The Money Files

Can software really help save money on projects?  Genius Inside's blog claims that it can improve productivity by a quarter.  That's an impressive claim, and I wanted to hear if that was really the case.  I spoke to Neil Stolovitsy, Senior Solution Specialist, at the company.

Neil, you say on your blog that project management software can improve lost productivity by 25%. How is that?

We arrived at this percentage from various conversations internally as well as feedback from our clients. We also have an ROI calculator which helps us demonstrate the value of project management software to prospects and clients.

The Golden Gate Bridge project that you talk about was brought in under budget and on time. Would software really have improved the outcome that much?

It is important to look at the project within its historical context where no automation of any kind was used. I believe the ability to automate many of the project management (PM) processes employed and the significant increased visibility provided by today's PM software reporting tools would have positively impacted the bottom line and improved the efficiency of the work achieved. So although the project was on time and under budget by the acceptable standards of the year 1916, its success was measured based on the available tools of the time. However, the participants could have achieved even greater success using 21st technology.

How do you feel project management software like Genius can help us save costs on projects?

Most project cost losses result from the inefficient use of time and lack of visibility of project progress and potentially disruptive issues. Genius Project provides a single view that can be accessed anywhere allowing the efficient capture of project details, the elimination of manual processes, and 360 degree visibility into project progress and potential bottlenecks. The Genius Project solution therefore ensures lean project management processes are in place at the start of a project, helps eliminate wasteful activities and allows for project leaders to quickly respond to potential problems that may lead to increased costs in projects.

What are your top tips for cutting costs on projects without compromising quality?

There are several best practices I’d recommend but the most important is to have a solid project governance and business process strategy in place at the outset. Project governance will ensure that project teams follow a proven path to success and will increase the productivity of team members on their assignments while maintaining the quality of the work. Project governance also allows for the development of repeatable processes that will save time and money for future projects. You also want to have a solid business process strategy that has been approved and vetted by all stakeholders at every point within the life cycle of the project. This ensures no stone that can impact the project timeline, budget and ultimate success and quality of the project is left unturned.

Thanks, Neil!

More about my interviewee:

Neil Stolovitsky has 10 years of IT experience with end-user, consulting, and vendor organizations, along with extensive expertise in business development, software selection, and channel strategies. Neil is a Senior Solution Specialist with Genius Inside and can be reached at [email protected]

There’s been an interesting discussion on LinkedIn recently, in the BCS Project Management Specialist Group forum.  Members have been debating the hidden costs of projects.

Once you have a few projects under your belt, you’ll find it easy enough to work out what your project is going to cost – especially if you do the exercise with your project team.  The costs we focus on tend to be the things that we actually have to buy in order to deliver the project successfully, like new computers.

There are a host of things the LinkedIn group has come up with that are overlooked. For example, do you routinely factor in costs for marketing and advertising?  What about database and server licensing (even if you remember client licences)?

Here are some other items that you might want to double check are included in your next project budget:

• Training
• Internal communication and marketing materials, for example posters for the launch of your project
• Redundancy payments for people leaving the company as a result of your project
• Room hire for off-site meetings (and the associated costs of feeding everyone during the lunch break)
• Travel costs
• Decommissioning costs for wrapping up defunct servers or software
• Costs for end of project party!

What else do you include, that other people might not always remember?
 

The holidays are over and we’re into the final stretch before the milestone of year end.  This is a great time to get your project financial records in shape and set up systems to help you breeze through the end of year demands from your corporate finance people.   Today I’m looking at filing systems.

A flexible filing system will help you feel more organised and on top of the financial details.  Your files can then easily be archived at the end of the project or handed over to the operational team.

You need:

• Somewhere to store paper documents:  ring binder with dividers per project or hanging folders.
• Somewhere to lock away paper documents: filing cabinet, lockable desk drawer etc.
• A place to store electronic documents, preferably on a networked drive so if your PC or laptop breaks your files are not lost.  This networked drive should not be available to everyone.  Some (if not all) of your financial records will be sensitive, and should not be shared.
• A method of scanning in paper documents for electronic storage.

Keep these in paper format:

• Signed copies of contracts including appendices and amendments
• Any insurance policies you have set up as part of the project
• Escrow agreements
• Signed copies of change control notifications to contract terms

Keep these in electronic format:

• All the above – scanned in and stored electronically with the rest of your project files
• Service level agreements and other contract appendices – keep paper copies as well.  The electronic records will be good for easy reference
• Purchase orders
• Invoices
• Quotes
• Contact details for Accounts Receivable, Account Managers and other key financial contacts at your suppliers

Shred these:

• Paper copies of purchase orders and invoices – your corporate finance team responsible for Accounts Payable will also store copies, so you don’t need these
• Paper copies of quotes, once you have stored a copy electronically

Be especially careful with these:

• Financial records relating to project team members.  

If your project team members work for you, you’ll probably already have visibility of their salaries, expenses and bonus arrangements.  Don’t lump all this in with your ‘project’ records.  If the project team works for someone else who has asked for your input to their performance review to award a bonus, or you are responsible for their expenses or timesheets, don’t store this with the project records either.  Create a separate, private, ‘Personnel’ filing system for this type of sensitive record.
 

There’s a lot around at the moment about green project management.  It’s a good thing: we could all benefit from living and working in a more sustainable way.  However, selling that to senior management can be difficult, so is there a financial benefit to being green?  I spoke to environmental and management experts Rich Maltzman and Dave Shirley, authors of Green Project Management, which is published this month.

Rich, Dave, how do green project management practices help businesses from costing the earth?

To best answer that question, we tried to first answer the question, “what are green project management practices”?  Green project management is not a new discipline, but rather the intertwining (or intersection if you will) of green business practices with project management discipline.  By nature, project managers manage limited resources,cost and time, and it also includes the earth’s limited resources, fossil fuels, water, and other things we take from the earth.  By viewing their project through an environmental lens, making sure that resources like energy are conserved throughout a project, project managers can conserve those scarce natural resources and reduce what we take from the earth.

Right, so through taking an environmentally-aware approach to projects we can make a contribution to being green.  Convincing others that this is worthwhile goes further than just ‘doing the right thing’.  Is there a money saving benefit to being green?  How does it manifest itself?

The short answer is yes there is a benefit to being green and it manifests itself as cash!  One only has to look to Interface Global (worldwide leader in modular carpets) and Ray Anderson, its founder, who we consider one of the green business gurus.  His aim is to be sustainable in all its dimensions by 2020.  According to our research, “the company started with projects focused on waste reduction, considering the reuse of everything from carpet scraps to industrial effluent, which immediately led to savings—more than $60 million in the first three years.”  You can read more about Interface Global here.

Wow!  That’s a lot of money to be saving.  We should be including green savings in all our project business cases.  What’s your top tip for project managers who want to employ green project management practices on their next piece of work?  Where do you start?

Rich says:

Let me answer both questions at once. Start with the Environmental Management Plan and/or the environmental policy statements of the enterprise.  Like a project manager draws power from their project charter, the PM who is trying to increase greenality on their project must draw power from the company’s mission to reduce its carbon footprint, reduce waste, and whatever other aspects of corporate social responsibility fit into your piece of work.
So the tip is to connect your project’s charter and its resulting work statements to the Environmental Management Plan of the company, which should be conveying the rationale that to excel in this area is actually a benefit to the company’s bottom line.

And, if your company is lacking in that area – become its champion!  After all, projects are all about change.  Be that change.

Dave says:

Well, I’ll be a little more expedient (or should I say a lot more).   You start with our book, Green Project Management; it will give you insights into all of the things Rich has said above, as well as an understanding of your stakeholder’s green drivers, green project fundamentals, lean and green,  takes a look at the companies we believe are “At the Top of Their Game” and more.  It is a quick read, but will be the project manager’s starting point to affect the greening of their “next piece of work”.

Rich, you mentioned the word greenality.  What’s that?

Greenality is an attribute.  It’s a less clumsy way of saying that an organisation is “greening up”.  In fact, if you look around the literature, and the web, you’ll notice a lot of quotation marks around the word green or greening. To us, that says that people are not comfortable using the actual words.  That implies there is a missing word.  Otherwise, why the “quotation”  “marks”?

Good point!  So where did the word greenality come from?

We created the word by smashing two known words – which need no quotation marks – together.  Those two words are green and quality.  Quality, as we know, is built in, not bolted on, to our projects.  It’s in the fabric of what we do, always aimed at meeting or exceeding customer requirements.  The green we understand it is focused on sustainability, the environment, on reducing waste.

So by putting the words together we have a definition for Greenality which goes something like this:

Greenality (project): The degree to which an organization has considered environmental and sustainability factors that affect its projects during the entire project lifecycle and beyond. It contains two important aspects: (1) minimizing the environmental impacts of projects (this includes efforts to simply run the project more efficiently and effectively) and (2) minimizing environmental impacts of the product of the project. Like quality, greenality must be designed-in, not inspected-in.
Greenality (general): The degree to which a set of inherent characteristics fulfills environmental and sustainability requirements. Like quality, greenality must be designed-in, not inspected-in.

This definition is actually up for editing at a non-profit site called Open4Definition.org.  You can join a project to help refine this definition on the site.

We do not yet have a scale for greenality. It is a word quite literally in its infancy. However we have seen efforts to do this on a broader scale for enterprises with examples such as the Pacific Sustainability Index, where measurements are made of the companies’ greenality by observation of their public presence on the web.  Another example is ClimateCounts.org.  We need to take this initiative which is applied to business in general, and ‘projectize’ it.  We are glad to collaborate with others to do just that.

So there is still some work to do embedding greenality as a concept and a word in our consciousness.  How sustainable is this trend?  Businesses may have high level statements on reducing their carbon footprint, but that has not filtered down to general project management practices yet.

We certainly hope that this is not a trend, but even if it is, we go back to the idea that sustainability makes good business sense even if there is not a groundswell for environmental action and responsibility.  And project managers should – by their nature (excuse the pun) – be all about reducing goldplating, reducing waste, and effective use of resources.  So we maintain that the sustainability of sustainability is sustainably sustainable

[Laughs.]  OK, thanks, guys!

More about my interviewees:

Rich Maltzman and Dave Shirley are the authors of Green Project Management and the blog Earth PM.