Is project management a cost to be reduced or an enabler for cost reduction? This was the question asked at the Austerity Debate in London last month. Donnie MacNicol, Director, Team Animation, presented his view.
Project management is likely to be seen as a cost to be reduced, he said, in organisations which do not have mature project management structures. In this situation, project management is not linked to strategy and it is ineffective. Projects delivered are not the right projects, and they don’t deliver appropriate benefits.
Project management is likely to be seen as an enabler for cost reduction in an organisation where project management as a discipline is understood and well-implemented.
The role of organisational culture
Organisational culture is a key driver for how project management is perceived in the business. “Project management typically requires people to have a certain level of openness,” he said. How does this work across an organisation where other departments are not like that? It certainly makes it harder, he explained.
Culture has an impact on the PMO, which supports the organisation in achieving its strategy. It also has an impact on how well this strategy is articulated. Getting the strategy implemented isn’t something we can spend too much time on now, he explained. We’re now in a position where we have to make large scale changes using a directive style – because we have to change things quickly. In a time of austerity, organisations need to be responsive and flexible, and that means implementing and adopting change speedily.
He also explained that how we brand the project, programme and portfolio management internally has a big impact on its success. “Do you understand your organisational culture and the impact it has?” he asked.
Attendees at the austerity debate were asked to vote on whether project management is a cost to be reduced or an enable for cost reduction. Some people put their hands up to show they thought it was a cost to be reduced. However, many of them also put their hands up to show it was an enabler for cost reduction too. Overall, the ‘enabler’ opinion won out, with the majority of people thinking that project management facilitates cost saving in companies.
Project management is an enabler, but I think that those people who voted for it to be both an enabler and a cost to be reduced had it right. It is both those things. We need to be delivering projects in a cost-effective way. We should be looking at the cost of project management and working out how we can best make savings to make the PMO (or P3O) as efficient as possible. Only then can we really use project management as an enabler for cost reduction in the enterprise.