Project Management Institute

Enterprisewide project management

getting off to a solid start

This paper spotlights the practical side of initiating an Enterprise Project Management program. A prior paper entitled An Executive Game Plan for Managing Enterprises by Projects, presented at the 1999 PMI Symposium, outlined the theory and showed the models for managing an enterprise by focusing on project management as an organizational creed. This sequel paper focuses on a case study and outlines first steps for implementing Enterprise Project Management.

Different Approaches

In practice, change toward an enterprisewide approach for managing projects comes about because an internal force makes it happen. That force may originate in different places but ultimately it must spread to and influence other parts of the organization. Here are the classic ways for implementing project management on an enterprisewide basis.

Top Down. The top-down approach may appear to be the most direct route to implementing project management enter-prisewide, yet the challenge of executing such change continues to be a formidable one. Getting the rest of the organization to buy in doesn’t happen just because higher management says it’s a good idea. Such a “start at the top” effort requires the same care and nurturing as initiating change from other levels within the organization.

Information Technology. The information technology group sometimes takes the lead in kicking off an Enterprise Project Management effort. Since due to their complexity IT projects are noted for coming in late and not fully meeting client requirements, they represent fertile ground for the “portfolio of projects” philosophy proposed in the enterprise approach. CIOs are increasingly open to using enterprisewide project management to improve the probability of delivering work on time. Alternatively CIOs may choose to apply an enterprise-like concept solely within the IT area to solve their own challenges, as opposed to promoting the effort on corporation wide basis.

Project Office. If the company has a Project Office set up somewhere in the organization, that office might well take on the change agent role. Depending on the positioning of the Project Office, it may be able to spread the enterprisewide concept by showing the effectiveness of using the project approach and making the results visible within the company.

Human Resources. The Human Resource area is sometimes tagged with the change agent role. As HR has shed its old “personnel” role, HR people increasingly takes the initiative to promote programs they feel will have a positive impact on the company. Since the HR group has broad access to the organization, it is well set to promote change.

Four different routes used to implement the practice of Enterprise Project Management within organizations were summarized here. The case shown in the paper developed through the Project Office approach.

MCI WorldCom’s Brazilian Subsidiary

Embratel—Brazilian Telecommunications Company, acquired by MCI on July 29, 1998, is the largest national telecommunications network in Latin America. Embratel has a full range of national and international services including long distance, data communication, Internet, messaging, maritime communication, and the transmission of television and radio signals.

As the telecommunications market began to open up in Brazil, new economic opportunities arose. With a totally competitive market (transitioning from the previous government-controlled monopoly) scheduled for year 2002, the Brazilian market is expected to grow from the current $5 billion to $30 billion. This means that the demand for new, dynamic products and services will continue to increase. In turn this creates a demand for effective project management to ensure that those products and services are made available on a timely basis.

At Embratel, prior to the privatization of the company in 1998, a survey on project management as performed by the Engineering Directorate was done by outside consultants. The study indicated a number of areas calling for improvement such as: project planning, implementation of a Project Office, development of cost and time estimating parameters and a project quality plan, training in project management and team building, development of a communications plan, identification of risks and improvements to the contracting process. Those recommendations were to coincide with actions taken later by the new parent company.

Getting People’s Attention

Upon takeover, the parent company adopted a policy of maintaining Embratel’s key executives in top management positions and provided support through experienced MCI WorldCom personnel and outside consultants. In the case of project management, in the latter half of 1999, it was decided to bring in a Senior Manager of Program Management from MCI WorldCom on a full time basis to be responsible for organizing project management across the enterprise. A presentation was made to upper management showing the importance of project management in the transition period from a state-controlled monopoly to a privately owned company immersed in a suddenly-very-competitive market. Here are some of the points made during that presentation.

The Initial Presentation

Purpose

• To take the necessary steps toward the full and effective implementation of the outstanding project before the end of the year

• To incorporate Engineering in the full realm of the product development process and the concept of project management

• Improve time to market.

Objectives

• To understand the tangible outputs of the product development process

• To understand the relationship and synchronization between the project management group and the network implementation group

• To review the network implementation process and the steps toward its full implementation

• To understand the project management organizational structure

• To establish an executive steering committee for issue escalation and resolution

• To delineate the steps toward the full implementation of the project management concepts into Engineering daily operations

• To introduce the project management information system.

Where Are We?

• Time to market metrics do not exist

• Mechanisms for end-to-end management of projects across technology segments and functional organization is under implementation

• Engineering is not effectively organized by project and product initiatives

• Commitment accountability is not highly enforced

• Project performance metrics are very loosely defined

• An integrated management approach toward projects is not clearly defined and implemented

• Mechanism for cross-functional management of projects is not fully implemented.

The Vision and Goal

• Synchronize the efforts across the boundaries of the organization to make Embratel the premier service and product providers in Brazil

• Create an environment in Engineering to allow for the fastest time to market.

Understanding Project Management

A Project can be considered to be any series of activities and tasks that:

• Have specific objective to be completed with certain specifications

• Have defined start and end dates

• Have funding limits

• Consumes resources (i.e., money, people, equipment)

The General Benefits From Project Management Are:

• Identification of functional responsibilities to ensure that all activities are accounted for, regardless of personnel turn-over

• Coordination and scheduling for all activities required

• Budgeting, cost analysis and control for the defined project

• Assessment of risk and early identification of problems so that corrective action may follow

• Ensure effective and efficient utilization of the assigned resources

• Compliance to a predefined set of standard and performance of the project.

What is Project Management?

It is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations for a project. Meeting or exceeding stakeholder’s needs and expectations invariably involves balancing competing demands among:

• Scope, Time, Cost and Quality

• Stakeholders with different needs or expectations

• Identified requirements (needs) and unidentified requirements (expectations).

Components of Project Management

Project Management is made up of nine management disciplines, which include: Integration Time, Cost, Quality, Scope, Human Resources, Communications, Risk and Procurement. The Project Management Process is composed of the following phases: Initiation, Assessment, Analysis and Design, Construction, Testing and Implementation.

Network Implementation Project Management

• Mission: Ensure timely and within budget delivery of new or enhanced network infrastructure that will further corporate objectives.

Implementation

• Establish project management processes

• Coordinate development of project plans

• Establish project kick-off meetings

• Measure implementation performance

• Establish management reporting

• Establish formal project completion

• Consistently complete projects on time.

Exhibit 1

image

Benefits

• Consistent management approach across projects

• Management across functional boundaries

• Enhanced interdepartmental communications.

The Project Management Information System

Project Management Information System is a system that will facilitate and standardize the accomplishment of the enterprise project goals and objectives.

Benefits

• Provides for the integration with the costing system for project performance reporting.

• Allows for accurate, dependable and standard record keeping of project status information.

• Becomes the standard communication medium for all project managers regarding their project status and project performance reports.

• Increase efficiency in the project coordination activities, since all the information is provided with a high degree of accuracy and timeliness.

• Permits the integration with the change and scope management components of the given project.

Objectives

• Easy to use Web-based interface

• Incorporates risk as an assessment factor on the project performance

• Provides links for project financial control

• Provided user level security at a application level

• Incorporates scope and change management as an initial component of the system

• Provides reporting capability for executive management.

Systems Users

• Administrator

• Managing user access

• Insert data into the following tables: Owner, State, Problem Area, Phase, Priority, Risk and Products, Manager, Project End date

• Project Manager

• Insert data into the following project information: status, team, change

• Accomplish the project performance through queries and reports concerning to its project.

System Components

• Project Definition

• Status

• Risk

• Change

• Team

• Budget

Next Steps

• Implement and use the system for all projects

• Implement the network implementation group

• Assemble schedule for all the products and projects

• Initiate project specific budget management

• Establish project management process review meeting with Engineering

The initial presentation outlined above was the basis for “selling” the project management approach to the principle stakeholders at Embratel. The presentation, along with one-on-one discussions with key executives, helped create a consensus that the program should proceed. Once buy-in was obtained regarding the value of managing the organization through project management, the issue as to how it would be done, was raised. From an organizational standpoint the recommendations varied from establishing a centralized Project Office to setting up separate Project Offices in each of the directorates.

Exhibit 2

image

The Virtual Project Management Office

One alternative for stimulating the practice of Enterprise Project Management at Embratel was to create overall project coordination responsibility at a directorate (vice presidential) level. That proposal was not considered feasible by top management at the time because of the organizational transition under way. Recognizing, however, that there was a definite need for coordination of priority projects at a high level, top management ultimately approved an alternative solution called the Virtual Project Management Office—VPMO.

The VPMO includes the company directors (who act at the vice-presidential level), and a few other key executives from areas like strategic planning and budget control. It is coordinated by the head of the Project Management Department, which is located under the Engineering Directorate. It was tacitly agreed the Project Management Department’s scope would transcend engineering projects particularly when involving important interfaces. The VPMO is shown in Exhibit 1.

The VPMO Presentation

The Virtual Project Management Office concept was presented to the management team in November of 1999 in a meeting with the following agenda:

• Establish the guidelines for the establishment of a Virtual Project Management Office

• Define VPMO objectives

• Define the organizational structure

• Define the roles and responsibilities

• Define the dynamics for the VPMO

• Review the next steps.

VPMO Objective

Facilitate the executive decision-making process to more efficiently utilize company resources to exceed company revenue goals.

Roles and Responsibilities

• Ensure coordination and cooperation across functional organizations

• Communicate comprehensive status to executive management

• Present executive management with alternative solutions and recommendations to remove roadblocks affecting the implementation of revenue generating programs.

VPMO Dynamics

• Host biweekly issue escalation meetings

• Determine viable course of action

• Obtain executive support for issue resolution

• Follow-up for closure and completion.

Next Steps

• Directors appoint department level responsible person (VPMO Representative)

• Prepare program status summary and issues

• Hold first VPMO meeting.

Once the VPMO was put in place, priorities were established. Consultants were hired to give support for developing procedures and processes for implementing projects and to help implement the enterprisewide approach to managing projects.

A Work Breakdown Approach for Enterprise Project Management

The WBS, shown in Exhibits 2 and 3, was developed to obtain an overview of the program. The starting point for the WBS was drawn from chapter 4 of the book Winning in Business with Enterprise Project Management (AMACOM, 1998). The work breakdown structure was customized to reflect the situation at Embratel and was used to help pinpoint items requiring immediate attention.

Exhibit 3

image

The Enterprise Project Management movement was labeled the “EPM Program” and broken down into seven levels as follows: Management of the EPM program, Strategic Alignment with Company Objectives, Cultural Change, Communication, Corporate Organization and Process, People, and Areas of Interface. Each of those items in turn were subdivided into their respective component parts as listed below:

Management of the EPM program

The key elements for managing the EPM program were defined to ensure adequate managerial effort was focused on the program. The items outlined were as follows:

Organization for the EPM Program: determine responsible parties and players for carrying out the program and how they relate to one another organizationally.

Methodologies and Procedures: identify a basic methodology for managing projects in the organization and develop the necessary procedures for putting them in place.

PMBOK® Guide Project Areas: prioritize the areas requiring attention and develop plans for making necessary improvements.

Program Strategy Planning: develop overall strategies for ensuring program success.

Program Detailed Planning, Administration and Control. Map out the details for implementing and monitoring the EPM program.

Program Change Management: Establish the criteria and procedures for dealing with the inevitable changes that crop up throughout the project.

Strategic Alignment With Company Objectives

Since the aim of Enterprise Project Management is to ensure that projects are aligned with company objectives, this heading was subdivided into the following sub headings

Stakeholder Analysis: identify stakeholders, analyze probable behavior, plan best approaches and implement action.

Strategic Alliances: determine which groups or movements within the company should be targeted for strategic agreements.

Formal Declaration: formalize a charter for the EPM program.

Operating Premises: establish the assumptions for how the program is to be implemented and operated

Positioning with Respect to the Competition: determine how Enterprise Project Management can best help the company create competitive advantage.

Strategic Interfaces: identify and manage the interfaces necessary to ensure smooth management of projects across the enterprise.

Cultural Change

Enterprise Project Management is a different way of doing business and therefore calls for cultural change within the organization. These are the items targeted to bring about that change.

Description of Desired Change: describe specifically what needs changing in terms of organization, behavior and results.

Present Organizational Climate: relate the characteristics of the present organizational climate to be used as a baseline.

Desired Organizational Climate: describe the climate that needs to dominate the organization in order for corporate goals to be met.

Communication

Always critical to the success of any project, the action items for communication were targeted under the following headings:

Communication Strategies: develop overall approaches for communicating strategies and information for the project.

Select Channels: determine which communication channels should be used in each given situation.

Create Awareness: develop plans for ensuring that the organization is fully involved in the Enterprise Project Management movement.

Monitor Communication Effectiveness: establish a system for tracking the effectiveness of the communications strategies developed.

Corporate Organization and Process

EPM requires adjustments across the organization and affects on-going processes; therefore, these topics were selected for review for compatibility and convergence:

Systems: analyze compatibility of overall organization systems and propose necessary adaptations.

Roles and Responsibilities: formally determine who is responsible for carrying out the various activities involved in implementing and operating Enterprise Project Management.

Processes: review and optimize project management processes.

Technology: ensure that related technology is up to date and that provision is made for future updates.

Hierarchy and Interfaces: analyze the impact of the existing hierarchy and principal interfaces.

Corporate Organization Design: review formal organization design and recommend adjustments as deemed necessary.

People

Since the success of the entire program hinges on the people issues, the following topics were selected as focal points for action in the EPM program

Training and Development: determine needs and develop programs such as training for PMP® (Project Management Professional) in order to improve the level of individual performance.

Team Building: develop team spirit through on-the-job attitudes and group training programs such as outdoor experiential workshops

Personnel Allocation: determine the requirements for recruiting and for best allocation of all personnel

Competency Assessment: evaluate need for performing a formal competency assessment of individual abilities and carry out necessary measures.

Competency Based Remuneration: determine requirements for remuneration based on the results of the competency testing.

Areas of Interface

Because the program was being launched and managed on a virtual basis, areas of interface become particularly critical to the success of the effort. These are the areas identified for specific interfacing strategy and action.

Finance: articulate with the financial areas the requirements involving business case criteria and corporate resource allocation requirements.

Procurement: coordinate policies and practices for contracting and contract management.

Quality: develop working relationship with internal quality programs and project quality criteria.

Marketing: articulate interface between initial business case phase and the project implementation phase.

IT: develop coordination relationship with the IT area. At Embratel, because of the importance of the projects under way, IT has its own Project Office structure and a separate steering committee.

VPMO: provide leadership and coordination for the biweekly Virtual Project Management Office meetings and carry out appropriate follow up activities.

Engineering: carry out hands-on coordination of all projects assigned to the engineering directorate.

Administrative: develop working relationship with all administrative areas and procedures to ensure the smooth flow of the Enterprise Project Management effort.

Operational: involve the operational directorate in projects to optimize operations once the project is completed.

From Change to Optimization

The Enterprise Project Management program is designed to operate initially as an agent of change—to bring about needed transformation to the organization. From the change agent status, the program is proposed to reach a degree of standardization by updating and introducing procedures as needed. This in turn is to set the stage for attaining a level of optimization across the enterprise.

A strategy was established to strive for broad-based, long-term success in transforming the project management practices of the organization. At the same time short-term results were targeted to ensure that the value of the effort was recognized early on. The policy of “small victories” was established and managed through the WBS item “Short Term Deliverables.” Tasks targeted early on were: a project acceptance document, standardized business plans and reliable cost data. Stakeholder management and interfacing, although not generally perceived as “deliverables,” were key elements to getting the program off to a good start.

For Embratel to make a successful transition from a state-owned monopoly to a full fledged competitive player in the privatized Latin American market, the key success factors, aside from developing and maintaining relationships with stakeholders, include concentrating on issues where benefit is not only achieved for the company cause, but for the people involved, who in turn grow professionally and perform their work using improved processes thus requiring less strain and wasted effort. At the same time, special care must be taken to ensure that the effort to improve processes does not increase bureaucracy. The other major factor involves picking topics that rapidly result in increased benefits to the company and its stakeholders. The long-term success of Enterprise Project Management depends largely on targeting these areas and getting off to a solid start.

Reference

Dinsmore, Paul C. (1998). Winning in business with Enterprise Project Management. New York: Amacom.

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 or any listed author.

Proceedings of the Project Management Institute Annual Seminars & Symposium
September 7–16, 2000 • Houston, Texas, USA

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