

8-Managing Project Conflict

7-Managing Teams


4-Managing Project Change

5-Marketing and Project Management

3-Project Management Plans

2-Portfolio Management

1-Project Management

Introduction to ERP

ERP is the acronym of 'Enterprise Resource Planning'.
'Enterprise' is the first word in ERP. That means it will consider the enterprise overall interest first. It gives an integrated approach to resource planning all over the enterprise.
That is building a single software program that serves the needs of people in finance as well as it does the people in human resources and in the warehouse. Each of those departments typically had its own computer system, each optimized for the particular ways that the department does its work. But ERP combines them all together into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other.
ERP automates tasks that performs business, thereby reducing delay, manpower & hence cost of the business.
ERP can

  • Automate Purchase Order generation process by considering stock, order position & consumption pattern
  • help sales team in giving real time position on stock, pending orders & production plan.
  • help customers in getting status of their orders
  • help warehouse personnel in providing exact stock & it's location
  • help production persons in planning production orders, tracking them & plan materials for the same.
  • help finance in updating ledgers, tracking any entry
  • Materials manager in reducing stock, minimize stock outs & control on thefts etc.
  • Top management in getting real time picture of their business, tracing any problem up to transaction level on their own.

As all the personnel in the organization are looking at the same data real time, the communication among various departments is better.
That, at least, is the dream of ERP. The reality is much harsher.

Why do ERP implementations Fail?

Why Do ERP implementations fail?
Many of the ERP implementations fail & management not able to understand the reasons. The same ERPs give very high ROI in one company, but it may fail to reproduce the results in another in the same industry. What can be the reason?

A study was conducted in India on failure of ERP implementations. The three main reasons spotted in the study are
• Client unable to perceive potentials of an ERP package: The clients perceive ERP as just another software development tool. They try to change ERP as per their current practice, instead of a readymade management tool with best practices incorporated.
• Perceiving ERP as cost & not as 'Investment'. As ERP is regarded as cost, the clients try to minimize the implementation cost by choosing Implementation partner having lowest quotation. There are many small players in India, employing fresh consultants. A team with almost all fresh consultants can not deliver expected results.
• Clients fail to perceive ERP as on-going activity. The clients (specially in India) is growing very fast every year, but implemented ERP system is the same, giving mismatch between the added needs and capability of implemented system. The client should modify the system continuously as per the changing needs of the business


This era is the era of outsourcing. The move to offshore work to take advantage of low cost labor is affecting every area of outsourcing. Every company needing applications will have to outsource or create its own offshore captive if it is going to have the work done cost effectively. Last year offshore service providers moved from project work to true outsourcing. Now that they have earned the respect of their buyers, the offshore suppliers are entering into long-term outsourcing relationships. Substantial migration of SAP R/3 support work to India is expected in the near future.
Appropriate support model needs to be developed for each engagement depending of the client’s organization, supporting organization. Many cultural issues need to be addressed. Communication channels need to be developed.
Mr. Karkhanis is a very senior SAP R/3 consultant having 10 years of SAP R/3 implementation and production support experience with big consulting firms. He has implemented SAP R/3 in USA, Australia, Hong Kong, China, India and many other countries. Currently he is working on developing and stabilizing SAP R/3 offshore development models for many big accounts. The organizations to be supported are big multinationals having offices in many countries across the world. The support is being managed from India and other countries by mainly Indian software firms.
Mr. Karkhanis is offering support to Developing onsite/offshore production support model for supporting SAP R/3 and other ERP packages. He is available on job-work as well as on retainer basis. He is expert in developing solutions for such assignments.
If your organization is looking for a support partner from India or other countries, Mr. Karkhanis will assist you in selecting the partner. If you are looking for engagement with an organization for giving offshore production support. Mr. Karkhanis can assist you in pre-sales discussions, developing appropriate solution and support organization as well as providing technical support.
You may contact him at

Just In Time - JIT - Steps in Implementing JIT Manufacturing

  1. Obtain commitment from the top management.
  2. Gain Co-operation of the Work-force. Begin cross training of the work-force. 
  3. Start with the Final Assembly. Reduce set-up time, level production, achieve mixed model production.
  4. Working backward from Final Assembly, reduce set-up times and lot sizes in fabrication areas.
  5. Balance fabrication rates with the final assembly production rates. This may require correction of capacity shortfalls.
  6. Remove WIP inventories from the storage rooms and put it on the shop-floor (Point of use storage).
  7. Extend JIT to the vendors. First stabilize their delivery schedule & ask for frequent deliveries. Help vendors with quality assurance, negotiate long term contracts.
  8. Remove purchased inventory from the store rooms & put it o the shop-floor (Point of use storage).

The attributes of a company likely to be successful in JIT are many, but one constant is a company's willingness and commitment to become and remain "world class" in manufacturing. It is this enabling dictate of management which
makes JIT strategy appropriate to a company. A good JIT prospect is a company which has not over-chased the low wage syndrome but decided instead that quality, responsiveness and competence in production and processes represent
the decided competitive edge over price, and that high cost is a result of accumulated operational activities which should be addressed to, to remove the causes of high cost and uncompetitive price.

Just In Time - JIT - Elements of JIT Production

An overview of JIT production can be gained by understanding the following outline of key elements of JIT strategy.

  1. Policies: to provide direction, and to indicate to the work for that management is concerned and involved; cover a wide range of subjects: customer service, elimination of waste, continual improvements, lead time reduction.
  2. The people strategy: Positive attitude towards workforce; treating people as company’s valuable asset; Employment as a long term decision; employee involvement, flexibility, small-group improvement activities (SGIA); company unions.
  3. The Product Strategy: The design 'quality; integration of product design with manufacturing and-vendor capabilities; role of CAD/CAM configuration control and standardization, grouping products; by families for production through group technology.
  4. The plant and equipment strategy: Concepts of focused factories, group layouts, quick conveyance means such as belt conveyor, chute, fork lift; productive maintenance.
  5. The process Strategy: Shojinka (flexibility of process in meeting demand)'through GT layout, multifunction work force and job rotation; autonomation (autonomous control of defects), statistical control of defects, set up time reduction, small lot production; achieving balanced production add uniform plant loads through standard operations and mixed model assembly and fabrication.
  6. The Planning Strategy: The three month horizon, production plan leveling, Final assembly scheduling (daily buckets) and sequencing.
  7. The production scheduling strategy: The Kanbansystem, the role of kanban in achieving improvement activities; produce to exact demand; no contingencies) whirling round tour system.
  8. The purchasing strategy: The long-term supplier relations, the subcontractor networks; the transport innovations.

Just In Time - JIT - Continuous Improvement

A central theme of Just-in-Time is continuous improvement. This is a crucial element because it stimulates 'improvement in all of the competitive variables simultaneously.

In the JIT environment, achieving productivity and quality are seen as a journey, and a continuous one at that. The Japanese word Takumi means the continuous pursuit of, excellence. Excellence through a continuing search for better ways to meet the same objective. Excellence in ~kills one must possess to accomplish an uncompromising quality in one's achievements. Takumi is a sort of quality, but with the Japanese mystique of calm understatement. It is more of a quality of spirit, which provides the conceptual framework within which current Japanese manufacturing policies have been shaped – policies with a kinetic obligation of continuous improvement.

The commitment to continuous improvement manifests in the activities of the voluntary groups of employees known widely as “Quality Circles” (also called by the name "Small Group Improvement Activities”). One of the key areas of focus for improvement is the entire manufacturing process, towards the most efficient pattern of flow. The numerous steps of improvement lead to permanent major changes over the years. Problems to be taken up for tackling are continuous1y triggered by exposing them through gradual reduction of inventory and/or work force levels.

Just In Time - JIT - Unlearning Old Beliefs


Implementing JIT production in a traditional manufacturing plant represents a big change - in the culture of a company as well as in its operations. Established routines and rules become obsolete. Thus applying the JIT philosophy requires not only learning some "new" ways of thinking, but putting some of our time - honored and cherished beliefs and practices to rest. The following table briefly compare the JIT philosophy against conventional wisdom:

Conventional Wisdom
JIT Philosophy
An asset
A liability
Lot size
Select lot sizes to balance set up cost against holding costs as a general principle.
Immediate needs
Set up
Low priority since, it represents a small fraction of the total time.
Make them insignificant
Necessary Investment
Eliminate them.
Tolerate some scrap
Zero defects
Equipment Maintenance
As required. But not critical because we have queues available.
Constant and Effective. Machine breakdowns must be minimal.
Lead times
The longer the better (Most supervisors and buyers want more lead time). Keep them at planned levels •.
Keep them short.
Worker Involvement
Management by edict. Measurement to monitor adherence to plan
Management by consensus. The vital ingredient of "ownership" is achieved.