Project Management Institute

What went wrong?

three reasons project management fails in tech-driven companies

By Derrick A. Richardson, PMP

Organizations that develop complex technologies face unique challenges that project management can help solve. Smaller tech companies, including startups, are beginning to make use of project management, while bigger technology-centric organizations are creating formal, fully staffed project management offices (PMOs). However, I have seen that some of these technology companies’ investments into project management and PMOs do not deliver the intended value. I believe there are three primary reasons for this failure.

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Even after an organization forms a PMO, leadership can still struggle to see the value in project management. Despite tremendous advances in the field, hardcore technologists often perceive project management as administrative fluff.

Other times, tech companies fall into the trap of believing that the technology itself is so great that it will overcome challenges like the schedule, compliance, cost and performance. This attitude often results in derailed projects, frustrated employees and chronic problems with organizational growth.

While one of the duties of a good project manager is to influence skeptical stakeholders, no amount of project management skill will overcome senior management's indifference. Moreover, while there should be a healthy tension between project management and functions such as marketing, engineering, finance and operations, project managers need the right amount of organizational visibility, influence and authority in decision-making. Good project managers attain this when they have the full support and commitment of senior management.

Tech companies fall into the trap of believing that the technology itself is so great that it will overcome challenges like the schedule, compliance, cost and performance.

2. Poor scope management

Two of the most insidious problems that can rapidly cripple technology-driven projects are poorly defined scope before launch and ineffective scope management during execution. Often, tech companies believe time is wasted if tasks related to execution do not occur immediately after the project is green-lighted. All too often, engineering teams spring into action headfirst, confusing activity with progress. Even companies that engage in disciplined project management routinely give short shrift to scope definition and management.

A good project manager will properly initiate any project by understanding the bigger business picture and the technical challenges and issues. He or she will also take the time to identify and quantify technical, operational and commercial project risks and incorporate risk management into planning.

Scope problems are even tougher to manage in contract manufacturing environments for two reasons: revenue pressure and external customers. The pressure to “get going” described above can be intensified when a technology contract manufacturer receives a purchase order for delivery of goods or services. An internal sales team may have brokered the agreement, sometimes with poor alignment with the groups that will have to deliver what was promised.

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Ideally, the PMO will be involved in negotiating the scope of work and can serve as a unifying voice during planning, execution and delivery of goods and services. The typical contract manufacturing engagement can be complicated by a demanding customer who may have limited understanding of what's required to deliver what was ordered. The customer may be understandably unaware of the innovative “secret sauce” fueling the proprietary device or manufacturing methodologies. He or she may not understand how a seemingly innocuous request can disrupt a timeline, budget or quality.

A skilled project manager must walk a fine line of managing the expectations of internal stakeholders and external customers while also protecting the company's trade secrets. A strong alliance between the PMO and internal sales and marketing team is essential to manage customer expectations.

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3. Lack of clear prioritization

It's critical that tech organizations establish clear priorities at the portfolio level. At any time, the composition of a technology portfolio can change based on new project initiation, technical or commercial failures, competing priorities or financial concerns. Effective technology portfolio management is achieved by establishing clear, well-aligned performance metrics relevant to the business and business model. An effective PMO provides the tools and disciplines to accurately track these metrics and enable objective decision-making by senior management.

Organizations that have no method for continually assessing the relative priority of projects in their portfolio can fall victim to subjectively prioritizing initiatives that are the newest, coolest, sexiest or most complicated, with limited visibility into which projects actually best serve the needs of the business. This is an especially relevant blind spot in technology-driven organizations due to the excitement and buzz that is often associated with truly novel, cutting-edge products and services.

At the project level, issues always arise during technology development. This can put significant pressure on the project team and result in confusion and frustration if project-level priorities are not clear from the outset. One of the technology project manager's most critical jobs is to make decisions in line with organizational objectives and cross-functional alignment. Often, decisions made at the project level can impact an associated program; in turn, program decisions can impact individual projects.

Project management and PMOs can add tremendous value to technology-driven companies. But that value starts with a sober, realistic and dynamic understanding of how to properly integrate project management disciplines into the organization. PM

img Derrick A. Richardson, PMP, is an executive-level project management consultant based in Union City, California, USA.
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.

SEPTEMBER 2016 PM NETWORK
PM NETWORK SEPTEMBER 2016 WWW.PMI.ORG

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