Project management skills can mean the difference between a project that generates expected returns and one that morphs into a sponge and soaks up surrounding resources. And when you have hundreds of projects in the works, this difference can mean your job or the very health of your employer.
That was the message that emerged from a panel discussion of project management experts at a recent Gartner Group conference on project and portfolio management in Boston.
Consider AAA of Northern California/Nevada/Utah, which employs 6,000, supports 4 million members, generates some $2 billion in revenue and is the second largest of AAA’s regional auto clubs, which provide auto insurance, financial services and travel aids.
“Eight of 10 projects are on time, on budget now,” says Chief Portfolio Officer San Retna. “Three years ago that was true of only three out of 10. And each point [between three and 10] means about $2 million in additional costs.” The AAA chapter today takes on 70 to 80 projects per year that cost $200 million, Retna says.
“Projects” in AAA’s case include everything from business process redesign to real estate, IT infrastructure upgrades and application development.
Panel member Steve Rice, manager of Dell’s Product Life Cycle Information Management program, focuses strictly on IT. He says that when he started his job in 1998 Dell was roughly a $10 billion company, and there were 900 projects in the works and on-time delivery was only 30%. Worse yet, he says there was “no visibility into the health of the projects, whether they were on time, on schedule, on scope.”
It took years to sort it out, but the payoff is huge. Today, Dell is a $50 billion company and IT spending as a percentage of revenue is 1.3%, down from 1.9%, even as project workloads have tripled.
Patience is the byword, panelists agreed. Richard Shapiro, manager of Royal Caribbean Cruises’ Program Administration Office, says it took his company five or six years to get to where it is today – capable of managing 1,000 active projects.
The highest hurdle? “Getting IT people to understand structure and accountability,” Shapiro says. “The goal is a single point of truth for everyone, instead of you saying you’re two months early and me saying you’re two months late.”
Planning in one piece at a time is the best way to avoid failure, the panelists said. And the job is not for the faint of heart. “It takes a special kind of person to step into IT portfolio management, because you have to enjoy getting beaten on a regular basis,” says Dell’s Rice.
