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Managing the "Double-edged Sword" for a Successful Project Performance

The indicator for an organization for measurement of  successful project management primarily has always been its cost performance vs. meeting the ultimate set deliverables "on time". This "Double-edged Sword" - "On Time Delivery" and "Project Cost Adherence" has been the key issue the industry and enterprises have been struggling with for years.

"Project Management" as we all know has always been a very crucial and important program across enterprises and industries to deliver the overall operational and financial effectiveness objectives. Talking about any project ranging from a small scale to large scale in any dimension like - greenfield turnkey, ramp up and overhaul, delivery improvement or services quality improvement within any industry sector - starting from industrial infrastructure to manufacturing, consumer, healthcare, energy or technology the challenge has always been to meet the most important objective of "cost adherence" within all its elements to meet or exceed the desired project performance level.

Typically any project of any order is planned on a network of interlinked activities or building blocks, what we call as "Project Plan", and the blocks which forms all the elements are the functional units - from planning, organizing and execution at a high level to fragmented sub-units of design, survey, sourcing, ordering, manufacturing, logistics, distribution, installation & commissioning, commercial / finance and quality. So it is this capacity of the system itself to hold all different competencies and domains closely knit together in harmony that either makes or breaks the performance of the project.

The indicator for an organization for measurement of successful management of a project primarily has always been its cost performance vs. meeting the ultimate set deliverables "on time". So this "double-edged sword" - "on-time delivery" and "project cost adherence" has been the key issue the industry and enterprises have been struggling with for years.

If we look at the workflow of this whole project delivery process we would find it divided mainly into two parts - "pre sales" and "post sales". The "pre sales" portion takes care of the process starting from developing a market opportunity to evaluation of customer requirement and finally translating it down to a blueprint of "deliverables" and "cost structure" what is called as a "solution"; and the "post sales" portion takes responsibility of physically converting the "solution" into tangible deliverables for the customer in line with deliverable objectives set in the earlier phase.


So the "pre-sales" phase and "post sales" phase performing two distinctive set of activities work in sequence to fulfil the final objective for the customer.  However in practical situations many times these two phases remain isolated and the supposed to be interconnecting link is found broken leading to potential risks of becoming a threat to the overall performance during the phase of transition or delivery. As a result the project managers and operation managers on the field are found struggling hard to find alternative ways and meet an absolute dead-end many a times accepting a compromise in performance level in either  performance or cost. The "double-edged sword" if managed to be held at one end would definitely cut through the other end if the means of balancing it are not put in proper place and time. 

This vulnerability of the performance of the project traces back its root cause to a lack of successful collaboration during the evaluation phase leading to practices of defining the scope and cost baseline purely on assumptions with no validation (due to lack of planning input) or on some judgements based on past experience or industry average leading to % estimation method of allocating costs to sub units e.g. - freight cost x% of total value of goods supplied etc. with no  feasibility study of these  basis on the current situation and scope. This leads to very high possibilities of overwork (higher cost), rework (COPQ- Cost of Poor Quality) of resources, lead time delays (productivity loss), hidden set up costs etc. going forward which hits directly on the bottom line.

It is the practice of collaboration amongst teams which can help enterprise combat and eliminate this challenge and effectively prevent and control the "double-edged sword" cut through its operational and financial efficiency framework.  This is where introduction of a "start up" process comes in which bridges or makes an effort of bridging the gap between "pre sales" and "post sales" by evaluating the cost baseline vis-à-vis the scope and project environment parameters before the same is moved into delivery phase.  It is this "start up" process or the bridge that has to be leveraged well during the evaluation phase in "pre sales"; which by its early involvement can provide real time inputs and situation fall outs with risks that can form the scoping and cost baseline principle of the overall project . It is only then that an optimum balance of this "double-edged sword" can be restored and help establish a discipline which can be successfully nurtured and evolved into a practice for achieving excellence.

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