European Business Magazine: Why Everyone Is Talking About Project Management
This article was originally published by European Business Magazine
Project management used to be at the margins of a corporation’s strategy. That has changed over the last 20 years. Today almost half of Britain’s workforce is engaged in projects. Richard Fitzpatrick investigates why project management once had a reputation for failure and finds the keys for its successful practice today. Project management has become a cornerstone of the way enterprises earn their corn.
The Association for Project Management released the results of a YouGov study it commissioned recently in which it discovered that 43% of the UK’s workforce are involved in projects of some description; and of this group, 11% are fully-fledged project managers. The widespread acceptance of project management as its own discipline in business is a trend that is reflected worldwide, as explained by Kyle Wills who works out of Pennsylvania, USA as a global director – portfolio management for DSM Biomedical, a large life sciences corporation.
“Most industries now recognise the importance of project management – although not all do; there’s still work to do there – and it encourages me that there are now many educational institutions that offer project management courses and even degree programmes in project management,” he says. “What was seen before as a skill to be picked up through on-the-job experience is now a legitimate discipline with a well-defined core structure and a strong library of best practices. “In the early days of formal project management, the focus was almost exclusively on the technical aspects of project management.
Today, technical project management is but one of three equally critical areas identified by the Project Management Institute. The others are leadership and strategic and business management. Project managers are now expected to display aptitude in all of these areas.” The demand for greater competency, particularly project managers’ ability to tie in with corporations’ strategy, suggests that project management will become even more important in years to come.
According to Sara Drake (pictured above ) CEO, Association for Project Management, the size of the global project management industry is estimated to be $6.6 trillion by 2020 while globally there will need to be 15.7 million more project professionals than there were in 2010. “Since project management’s inception we have seen a step change in how projects are managed and delivered,” says Drake. “Skills have evolved. Research and formal training has skyrocketed. Within the last 20 years we have seen our skills and processes truly challenged. “Embracing demand for digital transformation and globalisation has allowed organisations to build more complex and larger-scale projects. Artificial intelligence and increased automation will continue to affect work patterns at all levels so work will be more about managing these projects. “The role of project professionals is transforming and advancing – even today.
While the traditional skills remain vital to delivering projects on time, on budget and to the right standard, they must now be world-class communicators, leaders and mentors too.” Drake points out that project management became a recognised profession within the last 50 years. In reality, though, it only became mainstream over the last two decades, notably when the millennial frenzy around Y2K spooked businesses, airliners and financial services companies in the late-1990s. Dealing with the Y2K bug became a key project objective for corporations. Since the turn of the millennium, the practice of project management has developed into an essential element of companies’ make-up. Programme directors, who look after large portfolios of projects, sit side by side with HR directors and finance directors when it comes to guiding the direction and culture a company wants to take.
Project management has become a strategic competency. Not all projects succeed, however.
According to a study by Geneca, 75% of IT executives believe their projects are “doomed from the start”, which is a rather startling revelation. John McGrath, a project management consultant with 20 years of experience and a professor in the discipline at several universities, including Brunel University London, says that having a tough attitude when it comes to selecting whether a project should proceed or not is critical. “The one area you have to be absolutely ruthless with in your organisation is project selection,” he says. “What happens is that an organisation selects projects on the basis of who proposes them – not on the business case. “I can guarantee that if I walked into a corporation and asked, ‘Can I see all projects that were proposed at director level with full project initiation, with full business-case documentation that were rejected as they weren’t a sound project?’ I’d be told, ‘We don’t have any.’ “Senior people don’t have to suggest projects the way other people do. They just say: ‘We’re going to do this project.’ The one thing we saw in the financial crash in 2008 was the mistakes senior people made in decision-making. It’s vital you address this issue.” “When I look back at the projects that have failed in our organisation, I see some common elements,” says Wills. “The main reasons for us include scope creep, inadequate change control, and changing business/market needs.
Our business model depends on customers and strategic partners to sell the products we make to the end user, so when a partner requests a feature or additional work, it is all too easy for our project teams to oblige them, but often without updating the scope statement or the statement of work. Each change on its own may be small, but collectively, those additional requests add up to longer development times and, ultimately, longer time to market. “Also, since the development of a medical device can take multiple years, we can look back at several instances and see that by the time we launched a product, the market had already started to shift to other technologies and consequently, we would never be able to achieve the business case that was originally envisioned. In other instances, we found that from the start, the business case was overstated or overly optimistic.” There are several common threads to effective project management. The one that is most regularly repeated is the need for good communication. Once staff members – and senior management – have visibility on how a project is proceeding, it brings peace of mind. “You need to be able to communicate effectively, making sure everyone knows where we stand with the project we’ve completed up to this point, and what our current projection is for getting to the next stage so they can see it clearly. It’s important everyone is aware of what the plan is,” says Bart Bradbury, Senior Project Director, Achillion Pharmaceuticals. “One of the reasons [projects] fail is that people don’t know what ‘the score in the game is’. They don’t know where we stand. It’s an important part of executing. Imagine yourself going to a soccer game. You’re at the stadium and nobody posts up the score. You’re sitting in the stands. Would you be engaged watching this game if you had no idea are you a goal behind and you need to score to tie – or what? It’s the same thing in a project. If we don’t know how far away we are from completing our goal, people aren’t going to be engaged. It’s a critical part of making sure execution happens.” McGrath says that typically it takes seven years for a project management office (PMO) to start delivering a return on its investment.
Software forms a key component of the way a business will execute on its portfolio of projects. A good software solution can be invaluable, for example, in managing how resources are allocated on projects and programmes, which can be an extremely difficult science – and a costly one when it goes awry. “As a manager in a busy and growing organisation that runs many projects every year I think it’s really important that expectations are set around what projects can be delivered in a year and what is required if more projects need to be delivered. You could describe this as ‘top-down capacity planning’,” says Philip Martin, CEO, Cora Systems, which delivers project management solutions to organisations such as City of London, Honeywell Building Solutions and the UK’s National Health Service.
“Clarity on the organisation’s capacity is key,” he adds. “Projects generally fail because not enough resources are allocated, or the same resources are allocated to different projects simultaneously, or simply the manager planning budgets has no idea what a project entails and naively allocates only 25% of time needed to deliver it. “Top-down resource management facilitates resource planning through resource pools. What skills are required to do this project and for how long? Do we need, for example, a project manager for six months for 50% of his or her time? Various skill requirements can be bulk-assigned by project to provide management with an accurate picture of resources required for the year ahead.
This leads to a realistic set of project estimates and a clear view on capacity for the year and helps deliver a realistic programme plan rather than falling behind on estimates of an unrealistic programme plan. “By having clarity on the capacity of an organisation, it becomes a much easier task to deliver projects on time and within budget.”