50% of all projects are not resourced properly and 20% of all projects should never have been started in the first place
Those are some pretty alarming statistics, right? For those of us who work in the PPM / Resource Management world, we would never knowingly start a project that is destined to fail from the outset. Yet the findings from this November industry report by the Project Management Institute suggest that we need to do much more to make sure our projects start off on the right foot.
The report – ‘Implementing the Project Portfolio: A Vital C-Suite Focus’ – which surveyed over 500 senior executives, concluded by highlighting three areas of portfolio management that require a strong commitment from the C-suite (high ranking management). They were:
- Provide ‘effective communication between strategy formulation and execution’
- Deliver a cultural change to ‘eradicate silo mentality’
- A commitment to provide the ‘necessary project resources’
Add to this recent research, an annual report in September 2014 from analyst firm PwC, The 4th Global Portfolio and Project Management Survey, which looked at the top three reasons that have contributed to project failure since 2004. Three of the most regular themes over the last 11 years? Changes to scope, insufficient resources and poor estimates in planning.
So, with resources (or lack thereof) regularly highlighted as an area that needs better management, we wanted some real-world feedback ourselves. We sat down with Daniel Zitter, author of ‘Being a Project Manager’ and qualified industrial engineer, with over 16 years’ experience working in the project management field, for his views on the state of resource management and these recent findings.
As Owner of PMzOne, a project management consultancy in Israel who focus on helping PMOs give more value to their companies, I asked Daniel whether people understand what resource management actually is?
“I think every person you ask will define resource management as being something else. Most of the people you talk to, will talk about ‘tactical resource management’ and look at the short term, i.e. what are people working on today? where are they tomorrow? what’s happening next week? etc. There are less companies today that actually look at the long run. If we take upper management for example, while some understand they need to look at this area (the long term) many have no idea what we’re talking about.
As agile methodology became more popular in the last 4-6 years, the focus here has again been on what are we going to do tomorrow and how many people do we have available to do it, and less on looking at the overall picture.
However, I do think people are beginning to understand again that not only do they need to have this ‘tactical view’ but they also have to have this long term vision when it comes to their resources. They need to.”
Are people underestimating the impact poor resource management can have?
“I don’t think there’s enough focus from management on their critical resources. Now, I’m not sure if it’s because they aren’t looking at their most important resources, don’t see the value or if they aren’t looking at the overall picture, but they need better focus.
As an example, in every organization you have the team, or teams or the person, depending on the size of the company, that is the bottleneck of the whole project. Everything is being held up because of that one individual or team. They could be a software architect, a development team, or it could be some sort of field expert, but I find many companies don’t spend enough time managing these critical resources. So they don’t know the severity of the problem and aren’t figuring out how much it’s costing them because of this bottleneck – it just happens.
What needs to happen is management need to look at the allocation of their critical resources and put together a strategy, which looks at having alternates in place for a particular resource, or you develop people that can do that role and are aware of what might happen, or prioritize more teams in different locations that can do these things. Currently, it’s not enough in the focus of management.
A managers’ biggest power is asking the right questions and moving around their resources; people and money, to do the task. The next decision is often made on intuition, or it’s whoever yells the loudest gets the resources they want. Some are smart enough to ask for tools out there, like Excel, which aid how they can make decisions, but ultimately they just aren’t good enough. They don’t have the right tools in place to look at the overall view, and this lack of knowledge really hurts the company”.
Do you think there is a need for a dedicated position, i.e. a Resource Manager?
“It really depends on the company. Most organizations of today are matrix orgs where they do have a resource manager position, but they aren’t always called a resource manager. They’re often referred to as ‘team leaders’, or ‘division managers’, and is a person who is very skilled in their technical positon and are responsible for managing other skilled people.
But many times this person doesn’t have the managerial experience, or really understand or know how to fill the role of a resource manager, even though that’s what they do. So there’s a question to be asked. Who do you bump up positionally? Is it an engineer? Is it a programmer? Maybe a contractor? These people might be really good at their jobs, but are they good leaders and do they have the tools to do the job?
So I think it’s extremely important to have the right person in place to do the job. So a dedicated Resource Manager will certainly help. I also think that to support the good people you have; you need to have the right tool in place. Now that could just be a process, a detailed doc explaining how to do things, but more so, you need the right software”.
With that in mind, what are the main benefits that a resource management tool can bring to a business?
“Number one, it’s a management decision maker. A resource management tool can help managers clearly understand what needs to be done, provide a picture and help steer the company in the right direction. That’s the most important thing.
Let me tell you a quick story. In many of the organizations I go into, I ask the question; how much does a certain project cost, and they look at me and say, “it doesn’t cost us anything”. What do they mean when they say that? They mean they have people on the payroll so it doesn’t cost them anything, they only look at costs as contractors or materials – they see that as when a project costs them money. Which is completely the wrong way to look at their organization.
So for those in management positions, it’s about understanding how they should look at things better and how they can lead the company in the right direction. Resource management tools that really focus them by saying, ‘you’re spending a 1,000 man hours per month on this project and it’s costing you X’ or ‘if you take 5 resources from Y and put them into Z, this is what will happen’, then yes absolutely, resource management tools can really help you focus and can help to overcome these challenges highlighted in the two reports”.
Firstly, thank you to Daniel for taking the time to speak with me. I think what he’s highlighted is indicative of what we’ve seen ourselves. Companies understand that resources are important, but they aren’t doing anywhere near as much as they should be. ‘Insufficient resources’ has been among the top causes for project failure since PwCs first survey in 2004 and remains a major factor today. There’s a real need to do more.
With Gartner recognizing the growing resource management market, there’s a fantastic opportunity for organizations to learn more, and to implement tools and practices that can steer strategic decisions, run ‘what-if’ simulations, react to unpredictable circumstances and help paint a clear picture by visualizing a company’s resource portfolio capacity.
With the right tool, a company can make decisive decisions based on actual facts rather than instinct and gut feeling. As a result, the chance for project success is higher, and the possibility of driving forward a company’s goals and strategy is greater.