By: Guy Barlow, Oracle Primavera Industry Strategy Director
Over the last few years there has been a tremendous shift – some would say tectonic in nature – that has brought project management to the forefront of executive attention.Many factors have been driving this growing awareness, most notably, the global financial crisis, heightened regulatory environments and a need to more effectively operationalize corporate strategy.
Executives in India are no exception.In fact, given the phenomenal rate of progress of the country, top of mind for all executives (whether in finance, operations, IT, etc.) is the need to build capacity, ramp-up production and ensure that the right resources are in place to capture growth opportunities.This applies across all industries from asset-intensive – like oil & gas, utilities and mining – to traditional manufacturing and the public sector, including services-based sectors such as the financial, telecom and life sciences segments are also part of the mix.
However, compounding matters is a complex, interplay between projects – big and small, complex and simple – as companies expand and grow both domestically and internationally.So, having a standardized, enterprise wide solution for project portfolio management is natural.Failing to do so is akin to having two ERP systems, one to manage “large” invoices and one to manage “small” invoices.It makes no sense and provides no enterprise wide visibility.
Therefore, it is imperative for executives to understand the full range of their business commitments, the benefit to the company, current performance and associated course corrections if needed.Irrespective of industry and regardless of the use case (e.g., building a power plant, launching a new financial service or developing a new automobile) company leaders need to approach the value of enterprise project portfolio management via 3 critical areas:
1.Greater Financial Discipline– Improve financial rigor and results through better governance and control is an imperative given today’s financial uncertainty and greater investment scrutiny.For example, as India plans a US$1 trillion investment in the country’s infrastructure how do companies ensure costs are managed?How do you control cash flow?Can you easily report this to stakeholders?
2.Improved Operational Excellence– Increase efficiency and reduce costs through robust collaboration and integration.Upwards of 66% of cost variances are driven by poor supplier collaboration.As you execute initiatives do you have visibility into the performance of your supply base?How are they integrated into the broader program plan?
3.Enhanced Risk Mitigation– Manage and react to uncertainty through improved transparency and contingency planning.What happens if you’re faced with a skills shortage?How do you plan and account for geo-political or weather related events?
In summary, projects are not just the delivery of a product or service to a customer inside a predetermined schedule; they often form a contractual and even moral obligation to shareholders and stakeholders alike.Hence the intimate connection between executives and projects, with the latter providing executives with the platform to demonstrate that their organization has the capabilities and competencies needed to meet and, whenever possible, exceed their customer commitments.Effectively developing and operationalizing corporate strategy is the hallmark of successful executives and enterprise project and portfolio management allows them to achieve this goal.
Article was first published for Manage India, an e-newsletter, PMI India.