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Does Your Firm Require Project Management as a Core Competency?

For some companies, who only conduct occasional projects, it may prove sufficient to bring in consulting personnel to help manage the occasional critical project. For others, who are in the business of developing new products, or who are growing and need new facilities, or who require grants as a means of funding their growth, project management as a core competency makes competitive and financial sense.

A project is defined as a temporary endeavor consisting of a series of tasks with a beginning and an end. Manufacturing an automobile on an assembly line would not fit this definition of a project, but the design and installation of the assembly line would. Companies conduct projects all the time, sometimes without realizing what they are and how they can impact their bottom line. If your line of business involves developing new products or delivering customized products to different customers, you should be using a project management process. If your company is building a new assembly line or adding a new machine, or redoing its processes, then you need project management. While managing a project may not seem like rocket science, it does require knowledge and discipline to do it correctly and to reap the full benefits. Managing these projects in an efficient manner can increase the bottom line, improve customer relations, and enhance your company’s reputation. The question then becomes: “how much project management does my company need?” Does it need to become a core competency with its own dedicated personnel or can I get by with something less?

Project Management as a Discipline

Project management is simply a process with its own techniques and tools designed to ensure a project meets its requirements. Note that I use the expression “meets its requirements,” not “deliver on time,” or “deliver within budget.” While those are the most common project requirements, and are inherent in every project, most projects will have a myriad of other requirements, such as technical specifications, progress reports to customers and management, deliverable test and material certification data, reviews, quality inspections, analyses, and the final deliverables. Not meeting any of these can lead to customer dissatisfaction, delays, returns, and reduced profitability.

Project management techniques and tools have been standardized by the Project Management Institute (PMI) and are reflected in the Project Management Body of Knowledge or PMBOK® for short. PMI is recognized internationally with a current roster of about 500,000 certified project managers worldwide. The PMBOK® is a 600-page document designed to address even the largest, most complex project. Tailoring is used to adapt the process to smaller projects and to meet your company process needs. The PMP after my name attests that I am certified by PMI in my knowledge of the PMBOK (by a four-hour test and continuing education). In many ways, PMP is analogous to the Professional Engineer or PE certification. There are also project management experience requirements for taking the PMP test. I have been doing project management for almost forty years, first as a project engineer, and then as a program manager.

The Process

So back to project management. A project by definition must have a defined ending, e.g., a deliverable product, process, or a report. Even the simplest project is composed of a series of tasks that must be accomplished in a particular order to achieve a set goal. In the project management process, these tasks are contained in a Work Breakdown Structure (WBS), which is, in its simplest form, a list of all tasks required to complete the project. This represents the scope of the program. These tasks must usually be performed in a sequence, e.g., writing computer code and then testing it. Projects usually have an associated time element; i.e., it must be completed by some agreed upon date. The schedule combines the WBS with the sequence and time requirements and provides a trackable measure of scope progress. Each of these tasks has a cost of labor, materials, overhead, etc., associated with it. Furthermore, in order to be trackable, they must be distributed over time. This is the budget which must be time-based for accuracy and monitoring. The important thing to understand about project management is that it utilizes the old adage that “you can’t manage what you don’t measure.” Project management defines a project’s goals, its requirements, its tasks, and then allows you to measure its progress through those tasks.

Beyond scope, schedule, and budget, there are other aspects to a project that must be managed in order to achieve successful completion. How much quality do you need? How is that quality to be accomplished? Inspections? Data review by the customer? And, what about risks? Have you identified the risks you face to successfully complete the project? Do you have a plan for how to deal with them if they arise? Have you allocated enough resources to deal with some of the more likely risks? Finally, do you have sufficient resources available to accomplish the project? Resources include, but are not limited to, workers with the right skills and sufficient labor hours available, machinery, software, materials, etc.

The six italicized bold terms, scope, budget, schedule, quality, risk, and resources are known in project management parlance as constraints. It’s almost as if, when working on a project, you’re working in a six dimensional space. Everything done on a project must be evaluated in terms of those six constraints. Failure to account for any of them can lead to delays, increased costs, and, of course, unhappy customers. For internal projects, management or your investors become your customer.

How you handle these six constraints can depend on the size of the project, its complexity, and the resources available. Theoretically, the overall process for managing a $1M project versus a $100M project is the same. These same six constraints exist in both sized projects and need to be managed. The devil is in the details, which is why tailoring of these processes is required. A ten-person start-up company performing a $250K NIH research grant project does not have the resources to conduct the project in the same manner as a multi-national oil corporation conducts a $100M refinery construction project. Nor does it need to. This is where tailoring comes in. While following the same basic process, the details of how the project management is accomplished may differ. As the old adage goes, “the devil is in the details.”

Should It Be a Core Competency?

So should your company require project management to be a core competency? First, let’s define what I mean by core competency. If you Google the term core competency, you find many definitions. I prefer two:

  1. a level of ability in a particular area that is inherent to a particular project, technology, or company
  2. a unique ability that gives a firm a competitive edge

So, based on these definitions, does your firm need project management as a core competency? In my view, the answer is “it depends.” For example, if you’re a small manufacturing company making the same product over-and-over, I think probably not. However, if you’re going to upgrade a machine, or maybe develop an improved product, or routinely calibrate and perform maintenance on your assembly and inspection equipment, then you will definitely benefit from project management for those tasks. However, in reality, this effort may represent only a small portion of your business activity. Therefore, the investment in project management as a core competency, which normally includes creating a Project Management Office (PMO), may not make business sense. In that case, you can obtain the project management competency from a consultant like Rocket Science Consulting to help you develop the project plan and train your personnel to operate within its parameters. Most importantly, as a result of the process, as management you’ll be able to track progress and cost of these projects.

On the other hand, if, for example, you’re a biotech or biomedical firm developing a new product, working on grants, and also conducting the testing necessary for FDA approval, in an environment where you conduct projects frequently, then you definitely need it as a core competency. Ask yourself, “what if my competition has a project management core competency and uses project management inherently in running its project? Are we at a disadvantage if we don’t?” My answer is yes. You may think you can streamline the project without project management processes and therefore, possibly bid a lower price. I believe you’ll find that’s it’s a “pay me now or pay me later” situation. Invariably, something will go wrong on the project. A task will be overlooked. A report not submitted. A task will take longer than planned because the person assigned it is too busy on something else and you won’t find out until too late. Consider project management as a competitive advantage. Consider making project management a core process.

Conclusion

Companies conduct projects for multiple reasons. For some companies, it’s an occasional thing, while for others it’s a constant requirement. Project management provides the means to better define a project and then delivers the transparency and flexibility of measuring a project’s progress.  There are options on how this core competency may be achieved, depending on the size and nature of the company and its resources. No matter what your project management requirements are, Rocket Science Consulting can assist you and provide cost-effective support.