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When project management meets business development

Historically for PMOs and project managers, and still all too often, new projects seemed to appear almost magically out of thin air. The reality is this is rarely the case, and a lot of discussion had taken place without any visibility by those involved in project delivery. Given this, how should a project/PMO manager deal with the process and people in business development? In particular, how can they ensure that what is put forward at a tendering/proposal stage is what the project team is capable of delivering?

Businesses and organisations—both public and private—operate in an uncertain and changing economic environment. Over the last two years alone Australian organisations have felt the impact of the global financial crisis, combined with a continuing resources boom and domestic elections.

Organisations have long recognised the need to develop or adapt operations to meet evolving environment and objectives, requiring them to look at implementing business development or improvement activities. In the past, this might have occurred in an unstructured way, with managers initiating projects without considering impact on other parts of business, leading to duplication of effort, overlapping schedules, conflicting demands for resources and even changes that are redundant before full benefits can be realised.

In addition, new projects were often not started until the desired delivery dates were already difficult to achieve, sometimes because the business sponsors did not appreciate the time and effort required to establish projects, at other times because they delayed making the decision too long due to a fear of uncertain outcomes.

Where senior management understanding of project delivery process was lacking, there was a tendency to focus on outputs, rather that the development of capability or capacity to use outputs. Upgrading to a new version of a software package, for example, might be a technically simple project and have the benefit of reducing IT costs, but sometimes the differences with earlier versions required considerable effort to educate users on new features and the organisation needs to establish support for resolving user issues, which leads to an underestimation of effort required and insufficient change management planning.

According to the contract

Other issues include where contractual differences arise, with disputes from lack of communication or understanding of the requirements, or even an expectation that the original budget is just a starting point rather than being fixed is another problem faced in delivery. Take the UK’s NHS Connecting for Health, which became the National Programme for IT, which was originally expected to cost £2.3 billion when it began in 2002. When it was killed in September 2010, estimated costs had risen to £12.7 billion.

One approach to these issues has been to introduce greater standardisation of procurement processes, especially in government, as a means to reduce delivery risk. Today, many projects, especially in construction and the public sector, require complex and lengthy tendering processes. This can be frustrating to those looking to deliver a project but this upfront planning and clarification is essential to improving successful delivery.

However, delays in moving from requirements definition and contract negotiation without the end date moving can still compromise the project delivery methodology—this can be identified by symptoms such as initiation and requirements documents not being signed off until project is well under way. Many of these problems can be avoided by a PMO educating business management on the processes to explore, prioritise and establish projects, as well as provide support for the mobilisation of projects.

Today, business change initiatives are generally better controlled and managed as programs or projects, increasingly managed through a PMO or other coordinating group, although the approaches used vary by business and industry. In addition, portfolio management, or another means for maintaining a holistic view of activities across an organisation, prevent projects emerging from business units in response to local issues without consideration of the wider impact.

At the simplest level, projects emerge at the end of a process, starting with an idea that develops into a mandate. This mandate forms the basis of a project setup and initiation. The variation in how projects start and how project managers become involved means the standard methodologies cannot cover everything in detail, leaving the practicalities to experienced professionals. This need for experienced professionals is accepted by most organisations as they recognise the delivery of projects requires specific skills that are either missing or in short supply internally. Although sometimes caused by financial constraints, this lack of capability is often intentional, as maintaining a project delivery capability is expensive, especially in stable industries with little need for significant business change and where most change can be managed through quality improvement programs in business as usual.

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Gary Yorke
Gary Yorke is a senior consultant at MetaPM and chair of the PMO special interest group for the Victoria Chapter of the Australian Institute of Project Management (AIPM).
has written 7 articles for us.

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