Wasting your profit! – On Project Management and Beyond
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Yesterday, in addition to attending the Startup Insiders Session hosted by NIIT, i also attended a free seminar/workshop sponsored by PMI-Islamabad Chapter on “PMO’s Role in OPM3 Assessment”. The speakers were Mr. Suhail Iqbal, from SysComp and Mr. Asadullah Chaudrey from AUC Technologies.
Coming to the meat of the matter, two areas were discussed which i believe should be of quite some importance to our community, specially those involved in software development. First was the concept of a Project Management Office (PMO) which basically acts as a central command & control entity & information clearinghouse (depending upon its charter) for project managers within the organization and the second was the OPM3 standard, which is a maturity model focused specially on project management. Designed by PMI and based heavily upon Project Management Body of Knowledge (PMBOK), OPM3 attempts to classify the maturity at which organizations perform project management, starting from managing projects and moving upwards to managing programs and eventually portfolios.
Here’s my take on project management. You may well be thinking, so how does it affect us? Well, read on…
CMMi, the current defacto standard of software development maturity, specifies that organizations will be at level two when they start managing projects effectively. And the onus is on individual projects. Then at level 3, you move towards organizational stability, at level 4, data becomes king and finally at level 5 continual improvement is stressed upon.
But many organizations in Pakistan say, we’re too small to have formalized structures and control procedures and big bureaucratic procedures. In other words, we’re small, we’re agile and we’re productive. Why take that away in the name of formalization even at level 2? Why should we ‘manage’ our projects when we can spend more time writing code!?
The answer, is simple.
Its profitability!
The one thing, as a manager and as a business owner, you should focus upon is ensuring you are profitable as an enterprise. This ensures your survival (both in an individual capacity in your current job and future career as well as organizational capacity). For smaller firms, its vitally important. You cannot have quality HR with you for long if you do not pay them well. And you cannot become a world class organization without quality HR. Hence, if you are paying them well, then you must ensure they are pulling their weight.
The 80/20 rule postulates that 80% of your profitability comes from 20% of your efforts. This begs the question, what about the remaining 80% of effort? The truth is, the remaining 80% of your effort is wasted and goes under the radar because you are not looking for it. Its spent on things like miscommunication, duplication of efforts, design fixing, code fixing, fixing code broken during fixing, administration overhead due to confusion etc.
This is where project management (and later program and portfolio management) come into play. It is the job of the project managers to ensure that 80% wastage is not wasted, but rather harnessed into productive work leading to more productivity and profitability of the organization, through ensuring stakeholders are involved, communication lines are drawn clearly, requirements gathered effectively and an efficient design created and freezed, and work proceeds according to a plan, changes appropriately factored in and avenues of potential code-breaks examined and closed and all the things a project manager is supposed to do. What a project manager is not supposed to do, is code!
Of course, the trick is in doing it effectively. Managing projects while ensuring bureaucracy is not introduced. Having a procedure which helps do the job instead of just filling paper for papers sake and all. This is where you need to increase your skill base, your knowledge base and your experience base. This is where you hire consultants and advisor’s and trainers and what not (who in effect, will only cost you a fraction of the wastage in your organization and who’s cost can be recovered in less than a year through savings provided they’re the right firm for you).
If you are a manager, or a business owner, this is the time for you to think. Where are you wasting 80% of your profits?
10:49 pm
Very true. PM role in any organization big or small shouldn’t be undermine. I always think about the best mix of resources a world class organization should have and PM role is always on my top 5 list…
/Majid
9:38 am
Nice one again Mansoor. I’d like to share a few supporting facts that justify the the role of Project Management here.
Research tells us that as good as 66% of all IT projects fail, come in over budget or run past the original deadline and every year, $55 billion is wasted on failed IT projects in the U.S. These evidently lead to poor business impacts such as reduced overall profitability, inability to fund new projects and poor customer satisfaction. (Source: Chaos Chronicles 2003, The Standish Group).
In situations like that, formalized Project Management saves the day..
Shahzad
5:25 pm
majid: very true. the skills should be present, even if the designation doesn’t specifically highlight them.
shahzad: thank you. it is these exact situations which have created awareness of the fields of process improvement, project management and the host of other ‘management’ we have in software.