CFOs may be amazed to find this approach described as new. But J. Kent Crawford, CEO of PM Solutions, a consulting, research, and training firm in Havertown, Pennsylvania, says that in courses he teaches on effectively running IT projects, 80 percent of attendees can’t even list (let alone manage) all their ongoing projects. “In IT, the term ‘project manager’ has been around a long time,” he says, but the title is almost meaningless.
Air Products and Chemicals Inc., a manufacturer of industrial gases in Allentown, Pennsylvania, is one company that can list every one of its IT projects. In fact, the company uses what Bill Townsend, senior program managers of global IT, calls a “gating projects” whereby each prospective project is taken through a four-part decision tree on its way to final evaluation.
This process begins when the company’s project managers decide whether a prospective project aligns with the company’s technology plan. Then they consider the availability of the resources required. Finally, they subject the proposal to a financial ROI analysis.
In short, the company devotes as much energy to the process of project approval as it does the projects themselves, making it extremely unlikely that effort will be wasted down the line.
The More the Warier
Some companies approach the issue by establishing a PMO, or project management office. This group, typically made up of senior executives, reviews all project proposals over a certain dollar value, compares them against the business’s overall strategy, and then decides yea or nay.
Siemens Enterprise Networks (SEN), a Boca Raton, Florida, division of the German conglomerate that makes communications-network equipment, has had such a team since 1998. Funding for the program has been surprisingly easy to justify, explains Kandi Miller, SEN’s vice president of information management and head of the project committee. “We found that just one blown customer project and one internal initiative that didn’t come in on time could basically justify the program for the first couple of years,” she says. “The savings were that great.”
SEN’s project team does not actually manage projects, but instead helps determine whether they are worth doing at all. In the pat nine months, the team has evaluated 12 proposals and given the green light to 3. The number has been kept fairly low, since SEN is now in the middle of installing a massive SAP ERP system.
Vital support for the effort comes from Roland Meinzer, CFO of Siemens Information and Communications Network, SENS parent company. Previously Meinzer was CFO of Siemens Canada, which went through what he describes as a “traumatic” SAP implementation. Determined to avoid that in the U.S., Meinzer says that one key to success is the involvement of people not working directly on the project. “Business owners are often blind to process improvement because they live in the day-to-day- world, while the CIO is very often driven by his IT tools,” he explains. “You almost need to have somebody who brings a different view.”