“Sure,” he replied. “Project management is doing a specific thing within a specific time with insufficient resources.” We all laughed but I scribbled it down.
It’s almost universally true. After all, if you had more than enough resources and unlimited time, who would need project managers or project management? Lots and lots and lots of people would work on the project until it was done whenever that was.
Everywhere I go, project resources are overloaded and project managers struggle to allocate those resources on the work that they have committed to accomplish.
In a multi-project, matrix organization, everyone wants their project to be selected and approved. In a 2006 survey done by UMT for Microsoft, the majority of organizations polled reported that they selected projects for approval based on their individual merits only rather than comparing them against the merits of other projects. In fact, this method was more than 50% more popular than any other answer.
Not only do project sponsors want their projects approved, but once they’re approved, they want them to be done first, as the highest priority, before any other project is undertaken.
That is a lot of pressure towards a resource management crisis. You can see the result below
I see this picture all the time at the clients I visit and when you’re as used to it as I am, it doesn’t take too long to interpret. The blue bars represent resource capacity. The red bars represent resource requirement. In any period where the red bars exceed the blue bars, the resources are overloaded. In this example which would be taken at the beginning of January and looking forward to the next 12 months, the resources are overloaded in January through June. Then the resources are underloaded from July through the end of the year. If we look for a moment or two longer at the height of the bars, we can see that the requirements in January through April are overloaded by about 300%.
This is not going to be fixed with a little overtime and some elbow grease. This overload is unfixable. It was caused by starting too many projects within this period and it’s a fact that they won’t happen when they’re planned. And yet, if I look at the end of the year, it is clear what will happen here. The underloaded months will take the projects which are sure to be delayed and by the end of the year, most of this work will be accomplished.
If you’re reading this and saying under your breath “How can that guy see our internal data,” don’t worry. The good news is, you’re not alone. The bad news is, you’re not alone. This is a very common scenario.
Now, it’s clear that the projects which have been pushed into the first half of the year won’t all happen as they were scheduled so what will happen?
- Management by Emergency.
This is almost certain. All the projects underway in the first half of the year are going to be under tremendous pressure. That pressure is sure to translate to emergency after emergency after emergency.
- Low Staff Morale
This is often characterized by high staff turnover, though in the last 18 months or so this has been less prevalent due to the economy. As a side note, one thing to be cautious about if you are in this situation is that the economy may be postponing staff turnover, even if staff morale is low. That may make for a big wave of staff changes as the economy improves.
- Low Productivity
It’s simply not productive to have priorities change hour by hour or day by day. Staff are told “Do this. No, do that. No, do this other thing. No, do this again”. All the change in focus inevitably means loss of focus and less productivity.
Well if it’s that common, it should be easy to fix right?
Fixing this kind of problem is unfortunately easier said than done. The source of this problem originates at a couple of levels higher that the PMO and can only be fixed there. Yet project managers have the methodology to fix this.
Now, you may have seen software tools that promote the kind of functionality that will “automatically” resolve resource overload challenges. Every project portfolio management (PPM) tool has something in this category. However, no matter what tool you choose, you will need to do the core work with management if you want to solve this dilemma.
Whether or not you choose software to help you fix this problem, here is what you’ll need to do from a process standpoint:
- If you want to prioritize projects, forget about just giving them a ranking or some number. Doing so just makes all the project sponsors crazy as they argue why their project should be a priority of 75 rather than 92. Instead, work with senior management so they agree on what business factors affect the importance of projects. Some examples might include:
- Return on Investment/Profit (an obvious one for private firms)
- Project risk (again pretty obvious)
- Technical competitivWheteness might be a little less obvious
- Client satisfaction
- Strategic advantage to the organization
- Reduction or avoidance of threat to the organization
- Create a set number of answers for each business factor. Try to stay away from a score of 1-5 or 1-100 and instead go for a descriptive answer. It will be much more powerful if you can have the answer correspond to a measurement. For example, “Improve Customer Satisfaction by 10% as measured by our quarterly customer satisfaction survey
- Now you’ll need to create a formula that scores the answers from the business factors. This is where software may be attractive.
- Finally, you’ll need to weave in the cost of each project. You can think of cost in almost any denomination so long as all projects are measured the same way. So, total person-hours or person-days, total dollars or whatever. This will allow you to create a business factor score/cost calculation so you can determine which projects will give you the biggest bang for the buck.
Now, if you’re thinking you can do this in isolation and then present it ‘fait accompli’ to management, think again. Doing so will make you responsible for any project which is not priority number one, and that puts you no better off than you are already. The secret to success in this process is get senior management to define these factors themselves and to agree on the relative responses for each one. When that happens, the resulting levelled schedule is, by definition, doing the projects that are in the best interests of the organization first.
Project prioritization is often a part of project management that is avoided by senior management, but the impact in a tough economy of avoiding prioritizing can be significant. That’s why looking at project prioritization now may be timely. PMOs may find management more receptive than ever to participating in making this kind of process successful.
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Chris Vandersluis is the founder and president of HMS Software based in Montreal, Canada. He has an economics degree from Montreal's McGill University and over 22 years experience in the automation of project control systems. He is a long-standing member of both the Project Management Institute (PMI) and the American Association of Cost Engineers (AACE) and is the founder of the Montreal Chapter of the Microsoft Project Association. Mr. Vandersluis has been published in numerous publications including Fortune Magazine, Heavy Construction News, the Ivey Business Journal, PMI's PMNetwork and Computing Canada. Mr. Vandersluis has been part of the Microsoft Enterprise Project Management Partner Advisory Council since 2003. He teaches Advanced Project Management at McGill University's Executive Institute. He can be reached at firstname.lastname@example.org.