Finding resources in a global organization
Scott Hardey, PlanView Inc.
The Internet has certainly changed the face of business. But most of the effort to-date under the umbrella of e-commerce has been about applying the Internet to the processes of the Industrial Age. In comparison to factory and business process automation, the new frontier is E-Services, web-enabling the efficient use of human capital, especially in arenas such as financial services. In today's economy, intellectual capital has become a core asset. The problem is that human capital—the skilled workers whose knowledge is being leveraged—is both expensive and scarce. Organizations must therefore use their workers' time productively, to full capacity, if possible, and on the right work. Project management is just the beginning. Project management integrated with resource management to create workforce management is a more mature approach.
The profitability and viability of many financial organizations is becoming more and more contingent on leveraging technology and human capital as well as reducing time to market. Luckily, integrated project and resource management techniques have evolved to help. In addition to its role in e-commerce, the Internet has also become critical for supporting the asynchronous collaboration and communication required by today's geographically distributed businesses. New web-enabled management processes can bring benefits to a range of project team members and other stakeholders. This paper discusses the following innovations:
• Multiproject environments
• Workforce management
• Projects in context of all other work
• Managing skills
• Staff-driven progress and performance tracking procedures.
For the organizations that learn to manage their projects and resources well, the reward can be realistic project schedules that use the full capacity of the workforce without overbooking, lower risk, higher profits, better alignment between project management practices and the goals of the organization, and recruitment or outsourcing initiatives that position the organization to capitalize on business trends.
Most of today's leading financial organizations are huge and multinational. Other financial organizations are multistate, and many are at least geographically distributed. The conventional, desktop, project management software tool, while still valuable for smaller organizations, has limited usefulness for large-scale enterprises with offices scattered across the globe. Today's most effective enterprise management systems allow project managers, staff, contractors, executives, equity holders, and customers to review project, initiative, and service portfolios from anywhere in the world via the World Wide Web.
To a large part, advances in technology have allowed organizations to mitigate their people shortages by using nomadic workers, contractors, and subcontractors, and creating “virtual” project teams, all of which adds more complexity for project managers. For some, project success depends upon skilled human resources of ever-decreasing availability, such as IT workers, financial analysts, and other knowledge workers. Project schedules must often accommodate what amounts to paradigm shifts in software, hardware, customer requirements, regulatory requirements, and technology. Here, basic project management techniques fall short and risks are high. Directing the right staff to the right work is the province of workforce management.
When the Workforce is Key
Workforce management is a concept that lets organizations take on work according to the skills and availability of their staff, both present and forecasted. Integrated with project and service management, it is a way to direct the staff and virtual staff of the enterprise to the right work. For instance, there are often leverage points, typically individuals with critical skills, whose under-use or overbooking have the most effect on the amount of work the organization can complete. For those organizations that depend on a skilled and limited workforce, an effective project management system must give insight on how all staff time is utilized, as well as a view of all the work the organization has planned or proposed.
Outsourcing has become a way of doing business in the new economy, and its challenges must be confronted by a good workforce management system. According to the Harvard Business School (May 1998), conservative estimates say that 15 million Americans now work in “virtual offices,” and that number is growing 20% annually. The GartnerGroup predicts that by 2002, there will be more than 108 million people worldwide working regularly outside the traditional office. Yet a reality of the virtual office is the very things that provide the flexibility and cost benefits create challenges for project managers (see Exhibit 1).
Exhibit 1. Challenges of the Virtual Office
The continuing evolution of the demographics of the knowledge worker has also required a natural adaptation of processes to manage the enterprise. The modern staff contributor is highly skilled, sometimes practically irreplaceable within a project deadline. They may have limited availability, with constant competition from other employers. They're typically simultaneously involved in several projects, maintenance, service and other work. They might be distributed all over the map, with little or no direct supervision, and may even work for a separate organization.
A project manager must typically draw workers from the various resource pools of full-time or part-time employees, contractors, and subcontractors, all with multiple skills. These virtual project teams may or may not have indoctrination into the organization's business practices. Managers must be able to match people to the work and communicate objectives through a common business language. There must be a simple means of communication of complex information to large numbers of people in this type of distributed collaborative process. The GartnerGroup, in its September 1999 report “What is a Virtual Team and How Should It Be Managed?” lists several requirements of managing a virtual team:
1. Have a manager or executive sponsor the team to champion it, provide political “air cover” and help identify issues and goals.
2. Have a team coordinator who sets up schedules, conferences, agendas, and helps create archives and workfiles.
3. Meet face-to-face at the beginning of the initiative to establish a rapport and set expectations.
4. Agree to communication protocols and other procedures that will govern team interaction, product development and review, and assignment of responsibilities. Global teams especially need to establish commitments for teleconferences, web meetings, etc. that accommodate different time zones. A common vocabulary with sensitivity to multiple first languages and different idioms and cultures is also often important.
5. Though much work can be completed in cyberspace, meet face-to-face periodically, anywhere from once a week to every six months.
Work is More Than Projects
Though some organizations would like to hope that most, if not all of their work is on projects, it's rarely the case. Staff members are usually working on multiple projects, and have some amount of nonproject work as well. Ignoring or discounting the effect these other types of work have on project schedules can be devastating. The lack of reality in most project schedules is a great reason for failed initiatives, missed milestones, and cost overruns.
In many financial organizations, projectized work further breaks down into two categories that each require a little different management approach. Therefore, many organizations have in reality four different types of work:
• Major projects—Those initiatives to redefine the workings of the organization, launch new products or services or other major events. Most organizations only have a small portfolio of major projects, but those get the overwhelming majority of the management attention.
• Projects—Typically capital improvements: those enhancement and maintenance projects affecting in-place systems, products, and procedures, etc. These projects are typically shorter duration with less dramatic impact on the organization, but they are often critical to smooth operation.
Exhibit 2. Workload of a Department
• Service requests—An occurrence of recurring work with a resolution. It may be maintenance, a user question, a system failure, or a simple task—any event that has a limited scope and can be resolved often without management intervention. The critical issue with service is to accurately account for the work, charge it back (if applicable), and communicate status to the clients.
• Administrative—All organizations also have some amount of training, vacations and proper documentation of sick leave, internal meetings and other administrative functions which help to fulfill legal requirements, define the investment of the organization in their staff and keep everyone informed. These “standard activities” affect a worker's availability for project work.
Resource Availability Affects Project Schedules
Most project management tools or systems include a feature for creating a project schedule using the Critical Path Method (CPM). Some projects never go on to find people with the right skills and availability, assign staff to the work, much less ask the person if they can accept the assignment and let them drive status and remaining work. A critical path calculation is an important step in planning a project and justifying the upfront investment, but only the first step in building a schedule. And yet managers are often comparing projects with no idea of the maturity of the data behind the Gantt chart.
Project schedules only become realistic when all of the workforce workload is considered. A work management tool must let managers integrate planning for both project work and non-project work and provide a full accounting of all the resources necessary to plan, implement, and complete an initiative—on time and on budget. Staff members and virtual staff members are at the top of the valuable resource list. Managers require a tool that will allow them to evaluate proposed work schedules based on the availability and capabilities of their work force, to balance workload assignments, and forecast which skills are needed for new projects. A useful work management system will let managers integrate data and view all of the work, both as Gantts and resource histograms.
A resource profile or histogram (see Exhibit 2) can display total availability of staff, with a way to note when over- or under-booking has happened. This can also be displayed in a spreadsheet format with excess hours flagged in a different color, to alert that schedules are at risk. Because most financial organizations operate within a multiproject environment, this info should be able to be grouped and sorted by individuals, groups, teams, etc. As we have shown above, the histogram must include more than multiple projects. It should also show proposed work, already scheduled work, recurring work, and administrative.
A flexible hierarchy is important: views should accommodate different levels, offices, phases, projects, initiatives, etc. A site could be defined as a different department, a different office, or a different country anywhere in the world. Managers and executives can then drive down the detail to get information on the scheduled project or service work if needed. Overbooked staff would be immediately visible and allow managers to reallocate, outsource, hire, push back milestones, etc.
Short-term demands on staff and project priorities can be clearly displayed and updated instantly to reflect new project assignments, sick leave, customer-service calls, or other scheduling changes. Employee information fed back into the system can provide regular, timely status reports to functional managers and others. This also allows managers to more accurately plan future activities, because they can see how much time and effort was required for similar projects or tasks in the past. The amount of staff time spent in servicing and maintaining a product can also be tracked to provide product profitability reports.
Exhibit 3. A Web Architecture
In functional organizations, managers should also be able to assign work by project or by task at the departmental, team, or skill levels without identifying specific individuals. Groups or individuals can be authorized to perform ad hoc tasks of a certain nature. This is especially useful when the system is used to manage service and maintenance workers.
A Web-Enabled Management Environment
Another requirement is that global systems be flexible. To be competitive within the global arena, organizations have learned that they must configure their activities around seamless, geographically dispersed areas. Luckily the web supports sharing information and collaborating across locations, and even across country borders. Having a workforce database on the central repository can allow managers in Detroit, for instance, to schedule and monitor staff in Switzerland. Further, a project management system cannot stand alone, but should share data and integrate with the organization's legacy systems and other enterprise and manufacturing software systems, especially with ERP, finance, and accounting packages.
An effective management tool supports varying levels of executive decision (as in the hierarchy discussion above), but makes sure that all managers are seeing the same data. The best enterprise-system for this is a multi-tier architecture that provides contributors and managers with a realtime connection to a central repository of all work and workforce data (see Exhibit 3). This eliminates confusion and ensures that authority and responsibilities are retained even as project planning is done at an enterprise level. Taking full advantage of Internet technology, a system should also provide web user interfaces whenever possible. The hardware infrastructure now supports high performance for sites even with over 600 nodes. Slow network connections and line chatter have been minimized. Bandwidth problems are being improved by advancements in telecommunications equipment almost weekly.
Critical information can be put into a corporate Internet or intranet for accessing any time from anywhere in the world. Web-based reporting tools for project management must be able to convert documents from many sources into HTML documents that can be reviewed, commented on if necessary, and easily disseminated. Even better is to save changes in a history file that documents how the final product was achieved. Implementing security becomes important with the web enabling of workforce management. Encryption techniques, passwords and user identification are critical to the success of the business application of the web. The business process being enabled by the software must be easy to learn, easy to remember and interesting to the user.
Exhibit 4. Skills Searching
Measuring Where Effort Goes
When it comes to project schedules, you can't manage what you can't measure. Time and expense accounting can become the foundation to performance tracking your projects. The best arrangement for accommodating a geographically dispersed workforce is a web-based software tool with an architecture that can enforce universal business rules. This integrated system of simple, accurate time and expense accounting can provide a framework for notifying staff of weekly tasks and other work, tracking progress on projects and service requests, as well as charging work to customers, explaining changes and measuring quality and performance.
Web software can replace legacy timesheets and allow staff members from anywhere in the world to access their assignments and report their hours worked. They can also report their own estimates to completion, and add documents and remarks that will also be retained in the central repository for managers to review. Staff members may even be able to add maintenance, service logs, and other tasks on the fly to report time to them. Staff information should be fed back into the system to provide regular, timely status reports to functional managers and others.
For those organizations with software development costs, there has been even more emphasis on professional level time and expense tracking due to Statement of Procedure (SOP) 981 issued by the American Institute of CPAs that went into effect starting fiscal year 1999. For organizations that must follow GAAP (Generally Accepted Accounting Principles—which is true for all publicly traded companies) and for those that choose to, requirements for accounting for the costs of “in-house” software are more complicated and must be handled much more formally. Development and support and training costs cannot be grouped together because different rules determine whether they're to be capitalized or expensed.
Time accounting therefore becomes much more than simply collecting timesheets and expense reports. Manager approvals, batch validation, follow-up of missing or late timesheets are all also required and, in a good system, even automated. In addition, this process is the most effective way to collect information on remaining work from the individual staff members. Your staff becomes empowered by reporting actuals and their estimates of hours remaining because this information is used by management to update, replan and schedule the organization's work. And by automating the collection of progress data from the staff, project managers can focus on managing work.
Skills Searching + Availability
“This approach of lumping all IT jobs into a single category is simplistic and fails to take into account that certain skills will be more in demand than others down the road. Enterprises that understand this, and project their need for and supply of skills—not just bodies—will be more successful at delivering strategic applications on time.” From the Gartner Institute's “The Star Model: Assessing the Potential of IT Workers,” February 2000.
Finding the best person(s) for a task becomes even more problematical in a global organization where line-of-sight management is not feasible. Luckily, the Internet offers enhanced communication and collaboration to support global project teams. Effective tools use the web to leverage knowledge transfer (both structured and unstructured), document management, threaded discussions, project websites, virtual meeting spaces, etc. to enrich project management.
Setting up a skills database on the central repository allows managers in different offices to search the repository for the best person(s) for a given task in their area, or expanded to include some or all of the whole organization. Included in this resource database should be information on the skills and proficiencies of each person, as well as other criteria such as location or facility, R&D background, cross-functional capabilities, etc. Determining best fit from a set of skills is one thing. Knowing that those identified resources are available for the work is another, so any tool should take availability into account. Searching through the resource database should take no more than a few seconds up to a minute, and the results should be real-time data, with a list ranked according to some preset algorithms.
Since the skills of the staff and contractors can be critical to staying competitive in today's ever-changing business environment, establishing a process where staff self-administers their information with managerial review can ensure that the skills database remains fresh.
While manufacturing continues to be a significant driver of growth in America, according to the Encyclopedia of American Industries, service businesses employ more workers and generate more revenue than any other sector in the United States economy. E-Service comprises Internet-related services offered to a variety of markets: IT, legal, financial services, management consulting, civil engineering, telecommunications, and more. E-Services Automation (ESA) is about maximizing productivity from human capital, with the end goal of stimulating innovation and creating new value—either on a personal or corporate level.
The unlimited mobility and flexibility in business practices promised by the Internet environment and the virtual office will require the reengineering of many business processes, as well as enterprise tools to expand connectivity and communication. In the search for improvements to get work done, integrating workforce management with project and service management can improve the maturity of the information that managers draw upon to guide their organizations to profitability. The techniques and products available to support ESA can help ensure leadership positions for financial organizations in the new economy.
Proceedings of the Project Management Institute Annual Seminars & Symposium
September 7–16, 2000 • Houston, Texas, USA