Business management practices are changing…downsizing, rightsizing, global competition, reinventing the organization, TQM, and enterprise systems. And project management's role in this new environment is changing too ... increased visibility, informed decisions, support for business strategies, resource management, project teams.
More and more organizations are emphasizing the “project” nature of their businesses. Although the typical business is involved in many activities besides projects, projects are the heart of most modern organizations. And projects do not exist in a vacuum. Every new project must coexist and compete with existing projects for limited resources. What is needed is control of projects, resources and costs at the enterprise level.
Over the years in our project management training and consulting practice we have seen this need intensify. We have also seen numerous organizations struggle with a solution—most times unsuccessfully. But new software and telecommunication technology, combined with an innovative implementation methodology, gives organizations a good chance at getting their arms around this project management beast.
We define “Enterprise Project Control” (EPC) as a system by which an organization has knowledge and control over its projects (their type and status) and its resources (specific types, those currently available and those required in the future).
The Problem
We have consulted on project management issues for roughly 200 organizations—in industries from telecommunications to electronics, defense, pharmaceuticals, insurance and finance, computer hardware and software, architecture, construction, and consumer goods and services. What we have found is a remarkable similarity of problems. Whether a 75,000-employee multi-national defense conglomerate or a 15-person startup biotech firm, the issues are likely to be pretty much the same.
Resource Insufficiency and Bottlenecks. Many projects share the same limited pool of resources. This is by far the most common problem that our clients face.
Case Study. The data processing department of a large insurance company has 400 programmer/analysts. In a given year they will deal with 1,000 projects. How many can they do at a time? How can they keep from over-committing to their customers who all want their projects finished in the first quarter of the year? And how can they justify hiring more resources or even maintain the existing head count?
Setting Priorities. No organization we have ever been associated with has unlimited resources. All must allocate resources based upon the priority of the project. Organizations need a rational way of setting priorities.
Case Study. A medium-size manufacturer of medical devices has over 200 new projects in some stage of development. These projects compete for a pool of about 300 engineering resources. With limited resources, they cannot do all 200 projects at the same time. Which should they do? Clearly, in order to set priorities and make tradeoffs they must have a broad view of the organization's entire workload.
Dependency Links Between Projects. Large and technically complex projects often have a task in one schedule driving a task in another schedule. To get a true overall picture of the project it is imperative to establish these links, yet allow different teams to create and maintain their own schedules. This can be an especially nettlesome problem, but one that an enterprise project control system can solve.
Case Study. A defense client of ours has a large program with over 3,000 identified tasks, broken down into 20 “projects,” each managed by a different contractor. The client has identified over 300 dependencies between these different projects. They must allow their contractors to maintain their own schedules but then “merge” them periodically to determine program-level progress and criticality. This merge process must be fast, automatic and 100-percent accurate. This has been a very tough problem.
Tracking Project Status. Many organizations do not know where their projects stand, let alone when they will finish. Often the problem starts with a lack of definition of project goals. One of the first goals of an enterprise project control system is to determine the status of existing projects.
Case Study. A 150-person biotech firm is under tremendous pressure from their investors to bring products to market. But exactly where are they in the approval process for each of their five projects? Has the schedule slipped? And when can they reasonably expect to obtain FDA approval so they can lock out their competition?
Case Study. A large architectural firm manages the construction of new locations for a large retailer. In a given year their client will build 300 new stores. Every day that a store opening is delayed will cost their client $200,000. How can this architecture firm get timely status information from the job site, from their regional civil engineers, and from key vendors?
Communication. Many projects involve players from different locations, be it a different floor or a different country. Communication is a must and has historically been a problem. Any enterprise project control system must overcome this problem.
Case Study. A large telecommunications client is undertaking a massive upgrade of their main product. This massive project involves 1,500 engineers located in five different cities in Canada and the United States. Parts of the project are controlled by management in each of the locations. Resources are shared between locations as well. How can workers be notified about what they should be doing? How will project managers quickly know project status? And how will top management control the entire project without accurate and timely information?
The Right Mix of Projects. A number of our clients in various industries are uncomfortable with the mix of projects they have under way. Many have no formal process for choosing and managing their development projects. Upon analysis, these clients find that they have many more projects than they thought, clearly more than the organization can support. Worse, sometimes a large portion of resources are focused on projects that are not critical to the business.
The effort to achieve enterprise project control will necessarily highlight this problem so that management can start to deal with it in a more rational, quantitative way.
Why Has the Solution Been Elusive?
There are two basic sets of issues that have made enterprise project control systems difficult to implement: cultural issues and systems issues.
Culture. Enterprise project control is virtually impossible to implement without top management's commitment. They must be willing to invest time and money to implement and maintain the system. They must also know how to use (or not use) data produced by the system.
Just as important, implementing enterprise project control requires modifying the existing management structure and the work behavior of all the people involved. It requires knowing and documenting the process by which the organization produces its new products or implements its other project-type work. And it requires work teams who are truly empowered to make decisions.
A further complication: a necessary element for success with enterprise project control is accountability. At every level in the organization, people must be accountable, must be willing to make commitments. Although this has changed in recent years, players in certain industries still seem reluctant to commit to plans, thereby undermining the entire EPC effort.
Most companies are confronted by today's project-related problems gradually, over time. When facing these problems for the first time, they try to invent solutions, which may be difficult and expensive. Often the solutions are unattainable because there is a lack of inhouse expertise and the problems are not fully understood. Our solution relies on obtaining competent outside help to aid in the implementation.
Systems. Project management software is a prime ingredient in enterprise project control. In order to succeed, the software must be powerful yet easy to use: powerful enough to do multi-project resourcing, cross-project linking, and schedule and cost roll ups; easy enough so that all key the players will use it.
Project management software vendors are now offering powerful second- and third-generation Graphical User Interface packages that are easier to use. Some of these project management packages can be supplemented with other packages, making them even more adept at multi-projects.
Communications among and between remote offices has always been a problem. Only in the last several years have organizations installed local and wide area networks and electronic mail. This facilitates communication between top management, project managers, and project team members. Via e-mail, project management packages can now easily deliver task updates and quickly disseminate project status information to interested parties worldwide.
Implementing Enterprise Project Control
Only after an organization has the knowledge and control of its projects and resources can it confidently predict what can and what cannot be done with current resources; employ resources more effectively; complete projects in a predictable, timely and cost effective fashion; and assure the right mix and priority of projects.
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Sounds good, but implementing an enterprise project control system requires a significant amount of effort and time. Although classroom training on project management fundamentals and project management tools can be completed in weeks or months, achieving EPC is an evolutionary process that will take much longer. This is because what is needed is more than just a project management software system. What is needed is a management system in which to embed the software. Our experience in this respect agrees with that of Philip Nunn (“The Transition to Project Management in Manufacturing,” PM Network, January 1995).
Below, we discuss two key factors in implementing EPC: the personnel involved, and the implementation methodology.
Figure 1. Implementing a Project Control System at the Enterprise Level
Personnel. Having worked with a number of organizations that wanted to achieve enterprise project control, we believe that three players are crucial to a successful EPC implementation:
- EPC Director. Enterprise project control requires commitment from top management, who must approve funding and resources for the effort. The EPC Director is given the task by top management of implementing enterprise project control. He or she is given a budget and mission that is well articulated, highly visible, and communicated to the rest of the organization. Responsibilities of the EPC Director include defining specific EPC goals, selecting an EPC Consultant, and developing a rough implementation plan. He or she must then get top management's sign-off on all of this. We have found this to be a problem for some of our clients. While senior management has committed to enterprise project control in principle, securing the funding and agreement on procedural issues can be tough. The EPC Consultant can help here, drawing on the experience of other similar clients.
- EPC Database Manager. This person is responsible for the integrity of the project database, report generation, enterprise-level resource analysis. He or she is the focal point for project data, and often reports to the EPC Director.
- EPC Consultant. Most organizations will be embarking on an enterpriselevel project control system for the first time. They can profit from the experience of a professional in the field. As an independent expert, the consultant will more quickly identify the issues and propose solutions. Implementing an enterprise project control system will likely be the most significant project management project the company will ever undertake. It will require an investment in time, money and resources. The expertise and experience of an EPC Consultant can greatly improve the odds for success.
Methodology. We have developed a method for implementing enterprise project control. Figure 1 presents a work breakdown structure of this implementation approach, and the following discussion highlights some important points.
- Manage the Project. A crucial element here is the needs analysis, which is conducted by the EPC Director and EPC Consultant. This analysis matches solutions to identified problems, and raises issues that the client will have to decide (e.g., organizational restructuring, software, hardware and network purchases, and personnel additions or re-deployments.)
- Develop Methodology. Senior management should form a steering committee (including the EPC Director and EPC Consultant). This steering committee develops the “project bible,” a crucial document that outlines how project management will be performed in the enterprise. The “bible” defines the organizational structure, roles and responsibilities; standardized project planning reports and procedures; milestone definitions; criteria for prioritizing projects; etc. Development of this “bible” is a key step in implementing enterprise project control.
- Implement Training. This includes education about project management tools and techniques. Senior managers should be trained also—not necessarily on the tools but more on what to expect from the project control system, and how they should use (or not use) the information it produces.
- Implement Enterprise Project Control. Implementing EPC first requires a decision as to which projects are tracked. For example, are projects with durations of less than five days tracked? This decision is based on the reporting needs of management and requires a more intense effort from the EPC Database Manager. Once projects are identified, they are loaded into the system and tracked under the direction of the EPC Consultant. This is the real test of the system for which the EPC Consultant is responsible. The client is simultaneously developing in-house expertise for maintaining the system to ensure a successful hand-off from the EPC Consultant.
Figure 2. Enterprise Project Control Database
The System
A central feature of an enterprise project control system is a database of projects and project management methodology. Interested and qualified parties contribute to and draw information from this database.
Computer Hardware and Project Management Software. This theme of meaningfully interacting with a central project database has implications for computer hardware, software and communications. Project participants must have ready access to computer hardware and project management software, and must be comfortable with their use.
The software, in particular, must be easy enough for non-project management people to use. Despite improvements in the usability of project management software, it is simply not reasonable to assume that all project team members and resources will be able to use the software to plan and status their tasks. For these people, we rely on task lists generated by the project manager from the EPC database, perhaps sent via e-mail. Task status is quickly updated and communicated back to the project manager.
The EPC Database. The database should reside in a central location, usually on a server, under the control of the EPC Database Manager. Figure 2 depicts the EPC database and its central role in an EPC system. The enterprise project control database consists of:
- Projects. The current version of all active projects. Being centrally located facilitates the update process, allows for version control, enables cross-project links, and multi-project resource analysis.
- Resources. Resources should be defined and managed centrally, with project files pulling resources from this file.
- Calendars. To save time and ensure consistency, project management software should use standard calendars.
- Templates (for projects, WBS, standard reports, views, filters, macros, etc.). Project managers save time and develop better, more consistent reports starting with templates.
- Project Development Information. Enterprise project control requires a formalized project development methodology. This should be part of the EPC database (perhaps integrating it with the project management software) to give project managers and team members quick and easy access. Typically this includes information on the client's gating process, guidelines for creating and updating projects and obtaining management sign-off, and so forth.
Ideally, project data should be accessible to a wide variety of users in addition to project management software (e.g. spreadsheets, time and cost accounting modules, estimating tools, and custom applications).
Roles of Project Participants. An enterprise project control system relies heavily on personnel and procedures that govern the production, flow, and use of project data. Issues like the following must be addressed: Who “owns” the data? How often is project status updated? Which projects are managed via the EPC system? Who has access to what data?
Following is a description of the roles of the main players in an enterprise control project system and the benefits they receive from it.
- Project Managers. Project managers can be located at a central or remote site. They create project plans using templates; update status of project plans; identify inter-project dependencies; identify and manage variances from plan; resolve resource conflicts and bottlenecks; and communicate project status to interested parties via e-mail and hard copy. The benefits to project managers include maximized productivity of scarce resources; accurate and timely information that allows the project manager to make informed tradeoffs between cost and schedule; improved project visibility and coordination for contributing project teams; and minimized technical and financial risks of their projects.
- Project Team Members. Organizational changes have created the opportunity and obligation for workers to buy into the plan and to be responsible for their own performance. Team members can be located at a central or remote site. It is often advisable not to require them to use project management software, but simply to communicate project data via paper or e-mail. Team members receive “to do” lists from project managers, report actual hours and progress, and receive project status updates. Team members can participate without knowing project management software, save time by quickly updating status, and can see how their piece integrates with the larger picture.
- Senior Management. When faced with information overload, maintaining a clear focus on the big picture and organizational goals becomes difficult. A successful enterprise project control system provides senior management with that focus. Senior management must review resource and cost information at the project level, resolve multi-project resource bottlenecks, and set priorities. With enterprise project control priorities can be set rationally, in accordance with goals of the organization; the mix of products is more easily seen and therefore controlled; the organization can prevent over-committing to customers; and change can be more effectively managed to take advantage of new opportunities.
Conclusion
Over the past decade, working with clients in many industries, we see the same forces at play. Being first to market with competitive products is everything. Doing more with less. Being more accountable. This emerging environment places critical new demands on every level of the enterprise.
Top management must coordinate multiple projects across the organization, establish effective communications between project teams, and have instant access to cross-project resource loading and status information. Project managers need to monitor the activities, resources, tasks and status of every aspect of their projects. Project team members must know their responsibilities and communicate their progress to management.
We believe that for many organizations the only way to thrive in the coming decades is to implement some form of enterprise project control. EPC enables one to implement projects with a level of control never before available. And everyone, including customers, has confidence in the organization's ability to deliver the right mix of projects in a timely, cost-effective fashion. ■