Project Management Issues in the Finance Transformation Arena

Project Management Issues in the Finance Transformation Arena

Projects, and the ability to deliver them on time and on budget, not only represent an ongoing challenge for any organization, but also require a significant investment. Regardless of the size or undertaking in question, effectively managing a project from start to finish is essential to ensure the value of the project s objective is realized and that the project process yields an appropriate return. Because of the business-critical nature of effective project management, adequate attention must be given to both the mechanics and the gains expected from the activity. More and more companies are realizing that projects can no longer be viewed as one-off isolated activities, but instead should be treated as a core activity that drives future business profitability. In fact, the effectiveness of an organization s project management process can make or break the success of any undertaking, and therefore, the business s bottom line. The activity of project management then must be tightly associated with the objective of the project itself. This white paper explores the fundamental issues that often hinder successful project management, and by extension, finance transformation and business process optimization initiatives, and the strategies that organizations should embrace to overcome them. Executive Summary Delivering projects on time and on budget is a minimum requirement to do business for most organizations, and for most it is critical to long-term success. Companies that adhere to strong project A key challenge facing businesses in achieving successful project delivery is this: mastering the multi-faceted collaborations necessary to successfully execute the project components seamlessly - and doing this as a natural extension of the business rather than as separate, alien and conflicting activity. management methods, including detailed evaluation of scope and budget, ongoing risk management and measurement of project results, consistently perform better in the marketplace than those that do not. Following a structured project management methodology enables companies to predict and mitigate risks, better manage costs and deliver quality results that satisfy the company s overall objectives. In the more mature project management organizations, these project goals are directly linked to strategic business objectives, giving these organizations a powerful competitive advantage. Yet, many companies consistently fail to meet their project goals or measure project success. This failure stems largely from an inability to implement and follow well-defined project management practices, despite ongoing efforts to improve processes with the goal of delivering better, faster and less costly results. 2 Project Management Issues in the Finance Transformation Arena

Project Planning Issues Project Execution Issues 1. No Dedicated Project Manager 1. Inadequate Project Communication 2. Inadequate Project Manager 2. Lack of Dedicated Project Resources 3. Vaguely Defined Project Scope 3. Lack of Senior Level Support 4. Lack of Strategic Alignment 4. Ignoring Lurking Disastrous Issues 5. Ineffective Stakeholder Management 5. Ignoring Key Steps (e.g., testing) 6. Unclear Project Ownership 6. Lack of Technology Investment 7. Inadequate Communication Plan 7. Inadequate Change Management 8. Unrealistic Project Timelines This white paper explores the value that executives and project managers place on adhering to strong project management methods, how those methods are practiced across the organization, and the gaps that exist between the perceived value of project management strategies and their consistent application on the job. While there are a number of critical issues in both the planning and execution phases of a project, the primary focus of this paper is on the planning stage of the project management process. That s because it is critical to understand the foundation that needs to be built prior to starting a project, and the issues outlined in this paper demonstrate the pitfalls that can occur even before the project begins. Neglecting these issues will have far-reaching consequences and cause significant problems to the project as it gets underway. Major Challenges in Project Management Too many transformation initiatives either fail outright or don t achieve all of the goals due to poor project management. One misconception common in a number of organizations is that a single person can be both intimately involved in the effort, perhaps as a subject matter specialist, and somehow manage the project on the side. Generally, this results in a lack of attention paid to important project management activities. Even a relatively small transformation effort requires someone dedicated to project management activities. When one person splits his or her time between project manager and team member activities, it s typical to focus on the urgent needs of the project, while unintentionally ignoring the important, but longer-term requirements of project management. The project manager must be able to step back from the urgent activities of the day to look at the longer-term plan. In other words, they need to see the forest for the trees. Another issue is one of fit and skill set. While some people might be good general managers in their organization, they may not possess the skills necessary to objectively manage the many moving pieces of a project. There is some overlap in the skills needed to manage a Project Management Issues in the Finance Transformation Arena 3

Mitigating Critical Risks From planning to execution, there are critical risks that integrated project management can help mitigate: Lack of uniformity and rigor in how initiatives and projects are proposed, budgets requested and assigned, and impacts supported and justified. Forecasting and planning activities are not synchronized with subsequent project execution and management. Senior management does not have visibility into project execution, including milestones, issues and benefits realization. Individual projects and initiatives are not synchronized with activities elsewhere, causing dependencies to be overlooked or ignored and leading to adverse impact. unit and manage a project (people skills being a key requirement), but there are also some key differences, driven primarily by the management objectives involved. Most transformation efforts require a full-time project manager, or at a minimum someone who is dedicated primarily to the project management tasks. That person should be skilled, or at least well versed, in the specifics of project management. While separation of the project manager and team member roles is ideal, projects can still be successful if both roles are combined into one, which typically occurs on small projects. When this does happen, however, it s critical that the project manager set some time aside each day to look at the longer-term implications of the project and to stay on top of the risks that can derail a transformation initiative. The role may be combined, but the responsibilities should remain distinct. A key challenge facing businesses in achieving successful project delivery is this: mastering the multi-faceted collaborations necessary to successfully execute the project components seamlessly - and doing this as a natural extension of the business rather than as separate, alien and conflicting activity. Successful integration at the strategic and operational level seeks to address this issue by enabling the business to align resources and project investments with corporate objectives, driving greater return on investment from projects across the board. Many of the risks inherent in business change are often found in poor execution and oversight, rather than mismanagement and bad strategy from advisors. Routinely, projects do not or cannot begin on time, yet project managers are expected to complete the project based on the original schedule. Projects may also have vague requirements, resulting in a disordered approach to meeting the project objectives. In situations like this, it is common that every step forward is accompanied by two steps backward. Perhaps the project began with nebulous objectives and milestones, resulting in the project manager s inability to stay within project parameters, or the project grew in scope as team 4 Project Management Issues in the Finance Transformation Arena

members work and as more tasks are assigned. Ineffectively planned and managed projects often suffer from a cascading of unacceptable consequences. Another critical issue is the lack of strategic alignment. The only thing more important than doing projects right is doing the right project. An all too common reason for projects being cancelled is because they never should have been started in the first place; that is, there is no auditable mapping between the project objectives and the business objectives of the organization. The first step in effective project planning is to ensure the value gained by the endeavor is worth the cost of the investment. Finally, there is the issue of stakeholder management. Effective stakeholder management requires the identification of individuals who are affected by and/or can affect the successful outcome of a project especially those who hesitate to buy into the project objectives. This seemingly political element of project management is just as important to project success as are proper subject matter expertise and appropriate resource allocation. All stakeholders require attentive management to minimize obstacles of this type. The High Cost of Failure Effective project management is integral to business success. Milestones, kickoff meetings, deliverables, stakeholders, Gantt charts and work plans constitute the everyday world of most managers, whether or not they are called project managers. Given the experience most organizations have with project management, it s reasonable to wonder why all projects aren t completed on time, on scope, and on budget. More frequently, however, large projects especially those in the information technology sector have a poor record of performance. Multiple studies show that a significant number of projects overrun their original timelines or are never completed. A study by PricewaterhouseCoopers, which reviewed 10,640 projects from 200 companies in 30 countries and across various industries, found that only 2.5 percent of the companies successfully completed 100 percent of their projects. A study published in the Harvard Business Review, which analyzed The only thing more important than doing projects right is doing the right project. 1,471 IT projects, found that the average cost overrun was 27 percent, but one in six projects had a cost overrun of 200 percent on average and a schedule overrun of almost 70 percent. We have all heard about large construction projects the Channel Tunnel, Euro Disney, and Boston s Big Dig that ended up costing almost double their original estimate. Most organizations simply cannot afford to fail on such a grand scale. The changing nature of work suggests that more, and not fewer, project management opportunities is a trend that is here to stay. With an ever-growing need for accessible and integrated data, organizations require larger platforms to manage supply chains, customer relationships and dozens of other crucial systems. Mega-software projects are now common in private and government organizations. Development is not slowing down, especially in emerging economies.this alone suggests a continued focus on transformational projects, and the resulting need to effectively manage them. Project Management Issues in the Finance Transformation Arena 5

When we consider the failure rate of these endeavors, it can be correctly assumed that a great deal of human effort and organizational resources could be ill-used, if not squandered completely. So why haven t organizations become better at managing projects, especially large initiatives in the IT sector? As you consider ways to avoid the costly consequences of project failure, consider the following observations and suggestions: Communication breakdowns are an underlying theme in most project failures. Management may rethink its goals for a project, not communicate them well and expect the team to adapt accordingly. In this case there will be, at a minimum, discrepancies between the work performed and the work expected, which is a recipe for project disaster. Within the working levels of the project, effective communication of status, i.e., where we stand, is essential to keeping everyone focused on their contribution to the overall project. It is axiomatic to suggest that it is impossible to over-communicate during project execution. Next, the project scope must be well defined at the outset to provide a clear path to the end. The vision of success begins with a clear and understandable statement of what the effort will encompass. Before moving forward, project managers should establish reasonably stable metrics to ensure effective intermediate progress. While there will always be some degree of readjusting priorities and tasking during the project, a well-defined scope ensures these adjustments are made within the context of the overall project objectives. If significant changes are made to the scope or the objectives of the project, ask management how these changes relate to corporate strategy and how they impact current objectives. If project managers amend project tasking, then they should determine the need for additional resources to help accomplish the new tasks. In this case, project managers should establish new deadlines, adjust project plans, reschedule work and continue to monitor progress toward desired goals. If project managers stick to these steps, they are more likely to achieve control of the project, stay within the revised project parameters and achieve the desired results. Finally, it is necessary to create a truly collaborative work environment where visibility of the work involved in the project and the change which is likely to occur as a result of the project can be analyzed and discussed by interested and affected parties. This ensures minimal uncertainty and the wherewithal to keep all interests on board. Ownership of risk identification, planning, management and tracking must also be taken to then be communicated to the appropriate stakeholders. 6 Project Management Issues in the Finance Transformation Arena

Conclusion No project is perfect. Problems occur because of inaccurate milestone predictions, budget allocations, schedule delays, new technology demands, additional requirements unanticipated during initial planning and changes in project mission. Management hates surprises, and any of these situations if unaddressed can cause disaster during the life of a project. While there are several ways to avoid the impending doom scenario, the tactical concepts covered in this paper represent basic project management activities to keep this from happening. Organizations often believe that project management is simply an additional element to the overall project activity set. Nothing could be further from the truth. Regardless of project size, appropriate attention must be paid to the effective execution of project management. Paying the right amount of attention to this key activity goes a long way toward ensuring ultimate project success. Project Management Issues in the Finance Transformation Arena 7

About Experis Experis is the leader in project solutions, and professional talent resourcing for contract and permanent talent positions. We accelerate organizations growth by intensely attracting, assessing and placing specialized expertise in IT, Finance and Engineering to precisely deliver in-demand talent and solutions for mission-critical positions and initiatives, enhancing the competitiveness of the organizations and people we serve. Experis is part of ManpowerGroup, the world leader in innovative workforce solutions. experis.us About ManpowerGroup ManpowerGroup (NYSE: MAN) is an innovative workforce solutions company specializing in temporary and permanent recruitment, career management, outsourcing and HR consulting. Founded in 1948, Milwaukee-based ManpowerGroup is a $22 billion company with offices in more than 80 countries and territories around the world. Each day, ManpowerGroup connects more than 500,000 people to meaningful work through its relationships with 400,000 clients worldwide. In the United States, ManpowerGroup operates more than 500 offices through its family of companies, including Manpower, Experis, ManpowerGroup Solutions and Right Management. www.manpowergroup.us