Setting-up the environment for EPM in a large multinational IT services organization
This article presents the approach used in the set-up of Getronics' Enterprise Project Management environment, with particular emphasis on requirements and initial situations. The nature and organization of the current implementation of the Italian Project Office will be introduced. The method to set up the current Enterprise Project Management environment and related tools will also be explained. Finally, lessons learnt will be discussed and future work will be illustrated.
In the modern economy, managing projects has acquired a very central role due to a number of circumstances, such as the overstressing competitive asset, new business models, reduced margins, which have been amplified by the current market globalization trend with related complexity of multicultural approaches; or the demanding ever progressing technology and implied requirements. Exhibit 1 (GAREIS, 2000) illustrates this point further, showing how project management practice is changing.
Exhibit 1 Driving Factors for the current Business Scenario
In the past years proper project management practices, the way we are used of thinking nowadays, were mostly applied in large programs or specific businesses, such as civil or mechanical engineering. As my memory goes back to my long professional career, I have seen a continuous growth in the attention to the processes, techniques and project organizations and skills, as shown by of the PMI associations in the last couple of years. The number of PMI members worldwide has just exceeded 100,000, with an increase around 15% over the previous year.
Many studies report a trend to adopt a generalized Project Management approach, named “Managing by Projects”. The differences between Project Management and Managing by Project can be summarized as follows:
Project Management is:
- The direction and management of a project
- A discipline
- A tactical issue
Management by Projects is:
- The integration, prioritization, communication, and continuous control of multiple projects
- An operating environment
- A strategic issue
Gareis and Heumann (2000) identify a Project Oriented Company (POC) as a company, which:
- Defines “Management by Projects” as an organizational strategy
- Applies temporary organizations for the performance of complex processes;
- Manages a project portfolio of different project types;
- Has specific permanent organizations to provide integrative functions;
- Applies a “New Management Paradigm”,
- Has an explicit project management culture, and
- Perceives itself as project-oriented.
According to the authors: “POCs consider projects not only as tools to perform complex processes, but as a strategic option for the organizational design of the company”. In practical terms “Management by Projects” has been defined as “the organizational strategy of companies dealing with an increasingly complex business environment”. The adoption of the Enterprise Project Management approach, which is becoming more and more popular, is a step towards POCs.
Enterprise Project Management can be defined as the business processes, methods, standards and tools an organization puts in place to manage their business by projects. Gartner Research (2000) forecasts that in the 2000s Enterprises will spend a great amount of effort in the coordination of internal and external resources to deploy applications. A substantial complexity arises from this situation which requires, amongst the other things, special kinds of project oriented organizational structures, such as Project Offices. In the same report, Gartner assumes that: “Through 2004, IS organizations that establish enterprise standards for project management, including a project office with suitable governance, will experience half the major project cost overruns, delays, and cancellations of those that fail to do so (0.7 probability)”. A recent top 500 Project Management Benchmarking Forum sponsored by the Executive Initiative Institute and the Center for Business Practices (CBP) in USA (Bigelow 2002, p.20) revealed that the biggest project management priorities among the Fortune 500 Companies are: Project Office, Portfolio Management, Risk Management and Financial Return. Forum attendees mostly believed that “portfolio management tasks should be handled by the Project Office”. Bigelow also reports that the CBP's August 2000 edition of Project Management Best Practices Report states that “nearly half the projects implemented are over budget by 100 to 400 percent” and that “86 percent of projects are late in achieving deliverables”. Various strategies are possible in order to avoid this situations and a very important one is “assigning a risk manager to the project”. These have been driving factors for Getronics too.
Organizing a project office is a major task for all enterprises (Knutson, 2001). We will discuss in the next chapter how Getronics corporate is supporting the implementation of Enterprise Project Management strategies, therefore contributing to the set-up of local project offices in the subsidiaries. We will also present how the implementation of a project office has been addressed in the Getronics' Italian subsidiary.
Enterprise Project Management in Getronics
Getronics is a large multinational based in The Netherlands, which provides vendor independent Solutions and Services to the professional users of Information and Communication Technology (ICT). As such, a great deal of the Getronics' business is about project delivery, in one of the following fashions:
- Contracted projects for the supply of either integration or e-business solutions.
- Contracted Project Management professional services (particularly high profile resources)
- Project Office set-up / outsourcing services
With more than 25,000 employees in over 30 countries, Getronics is one of the largest global IT vendor organizations. Getronics helps many of the world's major companies to maximize the value of their technology investment and improve interaction with their customers. As it grew by acquisition, different Project Management approaches existed in the different parts of the company, mainly based on PMBOK® (PMI, 2000) recommendations or on the PRINCE2 method (OGC, 2002). Getronics senior management has always been convinced that a common Project Management approach is to be applied throughout the company for the benefit of the business. This explains the strong requirements for an Enterprise Project Management strategy.
At the beginning of 2000, the Board of Management mandated a working group to define the Getronics Global Project Management Methodology. The purpose was to:
- Create a common enterprise-wide Project Management culture;
- Promote common enterprise-wide Project Management best practices;
- Share common enterprise-wide Project management tools;
- Promote the set-up and sharing of knowledge bases for work reuse and optimization;
- Promote Project Management professionalism by means of a professional development curriculum. The preliminary assessment, conducted in the 10 major subsidiaries on the main practices in use, pointed-out that the best evolution from the existing environment would be to adopt a global methodology based on both the principles of the PMBOK® and the method/components of PRINCE2. Furthermore, the assessment report recommended complementing the methodology, where necessary and appropriate, with components and techniques from Project Management best practices already in use within Getronics. The main reasons for the recommendations were:
- Getronics' strong preference to apply public domain standards which are widely recognized by the market, supported by official certifications and never stop evolving.
- The nature and complementary value of the PMBOK® and the PRINCE2 method.
- The need for a continuity, when possible, in the project management processes.
PMBOK means the “Project Management Body Of Knowledge”, and represents the PMI's view of the relevant topics and knowledge within the Project Management profession. A PMI publication entitled: “A Guide to the Project Management Body of Knowledge – 2000 Edition”, identifies and describes the subset of PMBOK® which is generally accepted. When people talk about PMBOK® they are usually referring to the Guide. PRINCE2 (Projects IN Control – version 2) is a Project Management method which can be tailored for use on all types of project. It is owned by the UK Office of Government Commerce (OGC) and is in the public domain. The method is described in a reference manual (OGC, 2000). PRINCE2 is not a methodology framework; on the contrary, it is a precise methodology which defines specific processes and templates. It is flexible enough to allow simplification of basic processes, yet retaining consistency with the general method.
A study, commissioned by APM Group Ltd (2002), showed the possible complementary role of PMBOK® with respect to PRINCE2. A comparison of PRINCE2 vs. PMBOK® can be found in (WIDEMAN, 2002).
A Project Management Knowledge base, where corporate knowledge and general information can be retrieved, has been made globally available on the intranet. The knowledge is maintained centrally, but any subsidiary can contribute to it. This knowledge extends the local one build locally by each subsidiary.
Giving the different requirements of the different national markets, only recommendations for MS Office 2000 and MS Project 2000 have been issued by the corporate. Currently, the MS EPM tools (Stover, 2003) are under evaluation as the base for the future Enterprise Project Management architecture.
Project Management Curriculum
A Project Management Curriculum has been set-up, which supports the professional growth of Getronics' Project Managers from basic entry in the profession through the PMI Project Management Professional (PMP) certification. At the beginning, almost all project managers, despite their actual seniority in the profession, had to start at a basic level (Jump Start course designed in collaboration with the Boston University). The curriculum is defined as follows.
- PHASE 1 Self-training based on:
- a specific project management book and related CD
- Project Management Body of Knowledge by PMI
- MS-Project 2000 CBT
- PHASE 2 Jump Start Course (5 days intensive)
- PHASE 3 Experience gathering (at least 2 years of practical project management)
- PHASE 4 On-line assisted self-training on project management
- duration : 24 weeks
- required : 1 day/week
- PHASE 5 PMP exam preparation course (5 days)
In addition, on-line specialized trainings and University curricula for higher PM profiles, have been scheduled.
The Project Office in Getronics Italy
Getronics Italy, the Italian subsidiary of Getronics, with about 2800 employees and 480M€ 2002 revenue, is one of the biggest in the company. Having to implement the required project management strategy set by the corporate, a local committee was appointed to define the local implementation program. The committee had to answer the following questions first:
- What is the PM maturity level in the Italian subsidiary?
- What kind of specific requirements are to be considered from the various divisions?
- How should the PRINCE2 method be tailored in order to respond to the local PM requirements?
- Is a Project Office required and, if so, what kind of duties, organization and reporting should it be given?
All this questions were given an answer in a fairly short timeframe. In particular, an assessment was conducted in the divisions which clarified the topics. The PM competence of Getronics Italy personnel was also assessed, which has been very useful to the definition of a proper training plan and recruitment needs. It is not the scope of this paper to discuss this assessment in detail, therefore, in the following we will concentrate on the project office topic.
Starting early 2000, the Getronics Italy project office has been organized as a permanent structure and has evolved through three stages (and different names), which loosely map with the ones reported by Knutson (2001) :
- Consultative role;
- Information role;
- Managing role.
However, in Getronics Italy the threshold between the first two roles was never so clean. In the first stage, the project office, although very much oriented to the support of project managers, has been also giving some support to the set-up and distribution of management reports. Due to the conception that projects were mainly used to execute solution contracts which could integrate specific network technology, HW/SW, maintenance and other collateral services, the project office was allocated inside the Solutions division. According to Knutson (2001), locating the project office within a specific business unit is very common in the first and second stage. For Getronics Italy the first two stages of the project office served as a sort of pilot to consolidate the definition of its duties and organization, before extending it to the whole company.
The following stage used lessons learnt in order to improve the project office organization, duties and effectiveness. In particular, the task of gathering and distributing data for managerial reports was strengthened and the PM processes were improved as needed. The experience gathered with the project office of a very big Year 2000 contracted project (Ginevri, 2001) was also very useful to the evolution of the Getronics Italian project office.
Finally the project office has been extended to all divisions
Role and Organization of the Project Office
Nowadays, the Getronics Italy Project Office is a permanent structure which reports to the management team, a committee of high level executives which together steer and manage the company. The project office mission can be defined as follows:
- Assure the continuous development of a proper project management culture and profitability
- Assure project management customer satisfaction
- Identify and manage project interactions, reducing their overlapping and conflicts
- Assure proper project portfolio government
- Assure proper project management processes for an effective integration of the project management business in the company's business processes.
The Project Office is organized as shown in Exhibit 2. It serves the following purposes:
- Project Support Services are the set of services for the operational support of the entire project management life cycle
- ⇒ PM Processes: ownership, evolution and support of the PM methods, processes, metrics and tools;
- ⇒ PM training and coaching;
- ⇒ PM operational support : Planning activities; Reporting; Cost control; Risk Management;…;
- ⇒ Project assurance
- ⇒ Project profiling and reuse
- Project Portfolio Management and Reporting Services is the set of services needed to keep control, centrally and globally, on all active, closed or perspective project engagements. The project portfolio is a dynamic set of projects that can be managed and updated to keep step with business and economic changes.
Regularly a summary report which contains an analysis of the portfolio performance is elaborated and passed onto the top management.
Not all projects executed in Getronics Italy are executed by the Project Office. Only projects which can be classified as belonging to the Medium or High category are handled by the Project Office. The low category projects are handled inside a single Business Unit. They are projects which do not require risky or complicated interdivisional management. Therefore, a class assessment algorithm is used which takes into account 24 different risk factors relating to the relational, commercial, contractual and technical competencies required for the project. The nature of the project start-up phase and the complexity of the processes to be applied for a given project depend on the estimated project class. It is the duty of these services to determine the class, the basic process profile needed to execute the project and the Project Manager/Managers to be proposed to the Project Sponsor.
- Project Management Services is the set of services required to execute a project from start to end, i.e. the services delivered by the Project Managers, which include contracted Project Management services and contracted projects. In the first case the start-up, implementation and tracking of the projects is the responsibility of the customer's organization. In the second case, the most common, the responsibility for project delivery lays with Getronics, although customer and user's involvement in the project execution is a basic requirement of the Getronics' PM processes.
Exhibit. 2 Project Office Organization in Getronics Italy
Currently, the following tools are commonly available:
- PMS (Project Management System). This is an intranet, centralized, repository-based system. It is a proprietary version of the Project Portfolio Management and Reporting system. All new projects are logged-in as they are mandated. They are put in the historical log as they are officially closed. Therefore, at any given time, all projects are tracked with their status and progress. Progress information on a specific project is input regularly by its Project Manager or the project team (time cards). This allows both internal reporting and reporting to the management either regularly or on request. The nature and presentation of the reports can be defined dynamically by a systems administrator. Strict security is supported on the basis of role/password. Typical report information on a specific project are:
- ⇒ Project revenue and percent margin (planned vs. actual) to date;
- ⇒ Project revenue and percent margin forecast for current year;
- ⇒ Earned value and related performance indexes (CPI, SPI)
- ⇒ Risk performance (planned vs. actual)
- ⇒ Forecasted/recurring risks and opportunities
- ⇒ Milestone plan progress
Typical information for management reporting are summary data elaborated from the project performance data. In addition resource allocation and saturation data; cash flow information (planned vs. actual/forecast); supplier performance data; are reported. These reports allow top management to take strategic short/long term decisions to improve the portfolio global performance.
- ORTS (Order Receipt and Tracking Solution). This tool is used to track all administrative aspects of projects, such as issue of an order; invoicing and its status.
- Knowledge Management and Library portal. It is an online portal with important historical/process data which can be used as a reference to improve project performance when needed. It also contains a section with active project libraries; and another section with process and procedure on line (graphical) documentation.
- Risk Management Tool, which supports the identification analysis and mitigation of risks. A log of basic risk factors deriving from experience is available to improve the identification process. Both quantitative and qualitative risk analysis is supported.
- Scheduling tools, which consist of MS-Project 2000 with customized entry tables and reports.
- Earned Value Analysis tool.
Current Situation in Getronics Italy
Currently there are signs that the goal of stimulating a common PM culture based on the PMBOK® guide and a common PM method, is being achieved. We have already reached (mainly in one year) about 10% certified PMPs project managers and we plan to reach 20% by the end of this year. This is already a fair number, given that some 40% of our Project Managers are young professionals and that soon they will be introduced into a lower level of certification as a preliminary step towards the main PMP certification.
As the PM culture grows, and the level of project control, project coordination and project support gets better, the percentage of projects which end-up breaching the required tolerance limits set by the management, tends to decrease. As of end of last year we have had 3% less project failures (outside planned tolerance) with respect to the previous year. We are still a long way from the Gartner forecast (2000) that we have already mentioned at the beginning of this paper. We expect that, in addition to the benefits that our Project Office is starting to show, the use of tools and behaviors which promote significant levels of (knowledge) reuse, should contribute to getting closer to Gartner's forecast. Process simplification is currently an asset and we plan to achieve a significant level of process simplification by the summer.
Implementing Enterprise Project Management processes and tools in a large multinational organization is a very major undertaking. Many problems need to be addressed and overcome: cultural differences; organizational differences; different market requirements; infrastructure technology; different levels of maturity. When you start you need to work towards the following goals:
- Uniform and up-to-date project management culture;
- Consistent and shared vision of the business model;
- Proper set-up of the control system;
- Proper selection and knowledge of tools;
- Development of specific competencies.
It is very fundamental, at the beginning, to create a common cultural ground and this cannot be achieved if the current cultural situation is not understood. We can confirm a strong correlation of project management cultural knowledge and project performance.
Mediation and conflict resolution amongst the various subsidiaries/divisions are very important aspects. We suggest that you address different geographical/cultural areas separately and that once you have set-up general criteria centrally, then each subsidiary chooses its own implementation rules: think global, act local!
Since the implementation of a common Enterprise Project Management strategy is a very slow process, keep the implementation simple (at least at the beginning) and refine it in steps.
The more complex the PM processes, the more you need tight and automated integration amongst them. Failing this, the project stakeholders will be tempted to avoid some step or to oversimplify it. A true support from a workflow management system can be very important to ease the task of the stakeholders and to achieve true process integration and consistency.
We have also learnt that proprietary tools are a very big investment and at this point of the technological evolution they are not necessary. Leveraging this aspect, frees resources to be invested for other important aspects, e.g. support.
Despite the effort we had to place in this implementation so far, there is still a lot to be done. Besides natural refinements to the processes and the project organization, we need to improve the process integration and the reporting tools. We are planning to substitute PMS with MS Project 2002/2003. This is a consequence of lessons learnt with PMS but also it is an opportunity to improve the performance and the integration of the environment. Getronics is a Microsoft global business partner, so a joint program has been started to implement pilots and beta sites in a few subsidiaries to support their national Enterprise Project Management solution. This will be beneficial in several ways:
- Set-up a powerful environment for improving the efficiency of Getronics internal Enterprise Project Management
- Gather knowledge and expertise on Microsoft middleware, so that the product could be used as a base for contracted projects aiming at setting-up Project Offices; or for the outsourcing of Project Office services
Changing tools is not necessarily producing more controllable situations. We will use the experience gathered so far to improve our metrics and reports. Finally, we are about to revise our basic Project Management curriculum in order to take into account the new kinds of certification that PMI has introduces last year.
Enterprise Project Management is globally a very strategic asset to Getronics and to its Italian subsidiary, where a Project Office organization has been set-up and is already gathering some important improvements in the way project management culture, processes and support are organized. Continuous improvement and a higher maturity level will be pursued in the near future for business and customer's benefits.
I wish to thank all the people who have given their contributions in the production and revision of this paper. In particular, I wish to thank Pierre Courtois, Director of Project Services with Getronics Belgium, for his important contribution in the PRINCE2 vs. PMI/ PMBOK® case study and for the very useful suggestions to the improvement of this paper.
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