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Introducing Project Audits: Importance, Benefits and Preparation

Posted by Rolando Martin on Mar 24, 2014 9:10:30 AM

Classic project management theory states that projects have three constraints: cost, time and scope. In some environments, there are additional constraints; for example, healthcare projects include an additional patient safety constraint which is considered paramount. In general, every project environment is unique as factors such as quality, risk, vendor relations, and so on are taken into account.

So, what have we learned after years of executing projects based on PMI’s PMBOK and/or Prince2’s methodology? In project management, there is never a “one size fits all” methodology; we must adapt our methodologies to the environment and client’s expectations. Prince2 and PMI are very consistent in this regard, and experienced project managers will attest to this need.

Unfortunately, some project managers have adapted their methodologies to the point where they are using deficient techniques. As well, many people without formal project management training bear the title of “Project Manager,” but do not produce thorough standard Project Management deliverables. Consequently, many projects are not properly managed resulting in cost overruns, scope creep, schedule delays, and inevitable workarounds to compensate for inadequate risk management. Many of these “undesirable” situations are, in principle, avoidable – if we just knew how to properly steer a project out of the mud and apply corrective measures when it starts to move off-track.

Benefit of Project Audits

Project audits can help identify when a project is about to go off-course. In addition, a project audit can provide the following benefits:

  • Improve project performance.
  • Increase customer and stakeholder satisfaction.
  • Save costs.
  • Control scope and avoid scope creep.
  • Provide early problem diagnostics.
  • Clarify performance/cost/schedule relationships.
  • Identify future opportunities for improvement.
  • Evaluate performance of the project team.
  • Inform client of project status/prospects.
  • Reconfirm feasibility of/commitment to project.

The benefits of project audits become especially evident in large organizations running large projects. Multi-million dollar projects can easily derail due to poor management techniques causing the investors millions of dollars. In this scenario, the cost of not performing periodic project audits can be much higher than the cost of performing it. Multiple audits, perhaps one per phase, are recommended for large projects.

Preparing for the Project Audit

The aim is to ensure that the audit team receives full and uninterrupted access to all required information, people and facilities during their audit. This includes, but is not limited to, emails, and documents developed by the project team. Having everything at your fingertips makes it easy to answer questions when they arise.

When auditing the project, interview the PM as a starting point and review the project library to ensure you know where to find the information you are looking for.

When you conduct an audit, determine whether the PM has addressed the key items in each phase of the project lifecycle. This includes, but is not limited to:

1. Initiation Phase

  • Identify the main objective of the project.
  • Write the project charter.
  • Get sign-off on the project charter.

After you complete reviewing the Initiation Phase, review the actual project plan or Work Breakdown Structure (WBS). You should focus on how well defined the WBS is and how well tasks and dependencies have been scheduled. A Visio or flow diagram is also a good alternative. Ask the PM what software has been used to create the required documents. Make sure the planning is sound. Failing to plan is planning to fail. Again, the key items that must be reviewed after initiation are:

2. Planning Phase

  • Create a Project Management Plan.
  • Establish project deliverables.
  • Write a scope statement.
  • Determine a project budget.
  • Distinguish project activities.
  • Work out a schedule.
  • Determine special skills needed to complete planned tasks.

Once the planning phase has been reviewed, the execution phase review takes place. Many projects suffer from scope creep during this phase. Has the project team stuck to their scope? Poor communication, misunderstandings and lack of information may have caused issues. Some of the tasks to review are listed below.

3. Execution Phase

  • Put together the project team.
  • Administer and guide the project team.
  • Conduct status review meetings.
  • Communicate project information.
  • Implement quality assurance measures.

Make sure the control measures are sound and the correction procedures are well described.

4. Controlling Phase

  • Measure performance against the plan.
  • Evaluate the corrective measures.
  • Manage change requests.

Once most of the work of the project is done, we approach to closing phase. Has the project been documented and closed properly?

5. Closing Phase

  • Manage acceptance of project deliverables.
  • Document lessons learned during the project.
  • Archive project records.
  • Formalize the closing of the project.
  • Release project resources.
  • Write final Status Report.

In general, you must try to understand all the processes. How well suited is the methodology to this particular project? Are all the processes required in place? Did they miss anything from the methodology that should be there?

A project audit is a project of its own, and as such, no one size fits all. It takes an experienced and knowledgeable project manager to conduct an audit from beginning to end, and to adapt it according to the environment.

Some final words on the success of audits: Identify the constraints that the customer is most concerned about, and focus on these. Track the costs, schedules, scope, quality, human resources, customer satisfaction, and any other indicator that can be a symptom of trouble. Map the customer project processes into PMI processes or Prince2 processes. Try to find the pains, the flaws, and the problems, and clearly document them and present your findings to the customer. Come up with creative solutions and propose them along with a very good rationale on why the solution proposed would work.

Moving Forward

Strong project management practices are critical to the successful execution of any kind of project, and consequently, to the overall competitiveness of any organization. Periodic audits of the project management process ensure that systemic flaws are identified and fixed and the process is improved. Every aspect of the project management life cycle can introduce problems if not done properly, therefore must be reviewed thoroughly.

 

Topics: Methodologies, Project Management

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