Relying on project manager heroics
Too often, companies rely on the heroics of their project managers to pull together project delivery. The practices that make up good project management, such as leadership, planning, risk or change management as well as communication, are vital pieces of the puzzle. Real-time visibility and reporting, however, are just as important but unfortunately they are often a missing piece.
Managers will almost always be running some type of project management software but typically this software is not a native part of their ERP system. The software may be integrated to some degree with an ERP application, but this integration is not complete or thorough enough to provide full visibility into important metrics like committed cost.
Worse, disparate ERP systems may force a business to spend hours or even days to obtain things like daily logs and reports including materials data, incident reporting and time reporting. This leaves someone managing a project from a desk perspective without knowledge of the exact number of hours or the exact cost that has been incurred during a certain period. They don’t really have a true picture of everything until the end of the day, the end of the week or in some cases the end of the month.
Technology plays an important role
In today’s risk adverse and competitive environments, technology plays an important role in supporting and fostering best project management practices. The logical solution is to select and implement highly usable enterprise software designed for the project environment, with project management functionality that shares data, in a natural, event-driven way, with the rest of an enterprise suite. At the very least, the enterprise software used in a project environment should allow for comprehensive roll-up of project costs. Project-based ERP systems can also enable on-demand forecasting, monthly reviews and simulation to accurately visualise and capture cost trends on projects.
Other important features of project-based ERP solutions include:
- Tracking of front-end costs: Including engineering, the creation of documents and other time-driven costs that typically would be considered indirect or overhead;
- Full project enterprise planning: Ensuring the functionality is connected into the application’s planning engine, so production items (if you have them) show up on the project plan;
- Standard plan: One goal of implementing management by project is to allow detailed management and analyse parts of the business as de facto projects. But even with those projects, some parts should be allowed to be shared commonly across multiple projects. Standard plan capabilities allow for example items such as fasteners to become common to multiple projects;
- Re-use: Organisations may enter into contracts with customers when the final specification is incomplete. To reduce risk providing the ability to copy from a template of a similar project is essential;
- Swap (borrow and pay back): The ability to change resource items from one project to another to maximise resource availability and at the same time reduce costs of holding items that are not required as originally planned due to changing priorities;
- Contractor support: For a company that outsources work to a contractor or subcontractor, it is far more efficient to work with an integrated system that records and can report on OH&S information, insurance data, training programs and specific contractor and owner/client documents; and
- Asset management portal: Software tools should be able to communicate with, and engage, outside parties; for example, by giving them full access to a portal containing the state of assets. With a user-friendly and flexible enterprise software, contractors can work on the same database that will follow the asset through its lifecycle.
In evaluating project-based enterprise solutions, bear in mind that there is a tremendous value difference between ERP with native project management and point-to-point integration with external project management software. Some ERP vendors may claim to offer the former but in fact offer the latter. So it pays to ask a lot of hard and pointed questions to ensure that data in fact flows freely between project management and the rest of the application set.
Visibility removes elements of risk
For project-driven organisations in the mining and oil & gas sectors, visibility is the critical element that ties together planning and execution. Integrated project-based ERP solutions bring that support to the project lifecycle, removing elements of risk by getting key project stakeholders on the same page.
Listed mineral exploration company CuDECO Ltd, for example, is implementing IFS Applications, a project-based ERP suite for full visibility and control of its mining operations at the Rocklands Group Copper Project near Cloncurry, Queensland. Among other benefits, the implementation of human resources and OH&S on the same database will provide transparency of all necessary qualifications and competencies that will enable CuDECO to manage and optimise its business arrangement and project schedule.
Other benefits offered by integrated project-based ERP solutions include:
- Reduce administration costs: Providing a single view of the organisation across all departments so synchronisation and duplication issues are reduced;
- Faster allocation of resources: Resources can be pooled centrally, making them easier to search for and find;
- Help with business compliance: Help companies meet compliance obligations by automating key processes and quickly creating standard reports;
- Standard integration with key third-party systems: A deep base of project and customer information can be created that makes for stronger customer information gathering, accounting and strategic planning;
- Effectively supported OH&S policy: Reduces accidents, which have a direct impact on the efficiency of an organisation, and is vital to attract and retain the best people; and
- Hand-off of asset information: Represents an opportunity to eliminate costly mistakes and non-value-added work to lower total asset cost, reduce downtime and maximise return.
So, if your organisation uses a number of different project tools and applications that don’t integrate with each other, struggles to update project plans or provide the latest information on the status of projects, perhaps it’s time to see what an integrated project-based ERP solution could do for you.