KPMG’s 2010 Project Management Survey identified resource competition as the second highest reason for project failure (at 36%) after scope changes (40%). This is consistent with the findings of the Centre of Business Practices’ Project Management: The State of the Industry publication, which states that the biggest project management problems facing organisations today are:
- Inconsistent approaches to managing projects in 24% of organisations;
- Difficulties in allocating resources (20%);
- Too many/not the right projects (17%).
Even organisations with mature PMOs, resource management stands out as the most significant problem area according to PM Solutions’ The State of the PMO 2010.
The root cause of this problem lies in the basic nature of projects themselves. Because projects are by definition temporary endeavours undertaken to create unique products, services or results, according to the Guide to the Project Management Body Of Knowledge (4th edition), organisations have temporary resource requirements that need to be accommodated.
Organisations have the following options to address their temporary resource requirements: hire in contractors; maintain a dedicated project team; or divert resources from existing operational activities.
Hiring in the additional resources needed to undertake a project enables an organisation to:
- Continue with operational activities undisturbed;
- Access expertise not normally in the business; and
- Easily release resources when no longer required.
However, as good as this sounds it does have its downsides. For example:
- Contractors do not have an in-depth understanding of the objectives and culture of the organisation;
- Organisations are often left with a brand new capability, but minimal skills to maintain or update the capability;
- Given that projects inherently operate at the bleeding edge of technology, the availability of expertise is limited, costly and, in the case of many government organisations, timely due to the need to obtain security clearances; and
- Contractors can not normally share their time between multiple clients and are therefore not inclined to be engaged on a part-time basis.
Maintaining a dedicated in-house project team addresses may of the negative factors of engaging contractors. That is they:
- Come at a lower direct cost;
- Can provide greater transition services;
- Are ‘on-tap’ to undertake any maintenance/upgrade activities;
- Can be shared between projects; and
- Have a greater connection with the organisations objectives and culture.
However, a dedicated in-house project team does have its own disadvantages. Namely these are associated with the indirect costs associated with maintaining the project team when there are no active projects.
Diverting resources from existing operational or ‘business as usual’ activities provides the greatest level of connectivity between project teams and the organisation’s objectives and culture. It also significantly reduces the possibility of a project ‘tossing a dead cat over the fence’ to the operational team. Operational team members participating in projects will ensure that the solution designed and developed will be supportable and easy to maintain.
This option does have its own disadvantage. Namely, project managers can not be confident that they will have exclusive access and/or control over the resources. Often in these resource sharing arrangements, resources are often ‘called back’ to address operational problems leaving the project stranded without prior notice.