Have you been in a situation where you started implementing Project Management (PM) in your company or a client organization with great expectations and after heroic efforts of few individuals, countless trials and many dollars only to find yourself with some intangible improvements? Experience shows that significant number of PM implementation efforts result in development of several planning templates, fancy reports, few people trained on the basics of PM (usually with emphasize on scheduling), and a lot of burnt out individuals, unsatisfied managers and lame reasons why it didn’t work. On the other hand, there have been many successful PM implementations that have met or exceeded expectations.
So what works and what doesn’t?
Setting the Stage
This paper is primarily based on lessons learned from a PM implementation initiative at a $150 million machine tool company that designs, engineers and builds machine tool lines per customer specifications. The engagement covered the design and development of a PM organization, and PM processes, procedures, templates and forms. It also covered the development of a training program on the newly developed roles and responsibilities, and processes. The training program was delivered to the entire management, engineering and salaried manufacturing staff.
We identified five PM implementation critical success factors in this paper. This, by no means, is a complete list of critical success factors in an enterprisewide PM implementation. There are several other factors, such as competency of the implementation team, that affect the outcome of a PM implementation initiative. This list specifically focuses on the areas that may be under-emphasized by implementation teams:
1. Key implementation drivers—What motivates a company to undertake a PM implementation effort.
2. Span of PM involvement—When PM involvement begins and ends.
3. Estimating a PM implementation effort.
4. Organizational issues—Identifying organizational roadblocks to a PM implementation and taking proactive measures to deal with them.
5. Scope of PM implementation—Components of a PM implementation.
Key Implementation Drivers
Key implementation drivers are the primary reasons for an organization to undertake a PM implementation or improvement initiative. It is paramount for PM implementation teams to identify and leverage key drivers during the PM implementation effort. They can serve as guides to keep the effort on course or refocus it as needed.
Some of the drivers why an organization initiates a PM implementation effort include the following:
• Customer requirement:
Frequently, the supplier companies are pressured by their customers to prove that they have sound PM practices in place. Especially, in the automotive sector, OEM’s require their suppliers to have a PM structure. They want one person (a project manager) to deal with, accurate work plans using a software that is compatible with theirs, and, of course, the confidence that the suppliers will deliver on time.
• Need to improve timely and within budget delivery:
In today’s environment, companies are faced with increasing number of projects, small profit margins and challenging project durations. There is no room for rework and missed deadlines. More and more companies understand the value of PM and initiate PM implementation efforts. They believe that an effective PM operation with formal organizational structure and position, and processes and procedures supported by appropriate software tools is essential to project success.
• Peer pressure:
Organizations are more willing to implement PM if they see that a successful competitor has already implemented one.
Whatever the reasons are, the implementation teams must identify and leverage them throughout the implementation effort. However, the teams must be aware of the reasons that are not driven by the primary objective of improving the organizational performance. For instance, if the desire to please customers with a show of PM is the only driving force for a supplier company to implement PM in its organization than we can safely estimate that their efforts will not produce the generally expected results from PM. When the key motivation is simply to satisfy the customer’s PM requirements, the PM implementation initiative does not receive the required leadership, resources and commitment from senior management.
In a case like this, even though, the management expectation is simply to create a PM window-dressing at the start of the implementation, it usually expands as they learn more about PM. However, our experience shows that the commitment and resource levels remain the same, as the expectations grow. This situation creates a huge challenge for PM implementers.
Recommended Approach
As practitioners, we must watch for these signs and develop our implementation strategy accordingly. Recommended approach is to limit the scope of the initial implementation to a few strategically important projects and generate bottom-line results that exceed the “grown” expectations of the management team. Once, significant, tangible improvements have been achieved, the implementation team can leverage the success to obtain required resources and management commitment for full implementation that includes all projects.
We experienced a very similar situation in our automotive machine tool supplier case. The company was forced by a large customer to implement a PM structure. Working with a few individuals, who really understood the value of PM and respected by peers and managers, we were able to create a small PM organization and convince the management to give full responsibility to manage few, carefully selected projects as a trial case. Success in these projects convinced the top management that PM was the only way to stay competitive, and improve deliveries and profit margins. Today, the PM group directly reports to the CEO and runs all external company projects. It also provides PM expertise and support for internal projects.
Span of PM Involvement
This factor deals with the integration of PM in the overall business process. Discussion focuses around when the PM groups should get involved in projects. Often, PM groups’ involvement does not begin until the projects are identified and initiated. Usually, PM groups do not participate in the strategic business planning stage or contract sales process for third-party projects.
Strategic company objectives should form the basis for all company projects. Each project must be aligned with the strategic company goals. During strategic planning sessions, strategic objectives are broken down into programs and projects. Once the projects are defined and initiated, they are handed over the PM groups to execute. A project manager is appointed to lead each project.
Not having participated in the strategic planning activities, project managers do not always completely understand how their projects are aligned with the corporate objectives, and how their projects relate to other projects. Each project team independently strives for success even at the expense of other projects. The task of coordinating projects, and resources and priorities among multiple-projects become monumental.
Recommended Approach
Identifying project managers in advance and having them involved in pre-project activities is not always possible. With constantly shrinking resources, companies cannot afford to assign a project manager to a potential project and use his/her time on activities that may not even generate a viable project. Especially, in the automotive supplier world, involvement of project managers in the sale and proposal process is not feasible due to lack of time and proposal development expertise.
Paul C. Dinsmore, in Winning in Business With Enterprise Project Management, recommends the “Guardian Angel” approach, where a sponsor is identified for each project. The project sponsor, who becomes involved in the project from the earliest stages, acts on behalf of the project to ensure that it gets required organizational support and political coverage, and receives resources to carry out project activities. Sponsors also help project managers and teams understand overall corporate objectives and relationships with other ongoing projects. To accomplish these important tasks, a project sponsor must possess a vested interest in his/her project, knowledge of corporate strategies, basic understanding of the project technology, organizational clout to influence other executives and important groups, and rapport with the project manager and team.
The project sponsor approach is suitable for internal projects. For third-party projects however, such as in the case of automotive suppliers, the recommended approach is to have the leader of the project/program management organization get involved in sales and pre-proposal activities. This approach allows the PM group to become aware of potential project requirements, evaluate overall resource needs and provide feedback in determining the promised delivery dates.
This solution worked well in our machine tool supplier case. Their overall business process was revised to show the PM group’s involvement to start as early as possible with pre-proposal activities for potential orders that have over 50% chance of winning. The PM department manager now participates in weekly potential sales review meetings, client meetings to clarify requirements and specifications, and proposal development activities. This allows the PM group manager to understand the project scope in detail, get to know the customer, and be aware of the issues and nuances that are usually not included in written documents. This kind of information enables the manager to select the most suitable project manager for a new project.
Estimating the PM Implementation Effort
PM implementation initiatives are often underestimated in regards to scope and resources. Frequently, the implementation professionals primarily focus on the project time management. They develop scheduling templates, planning processes and procedures and standard reports, and provide training for the designated PM personnel. Processes that are commonly addressed during a PM implementation include:
• Project definition
• Schedule development
• Baseline setting
• Communication management
• Project startup
• Project status update and project performance evaluation
• Project closeout.
The following processes are often excluded from PM implementations. Reasons for excluding them include lack of implementer expertise, lack of resources or already existing corporate systems and processes that provide similar functionalities:
• Cost management
• Risk planning and control
• Quality management
• Change management (scope management).
We would like to focus the reader’s attention on the following supporting processes that are usually neglected by PM implementation teams:
• Issues management
• Lessons learned management to minimize rework and reinventing (redundancy).
Although, these processes are not classified as one of the primary PM processes, they are critical to the success of the PM operation. Issues management process deals with identifying and documenting issues, assigning responsibilities, determining action items, and monitoring the resolution progress. Additionally, an escalation process must be established to raise issues to higher levels if they cannot be resolved at the project team level. Without an effective process, issues are not identified and resolved on a timely basis thus jeopardizing the performance of the affected project activities. Also, lingering issues disrupt teamwork by causing conflicts among the project team members.
Lesson learned management process deals with documenting lessons learned, and reviewing and incorporating lessons learned from previous projects into the project at hand. An effective lessons learned management process will help eliminate common project wastes resulting from reworks and redundancies. High-level project management processes that span from project inception through closeout must include an early step to review and incorporate lessons from previous projects.
Process integration is another important task usually left out in a PM implementation initiative. All PM processes must be integrated with core business processes and process relationships must be established to depict how PM fits in the overall practice. In our machine tool supplier case, we reengineered the overall order process, which spanned from pre-proposal through project initiation, execution, delivery and warranty phase, to incorporate the newly developed PM processes.
Without the integrated process, which had not been included in original implementation plans, we struggled to establish and communicate the specific roles and responsibilities of the newly formed PM department and its interaction with other organizational units. Once we included PM in their main, “cradle-to-grave,” ISO 9001 registered, process flow, it was clear to everyone how PM fit in the company’s overall practice of designing, building and installing machine tool lines.
Reengineering the overall business process to incorporate PM creates a new set of challenges for the implementation teams. Because of its cross-functional nature, PM affects almost all business units in an enterprise. In our machine tool supplier case, certain business units felt like that their organizational importance and control diminished by transferring some of their responsibilities to the newly formed PM department. These kind of organizational issues must be proactively dealt with. The next strategy focuses on this subject.
Recommended Approach
PM implementation teams must “walk the talk,” and practice PM. A well-developed PM implementation work plan, which includes activities and resources needed to develop and implement all required PM processes, is essential to a successful PM implementation. Practicing PM during the implementation of PM provides many benefits. Most importantly, it demonstrates to the host organization the value and use of PM methodology. It also provides means for accurately estimating and communicating implementation resource needs to senior management.
Specific recommendations regarding the issues and lessons learned processes:
• Issues management:
• Include an issue review item in the project status review meeting agenda.
• Review each open issue in the meeting without an exception. Although each issue is assigned to a specific individual, most of the issues are cross-functional and require some level of team discussion in project status review meetings. The challenge is to have a meaningful discussion without going into excessive detail and wasting valuable time of team members. Detailed follow up meetings may be arranged with appropriate individuals.
• Use a formal, common system, a database application or a simple spreadsheet, to document and keep track of issues.
• Assess the impact of the issue on the work plan and revise baselines if they are affected.
• Lessons learned management:
• Add a formal review of lessons learned step at the start of the overall PM process.
• Include a lessons learned review item in the project status review meeting agenda to ensure the identification and documentation of lessons throughout the project execution, not at the end of the project only.
• Use a formal, common system (possibly a database application) to classify and document lessons learned.
• Add a formal, multidiscipline post-project lessons learned debriefing step in the overall PM process to validate and share lessons learned with extended project team, and identify and document the ones that were missed.
• Modify related scheduling templates based on the lessons learned.
Organizational Issues
Another area that is often neglected during a PM implementation is proactively addressing the organizational issues. Most PM implementations result in modification of roles and responsibilities of affected individuals, development of new roles and responsibilities and creation of new PM organizations. The amount of change differs from company to company. Regardless of the degree of the change, people are affected due to PM implementations, and this usually causes a great deal of challenge for the implementation teams.
Symptoms of unresolved organizational problems include the following:
• Continued inability to adhere newly developed processes and procedures.
• Absence in project review meetings.
• Failing to update PM work plans on a timely basis. Usually, personal spreadsheets, which are not aligned with the plan, are used to capture progress information.
• Refusing to utilize PM reports, indicating that they do not understand how to read reports even after numerous explanations by the project manager.
• Withholding project information from the project manager and fellow team members.
• Communicating directly with customers and vendors without project manager’s knowledge thus potentially agreeing on scope changes and different delivery dates.
Unfortunately, many implementation teams avoid focusing on the organizational issues due to number of reasons. Mostly, they lack expertise to assess organizations, detect potential issues and develop corrective plans to proactively address the organizational pains. However, our experience shows that without exception unresolved organizational issues slow down the PM implementation effort and inhibits the realization of tangible benefits promised. This causes the senior management, who were skeptical to start with, to either withdraw their support and commitment or be satisfied with the mediocre benefits.
Recommended Approach
As recommended earlier, project teams must diligently practice PM principles while implementing PM. Organizational issues can be proactively dealt with within the context of risk management. To ensure that organizational concerns are addressed, the implementation teams must incorporate relevant activities in their plans and estimate special resources and expertise required. Some of the activities include, assessment of organization to identify potential roadblocks (risks), identify signs of problems (risk events), and develop action plans (risk avoidance plans) to overcome the issues.
Also, many organizational problems can be avoided by simply involving affected individuals in the development phase. This could be accomplished in many ways, including periodic status review presentations with questions and answers and personal interviews when appropriate.
Scope of PM Implementation
Previous four strategies focused on areas the teams need to pay close attention during PM implementation initiatives. These areas can cause potential issues and need to be addressed proactively. We will now focus on the contents (i.e., phases) of a PM implementation effort.
There are four key PM implementation deliverables:
• Organization
• Processes and procedures
• Software tools
• Continuous improvement.
Organization
The creation and placement of a PM organization within the host company and the individuals selected to staff it are critical success factors. Defining an appropriate PM organization is the first step in an implementation effort. The style of the PM structure depends on the host organization’s business, number of projects, project types, project sizes, organizational culture, organizational readiness to accept PM and various other factors.
The challenge is to accurately assess the organization and determine the optimum PM structure. A staged approach may be required for companies that are not ready for the organizational restructuring required to implement the recommended solution. For instance, first a project office may be formed within a department to provide PM administrative support for key projects. Next, the office can be expanded to provide support for all projects, and in later stages the office can be transformed into a PM department with full project responsibility.
There are various types of PM organizations. They can be grouped in three major categories:
• Project Support Office (PSO): This type of office mainly provides administrative support and is not responsible for success of projects. PSO owns PM processes related to schedule development, progress updating and status reporting. Usually, functional departments own projects and project managers.
• Project/Program Management Office (PMO): This type of structure is appropriate for companies that conduct many cross-functional projects. Usually, PMO is a functional department that is responsible for delivery of all company projects. PMO establishes PM policies, and owns all PM-related processes, procedures and tools. Project managers may be permanent members of PMO.
• Project Management Center of Excellence (PMCE): PMCE serves as an internal consulting organization, establishes PM policies, and owns and maintains all PM processes, procedures and tools. PMCE is not responsible for any project activity but provides help for project managers as needed. It conducts periodic audits to ensure adherence to PM processes and procedures.
Once the PM structure is defined, the implementation teams need to focus on the following organization design and development activities:
• Define PM staff skill and knowledge requirements.
• Define roles and responsibilities of, PM staff, project manager and team members, and resource (functional) managers in supporting projects.
• Evaluate and modify the company performance evaluation system. One of the greatest challenges for project managers is to get project work done through team members who belong to various functional departments. Since, project managers do not usually have functional authority over the project team members, they have to rely on their personal skills, influence and relationships to get project work done. One way to address this issue is to include team members’ project performance in their periodic performance review process. Additionally, project managers may be asked to provide team member reviews at certain project milestones or at the end of projects. This would demonstrate the importance of project work to the work force.
Processes and Procedures
There has to be a common roadmap for getting any project work done. Standard processes and procedures provide this common road map. They are developed based on successful engagements and company best practices. They provide consistency in project execution, minimize learning curve for new project members and present a professional image of the PM group to the rest of the organization.
PM processes can be grouped in five main categories:
• Strategic processes: Strategic processes deal with selecting projects that are aligned with organizations strategic objectives, prioritizing projects, assessing overall project portfolio risk, and evaluating the projects’ contribution to the company and canceling the ones that no longer have required value. For third-party projects, the strategic processes focus on evaluating proposal requests, making bidding decisions and developing proposals.
• Multiproject processes: These processes focus on categorizing and consolidating projects into a project portfolio, evaluating overall resource requirements, performing resource leveling, establishing priorities based on strategic reviews and generating reports for strategic and multiproject review meetings.
• Single-project processes: Single-project processes deal with initiating, planning, executing, controlling, and closing individual projects.
• PM organization processes: These are processes for maintaining and improving the PM structure across the company. Specific processes include maintaining resource libraries and calendars, and maintaining and improving PM processes, standards, conventions, templates and forms.
• Supporting processes: Some of the supporting processes include identifying and documenting lessons learned, managing and escalating issues, resolving conflicts and conducting status review meetings.
Development of processes and procedures also include the design, development and implementation of standard reports, forms and templates used in executing the process steps.
Software Tools
Appropriately selected software tools enable process efficiency. Therefore, PM software must be selected based on the process needs. However, frequently companies acquire PM software first and try to adjust their processes and procedures to match the software’s capabilities and features.
PM software tools include more than simple scheduling software. Database or WEB-based applications to manage such PM functions as cost management, risk planning and control, change management, quality management and communications management are required to increase PM efficiencies. Other applications may also be required to execute supporting processes such as issues management, management of lessons learned and project data collaboration among team members. High-level PM software implementation activities may include the following:
• Document business requirements and functionality desired.
• Develop technical specifications including interface requirements within PM modules and with other corporate systems.
• Establish acquisition strategy aligned with the corporate IT vision.
• Buy and/or develop software based on the technical specifications and acquisition strategy.
• Implement software including the development of standard report, views, and forms.
Continuous Improvement
The last phase of a PM implementation effort is establishing a continuous improvement process. PM processes must be periodically reviewed and modified as needed by process owners to adapt to changing business conditions or to improve their efficiency. Each PM process must have a set of metrics to measure its efficiency and identify its weaknesses to fix. Process metrics should also be reviewed periodically and adjusted based on competitive conditions.
In our machine tools supplier case, we established a metric to measure the efficiency of the schedule development process. The objective was to have a project schedule ready for team review within five days of receipt of a formal go-ahead signal from the sales department. We had to make two revisions to accelerate the schedule development process to meet the objective. Other examples of process metrics may include:
• Issues management metrics: Average number of days issues stay open and average number of due date extensions. In both cases, the objective would be to minimize those numbers.
• Risk management metrics: Number of problems that were not foreseen during the risk planning process and additional project costs accrued due to unexpected issues. Again, the objective is to minimize both numbers.
Summary
Increasingly, organizations are faced with managing multiple, simultaneous projects with limited resources. Companies are continually forced to deliver more projects with lesser resources due to cost cutting measures in order to stay competitive. In the mean time, they are required to improve quality, reduce cycle times and undertake numerous projects to meet customer requirements and compete in the global economy.
The ability to effectively integrate, coordinate, control and drive to successful completion multiple and diverse projects is critical to corporate success. To meet these modern challenges, companies spend millions to improve their project management practices. Unfortunately, significant numbers of these initiatives fail to deliver expected benefits due to various reasons.
Implementing program management is not an easy undertaking. It requires a significant reengineering effort that includes creating new processes, redesigning existing ones, managing expectations, addressing fears, integrating new software packages and realigning organizational structures.
Following five critical factors were identified as areas that need special attention by PM implementation teams:
1. Key implementation drivers—What motivates a company to undertake a PM implementation effort.
2. Span of PM involvement—When PM involvement begins and ends.
3. Estimating the PM implementation effort.
4. Organizational issues—Identifying organizational roadblocks to a PM implementation and taking proactive measures to deal with them.
5. Scope of PM Implementation—Components of a PM implementation.
