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Cost cutting a boon for project workers

PM News
May 4, 2012

Project workers are set to benefit from the cost cutting practices of businesses as more organisations employ a more project-based approach in their operations.

Results from a survey conducted by international project services firm Resources Global Professionals indicated that cost cutting and improving internal processes remain strongly on the agenda of the CFOs of Australia’s big companies in the mining/resources, retail, manufacturing and financial services sectors, which is good news for project managers looking for employment.

“After five tough years, businesses are acknowledging they have to look continually at processes to stay lean, and smart companies realise the benefit of being able to tap into a reliable source of skills and expertise without adding to headcount,” said Jacinta Whelan, managing director of Resources Global Professionals (Asia Pacific). “All companies are keen to work on their business processes, from the struggling manufacturing and retail sectors to the boom mining sector.”

She said, however, that it isn’t just about cutting costs but investing more wisely in process improvement. “Companies have taken out the obvious extra costs of the business over the past 12 months and are now looking at ways to continually improve and grow.”

The three key findings from the survey acknowledge that process improvement is now at the centre of a lot of internal business activity, that project workers have an increasing role in this new paradigm, and that project durations are becoming shorter.

1. Almost all businesses are doing process improvement

The major business initiative undertaken over the past 12 months was overwhelmingly process improvements (92%). Cost cutting (60%) and restructuring (52%) were common strategies, as was redundancies (40%), moving more of the business to a shared service environment (36%) and marketing and advertising activity (36%).

“Companies have been using every possible strategy to improve their operations, with all of our response areas scoring greater than 32%,” said Whelan. “As companies redefine the roles of their lean teams, they need to ensure the processes are as streamlined as possible.”

The survey indicated process improvement (92%) and cost cutting (56%) will continue on the business agenda into 2013, with a decreased focus on restructuring (32%) and redundancies (32%).

2. Project workers are now part of the Australian HR toolkit
The use of project professionals continued to grow, with one third of businesses increasing their use and almost half maintaining their level, despite tough economic circumstances.

“Companies continue to do more with less, and our clients see the greatest advantages of using project professionals are having access to a specific skill set as they need it (64%) and being able to tap into a flexible resource to manage work peaks and troughs (60%),” Whelan reported.

Almost half (48%) of CFOs surveyed expect their need for additional project people will be stable through to 2013. Respondents also indicated the skills their teams currently lacked were specific ERP functional skills (32%) and advanced modelling skills (26%), with some noting that their finance teams were short of project management/change management skills.

3. Projects are getting shorter
Projects are getting shorter and sharper according to the trend indicated in the 2011 survey. This year’s results show that project length continues to decrease from an average 3-6 months to 1-3 months.

“Companies are prioritising their projects, spending time defining these projects, then determining their ROI and being accountable for delivering the projects against these metrics,” Whelan said.

Despite most organisations having conducted cost cutting measures in the past 12 months, the survey found that CFOs are less concerned about the cost of the project professional they hire than his or her ability. Respondents said the most important factor is the quality of prospective team member (88%) over cost (44%).

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