Synergy
PMI North India Chapter
Collaborating Project Management for High Performance Business Insight
April-June 2012 Newsletter
Issue 5
this issue Managing Complex Business… P2 Cash Flow Management…P3 Organizational Change… P7 Quiz…P9 Rigidity to Agility...P12 Project Management Office…P16 Best Practice Quality Assurance…P18 Past Events…P21 Authors… P22 Editorial Team…P23
Work life balance, critically yours…
From the Editor’s Desk
First Anniversary Issue
It is a proud moment for entire community as our SYNERGY turns 1 year old. I, along with my entire Editorial team, take pride in releasing the fifth edition as a First “Anniversary Issue”. Successful and timely releases of SYNERGY reflect the involvement and commitment of entire Project Management fraternity. Timely releases of SYNERGY would not have been possible without your support. I, on behalf of Chapter board, eulogize all the authors in the last 1 year who have devoted their valuable time for nurturing SYNERGY despite their other professional and personal commitments. 21st June is longest day of the year since sunlight is for longer duration of the day in Northern Hemisphere. We aim to take this cue from nature and spread the light of knowledge and experience using SYNERGY as a medium for many more years. We have symbolically chosen 21st June to release our SYNERGY Anniversary Issue as a source of inspiration towards continuous growth and awareness of Project Management. I am also grateful for Editorial team's efforts comprising of committed individuals who have zealously worked as a team in reviewing all inputs and feedback to ensure that a well packaged SYNERGY is released every quarter. Our entire editorial team is a classic example of executing project using a virtual team. This is due to the fact that our editorial team has never had a single face to face meeting since the time SYNERGY was conceived! We take pride that we have released every edition of SYNERGY on the announced date without any schedule overrun. I urge fellow professionals to read SYNERGY and we always look forward to your critical review that will help SYNERGY to become a mature adult. Happy Reading! Regards Piyush Govil PMP® Vice –President – Communications PMI North India Chapter
P1
Managing Complex Business Deliverables in Projects Business Case – Telecom Industry By – Ritesh Arora
In
today’s dynamic futuristic world the role of a business analyst is focused on the risk analysis of the business vision and project opportunities. The technology is changing fast, in the times of recession there is a huge pressure on the margins and the customer wants the best at
the
cheapest
rates.
opportunities various
Further
in
case
of
global
legal, geographic specific risk,
political risks need to be assessed.
Project management key essentials Managers:
Technical architect and commercial architect of the business /project opportunity will have to take project oriented approach. Analyze the risks and suggest multiple scenarios to the customer as well as to the management and will have to create a balance between customers requirement and organizations goals of profitability before coming up with an optimum techno-commercial solution.
Key Inherent Risks for Working Project Managers:
It is a trend and most of the organizations today are hence using teams to analyze these risks and suggest
Inherent risks in markets (systematic risks)
Specific risks (non systematic risks) which can be classified as: Market Risk (Market price fluctuations, FX etc)
mitigations and come up with scenarios with technical, commercial and legal background. Right project management approach in these kinds of teams is not currently used to an optimum level at least
Case Study – Telecom Industry Managers:
in Indian companies and a lot can/ needs be done to
A business customer has a requirement which can be served by a global MPLS based VPN but the customer has a limited
introduce
the
concept
and
principles
of
project
management in such teams.
budget and also wants the solution to run for seven years
Project management techniques specially those of
without impacting its real time requirements.
analyzing
Techno commercial risks are:
frameworks, risk registers etc are the essential need of
Hardware obsolete.
requirement
-suggested
may
become
Technical obsolesce and Capex limitations
mitigating
risks
like
creating
risks
business managers/analysts/bid managers in today’s global volatile business environment.
Take Away Managers:
Current
Geo political risks are:
&
telecom
market
business
atmosphere
with
uncertainty and project delivery limitations can be best
Regulatory constraints in the different global locations
managed by a balanced careful approach for project
may impose different challenges like censorship on the
managers/BA’s/Procurement teams to plan and analyze
content and risks which needs to be mitigated by
potential risks event with mitigation plan for seamless
proper contracting.
delivery and satisfied end customer expectations.
About Author
Mr. Ritesh Arora Senior Manager-Central Bid team, HCL Infosystems Ltd, Noida Save Earth, Go Green
Ritesh has close to 10 years of Management Consulting, and Industry wide experience across multiple sectors - Telecom, IT, Oil & Gas, Government ( e-Governance), BFSI . His key competencies are: Project & program management, Commercial & bid management, procurement & vendor management, business development, relationship and stakeholder for transition & change management and provide thought leadership. He has worked with various clients in India & Middle East. He is BE in Computers Science and Engineering from DIT in year 1998-2002 and MBA from FMS (part-time). P2
Cash Flow Management in Large Infrastructure Projects By – Asim Prasad
P
roject Cash Flow Management involves estimating costs of different packages, predict the timing of cash outflow, arrange funds, monitor the actual cash outflow,
Sl.
Total Cost TCi
Cost head
identify deviations with respect to plan and modify the
1.
Procurement packages (P1,P2….Pj)
TC1
baseline plan as the project progresses so that the actual
2.
Work Packages(W1,W2….Wk)
TC2
cash outflow is within permissible deviation limits. This is a
3.
Owners Management Expenses
TC3
continuous and intricate process as it involves thorough
4.
Contingency
TC4
5.
Inflation
TC4
6.
Interest on Debt , Margin Money for Working Capital
TC5
knowledge of the commercial order conditions for raising bills, timing of the bills raised, payments cycle, physical progress
made
against
each
package
etc.
Large
infrastructure projects are capital intensive and require
Project Approved Cost(Baseline-0 at Time T0) Table 1
funds during the project execution. The source of these funds may be either debt or equity. Managing the funds and its efficient outflow synchronizing with the actual
TACB0
2 Estimating cost for each item under the cost head Managers:
progress made is a complicated task due to the fact that a
During the project investment approval, costs are allocated
track of the incremental physical progress is required to be
against each item under the cost head based on market
kept on real time basis. Efficient Management of funds is
estimates and in-house cost database. Applicable taxes and
essential to optimize the interest cost and at the same
duties if any are also indicated. If required, cost of some of
time ensure that sufficient funds are available to release
the items under the cost head are estimated in foreign
payments
currency assuming that such items would be imported.
against
the
bills
being
received,
without
Thereafter the total cost estimate is derived. Tolerance
annoying the vendors and contractors.
limit in estimated cost of +/- 20 % at the time of seeking
Steps in Cash Flow Management Managers:
investment approval is considered accurate.
Cash flow management is an integral part of Project Management. It’s a systematic long drawn continuous process which starts immediately after the project capital
Mathematically, TACB0 =
i
where i=1 to n; n= total number of cost heads
cost estimates has been prepared. Estimating the net cash
The total approved cost=TAC, is a function of time and is
flow over the economic life of the project with accuracy is
dependent on market forces.
important as it affects the wealth creation of the
3 Calculate the Cash Outflow based on estimated cost
shareholders. Based on my experience of executing cross country natural gas pipeline projects the steps required to be followed for efficient cash flow management for large
Large infrastructure projects are completed in three to five years time depending on the project complexity and size. At
infrastructure projects are as under:
the time of investment approval, considering the estimated
1 Identification of cost heads
are forecasted based on project schedule, past experience
project schedule, the cash outflows against each cost head
Cost heads are identified with the decomposition of the
and market estimates. Thereafter the total outflow against
project
Large
each month is calculated.
heads
Further the percentage monthly cash outflow is also
at
infrastructure
the
time
projects
investment involves
approval.
various
cost
comprising direct and indirect cost, hard and soft costs as
calculated based on estimated costs. Refer Table 2
detailed herein. The project cost estimated at the time of project investment approval forms the basis for ascertaining the project cost overrun at the time of project completion.
Food for thought Work life balance, are we really serious? or buzz words… Served by – Piyush Govil
Save Earth, Go Green
P3
Sl.
Total Cost: TCi
Month -1
Month -2
1
Procurement packages (P1,P2….Pj)
Cost head
TC1
TC11
TC12
Month-(N-1)
Month-N
2
Work Packages(W1,W2….Wk)
TC2
TC21
TC22
3
Owners Management Expenses
TC3
TC31
TC32
4
Contingency
TC4
TC41
TC42
5
Inflation
TC5
TC51
TC52
6
Interest on Debt , Margin Money for Working Capital
TC6
TC61
TC62
Total [Basaeline-0]
TACB0
TCM1
TCM2
TCM (N-1)
TCM-N
% Cash Outflow [Basaeline-0]
-
TCM1/ TACB0
TCM2/ TACB0
TCM(N-1)/ TACB0
TCM-N/ TACB0
Table 2
Mathematically,
where m=1 to N; N= total number of months for cash outflow
The cash outflow so calculated is the baseline-0 cost outflow based on estimated cost.
4
The actual expenditure under cost heads like Owners Management Expenses, Contingency, Inflation, Interest on Debt, Margin Money for Working Capital are calculated after the project completion during capitalization. However,
Calculate the Cash Outflow based on actual ordered cost and scheduled progress [Baseline-1]
during execution certain values are estimated based on past
In large infrastructure projects, awarding contracts to vendors and contractors for procurement and works is a
experience and indicated under total cost head. The steps are repeated till all orders are placed. Refer Table 3
lengthy process as high value procurement involves several
Further the percentage monthly cash outflow is also
intricate steps for which standard transparent procedures
calculated based on ordered costs.
and guidelines are followed. This process also involves different categories of stakeholders who interact with each other and are influential enough to alter the decision process. Considering all this, as and when the orders are
Mathematically, months for cash outflow
placed, the actual order value is recorded. Based on the
The cash outflow so calculated is the baseline-1 cost outflow
execution schedule for the particular order considering the commercial conditions, the cash flow is determined.
based on ordered cost.
Sl.
Cost head
Table 3
Total Cost: TCi
Total Order Cost: TCi
Month:
Month:
Month:
N-m
N-2
(N-1)
Month:N
1
Procurement packages (P1,P2….Pj)
TC1
TOC1
2
Work Packages(W1,W2….Wk)
TC2
TOC2
3
Owners Management Expenses
TC3
TOC3
4
Contingency
TC4
TOC4
5
Inflation
TC5
TOC5
Interest on Debt , Margin Money for Working Capital
TC6
TOC6
Total [Basaeline-1]
TACB0
TOCB1
TOCM (N-m)
TOCM (N-2)
TOCM (N-1)
TOCM(N)
% Cash Outflow [Basaeline-1]
-
-
TOCM(Nm)/ TOCB1
TOCM(N2)/ TOCB1
TOCM(N1)/ TOCB1
TOCM(N)/ TOCB1
6
Save Earth, Go Green
P4
5
At the time of project execution, recalculate the cash outflow based on balance expenditure to be made and actual progress made [Baseline-2] Z=X-Y=
X=Total Order Cost: TCi
Y=Cumulative Expenditure Made till previous month
Balance Expenditure till previous month
Procurement packages (P1,P2….Pj)
TOC1
TCE1
Z1=TOC1-TCE1
2
Work Packages(W1,W2….Wk)
TOC2
TCE2
Z2=TOC2-TCE2
3
Owners Management Expenses
TOC3
TCE3
Z3=TOC3-TCE3
4
Contingency
TOC4
TCE4
Z4=TOC4-TCE4
5
Inflation
TOC5
TCE5
Z5=TOC5-TCE5
6
Interest on Debt (Indirect Cost)
Sl. 1
Cost head
TOC6
TCE6
Z6=TOC6-TCE6
Total [Basaeline-2]
TOCB1
TCE
Z=TOCB1 -TCE
% Cash Outflow [Basaeline-2]
-
TCE/TOCB1
(TOCB1 –TCE)/ TOCB1
Table 4
Further the percentage monthly cash outflow is also
7
calculated based on balance expenditure. The cash outflow so calculated is the baseline-2 cost outflow based on balance expenditure. As the project progress, on month to month basis the balance expenditure and revised cash flow are calculated. This continuous process improves the
accuracy
level
of
prediction
w.r.t.
anticipated
expenditure required in subsequent months. Refer Table 4
6
Prepare contingency plan to minimize the deviation
Once the reasons for deviations under different WBS element are identified, contingency plans are prepared to minimize deviations. Implementation of the contingency plan in true spirit ensures that the project is still on the scheduled path. Some contingency plans may involve usage of resource like time, cost and heavy equipment. However, due to scarcity in resources, it is not always possible to implement contingency
Identify the deviations with reasons between the
plans due to which projects are delayed. This may result in
cash outflow derived in step 4 and step 5
cost overrun also.
The project manager may therefore
The project execution involves uncertainties and often it is
conduct a decision tree analysis along with a cost benefit
difficult to precisely predict the risk and its outcomes. Risk
analysis before proceeding ahead.
may be known-known or known-unknown. This affects the
Monitor the actual cash outflow
cash flow during actual execution. Mostly it happens that the
8
actual physical progress is in variance with the planned
Cash outflow is required to be monitored on continuous basis
progress. Therefore it becomes important to identify the reasons for deviations and the corresponding variation in cash outflow. Once such deviations are identified, the planned cash outflow can be prepared with higher levels of accuracy. Accuracy levels in prediction of cash flow on month to month basis of 95 % are considered good.
The
periodicity of such a detailed analysis for ascertaining deviation is one month.
with the release of payments against running bills. This being a real time process, some system needs to be designed that will monitor the progress electronically and provide a snapshot information to the project manager on aspects like balance payment against each cost head, look ahead plan for succeeding months, percentage financial progress made in each cost head along with overall percentage financial progress. The percentage progress is measured considering the overall approved project cost in the denominator.
Project Management – lighter side The more innocuous the modification appears to be, the further its influence will extend and the more plans will have to be redrawn. Overhead by -Kumar Saurabh, PMP® Save Earth, Go Green
P5
Take Away Managers:
The above methodology has been applied in execution of
expenditure in the successor month is borrowed on month to
cross country natural gas pipeline projects with high
month basis. The above exercise also helps to prepare budget
degree of success in predicting cash outflows with
estimates for the financial years during the lifecycle of the
accuracy within permissible limits. Considering the fact
project completion. If the company is executing number of
that debt financing is also involved in large infrastructure
different
projects, it becomes very important to precisely predict
complexity, it helps to ascertain the cash flow of the entire
the future cash outflows on monthly basis for project
project portfolio at the organizational level.
infrastructure
projects
of
varying
size
and
completion so that only the portion of amount required for
About Author Mr. Asim Prasad is a graduate in Mechanical Engineering from IIT Kanpur and working as Chief Manager
at GAIL(India) Limited,
New Delhi. He has varied rich experience of the natural gas value chain comprising Operation & Maintenance of Cross Country Natural Gas Pipelines, Project Management of Cross Country Natural Gas Pipelines and Natural Gas Marketing. During the course of his professional career he completed Post Graduate Diploma Mr. Asim Prasad Chief Manager GAIL (India) Limited, New Delhi
Save Earth, Go Green
in
Project
Management,
Advanced
Diploma
in
Management and Executive Diploma in Project Management. He is a member of PMI USA, ASME USA; Life Member IIGE Kolkotta and Member IEI Kolkotta.
P6
Organizational Change – What’s in it for me? By – Anju Agarwal
C
hange is a necessary part of growth and it is accelerating at an increasing rate. Factors, such as
Top reasons and remedies for employee dissatisfaction during an organizational change:
globalization, new technologies, mergers & acquisitions, shifting markets, structural changes and outsourcing, force
1 Lack of a shared vision
businesses to respond effectively in order to survive. Every organization must change - not only to survive, but also to
Employees fail to see the reason for the change. It is natural
retain its relevance in a world of intense competition,
for employees to view change, first from the perspective of
constant scientific progress, and rapid communication.
their own job security, and then from the needs of the
Though it is very clear that change is necessary, one
organization. Employee’s concern zone is limited to their
question why change efforts fail to achieve the desired
projects or working teams, and thus they fail to connect to
results, or why employees feel totally lost and frustrated
the big picture that the senior management is able to
during and after a change, or why the attrition rate
envision.
skyrockets during these organizational changes.
Managers need to define the change for the employee in as much detail and as
It is very important that change is identified by the
early
employees as a stimulator
Updates should also be
of
their
growth.
as
provided
One
possible. as
things
and
become
cannot drive and motivate
develop
an employee for long, by
clearer. The reason or
providing figures of future
rationale
benefits of organizational
must
changes. requires
Every an
be
for
change
passed
to
every single employee
change
constantly
adjustment
and
and it is very difficult to
consistently.
get a buy in from an
Employees should be able to see the clear
employee without framing
objectives
the change as a “What’s in
achieved
it for me? (WIFM)”.
reason for the change. Buy-in is also about personal benefit, and if employees don’t believe that they shall receive a certain level of individual benefit from the change, getting buy-in will always be a challenge.
by
be the
company wide changes.
To embrace change, people need to feel comfortable about the change; they need to understand and appreciate the
to
2 Lack of support, training and guidance Along with the change, comes the team alignment shifts. Employees may have new managers, new leadership, team members, policies, processes, locations or alterations of working hours.
This paper explores why employees are left unappreciated
Implementing change in an organization forces people to alter
and undervalued during corporate change programs and
how they relate to one another. Not only do their goals,
offers
can
processes and equipments change but the way they deal with
a
others in the organization changes. It causes anxiety, which
some
institutionalize
ideas
as
change
to
how
management
constantly evolving success story.
Save Earth, Go Green
a
corporation to
become
leads to resistance to the change.
P7
One way to counter this is through communication and ownership in the process. Involvement in formulating the education. The top management should instil the need of proposals to implement change as well as participation in the change with frequent and early communication to the task forces reduces the fear of the unknown and leads to employees. Managers should minimize uncertainties by commitment. addressing the employee’s needs and talk about any fears or concerns with the employees. They should educate their
5 Disengagement
employees to be “change-ready” as it serves two broad
Employees need to know what is expected of them. They need
purposes. First, it enhances employee’s understanding of
to believe that their needs are important and their value is
the organization’s business so that they comprehend both
acknowledged. They need to know how to contribute and
where and why change is necessary. Second, education
remain involved in organization.
provides employees with the necessary skills to implement change.
Organizations cannot afford to lose their skilled employees by causing them to disengage from the organizational changes.
3 Loss of direction
Managers should do their part in keeping their employees
Often during a change, there is chaos and uncertainty regarding the to-be policies and new processes. Old policies may need to be replaced, while the new policies and process are still not developed. This can cause confusion in the mind of employees and they feel that nobody is caring for them with respect to their self growth,
engaged and they should find projects which justify their skill set and experience. Employees should not feel that their skills and abilities have been devalued by the organization and managers should provide meaningful work to all employees.
6 Weak leadership To drive organizational change, one needs a very skilled and
both in monetary and professional terms. If senior managers can put these processes and new structures into place early in the change process, the rest of the change implementation will proceed more smoothly. As a direct manager, it is important to empathize and
matured set of leadership. Often it seems that people are promoted on a criterion not at all related to the skills needed to drive this change. This can be a serious mistake and can jeopardize the organizational change efforts.
listen to your people so that you understand their fears and
Serious consideration and thoughts should be given to the
work to address them.
drivers of these changes – the top management. They should either have had extensive experience in handling such
4 Lack of employee participation Often
after
the
initial
announcement
changes or must have previously shown their capabilities in of
a
big
organizational change, the senior management often delays to present the ancillary plans. They might take a long time
such situations.
7 Indifference to the change and loss of productivity
to create a final structure which they think is more
When people are forced to embrace change or do not see any
appropriate for sharing with the employees. But a
benefits for them in the change, the quality of human capital
prolonged roll-out can also exacerbate staff uncertainty
deteriorates. Highly energized employees start to lose their
about the future; heighten anxiety, and lower morale. This
passion and stop applying themselves to the process. They
leads to a communication gap between them and the
become distracted and lose interest in their current work
employees, who feel that they do not have any say or
responsibilities. Hence a very motivated employee becomes
inputs in the supporting decisions. Faced with forced
an indifferent employee. In the worst-case scenario, the
change, many employees feel threatened and believe that
valued employees leave the organization.
they will lose power, prestige, competence, and security. They feel that the situation is beyond their control and they fear the process.
A rewards and awards programme is an important binder for the
change
drive.
An
organization
should
properly
acknowledge and appreciate its people for their support for
Here, employee participation is necessary to keep them
change and constantly encourage them for their inputs in the
engaged
process and make sure that their voices are heard by the
with
the
changes.
Employees
should
be
encouraged to participate, as this will give them a sense of
Save Earth, Go Green
senior management.
P8
It’s not only the change that people resist, but the
As a manager, you also have a choice. You can either be blind
method of the organization’s change management.
to the various employee-perspective challenges that any form
Leaders need to identify the business imperative,
of change management brings or alienate your employees, or
communicate the vision, establish the parameters, and
you may acknowledge and work together these human
create a supportive environment with the employees so
components of the corporation to build a healthy and
they understand what is coming and what it means for
profitable enterprise that best survives and flourishes in the
them.
ambiguity of change.
As an employee, you have a choice. You can lie back and have it thrust upon you, whether you like it or not, or
References:
you can try to participate in that change and therefore
Joanne Mowat, The Herridge Group – Managing Organizational Change F. John Reh – Managing Change: Managing People’s Fear
have an input into its design and outcomes, to move the organization towards the goal. About Author
Anju has 13+ years of experience in IT. She has worked in various domains like Insurance Sector, Media Industry, Fleet Tracking and Medical Industry etc. Currently she is working as a Project Manager, responsible for designing and developing end to end IT solutions. She had worked in the technical role for more than 10 years and still cannot resist the temptation to fix errors in a team member’s code.
Ms. Anju Agarwal Project Manager Stryker, New Delhi
She is an MCA and a certified PMP. She is a passionate Project Manager, who would love to see a world where people acknowledge the work of PM's and would fully understand the significance of this role.
Quiz By – Abhijit Bharatkumar Answers to quiz – SYNERGY 4th Edition - http://www.pminorthindia.org/Synergy/Issue04/ 1-b, 2-b, 3-d, 4-d, 5-d
3
No winner for fourth edition
First correct entries will win a prize
To generate interest and increase the readership along with participation of members, Quiz has been designed based on the articles published in this edition. To attempt and Win a prize, please read all articles carefully. Do send your entries (pminicmag@pminorthindia.org), support your SNERGY…
Save Earth, Go Green
P9
5th Edition Quiz
Managing Complex Business Deliverables in Projects
Question 1 Which of the following activities can be considered project management? I – Quality control of an automobile manufacturing plant II – Budget setting for the next financial year of a venture capital firm. III – Construction of a new tower for a cellular communications company
A. B. C. D.
I only I and II only I, II and III II and III only
Question 2 Which of the following statements are true in regards to Risk Management? I – The risk register is the detail documentation of all risks associated to a particular project II – Risks always have a negative impact and not a positive one III – Risk Management is an active part in overall project management
A. B. C. D.
I only I and II only I, II and III II and III only
Organizational Change – What’s in it for me?
Question 3
Which of the following is NOT a part of emotional intelligence?
Question 4
According to article, which of the following is NOT a reason for employee dissatisfaction during organizational change?
A. B. C. D.
Understanding employee emotions Facility with words and languages Motivating employees and executing employee engagement Recognizing emotions in team members
A. B. C. D.
Lack of a Shared Vision Lack of infrastructure Lack of Support, Training and Guidance Indifference to the change and Loss of Productivity
Project Management Office – An Integrative Approach
Question 5 Which of the following is usually NOT a function of the Project Management Office (PMO)?
Question6 According to the article, which of the following is NOT a step that helped CDAC, Noida to achieve Capability Maturity Model Integration Level 5 index rating?
Save Earth, Go Green
A. B. C. D.
A. B. C. D.
Appointing the chief executive officer for the organization Providing expert judgement when required Act as a hub of central co-ordination of all projects Can also be responsible for direct management of a project
Appointing the chief executive officer for the organization Providing expert judgement when required Act as a hub of central co-ordination of all projects Can also be responsible for direct management of a project
P10
Cash Flow Management in large Infrastructure Projects
Question 7 Which of the following is NOT an element of Cash Flow Management according to the article?
A. B. C. D.
Estimating costs of different packages Predicting the timing of cash outflow Generate product sales for required cash generation Monitor the actual cash outflow
Question 8 Accordingly to the article, some of the processes required for efficient management of funds are listed below. Please suggest the correct order. I - Identification of cost heads II - Calculate the Cash Outflow based on estimated cost III - Calculate the Cash Outflow based on actual ordered cost and scheduled progress IV - Prepare contingency plan to minimize the deviation V - Monitor the actual cash outflow
A. B. C. D.
I – II – III – IV – V I – II – V – IV – III II – I – V – IV – III II – I – III – IV – V
A. B. C. D.
357,000 412,000 288,000 734,000
Rigidity to Agility - A Case Study
Question 9 Which qualities one should imbibe to adopt Agile?
A. B. C. D.
Transparency, Centre of Importance Truth, Honesty & Trust Being bossy, Me & Myself over team Lies, Dishonest & Distrust
Question 10 How many dollars did we save by saving man-hours in transforming to Agile?
About Author Abhijit is trained as a mechanical engineer from NIT, Bhopal and works as an Executive in Siemens, specializing in Piping & Plant design for the world's most efficient natural gas based power-plant projects. He has worked on projects in Germany, Oman and South Korea, as well as several standardized power plants for Siemens and has worked in India and Germany. Apart from Project Management, his other interests include finance and Mr. Abhijit Bharatkumar travelling. Siemens, India
Food for Thought It’s easy to stand in the crowd but it takes courage to stand alone. By - Father of Nation -Mahatma Gandhi Save Earth, Go Green
P11
Rigidity to Agility - A Case Study By – Prashant Malhotra
A
s the world grows leveraging the power of technology, which is expanding multi-fold, there is always
The product team had been working in waterfall methodology for a century or so. From
a threat from new or existing competitors in the market.
application
architects,
Customer loyalty may start shifting and they would think
database administrators to
twice on buying your products if they get better bargains.
application
How does one survive in such an environment where you
testers
need to produce better, faster & cheaper products?
engineers;
Companies till now had formulated strategies to meet at
played a critical role at
least one end of this triangle i.e. either by producing
various
cheaper products through mass production or outsourcing,
project lifecycle.
developers, &
support everyone
phases
of
the
producing better products by investing in vendors & employees etc. or by being ‘The First One’ to market. For past couple of years, companies have been revisiting their strategies as they could easily see the scope of meeting at least two corners of the better-faster-cheaper triangle. And with this, we saw the emergence of Agile In IT world, everybody nowadays is talking about Agile. In current scenario, if you don’t know Agile; people would see you as if you have just arrived from 18th century. Agile has many avatars and had been surviving in this world since 1950s. As this was the buzz word, we too wanted to be AGILE by snapping of our fingers in our organization but this was not sufficient. In order to transform ourselves into agile, we first went through white pages, articles & blogs by Agile Gurus. Then, to get a good grasp of the real potential & contribution of Agile, we attended multiple conferences, webinars too. Our immediate manager showcased the potential of agile to management and finally our management agreed upon to do a pilot run. Below is a case study wherein, we would like to present some facts as how our transformation to agile improved our results.
Journey The biggest task for anyone in adopting Agile was, is & will be “Changing of Attitude from I, me & myself to We & Ours”. Truth, Honesty & Trust are valued very high instead of hiding key facts to remain center of importance or Mavericks. With agile coming in, the focus was to equip all team members with attitude as “Jack of All, Master of Some”. Resources
were
encouraged
to
share
the
knowledge
overcoming their false loss of importance to product; as transparency
was
the
most
important
aspect.
Fault
acceptance attitude was given more importance instead of blame games. Walls were covered with Whiteboards that also acted as status-boards to give a clear picture to everyone on the progress & hurdles from letting the team move forward. Each & every Enhancement Request that spanned across multiple months was broken down to multiple tasks that could be covered in least possible time. The bridge of trust was built from both sides (Management & Team) as being a product team and estimations were taken from team members directly. The team members automatically turned personally responsible & accountable for delivery. There were separate tasks opened up for R & D which were earlier part of a feature
History The product roll-out used to happen once a year. Then as competition grew; there arose a need to deliver the product frequently and yet meeting the quality. The below
request. Buffer time which was one big culprit in any project would now no longer exist either at management’s end or at team’s end.
project management triangle always plays a role, no matter what methodology you follow.
Project Management – lighter side
If you perceive that there are four possible ways in which a procedure can go wrong, and circumvent these, then a fifth way will promptly develop. Overhead by -Kumar Saurabh, PMP® Save Earth, Go Green
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Below depicting an old work flow using a waterfall method. So, no matter what you do, how good you do & even if it’s best for you, your team or company; nothing counts or matters if
Old work flow
the results cannot be quantified. So, in order to measure as what’s done now versus what’s done earlier; we started analyzing data from our bug tracking software. Results
RootCause 23%
Coding Error Non Coding Error 77%
Earlier With agile coming into practice; the above cycle saw a change. With newer approach, we broke the big features &
Current
RootCause
phases to smaller ones. As the deliverables became smaller, quality team involvement commenced from understanding the requirement till delivery. Many implicit requirements that slipped through the cracks during design
Coding Error
42% 58%
& development phase were caught right up front and were explicitly made part of overall scope. Below is the diagram that depicts a smaller cycle as compared to the entire phase.
New work flow
Non Coding Error
The above diagram clearly shows that there has been a noticeable change between ‘Coding’ & ‘Non-Coding’ errors. Non-Coding errors have increased by about 17%. When we went deeper, we found that Requirements & Design errors had increased quite a bit (as seen in the below diagram).
7%
Results
RootCause
Coding Error
11%
Enhancement Requests
5%
Design Error 77%
Requirements
Earlier Current
Root Cause
Results & Measure – 17% Good or excellent are qualitative attributes to a result of task performed but these can be interpreted in different scale & style from person to person as each has his or her own definition or perspective. But if you show numbers such as 3 out of 5, or let’s say if 4 out 5; people can easily understand as good or excellent respectively.
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21% 4%
58%
Coding Error Enhancement Request Design Error Requirements
This made us curious to understand the real root cause of such a change in numbers.
P13
Upon analyzing, we came across that introduction of quality
For this, we took numbers reported by bug tracking software
/quality team member right in the beginning transformed
and approx cost of fixing a defect in various stages of SDLC.
implicit requirements to explicit ones. Their way of looking
To ease our calculations, below is the table that we can use
upon the functionality & technicality of a piece with the
as reference point –
entire system in background made the product owners & designers
revisit their work to incorporate every aspect
before handing over to the team to start off construction or
SDLC Phase Requirements
Cost of Fixing ($) 100
task.
Design
200
The above results were something that we noticed in our
Development & Testing
300
product delivery cycle in a one year period. The results may depend & vary from product to product & service to service.
Let’s assume that there total 100 bugs (earlier cycle &
After the results were quantified, transforming these
newer cycle), so cost of fixing would come out to be –
numbers for management to comprehend was the next big
Old cycle
step. So, we thought of two ways through which we could SDLC Phase
collate results in dollar value –
1 Saving of man hours to deliver workable software We calculated & compared costs incurred in delivering the software and we saved approximately 24% of man hours on yearly-product cycle basis.
Requirements Design Development & Testing Grand Total ($)
# of Bugs
Cost ($)
7 16 77
100 200 300
Total Cost ($) 700 3200 23100 27000
Converting man hours into
dollars were put to management. In our case, we were around 20 resources across the globe and if average
New cycle
resource is $30 an hour; we saved approximately $288K for
SDLC Phase
this year.
Requirements Design Development & Testing Grand Total ($)
2 Reducing the cost of fixing a bug It is a well known fact that cost of fixing a defect at an early stage is always lesser than at later stage as depicted
# of Bugs 17 25 58
Cost ($) 100 200 300
Total Cost ($) 1700 5000 17400 24100
From above calculations, its turns out that we saved approx
in the below diagram.
$2900 for every 100 bugs; the real figures would definitely be on higher side in a highly evolving product cycle.
500 450
3 Time to market
400 Customer
350 Test
$ dollars
300 Development
250 200 150
Design
dollar value but was easily accepted by our management. Turning agile gave advantage to change our direction on the fly based on market sentiments. We could now easily maneuver to meet the ongoing changes in expectations of
Requirement
100 0
Market growth is something we couldn’t really put into
customers. Customers were happy and ready to shell in extra dollars as we helped them remain in competition by
Time
using our fast evolving product.
Food for Thought Work is a means of living, it is not life itself. By - Father of Nation -Mahatma Gandhi Save Earth, Go Green
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The management saw the benefit and praised us and is This product has more number of centers of development across now buying in arguments easily on being agile, but we still the globe as compared to current one. feel we have a long way to go as, still some features of With customized or hybrid approach, we have achieved such an ours expand over months as partly delivered features improvement; so the bigger question is, should we move doesn’t add value to base product. forward to pure agile? If yes, how much scope of improvisation And obviously the other part is Reward. We got rewarded should we expect? Should we jump onto second product or by another product transformation which is bigger, should we first transform the first product fully? Any input, comment or response is more than welcome.
complicated.
About Author Prashant has 12+ yrs of work experience in IT, having cross functional experience in domain of CRM & CEM, HR (401K), and Consultancy &Membership lifecycle. In addition to an MBA from IIM Kozhikode in Finance & Operations, he is an MCA; and currently working as a Project Manager delivering end to end solutions. Building self propelled effective & Mr. Prashant Malhotra efficient teams is one of his mottos of life. Project Manager Aspire Systems
Project Management Office --- An Integrative Approach By – Shalu Gupta & R.T. Sundari
P
roject Management Office (PMO) is the central nerve of the any organization. Any project starts and ends with PMO. In projects like infrastructure or product development the right material used at the right time constitute 70% of the project execution, where as in IT projects Human resource utilization is the major that helps the project delivery in time and within the budget. This
Control Tower. It is therefore important to consult entire stakeholders to implement
PMO
effectively within the
organization. Integrative approach of PMO The objective of the restructuring of PMO is to improve project delivery in terms of schedule, budget and quality. To achieve the objective we have selected the cross breed of Weather
article highlights effective implementation and integrated Station and Control Tower. approach to PMO in organizations, by taking reference to such practice adopted in CDAC, Noida.
1 Merge QA with PMO:
PMO is constituted to help the project group to plan and
The first step taken was to merge the Quality Assurance (QA)
manage the project. The role of PMO should have an
with PMO. While PMO sets the process and method for project
integrated approach based on the nature of projects
execution, QA becomes the watch dog in process adherence.
running in the organization, be it, Weather Station or
QA has dual responsibility of the project and process audit.
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Project performance data and reports are collected by QA using various innovative tools and submitted to PMO, who manage the resource allocation and priority issues with the help of data.
2
1
Centralized Repository
The Centralized Repository of all project documents and codes was created with PMO having an administrative control. The baseline documents were uploaded in project
Stakeholder in Projects
repository for the stakeholders to use. This enabled the
The turf wars between PMO and project manager that usually arise when the Control Tower PMO is implemented. To minimize conflicting roles, the Program Managers are
project managers to monitor the activity systematically. The centralized repository helps in reducing the non-availability of project related documents.
brought into PMO fold to head the different project groups.
The Functional Organogram
PMO become one of the stakeholders in all projects. The existing structure consisted of groups organized around technical groups like Health Informatics, e-Governance,
•SRS •Client CR
•HLD •LLD
Language Technology and Embedded Systems. Project teams were formed within these groups, who were responsible
for
design,
development,
testing
and
Implementation
Design
Testing
Development
implementation. This resulted in more emphasis on coding and little importance was given to design, testing and documentation. A root cause analysis of the above problem brought out that it can be solved only with the proper restructuring of the existing system. How we did it…
•System Integration Testing
•Code •Unit Testing
Implementation Team: Responsible for interaction with the customers for understanding and freezing the requirements. They prepare the Software Requirement Specification (SRS) and submit it to the Design Team for designing. Design Team: Responsible for creating High Level Design (HLD) and Low Level Design (LLD) and their review by the Review Committee before they are handed over to the Development Team. Development Team: Responsible for Coding and Unit Accordingly a restructuring strategy was adopted by which
Testing and generating Test Reports.
the existing groups were demolished paving way to creation
Testing Team: Responsible for System Integration testing
of four verticals viz. Implementation, Design, Development
and generating Test Reports.
and Testing.
Due to this structure, the documentation has
become a MUST. It became a deliverable from one vertical to the other.
Food for Thought There is more to life than simply increasing its speed. By - Father of Nation -Mahatma Gandhi Save Earth, Go Green
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2
Benefits achieved
Coordination and Communication
Coordination
and
Communication
between
different
functional units were routed through PMO. Based on the functional area, the new and existing projects got registered in PMO after filling the project registration form.
The vertical functional group and horizontal project team of matrix helped us to speed up our journey towards CMMI Level 5 and finally achieving it..!! Some
3
the
benefits
obtained
by
restructuring
and
implementation of PMO include:
Schedule and Cost Estimation
The projects schedule and cost were estimated based on functional area and timeliness. As per estimation of resources projects cost were segregated among different functional areas. This helps PMO in monitoring the projects by each functional area in terms of schedule, cost and resource utilization.
4
of
Improvement of project management practices in the organization. Reduction in cost and schedule overrun by accurate evaluation of the schedule and cost estimates. Improved utilization of resources by centralized allocation of manpower and resources. Improved historical data collection for future projects by better documentation processes.
Monitoring and Control
Increased customer satisfaction through quality and timely
The processes carried out in the organization were
delivery of the projects.
mentored by experts and trainings were provided to functional
area
team
members
leading
to
effective
implementation of processes in the organization. PMO could track and control all deliverables of projects.
About Author Ms. Shalu Gupta, is working as Sr. Technical Officer ’in C-DAC Noida. She is PMP certified. She has nine years of experience in software development. She has worked in the field of NMS, SNMP, Optical comm., DSLAM OCR and Quality Assurance. She has worked in various companies like C-DoT, Wipro
Technology
and
Flextronics
Software
Systems.
Currently she is associated with the Quality Assurance Group. She has published 9 international and national research Ms. Shalu Gupta Senior Technical Officer C-DAC,Noida
papers. Her area of interest includes Software Quality Assurance and Software Metrics. About Author
R.T.Sundari is working as a consultant in C-DAC Noida. She has a post graduation in management and more than 30 years of experience in designing, development, testing and quality assurance. She has published 5 national research papers. She is currently heading the PMO and Quality assurance division.
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Ms.R. T. Sundari Consultant C-DAC,Noida
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Best Practice – Quality Assurance Maturity By – Chetan Mathur
Q
uality Management is often considered an overhead, but indispensable component of Project Management.
Increased go to production time performing additional
Essentially comprising of three vital components, quality
Fewer adherences to quality assurance process, thereby
management flows top-down within an organization’s
releasing products with defects in testing / control
hierarchy. This approach helps project managers understand
stage.
customer’s requirements precisely and consistently deliver
Defect seepage data is neither maintained nor managed.
the key results that stakeholders expect.
Increased Cost – Cost of Non Conformance.
Let’s look at the three vital areas of quality management: Defining the organization’s vision in terms of delivering quality – Quality Policy. Process
definition
implementation deliveries
testing to conform to quality standards.
Common Root Cause Analysis for Defect Seepage Inadequate base lined standards being followed
and
to
ensure
meet
their
objectives – Quality Assurance Make sure the results of what has been developed are what was
expected
–
Quality
Control. Clearly
visible,
the
key
differentiator between QA and QC is that while QA is process oriented, QC is product oriented. It is not an uncommon scenario whereby delivery
Unit / Component Development Standards
organizations are recalling their products from the markets
Development / Production best practices
months after they have been delivered, now at a huge cost
Performance Productivity Baselines
incur – The reason
-
They failed to implement Quality
Management as a matured process in its essence and failed
Unstructured Change Management Procedure
to capture and correct the defects internally.
Unstructured Reviews being performed
Common scenarios in Quality Management – Defect Seepage Approximate 60-70% of the defects are being captured
Work In Progress Reviews Document Reviews – Including Requirements Work plan, Requirements Analysis Documents, Enterprise Analysis, Design, Test Plan & Logs
at QC stage or even after release.
Review checklists not base lined across the Enterprise
Only 30-40% of defects are being captured internally.
and made available as Organizational process Assets.
Food for Thought Satisfaction lies in the effort, not in the attainment. Full effort is full victory. By - Father of Nation -Mahatma Gandhi Save Earth, Go Green
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Inadequate / Unstructured Testing performed:
Best practices for QA maturity
Product Level unit testing Integration testing
Development standards to be a derivative of best practices and industry standards.
Regression / Negative testing System Level Testing
Development standards should be base lined either across enterprise or for a customer or across a vertical. This should
Black / White Box Testing
be done in order to.
Un-available / Un-structured Test Data. Lack of detailed project planning
Avoid conflicts during implementation. Create
Project Reviews not defined / estimated.
synchronization
Project re-work based upon reviews not defined / estimated.
Optimum utilization of man-power.
Others
Save duplicate work / repetition cost.
Lack of organized team structure
reviewer
and
Same resources shared across development &
Formalize Change Management Procedure and make the customer / Delivery teams / Vendor / Partner aware of the
testing teams.
same.
Other than peer reviews, no cross team /
Formally Release Change Management procedure.
functional reviews performed
Conduct training sessions across stakeholder groups for
Others
change management. Track and report changes and change parameters.
Lack of documentation
Do Not Gold-Plate.
Project Plans not being developed, reviewed, approved and base lined.
Structure & Formalize Reviews
Test Plans, Test Cases, Test Logs and Test Data
Formally Release Review checklists for Component /
not developed, reviewed, approved and base
Unit and Document Reviews – Including Requirements
lined.
Work
Configuration
Management
not
plan,
Requirements
Documents,
Conduct training sessions across stakeholder groups for necessity and usability of the checklists.
Defect Level Pareto Chart
Track and report checklist compliance across projects. Review teams to be
Percentage Wise Pareto Analysis 16
15
Analysis
Enterprise Analysis, Design, Test Plan & Logs
implemented
across the projects.
18 16 14 12 10 8 6 4 2 0
between
developer.
structured
separately
than the development teams.
12
Reviews
12 9
10
10 8
&
associated
Re-work to be estimated
8
and workforce managed separately Percentage Wise Pareto Analysis
from
development. Stages of reviews to be planned including Peer, Functional,
Cross
Functional, Quality just to name a few. Have a “Review” Center of Excellence in place.
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P19
Structure & Formalize Testing Requirement
Traceability
across
all
Conclusion
testing
stages to be maintained.
Quality assurance (QA) consists of a means of monitoring the
Test Plans, Test Cases, Test Data and Test Logs
engineering processes and methods used to ensure quality.
to be reviewed and review logs maintained.
The purpose of Quality Assurance is to define and implement
Automation testing tools to be used as far as
the techniques, procedures, and methodologies that will be
possible.
used to assure timely delivery of the application / product
Testing teams to be structured separately than
that meets specified requirements within project resources.
the development teams. Testing to be estimated and workforce managed separately from development. Have a “Testing� Center of Excellence in place. Implement Release, Management.
Problem
and
Configuration
With a focus on improved Customer Satisfaction and enhanced business opportunities, a matured QA process aims at controlling defect seepage and enhancing the percentage of defects detected internally before being released to production to close to 80-90%.
Develop Requirements Work Plan – Make sure no
An un-matured QA Process
requirements fall through the cracks. Maintain Requirement Traceability across the life cycle of the project. 35% A matured QA Process 65% Defected detected before being released to Production
15%
Defected detected before being released to Production Defects detected post Release
Defects detected post Release 85%
About Author Chetan has rich 16 years of experience in End to End Program Delivery. He is a certified PMP and is also certified on ITIL and eTOM best practices and a member of IIBA and is a nominated Champion by PMI India. He has managed and delivered various end to end projects and programs from RFP, Discovery, Due-diligence, Transition (KT, Shadowing, and Reverse Shadowing), Transformation (Analysis, Design, Development, Testing & Implementation) to Application Support & Maintenance phases. Mr. Chetan Mathur Asst. Director - IT Sistema Shyam Teleservices Limited (MTS India)
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Chetan has been managing large teams and multiple projects, ensuring deliveries are completed on time & within budget and in strict compliance with quality systems/procedures in an onsite offshore model.
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Past Events: Chapter Networking / Knowledge Sharing Event at Jaipur, Rajasthan 25th March’2012
“4” PDUs
Rajasthan Chamber of Commerce & Industry Sukhadia Bhawan, M.I. Road, Jaipur
On 25 March, the chapter held “Project Management: Infrastructure and IT Projects” in Jaipur, Rajasthan. In an
Chief Guest Welcome
effort to conduct effective discussions on infrastructure projects, the chapter invited senior officials of the Rajasthan government. Mr. Vinod Garg, managing director, PROMAC, commenced the event, followed by an address by Mr. Manoj Gupta, president, PMI North India Chapter. Mr. Rakesh Verma, IAS, principle secretary, Planning Department, Rajasthan Government, was the chief guest and Mr. Atmaram Gupta, chairman, Federation of Rajasthan Trade and Industries, was the guest of honor. Highly experienced Subject Matter Experts participated in a panel discussion on “The Importance of Standard Practices for Efficient
and
Effective
Completion
of
Infrastructure
Projects.” The panelists were Mr. Mukund Joshi, chief engineer, Central Public Works Department – North Zone - III; Brig.
Balbir
Singh,
additional
command
chief
engineer,
Headquarters, South Western Command – Indian Army; Mr. Puneet Mittal, managing director and CEO, Pratham Software; Mr. Alok Ranjan, chairman, Indian Institute of Architects, Jaipur Chapter; Mr. Tushar Sogani, secretary, Indian Institute of Architects, Jaipur Chapter; and Dr. Vanita Ahuja, assistant professor, Gautam Buddha University, Greater Noida. Mr
Panel Discussion
Hemant Seigell shared Risk Management Best Practices.
13th – 15th April
PMI Agile Certification Training Workshop
“21” PDUs
The two and a half day training, conducted by Mr. Hiren Doshi, trainer, Practice Agile, served as a primer for those involved in teams adopting agile techniques or those planning to take the PMI Agile Certified Practitioner (ACP) examination. Watch out this space for upcoming events. Be involved
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P21
Past One Year, Authors Felicitation
We are grateful to you to nurture SYNERGY to 1 year old…
SYNERGY First Edition
SYNERGY Second Edition
Mr. G Ravi Mr. Kumar Saurabh Mr. Nirmallya Kar Mr. Amit Tambi Mr. Maneesh Dutt Mr. Navin Das Ms. Archana Sharma Mr. Hemant Seigell Mr. Piyush Govil
Mr. G Ravi Mr. Kumar Saurabh Mr. Nirmallya Kar Mr. Maneesh Dutt Ms. Pauline Jacqueline Mr. Prabhu Jha Mr. Tathagat Varma Mr. Hemant Seigell Mr. Piyush Govil
SYNERGY Third Edition
SYNERGY Fourth Edition
Ms. Vidhi Singh Mr. Vikas Dua Mr. Chetan Mathur Mr. Hemant Seigell Ms. Pauline Jacqueline Mr. Suhail Qadir Mr. Anshul Chetal Mr. Kumar Saurabh Mr. Piyush Govil
Mr. Prashant Malhotra Mr. Vikas Dua Mr. Chetan Mathur Mr. Asim Prasad Mr. Arun Gupta Mr. Abhijit Bharatkumar Ms. Vanita Ahuja Mr. Kumar Saurabh Mr. Piyush Govil
Special thanks to Mr. Pritam Gautam – VP Technology - PMINIC for publishing every edition on Chapter Website. http://www.pminorthindia.org/Synergy/Issue04/ Previous Editions
http://www.pminorthindia.org/Synergy/Issue03/ http://www.pminorthindia.org/Synergy/Issue02/ http://www.pminorthindia.org/Synergy/Issue01/
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Renew your membership today visit chapter website Editorial Team
http://www.pminorthindia.org
Piyush Govil
Manoj Gupta
Kumar Saurabh
Felix George
Pooja Kapoor
Nitin M Singh Prashant Malhotra
Abhijit B Kumar Hemant Seigell
Nirmallya Kar
Jitin Bindlish
Editorial Team welcomes Articles, Case Studies, White Papers, etc. for their ongoing endeavor. We always welcome suggestions or ideas for improvement. Kindly submit at piyush.govil@pminorthindia.org pminicmag@pminorthindia.org
PMI North India Chapter http://www.pminorthindia.org pminicmag@pminorthindia.org Save Earth, Go Green