T here is an unmistakable trend in the move of the world s best companies towards. Development of project management systems.

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1 Development of project management systems Anthony Eve Anthony Eve is a Practitioner at VP MC Consulting and UK Operations Director usiness Management Consultants, eaminster, UK Abstract Purpose The purpose of this paper is to highlight the need for organizations to synchronize the development of the complete project management system. Design/methodology/approach The paper concentrates on the three key areas of development for the project management system, what we do, when we do it and how we do it. The paper further looks at these key elements in conjunction with an organization s project management maturity, defines the typical components of the project management system and how organizations can measure improved project management effectiveness to their bottom line performance. The paper concludes with a high level prescription for developing a project management system. Findings The paper identifies the cost of not synchronizing efforts in developing the project management system. It demonstrates how large investments are not maximized when individual elements of the project management system are developed separately. Practical implications The is paper highlights the need to establish near, mid and long term change plans, or road maps, which under the control of senior management define the development of all aspects of the project management system. Originality/value This paper looks at the organization support required to develop successful project management systems and relates this with measuring project management maturity and the impact to bottom line performance. This paper has relevance to CEO s, CFO s, HR directors and senior executives who have responsibility for developing project management who need to transition their organizations project based. Keywords Project management, Organizations Paper type Research paper T here is an unmistakable trend in the move of the world s best companies towards adopting project management as a way of working rather than simply a methodology or tool set. Project management is also a key enabler with which companies adopting business improvement methodologies such as Six Sigma or lean manufacturing improve their efficiency and competitiveness. In fact, a robust project management core competency is a necessary condition for a company to maximize the affect of these methodologies. Organizations for years now have been mainly focused on the development of their products lifecycle and ensured that their project management practitioners have had the required knowledge in the form of procedures, tools and techniques. Companies have sought to improve their project management competency through structured training programs. Large companies have invested significant sums (multi-million dollars) in developing their project management system and still do not fully benefit from that investment because the organization is not fully aligned to supporting project management. Companies who most successfully utilize the project management way-of-working have a combined focus on identifying their products lifecycle (the most optimum procedures to take product or services to market), developing their DOI / VOL. 39 NO , pp , Q Emerald Group Publishing Limited, ISSN j INDUSTRIAL AND COMMERCIAL TRAINING j PAGE 85

2 Upper management levels... should have senior development workshops that educate them on the benefits of applying good project management. knowledge/competency (how to best implement these procedures) and have the support of the organization towards a project management way-of-working. Superior performance is reflected by companies who actively demonstrate the effect of this focus through the behaviours of the entire workforce that can be measured (see Figure 1). There is now considerable data of the effect project management can have upon a company s performance. Published data references[1], including companies such as AT&T, oeing, Hewlett Packard, IM and GM, report that as a direct result from introducing project management process/cycle times have been reduced between percent, defects/scrap and reworks have been reduced between percent, scope and engineering changes have been reduced between percent, average profits have increased by 6 percent and the return on investments have increased by as much as 20 percent. Your company s project management maturity Companies today are able to assess their level of maturity and performance in project management through the use of project management maturity models. Project management maturity models are designed around the company s own environment, structure and needs, and usually comprises of four to five levels of maturity (Figure 2): 1. The first level usually reflects an informal and individualistic approach to project management with poor project definition and co-ordination. 2. The next level reflects a more functional application with some project co-ordination and where project management is mainly viewed as a tool or technique. 3. The following two levels address project management as being practiced with some degree of excellence, but either in a transitional or mature state. Here a road map for developing project management exists, senior management are developed, competency frameworks exist, project management is part of most peoples performance development reviews. Figure 1 Three areas of focus for developing successful project management systems PAGE 86j j INDUSTRIAL AND COMMERCIAL TRAINING VOL. 39 NO

3 Figure 2 The levels of maturity 4. The final level addresses portfolio management and may not be applicable to all types of industry depending on their project types and numbers, i.e. the pharmaceutical industry would address this level it continuously has to decide where best to invest company resources within the large number of developmental products in various stages of progress. It has been MC s experience that for project management maturity models to be effective there must be ownership of them at the highest levels in the company s organization and this ownership must be shared across the executive management of the company. Implementation and deployment will generally be the responsibility of a dedicated team assigned, preferably, to a central department or group within the organization who work as a team and provide strong sponsorship, guidance and commonality across the organization. This management team can be supported by a network of project management practitioners who altogether form a center of competence for project management within the organization. Synchronized development of key elements of the project management system MC recognizes that an organizations project management performance is made up of a number of key elements which, if synchronized correctly, maximise a company s project performance and investments. These key elements are (Figure 3): Methodology and tools. Structured methodology and documentation should be simple to use across all levels of the organization, incorporating the company s cultural and operational characteristics, aligned with the company s quality system, complies to industry and professional standards; and is effectively applied in operational use. Project management tools, whether technical or non-technical, enterprise wide or not, need to meet the needs of the project management community, having first defined the methodology. Competence and career. One of the biggest investments for any organization is in its people and their recruitment. The project management competency required from them needs to be defined, measured, understood, and developed to a visible career structure that has formal recognition, status and reward. VOL. 39 NO j j INDUSTRIAL AND COMMERCIAL TRAINING PAGE 87

4 Figure 3 Key elements Mentoring, coaching and intervention. Organizations from time-to-time need some direct intervention, whether its mentoring executive and senior management, coaching project and line managers, assisting project team members carry out their roles, assessing and bringing back on-track in-trouble projects, recruiting project managers for permanent or temporary assignments, creating a project management office (PMO), measuring workforce performance, or improving the visibility of project management within the organization. Training. Career based and skill enhancement curriculum s that are designed and tailored to a company s requirements, recognized from both a professional and academic perspective, that deliver improved performance to individuals and the organization. Management development. Development of all the management layers is critical to success, whether an executive briefing, senior program or line management course, this community needs to fully understand their roles and responsibility in supporting the environment, coaching behaviors and mentoring individuals. Measuring the return on investment (ROI) Managers today not only need to be aware of the development and investment of the procedures, tools, training and competency, but how this investment manifests itself into the behaviors of the workforce across the whole width of the company. Specifically this would mean the development of the project management practitioners, line/functional, senior and executive management. It used to be that companies could rely on one or two champions of project management in their upper management levels. This would permit the development of project management even in the face of non-supporters. In today s environments maximum value has to be returned on company s investment (ROI) and it is crucial that all areas within the organization are developed to ensure that project management is allowed to work effectively and cross-functionally carrying the product or service to market. This means that the executives (often in the form of a committee or team at the top ) of companies should at least have a short executive briefing on project management if not a longer senior program to enable them to understand how to create the behaviors and how to support the project management way-of-working. Upper management levels, including line and functional managers, should have senior development workshops that educate them on the benefits of applying good project management and identifies their role in establishing and demonstrating the correct operating environment, attitudes and behaviors. These workshops give upper management a forum to share current practices across the company and discuss what parts of the project management system are being applied to their organization, what could be improved and to set actions to improve it. Measuring the behaviors in the upper management levels provides a clear demonstrable metric to the improvement of project management within a company. Figure 4 describes the PAGE 88j j INDUSTRIAL AND COMMERCIAL TRAINING VOL. 39 NO

5 Figure 4 Senior management development metrics average metrics of the top 100 senior managers of an aerospace organization both at the time of their workshops and six to nine months later using usiness Management Consultants (MC s) Assessment Inventory of Project Managemente. The behaviors are categorized into the five areas that constitute a project manager leaders role: 1. Planning. 2. Organizing and staffing. 3. Directing and leading. 4. Controlling. 5. Reporting. The improvement is measured in two ways, firstly a percentage improvement between before and after scoring and secondly the percentage increase when compared to MC s international database before and after. The international database is made up of over 200 companies who have all answered the same questionnaire and whose scores have been collated. The results led the Chief Finance Officer of AIRUS UK to quote: In terms of value for money, the Senior Project Management Development workshops have been the most successful thing we have done to develop our senior population. A way forward One of the simplest, yet most effective things upper management can do is to set out the company s policy for project management. This establishes the vision for how the company wants to best utilize project management concepts and gives a clear downwards communication. In conclusion, your company cannot get maximum value from project management unless you concentrate on the big picture: Describe the vision for project management and the environment, attitudes and behaviors expected in a policy statement from executive management. Establish simple procedures for project management with aligned tools, whilst recognizing that different parts of the organization have different needs. VOL. 39 NO j j INDUSTRIAL AND COMMERCIAL TRAINING PAGE 89

6 Identify and develop the project management competencies in all areas of the business, practitioners, line, functional and upper management. Make project management a core competence of the company with an identified structured career path and ensure it is part of the personal development review of the company s people with adequately aligned training and support mechanisms. Develop all areas of the company s population, focus should be given to Upper and line management who will establish the right attitude, behavior and act as coaches. Measure behavioral change and company performance early on in the project management development process. The main concepts described above can be applied to all industry types. Companies that have adopted project management as a way of working for their organization can demonstrate the dramatic and successful benefits of that investment. usiness Management Consultants offers any of the above tailored approaches to individual company requirements. Contact can be made through Note 1. How the World s est Firms Create New Products and How to Turn Computer problems into Competitive Advantage Frank Toney, Lexton ooks, New York and PMI, Upper Darby, PA; In Search of Excellence in Project Management Harold Kerzner; The usiness Stake in Effective project Systems, The business Roundtable An Association of CEO Committed to Improving Public Policy. About the author Anthony Eve is VP Consulting Division and Director of UK Operations with usiness Management Consultants. He is a certified Project Management Professional (PMP), a member of the Project Management Institution (PMI), a member of the UK Association of Project Management (APM) and a PRINCE2 Practitioner. Anthony Eve can be contacted at eve@bmc-online.com To purchase reprints of this article please reprints@emeraldinsight.com Or visit our web site for further details: PAGE 90j j INDUSTRIAL AND COMMERCIAL TRAINING VOL. 39 NO