Company
A consumer finance company with locations across North America
Challenge
Changing state and federal regulatory compliance challenges caused this
company to reinvent its custom-built storefront and home office systems. The IT and
PMO teams were geared more for operational maintenance rather than for the
complexities of developing new systems. This resulted in an overwhelming workload
and schedule overrun measured in years. Project personnel had suffered through
turnover of staff and technologies, requiring numerous restarts and integration
challenges. Even basic business requirements needed to be re-initiated. Little progress
other than some “wire frame” models and discarded technologies had been realized.
Solution
The company reached out to PM Solutions for a senior-level program manager
to take charge of the situation. He recommended a “back to basics” approach,
including a full project review and the establishment of stakeholder ownership and
project governance. Business requirements were then developed to guide the team in
the work necessary to succeed. Gradually introducing agile techniques permitted a
quick restart, with a series of sprints to develop “proof of concept” components of the
system.
The company already had Atlassian’s JIRA system for operational
maintenance, and PM Solutions expanded JIRA’s use by creating workflows and tools
to apply the agile approach to a new development project. Embedding the PMO
business analysts and quality assurance personnel with the developers helped to
improve timeliness and success rates for delivered work.
To help pace the work, a Kanban approach was introduced; this also assisted
project management in tracking deliveries and reporting progress to the stakeholders.
Workload assignment overloads in a department tasked with supporting both new
development and operational systems, threatened to derail the project; however,
introducing work in progress (WIP) limits improved work throughput, and
management effectiveness for the team.
The company next employed PM Solutions to develop a change management
system that emphasized the early management review of requirements and
authorizations prior to work being assigned. This reduced the overall workload for the
IT Department and permitted company leadership to take part in priorities and
resource utilization decisions, and focus on the “must haves” before the “nice to
haves.” Transparency in the system reduced the impact of politics in getting tasks and
projects prioritized in the information systems departments.
Results
After numerous restarts and turnovers of staff and technologies over the five
years prior to PM Solutions’ involvement, the assigned consultant helped the PMO
reorganize the development team to include project management, stakeholder
governance, business analysis, and quality assistance. With a team of up to a dozen
developers, the system was redesigned and delivered to stores in four states as a
production pilot in two years. The team now focuses on improving and developing
systems in more states, taking into account complex differences in federal and state
legal requirements.
Employing Kanban via JIRA, and a theme of “stop starting and start
finishing,” the throughput of task completions improved from about one task in 20
hours to one in five hours of development time. Improved requirement definitions,
and quality assurance participation in planning also played a large role in the
improvements to throughput. Rejection rates of work submitted for QA dropped from
30% to 5% over six months running up to the pilot deployment. Workflow and
success rates are now measured and monitored weekly and monthly. When some IT
managers reverted to a more “traditional” workflow, rejection rates increased and
throughputs slowed. Active governance was applied to bring work practices into
conformance with the new, proven processes, demonstrating the value of a strong
metrics and monitoring program.
Company
The bank, which operates over 100 branch offices in three states, found itself at a crossroads.
Having spent significant time creating a good strategic plan for the bank, they wanted to
improve execution and delivery. Executive leadership recognized the effectiveness of
aligning projects and strategy; and realized that the company’s existing project management
processes were ad hoc and inconsistent across IT and business projects.
Challenge
The company had begun the process of building an Enterprise Project Management Office
(EPMO) and there was energy, support, and sponsorship for the potential value that an
EPMO could deliver. However, initial attempts to get this organizational transformation
program off the ground had faltered.
One of the executive team had read J. Kent Crawford’s book, The Strategic Project Office,
which outlines plans to build an Enterprise Project Management Office. Initially, the bank
reached out to PM College in early 2015, with the thought of developing the skills first, then
working toward the structure and methodology. But as the PM College business development
representative listened, she realized that, in order to fully realize the benefits of the training,
the bank needed to first create the structure and processes that would give newly trained
project managers the tools to succeed. She took the bank’s overview of their issues to her PM
Solutions consulting colleagues and enlisted their help to frame the problem and its solution.
Solution
Bringing in an expert was viewed as the key factor in accelerating the adoption of the EPMO
in the minimum amount of time. The managing consultant quickly established a strong
partnership with the new EPMO director. Some of the solutions agreed upon included:
Partnered to develop a roadmap for EPMO formation, while coaching and mentoring the EPMO team
to drive ongoing results. Create a charter and executive steering committee to guide the evolution of a
strategic EPMO.
Conduct Discovery—a process of stakeholder interviews and process mapping—to identify gaps and
develop a roadmap to drive subsequent capability improvement.
Initiate capability improvement efforts based on the roadmap. Where practical, capability
improvements were initiated in parallel with roadmap completion.
Results
Business impacts included:
De-scoped a major project using the new project management methodology, allowing the company to
spell out immediate possible achievements
Guided the enterprise-wide development of a project management culture, a significant organizational
change
Stronger partnership with business leaders and transparency of Project Inventory and Status
Prioritization of project selection and timing including the declination of projects that did not meet
strategic objectives
40% improvement in closing projects during first 6 months of EPMO.
THE RELUCTANT WORKERS
Tim Aston had changed employers three months ago. His new position was project manager.
At first he had stars in his eyes about becoming the best project manager that his company had ever
seen. Now, he wasn’t sure if project management was worth the effort. He made an appointment to
see Phil Davies, director of project management. Tim Aston: “Phil, I’m a little unhappy about the way
things are going. I just can’t seem to motivate my people. Every day, at 4:30 P.M., all of my people
clean off their desks and go home. I’ve had people walk out of late afternoon team meetings
because they were afraid that they’d miss their car pool. I have to schedule morning team
meetings.” Phil Davies: “Look, Tim. You’re going to have to realize that in a project environment,
people think that they come first and that the project is second. This is a way of life in our
organizational form.” Tim Aston: “I’ve continually asked my people to come to me if they have
problems. I find that the people do not think that they need help and, therefore, do not want it. I
just can’t get my people to communicate more.” Phil Davies: “The average age of our employees is
about forty-six. Most of our people have been here for twenty years. They’re set in their ways.
You’re the first person that we’ve hired in the past three years. Some of our people may just resent
seeing a thirty-year-old project manager.” Tim Aston: “I found one guy in the accounting department
who has an excellent head on his shoulders. He’s very interested in project management. I asked his
boss if he’d release him for a position in project management, and his boss just laughed at me,
saying something to the effect that as long as that guy is doing a good job for him, he’ll never be
released for an assignment elsewhere in the company. His boss seems more worried about his
personal empire than he does in what’s best for the company. “We had a test scheduled for last
week. The customer’s top management was planning on flying in for firsthand observations. Two of
my people said that they had programmed vacation days coming, and that they would not change,
under any conditions. One guy was going fishing and the other guy was planning to spend a few days
working with fatherless children in our community. Surely, these guys could change their plans for
the test.” Phil Davies: “Many of our people have social responsibilities and outside interests. We
encourage social responsibilities and only hope that the outside interests do not interfere with their
jobs. “There’s one thing you should understand about our people. With an average age of fortysix,
many of our people are at the top of their pay grades and have no place to go. They must look
elsewhere for interests. These are the people you have to work with and motivate. Perhaps you
should do some reading on human behavior.”
1. A major American manufacturer of automobile parts has a division that has successfully
existed for the past ten years with multiple products, a highly sophisticated R&D section,
and a pure traditional structure. The growth rate for the past five years has been 12
percent. Almost all middle and upper-level managers who have worked in this division
have received promotions and transfers to either another division or corporate
headquarters. According to “the book,” this division has all the prerequisites signifying
that they should have a project organizational form of some sort, and yet they are
extremely successful without it. Just from the amount of information presented, how
can you account for their continued success? What do you think would be the major
obstacles in convincing the personnel that a new organizational form would be better?
Do you think that continued success can be achieved under the present structure?
2. Assume that you have to select a project organizational form for a small company. For
each form described in this chapter, discuss the applicability and state the advantages
and disadvantages as they apply to this small company. (You may find it necessary to
first determine the business base of the small company.)
3. A major utility company in Cleveland has what is commonly called “fragmented” project
management, where each department maintains project managers through staff
positions. The project managers occasionally have to integrate activities that involve
departments other than their own. Each project normally requires involvement of
several people. The company also has product managers operating out of a rather crude
project (product) organizational structure. Recently, the product managers and project
managers were competing for resources within the same departments. To complicate
matters further, management has put a freeze on hiring. Last week top management
identified 120 different projects that could be undertaken. Unfortunately, under the
current structure there are not enough staff project managers available to handle these
projects. Also, management would like to make better use of the scarce functional
resources. Staff personnel contend that the solution to the above problems is the
establishment of a project management division under which there will be a project
management department and a product management department. The staff people feel
that under this arrangement better utilization of line personnel will be made, and that
each project can be run with fewer staff people, thus providing the opportunity for more
projects. Do you agree or disagree, and what problems do you foresee?
4. THE BATHTUB PERIOD The award of the Scott contract on January 3, 1987, left Park
Industries elated. The Scott Project, if managed correctly, offered tremendous
opportunities for follow-on work over the next several years. Park’s management
considered the Scott Project as strategic in nature. Case Studies 673 CASE STUDIES
c15.qxd 10/30/07 3:29 PM Page 673 The Scott Project was a ten-month endeavor to
develop a new product for Scott Corporation. Scott informed Park Industries that sole-
source production contracts would follow, for at least five years, assuming that the
initial R&D effort proved satisfactory. All followon contracts were to be negotiated on a
year-to-year basis. Jerry Dunlap was selected as project manager. Although he was
young and eager, he understood the importance of the effort for future growth of the
company. Dunlap was given some of the best employees to fill out his project office as
part of Park’s matrix organization. The Scott Project maintained a project office of seven
full-time people, including Dunlap, throughout the duration of the project. In addition,
eight people from the functional department were selected for representation as
functional project team members, four full-time and four half-time. Although the
workload fluctuated, the manpower level for the project office and team members was
constant for the duration of the project at 2,080 hours per month. The company
assumed that each hour worked incurred a cost of $60.00 per person, fully burdened. At
the end of June, with four months remaining on the project, Scott Corporation informed
Park Industries that, owing to a projected cash flow problem, follow-on work would not
be awarded until the first week in March (1988). This posed a tremendous problem for
Jerry Dunlap because he did not wish to break up the project office. If he permitted his
key people to be assigned to other projects, there would be no guarantee that he could
get them back at the beginning of the follow-on work. Good project office personnel are
always in demand. Jerry estimated that he needed $40,000 per month during the
“bathtub” period to support and maintain his key people. Fortunately, the bathtub
period fell over Christmas and New Year’s, a time when the plant would be shut down
for seventeen days. Between the vacation days that his key employees would be taking,
and the small special projects that his people could be temporarily assigned to on other
programs, Jerry revised his estimate to $125,000 for the entire bathtub period. At the
weekly team meeting, Jerry told the program team members that they would have to
“tighten their belts” in order to establish a management reserve of $125,000. The
project team understood the necessity for this action and began rescheduling and
replanning until a management reserve of this size could be realized. Because the
contract was firm-fixed-price, all schedules for administrative support (i.e., project office
and project team members) were extended through February 28 on the supposition that
this additional time was needed for final cost data accountability and program report
documentation. Jerry informed his boss, Frank Howard, the division head for project
management, as to the problems with the bathtub period. Frank was the intermediary
between Jerry and the general manager. Frank agreed with Jerry’s approach to the
problem and requested to be kept informed. On September 15, Frank told Jerry that he
wanted to “book” the management reserve of $125,000 as excess profit since it would
influence his (Frank’s) Christmas bonus. Frank and Jerry argued for a while, with Frank
constantly saying, “Don’t worry! You’ll get your key people back. I’ll see to that. But I
want those uncommitted funds recorded as profit and the program closed out by
November 1.” Jerry was furious with Frank’s lack of interest in maintaining the current
organizational membership. a. Should Jerry go to the general manager? b. Should the
key people be supported on overhead.
c. If this were a cost-plus program, would you consider approaching the customer with
your problem in hopes of relief? d. If you were the customer of this cost-plus program,
what would your response be for additional funds for the bathtub period, assuming cost
overrun? e. Would your previous answer change if the program had the money available
as a result of an underrun? f. How do you prevent this situation from recurring on all
yearly follow-on contracts?