Build the business with powerful project management.

EXECUTIVE SUMMARY

Project management is a powerful tool that you can use throughout an organization to boost personal and collaborative productivity and ultimately show triple-digit return on investment. Explore the use of PM throughout the enterprise, and learn to build a standardized system that embeds PM best practices. Project management is the science of getting things done. It's what every organization and individual needs to do to succeed. The problem in most companies is that there is no standard process for PM. According to a February 2003 study by the Center for Business Practices, the largest PM challenge facing companies is implementing a consistent process.

What happens when there is no common process for getting things done in an organization? From lost time to inconsistency, a lack of process means poor performance. Signs of poor performance include lost time, duplication of efforts, lost institutional knowledge, inefficiency, and inconsistency.

A project is any activity in an organization that has a distinct deliverable and a clear beginning and ending. There is an interdependence between processes and projects because organizations are made up of processes (activities that are done repeatedly) and projects (events with a distinct beginning and end). When your projects follow a process, then you achieve greater performance.

As the quality movement showed in the 1990s, the biggest improvements in operational productivity result in addressing process improvement and control of operational processes, both manufacturing and administrative. According to a Standish Group report that reviewed more than 40,000 projects in the past 10 years, when there is not a consistent process for doing PM in a company, companies waste up to 20 percent of all project dollars spent. Beyond dollars, poor PM processes result in schedule delays and lost customers and can cost organizations a competitive advantage when they are late to market.

The power of PM is a competitive tool for your organization that is easy to learn and can be applied with simple Web-based and office automation tools. The performance benefits of a uniform, repeatable approach to PM are achievable for companies of all sizes.

Transformation tool

There are five ways that PM transforms organizations:

* PM develops exponential effectiveness. In most organizations, people work on cross-functional teams to complete projects. For example, a company working to automate its bookkeeping system will have a project team consisting of computer programmers and specialists in finance, accounting, and computer hardware. When people from different departments know and understand a common PM process to get their work done, they can start to work together without having to design how they are going to do it. They can have fewer time delays and conflicts because there is a common understanding of how the work will progress, how their work together is interdependent, and how they will measure their

success.

* PM empowers individuals and team leaders with the skills to succeed. People inherently want to do the right thing and work effectively with others. When there is a common, simple approach for PM and the correct tools are available throughout the enterprise, people are empowered to reach their goals effectively, together and individually. * PM creates institutional memory. How smart is your company? Industry-standard PM practices require a critical project closeout phase that collects lessons learned and gives your organization powerful historical knowledge from across the enterprise. A company that can learn and grow, rather than continually repeat mistakes, will move faster.

* PM realizes return on innovation. An easy-to-use PM methodology gives organizations a way to put innovation in motion and make implementation a reality. It's easy for a good idea to get derailed when people struggle to implement the details of the work required to bring the idea to fruition. A framework makes it achievable for people to move from vision to action with a comprehensive project plan that supports their objectives.

* PM turns information into insight. When easy-to-use PM principles are applied throughout your organization, you have a competitive advantage by turning information into insight. You capture best practices and know what is and isn't working in your organization. You can also get new products to market faster and use the best information out there--information based on your customer's insights.

Figure 1 shows the typical capability of PM in an organization based on the type of work the people in the organization do. It also shows how much time each of these areas of the company are usually involved in PM and the value they would gain by adopting a standard framework for doing PM across the enterprise.

Success factors

To motivate change, it's best to work with the key levers for change in the organization. Instead of rolling out a large change effort for the entire organization, focus on smaller, high-profile improvement activities in the areas where there is a high value from using a standardized PM method. For example, marketing is a department that will receive a high return on investment by adopting a standardized approach to PM. People attracted to the marketing field are generally adept at internally promoting their efforts. By getting the people who will spread the word about the effectiveness of the new techniques as early adopters, you increase the chance of your success throughout the organization. Additionally, marketing projects tend to be less complex and produce faster, high-profile results. People want to be part of a successful initiative. When you go after the early wins where there are big payoffs, the rest of the people in the business will jump on board much faster. Nothing sells like success.

Addressing the human elements of an enterprisewide PM initiative is critical for a successful launch, but for long-term sustainability, there has to be a system that supports the staff's implementation of standardized PM. The support system needs to go beyond a Web site of shared best practices to include performance measurement because what gets measured gets done. A Web-based PM performance measurement tool can help measure a project manager's performance. Holding project managers accountable for their performance will create long-term sustainable changes in the way your operation manages projects.

In addition to implementing a consistent approach to PM, there are four critical success factors that will help an organization gain significant improvements using an easy-to-apply PM approach. Figure 2 looks at these four critical success factors and who is responsible for meeting them.

Implement PM enterprisewide Once you understand why people in various elements of the organization will adopt a standard, enterprise approach to PM, what their critical success factors are, and how they can achieve them, then you're ready to implement an enterprisewide approach to PM.

Here is one way to implement it in three steps:

1. Select an enterprisewide approach to PM. Understand your organization, best practices within your organization, and those available in your industry.

2. Teach the appropriate PM techniques to people at all levels of the operation.

3. Provide ongoing support and motivation to use the enterprise PM methods.

Surveys, studies, and statistics all point to one thing: PM impacts the bottom line, and return on investment is quantifiable. In their report, the Standish Group conservatively estimates that 20 percent of money spent on projects is wasted due to a company not having a consistent approach to PM. Research by the Center for Business Practices shows that PM improvement initiatives improve project performance by up to 50 percent for the first project and can continue for each new project if the enterprise offers ongoing support with PM tools.

The sidebar "How PM Affects the Bottom Line" illustrates two return-on-investment scenarios. The first shows the improvement percentage as measured by the Center for Business Practices for rolling out an enterprisewide PM approach. For a 50 percent reduction in waste, the return on investment is greater than 342 percent. A more conservative estimate--let's say half--still shows a 136 percent improvement. The faster an enterprisewide initiative is rolled out, the faster you can reap these rewards.

For organizations with up to 100 people involved in projects, their enterprisewide PM approach (including training and support systems implementation) can be completed in less than six months with proven methods for using PM to build business. What other business investments can a company make that drive a 342 percent or more improvement in less than a year?

Power PM

PM is a secret weapon for your organization. It is the science of getting things done, a process that can create competitive advantage for your organization, and ultimately affect your bottom line with real return on investment. Here is a checklist to unlock the power of PM in your organization.

* Know the business drivers and return on investment for adopting an enterprisewide approach to PM. Make sure your investment in PM process improvements, training, and tools makes sense for your operation.

* Use a simple and proven approach to align the efforts of project teams.

* Have people at every level of the organization learn the skills needed to use PM to improve their value to the organization. Have people get the right training for their unique needs.

* Share best-practice PM processes throughout enterprise.

* Get big wins early by leading with parts of the organization that have the least skills in PM and the most to gain by using a simple PM approach.

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