“The sooner you can identify risks, the sooner you can mitigate them,” he says. “That is one of many ways that strong project management drives value.” And because those risks are seen in the context of the entire project portfolio, companies can adapt their investment decisions more proactively. “Being able to transfer resources from one business line or project to another to quickly adapt to the marketplace—or better yet, the amount of demand in the marketplace—gives us a competitive offering,” says Richard Gerspacher, PMP, Paris, France-based program director at Fluor, a global engineering firm. For example, the energy sector may be slow, while mining is booming, prompting
That flexibility must be carried through at the project level as well. “Every project is different, and each client has a different priority list,” says Mr. Gerspacher, who was Fluor’s project director for the engineering giant’s construction of a US$533 million coal-fired power plant, named the 2009 PMI Project of the Year. Fluor also was a finalist for the 2011 PMI Project of the Year. The oft-fluctuating goals of the project, stakeholders, and the state of the market all affect how projects are planned, managed and executed. A mature project management practice that helps organizations deal with all those shifting factors makes business more competitive, Mr. Gerspacher says. “Being flexible in project management capabilities demonstrates that we can adapt to the client needs, whatever they are.”
Building the Case With Numbers
Tough times drive home the value of project management, but organizations
shouldn’t wait for another recession to make the investment.
“It is essential to have sound, proven project management skills and tools before
another economic crisis hits,” says Janice Weaver, PMP, associate vice president
and head of the enterprise project management office (EPMO) at Norton Healthcare,
Louisville, Kentucky, USA. “Waiting to react once the crisis hits goes against
the foundation of the profession, which is to anticipate, avoid and be proactive.”
Even so, during the latest recession, Norton’s project management practice delivered
just what executives needed: the ability to document and repeat processes
to cut costs and reduce risks.
For some, project management templates and processes may seem like added
paperwork, but standards like these help to manage repeatable processes and enable
companies to focus their energy on consistently delivering innovation and quality.
Norton’s project management practice brought just what executives needed: the ability to document and repeat processes to cut costs and reduce risks.
“The value isn’t apparent until you complete project after project after project
successfully,” Ms. Weaver says. “Then it’s hard to argue with success.”
One of those projects was to build the Norton Brownsboro Hospital, a 2010 PMI
Project of the Year finalist, which was delivered on time and US$2.9 million under
budget.
That track record gave Ms. Weaver the ammunition she needed to justify the
company’s investment in project management. “When the bad times hit and the
organization started looking for places to cut, we were able to show results,” she
says. “All of the projects and programs we have managed have been completed
on time, on or under budget, and according to customer expectations and requirements.
It’s hard to cut a group that adds that kind of value.”
But unless project management is seen as a core competency, it becomes easy
enough to axe, says Jose Eduardo Motta Garcia, PMP, portfolio, program and project
manager at Itaú Unibanco, a financial services company in São Paulo, Brazil.
“Those organizations that are less mature are precisely those that tend to cut
this type of function in times of crisis,” he says. “Unfortunately, it’s still common
for companies to not properly recognize the value of project management.”
Of course, there’s nothing like solid data to make the case.
“Quantifiable metrics are one very important datapoint in measuring the health
of a project,” Mr. Gerspacher says. “It shouldn’t be the sole barometer, but it is
clearly a critical component in determining health.”
Tracking key performance indicators enables companies to be more proactive.
“If you recognize early that there are problems, then you have adequate time to
correct them and minimize financial and time impacts on the project,” he says.
Proven Value
The pressure is on at Accident Fund Holdings, an insurance company in Lansing,
Michigan, USA.
“The state of Michigan has been in a slump for so long that it has forced us
to focus on strengthening our benefits-realization process,” says Marsha Fenton,
PMP, manager of the company’s EPMO. By doing that, organizations can help
connect their project processes with business goals to cut down on wasted time
and cost.
Executives sit on the project-steering committee and vice presidents sponsor
every major project, backed with a plan that outlines a clear cost-benefit analysis
with a discussion of potential risks, milestones and success measures.
The EPMO also reports on progress metrics to the executive team quarterly,
and shares budget and schedule reports with the executive oversight committee on
a monthly basis. “We want to make sure every project makes sense and delivers
