Peter Hers Consulting
Home Contact CV Services Links    

Project Health Audit
Version 1.0: 30 June 2005

Why conduct an audit?  

Many IT projects run into difficulties of one sort or another.  Significant new facts about the problem to be solved may be uncovered once the project is underway; Third party components may not deliver as expected or promised; Technical staff may be lost; Critical people with knowledge of the business may be lost or unavailable to the project; Etc.  You know that something is wrong with your project when progress is not as expected.  You suspect something may be wrong when reports do not tell you what is really going on, or when the business users start losing faith in your ability to deliver on time.  Some surprises may in fact be symptoms of underlying problems. For example, cost overruns usually indicate problems with technology, with management, or even with the original scoping and estimating activities.

Project success  

A project is successful if it delivers on time, within budget, and delivers what was originally promised (scope).  Along the way many challenges can arise (risks), and these must be effectively managed to ensure success.

Project success is always important to your business.  There may be a defined window of opportunity for a new product, making on-time completion essential to achieve the expected benefits.  A project conducted for one of your clients can only be profitable if costs are kept under tight control. Overruns in use of critical resources can impact on other projects which have their own requirements.  Bad quality control in a development project can return to haunt you and raise maintenance and operational costs for many years to come.

Benefits  

Early detection of problems in a project is essential if costs are to be kept under control. In the worst case, detection of serious problems towards the end of a project can result in the complete project being aborted – But by that time the original budget has been totally expended or even exceeded.  The graph at right shows how the cost of a project can escalate under various scenarios.  This model shows that the later corrective action is applied, the less effect one can have on the final project cost. The purpose of a Project Health Audit is therefore to discover any potential problem areas, and to follow this with corrective action as soon as possible to improve the likelihood of project success.

There are significant advantages to an independent evaluation of your project. Project staff are deeply involved in the project itself, and are often not able to stand back sufficiently to provide a truly balanced view of the project. An independent review can provide you with the required confirmation that the project is on track, or draw attention to problems in the project management process which can be corrected in time to make a difference.

How we do it  

The starting point for the Project Health Audit is a clear frame of reference.  Many companies have adopted a project management methodology, either one of the popular commercial methodologies, or their own internally developed and adapted methodology.  Organizations also adopt their own internal standards which are appropriate to the environment in which their projects are executed.  In order to encompass all these different environments, we have developed an absolute framework which is based on the information contained within the PMI PMBOK© Guide, ie: “that subset of the Project Management Body of Knowledge that is generally recognized as good practice.” 

The project is assessed in terms of all the project management knowledge areas, not as an academic exercise, but in order to uncover those deliverables and processes which are essential to the success of the project.   The focus is always maintained on the processes employed to manage the project. 

The detailed content and quality of the deliverables will differ widely from project to project, and these are not examined in the Project Health Audit.  Instead, we concentrate on ensuring that all the required project management processes exist and are exercised to produce the required results. In the hands of a skilled auditor this is a powerful way of determining any gaps in the project, and rapidly identifying areas for corrective action.

Timing   

The amount of time required for an audit depends on the size of the project being audited as well as the stage the project has reached at the time of the audit.  For example, an audit conducted directly after project initiation may only be able to examine the Project Charter and Initial Scope Statement, and project standards to be used, whereas at a later stage all components of the project will be in place and would be audited.

Example: An IT project has an expected staff resource requirement of 6 000 man-hours and its planned duration is 6 months.  A Project Health Audit conducted at the end of the second month could be completed over a period of 5 days, depending on the availability of project team members and other stakeholders.

Deliverables   

The result of the Project Health Audit is a written report which highlights all findings.  The final report is presented to the project sponsor, project team and other stakeholders, to allow explanation and discussion. The health of the project is assessed against the nine PMBOK©  knowledge areas, and results are provided in graphical form.  Results are interpreted in relation to the specifics of the project, and recommendations for corrective action are made.

Indications for corrective action may be relevant to the project itself, or may have a wider scope, for example, pointing to lack of support for the project within the organization, or even to shortcomings in the project methodology or its application within the organization.

Pricing and applicability

As noted above, the amount of effort involved in an audit depends on the size of the project as well as the stage which has been reached.  The starting point is usually a discussion with the project sponsor, where basic information is obtained.  A firm price quotation is provided, and work can begin as soon as this quotation is accepted and arrangements have been made for access to the project team.

Example: An audit of the project described above, conducted over 5 days, would be priced at around R10 000.    The cost of the audit exercise in this case would be of the order of 1% of the original project budget.  It would be expected that this small expenditure, incurred at the right time, could result in much larger savings on the eventual cost of the project, and will result in a successful project delivered on time.