Monday December 9, 2019

The rise and rise of the project economy

As more and more companies struggle to deal with the increasingly digital nature of business, project management is coming into its own. Alex Meehan reports

1st December, 2019
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Are there any companies out there that remain undisrupted by the digital economy?The answer is probably not, because from retail to services to logistics to manufacturing, huge change has occurred in the way businesses and consumers interact with each other in recent years.

Powering this revolution are the ‘change projects’ companies are undertaking to help make them fit for purpose in a digital economy. And for those companies that don’t have access to project management skills in-house, that means working with one of the many project management services organisations operating in Ireland.

“Right now, there are a lot of organisations out there doing a lot of projects. It’s common to hear people talk about the gig economy, and that’s de facto what’s happening in the corporate world as well. We’re moving towards a project or gig economy and a generally more ‘projectised world’,” said Peter Ryan, managing director of Aspira Europe.

“More and more projects are being commissioned as a response to the massive digital disruption that’s happening out there. Companies are having to adapt to change much quicker than they used to, and projects are being used to drive the digital transformation that’s necessary to meet this challenge.”

Aspira has offices in Dublin, Cork and Amsterdam, and typically helps large enterprise-scale companies roll out solutions with a heavy focus on data.

“We typically work with people trying to pull large chunks of data together into a system to try to use it to help inform decision-making. They want to put data into the hands not just of management, but often into the hands of end users on the ground,” said Ryan.

“For example, we’re currently working on a project with a large energy provider that wants consumers to be able to control and monitor their energy usage while out of the house, using their phones. That’s not untypical of the kind of project we work on.”

While every project manager starts out with the best of intentions and with a clear goal of success, the reality is that in a not insignificant percentage of cases, projects fail. According to the Project Management Institute (PMI) of Ireland, around 30 per cent of projects don’t succeed.

“It’s a sad reality that a third of projects fail, and that’s really an unacceptable statistic given that professional project management has been around for decades. The PMI, which I’m a director of here in the Netherlands, has been around for 15 years and we’ve helped turn the dial up on standards and approaches, but it’s not enough,” said Ryan.

The failure rate of projects has dropped from a high of 70 per cent to a low of 32 per cent, but Ryan insists this can be improved still more.

“The PMI has highlighted several reasons why projects fail, and they can be split into two groups. One is a failure to use proper technical practices to understand the scope, scale and schedule of a project – being able to apply proper science to planning that out and really saying that’s how big it’s going to be. Often people still don’t get that right and that’s a big part of why projects fail,” he said.

“The other main reason is the ‘people factor’. All kinds of people factors result in failure – we don’t properly engage with end customers, we don’t properly engage with internal project teams and we don’t properly engage with our internal company stakeholders. Those three groups are neglected badly in the instances where we get those 32 per cent of failures.”

The solution to these failures is for project managers to spend more time on the human elements of their projects that are important and less on those that are not.

“They should spend less time doing human error, waste data collection and data analysis – there is a lot of manual activity that project managers do that they actually shouldn’t,” said Ryan. “They should reduce that and instead increase the amount of time they are spending with people. Spend more time engaging with customers, stakeholders and the project team.”

While Aspira works on projects of all sizes and from start to finish, given this 32 per cent failure rate it’s not uncommon for it to be called in to fix projects that aren’t going well.

“The nature of the industry is that we often get called into projects that are half complete and going horribly wrong. The client wants us to rescue them and that is one of our consulting offerings. Sometimes we go in, get things back on course and then leave it back in the hands of the customer, and sometimes they want us to stay with it and see it over the finish line,” Ryan said.

A recent project the company oversaw in the Netherlands saw Ryan arriving into a project that was nine months old and struggling. The client company has a European financial shared services centre in Amsterdam and was merging financial departments from around Europe into one consolidated centre there.

“They had failed to hit any of their projected milestones and were wondering why,” said Ryan. “They had done up great plans for how they wanted things to go, with lots of diagrams and drawings highlighting timelines and so on. But they hadn’t worked out the logicstics correctly and they hadn’t included the right stakeholders.

“We diagnosed the core issues within two weeks and rectified them in around six weeks, basically coming up with a new plan that would bring them into the scope of the business case timing and budget. We delivered a brand new plan and a better approach and that rescued the project.”

For many companies, projects are the way they keep pace with change in the market when that change requires them to think deeply about their fitness to meet market demands.

Phillip Bergin, professional services manager with Logicalis

“We see ourselves as architects of change. We design and deliver our customers’ digital transformation projects, using our industry knowledge and technological expertise,” said Phillip Bergin, professional services manager with Logicalis.

Historically Logicalis completed a large number of infrastructure and data centre-style projects and while it still carries those out, in recent years it’s seeing a lot more demand for project management in the network, security and cloud space.

“Technology has never been as innovative as it is today and the pace of change is huge. There’s a good quote from Justin Trudeau where he said that ‘the pace of change has never been this fast, yet it will never be this slow again’. That makes sense to me,” said Bergin.

Every year, Logicalis carries out a chief information officer (CIO) survey internationally, and in 2019 it spoke to around 840 CIOs across the globe.

“What we found is that as well as system availability being a core requirement of the CIO’s job – keeping the lights on and the show on the road – there is also pressure from business units to deliver service innovation,” said Bergin.

“They’re looking to deliver innovation fast and if a CIO doesn’t do that then the concept of shadow IT comes into play, in which the business will go out and provision themselves with whatever they need anyway. This can be done in the cloud without needing to spend massive amounts on capital investment. All that’s needed is an internet connection and a credit card.”

One area in which project management is changing, according to Bergin, is that certain aspects of IT have taken on increased levels of importance in recent years. The result is that companies are engaging with project management specialists in an effort to make sure they are ‘covered off’ in these areas.

“Security is a good example. In the past, companies would deliver a project, and at the end ask themselves how they could secure it. Now that’s a key requirement from the very outset. ‘How secure is this going to be?’ is often the first question asked at the beginning,” Bergin said.

“That’s one of the biggest changes we’ve seen and the most typical of requests, and it’s not hard to see why, with GDPR focusing people’s attention, and data loss prevention being high on people’s agendas.”

For Bridget McCormack, professional services manager with Datapac, part of the appeal of working in project management is that no two days are the same.

“We’ve worked on projects at every scale, everything from managing huge infrastructure upgrades right down to installing a single PC. From a project management point of view, your day is never the same and no project is ever the same. Everything depends on what the customer requires,” she said.

Datapac recently completed a project for a company that was unusually challenging. It involved a huge infrastructure upgrade at the same time that the business moved offices.

“This was atypical in the sense that we did two things at the same time, but it was typical in that we’re finding more and more customers are looking for proper project plans with proper charters of risks and rollback plans,” said McCormack.

“Communications are extremely important – you need the customer to be really open with you about what their strategy plan is and where exactly they see their company going. You have to keep in mind the costs involved in trying to achieve that and what time factors are involved. We have to keep all that in mind but still give a good quality of service throughout.”

In its recent ‘double project’, Datapac found itself fielding daily communications in the form of mails and phone calls with the customer, as well as weekly phone calls with builders and sub-contractors to make sure that things were going according to plan and within budget.

“That was the only way to make sure that our end of things went smoothly and that ultimately the customer was able to move in on time. The goal was to have minimal interference in the day-to-day running of their business,” said McCormack.

“Anything could have gone wrong, but three months later everything went well, with the project delivered on time and within budget. The customer is extremely happy and you can’t really ask for any more than that.”

According to Paul Verjans, chief technology officer of Vantage Resources and an experienced observer of the project management sector in Ireland, the only constant in the market is change.

“The truth is that there isn’t really a typical interaction. I’ve been involved in IT for around 40 years, first in the public sector, then with AIB, then with a small start-up and now with Vantage. In that time, I’ve seen a lot of projects and I’d have trouble saying what a typical one looks like,” he said.

Paul Verjans, chief technology officer of Vantage Resources

The reason is that there are as many different projects as there are companies. While types of projects might reoccur, the specifics are always unique.

“Organisations need to make change and they need technology to enable that change. They make decisions about what they’ll do and when,” said Verjans.

“You can have infrastructure projects and companies doing things like building out data centres, then you’ll have people changing their core accounting systems and then these days you get a lot of companies getting involved in digital transformation projects. These are all quite different.

“Companies come to us at different stages in the project life cycle. They engage with us at the start when they’re thinking and want advice on planning, and when they’re starting out if they need capacity, capability, expertise and support. Sometimes they also engage us when they’re halfway through a project and have hit a bump which means they need some support.

“That can be technical resourcing or whatever they need to get over the hump and get on with the project.”

Verjans has overseen many projects in his time, and said the best results usually come where a company engages with a project management partner from the outset.

“Ideally they come at the start with the initial idea, and we work with them all the way through the life cycle. If they’re looking to partner up, we prefer to do that early as possible so we can add more value and work our way through the process,” he said.

“But it’s always up to the client – if they are halfway through a project and have hit a wall, we’ll obviously pitch in and do our best to make sure that it’s successful.”

In Verjan’s experience, there is no such thing as a one-size-fits-all project management solution. Projects are different, organisations are different and over time, the potential problems and pitfalls that can derail a project have become more numerous and more complex in nature.

“The holy trinity of project management has always been that a project is specified, is delivered on time and meets budget. That triangle has been around for many years, and trying to meet those three requirements has been a challenge for everyone involved forever,” he said.

Over time, as projects have become more complex, the industry has found different approaches to try to tackle these.

“The most difficult aspect of that triangle is to ‘properly specify’ a project,” said Verjans. “Years ago, people tried to almost design the entire thing right up front, and then build it and try to stick to budget. But the reality is that it is almost impossible to identify every single aspect of a project up front. If you try to do that, you end up taking so long that by the time you’ve got the project done, it’s out of date.

“That’s particularly true in 2019 and heading into 2020 as cycle times are getting faster and faster. People will talk about agile methodologies and things like that, whereby they try to specify the project in bite-sized chunks – the idea is that you design and specify and put in a piece of a project before moving on to the next piece,” he said.

“You can do a piece in a shorter time, and if you do a smaller piece and it’s wrong, you haven’t made a big mistake, you’ve made a smaller mistake. If you’re taking on a big project, say a digital transformation process, then you need to remember that these are huge business change projects, as well as IT projects.

“Your business processes, your people and, yes, your technology will all come under scrutiny. It’s the technical side that people think about more, but actually the human impact is also massive. Sometimes projects are technical successes but the technology doesn’t sit well with the customer or staff of an organisation. Is the project really a success in that case?”

Managing projects as a service

Conventionally speaking, engaging the services of a project management (PM) team is a hands-on affair. But one Irish company is bucking the trend by offering PM using the ‘as a service’ model more usually associated with things software, storage and infrastructure.

The reason? Because not all projects are created equal and some can be a lot more complicated than others.

“When a project management ‘ask’ comes in the front door, it’s usually pretty straightforward,” said Terence O’Donnell, director and head of projects and consulting for Auxilion. “The customer is doing X and has all the skills they need to do that except for project management. They want advice and/or resources to complement what they already have, and that’s no problem.”

“On the other hand, we sometimes get far more complex requests, in which a client comes to us wanting to upgrade X or do Y. They need either a turn-key solution or they want three or four project resources because that’s not their core skill set.”

In cases like this, Auxilion assesses the client differently. To begin with, instead of looking at the project with which the client wants help, O’Donnell and his team want to know what outcome they want to achieve.

“We sit with them and then design a solution which includes a layer of project management and support. They may have some junior project managers so there may be the need to put in a small PM office to track and control what’s going on, or to work with other vendors. We can then shape a journey to get the client to the outcomes and benefits they want,” he said.

“We then agree with them what the key performance indicators [KPIs] would be, linked to a service delivering that service. Then you’re into service-level agreements – if we don’t do a good job and don’t deliver what’s been agreed, we might end up with penalty clauses. If we overachieve, we’d hope to get some incentives, so there is some risk sharing.”

This lends itself to a slightly different pricing model, one which is linked to these KPIs rather than the project itself. “It’s a completely different proposition than a customer coming in and asking for a project manager to come and work on their project,” said O’Donnell.

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