Project management is a big challenge for businesses large and small. A recent industry survey indicates that over 50 percent of all projects that the average enterprise is engaged in are considered complicated, and 40 percent are priced at over US$1 million. A roundtable discussion of projects and technology reveals how Oracle customers and experts are grappling with project management. One of the biggest issues facing Mustang Engineering, which does project management and engineering around the globe, is connectivity. A successful project depends on keeping diverse teams connected at all times. Fair Isaac, a decision management firm, also is becoming more global, but it points to regulatory controls as a factor in increasing project costs. It depends on new technologies for success, including real-time collaboration, videoconferencing, and conference calls. Collaboration and connectivity are common challenges, but some firms are reluctant to invest in tools to enhance project collaboration and create project management best practices. One cause is inertia, while others point to problems managing project interdependence among dispersed project teams. Projects do fail, and there are various reasons for this lack of success. Some projects are very complex without clear expectations, while other projects are hampered by priorities that are altered midproject. Most project managers agree that to ensure project management success, it is critical to select the right tools from the beginning, coupled with effective communication.

As Published In August 2006

Project Management
By Aaron Lazenby

Technology is driving workplace change for project managers.

According to research from the Center for Business Practices, companies large and small rely on an array of complex, expensive projects to drive their business forward. A survey of project managers and other project influencers (such as business and office managers and executives) found that more than 50 percent of all enterprise projects are considered complex and 40 percent cost more than US$1 million. To take a closer look at the project management challenges facing many enterprises, Profit: The Business of Technology assembled a group of Oracle customers and experts to discuss projects, technology, and the intersection of the two.

Profit: Projects are getting more complex, as is enterprise software. Is technology evolving at the same rate as the projects it's designed to manage?

Meg Lassarat, Chief Financial Officer, Mustang Engineering: Mustang Engineering [based in Houston, Texas] does project management and engineering around the world, and we're a people-oriented, project-driven company. The task of finding oil and gas around the world is becoming more complicated. We're dealing with multinationals, large oil companies, as well as fabricators; layer on top of this the complexity and urgency of safety issues.

For the oil and gas industry, the technology leapfrogs about every three or four years. New technologies come out that help us find and bring to market oil and gas from more complex regions. The biggest challenge has been connectivity. We're working with diverse teams with different interests and different views, such as construction companies, engineering companies, oil companies, end users, pipeline companies—and keeping them all connected is what's key to a successful project.

Amy Halverson, Director of Business Applications, Fair Isaac: Fair Isaac [a Minneapolis, Minnesota-based decision management firm that uses advanced analytics to improve its customers' decision strategies] is becoming more global. It's not a situation where everybody is sitting in the same room, working on a project, and talking to each other. And there are a lot more regulatory controls that you need to deal with. For example, Sarbanes-Oxley affects us immensely. It probably adds 30 percent to the cost of projects. Being able to deal with all those extra outside requirements in addition to the original project requirements is what really makes them more and more complex.

We are relying on new technology to help us deal with those problems—things like conference calls, videoconferencing, and being able to collaborate in real time. We no longer have the binders of test conditions that require actual physical sign-off anymore. That's difficult to audit. You have to rely a lot more on the document control and workflow.

Nari Kikkeri, Director of Strategic Planning, InnerWireless: At InnerWireless [a Richardson, Texas-based installer of in-building wireless distribution systems for wireless utility service providers, enterprises, and building owners] we deal with up to 150 projects at a time, valued at as much as US$20 million. Our project lifecycle involves customers, vendors, contractors, and employees. As we start adding dimensions to these projects—cost management, document management, budgeting, capacity planning—they become very complex. This can make our project execution process very difficult. We need to have sound strategic planning and an integrated project tool to deliver our projects successfully.

Profit: It sounds like connectivity is a common issue. What's keeping companies from investing in tools that improve project collaboration and enforce project management best practices?

Suhail Maqsood, Group Manager, Oracle Projects Product Management: We're seeing customers focus on key project management areas that they're finding challenging and try to get a solution up and running. But gradually customers realize that they need to have business processes defined around project management where previously they did not.

Lassarat: We really weren't connected before. It wasn't a technology issue; it was inertia within our organization and bureaucratic reporting structures that weren't really addressing the challenges facing our projects.

Halverson: Our projects are crossing multiple areas more frequently. They're becoming larger and more interdependent. And the natural tendency of people is to hold on to what they have and not share their knowledge.

Jeffrey D. Ford, Associate Professor of Management & Human Resources, Ohio State University, Fisher College of Business: One of the things I've found with the managers in my MBA class is that they generally approach larger-scale projects pretty much the way they approach the rest of their work. They rely on the same habits and practices, and as the complexity increases, those habits and practices begin to break down. Are we trying to overcome breakdowns in habits and practices, what you're calling inertia, with technology, and is there a limit to how far we can actually accomplish that?

Lassarat: I think it's a whole lot easier to fix technology than to fix people. So you naturally get a greater return on your investment if you can make the system work instead of making the people work. Often with some of our largest projects, engineers tend to solve problems with a technical solution, when in fact we need a behavioral change rather than technology.

Roundtable Participants Jeffrey D. Ford Associate Professor of Management & Human Resources, Ohio State University, Fisher College of Business Columbus, Ohio Amy Halverson Director of Business Applications, Fair Isaac Minneapolis, Minnesota Nari Kikkeri Director of Strategic Planning, InnerWireless Richardson, Texas Meg Lassarat Chief Financial Officer, Mustang Engineering Houston, Texas Suhail Maqsood Group Manager, Oracle Projects Product Management, Oracle Redwood Shores, California

Halverson: You can't underestimate the change management effort. It requires a two-pronged approach: the carrot and the stick. Showing what's in it for the project stakeholders and having the right sponsorship from above that's saying, "Yes, as a company this is what we're doing—this is important." The project sponsors and executive leadership need to define the direction and the business value we're going to get from it.

Ford: Even with the complexity and sheer number of projects, you are obviously very successful with most of them. Then there are the ones that are late or exceed their budgets—or fail completely—which shows some kind of breakdown in the system overall. Why do you think projects come in late or over budget?

Lassarat: No. 1, the expectations weren't clearly set up-front. No. 2, the leadership team didn't stay actively involved in the changes to the project. It's a whole lot easier to make a change on a design table than it is out in the shipyards. And getting decisions about change made quickly, that would be the third piece.

Halverson: Fair Isaac is a much smaller company, and a rapidly changing company. To me, our biggest struggle is changing priorities of the business midproject. For example, doing a major change in your go-to-market strategy while you're doing a sales force automation implementation. Yeah, that's going to delay the project.

But stuff like that just happens, and you've got to go with the flow and figure it out and replan. Those are the things that are going to cause you to go over budget and overtime.

Kikkeri: We install wireless utility inside buildings. We have big projects like the Time Warner building and Children's Memorial Hospital. These buildings sometimes have more than a million-square-foot capacity. So we have to really put in a sound project execution plan to track cost and revenue on a per-square-foot basis.

Tracking costing at a detailed level is tricky, but we have mastered it over time by fine-tuning our system functions. For us, having a usable tool with the right functions and technology to fulfill our business processes plays a critical role.

Maqsood: One of the things we've seen is that customers fail to realize that having different systems and different spreadsheets actually makes it more difficult for the project managers to prepare necessary reports, and measure themselves against the original plan. Having one central definition of the project gets all interested parties tracking the costs for the project from a common location. So a project manager or anybody on the system who has the right privileges can log on and see exactly what the latest status is on that project.

Lassarat: As the CFO of Mustang, I couldn't agree more. I just shudder when I hear folks talking about using Excel. That single version of the truth is absolutely critical. And so is the ability to slice and dice it with everybody using the same set of data. All of the constituents in a project have different needs, but if you all are working off the same data, you're not debating who's got the right data. That's so unproductive. And yet one of the things that frustrates us beyond all belief is when people spend their time fighting over who has the right data, instead of making sure we really understand and draw sound interpretations from the data.

Halverson: Having one system to pull the forecast and the actuals together so you can see them in one place is critical. Project managers spend so much time pulling those two views together.

Lassarat: And who knows the truth? What did you send to the CFO? Well, did that go to the project directors? Well, what about the clients, do they have this? And you're saying, "Okay, what date do you have in the upper right corner of yours?"

Kikkeri: We have situations where somebody misinterprets the date or time and ends up closing the project a little bit late. In that interim time frame, customers can call and request additional material. And we have to ship that material because the task appears open in the system. The difference of an hour can create a process issue or functional nightmare. It's a communication thing. When we say 2:00 p.m., people interpret that differently in different locations.

Maqsood: And I think we're going to see a lot more of those global projects where the project team is dispersed in different time zones. Organizations are more global and they're running projects globally, adding other challenges to the project.

People have to make the right choice on what tool or product to use for their project management practices, because that's such an integral part of any company that's project-oriented. Without the right tool, you're going to be left with disparate systems [and] users who are replicating information from various sources and not getting that holistic view of where they're at with their current project.

Ford: I'm curious what your experience is in being able to translate large-scale projects down into the lives of the people on the project. I've done a lot of work with project managers and one of the things that I discovered was that even though there was a project structure in place, the work required to successfully deliver on those projects didn't end up in the schedules of people working on the projects themselves. So there are a lot of people who were very, very busy, but they miss things. They have to go back and redo things. Or some part of a project runs over, and they had to commit additional resources to get it back in line.

Kikkeri: We're looking at next-generation project tools with advanced capabilities. Let's say we don't need to hard-core assign somebody to a project. But we have situations where we start a project with critical schedule dates in place. The ideal situation is to let project teams, with the right tools and technology, decide the best use for their talents and resources, based on the schedules they keep. If they have an open time slot and see a need on another project, they'll be able to pitch in and put those resources to work. Some of our project resources are deployed in such a way—key members take charge of several projects, own and execute them successfully.

For More Information Oracle Project Management Project Management Customers

Lassarat: We're not a huge company—we're 3,500 professionals. But we use a matrix that has project managers on one axis and the department managers on the other axis. So project managers are focused on their individual projects, but department managers are partially responsible for the staffing of engineers on projects. They make sure the individual engineers understand their tasks and understand their roles within projects. An engineer could be involved in 10 projects at one time, but the department manager has to help prioritize all the different projects and help the individual engineers understand what all they're doing.

Halverson: We have a similar situation and there are key reports that are pushed out to both our project managers and our resource managers weekly. So our project managers will see how much time people charge to their projects, and should know based on the staffing what they're really expecting.

So it's good communication, good milestone reporting. And it's also getting the right person with the right skills for the right project at the right time, so it's good resource management too.

We just rolled out the resource management module for our professional services organization, and it lets you schedule very flexibly. I need this skill set, for example, or search for somebody in that location, with that skill set, and schedule them for short periods of time or long periods of time at certain percentages. Good project management is invaluable. Each day, each misstep, each slip on the timeline could cost the company millions.