Q: How does project management help companies survive tough economic times?
PARTNER, GLOBAL RISK MANAGEMENT SOLUTIONS, PRICEWATER-HOUSECOOPERS LLP, SAN JOSE, CALIF., USA
My clients have recognized the need to continue to make investments in business change initiatives despite tough economic times. Aggressive corporate programs have been launched to reduce costs and identify opportunities to plug revenue leakage. However, there is little money to waste, the investments are highly targeted and there is an incredible focus on the acceleration of business benefits. In addition, many of these efforts have required complex, decentralized, global companies to address projects in a more centralized manner. Given headcount reductions meant to streamline costs, projects are competing even more for scarce, talented human resources who can “get the job done” given their other responsibilities.
In light of this environment, there has been a growing trend to recognize professional project management as an organizational core competency—not only as a means to optimize the projects being undertaken today, but also to competitively scale the business when recovery is in sight. In addition, program management as a vehicle to rationalize the project portfolio, foster corporate communication, engage senior management and manage inherent project risks continues to gain in popularity. In these tough times, professional program and project management serves as a lens to focus scarce resources on the most critical projects to reduce waste and accelerate the realization of business benefits from corporate investments.
CRISPIN (KIK) PINEY,
PMP, CONSULTANT, PROJECT BENEFITS CONSULTING, VALBONNE, FRANCE
The biggest shock to a business is the transition from a buoyant economy to sudden restrictions: Most organizations will have relaxed the tight disciplines needed to weather the storm.
However, organizations with a strong project management culture will have institutionalized processes for aligning their project management rules with their business environment. When times are good, all limits are relaxed; when times become hard, authority ceilings and risk thresholds are adjusted downward. The processes themselves do not need to be changed.
This means that the way of working adapts rapidly and smoothly to hard times, without compromising its ability to react rapidly to future opportunities—in the same way that a competent cyclist changes down when coming to a steep upgrade rather than getting off to walk and is ready to change up whenever the slope eases off.
PROJECT MANAGER, ICF CONSULTING, FAIRFAX, VA., USA
Tough economic times force businesses to ask fundamental questions about strategy and tactics. The discipline of properly applying project management techniques and knowledge can assist greatly in both asking the right questions and in obtaining effective answers. At a strategic level, more detailed initial scope planning can assist in making more informed “go/no-go” decisions on projects based on profit margins and alignment with company strategy.
Tough economic times tend to cause businesses to focus on achieving short-term goals and minimizing exposure to risks. Thus, a focus on project risk management and being able to communicate those risks effectively to management is an essential element of effective project—and business—management during an economic downturn. Planning for project risks, as outlined in [A Guide to the Project Management Body of Knowledge (PMBOK® Guide)], can offer an effective context in which to address the often complex and charged high-stakes issues, such as layoffs, plant closures and reorganizations, that typically arise in tough economic periods. During these times, it is even more important to be able to show stakeholders that a systematic, careful and focused approach, as afforded by project management practices, was used to make these decisions.
LUIS MIGUEL DE HOYOS GONZÁLEZ,
PMP, PROJECT MANAGER, NCR CORP., MADRID, SPAIN
I think that project management can help companies select projects that are more profitable by allowing us to identify and evaluate risks in a precise way. In addition, a company avoids losses through continuing risk identification, assessment and response development during a project's life cycle. Fewer projects have trouble, and the companies can then use their resources in projects where they have more opportunities to succeed.
Project management assures that projects are on time, on budget and, overall, meet the objectives for which they were initiated. In this way, the methodology provides an organized way to reach business goals.
PMP, SENIOR VICE PRESIDENT AND DIRECTOR OF PRODUCT DEVELOPMENT, INTERNATIONAL INSTITUTE FOR LEARNING, NEW YORK, N.Y., USA
Project management is a value-added discipline. It is the ability to more objectively and consciously decide what to do and how to do it throughout project life. Project management requires stepping back from the day-to-day work to initiate, plan, execute, control and close projects using information, principles, tools and techniques.
In tough times, resources are more likely to be scarce. The ability to quickly and wisely decide which projects to initiate, continue, reject, postpone or interrupt is critical to survival. Effective project governance, supported by common project planning and reporting and multi-project management, is the key to prioritizing the critical projects that support the organization's needs.
Project management, when done right, increases throughput—the number of completed projects and the value of project results. Effective resource management, scheduling, standardized processes, formal documentation, communication, common tools and techniques, effective scope management, and other project management processes all combine to improve productivity and increase throughput. For example, the formal (but not excessive) documentation of project performance enables a project to be picked up by a new team when staff turnover and postponement interrupts the project.
Project management promotes the qualities that, in turn, support more than just survival; they uphold continuous improvement under any conditions.
HEAD OF THE SOFTWARE ENGINEERING DEPARTMENT OF ORT SYNGALOVSKI COLLEGE, TEL AVIV, ISRAEL
This question seems to be very simple, but it is too important and crucial to many companies to be that simple. Most of the companies do their job in a “project style,” even if they don't see it like that. A project manager is an expert who has to know how to mix together the resources he has—mainly people, budget and time—and bring the project to its end by the required time, on budget and with quality. We used to look at time, budgets and quality as connected in a “magic triangle” in which you can't achieve all the three apexes at the same time, only two of them. But a good project manager can!
So, in tough economic times, a good project manager is needed even more. Presuming that your company has no extra money and the competitors are behind you, you can't give away your projects' budget for the sake of the time and quality, and you can't give away the time or the quality goals for the sake of the budget—your competitors will overtake you and your projects.
DIRECTOR OF PUBLIC RELATIONS, PMI RISK MANAGEMENT SPECIFIC INTEREST GROUP, AND SENIOR PROJECT MANAGER, AXA FINANCIAL, NEW YORK, N.Y., USA
Companies have traditionally looked for project management to identify or mitigate and control risks in such areas as technology, business continuity, vendor delivery, projects and programs, legal, security and operations. For the most part, these have been at the project level. Since the 11 September attacks, however, it has become more important than ever to implement risk measures to protect the enterprise from the unknowns.
With a tight budget and declining economical terms, companies are now turning to project management to help in prioritizing their initiatives at the enterprise level before undertaking them. By measuring risk vs. cost, project management is able to score strategic initiatives and projects in a scientific yet practical way, and thus produce an ordered list of critical projects. When companies implement such techniques, they know that the projects that get executed first are the ones that are most important, most profitable, least risky and, therefore, will provide the most competitive benefits.
PM NETWORK | MAY 2002 | www.pmi.org
MAY 2002 | PM NETWORK
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