Often the problem with understanding the challenges of implementing a project and portfolio management (PPM) solution is that we only consider it from the perspective of Project Managers and the PMO.
Overview
This is short-sighted. A good PPM solution will positively impact the whole organization. It has a profound effect on key stakeholders in the business. In this four-part blog series, we ask two industry experts what different leaders in the organization gain from PPM. In part three we examine the discipline from the perspective of the Head of Engineering.
How the Head of Engineering Can Benefit From PPM Software:
Philip Martin, CEO, Cora Systems –
For heads of engineering, project control is really important. Take the pharma sector, for example. For the big players, the budget is important, but not as vital as being on time. “Make sure it happens on time” will be their mantra. It doesn’t matter what the price is; if they’re late, they’re banjaxed because late equates to lost revenue. For them, being on time, every time, is critical.
Think for a second back to the start of a project. Somebody said: “This is a good idea.” Management challenged the proposal: “We don’t believe you.” The retort is something like: “We should definitely do this because, in Year 1, I can guarantee you we can bring in €500 million revenue; Year 2 that’ll be up to €1.2 billion; Year 3, €1.5 billion. The cost of this project will be €400-500 million to implement. So we’re looking at pay-back after Year 1.”
That’s fine. However, if you’re late with your project – and you’re stopping production – that means the company doesn’t get its payback until Year 2, at best. Senior management will be looking for a head on a platter. That’s why time – when you’re forecasting sums as large as €500 million – is so critical to the Head of Engineering.
For smaller-scale projects – if you’re talking budgets of, say, €10 million or €15 million revenue, the principle remains much the same. It’s all about getting the product to market as soon as possible.
The other important point, of course, is that if you’re not getting to market before your competitor, they’re eating up market share before you get there. If you’re the first to market, you’re not opening the door to a competitor to walk through the gap instead. Late to market is never good – in the pharma industry or for any business sector.
As head of engineering, you also want streamlined Cost Books. You want a good handle on risk. You want early warnings. You want all of that funneled back into the Cost Book to make sure that everything is tracked well.
You will focus on keeping and maintaining corporate memory, even if – inevitably – you have turnover stuff. As a head of engineering, you’re conscious there’s a big demand for resources in your sector. You don’t want to lose people, but if you do lose staff, you want to have your corporate memory preserved inside the organization.
A big thing, too, is having an easy-to-use system. Your world is very process-heavy. It’s very paper-driven and very Excel-driven and a big thing you want to do is move a lot of that so it’s automated on web-based systems, as far as possible, and mobile-enabled. It makes your life far easier.
Paul Rees, Head of Client Services, Cora Systems:
As the Head of Engineering, you want to know that you’ve got the right mix of resources so you can deliver to client expectations. It’s about trying to balance a finite resource pool and being able to prioritize that against in-flight and upcoming projects.
You’ll want to manage your budget effectively, too. Inevitably, you’ll have a responsibility for the work carried out so that if a certain amount is budgeted for a project, you want to make sure it’s within range. You want to ensure, for example, that the estimate at completion (EAC) is on track against the original budget. Without a PPM solution, it’s difficult and time-consuming to get that accurate picture.
As an engineering director, you know what it’s like trying to manage an ever-increasing pot of projects that land on your desk. Under that pressure, it’s vital that you can easily prioritize delivery across those projects. You don’t want a project not finishing on time – which, of course, could have a massive impact on your end client.
You’ll have, say, a deadline to complete your project. If you don’t hit it, it will have knock-on effects on other parts of the construction build. It could have contractual implications. You don’t want to open that can of worms – like liquidated damages and fines. It could lead to program issues where, say, you didn’t complete your bridge on time therefore your team is unable to lay the surface of the road.
The beauty of having a PPM solution is that you can now be proactive rather than reactive. It will enable you to look ahead and anticipate, for example, that there will be resource shortages due to annual leave, holidays, and other extenuating factors.
You’ll also be able to better manage client expectations. Say you’ve got three projects running in parallel, and two may be falling behind, you’ll always know where you stand. You can start pushing project deliverables out a bit if necessary so that you’re not failing to deliver.
Without a PPM solution, you’re effectively reduced to checking in the rear-view mirror and seeing crashes and then reacting to them – after the event. Whereas with a PPM solution, you’re looking straight out through the front windscreen with the ability to better navigate the upcoming challenges on the road ahead. That level of control gives you incredible peace of mind.
How Cora PPM can help the Head of Engineering
- Revolve the plan around the Cost Book:
- Generate numerous estimates based on various scenarios. Eventually, a decision will be made on the valid scenario and the appropriate estimate is selected. This will form your Project Baseline Estimate, and this will create the underlying structure of the Cost Book where you will manage the project, taking into account any changes, budget transfers, accruals, the value of work done (VOWD), risks/opportunities, POs, invoices, etc., throughout the duration of the project.
- Automate document management:
- Organize all your documentation in a single repository, e.g. job specs, POs, every piece of written and visual data to do with a project. Now you’re persevering corporate memory in the system – not in the notes of the engineer who’s doing the job or the finance person who’s organizing it. You’re taking information away from the individual – where it’s often kept proprietorially – and giving it to the organization where it can be preserved securely. Info is generated quicker and more easily for client handover documents as a result too.
- Better manage your resources:
- Get an immediate view of your capacity – what work can be taken on and when, how to match the right crew with the right criteria for a particular client site, etc. Obviously taking on too much work causes delays and potentially, costs. Not taking on enough projects impacts profitability. Ensure you get a handle on this delicate balance.
Find Out More
Further details on the above, including customer success stories, can be found on our Engineering Project Management software solution page.
Our Guide to Engineering Project Solutions shines a light on some of the challenges you probably face. It then provides the specific engineering project solutions you need to address them.
