With a Doctorate in Project Risk Management and over 18 years of experience in Project Management and Decision Support Systems, Dr. Vanita Bhoola serves as a Professor at S.P. Jain Institute of Management & Research (SPJIMR), Mumbai. Apart from teaching at SPJIMR across programs, mentoring students and publishing in leading international journals, she offers tailored courses across different programs at the Institute and customized management development programs (MDP) in Project Management based on prior research about company, sector and the immediate business environment that impacts business. She currently heads the Center for Project Management at SPJIMR. The Center offers PMP® Training and Certification in Advanced Project Management. Dr. Bhoola has handled training & development projects and consultancy assignments with corporate clients, such as, CGI Group Inc. (India), Pfizer India, Siemens India, ICICI Securities, Deutsche Bank, Procter & Gamble, Colgate-Palmolive, Tata Housing Development Company, Brigade Group, KEC International, Quality Kiosks, Mahindra & Mahindra, Verchuska Infotech and Godrej Infotech.
Organizations measure project success in terms of cost, time, scope and quality, if a project manager is asked to display examples of failures, it might be at her fingertips. However, if asked to recall the last successful project, it may take a while. Project failures are common, project success is not. Question is whether meeting the quadruple constraints necessarily implies project success? Harold Kerzner author of several books in project management opines, “If management doesn't see how a project will deliver a value, that project will be canceled even if it's meeting time and budget constraints.” Kerzner says, “Time and cost used to drive all decisions…. Now we’re saying, wait a minute, are we providing value?” True indeed! Unless project managers focus on understanding the organizational vision, the business environment and the parameters that drives value to customers, the project may fail to deliver value. In order to ensure project success, today we are forced to ensure alignment of project goals with the overall objectives of the firm and top management engagement. Today we are forced to look beyond project success Kerzner’s view on value-driven project management that was proposed in 2008 is still so true! Analyzing project failure through the lens of cost and time overruns, continue to be a practice, in India. Of course, we still have a long way to go.
The VUCA world has posed daunting challenges to traditional project management practices. Life is no longer simple. Projects are highly complex with greater exposure to risks, which is oftentimes unforeseen. Even at the stages of evaluating feasibility or approvals of projects, it is important to consider the dynamic nature of risks, changing nature of complexities and ambiguous customer needs, among various other factors. Often, deadlines take the driver’s seat and project managers are forces to speed up the process, thereby neglecting the inherent risks. This is not only true for short IT projects but also equally true for long duration projects especially infrastructure development projects. Often defining the project scope follows traditional myopic procedure and completely irrational and unrealistic, purely based on assumptions. Learning from previous mistakes hardly happens. Periodically reporting estimates of time at completion and cost at completion are traditional practices. But, reporting of value at completion seems an ideal situation in textbooks. Much of it can be attributed to aversion to change and the fixed mindset that project managers demonstrate, despite knowing what is good and what is bad. Today we manage business by projects; project management has evolved into a business process – unfortunately the change in mindset of people who implement it is yet to happen.
Why bother about value?
Today’s challenges in successful project implementation has spanned beyond people and processes. It is beyond the quadruple constraints. In the VUCA world, chances of project success originates from project selection, its alignment with organizational goals, competence, emerging market opportunities, and above all, value proposition to all stakeholders.
The values that project management should derive cannot be isolated from the business values and project outcome. Value-driven project management includes internal and external values as much as financial values and future prospects. Merely creating financial value by providing attractive revenue streams may not be a sustainable model for the long run. Here comes the significance of customer focus. Did the project and its implementation positively impact the customers’ life? Was it successful in addressing customers’ needs? Is the customer satisfied? Will the project ensure customer loyalty and be willing to reorder or order a new product? These are important questions to be answered. As customers’ needs often change, they are generally not paranoid about meeting time, scope and budget limits. It’s the value that matters at the end of the day.
While external customers are important, creating an impact of the project on internal stakeholders to generate internal values, can’t be ignored. Unless a project has a favorable impact on project team and other allied members, including top management, it would fail to generate internal value. Good project leaders energize and inspire their team members and make the project a memorable and exciting experience. Other projects, in the non-VUCA world, may be remembered as a demanding and exhausting experience, though. Last, but not the least, is the ability of the project to create future values. This dimension addresses the long range benefits of the project. It reflects how well the project helps the organization prepare its infrastructure for the future and how it creates new opportunities.
So, how to deliver value?
Capturing best practices is a need of today’s business world. The role of project management has to be strategic development and inputs on project selection rather than just planning, executing, monitoring and controlling. It is certainly not a wise proposition to start project management after the project is being awarded. Even today project management consultants are selected or brought on board after the scope of project is defined or during the preparation of the proposal. This is an ad hoc approach to meet short term deadlines. Unless Inputs of project management are incorporated during the concept development and at the stage of bidding, there could be lapses in creating value. Customers expect business solutions that create value, and not just deliverables. Unless the role of project management is focused more on generating business value and less on technical skills/knowledge, i.e., understanding and applying technology, a quantum jump in this direction seems arduous. This is the key to moving towards value-driven project management.
Price is what you pay. Value is what you get – Warren Buffett