Companies are adapting needs. And project man seven time-tested trends to meet their specific agement needs to learn to deal with it—or else.
by Peter Fretty illustration by Fredrik Brodén
THE MOST PROGRESSIVE COMPANIES know how to weed out the fads from the legitimate trends. But the real work centers on weaving those trends into the organization—and its projects. Here are seven of the most significant trends currently impacting the marketplace and what they mean for project management.
Companies seek out the best of breed.
Forget the mega deal. In today's hyper-competitive environment, companies can rarely afford to rely on one large firm to be their dream supplier. Instead, they're unbundling all those huge contracts and multisourcing individual projects—or even portions of projects— to the suppliers deemed best capable of fulfilling their specific needs.
“It helps companies avoid putting all of their eggs in one basket and provides the opportunity to obtain the best value for the money since you are working with a group of very specialized vendors,” says Sandeep Mathur, PMP, manager of the project office at Fujitsu Australia & New Zealand, North Ryde, New South Wales, Australia. He's also president of the PMI Sydney Chapter.
Multisourcing means contracts of smaller size and scope, and that means smaller players no longer need to demonstrate their ability to handle enormous projects. And so we have the rise of the niche vendor, explains John Delaney, attorney at Morrison & Foerster LLP, a New York, N.Y., USA-based law firm specializing in outsourcing. Because this type and size of business doesn't attract the massive top-tier companies, smaller ones can zero in on one area to make their mark. “The unbundling trend allows vendors to focus on specific industries or specific functions and the nuances unique to them,” he says.
Yet even as companies realize it's not possible for one provider to excel at everything, there is a price attached to multisourcing, according to Global Sourcing Trends in 2007, a report by Mr. Delaney and his colleagues David Skinner and Nigel Colin Harris Stamp. Based on a 2007 survey of more than 50 of the firm's outsourcing lawyers in the United States, Europe and Asia, the study predicts that companies will spend more time and money managing all of these service providers. And as they struggle to do so, project management will need to step up—especially in its governance efforts—if multisourcing is to achieve its goals.
With the advent of multisourcing, more companies are involved in individual projects, upping the ante on data security. “You need to know that the businesses you are dealing with are protecting the information you entrust in them,” Mr. Delaney says. “This is another reason why it is important that you focus on fine-tuning your governance skills.”
2 Refining Knowledge Management
Not just any information will do. Companies want the hard numbers.
Companies are rarely at a loss for data. Indeed, most of them are drowning in it. These days, it's how a company collects, deciphers and digests its data that makes the difference between surviving or thriving. “Extracting meaning from the noise” will have a “large” or “extremely large” impact on business over the next two to five years, according to 74 percent of the 1,402 business managers and thought leaders from 49 countries responding to a study by Monitor Networks, Cambridge, Mass., USA.
This seemingly unending information overload has prompted a growing number of firms to embrace an array of business intelligence tools designed to arm executives with real-time data. But those tools are only as good as the information loaded into them.
Project teams must be able to provide high-quality quantitative data, says Alexandre N. Olivieri, PMP, a project manager at Motorola, Jaguariuna, Brazil. “More and more, we find a need to rely on data to support our activities and improvements,” he says. “We need to focus more attention to converting qualitative information like ‘We are on track’ into something like ‘SPI=0.93.’ The goal should be to put forth numbers where you can build historical data that describe your capability and help you drive your business.”
Samer Khoury, executive vice president of operations at Athens, Greece-based Consolidated Contractors International Co., agrees. “Typically, we have huge amounts of information on any project, but it is only the quantitative that is truly measurable,” he says. “To achieve optimum success, we have to be able to accurately identify these quantitative measures early in the project life, announce the targets and mobilize the entire workforce to believe in these targets.”
Version 2.0 applies lessons learned and puts the focus on finding the right people.
It's hard to think of outsourcing as a trend anymore. It's simply a fact of modern business life. But while it may have transformed into an accepted business practice, companies are getting a lot smarter about it. As outsourcing matures, it's moving beyond the usual suspects—think IT—and reeling in new sectors such as research and development.
On the Edge
Crowdsourcing isn't quite mainstream yet, but it could prove to be helpful for project managers. BY TIM GILCHRIST, PMP
Crowdsourcing is a relatively new term to describe the process of gathering groups of people together and using their spare time to create something of value. Google is probably the best-known user, but the method has attracted everyone from the U.S. National Aeronautics and Space Administration (NASA) to Procter & Gamble (P&G). All of these companies leverage talent pools outside of the sponsor organization to deliver value in the form of revolutionary improvements in speed, economy and breadth.
The rapid decentralization of expertise—combined with the growth of business and social networks across the Internet—represents a major opportunity for project managers. Tapping into crowdsourcing, companies can attract thousands of talented people to work for them and achieve goals not possible with a fixed staff.
Here are some examples of projects tapping into this new trend.
Product Development. P&G, Electrolux and Philips Electronics are among the major players using some variation of crowdsourcing to aid product development projects. All of these companies experienced customer demands at a rate that exceeded their ability to develop products in-house. To keep up, each one formed networks external to traditional product development and either used them in an advisory role or as a means to execute project work directly.
P&G, for example, posts sub-tasks directly to a public website and includes the price it will pay for the project to be completed. Members of P&G's extended development team respond with proposals, and the work is awarded to the best solution. Larry Houston, P&G's vice president of innovation and knowledge, told Wired magazine the company now counts 1.5 million people in its extended network.
Programming. NASA uses crowdsourcing to handle massive amounts of data streaming back from space probes. Volunteers—or so-called “clickworkers”—perform various tasks involving image analysis. An internal study found that 85,000 clickworkers mapped craters on the Mars surface with a degree of accuracy equal to that of an experienced geologist. The clickworker program not only reduces the image-analysis process cycle by months, it frees up valuable researcher time.
Google is most likely the largest crowdsourcing endeavor in the world, with millions of web-page owners working together to create value. In a radical departure from other Internet search engines, Google interprets links on web pages as votes. The more links that point to a page, the more likely it is that page contains what you are searching for.
Forecasting. Crowdsourcing can be applied to forecasting various metrics of project outcomes by combining the input of many individuals to arrive at a probable outcome. This is called a decision market.
HP, for example, estimates printer sales by forming a group of employees from around the company and offering financial incentives to make accurate predictions. In The Wisdom of Crowds [Anchor, 2005], James Surowiecki profiled decision markets at HP outperforming traditional sales predictions six out of eight times during experimental trials.
What does all this mean? Is mob rule the future? No. These phenomena are all linked together. Crowdsourcing takes advantage of the changing environment via the collective knowledge of many thousands of talented, networked people. They can be called upon at a moment's notice to provide project teams with valuable expertise to meet virtually any challenge.
Tim Gilchrist, PMP, is a partner at Microengagement, a management consulting firm based in Hartford, Conn., USA.
“Paying close attention to the lessons learned as a result of outsourcing contracts has improved the way companies handle their dealings,” says Luciano Cerqueira Torres, PMP, research and development project manager at BenQ Brazil, a high-tech product producer in Manaus, Amazonas, Brazil, and also president of the PMI Manaus Brazil Chapter. “Above all else, companies are realizing the focus must be on the people that make it work, which ultimately makes the technology aspect of much less importance.”
Taking a refined approach that focuses heavily on tapping into and capitalizing on what the global talent pool can offer yields the potential to be much more effective, says Alan Taub, Ph.D., executive director of research and development at General Motors Corp., Warren, Mich., USA. Establishing a worldwide network has let his department expand its source of ideas and increase output by leveraging the skills of some of the world's best scientists and engineers. “There was resistance in the beginning because people thought it would stifle creativity,” Dr. Taub says. “However, as it progressed, people realized that it coordinated efforts to work together.”
And because outsourcing results in teams scattered around the world, companies must have a proven cross-cultural communications philosophy— one that extends beyond e-mail. “A key mistake is that many tend to overemphasize the value of virtual communities, which can alienate some key partners,” says Karen Brown, Ph.D., a visiting professor at the Thunderbird School of Global Management, Glendale, Ariz., USA. She is also a visiting professor at the China-Europe International Business School in Shanghai, China. “When we rely too much on the virtual, we tend to forget the reality of the partner,” she says. “They need to be people who have lives rather than just being an appendage.”
4 Tapping Emerging Forces
If companies are going to capitalize on growing economies, they must adapt to local tastes.
By 2015, consumer spending power in emerging economies will increase from $4 trillion to more than $9 trillion, about where Western Europe is at now, according to The McKinsey Quarterly issued last January. The combined gross domestic product of emerging market nations will surpass that of the top 20 developed economies by 2015, per analysis by Vital Wave Consulting Inc., Palo Alto, Calif., USA.
“Companies that hope to improve or maintain their global market position must have a strong presence in developing economies,” says Brooke Partridge, CEO of the company. “However, the products, services and skills used to achieve market leadership in mature markets do not automatically transfer to emerging-market economies.”
Project teams may need to tailor their offerings because the required deliverables will function differently, require different methods of delivery and focus on solving different problems than solutions designed for mature markets, Ms. Partridge says. “Fortunately, most companies can reshape and recombine their assets into new solutions that are relevant within the context of emerging markets,” she says.
With emerging markets at various levels of development, the scope, scale and size of projects varies significantly. However, there's steady investment in basic services such as education, healthcare, financial credit, communications and even entertainment.
Companies successfully delving into these markets recognize that although they may initially contract with governmental entities, it's the masses who are the ultimate stakeholders. “They are the constituents of government, the beneficiaries of development agencies and the users of electricity, telecommunications, transportation and postal services,” Ms. Partridge says. “They are also the consumer base for everything from clothing and electronics to shampoo and paper. While some companies have found success by targeting business or public-sector customers in these geographies, long-term profitable growth depends on understanding the needs and preferences of the masses.”
5 Mainstreaming Sustainability
Everyone knows they must go green—now they just have to find a way to make money at it.
Green, sustainability, environmentally focused— whatever the preferred buzzword, the fact remains that nowhere on earth is there an undying pool of resources. Most organizations are rethinking the way they do business to show, at the very least, an increased sensitivity to the issue. Even this year's Academy Awards for the motion picture industry held in Los Angeles, Calif., USA, the land of conspicuous consumption, were swathed in green. In launching the massive project, the idea was to choose supplies, resources and services that would reduce the award ceremony's ecological footprint. That included everything from purchasing energy credits to offset carbon emissions to using recycled materials in paper products.
And many companies figure it's only a matter of time before they're forced to deal with the issue, so they may as well take a proactive stance.
“Leading firms have adopted approaches that understand and embrace sustainability more as a risk-management strategy than a greening strategy,” says Tim Minahan, senior vice president of marketing for Procuri Inc., a supply management solutions provider in Atlanta, Ga., USA.
“Being aware ahead of time of significant regulatory stipulations such as RoHS [Reduction on the Use of Hazardous Substances] in the European Union, the more forward-thinking companies have been able to prepare accordingly and realize the benefits of their actions,” he says.
Mr. Minahan points to Adobe Systems Inc. as a prime example. By embracing an energy-efficiency project, the company has posted more than $1 million in savings annually. And a used computer recycling program has helped HP maintain supply and stabilize costs even as copper raw materials soared.
Although project managers may find the integration of more sustainable approaches desirable, there may be pushback—especially within the organization. “Convincing internal customers as to why these proactive efforts are beneficial is not always easy, and the idea of something being good for the environment rarely sells,” Mr. Minahan says. “Instead, it is imperative to find creative and practical ways to demonstrate that in the long term it will have a positive impact on both the bottom and top lines. Profitability is still the trigger point.”
It is important for project managers to understand the broader context in which they operate and what impacts financial success.
—Les Labuschagne, DCom, Auckland Park, South Africa
6 Demanding ROI ASAP
Companies want it now, as in right now.
Facing smaller margins and tighter returns, stakeholders and executive leaders alike are showing far less patience when it comes to profitability. Projects are no exception, of course, so more organizations are working to make sure their project portfolios are in line with their strategic direction.
The need for a prompt return necessitates organizations abandon the project-by-project approach, explains Les Labuschagne, DCom, department head of business IT at the University of Johannesburg, Auckland Park, South Africa. “It is important for project managers to understand the broader context in which they operate and what impacts financial success.”
The push for a quicker return can be dangerous, however, warns Steven R. Mocarski, CTO at Singularity Design, a web design and development firm in Philadelphia, Pa., USA. “Every firm is short on some resource—cash, employees, executive mindshare, etc.—so you've got to pick the best opportunity,” he says. And just because a specific project will bring a quick return doesn't necessarily mean it's the best use of corporate resources.
7 Adapting to a Changing Workforce
The idea of employees staying with one organization for the majority of their careers is officially dead.
Here again, pressure to boost the bottom line is wreaking havoc on traditions. Companies will be dealing with an increasingly mobile, young and global employee base— and doing everything in their power to get the most of people they actually put on the payroll. “The pressure will be on to hire the best person for every role at every level and then manage every person aggressively to reach higher levels of productivity,” says Bruce Tulgan, founder of Rainmaker Thinking Inc., New Haven, Conn., USA.
In response, employees of every age are likely to become much more assertive—primarily seeking flexibility, he says.
And as a new generation enters the workforce, they are bringing with them their own style of getting things done. They apparently like to show off their abilities to work quicker and better than their team members, for example. So companies should structure projects in a way that both embraces and fosters motivation through competition and creativity, Mr. Tulgan says. Offering smaller projects with tighter deadlines may also prove fruitful. Younger workers enjoy responsibility and independence, and by taking ownership of these mini projects, they can see instant results. PM
Peter Fretty is a Whitehall, Mich., USA-based freelance writer whose work has appeared in more than 45 publications.
PM NETWORK | MAY 2007 | WWW.PMI.ORG