Where’s The Real Value of Project Management?
Ask that question and you’ll get a million different answers. You might hear:
- Projects align with strategic goals, or
- Project outcomes are more predictable, or
- Project health is more transparent, or
- Project management reduces spend, or
- Projects are completed on schedule,
- Project management improves customer service
These sounds good, but how is value like this put into dollars and cents? How can we touch, measure value with respect to project management? After all, if project management is about adding value, why then is it challenging for leaders to quantify the value of project management? If projects themselves have a quantifiable investment and an estimated ROI, then why can’t the same hold true, as in the case of any sound investment, for justifying project management? A business case is needed.
I had a client that realized the need to address projects differently. She scheduled a meeting with her manager, pulled together a two-page PowerPoint presentation, and met with her manager. During the meeting, they agreed that adding project resources could help them get quality projects out on schedule, within budget, and to clients’ expectations. However, her manager was reluctant to move forward with the plan because he felt more “tangibility” in the plan was needed.
The challenge facing leaders today, as they attempt to justify PM resources or a PMO, is defining the value of project management. Everyone agrees and nods their heads as the qualitative value statements are presented, but when the discussions of costs or investment in this endeavor are presented, things get difficult. Although the value proposition will change, depending on the project management maturity level of the organization and the focus of the request, backing up your intentions with tangible, quantifiable value that accurately supports your case for change is a must. A leader in this position should be able to state that this project management effort will require an investment of $X, but will return $X+.
There are 4 keys I’ve employed in helping leaders illustrate the value of project management in their organizations. In this article, we’ll explore the first of these 4 keys, which apply in most situations. Whether hiring your first project manager, justifying a PMO, or adding to or expanding a functioning project management competency, your case will be more credible if you apply the following approach.
Key #1: Develop a Current State Scenario – The Fuel for Change
This is nothing new. However, it is often overlooked; and that’s unfortunate, because this key unlocks understanding. Why would we ever want to automate an ineffective process or change a business workflow in marketing if we don’t understand how it currently works? Would you believe organizations do that all the time? Has it happened in your workplace? The problem is it leads to one of three outcomes: 1. A broken process is perpetuated; 2. Changes made exacerbate existing problems; 3. Both #1 and #2 result. The same applies in our efforts to justify project management. It is, in fact, that due diligence, done during our quest to understand the current state, which uncovers the value proposition needed to usher in the change we’re hoping to introduce.
Initially, your aim is to develop a line of questioning that goes something like this:
- How are projects currently managed?
- What value is currently derived in the way projects are managed?
- What are the opportunities for improvement (think in terms of budget, schedule, scope, client relationships, etc.)?
- Are there bottlenecks? If so, what are the impacts?
- Are users and stakeholders involved in the process? If not, why not?
- Do projects finish on time? If not, why? If they are finished on schedule, why?
- Is there consistency and/or repeatability in the approach?
- How are project resources managed?
- How are projects approved, prioritized, and how are resources assigned?
As you progress, you will uncover additional questions. At any rate, your goal at this point is to paint an accurate picture of how the current approach is working or not working. Don’t forget, objectivity is your friend. Lastly, make sure your perspective is broad enough. For example, at one client we learned about how a delay in a project delayed the launch of a new product. Revenue forecasts for the year had included $X based on the scheduled launch of the product. When the project was delayed by three months, it had a measurable impact to the bottom line, and that year’s annual revenue. This is the kind of data point that enlightens, and is quantifiable.
In another situation, I was asked by a client to help them establish an IT PMO. The current state scenario quickly identified several important pieces of information:
- There was no formal project management approach,
- Users and stakeholders were not involved,
- Projects had no scope, requirements, tollgates, documentation, or development standards,
- Projects had a history of missing dates,
- Testing took three times as long as development,
- Projects didn’t meet expectations in functionality or business workflow,
- IT projects delayed scheduled product launches impacting forecasted sales revenue,
- Projects went live without being completed, and development and testing continued into production support
- IT did a great job of keeping existing systems up and going.
In this case, there was plenty of fuel for change. Keep in mind, the goal with this first key is simply to uncover the existing situation and processes employed. Gather as many data points as possible, document and understand enough of the details to be accurate. As is the case with nearly everything, time will be against you. Work as quickly and thoroughly as possible.
With this key we unlock understanding, revealing important information about how the organization currently functions. Next we package this learning into a lever for change.