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8th International Conference of the

TOC Practitioners Alliance - TOCPA

26-27 October 2013, Moscow

Application of methods
to project management
at Severnaya Kazna
insurance company.
An overview
Ekaterina Ekhlakova
Severnaya Kazna insurance company
Yekaterinburg, Russia
October 2013

Ekaterina Ekhlakova
CEO Advisor, Chief Project Management Officer
Insurance Company Severnaya Kazna
(Yekaterinburg, Russia).
Ekaterina possesses seven years of Project
Management experience.
Her portfolio includes implemented projects
in various areas: telecommunications, IT,
finance services and insurance.

phone: +7(800)700-13-30
mobile: +7(965)548-00-55
e-mail:
ekhlakovaes@kazna.com
facebook.com/ekaterina.yekhlakova
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Company Info
Insurance company of a federal level
80 cities of presence
1 850 employees and outsourced agents
Income:
2010: 768 million RUB
2011: 1 812 million RUB
2012: 2 582 million RUB

As of 1st half of 2013 company is ranked 43rd by

premium gross among Russian insurance entities

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Project Management
before Introduction
66% of projects were test sales of new insurance
products
Projects either did not have plans at all,
or only final deadlines were planned
Project control was performed weekly
or at similar intervals
Company top managers were not provided
with structured information about running projects
In 2011 only 7 projects were started,
and just one in the first half of 2012
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TOC Introduction Timeline

February 2012 thorough analysis of CRT and FRT
shows the necessity of Project Management Office
July 2012 PMO is created in order to achieve
project goals in due time and budget
October 2012 education for top management
October 2012 a directive is issued ordering all
projects in the Company to be supervised by PMO
December 2012 CCPM education is included into
the curriculum of the Companys Manager School

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Project Lifecycle

Initiation

Planning

Execution

Post-project
supervision

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Project Initiation
Before TOC
A clear and unambiguous goal is not defined
for ~40% of projects

What Was Implemented

Key Question: is this a project and what value it gives to the
Company does it produce an increase in throughput or net
profit, or lowers the OE?
Project throughput calculation is mandatory.
Projects without the calculation are not approved
ROI calculation is mandatory
Evaluation of UDE and obstacles
Cloud analysis for initiation of complex projects
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Project Initiation
Difficulties
People do not understand well the concept of project
People do not easily accept the throughput scheme
Emotions

How We Managed To Deal With It

Key features of project concept were outlined in order to
compare with another types of management activity
Meetings of PMO and project owners for the discussion
of project goal and value
Throughput calculation was made mandatory by directive
Rationalization of the need of throughput calculation;
PMO assistance in the calculation
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Project Initiation
Achieved Improvements
Clear understanding of conditions for project initiation
Decision making is accelerated: from several days
to several hours
86% of projects have measurable goals defined
DO THEN THINK is NOT our motto anymore.
UDE, obstacles and revenues are calculated before startup
Some projects that had been deemed unprofitable
by traditional evaluation were revised and are in effect now
Projects lacking project features were downgraded
to routine activities
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Project Planning
Before TOC
A Plan is simply a task list constructed by a PM, or even just
jotted down ideas of a workgroup
No plan control system exists
Tasks of the plan are not linked by results, only by temporal
order
Several tasks of the same resource have the same finish term
Planned finish term is assigned based upon evaluation
of resource utilization
Maximum resource over-utilization reached is sevenfold
Project plans are prepared with no rules or standards
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Project Planning
What Was Implemented
Running projects are gradually replanned using CCPM
Planning Standard is introduced:
1) Project flowchart construction is mandatory
2) Project plans are to be created using CCPulse (MS Project)
3) All participants and PMO are involved in planning

Project plans are to be approved by PMO and resource

managers
Everybody must obey the rule:
No changes to the plan are accepted after project startup

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Project Planning
Difficulties
People do not understand:
-

The need of evaluation of time required to finish a task

The backwards planning concept
The need of defining the results of previous tasks

People resist to spend time constructing a flowchart or creating

the plan in MS Project
People urge to apply changes to the plan after its final
approval
They dont accept the plan with no specific dates

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Project Planning
How We Managed To Deal With It
Separate time intervals are planned for people to evaluate
durations of tasks
Resource over-utilization in the case of task concurrency
is demonstrated
Several meetings were carried out in order to make managers
and participants understand backward planning concept and
task interference

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Project Planning
Achieved Improvements
Quality of project plans increased dramatically
Time spent on planning increased threefold
The following needs are understood:
1) A thoroughly worked out plan is required for project startup
2) A project plan is a chain of interlinked tasks that leads to the goal
3) The plan is fixed after startup. If the correction is inevitable, the project
should be stopped, replanned and started over as a new one.

86% of projects have buffered plans all created by the same

guidelines.
Resources are never over-utilized

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Project Execution
Before TOC
Project Manager chooses the means and schedule of project
control freely
Tasks are delayed with little reason. Project finish dates are
delayed repeatedly
What Was Implemented
Everybody must obey the rule:
Project control is performed daily
Project initiation directives define:
- PMO and project manager are in charge of daily buffer status
monitoring;
- Project participants are in charge of daily reporting on task progress.
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Project Execution
Difficulties
Evaluation of time required to finish a task
Getting feedback from participants

Participants reporting fake data on task status

Project dissolving without daily influence from PMO
Project tasks being understood as overtime job
Resource managers influencing project, task finish dates
assigned and reassigned without approval from project
manager and PMO
Tasks being reordered in course of project execution

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Project Execution
How We Managed To Deal With It
PMO requests PM reports daily (and were going to switch
to weekly reporting)
Project Management Guidelines are made effective that
define roles of participants, their rights and responsibilities
Personal interviews with every project and resource manager
were carried out in order to rationalize the rigidness of the
plan, and why project tasks are not overtime
PMO insists on daily reporting and rigidness of project plans
Task results can be controlled any time
Task status reports are collected via e-mail

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Project Execution
Achieved Improvements
Project needs and problems surface early. Corrective actions
can be made in due time
Project delay reduced dramatically:
- Pre-PMO maximum delay was 18 weeks
- After creation of PMO and introduction of CCPM its 3 weeks

Task execution is accelerated:

- A pre-PMO task was suspended for 79 days due to the lack of control
- Being included in a project it was completed in 13 days

We now understand:
- Result AND term AND budget are all important for a task
- Task interconnection, and the common goal

Task duration is manageable and well understood

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Project Management
after TOC Introduction
Project hierarchy is maintained
Top managers are provided with project status information
weekly
Project activity is promoted to a higher priority:
- Projects are initiated to reach the most important goals
- Requests for new projects not only come from top managers, but also
from other employees
One of the Companys directors once sent me an e-mail:
its so cool you are controlling [me] and requesting [information]. Though I think I
am responsible, but the routine job [distracts me], and I feel uncomfortable when I do
not process [your requests], and the work thus progresses.

New fields for improvements are identified

Projects grow in numbers and in diversity:
second half of 2012 12, 13Q2013 . 14
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Thank you for your attention!

Any questions please?

8 th International TOCPA Conference