Robert Kelly, PMP, Red Hat, Raleigh, North Carolina, USA
The old silos are breaking down.
Many organizations are implementing new, less rigid business structures that emphasize collaboration across departments. To that end, project managers working within business units can help provide a big-picture view of the organization—one that sheds light on resource allocation, aids portfolio planning and detects risks.
Any disconnect between an organization's project management staff and its business units causes major problems, says Dave Pratt, PMP, managing partner for DHP Project Services, a project management consultancy in Yelm, Washington, USA.
Mr. Pratt stepped in to help a state agency with a US$15 million project that had derailed after six months. It stalled, he says, because the project manager worked for the IT department—even though the initiative supported the agency's primary revenue-generating business operations.
“The project manager did not know who the business sponsor was for the project; the vendor hired to deliver the system didn't deliver; and the users had been left out of the loop,” explains Mr. Pratt, who also serves as an adjunct professor for South Puget Sound Community College's project management program.
It was a highly technical project, but Mr. Pratt found answers not through the IT department but from the business unit. He says he “prowled the halls of the agency” one day, looking for the project sponsor. “Once I found him, educated him and introduced him to the project manager, the project immediately gained traction,” he says.
“A couple of the project's objectives were deferred until another phase could be started, but the majority of the functionality was brought online,” Mr. Pratt explains.
Having project managers as core members of the business unit has significant benefits—not the least of which comes in portfolio planning, says Robert Kelly, PMP, project manager of global lead management at Red Hat, an open-source software maker in Raleigh, North Carolina, USA. When he worked at the computer manufacturer Lenovo, he was an embedded project manager in the service, sales and marketing department. “The project managers on our team partnered with the product managers to optimize, create and implement new service offerings in our project portfolio,” says Mr. Kelly, also a managing partner at Kelly Project Solutions, a project management consultancy.
Product managers are often the ones who analyze the competition, review market trends, and validate their organization's current capability to provide a roadmap of new services or products to help achieve revenue targets, Mr. Kelly says. “Traditionally this is done in somewhat of a bubble, with little or no input on the viability of the proposed plan from other functions in the organization.”
As a result, executives unknowingly sign off on a plan riddled with resource, budget and capabilities conflicts. “And the organization spends the next year trying to move mountains to hit the numbers,” he says.
But when project managers are core members of the business unit, the portfolio more accurately reflects the organization. Because project managers work closely with all of the functions in an organization, they often know of systems limitations or other initiatives that could affect the proposed roadmap, Mr. Kelly says. In addition, project managers are often cognizant of similar efforts or vendors' capabilities, allowing them to combine or more efficiently leverage existing resources.
When project managers work across functions, they know the workload undertaken by various departments, including IT, legal and marketing, for instance.
“Let's say a business wants to develop a product that requires new terms and conditions to be created in two dozen countries, and will require that the call centers provide support for their customers,” Mr. Kelly says. “The project manager will be able to work with these groups to understand their contributions, the sequence and timing of these activities, and how that fits into the rest of roadmap.”
Additionally, the project manager might know that the legal team is writing terms and conditions for a similar product, or that IT is developing a new functionality for a current product that would work on this project.
“Legal is concerned with legal, and IT is concerned with IT,” Mr. Kelly says. “It is the project manager who can provide 360-degree vision of the business goals, market trends and strategic objectives with the tactical efforts of the development teams to both the business and functional managers.”
NO CHOICE IN THE MATTER
Some organizations would never even consider not placing project managers in business units.
“In the software product development industry, and in my organization in particular, project managers are an integral part of the business units,” says Tathagat Varma, PMP, senior director of strategic programs and business operations for Yahoo!'s research and development center in Bengaluru, India. “Yesterday's bloated monolithic organizations were too territorial and inefficient. Ultimately, they became self-serving and slow to respond to changes, let alone proactively manage them.”
The solution? Project managers need to manage interdependencies across multiple reporting structures and align all parts to the overall strategic objectives of the business unit, he says.
By embedding project managers in business units, an organization can maximize its portfolio's ROI and navigate complexity. PM