Learnings from my Experience

Couple weeks back, I was reading an autobiography of Richard Branson 'Screw it..Let's do it', such an inspirational story, it's worth own it. His instictive approach to solve many challenges is a great wisdom to know.

This book provoked me to write some of my own learnings during my professional career

1. Trust is very important, but we must instigate a mechanism to audit for confirmation. We are in a real world where 'everything can be trusted-nothing can be trusted', the only disparity is a process or mechanism to be established to confirm the Trust.

'Trust alone is a blunder', you should 'Trust, but Verify'

2. Team without goals, Leader without empowerment, Management without vision, Organization without ethics - A sure way to disaster
I have seen/been told during my career as how these traits decipher to a great debacle

3. Fail to understand the business, most of the technical folks concentrate too much on technicality of the program but fail to understand the business need. What happens if a programmer write a software not knowing the business implication? Mr Platt is a computer science instructor from Harvard University extention school, says, the programs won't just fit for the use. Almost 70% of the projects don't meet the needs of the business at the first time, an independent survey unveils

4. Open communication - project teams and project leads need to keep the communication open with all the stakeholders (sponsor, designers, end users, project team, integration team etc.). The open communication will ensures the stakeholder needs carried in a project, else almost always the project gets derail in terms of cost and time

5. Conflict of interest - I have seen many cases where supervisor fails to draw a line between personal and business interests with the team members, in most of the cases these raise a red flag and may lead to a strain on the healthy relationships, it will have vivid impact on the project outome.

more to come...

Sameer Penakalapati

Financial Management for Project Managers

You may be wondering as why a project manager should have a knowledge about financial management, the reason, you should be in a position to make a decision to go with the project/approach or not depending on the economic value of a project outcome.

Let us say in a overly simplified example, you are managing a project with an expected revenue of a product/service is $100 but your total cost of the project is $105, will you do it? Of course not!

But in reality, it may not be this simple, you (project managers) should know some of common accounting standards to measure the project outcome with the project cost. Here are some of the key financial indicators you should be aware of.

1. Return On Investment (ROI)

• It is a concept for quantifying the value of an investment. In a simplest terms, it is the net profit of an investment divided by the net worth of the assets invested.
• It is often an investment that companies must make in advance of any return.
• In almost all the cases, you will be asked to produce a business case for any investment with some sort of measurable return

2. Net Present Value (NPV)

• It compares the value of a dollar (or any currency) today to the value of that same dollar in the future, taking inflation and returns into account
• For example, a businessman want to buy a retails store, first he should cacluate the future cash flows that store would generate and discount those cashflows into one lump-some amount as a present value, let us say $100,000. If the owner of the store willing to accept an offer at or less than $100,000 (NPV) the you should buy it else should not buy the store
• In simple terms, NPV is positive, the investment on a project is good else you should look for other better opportunities

3. Internal Rate of Return (IRR)

• The rate (interest rate) at which the project inflows (revenues) and project outflows (costs) are equal.
• You can think of IRR as the rate of growth a projected is expected to generate
• In a simple terms, you have two projects to choose from, Project A with an IRR of 25% and Project B with an IRR of 40%, opt a project always with higher IRR, in this case Project B

4. Payback Period

• Time taken to recover the cost of an investment
• In a mathamatical terms, Cost of Project divided by Annual Cash Flows
• For example, if a project costs $10,000 and is expected to return $2,000 annually, the payback period will be $10,000/$2,000, or five years
• In a simple terms, if Project A with payback period is 6 months and Project B with a payback period is 12 months, you should pick a project with less payback period, in this case Project A

5. Benefit-Cost Analysis

• It is a way of evaluating all of the potential costs and revenues that may be generated if the project is completed
• For example, prior taking on a new project, prudent managers will conduct a cost-benefit analysis. Let us say, benefit-cost analysis of Project A is 2.5 and Project B is 1.5, you should choose higher benefit-cost project, in this case Project A

6. Working Capital

• It is calculated as 'Current assets minus current liabilities'
• Also, It is the amount of money available to invest by a company

7. Discounted Cash Flow (DCF)

• A valuation method used to estimate the attractiveness of an investment opportunity
• Converting the future earnings to today's money
• In simple terms, the time value of money

8. Depreciation

• Assets lose value over time is called depreciation
• Two types: Straight line depreciation, Accelerated depreciation
• Straight line depreciation: The same amount of depreciation taken each year. For example, if you buy a car for $10,000 with a life time of 5 years then you take $2,000 as a depreciation each year
• Accelerated depreciation: It depreciates faster than straight line

more to come...stay tuned

Sameer Penakalapati

Tips for passing PMP exam

Here are some of the tips that helps you pass the PMP exam in the first attempt



1. Understand the flow of 5 process groups (Initiation, Planning, Execution, Monitoring&Control, Closing) - Refer PMBOK for this material



2. Knowledge on key concepts in 9 knowledge areas (Integration, Scope, Time, Cost, Quality, Procurement, Human Resource, Risk, and Communication) - Refer PMBOK, Rita Mulcahy, any other material.



3. Practice questions from Rita Mulcahy and other free/paid online material would be a great help for the preparation. You take a mock test for 4 hours and test your knowledge when you are close to the exam date, so that if any areas that you are not strong, you will have an opportunity to prepare for some time



4. Always Always do a group study, this will reduce more than 50% of your prep time



5. You have about 50% of the questions are situational based, so it will be hard to find a definite answer, what is the best way to answer them?

You can follow two important methods:

5.1. Elimination of choices: how can you eliminate two bad choices out of four? If you have gone through the material good enough then it would be VERY easy to elimite two wrong ones

5.2. Read the question: Out of the two choices, you can pick the correct choice by reading the question carefully

Following these two steps, almost always you can able to pick the correct answer.

6. Pay a special attention to Time, Cost, Integration, Risk management areas. The questions in these areas are almost direct and easy to answer.

7. Know these important concepts without any glare!

7.1 WBS (Work Breakdown Structure)

7.2 Stakeholders and their respective roles

7.3 Network diagramming methods, Critical Path, Lead/Lag

7.4 Types of Costs, Cost vs Budget, Cost calculations

7.5 COQ/COPQ

7.6 How processes are integrated? which process output becomes an input to next process? etc.

7.7 Type of organizations, Functional - Balanced - Projectized

7.8 Communication channels n(n-1)/2, Types of communication (Direct, Indirect, Written, Oral, Formal, and Informal) - you should know where to use what type of communication

7.9 Procurement types (Time & Material, Fixed Cost, Cost Plus Fixed Fee, Cost Plus Percentage etc.)

7.10 Team development, Acquiring a team

8. Spread your study time in three months, 1 hour each day (this shouldn't be difficult committment). It's probably a less than 20% of your TV time every day :-(

9. Best way remember PMI concepts, pick a sample project and do all the process steps. Do it as a group, you will have FUN and Learn

10. Follow the above 9 steps, you will get PMP certification

Happy Learning...

Sameer Penakalapati

Top 10 qualities of a Project Manager

You might have seen many online posts or seminars talking about how a project manager should be and his/her capabilities as a successful project manager. I have different perspective on it, and will also explain why.

Here is my list in the order of preference

1. Excellent Negotiator

Who is Project Manager? Manage the assigned resources at defined/un-defined constraints. How a PM can manage these, my point and many others felt that it all boils down to how well you negotiate with your team, stakeholders, vendords/external agencies to get to the bottom of the project need or task. I have seen many great project managers are successful negotiators, everything else is next.

2. Advisor

In a real world scenario, you have many constraints and challenges to meet stakeholder requirements so some PMs are successful and others are not? Do you know why? In general, if a requirement or a request from a stakeholder is far from acheivable, most PMs jump in and negotiate to change or remove the requirement from the list but not understanding the impact to the business. The good PMs discuss the need for the requirement by understanding the business need and asess the impact and works with Stakeholders to identify an alternte solution.

In the same way, act as an advisor to the team members on various issues

3. Excellent Communicator
If you want to be effective communicator, you need to understand the audience you are communicating and their roles in the organization. If you are communicating with senior management, then communication is short and dollarize the objective. At the same time, if you are communicating with the project teams, then you need to be more clear and precise on the assigned action items

4. Highest Ethical Standards

One should be able to possess highest ethical standards to be a great leader. Respect all the individuals, treat every one equal, loyal to the organization, respect data privacy & personal information, equal opportunity to the team, work for the team and to the organization

5. Team Player

This is the basic requirement of a Project Manager, and without it would not be PM. How in the earth can you manage the team if you are not a Team Player? How can you buy-in from the team even to get to the project on-track all the time? PM should recognize the fact that every member in the team is equally important to their respective roles, and play by the rules as set for the project or PMO(Project Management Office)

6. Business Savvy

Successful Project Managers know always the business need of doing their project, and how it impacts to the organizational goals. Knowing the business always helps the PM in steering the project to align with the set goals for the project. I encourage organizations to be more suceptible to idea of involving their PMs in key project decisions, it always uncover any risks and plan for managing it well in advance.

7. Problem Solver
It is a basic trait of a Project Manager. Virtually every project in this world may have some constraints to manage, a problem solver can always find a way to manage those constraints. A constraint can be a limited time, limited money, limited resources, limited knowledge, team conflicts and many others to manage, a problem solver know how to isolate the problem and steer the project towards the set goal.

8. Focus on target
As mentioned the constraints above, you still need to manage the project to deliver on-time and on-budget, this is not an easy task, you may have a lot of stress and pressure at times to get around a problem to keep the project stay on-track. A best project manager always stay focussed under all these circustances.

To explain it more eloquantly, here is a small story: Three students were practicing a rifle shooting in a forest, the important trait is a focus on a traget. So the guru (teacher) want to test their skills, he called on the students and showed them an apple tree and pointed them to the apple on the tip of the tree, asked the students to keep the rifle ready.

1.Guru asked the first student shooter, what are you seeing at the target?
First student replied: Apple, Tree, and Sky
2. Guru asked the second student shooter, what are you seeing at the traget?
Second student replied: Apple, and Tree
3. Guru asked the third student shooter, what are you seeing at the traget?
Third student replied: Apple only

Now you know, who are focussed on the traget, third student. The PM should always focus on the project outcome keeping everything out of the sight.

9. Competence

The project manager should be competent in all the three following domains: Project Management, Business, and any specific skill set required for a project. Being competent in all the above three domains, a PM can manage the project with any complexity.

10. Empathy
Empathy is nothing but understanding, what does it mean?

> Understanding the business
> Understanding the stakeholders
> Understanding the need for the project
> Understanding team issues
> Understanding risks
> Understanding project committment..like many other

one should be open minded in embracing the project key needs.

Happy Learning...

Sameer Penakalapati

Note: These are the opinons of the author, the applicability is at your own discretion.