Things were looking pretty good for Guadalajara. Dubbed México's Silicon Valley, the city was quickly rising as a hub for high-tech projects. It was also in the throes of a massive construction frenzy to host the XVI Pan American Games in 2011.
Then the economy crashed, setting off a string of budget cuts and project cancelations. And although the city still has its fair share of tech projects and glitzy stadium construction under way, the pressure is on.
The crisis just might turn out to have a long-term benefit as it underscores the value of project management to a city looking for answers.
Technology clearly dominates the economy of Guadalajara and its home state of Jalisco, where electronics represent 70 percent of exports, according to the not-for-profit advocacy group Information Technology Institute of Jalisco. The state is home to more than 70 global IT companies, including big names like Intel, HP and IBM. And the group estimated information communications technology exports represented $16 billion in 2007.
Guadalajara also made consulting giant KPMG’s list of 31 emerging outsourcing centers. The report cited several factors, including the high number of educational institutions that produce more than 18,000 graduates in IT-related courses every year. Situated in southwestern México, the city shares a similar time zone and geographic proximity to clients in the United States, too.
Stakeholders are seeing —Roberto Osorno Hinojosa, PMP, Instituto Tecnológico |
It doesn't hurt that Guadalajara's attempts to stake its claim as a technology leader are backed by government at all levels.
The KPMG report pointed to cooperation among the city's government, industry and academia aimed at strengthening the city's high-tech cluster. The study also cited the state government's targeted improvements in administrative processes, which have resulted in reduced time to set up a business. At the federal level, the government helped fund the 2006 launch of Guadalajara-based Centro del Software, a high-tech business campus that now houses about 25 companies.
The government is also offering some serious business incentives, providing cash grants of up to half the cost of a company's technology project, and a tax credit of nearly one-third the cost of research and development.
But the economic crisis is taking its toll.
Although all sectors have been hit, electronics and IT have “reduced growth expectations due to the closure or postponement of several projects,” says Carlos Alberto Fernandez Guillot, PMP, a professor in the electronics and systems department at Instituto Tecnológico y de Estudios Superiores de Occidente (ITESO) in Guadalajara.
MORE WITH LESS
Fellow ITESO staffer Roberto Osorno Hinojosa, PMP, is one of those feeling the heat.
“Our budget is in Mexican pesos, but we buy and pay in U.S. dollars,” says Mr. Hinojosa, CIO at the school. “With the peso devaluation—combined with rising prices and falling income—we lost almost 30 percent of our project budget. As you can imagine, this put our project management office under a lot of pressure.”
Even against that backdrop, he sees a positive long-term outlook for project management in the city.
“This crisis gave us the opportunity to review our strategies and use our creativity,” says Mr. Hinojosa, who is also the president of the PMI Guadalajara México Chapter.
Project management's role in helping organizations find their way through the crisis can help solidify its future status.
“Stakeholders are seeing in our practices the opportunity to find business efficiency and effectiveness, transparency and strategy accomplishment,” Mr. Hinojosa explains.
Yet there's still some work to be done in getting that message to the very upper echelons, says Jorge A. Dueñas Lozano, an independent project management consultant and owner of Guadalajara-based JAD Ingenieros and a co-founder of PMI’s Guadalajara chapter.
ROADBLOCK AHEAD
The Macrobus was supposed to improve local public transportation—but it ended up setting off a bad case of road rage.
Operational since March—with 41 buses serving 27 stations—the rapid-transit system currently traverses 16 kilometers (10 miles) in dedicated car-free lanes. Two additional lines are slated for completion by 2012, creating an 81-kilometer (50-mile) transit network.
The not-for-profit environmental advocacy group Center for Sustainable Transport México estimates that during the next three years, Macrobus will reduce carbon dioxide emissions by 330,000 tons.
At the opening ceremony, Mexican President Felipe Calderón said, “I am convinced that the problems of traffic congestion, air contamination, the loss of time spent on excessively long trips, discomfort to transport system users and transit accidents can be resolved through developing effective transportation mechanisms like Macrobus.”
Not everyone is quite so confident.
In June, about 400 residents protested, claiming the bus expansion project would create severe traffic problems, according to the Guadalajara Reporter. The debate took a violent turn in September when 12 people were injured and six were arrested during a Macrobus demonstration.
Even with the controversy, though, Jalisco’s governor was eyeing plans for seven more Macrobus routes.
PHOTO COURTESY OF WIKIPEDIA
Acknowledging that the profession is still emerging on the local scene, Mr. Lozano says the picture of what project managers actually do isn't always clear to everyone.
“Sometimes the project manager is viewed as a functional manager in charge of a project, or an expensive consultant,” he says.
That's starting to change with the influx of multinationals fluent in project management. The city's business community is not only showing a growing appreciation for project management, it's starting to recognize the need for standardized methodologies. And that translates to an increase in the number of certification seekers.
“Some companies are experiencing project reductions or cancelations, but on the other hand, corporations are investing more now in education and certification,” says Miguel Angel Castaneda, PMP, CIO and business transformation manager for global projects at IBM’s Guadalajara office.
It's part of a shifting dynamic that has moved project management to the forefront in the city. Yet while he's witnessed a surge in the number of professional development opportunities this year, Mr. Castaneda acknowledges that 2009 has also brought its share of challenges.
“Guadalajara is very dependent on the U.S. economy,” he says. “I think the worst part was in the first quarter of this year when big companies laid off [a significant] number of employees. I know a few project managers who lost their jobs.”
In June 2006, Guadalajara officials received the good news: Their city had been chosen to host the 2011 Pan American Games. Not only was it redemption for the city's failed bid to hold the big event in 2003, the announcement kicked off a slew of new projects.
With a total budget of $250 million, the Organizing Committee for the Pan American Games Guadalajara 2011 is planning a major infrastructure overhaul. That includes new sports stadiums, of course, but it will also mean reengineering the city's transportation, including a new terminal at the Guadalajara International Airport, according to Banderas News.
The city plans to construct at least 15 new sports venues, including a 4,500-seat aquatic center with two Olympic-size swimming pools. In March 2008, a $5.5 million, 3,500-seat gymnastics complex wrapped up construction.
But some of the venue projects have encountered problems. For example, the 45,000-seat soccer stadium— already behind schedule—could experience further delays.
“Work finally began in earnest on the stadium in August 2007, with the promise that construction would be completed by the end of 2008. In December 2008, the stadium still wasn't ready, but the local media was told that it would be ‘100 percent’ finished by February or March 2009,” lamented the Guadalajara Reporter.
The deadline was shifted again—this time to January 2010—but the venue opening could meet further delays if local access roads are not added to remedy potential traffic chaos from exiting crowds.
In another setback, the Pan American Games Sporting Organization decided in September that Guadalajara would have to select a new location for the athletes’ village. The original location, Parque Morelos, was ruled out due to a lack of funding.
“The decision is a major blow for Guadalajara Mayor Alfonso Petersen, who has spent nearly $30 million on the project over the past two years, including buying up 40 homes and businesses at more than twice their market value,” according to the Guadalajara Reporter.
City officials must now quickly identify another site that will provide housing for more than 5,000 Pan Am athletes on their way to town.
Mr. Castaneda says the landscape is stabilizing, with growth opportunities in IT consulting and hightech manufacturing.
But it still takes a certain agility to survive these days.
“Project managers are facing a critical situation,” says Edgar Rodriguez, a project manager at Kodak de México in Guadalajara.
“The economic crisis…does not allow for big projects or investments. Most of them are under short-term strategies,” he says. “Based on this scenario, project managers must act quickly and adopt efficient change-management processes to provide added value to the company and the market, especially when the scope is not completely defined.”
Still, he sees the field gaining momentum and respect.
“Here in Guadalajara, there is a small project management community that's growing constantly,” Mr. Rodriguez says. “Companies and industries are starting to know about the potential of project management and its benefits.” PM