Josh Nankivel of PMStudent.com recently polled project managers (PMs) about how the current economic climate is affecting them, and he found that 27 percent had experienced project cutbacks, 14 percent had experienced PM layoffs, 11 percent had experienced financial scrutiny of projects, and 10 percent had experienced project staff reductions.
The fact is, the state of the economy is forcing many companies to cut costs in order to survive. There are different ways of doing this, and unfortunately, a common one involves slashing projects, employees and departments. Consequently, people are seeking out new ways to justify their work to upper management and other stakeholders in order to be spared. The PMO (project management office) often has even more work to do in this area, since many executives do not fully understand its value within the organization.
There are three important factors for PMO managers to consider when trying to ensure their survival. First, they need to focus on the right strategic projects. Once they do so, they must ensure that these projects are successfully executed. Finally, they must effectively communicate the value of these projects to upper management.
Focusing on the Right Projects
What is your PMO currently working on? Are these projects relevant and timely? Are they tied in with the overall business strategic objectives? Most importantly, are they profitable?
The PMO’s primary responsibility — especially today — is to manage and successfully complete projects that are central to the organizational goals and objectives. This requires an understanding of the business strategy as well as the various projects necessary to achieve its goals.
Sometimes projects are taken on for political reasons but are not necessarily essential to the organization. When money is tight, this is no longer an option, and according to the Project Management Institute (PMI), a recession presents a good opportunity to weed out such projects. Instead, PMOs must focus only on projects that align with company strategy.
Dennis Stevens, a Deputy Project Manager at the PMI, recently wrote a blog post entitled, “Five Keys to Reduce Project Failure.” One of the keys Stevens recommends is “Focus on the Right Projects.”
He writes, “Not all improvement activities improve the organization’s ability to achieve its strategy. Don’t expend dollars, management attention, and performer effort on everything that can be done better. Improve at key capabilities that improve performance for the business. Finishing a project that doesn’t result in business value is a waste.”
Beyond that, it is important to know whether projects are considered short-term, mid-term or long-term. During a recession, it is best to focus on short- and mid-term projects. When times are tough, long-term projects are abandoned, and if your PMO only works on short-term projects, you will not be needed once they are completed, so a combination of short- and mid-term projects best serves the PMO.
Successfully Executing Projects
Prioritizing projects is important; successfully completing them is imperative. No organization has any use for a PMO that does not achieve its goals and get things done. In times like these, you cannot afford to have only a small percentage of your projects succeed. You need successful execution across the board. There are a couple of key components to accomplishing this:
- Project managers need visibility into resource allocation in order to avoid over- or under-booking project team members. This will also ensure that no projects are taken on that your resources cannot accommodate.
- Team members need to track their time by task in order to provide actuals, and project managers must have visibility into this data as well, in order to understand true project costs and estimate future projects with accuracy.
When project managers can understand what resources are working on and measure actuals against forecasted timelines, they are better equipped to identify and address problems along the way.
Communicating Results Upward
Once you have the positive project results in hand, you need to spread the word. PMOs will only survive if they ensure that top executives in the organization are aware of project successes and what they are worth. Scrambling to keep up with the status of all of your projects and then report to executives and stakeholders often proves too difficult, especially in larger organizations.
Rather, PMOs today must have a solution in place that provides hard evidence on each project through properly delineated tasks as well as the actuals tracked against them. This gives you an opportunity to tell the executives, “These are all the projects we are working on to help achieve our organizational objectives, and here is data that proves that we are executing them on time and on budget.” How can they possibly argue with hard data?
In 2008, Gantthead.com published an article entitled, “Is Your PMO a Profit Center?” It states, “Companies have long struggled with being able to measure the benefit of a PMO … .”
The author provides the following advice: “Consider financial measurement for your PMO … and you may just find that senior managers look at your PMO with a whole lot more respect.” Such respect is absolutely crucial as executives look to each department to see where they can cut.
Showing upper management the projects and tasks you are working on is only the first step in the right direction. You also need to quantify what these projects are worth to the company financially. This means that the project management solution you use must provide visibility into project costs and ROI (return on investment). If you can prove that you are bringing in a significant return on investment, you are not likely to be eliminated. Project managers who recognize this and use it to their advantage will have staying power, while others will not.
The Bottom Line
The best way to avoid being viewed as “project management overhead” is to deliver real value to the organization by executing projects successfully. Once you have a firm grasp on resource availability and your team members are tracking their actuals, you will be able to keep tabs on how the projects are going as well as know who to talk to when problems arise. Executive visibility into all of this data is also essential.
PMOs today have a choice — they can either justify their existence by highlighting their achievements and illustrating their true value, or they can fall by the wayside when cuts are made.
Curt Finch is CEO of Journyx, a provider of Web-based software located in Austin, Texas, that tracks time and project accounting solutions to guide customers to per-person, per-project profitability.