By Steve Beaumont, SRP Solutions Marketing Manager, Planview
Today's changing business environment and a challenging global economic landscape means that how well projects are managed in organisations are under much scrutiny. The Project Management Institute (PMI) estimates that UK organisations waste on average £129 million for every £1 billion spent. That’s far more than the £109 million for the same £1 billion wasted by organisations that make up the global average. The success of these endeavours can determine whether your organisation thrives or fails.
At Planview we run an annual survey into project management and collaboration, to help us better understand the challenges facing our customers for the year ahead. Each year, I eagerly await the summary report to see what has changed in the past year and what challenges lie ahead for project management. So here I am, having spent days consuming volumes of data and feeling quite excited about the prospect of going into a new year with some additional insight into what could see the difference between success and failure for a business in 2015.
The most striking theme that runs through this year’s State of Resource Management and Capacity Planning Survey is the difference in the performance of higher and lower maturity organisations when it comes to resource management and capacity planning. The Organisational Project Management Maturity Model is a global best-practice standard from the PMI for assessing and developing capabilities in Portfolio Management, Program Management, and Project Management. It provides a way for organisations to understand their processes and measure their capabilities in preparation for improvement. It then helps them develop the roadmap that the company will follow to improve performance.
The divergence highlighted by the survey, between those mature and immature companies, has a critical impact on how companies operate. Below, I outline five key areas, highlighted by the study, which any organisation wanting to improve its maturity and improve its operating efficiency in 2015 would do well to consider:
1) Resource management and capacity planning: Interconnected but not interchangeable
It’s important to understand that resource management and capacity planning are separate but related disciplines. People often perceive them as the same thing, but they’re not. Each requires attention and improvement if you’re going to improve how you utilise resources, achieve higher value and drive organisational efficiency.
It’s therefore important to take a holistic view across the whole organisation in terms of both current projects and the project pipeline. Managing your resources effectively means not just staying on top of what’s currently happening, but also ensuring visibility across the work that’s pending. You need to focus on people, processes, and underlying resources to crack this challenge.
2) The business case for controlling capacity and resources
IT projects, product launches, service delivery…all of these areas face different challenges, but they all share the need to plan in order to be proactive rather than reactive.
A key focus of the results highlights the business impact of not addressing these areas properly. The top risk identified by respondents was the inability to deliver projects on time. Another was missed business opportunities (38% identified this area). If you haven’t got control of these areas - and you’re not focusing on the right projects in the right way - then you risk going missing out. That applies both to monetising projects and to improving your market profile by delivering projects properly and to increasingly stringent client expectations. Another significant risk is the escalation of project costs. If you’re not deploying the right resources at the right level then projects will inevitably overrun, driving the overall costs up.
3) Capacity planning: The importance of organisational integration
Capacity planning in particular must be approached in a holistic and integrated way, because it is so closely linked to resource demand. If we look at a project from an IT perspective, for example, the capacity planning process has to include all the stakeholders, IT cannot make crucial capacity decisions in isolation. In order to plan and allocate capacity correctly, we must first fully understand the objectives and trade-offs within the business. One of the most common project pain points is that of unrealistic commitments that cannot then be fulfilled. That stems from a lack of understanding of the demands and how they all fit together. So you need to have that discussion with stakeholders, marry and balance the demands and align that back to the business objectives and value as a whole to ensure you’re getting the best return out of those projects.
4) The maturity bubble: Does it really matter?
To improve project performance, organisations at all levels need to get a handle on these areas. Even high maturity organisations are striving to get better — and for lower maturity organisations it’s crucial to bring resource management and capacity planning into the mix. Part of the survey’s analysis looks at potential steps that can be adopted at different maturity levels. But one of the obvious trends that emerges is that the initial focus tends to be more around resource management than capacity planning - even amongst the more mature organisations. It seems logical that, for SMEs working with limited resources, improving the management of those resources is a sensible place to start. Once a strong process is established, you can then build on that baseline from a capacity planning point of view.
One area where higher maturity organisations perhaps have the edge is the ‘softer’ skills sets. Resource management is not just about understanding and allocating technical skills. People management and leadership are also vital. At the end of the day, your people will undoubtedly be the most significant factor in the success of a project, so you need to have the right mind-set and approach these challenges in the right way.
5) The role of technology in responsive project management
We work in a volatile climate these days, so flexibility in the project portfolio is important. Some of the findings show that mature organisations engage in much more rigorous and ongoing capacity planning. They’re constantly reassessing their focus, understanding likely changes in their market and positioning themselves to be able to react to that. The less mature approach is to put together and annual plan and stick to it, come what may. But things do change, so regular revisiting allows you to adjust your portfolio if something isn’t working.
Ultimately, for commercial success, it’s vital to link resource management and capacity planning back to strategy. It’s all very well having lots of projects running, but if those projects aren’t aligned to the strategy then you risk wasting time and money. Not all functions and planning have to be centralised, but at the very least you need a way of getting the enterprise-wide view of what’s going on, even if that’s then broken down into more discreet functions. That’s where good technology can come in. The right technology can allow different areas to function in the most suitable way, whilst also maintaining an overview of how different projects and resources are functioning and performing together. That equips you to get the most value from your resources, connecting them to your projects, financials and reporting for up-to-date information that will drive better decision making.
In summary, 2015 is widely recognised as a year of growth for the UK economy. There is opportunity for those organisations that are less mature to try and address the challenges and improve the way in which they approach these areas. However, change takes time and effort. If organisations are able to mature, then they should expect to see the rewards impact on their bottom line. What better New Year promise can you have than that?