Project Management Institute

Business processes for managing multiple projects

Reengineering the business process to a management-by-project approach is done in three phases. In which phase is your organization?

Ronald E. Warburton

The use of desktop project management software has become commonplace, and yet senior managers wonder why projects are still not completed on time or within budget in most large organizations. The problem is due to the lack of an effective business process for managing multiple projects.

Recent downsizing trends and the reduction of the middle management layer mean that management decisions increasingly are made by task force recommendations rather than through the classical hierarchal decision-making process. To meet objectives of task force projects and other corporate projects, an operating environment must be formed to support the new management-by-projects business process.

Our experience indicates that successful reengineering of the business process to reflect a management-by-projects approach is achieved in three phases (see Figure 1). These phases are somewhat reflective of the studies by the Carnegie-Mellon University in assessing the maturation of software development organizations. Each phase takes approximately two years to progress to the next level.

Figure 1. Organization Maturity

Organization Maturity

Figure 2. Managing Multiple Projects

Managing Multiple Projects

Phase 1: Ad Hoc

Initially, management will form project task forces, detail their objectives, and set target completion dates. When projects are not delivered on schedule, or suffer cost overruns, management realizes that it must improve its methods for preparing cost estimates and scheduling projects.

Senior management then will ensure that its personnel are trained in project management skills and instructed to use these skills in controlling their projects. To support this initiative, the use of inexpensive, stand-alone project management software proliferates throughout the organization, and computerized plans are prepared. Senior management now has a wide variety of nicely printed reports showing work breakdown structures, PERT charts, bar charts, and cost estimates. The organization shows some improvement, and yet projects are still delivered behind schedule and over budget as projects continue to be managed independently.

Although senior management can review project plans, there is no mechanism to report problems with interrelated projects and overlapping resources. Change control is lax, priorities are misinterpreted, personnel is not used to full capacity, and senior management has no sense as to how new projects will affect existing projects.

Phase 2: Defined

Real improvements will occur only when a formalized business process for managing multiple projects is implemented. Similar to managing a hierarchal organization, Phase 2 involves the implementation of a series of defined policies and procedures to manage the multitude of corporate projects.

The organization must review its business processes concerning its ongoing projects with respect to project prioritization, resource utilization, change controls, and maintaining project data.

Some of the issues that must be addressed in this phase are:

Determining reporting requirements at all levels. Business processes should be analyzed to identify the critical information requirements for technicians, project managers, department managers, and executive management (see Figure 2). The most effective reporting structure has information flowing upwards through an online time reporting system that updates project schedules.

Setting up a project control office. The project control office determines and supports the procedures required to standardize planning and reporting within the organization.

Reviewing the current use of supporting software technology. Effective multiple project coordination is achieved by using a multiple user system with a central database of information to reflect workloads on all projects. The multiple user system simplifies the management of multiple projects by involving the entire organization in the business process through the use of easy-to-use modules for work requests, project management, estimating, and time reporting.

Integrating with existing corporate systems. A multiple user solution should run on industry standard SQL databases such as Oracle, Ingres, or SQL-Server to enable interfaces to existing corporate applications such as payroll, job costing, and purchasing.

Phase 3: Managed

An organization enters the managed phase when its methods for managing projects are defined and institutionalized. For example, when faced with a delivery crisis, the organization relies on its process to confront the issues rather than throwing the rule book out the window.

The next step is to integrate non-project work, such as maintenance of existing programs, with the process for managing project work. The central database of information is updated to include non-project work as well as project work.

The organization then is ready to optimize its procedures by implementing a comprehensive measurement and analysis program. This gives a precise, statistical profile of the process and therefore provides the foundation for significant quality and productivity improvements.

Ronald E. Warburton, P.Eng., M.B.A. is president of Simetra Inc., a Canadian company that specializes in helping organizations manage multiple projects with Artemis multiple-user software and consulting services.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM Network • February 1995

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