Project Management & Professional Services Automation... The solution or the Problem? written by Mike Hesketh - published in Consultants Advisory Aug 2002 edition Mike Hesketh looks at the continuing trend towards project failures, and asks whether the project management or PSA software is to blame. The solution or the problem? It's never been easy to balance project needs against ongoing workload demands. Add to that the need to manage multiple projects for external clients, and the amount of effort needed to support and manage a tight operation becomes overwhelming. In response, many organisations have realised that structured project management methods bring real benefits to the bottom line: hence the vast increase in the number of qualifications, and qualified project managers, on the market. But while there's no doubt that formal approaches to project management have realised bottom-line benefits, to be really effective organisations need to have visibility of what is happening on each project and the impact that one is having on another. Of course, project management packages like Microsoft Project (MSP), Artemis, PMW and Primavera have helped bring project information and documentation under control. In a recent survey, 78% of organisations said that current project management software met their needs (although only 4% said that their needs were exceeded). Yet looking more closely at how such packages are being used, it becomes apparent that while most of them will track a single project at a time, controlling multiple projects in a thriving business is a much bigger challenge. Enter professional services automation (PSA) software. PSA is a simple enough concept - a logical extension of the project management package ideals. PSA links together resource planning and allocation, HR management, billing and project accounting. Add in drill-down project reporting, planning and documentation, customer management, practice management, knowledge management and business intelligence - and you have the all-singing, all-dancing panacea for greater efficiency and cost savings. The questions are: 'Does it work?' and 'Can it work?'. I remember the sales pitch that accompanied the introduction of project management packages 10 years ago. They promised greater control, reporting, management information and most of all 'better use of scarce resources'. Even a brief scan of the project management marketplace shows that claim to be over-optimistic. Projects still overrun time and budgets without delivering the promised benefits. The underlying issues have been highlighted by year-on-year surveys that show information is often the least of a project's problems. Lack of business requirement definition, scoping, planning and structured processes account for the vast majority of project failures. But if we can't even get the basic information right, how can we expect a software system, however sophisticated, to help us allocate resources more effectively, deliver projects and maintain customer satisfaction? All they are likely to achieve is more accurate reporting of how badly the project is going! The implementation of a PSA is even more complex. Whereas a project management system could be learnt and implemented by an individual on their single project, a PSA is far more invasive. In many ways it's the 'all or nothing' solution. Everyone must accept the need for consistent management processes and the importance of applying them to every project, regardless of the commercial or political pressures that are being applied to get things done. Changing the mindset of one individual or a department isn't too difficult - but changing a whole organisation, where departments could be either project-focused or not, is a wholly different prospect. There lie the issues. Vendors oversell the effectiveness of their packages. Organisations underestimate the major change that needs to be undertaken to realise the benefits of such automation. The biggest risk is changing people's mindset from a macho 'seat of the pants' management system to one that operates in a structured project management process environment. If you include in the implementation systems and data migration, business process re-engineering and reorganisations, the risks increase exponentially. Most organisations are wary of large IT implementations and the introduction of a PSA is no exception. So will PSA replace project management or is it a solution looking for a problem? The evidence is that as marketplace demands change at an ever-increasing speed with lower budget and greater expectations, a PSA will become a necessity. After all, there are many benefits that need to be considered: Improved billing and timeliness leading to better cashflow management. Better utilisation of resources. Automation of essential but mundane non-billable tasks. Project metrics to enable the fast and accurate planning of similar assignments in the future. Improved planning, risk and change management. Better knowledge management. Recent surveys over the last 24 months have shown that an effective PSA implementation can: Minimise the amount of time to assemble resources to complete project work. Reduce the invoicing cycle, creating increased cashflow for the organisations. Increase the amount and speed of delivery of information to be shared between different stakeholders. Optimise customer communications and satisfaction. So can PSA and project management be made to work? The sad fact is that for many companies the answer is 'no' - or at least not for the moment. These are the self-same organisations who implemented project management and ISO 9000 with such good intent but without changing the fundamental organisation, operation and mindset of the company. Getting back to basics is the key starting point. Make sure that your management processes and systems tackle the definition issues before worrying about the software implementation. (The elements that must be present in an effective business project management method are outlined in Table 1.) TABLE 1: Elements of a business project management methodology Management process Covering… Business Management Vision definition. Understanding the overall needs of the project and the commercial benefits it must deliver Benefits Management Development and management of the benefits that will be gained as the project delivers Blue Printing process Developing a clear understanding of what change the project will deliver and how the company will look in terms of processes, organisation, facilities and people. Identifying the scope of the BPR. Resource Management Identification and management of the skills and resources required to implement and balance with on-going business. Portfolio Management Development of project plans, management systems, reporting methods, communications and quality management Stakeholder Management Development of stakeholder organisations, management plans and communications implementation Transitional Management Development of handover, reorganisation and responsibilities plans Integration Management Development of business integration methods. Integration with client methods and systems. Review Management Development of metrics and systems for future projects The important factors are developing an implementation methodology that identifies the benefits that must be gained from the project, then developing a clear - and agreed - blueprint that must be achieved. Although an effective PSA or project management system will support every one of these processes, they will not succeed unless acceptable and working processes are already in place. But, just like the sale of project management packages, which vendors or consultants actually tell you that? In truth, they often underestimate the changes that you'll need to make to be successful because they are also lacking in the experience that is needed. So where does this lead us? Many organisations are concerned by the idea of implementing an all-encompassing IT system that attempts to rationalise business management processes across the organisation - and rightly so. IT projects have a well-deserved reputation for promising much and delivering little. But it's not a fault of the software, it's a fault of how it's implemented. If a PSA implementation is going to be a success, then it's a six-stage process: 1. Understand exactly what you want to achieve from the implementation - better cashflow, utilisation of resource or more effective project management. 2. Review your organisation - can you honestly say that the way projects are now developed and managed is effective? Will automating the process simply mean you complete more projects badly and quicker? 3. Blueprint the changes that need to be made in processes, facilities, organisation and the mindset of people, not just the technical implementation factors of the software. 4. Sell the concept. Communicate and get buy-in at all levels to the change - not just senior management. 5. Maintain and embed - develop audit methods to ensure compliance, create champions in each affected area and reward success. 6. Involve your clients. Develop interfaces that include their supply chain as well as your own. In short, get the environment, organisation and the people right first before you automate. You may find that you don't really need to integrate everything at all to get the real cost-effectiveness you've been looking for. So who is to blame for project failure? What is clear is that a PSA or project management package, however complex and all-encompassing, isn't the culprit All a PSA package will do is show how wide and deep the cracks are in your current control methods. The failure is due to vendors' over-optimistic views, lack of true consultant expertise in the field, and the failure of senior management to recognise the vast scope of the change - wanting the benefits of a PSA without the pain. The final question is: should you implement a PSA in your organisation? Ultimately the answer is 'yes' - but only where it supports effective management processes in the first place. And that's harder to achieve than it first might seem. Consultants' Advisory 2002 Copyright © 2002 Prime Marketing Publications Ltd.