Project Management Institute

Buenos Aires, Argentina

ALL FIGURES QUOTED ARE IN U.S. DOLLARS UNLESS OTHERWISE NOTED.

BY SANDRA A. SWANSON

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A TECHNOLOGY SURGE FUELS DEMAND FOR FORMAL METHODOLOGIES AND AN INTERNATIONAL TOUCH.

Buenos Aires translates to “fair winds,” but the name belies the essence of this Argentine capital, and the country in general: always vibrant, occasionally tumultuous. This is, after all, a country with a reputation for drama—Eva Perón is probably the only political leader to inspire a hit musical. One of the world's wealthiest countries 100 years ago, Argentina suffered from recurring economic crises during most of the 20th century. After a pronounced recession in the late 1990s, Argentina declared the biggest default on foreign debt in history in 2001. The country battled its way back from that crisis, and lately, more winds of change have been blowing through town—especially for project leaders.

Dubbed the Paris of South America, Buenos Aires is heralded as the financial, commercial and industrial center of Argentina. The government views the IT sector in particular as a powerful engine to drive the nation's economy. In 2004, the Ministry of Economy actively supported the IT industry by sanctioning the Industrial Promotion Law, which offers fiscal and tax benefits to software-related companies.

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IMAGE COURTESY OF WIKIPEDIA

The IT sector currently employs 40,000 people nationwide, and 15,000 of those employees handle offshore services, according to government figures. And those numbers look to be on the rise. Argentina's Chamber of Software and Information Technology Services predicts the industry will grow 90 percent and create 30,000 new jobs over the next four years.

Like other Latin American countries, Argentina is picking up plenty of Spanish-language projects and riding a wave of “near-shore” business from North American companies frustrated by working with vendors operating across multiple—and often drastically different—time zones.

With an influx of international business, this booming sector is forcing companies to reevaluate their approach for managing projects—and picking the people who run them. Beyond controlling the basics such as cost and scope, project leaders must bridge cultural divides, wrangle virtual teams and much more. Now more than ever, companies are seeking candidates with refined management skills.

GOING UNDERGROUND

Buenos Aires has the most residents in Argentina, but it's stuck with the oldest metro system in Latin America. The city's metro, known as the Subte, currently has six lines that consist of 48.6 kilometers (30.2 miles) of underground tracks. But the mayor of Buenos Aires, Mauricio Macri, recently unveiled an upgrade program to construct two new subway lines and an extension to a 63-year old line. In total, the projects represent 27 kilometers (16.8 miles) of new track, according to a report by AHN News.

And the investment required for the subway projects? Officials haven't released that information yet. But AHN reports the search is on for foreign participation because the city's tight budget cannot accommodate the new rail project.

PROJECTS ACROSS ARGENTINA

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TRAVELOCITY'S IT UPGRADE TAKES FLIGHT

In April 2006, mega-site Travelocity decided it was due for an overhaul of its nearly decade-old flight checkout system. The project includes an improved user interface, easier log-in and password retrieval, and improved seat mapping.

“This will benefit our customers by giving them a newer and more streamlined way to purchase air travel,” says Sebastian Silva, PMP, Sabre Holdings' Travelocity. The project is scheduled to roll out in several phases—the third of which is slated for June.

Along the way, the project has faced numerous challenges. For starters, there were time-zone differences, with team members based in Buenos Aires as well as two U.S. locations: New York, New York, and Dallas, Texas.

Then the schedule shifted.

“We had to face an early release, which meant finishing our work sooner than initially planned,” says Mr. Silva.

To keep things moving, Buenos Aires-based team members—many of whom had little industry experience—traveled to Dallas and met face-to-face with other team members. “This helped improve our communication and therefore our daily work,” says Mr. Silva. “It really helped us in understanding each phase and its importance.”

The team also has shifted its approach to documentation, which was lacking when the project began. “We invest time updating [documentation] as part of our daily work, so it helps new team members to catch up.”

NUCLEAR PLANT EMERGES FROM DEEP FREEZE

Schedule delays do happen, but the Atucha II project takes it to a whole new level. Work on Argentina's third nuclear power plant should finally wrap up in 2010—more than 30 years after construction started.

Based in the Argentine city of Lima—about 100 kilometers (62.1 miles) from Buenos Aires—the plant was slated to open in 1987. But that was before accidents such as Three Mile Island and Chernobyl made many countries uneasy about pursuing nuclear energy.

Spurred by the country's looming energy crisis, Argentina decided to revisit its long-dormant nuclear power program in August 2006. “If we had built the four [nuclear power plants] we originally planned, we wouldn't have the problems we do today with natural gas,” Atucha II project director Jose Luis Antunez told Dow Jones International News.

Late last year, the Argentine government budgeted $700 million to finish the plant, which was already about 80 percent complete—a cost-effective plan, considering a new plant would cost $2 billion, the paper reported.

When the project launched decades ago, it was led by Siemens AG. The German company is no longer in the nuclear energy business, so it transferred Atucha II plans and technology to Argentina's state-run Nucleoelectrica Argentina SA. The result: “We have become the technologists,” Mr. Antunez told Dow Jones.

SOYBEAN SURGE ENERGIZES NEW PROJECTS

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A biodiesel boom is fueling a wave of large projects in Argentina. Last October, Latin America's largest biodiesel producer opened for business in Puerto San Lorenzo, located in the province of Santa Fe, Argentina's biodiesel hub, according to Dow Jones Commodities Service. The $20 million plant is owned by Renova S.A., a joint venture between Glencore International AG and local grain exporter Vicentin S.A.I.C. When operating at full capacity, the company estimates its plant will convert soybeans into about 230,000 metric tons of biodiesel annually.

Other plants will soon follow. Aceitera General Deheza and Bunge are planning a $40 million plant in Argentina, and Repsol YPF S.A. hopes to launch a $30 million biodiesel project in the country, too.

Together, those plants will help ramp up Argentina's biodiesel production. And by the end of the decade, the country will be producing 10 times the amount of biodiesel it made in 2007, according to a U.S. Department of Agriculture report.

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>> AUTO PLANT SHIFTS INTO HIGH GEAR

Boosting its presence in Argentina, Japanese automaker Honda plans to finish construction of a $100 million plant near Buenos Aires by the end of March 2010. The company already produces motorbikes in a plant south of the city. The new plant will handle stamping, welding, painting and final assembly, as well as engine assembly.

The Argentine government approved the project late last October. When completed, the plant will employ 800 workers and produce 30,000 vehicles annually, some of which will be exported to other countries.

“Before all the U.S. companies that are now here as development centers, the IT market was filled with small-and medium-sized companies focused on local clients,” says Sebastián Silva, PMP, senior IT project manager at the Buenos Aires office of Sabre Holdings' Travelocity.

Due to cost constraints and a lack of project management knowledge, projects were often guided by the same people who designed the system architecture. And that has created a skills gap. “The problem right now is that there are a lot of ‘project managers’ without management knowledge that's focused on the skill of managing people or with experience as a project leader,” he says.

Carlos Urrea, PMP, agrees times—and demands—are changing.

“Recently, projects became more complex and the need for qualified managers increased, too,” says the director general at Buenos Aires-based Proyekta.

CERTIFICATIONS SURGE

The changing project environment has also helped spark demand for education and the Project Management Professional (PMP®) credential.

“The growing level of competition, especially in local subsidiaries of multinational companies, and the growing number of clients from around the world forced local companies to increase their investment in training and certification for their project managers,” Mr. Urrea says.

In Buenos Aires, large companies typically pay better salaries for credential holders and it's often a prerequisite for promotions. “In some companies,” he says, “if the project manager wants to be promoted as project director, then he or she must be a PMP [certificant].”

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In some companies, if the project manager wants to be promoted as project director, then he or she must be a PMP [certificant].

—Carlos Urrea, PMP, Proyekta, Buenos Aires

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IMAGE COURTESY OF ALSTOM

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THE FAST TRACK

A new high-speed rail line project could slash travel time between Buenos Aires and Cordoba, the country's second-largest city, from 14 hours down to three. In January, the Argentine government awarded a $1.3 billion contract to Veloxia, a consortium led by the French rail transport giant Alstom in partnership with Spanish and Argentine companies.

Alstom estimated the 700-kilometer (435-mile) line would cost significantly less than similar projects in other countries, because the flat terrain would require few tunnels and bridges.

Buenos Aires could benefit from some other high-speed train projects, as well, including a 400-kilometer (248.5-mile) line connecting the city with the coastal resort town of Mar Del Plata and a 1,000-kilometer (621.4 mile) line connecting the capital with winery hot spot, Mendoza.

Accordingly, the availability of project management courses in Argentina has increased dramatically in recent years. “There are many companies and universities offering courses and certification training,” he says.

That wasn't always the case. When Mr. Urrea took his PMP exam in 1999, he had to pack his bags for the United States: “It was impossible to do here,” he says.

These days, those three capital letters—PMP—are a hot commodity.

In a country that's no stranger to political, social and economic unrest, companies still look for some measure of certainty. Increasingly, they're turning to formal methodology as a recipe for predictable, successful results.

“Not so long ago, when I was starting my career, there were very few examples in the market for positions described directly as ‘project manager,’” says Diego Quiroga, PMP, program manager at the Buenos Aires office for Globant, a software product development outsourcing company.

Companies were looking for a mix of technical skills, some experience leading or coaching people, and enough seniority to handle customer needs and requests appropriately.

Today, companies demand more from project managers. “Experience always helps, but knowledge of formal methodologies is a total must,” Mr. Quiroga says.

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In a country that's no stranger to political, social and economic unrest, companies still look for some measure of certainty. Increasingly, they're turning to formal methodology as a recipe for predictable, successful results.

He has also observed a broadening scope for project managers' knowledge and duties. “You cannot be successful without a good understanding of risk management, for example.”

Mr. Quiroga welcomes the increased respect for the profession, but warns that simply getting the PMP certification isn't a panacea for project problems.

“I've found … that some young colleagues in their early 20s are pursuing this certification as a quick shortcut to the management level,” he explains. “Managing people is not just applying a set of techniques, but also implies an adequate level of personal maturity that can only be acquired spending years in the field.”

TAKING ON INDIA

India may be getting most of the limelight, but Argentina is putting up some strong competition for a top slot in the outsourcing market. The country ranked among Gartner Group's top 30 locations for offshore IT services.

Case in point: Capgemini, a French technology services consultancy, established its first South American facility in Buenos Aires late last year. By 2009, the company expects the applications development center to employ 1,500 workers.

“We are competitors with India and other countries in terms of IT outsourcing industries, so the project manager should also have an international perspective, with strong experience in organizational cultural changes,” says Raul Ramos Fernandez, Buenos Aires-based human resources Latin America project manager for Weatherford International, an oilfield services company.

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>>TURNING TO TECH

Argentina clearly is out to carve out a stake for itself in high-tech realms such as software, biotechnology and nanotechnology—and Buenos Aires has a front seat on the action. Shortly after taking office in 2007, Argentine President Cristina Fernández de Kirchner established the Ministry of Science, Technology and Productive Innovation. Early this year, the ministry announced plans for a scientific complex in the heart of the nation's capital. Slated for completion in 2010, it will include research facilities, an interactive museum and a convention center for scientific events.

IMAGE COURTESY OF WIKIPEDIA

International influences have prompted significant changes in project managers' roles.

“IT projects in Buenos Aires are being integrated with multicultural teams located in different countries,” says José Esterkin, PMP, cofounder of Buenos Aires-based IAAP, a project management training and consulting firm. “Project managers have the challenge to deliver the project on time and on budget while working in an international and multicultural environment. This did not happen in Argentina before, but it is a common practice now.”

Employees now must contend with multilingual requirements—especially English—and the need to integrate teams across different cultures and time zones.

That's something Mr. Silva knows first-hand. At Travelocity, he's the project manager for a team with members in Buenos Aires as well as two U.S. locations: New York, New York and Dallas, Texas. “Remote and distributed teams, different time zones and nonnative languages are real challenges for us,” he says.

“To handle this,” he says, “I implemented daily ‘stand-ups,' which are 15- to 30-minute conferences where the whole team ‘synchronizes watches,’” he says. “These meetings are not just about work. I try to spread other information, like people's weekend and vacation plans or parties they're planning, so people get to know about each other better.”

Project managers have the challenge to deliver the project on time and on budget while working in an international and multicultural environment. This did not happen in Argentina before, but it is a common practice now.

—José Esterkin, PMP, IAAP, Buenos Aires

Cultural nuances must be addressed, too. “We are learning to overcome some characteristics of our own Latin American character—things that become evident in meetings or calls with our partners from other parts of the world,” says Mr. Quiroga.

Meetings in Buenos Aires tend to start late and can lack focus, he says. Not surprisingly, they can run long, too. “Going straight to the point sometimes is considered impolite, but is necessary to better use the time of all participants,” he explains.

Mr. Quiroga says project teams also must learn new ways to deal with problems.

“Issues need to be recognized and discussed more openly, focusing the team on solving the problem rather than determining who to blame,” he says.

All of these project management developments in IT are influencing other industries as well.

“IT is becoming the training field for people who, after acquiring enough experience, are moving their expertise to other industries like oil and gas, steel or manufacturing,” says Mr. Quiroga.

Above all, the value of effective project management has been cemented within Argentina's business community. “What I see,” he says, “is that companies in the area no longer doubt the benefits of including project managers in the organizational structure to achieve their objectives.” PM

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 MAY 2008 WWW.PMI.ORG
MAY 2008 PM NETWORK

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