Cut a piece of wood hastily, and will likely be ruined. That’s why “measuring twice and cutting once” is a carpenter’s golden rule. That same rule applies to implementing and managing business projects or programs: double check your work to understand every project aspect before you launch.
Talk to nearly any corporate executive today, and you're likely to hear stories of frustration regarding projects gone awry. With the challenging nature of managing multiple projects, measuring their success and aligning their costs with objectives, it's no surprise that solid success stories are few and far between. Many companies improve their odds by implementing an Enterprise Project Management Office (EPMO).
Whether it's a merger, integration, spin out or some other large project, C-suite executives employ EPMOs to help handle major programs. Such projects generally run horizontally across the enterprise, impacting many areas. The EPM office is all about taking each project and measuring it twice -- understanding its requirements and risks while managing expectations and ensuring consensus of success. Use it effectively, and your projects will come in on time and on budget.
Controlling project chaos
Imagine yourself a retailer considering a project like a major store refurbishment. Perhaps you're introducing a new logo, theme, or look. This might include changing the physical appearance along with the product mix or displays -- all of which impact multiple departments -- from the office of CFO through marketing, pricing, sales, construction, and operations. Once you see the wide impact such an initiative can have, you see why every function must be well coordinated.
Corporate programs that are not managed by an EPM function are often poorly executed, missing deadlines, or budgetary requirements. But with a program management function in place, the success rate is much higher. Because redundancies and missteps are avoided, costs are also contained -- even 10-20 percent less than a project done on an ad hoc basis.
So, how do you measure success? With EPM, you create a set of criteria to define and measure success. Program plans include clearly defined steps and responsibilities. To ensure accountability, there are also people dedicated to the program management function who report directly to a C-level executive.
Establishing a governance committee
Just as corporate governance is now a critical part of doing business, so is making sure IT decisions and projects align with objectives. This is where a governance committee plays a vital role -- ensuring that the program management function is well structured and gets buy-in from the officers and department heads. It also establishes the criteria for managing programs, which could include project size and scope or factors like resource allocation, cost, or impact on strategic initiatives. Unless a program only impacts a single function or doesn't hit the thresholds of cost or impact, it should be managed by the EPMO.
For example, consider resource conflict, which includes things like operating capital or people. A governance committee may uncover a conflict like an employee assigned to five different programs plus his daytime job. Stretching people this way yields fragmented results, which can hinder the project's success through poor work quality, missed milestones, or cost overruns. If you're executing a large scale program, it's important to organize it properly from the outset, which is why appointing an EPM executive is a critical first step. That executive assigns a team of project managers and lays out the details in a formalized project management tool which can perform a variety of tasks, from tracking phases, tasks, hours, and costs to determining how long it will take and what the interdependencies are.
There are a variety of toolkits available for this purpose and for activities like collaboration, portfolio analysis and ERP. You may even custom develop a solution for yourself which leverages those tools. As for cost, some tools are available for free, while others can cost several hundred thousand dollars, depending on the scale of your program and the number of users. The key is finding a toolkit that works from a cultural as well as a technological perspective within your organization. Managing interdependencies
In virtually any project, managing interdependencies is critical. That means ensuring that step "A" is completed before step "B." If you missed the timelines or costs associated with any step, it impacts the cost of the overall program and prevents you from proceeding to the next, which is why all interdependencies must be well coordinated and managed. You can even ensure that steps are not interdependent by structuring activities to run in parallel or independently.
With portfolios in particular, you may find items that cause interdependencies across a set of programs or projects. Each is part of the portfolio, and if you don't complete them, they may impact something down the road. Your whole portfolio of programs or projects may also exceed your operating or capital budgets, which forces you to go back and reprioritize, which is another vital function of the enterprise project management function and governance.
Enterprise program management goes far beyond technology. It applies to all aspects of major programs your company might be initiating. Measuring twice and cutting isn't just a catchy proverb -- it should serve as a reminder for you to take those steps necessary to complete your picture of each project and build a detailed plan, namely through a robust Enterprise Project Management function. When you do, you can improve your overall focus and avoid the disappointments that a failed project can bring.
Mike Gorsage is a Partner and Technology Practice Leader for Tatum LLC. Tatum is the nation's largest executive services firm, providing financial and technology leadership nationwide.