On Time, On Budget — Every Time IMPROVING THE RELIABILITY AND COST-EFFECTIVESS OF ADVENTIST HEALTH PROJECTS 6 July 2007 Presentation to Corporate President’s Council

Slide 2 Questions to Ponder  Are you responsible for project(s) in Adventist Health?  Do you have confidence that your project(s) will be completed as scoped out, on time and within budget?  Do you know the actual status of every project?  Have you had project(s) that were reported on schedule and within projected costs— right up to the point when you found out the real status?  Have you initiated a project that was never fully implemented, or never fully embraced?  Have you wished for a more predictable perfor- mance from your project(s)? On time, on budget—every time!

Slide 3 Purpose of This Presentation  Share industry data on project effectiveness.  Ask what this information might mean for Adventist Health.  Recommend some next steps for improving performance of projects across Adventist Health, starting with the Corporate Office.  Opportunity for questions.  Acknowledge: Adventist Health accomplishes a lot of good in managing projects; even so, improve- ment of processes always make sense. On time, on budget—every time!

Slide 4 The Project Management Landscape  A great many companies don’t manage projects as efficiently as they tend to manage everything else:  They don’t adopt PM standards.  They don’t train people professionally.  They don’t know how to hold project teams accountable.  And yet, other companies do all that: Reports from—  The Standish Group.  Gartner Group.  Project Management Institute. On time, on budget—every time!

Slide 5 The PM Landscape – 2  Data from 2000:  23% of projects fail (are cancelled, or are finished but never used).  Another 49% are “challenged” (over budget, over schedule, cancelled functions/features).  Only 28% can be considered successful.  The costs to industry are great:  45% cost overruns.  63% time overruns.  67% of challenged projects drop functions/features. Source: The Standish Group, 2000 & CHAOS Studies. On time, on budget—every time! 2000 Data: 2006 Data: Improved, and yet: Cost overruns of 47%, Time overruns of 72% 35% 46% 19%

Slide 6  Standish Group “recipe for success” (their Top 10):  Executive support (18*).  User involvement (16).  Experienced Project Manager (14).  Clear business objectives (12).  Minimized scope (10).  Standard software infrastructure (8).  Firm basic requirements (6).  Formal methodology (6).  Reliable estimates (5).  Other criteria (5). The PM Landscape – 3 Source: The Standish Group, 2000 CHAOS Study. * Weight of item’s influence on project success. On time, on budget—every time! † Natural result of an “Experienced Project Manager” † † † † † † ??

Slide 7 From Gartner Group  Gartner’s “Critical Program Management” approach—  Assertion: 66% of “large scale” projects fail to meet stated business objectives, are delivered late, or are substantially over budget.  Assertion: Not unheard of for 30-40% of project budgets to go into rework.  Assertion: Lacking risk-assessment/mitigation mechanisms, at least 10% of $200k+ projects are canceled, as are 20%+ of all projects.  Assertion: 75% of failed projects >$500k will not be tracked through formal project-management support; 75% of successful projects in that category will be. Source: Gartner Group sales piece. On time, on budget—every time!

Slide 8 PM Network Magazine Readers On time, on budget—every time!

Slide 9 PM Network Magazine Readers – 2 On time, on budget—every time!  = Percentage Points

Slide 10 PM Network Magazine Readers – 3 On time, on budget—every time!

Slide 11 VitalSmarts Newsletter Readers On time, on budget—every time!

Slide 12 And Lest We Think ….  … This isn’t a problem in health care (according to a 2005 HIMSS article): Health care respondents—  50% have 1-4 major IT projects in process.  16% have 17 or more major projects in process.  60% said 1-10% of their IT projects failed in the past year.  21% said 10-20% of their projects failed.  19% reported a project failure rate of 20%. [Very consistent with CHAOS data.]  Wide perception in health care industry: Project Manage- ment is just overhead. On time, on budget—every time! Source: Healthcare IT News; Glen Knight, PMP, CPHIMS, FHIMSS. “Healthcare IT needs project management.” 1 Aug 2005.

Slide 13 And Lest We Think …. – 2  Per Glen Knight (author of the HIMSS article):  Most health care IT project managers are “accidental project leaders.” [LM: True across health care organizations, not just IT.]  Subject matter experts (excellent technicians and analysts) are pressed into PM without any formal training.  Most of these SMEs have other major responsibilities.  “Production applications and firefighting will always have a priority over even the most important projects.”  “It’s no wonder that many projects are behind schedule.”  However, there is a revolution in thinking in health care.  PM needs to become a recognized career path within health care. On time, on budget—every time!

Slide 14 Projects and Organizational Structures Source: Project Management Institute.  Organizational structures have an interaction/impact on project management within that organization. On time, on budget—every time! ?

Slide 15 What Are the Opportunities in AH?  To begin with: A PM assessment (Roseville).  How many “projects” (a defined term).  Sense of dimension (Large, Medium, Small).  Honest judgment of relative success (Successful; Challenged; Failed).  Beyond that, were the original expectations met or not (in terms of scope, schedule, resources/costs)?  Without this assessment: Have little or no firm know- ledge about how expected costs relate to actual costs on most Adventist Health projects— successful, challenged, or failed. On time, on budget—every time!

Slide 16 What Are the Opportunities in AH? – 2  Re-set organizational views of project management:  PM: A proven and reliable (that is, repeatable) and cost-effective process for planning and executing projects.  Where it makes sense, offload project administration from the SMEs, allowing them to focus on their technical contributions.  Set a standard for project leadership in Adventist Health.  The great thing: There is a world-wide standard for planning and executing projects—  Project Management Institute. 38-year-old standards-setting organization, with 232,000 members in more than 160 countries.  Certified “Project Management Professional.” ® [There are only three of us PMPs in AH that I know of.] On time, on budget—every time!

Slide 17 Project-Effectiveness Vision Monitor & Control Plan Execute Initiate Close On time, on budget—every time! The “PMI Way” — It’s not rocket science!

Slide 18 Project-Effectiveness Vision – 2  What might this look like, organization-wide (starting in Roseville):  Approval: Better information for approving projects that compete for support and scarce resources (strategic fit, resource estimating, return, prioritization).  Standardization of process and deliverables: Scope definition; Resource estimating; Scheduling; Budget, etc.  Execution control: Scope management; Change management.  Status reporting: Repeatable, reliable, and comparable progress reporting.  Formal project closure: A clear and definite end for all projects— including canceled ones. On time, on budget—every time!

Slide 19 Sample EVA Status Report On time, on budget—every time! “ Ideal ” Re-calc, based on history EVA: Earned Value Analysis

Slide 20 “Troubled” Projects  Starting Place: Admitting that a project is in trouble.  PMI has a SIG (special interest group) devoted to the area of “rescuing” “troubled projects.”  Effectively/objectively assess project status (including early warning signs).  Understand the troubled project in terms of the “triple constraints” (scope, schedule, resources).  Re-set project stakeholder expectations (as needed).  Develop buy-in during recovery.  Devise/apply control mechanisms to keep project within re- set triple constraints.  Leverage communication during recovery. On time, on budget—every time!

Slide 21 For Your Consideration  What does the “ideal” PM deployment look like? —  A very lean project facilitation function. This would help ….  Set standards for PM in Adventist Health  Increase professionalism among AH project leaders.  Set the expectation that all projects will have trained project leaders assigned (PM FTE variable by size of project).  Set the expectation that projects will be conducted in a standard manner to increase predictability of outcomes.  Improve standard status reporting to authorizing body/ies.  Capture, preserve and extend learnings from project successes and failures.  Provide project-recovery services.  Desired outcome: Increase confidence in the performance of projects in Adventist Health. On time, on budget—every time!

Slide 22 Summary and Conclusion  A large percentage of projects, by any measure, don’t fully succeed, or fail entirely.  Project success is highly correlated with a formal, standard approach to project planning and execution.  Adventist Health would benefit from improved effectiveness in the performance of internal projects.  There is a small, but growing community of project management professionals within Adventist Health who are committed to help make this vision a reality.  We need leadership commitment to PM to make this vision a reality. On time, on budget—every time!

On Time, On Budget — Every Time IMPROVING THE RELIABILITY AND COST-EFFECTIVESS OF ADVENTIST HEALTH PROJECTS 6 July 2007 Presentation to Corporate President’s Council