Many times we are asked by folks implementing project management systems to help with the business case and in particular, the benefits to the business. What are the project management business benefits from your system? Articulating the project management business benefits of a project management system is normally done at a high level and signed off by senior management.
However, one of the challenges is although the funding allocated for software and maintenance together with some training, it doesn’t always cover what is really needed fora successful implementation. For example, the internal resources needed,including additional headcount, as well as additional external consulting support and training.
One way to approach this is to break the business benefits down into further detail. This more detailed information can then be used to justify increased headcount, support, and budget while reducing implementation risk.
Not all the examples listed here will be relevant to your situation and organization, but all the principles should translate. So, let’s dive into the numerous ways you can provide more detailed project management business benefits for your implementation business case.
Typical Project Management Problems
It’s a given that management requires information in order to be able to make the right decisions. Lack of cohesive and co-ordinated information makes their decisions more difficult. Project managers are asked to provide a lot of detail using a variety of formats in order that management can gain confidence in information being provided.
Support groups and other departments often have to re-enter project data into their systems in order to be able to analyze the data using their own attributes. Also, some project managers adopt their own approach to project management due to the lack of enterprise wide standards.
This lack of a consistent enterprise wide project management system can impact several areas,in particular:
- The difficulty of objectively measuring progress
- Differing views of progress expressed by different parts of the organization
- Business summaries are not exact summaries of detail project data
- Differing terminology and methods used across projects and support groups
- Time taken to gather and report data
- Time taken to check and validate data
- The ability to only take monthly snapshots and then only at individual project level
- The lack of accurate trend data and analyses
- The high level of manual effort, with inevitable errors, involved in capturing data
- Difficulty in implementing new / updated reporting procedures
- Difficulty in establishing enterprise wide reliable resource forecasts
Implementing a project management system will inevitably lead to a more collective approach rather than a departmental (or silo) approach. Process improvement results in an extended enterprise, which means that data is shared across sites and also with the customer. The result is that information is made available sooner, to more people in a user defined format.
Data will adhere to a common and consistent style, nomenclature, and format. The electronic transfer of data across systems will be a viable solution where information is required by different departments for different analyses.
Benefits will be gained irrespective of whether the approach is based on PRINCE (Projects in a Controlled Environment), PMI (Project Management Institute), APM (Association of Project Management), or some other process.
The volume, complexity and size of the projects in an organization will determine the level of benefits accrued.
If the project management system is eventually automated, additional benefits will be gained. These additional benefits will be namely in the further reduction of manual effort, and in the accuracy,speed, and flexibility of information.
Today’s tools are flexible and relatively easy to operate. You can do almost anything you want with a simple mouse click and produce reports any way you like, anywhere you like at any level of detail.
However, there is one basis rule – The need to understand the processes around which the tools have been configured. Tools will not implement processes for you; they will only support processes.
Tangible Business Benefits
The establishment of an enterprise wide approach will provide tangible benefits to the three key business drivers of:
Revenue will be improved in two ways.
Projects often carry out work that is not within the scope of a project, often without realizing it. By establishing and supporting requirements/scope management processes, supported by a disciplined change control process any changes to initial project scope can be identified and costed.
This will minimize costs being expended on unapproved work. If the work is being undertaken for an external client, this approach will ensure that any additional work is matched by a corresponding increase in revenue.
Where work is being carried out for external customers, payments are often delayed and the agreement to pay can be protracted. Establishing a requirements management process enables the acceptance process to be more clearly defined. Once plans and progress reports have been developed, effort can be focused on payment milestones to ensure timely receipt of monies.
Where work is being carried out for an internal customer, the transfer of budgets from one cost center to another will be more streamlined. Any requests for additional budget will be built around the additional work identified.
If costs are managed, controlled, and minimized, margins will improve. Establishing an enterprise wide planning and reporting system should enable project delays to be minimized. Effective resource planning across the enterprise should ensure that the right resources are in the right place at the right time in order to carry out their tasks.
Knowing the status of all projects will enable management to focus their efforts on the problems and not become diverted onto less critical issues. Additional cost savings will result from the implementation of consistent practices and standards,which also drive efficiencies and reduce rework.
Having the ability to be able to identify total contingencies across all projects will ensure that contingencies reflect the true risk and that projects do not hold too many reserves. Release of contingency to profit will be swifter. A corporate view of contingency can be taken to ensure that the same contingencies are not held by different projects. Action can be taken corporately to overcome a common risk item in order to minimize the need for individual contingencies.
Growth will not be directly affected by the implementation of a common system. However, by implementing and supporting sound and consistent project management, should ensure that more projects are finished on time. Hence, the time to market will be reduced.This fuels growth.
Intangible Business Benefits
The use of a common integrated system will reduce the project manager’s effort currently expended on trying to reconcile disparate information using a variety of data sources and report formats. Release from these activities will allow project managers more time to attend to the essential tasks of managing the project, managing the project team and managing the customer.
An enterprise wide approach will enable the consolidation of project information resulting in succinct Management information being available more promptly. Comparative trend data will be available with the opportunity to drill down into projects to ascertain the root cause of problems. This will lead to earlier detection and therefore resolution of problems. Consolidation of individual projects will enable priorities to be assigned more efficiently.
Problems encountered solutions and lessons learned can be promoted across the organization. Best practices can be more easily disseminated across the company.
An intangible benefit is the increase in the morale of project staff as they are recognized as key contributors to the business with their roles identified as being key skills for the future. This increase in morale should lead to lower staff attrition.
Tangible Project Benefits
The implementation of an enterprise wide project management system will result in cost savings across several areas. These cost savings will affect bid teams, project teams,support groups and management. The key benefits are outline below.
Project Life Cycle
The establishment of a recognized project life cycle will enable project start-up and close down to be formally controlled as well as the transition between phases. Formal checkpoints or review points can be established to ensure that projects are fit to proceed to the next phase.
This will ensure that only those projects fit to proceed are allowed to proceed. The adoption of a controlled life cycle will also enable management to determine those projects that should be terminated before they spiral out of control.
The establishment of a project life cycle will ensure that a business case or bid process is established before a project can start. This will ensure that business benefits(and metrics) are established at the outset, which will ensure that only projects with a demonstrable benefit will be given authority to proceed.
- Effort spent on non-beneficial projects will reduce
- Effort spent of failed projects will reduce
- Effort spent on ill-planned projects will reduce
- Effort spent maintaining closed projects will reduce
Time Recording Data
Businesses need to be able to accurately identify where effort is being expended and need to allocate these efforts and costs to the appropriate projects and cost centers.
With a common approach to recording and allocating time, project costs and forecasts will be more reliable. Estimates for future projects can be based on realistic known data. Additional and overtime hours spent on projects can be identified.Additional hours and over time hours can be used as the basis for allocating additional staff.
- Effort spent on estimating future effort will reduce
- Effort spent on allocating time will reduce
Training and Education
Individual parts of the business may have adopted different approaches to project management training. With the introduction of a common project management system a common approach to training can be adopted. Education and training materials can be shared. Staff transferring projects or part of the organization need not be re-trained. The knowledge learned will not be lost.
Project teams and support groups will be trained in a common manner using a common language and common approach. The need for a wide range of trained specialists in each area will be reduced. There will always be a skilled practitioner somewhere within the organization who should be able to provide support, advice, and guidance.
The establishment of a common education program will ensure that all levels of the organization understand project management and realize that project management processes are different to other business processes. Senior management and support groups will understand project processes and will be in a better position to provide support and guidance to individual projects.
- Effort spent on developing and attending new training courses will reduce.
- High salary costs for scarce specialist skill will not be required
- Effort spend explaining how projects operate
Bid Plan and Project Plans
During the proposal or business case stage, the project will be planned using the same methods that will be used after approval to proceed has been given. The data used during the initial stage will be freely available to the project team. When a new project starts the plans together with educated and trained users will be available from day one.
- Effort spent on trying to reconcile bid data and learn new methods will be reduced.
- Effort spent on redeveloping the plans will be reduced
The establishment of a project management approach will define both organizational and project roles. The responsibilities of all of the project roles will be clearly defined together with clear reporting lines.
- Effort spend on duplicating tasks will reduce
Many projects maintain their own spreadsheets or databases to record hours and costs expended on a project. Each project will record data in a different manner with different, usually incorrect, assumptions.
- Effort spent on reconciling costs will be reduced
- Effort spent discussing discrepancies will reduce
Many projects prepare their own control and monitoring procedures. Many projects prepare their own procedures for using tools and spreadsheets. With the implementation of a common set of procedures, the need for individual procedures will reduce.
Quality plans and business proposal documents will be able to be prepared using a common narrative.
- Effort spent on writing, reviewing, issuing, and learning new procedures will be reduced
Many reports have to be manually consolidated. Effort is expended on consolidating reports using a variety of formats and a variety of data formats. Data for individual projects will reside on a common format and a common definition.
Each project will use a common code of accounts and a common set of rates. A common set of resource codes that will be used by all projects will be established.
Consolidated business reports, at varying levels of detail, will be able to be generated. These reports will include finance, schedule, resources, and earned value.
- Effort spent on consolidating reports will reduce
Project data emanates from a variety of sources. The implementation of a common system will help to establish data ownership and will ensure that all data has an owner, is generated in a common format and style and will ensure that the right data is in the right place at the right time.
- Effort spent on expediting data will reduce
- Effort spent checking and verifying contract values, labor rates, staff grades, etc. will reduce
Reports from projects often differ subtly from reports on other projects. Occasionally, new formats are developed for specific projects. This causes confusions and misunderstandings.
A common suite of reports can be established which everyone can use. Standard Company reports can be developed once and then passed across to each individual Business and project. When management modifies reports, they need be modified only once and not each time for every project.
- Effort spent on writing and checking new reports will reduce
- Effort spent on understanding different formats will reduce
When labor rates change, some projects take time to become aware of the change and then it takes more time to include the change in the project data. Some projects do not fully understand the significance of the different labor rate elements.
Using a common process, all projects will be able to be re-calculated using the new rates as soon as they become available.
- Effort spent checking rates will reduce
Many projects do not have controlled baselines. They change their baselines each month. Using a common approach, baseline change procedures can be established and an authority for changing baselines can be determined. Baseline changes and baseline issues can be controlled.
- Effort spent on developing and understanding variances will be reduced
- Effort spent on unapproved changes will change
Each project develops its own WBS and logic network. Based on knowledge gained across a variety of projects, it will be possible to develop templates so that they can be used in part (or in full) on new projects and bids. Standard activity logic can also be set -up.
- Effort spent looking through previous projects will reduce
- Effort spent developing new structures and plans will be reduced
The generation of forward load across a business is hindered as each project plans resources using a different approach.
Using a common system, resource information is established such that each project has to use a common coding structure. This will enable the organization to carry out resource aggregation using a variety of approaches.
- Effort spent in translating resource requirements to a common format will reduce
- Effort spent on identifying overloads and shortfalls will reduce
As data will be established using a common definition, the collection of project management metrics should be a lot easier.
- Effort spent in collecting metrics will reduce
The establishment of a common approach will enable a central repository for historic project data to be established. This historic data can be used when developing new project plans. Eventually, the use of this historic data will enable more accurate proposals to be developed and ideally, project costs and prices to be reduced.
- Effort spent developing project costs will be reduced
- Effort spent on nugatory proposals should be reduced
So, this list offers quite a few project management business benefits at a much lower level of detail than you typically see in a project management system implementation business case. This level of details can give more credibility to your business case demonstrating a well thought through budget justification. This can also make a more compelling case to get the appropriate amount of funding and fend off petty budget politics.
Some of these project management business benefits may not be relevant. But others could help strengthen your business case and justify a more appropriate level of funding and support. Our customers have used some of these project management business benefits for annual funding requests, creating a more robust and empirical business case. We hope you find this useful.