Project management is a strategic delivery capability that impacts directly on the bottom line

Business leaders who are serious about achieving tangible results from their strategic projects should actively be growing their organisation into a mature project environment.

But despite massive expenditure on projects across industries, not all leaders recognise project management as a strategic delivery capability that contributes directly to the company's bottom line.

What is mature project management?

A mature project environment begins with the organisational environment, in that there is top-down support for project management practices and investment in project management.

In rolling out projects, mature organisations focus on doing things the correct way, rather than simply doing what it takes to complete the project as quickly and as cheaply as possible.

Emphasis is placed on ensuring that the right people are available to do the work, that they have the required skills, abilities and qualifications to be a valuable resource on a project team.

Project management is approached on an enterprise level and not on an individual project level, thereby implying an investment in the necessary support through structures such as a project management office, best-practice methodologies, training and so on.

It is also about being prepared to measure the organisation's performance constantly and recognise the weaknesses and, indeed, to be willing to address those weaknesses.

This begins with initial measurement, which serves as an indication of where the organisation is, so that it can determine where it wants to be.

The benefits of a mature project environment

Why is it important that an organisation strives for a mature project management environment? Is there really a direct link to the bottom line?

The programme management fraternity will argue that by constantly improving project management practices, organisations can achieve effective resource management and an improved quality of service.

The knock-on effect is reduced cost, fewer risks, higher profits and improved relationships with internal and external stakeholders.

Professor Les Labuschagne, head of the Department of Business Information Technology at the University of Johannesburg (UJ) and active researcher in project management says, "The main benefit is that it delivers predictable results, which means that those projects the organisation does undertake have a high probability of success.

"If project success contributes directly to strategic objectives and the bottom line, mature project management should lead to organisational success."

In its publication, Project Management Maturity Benchmark, based on a survey with 81 senior project managers, the United States Center for Business Practices states that, "Improving an organisation's level of project management maturity results in significant performance benefits, especially in customer satisfaction.

"And, although organisations are, in general, fairly low in project management maturity, the higher the level of maturity, the better the performance of the organisation in all areas measured."

There is also the element of good corporate governance, a senior management imperative that can be assisted through correct project management practices, processes and documentation.

Projects require an investment in resources, so there is a responsibility on senior management to ensure investments are made wisely and that there is value associated with these investments.

"Unsuccessful projects mean poor investments, and senior management is ultimately accountable for projects not reaching their objectives," says Prof. Labuschagne.

A glimpse of prevailing maturity levels

Researchers in the UJ Business IT Department have devoted several studies to uncovering the dynamics around project management maturity in South African organisations, not only in the IT discipline but also general project management, as it is practised at companies ranging from financial institutions and medical schemes, to telecommunications and utilities providers.

In their 2008 Prosperous Report (the culmination of a study of more than 200 respondents from 10 industry sectors that had among its objectives determining the maturity of IT project management in South Africa), they reported an average maturity level of 3.61.

This is based on a project management maturity model on five levels where level 1 indicates processes are disorganised or chaotic, and level 5 indicates an organisation that uses feedback from the established processes to continually improve and redefine them.

A maturity level of between 3 and 4 means that the majority of companies surveyed are on the right track, but have yet to achieve consistent results from their project management processes.

"In general terms, it means that project management processes are in place and established as organisational standards, however, some processes are more established and mature than others."

(Labuschagne is referring to the processes found in the nine knowledge areas defined in the Project Management Institute's (PMI) Guide to the Project Management Body of Knowledge, which include integration, scope, cost, quality, human resources, integration, communication risk and procurement management).

He adds, "Management tends to understand its role in the project management process, and is involved in input and approval of key decisions, however, lessons learned are not yet documented or used consistently to improve processes and standards, and management is not yet focused on continuous improvement."

While these results are primarily applicable to IT projects, they provide a glimpse of the project management trends in organisations deploying projects across a range of specialised disciplines.

Measuring maturity

The PMI Organizational Project Management Maturity Model (OPM3), currently in its second edition, provides a way for organisations to understand their project management processes and measure their capabilities in preparation for improvement.

Harold Kerzner's PM Maturity Model identifies five levels of maturity and suggests diagnostic tools for identifying where an organisation is, and how it can move from one level to the next.

These and other industry-specific models share the same objective: measuring to what extent an organisation possesses the components of effective performance through the project management process.

The fact that there are several maturity measurement tools available and that the state of organisational project management maturity remains a popular research topic in countries across the globe, implies that organisations - regardless of their size, focus area or location - are still struggling with it.

Labuschagne says that, when considering project management maturity, "The sentiment has gone from a maturity model that measures maturity to a more organisational project management maturity which looks at the context in which project management is practised.

"OPM3 is the first standard to look at maturity from a programme and portfolio management perspective," adds Labuschagne.

Investing to support mature project management

It is up to senior management to create the right environment for maturity to develop. Labuschagne asserts that this begins with acknowledging that project management is a strategic delivery capability that has value to the organisation.

It includes an investment in establishing a programme / project management office (PMO).

In a nutshell, the PMO is a project hub that promotes practice of project management; provides an enabling infrastructure; ensures effective resource development, management and integration; delivers technical support; and facilitates alignment with strategic business objectives.

In the past, projects have been completed successfully without having these things in place. "Senior management will often question why, if it could have been done a certain way in the past, it needs to change.

Why should there be further investment? It is common practice to look for a quick fix instead of making an investment now so that in the future it can be done more successfully," says Labuschagne.

"You don't often hear of projects that are a complete failure, so there is often the perception that things are fine and there is no problem. Our research is also showing that few organisations are conducting benefits tracking so the focus is on overcoming the triple constraints as an indicator of success (on time, within budget and within scope), and not on how projects actually add value to the organisation."

Organisations that do make the critical link between project management and strategic delivery capability may have implemented formal project management methodologies, tools and techniques without realising any tangible benefits. In these cases, the problem may lie with their project management delivery capability.

This has led to Labuschagne and Dr Carl Mamewick developing a project delivery capability model to assist an organisation to satisfy the expectations of all its stakeholders.

The model addresses these expectations in a holistic way and focuses on the various needs of each and every stakeholder, creating an environment that is conducive to project, programme and portfolio success and ultimately organisational success.

Numerous books, standards and methodologies developed on the topic, consultants specialising in building mature organisations and communities of practice around the world are spreading the word about how organisations can achieve greater success by focusing on their project management maturity.

It is really up to senior management to recognise the strategic value of project management practices and make the necessary investment in achieving project management maturity.

The value of project management in troubled times

Pascal Mabelo, portfolio executive: Project Management Centre of Excellence at Transnet Capital Projects says, "In this climate, we cannot afford wasting scarce capital on failed or superfluous projects.

Good project management is therefore more critical than ever and shall assist in developing and executing projects with the right scope, to be completed on time and on budget.

"Good project management will also ensure better cash flow management, as accurate cash flow projections (emerging from proper project planning) allow the organisation to only commit (or borrow) when an expenditure is due, reducing interest on borrowing.

"In addition, delivery cycle (i.e. time-to-market) may even take precedence over (undue) quality requirements; hence, assets or infrastructures will come to operation soon enough to start generating income, which is needed to service
the debt."

Shelly Topham, project manager at Nedbank, adds her perspective: "Recently there has been much debate in the corporate environment around what a mature project organisation is. If one were to audit a corporate organisation, the following questions could be posed:

* Can the organisation identify what a project is, and run its projects separately from the day-to-day business operations?
* Is each project managed separately and are all projects co-ordinated and measured by a centrally run project management office (PMO)?
* Does the organisation follow a professional accredited methodology e.g. the Project Management Body of Knowledge (PMBOK)?
* Is there a sound change management approach in place to ensure that a project culture is embedded in the organisation, e.g. training and coaching in a recognised project management methodology?"

From her point of view, Topham has observed the following effects of the current economic climate on projects in some organisations in South Africa:

* cutbacks on new projects;
* multimillion rand projects being put on hold;
* projects cancelled due to budget constraints;
* budget allocations: pressure on spending - priority versus value add; and
* resource allocations: prioritise resource allocation based on value add - resource contention versus priority.

"The benefits of following a sound project management methodology, especially in the current economic climate are:

* Projects can be prioritised and aligned to the strategic objectives and contribute towards a more efficient day-to-day running of the organisation's operations.
* A strong business case and a positive NPV (nett present value) can enable management to make a decision whether to start or continue a project.
* Sound reporting mechanisms (e.g. dashboards) offer senior executives visibility of a project's progress and this enables them to make more informed decisions.
* It ensures good project governance."

Topham adds, "This is naturally dependent on the strategy of the organisation, the competitive advantage over other organisations and how effective each individual organisation's risk mitigation strategy is.

"Organisational maturity does not happen overnight and a 'crawling-before-walking' approach should be followed to ensure that a culture of project management is embedded and organisations do not fall into the trap of 'flavour of
the month'." 

Taryn van Olden

Mature project management

Mature project management

Knowledge is power

The Da Vinci Institute is equipping South Africa with the necessary knowledge to make it in the industry of project management

Companies are now acknowledging that one of the key drivers to gaining competitive advantage is through project management. Business success depends on creating a project management culture based on a balanced interaction of the key factors of successful project management.

These include an effective organisation with efficient structures and processes, proven methodologies and tools for project planning and control and the correct mix of competencies for the project.

As a school of business leadership working in the domain of postgraduate studies, The Da Vinci Institute is constantly exposed to, and challenged by, its students to understand and address the world of project management.

In doing so, the Institute sought to collaborate with organisations that are world-renowned for their success in managing projects - Dornier Consulting (Germany) and TenStep Southern Africa.

This collaboration resulted in the co-designing of various project manager development programmes based on international best practice, and has culminated in a range of qualifications in the certificate (NQF5), diploma (NQF6) and Masters degree (NQF8) domains.

While researching the requirements for such programmes, the consortium specifically focused on understanding why projects fail. In most cases, it is evident that the root cause is an inability of project sponsors to comprehend the full scope of the project. A survey conducted in Germany indicates:

* Projects are an important driver of organisational development. About 30% of organisational costs are already being spent on project work with an expected strong growth.
* Current market surveys state that only 20% of projects are successfully completed. The survey of the top 100 companies indicated a loss of about 150 billion € per annum through unsuccessful projects. This trend is internationally applicable.
* Professional Project Management development saves on company costs. The estimates from the survey indicate that up to 10% of overall project costs can be saved.

Further investigation by the consortium led to the observation that, while the basic concepts of project management are relatively easy to teach and assimilate, the fundamental deficiency in teaching can be attributed to the conventional approaches that makes tacit assumptions on the scoping of a project, with little or no emphasis on the upfront project scope definition.

Project management goes way beyond the management of resources according to a critical path. A skilful project manager needs to have a comprehensive understanding of the system as a whole in order to effectively manage the risk inherent in any project.

The Da Vinci Institute for Technology Management is a private, registered higher education institution offering accredited programmes in the management of technology and innovation.

The core programmes centre on the management of technology, the management of innovation for sustainability, and the management of people within a systemic context (TIPS).

Programmes are delivered through a business-driven action learning process where candidates leave the classroom being fully conversant and confident of being able to apply the knowledge and skills recently acquired.

Providing the project manager with a set of tools based on systems thinking which, if applied at the onset of the project, will limit the chances of projects failing to meet the desired outcome.

The systems approach enables managers to gain insight into the context in which they operate, affording them an opportunity to arrive at a more elegant solution than they may do if they used a purely analytical or reductionist approach.

The ability to operate in a 'system's mindset' is no longer a luxury that teases the minds of managers; it is an essential requirement to be able to fully comprehend the dynamics of an increasingly complex global playing field.

In order to take into account the realities of the South African skills base, Da Vinci provides development programmes that can be customised to meet the specific needs of an organisation.

These programmes, which are co-designed between the company and Da Vinci as a partnership, result in offerings that focus on a wide spectrum of people:

On successful completion of the Masters degree programme, candidates are in possession of an internationally recognised qualification and have competencies in project management.

More so than anytime previously, South Africa is calling for the brainpower, leadership and management acumen necessary to meet the deliverables of the projects required by our country.

Project management is an 'all pervasive' management tool that is applicable to both the private and public sector organisations, whether they be capital projects, organisational re-design or service delivery in nature.

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