Improving Business Performance Through Effective Project Management''

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Improving Business Performance Through Effective
Project Management.. Why you play a critical
role!
James M. Barnard Vice President, Client Solutions
Western Region
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• Outline current business challenges facing
  organizations
• Define project management as a critical business
  process
• Why this is important to you
• Describe the specific potential benefits of PM
• to an organization
• to YOU!

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World Reality the Evidence
A recent study by KPMG of 300 large companies
found that 65 reported that their projects were
grossly over budget and far behind schedule,
and/or offered no real value at completion.
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Consider this!
84 experience schedule overruns averaging up to
40 83 experience cost overruns averaging 40
while 15 reported cost overruns of as high as
100
31 of all projects never reached
completion 51 exceeded budget while delivering
only 70 of the intended functionality
Source Robbins-Gioia 2000 Survey of 166
corporations
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Something more to consider

• 42 of organizational project initiatives are
  abandoned before they are completed.
• At current project spending levels, this equates
  to US110 billion per year capital resources
  spent on projects that deliver absolutely no
  value.

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Doomed Projects!

• Half of all projects involving outside
  consultants fail to deliver what organizations
  expect.
• Through the end of 2003, 50 of projects
  involving external service providers will be
  considered unsuccessful.
• Root causes include
• lack of scope development/groundwork at the
  outset
• lack of communication
• changes/corrections not made in a timely manner

Source Gartner Spring 2003 Symposium Expo
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And..
Perhaps more ominous, over half of the executives
interviewed believed this situation to be
normal. They did not consider these numbers
either surprising or particularly
troubling. Jeffrey K. Pinto, Ph.D.,
Pennsylvania State University
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Non-IT skills in shortest supply
Silicon.com survey
Project Management
84
Leadership Communications
73
Selling Skills
62
Budget Planning
57
Foreign Languages
51
Negotiations
42
Other
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10
20
30
40
50
60
70
80
90
100
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The Changing Business Landscape
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Todays Business Challenge!

• Creating an environment for a successful project
  management practice

Going the next step
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Civilian DoD Organizations
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(No Transcript)
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Creating An Environment for a Successful Project
Management Practice

• Education and Training - a series of standard
  courses for all project participant levels
• Methodology - a repeatable project management
  process
• Tools Techniques - the consistent and scalable
  PM approach across all projects
• Career Path - certification, selection, and
  assignment of project management professionals
• Program Management Office (PMO) - PM support and
  organizational oversight

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IBM
Strategic planning - enterprise resource mgmt.
VP

• Director
• Extra courses

Portfolio Management

• Program Managers
• Support for PMP

Multiple projects
PMP

• IBM Certified PMs
• Manage value of projects
• Oral Exam
• Executive Sponsorship

Advanced topics
Project teams

• Project Managers
• Core curriculum training

Fundamentals
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Why make the investment?

• Business issues being faced
• Increase in time-to-operational readiness for
  products services
• Increasing project costs
• Reduction in levels of customer satisfaction
• Increasing contractor/vendor involvement or
  management
• Increase in staff turnover
• Decreasing shareholder value (commercial)
• Decreasing profit margins (commercial)
• Decreasing market share (commercial)

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The New Project Manager Environment
Objectives
Business Staff/Organization
Strategy
Business issues
New
Processes
project focus
Systems/Services
Systems issues
Systems Staff/ Organization
Strategy
Objectives
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What Do Organizations Hope to Achieve?
Better business performance leading to

• More consistency in work methods
• Increased operational readiness for products
  services
• Hiring and retention of the best project managers
• Creation of a Human Capital or Knowledge
  Management system

• Increased client/customer or end-user
  satisfaction
• Develop PM expertise as a marketable commodity
• Improved cost avoidance
• Improved resource utilization
• Improved vendor/contractor relationships

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Easier said than done!
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More and more companies government departments
are recognizing project management as a core
business competency in order to achieve their
performance objectives
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Strategic Business Process

• Cultivate and sustain a consistent, flexible, and
  repeatable process that maximizes organizational
  resources to meet specific performance
  objectives.

• Create a link between the application of project
  management tools, concepts and theories and
  increased corporate profitability.

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Return-on-capital Cash flow Project profitability
Financial Objectives
Organizational Mission
Operational Vision
Product Service innovation Continuous
improvement
Growth Objectives
Strategy
Competitive price Hassle-free relationship High-pe
rformance professionals
Customer Objectives
Superior PM Quality service Influence
requirements
The Strategic View of Project Management
Internal Objectives
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Improved Project Time Line
Volume of Work
Follow-on
Executing
Controlling
Initiate
Planning
Closing
Time / Phase
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Rework of requirements specifications
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Improved Business Performance

• Increased customer/end-user satisfaction
• Conformance to requirements/objectives
• Ability to meet the schedule
• Mechanisms to control cost
• Shortened development and implementation cycles
• Quicker availability or operational readiness
• More predictable performance
• Reduced costs / efficient use of funding
• Better resource planning, allocation, monitoring
• Better, more knowledgeable business decisions
• Ongoing, timely business case validation

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Specific Competencies

• Project Quality Management
• Project Human Resource Management
• Project Communications Management
• Project Integration Management

• Project Scope Management
• Project Time Management
• Project Cost Management
• Project Risk Management
• Project Procurement Management

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Additional competencies companies are looking for
in their project managers

• Exceptional interpersonal skills
• Ability to view the big picture
• Ability to solve business problems
• PMP Certification
• Political awareness
• Assertiveness
• Ability to mentor/coach
• Ability to delegate
• Ability to negotiate
• Consultative selling skills/upselling
• Exceptional business acumen

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Quantitative Performance Improvement
Industrialmanufacturingcorporation
reducedcapital equipment costs by 3.2 million
through effective scheduling and cost control
techniques
Services corporation 15 improvement in
productivity through effective planning and
requirements definition strategies.
Computer manufacturer realized a 2.1 million
savings using a 5-phased risk management
technique.
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What are the expected benefits?

• For the business
• To recruit and retain the best and brightest
  people
• To have PMs make better decisions leading to
  more satisfied clients ( more revenue/profit)
• To improve the organizations reputation
• To create a marketable asset which wins new
  business by differentiating their PM staff

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• Benefits to individuals
• Create a career path to senior management
• Develop business skills within their technical
  environment
• Enhanced status of PM within the organization
• Provision for a recognized certification
• Develop marketable skills for future career
  growth

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Summary

• Ours is the discipline of the 21st century, and
  those who will be its leaders tomorrow are
  educating themselves in its concepts today.
• PM Network, Sept 1995

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James M. Barnard Jbarnard_at_esi-intl.com