When project management meets business development
Horses for courses
Given this lack of capability, how have businesses in different industries evolved to manage new project establishment and delivery? Here are a few examples:
Construction and infrastructure organisations tend to run large independent projects with little crossover between project teams, so low levels of resource conflict. A core team often manages tendering/awarding/managing contracts for design, build and operation of projects. The end-to-end management of a project is increasingly outsourced to a consulting firm, which manages the relationship between all the parties. This requires high levels of trust, which has to be established over time.
Defence organisations run large procurement projects that may last for years or decades. Requirements definition and contract negotiation are projects in themselves. They are known for cost and time overruns, and political interference. DMO has invested significant time and resources to manage projects but the nature of the industry, such as allocation of defence staff to projects, will always present challenges.
However, these projects can’t be treated in the same light as most other projects. For example, how can benefits and a business case be agreed where a project is assessed against the long-term national interest? If a defence project is considered an extension of government policy, the capabilities delivered by the project might be less important than the message sent by the fact that there is a commitment to the project.
Large service companies (e.g. banks and telecoms) run a variety of small projects and transformational programs to improve business delivery and introduce new services. Internal asset and technology management becomes centralised, which business units engage to manage delivery of projects as an internal supplier. They may have one or more PMOs or centrally managed groups of project managers. Where technical skills do not exist, the supplier department is responsible for securing appropriate resources. There are tensions in this relationship as the business is introducing change and new processes, while the supplier departments seek to enforce standardised technologies and processes as they are usually under pressure to cut costs.
Government departments run a variety of projects and transformational programs to deliver on policy, legislative change and introduce new services, often driven by political priorities. They increasingly use gateway review processes combined with standard procurement processes. For example, in the Victoria Government Gateway process, four of six gateway reviews are held before a tender is awarded. A recent presentation at the AIPM National Conference reported this has resulted in cost avoidance of 22 percent and time saving of 29 percent. However, there is always the risk that ministers will announce initiatives in response to political expediency, resetting existing priorities.
Technology companies tend to run multiple projects with staff working across multiple projects, which leads to resource and scheduling conflicts. However, they operate in a dynamic environment and cope better with managing change. Time to market and costs are the drivers, sometimes impacting on quality, as seen by the defect and failure rates in new technology. Agile delivery methodologies were developed in response to these challenges.
Small and medium-sized companies run a variety of projects to improve business delivery and introduce new services. They are constrained by lack of most resources and few have a dedicated PMO or even project managers. Subject matter experts are often appointed as project managers, leading to issues with constrained time due to continuing involvement after transitioning to business-as-usual.
Consultancies run some internal projects but their focus is on maintaining a pipeline of potential project opportunities, including responding to tenders. Tend to be resourced with little spare capacity and will recruit when opportunities materialise. They have a preference to work on a time and materials basis to minimise the risk of scope changes.
Development strategies
The adoption of different strategies is one approach to managing the uncertainty of new projects once they appear but what other ways can PMOs and project managers get visibility of what is coming up and avoid issues arising? It is essential they have an active interest in understanding changes in strategy and the business drivers. They need to develop relationships with the business units and get involved in discussions and planning to understand what is being considered early on, or use a portfolio function to track potential projects and resource requirements. They also need to establish good communications with business unit managers, especially those undergoing greatest change, as these will generate the greatest number of projects.
Project managers have a responsibility to ensure the effective delivery of a project, which justifies an early involvement, but they have usually moved on when the benefits are due to be realised, and ultimately, business management cannot delegate accountability for a project’s outcomes to the project team. Not that much different from someone buying an exercise machine and blaming the manufacturer when it sits in the garage collecting dust and the owner remains unfit!
These approaches not only help with improving the mobilisation and delivery of projects, but they also facilitate the transition to business-as-usual, which is another major factor in project failure, a subject I will leave to another time.
