Project Management Introduction
Introduction Program and Project Management.
Management teams and key stakeholders have become accustomed to real-time management information in order to adjust the line organization and business operations very quickly. In fact, the performance of companies is so transparent that the stock market reacts immediately to incidents that (may) affect profitability. Look at Schiphol (staff shortage), sale of products on ecommerce platforms (logistics problems due to Corona lockdowns in China), shortage of oil and gas due to personnel strikes in large production centers (Nordics, mid 2022).
Looking at TCO (Total Cost of Ownership), the project portfolio in almost every company represents a very significant part of the total operational costs. In some organizations the project budget is > 30% of the Total Operational Cost. And often even more if we add maverick buying. To achieve operational excellence, the organization of project management must be included in the analysis as a significant part of the total operational costs.
Highly reliable project delivery is an important lever to realize cost savings and quality improvements. Quality and knowledge management are important change drivers. And in addition to highly reliable delivery, fast delivery is becoming even more important in this digital age. Companies are being overtaken left and right by Big Tech, start-ups / unicorns that literally ‘disrupt’ existing markets. The ‘Uber effect’. Speed, reliability and low costs are crucial for survival.
In practice we often hear the following project management challenges:
- “Nobody has a good or only limited overview of which project employees are available”
- “Many projects are still not delivered on time and/or within budget”
- “Our competitors innovate at lightning speed, we have to drastically shorten our delivery time (time to market) otherwise we completely miss the boat.”
- “Due to the mix of internal and external, there is still a mix of jargon, methodology and templates”.
- “Management does not have a complete and accurate picture of the project risks and the financial consequences”.
- “Projects within the portfolio are insufficiently coordinated and integration is often lacking”.
- “Too many external parties, little internal knowledge assurance”
- “Tension in the labor market remains, really good project managers are scarce”.
- “Learning from our mistakes, lessons learned / post project reviews, is highly lacking. We immediately dive into the next projects. There is too little time for intervision and reflection”
A number of trends in the project management function have been clearly visible for several years now. Trends to reduce total costs, improve quality and compliance.
- Program and Project Success is measured by on-time delivery, on budget and realization of business benefits.
- Portfolio management is necessary for the selection of the right projects in relation to the business strategy
- A clear shift towards the realization of a transparent project management model ('governance')
- An increase in the use of standard project methods such as Prince2, PMI and IPMA
- Emerging framework for measuring and guiding project management maturity (eg 'OPM3')
- The introduction of mature Project management tooling (EPM, collaborative workbenches, etc.), with integration towards ERP systems (Financialforce, Netsuite, SAP, Oracle). In 2016 and beyond, SaaS vendors offer out of the box processes and templates based on best practices.
Clients are considering the implementation of or have realized a Project Management Shared Service Centre. A number of trends are driving the emergence of SSC-like PM organizations:
- A strong focus from the Board to become cost leader and in parallel to improve on-time delivery and quality of project services. Business and customer oriented
- Projects are a significant part of 'Opex', total operational costs. The continued focus on operational excellence encourages a very good control of project management costs.
- Project costs are less budget driven and more value-adding driven
- Portfolio management is necessary to execute the right projects and to execute the projects mutually and in conjunction with the business strategy
- New organizational models are needed to optimize the supply and demand of programs and projects and to further improve the quality of the project management function
- Specific training of Project management employees to further enhance individual qualities, to use standard methodology and tooling and to develop the same PM language.
Project Management Center of Excellence. The business drivers for a CoE “Project Management”:
- Reduce total operational costs (economy of scale)
- Achieve project excellence in project delivery
- Knowledge management: Share experiences and project management best practices
- Increase organizational control & compliance
- Introduce one way of working (standardization of Project Management tooling, templates, 'professional jargon')
- Manage program portfolios and add value
A Center of Excellence “PM” is typically responsible for:
- Purchase (including pre-selection) of project managers and/or projects
- Defining Project Management standards & guidelines
- Creation of a Project Management community (“community of practice”)
- Setting up a Project Management Career plan and a PM Academy
- Coaching & Training
- Project Management Tooling
- Carrying out PM “health checks” / Review by a Colleague (for example, 'Peer reviews') Some guidelines when the implementation of a Project Management CoE / Shared Service Center can be attractive (business case):
- A strategic pursuit of significant TCO reduction
- A strategic pursuit of significant reduction in time to market to improve the company's competitiveness
- A strategic pursuit of standardization (“one way of working”) and quality improvement of the PM function
- A large number of parallel projects (15-20) with an average project duration of 6 – 20 months
- Size of the resource pool (varying from junior to senior project employees) has a minimum of 25 FTE
- An ongoing process of identifying, defining, prioritizing, approving, delivering and monitoring projects as an integral part of the Planning & Control Cycle
- Streamlining the purchasing process for the project management function & portfolio management
- Critical mass for the implementation of an internal PM Academy & PM Tooling o Specific Company Culture o Specific sector knowledge o Specific local and legal requirements The business benefits must be considered on a customer-by-customer basis to determine whether a CoE PM is sufficiently attractive or not. Blue Sky can help you with a full implementation of a PM CoE, end 2 end.