A decade plus ago, I headed the Project Management Office (PMO) for a large corporation leading in Information and Communications Technology (ICT) industry. The company saw the need to create a PMO because of the high level of innovation and constant need to develop existing products and services on the market. The introduction of a PMO in an operations-oriented entity is a major Change Management exercise which requires effortful stakeholder engagement.
I had a few problems however in setting the PMO. The main issue was the initial perception among other executives about the role of the PMO. The point is, introduction of the PMO and requisite Project Management processes in a company which was well structured for operations was quite disruptive. Few executives understood the role of a PMO and Project management processes and therefore they were not entirely supportive.
The perceptions were not made any better as a consultant engaged on a Job Grading exercise clearly quipped that Project management was not a strategic function. This article therefore addresses this opinion and shows that Project Management is at the center of execution of strategy, more so in this disruptive era.
Let me first dispense with definitions of a few concepts as per Project Management Institute (PMI) definitions, among others:
Projects are temporary efforts to create value through unique products, services, and processes.
Project management is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.
A project manager (PM) plans, organizes, schedules, directs, executes, maintains, and troubleshoots a project so it gets completed on time, within budget, and according to projected scope.
There will be other definitions later. But it is good at this juncture to contrast project management with operational management. Operations are the day-to-day routine business-as-usual (BAU) processes. Projects effect change by introducing new products and new services often requiring new processes and most times new skills set.
A study carried out by Antonio Nieto-Rodriguez (www.antonionietorodriguez.com) shows that over the years project work has gradually increased versus operations because of the need to constantly improve existing products and services, and introduce new products and services in order to remain competitive. As such, resources, budgets, and management time are being allocated and utilized for project work versus operations. This is termed the “Project Economy,” where projects are becoming dominant. However, most executives do not see this because of the way strategic plans are written, and the subsequent “Balanced Scorecard” used for performance measurement reflects operational work and is mute on project work.
The risk of executives not realizing the increasing project work versus operations is that there is imbalanced allocation of time, budget, and resources. Projects therefore suffer schedule and cost overruns, i.e. project completion is delayed and project costs increase.
Another risk is that projects are run in functional structures designed for operations rather than distinct structures for project management execution. Furthermore, training for upskilling is directed towards acquiring technical and general management skills at the detriment of Project Management skills. Projects are therefore run by subject matter experts with little project management skills, termed “accidental PMs”. The probability of project failure, schedule overrun, and cost overrun is high.
Projects have a higher probability of success if the PM is a well-trained and a certified professional exposed to the processes of initiating, planning, executing, monitoring and controlling, and closing a project. The person will be skilled at balancing Project Management knowledge areas encompassing, scope, scheduling, budgeting, quality management, resources management, and risk management. Furthermore, a well-trained PM will be adept at procurement management, communications management, stakeholder engagement, and benefits realization. An “accidental PM” may be good at say, the technical aspects such as scope, scheduling, and budgets, but weak at say communications. That will expose the project to numerous problems that threaten project success.
Agile Project Management is on the rise as there is a need to deploy new products services and services in a highly disruptive environment due to innovations in the digital ecosphere termed the Fourth Industrial Revolution (4IR). There is constant need to make sure that PMs are well-versed in both the traditional or Waterfall Project Management and Agile.
In terms of structures, most organizations do not have a PMO, and projects are run by the “accidental project managers.” As I alluded to earlier, the amount of project work versus operations is increasing. This must be reflected in the structure where it is now necessary to have a distinct PMO to oversee the running of the projects.
