Managing for Savings

With a shutdown narrowly averted, managers now can settle back in to today's status quo -- striving to do more with less. With the purse strings ever tightening, the prospect of significant savings through management becomes even more exciting, and one highly relevant study shows project and program management can help substantially reduce costs.

The study, performed by the Project Management Institute, a nonprofit association of project management professionals, looked at federal programs and projects with particularly successful management practices to identify common themes and practices that can be adopted across government.

Program leaders who already have invested in project management have seen measurable results, the study showed. For example, the Army Corps of Engineers saw cost reductions of 20 percent to 30 percent by using trained program managers and a more systematic approach to supervising projects and programs.

To identify best practices, PMI collected information from 40 programs across a variety of government agencies, among them the Census Bureau, Defense and State departments, Federal Aviation Administration, Federal Highway Administration, Navy Systems Command, and U.S. Coast Guard. The institute studied diverse programs covering information technology, construction and engineering, as well as the creation of public policies and departmental procedures. Some of the programs ran for less than a year with budgets around $1 million, while others spanned five years and had multibillion-dollar budgets.

Federal program managers made it clear in the survey they are facing an unprecedentedly challenging work environment. The respondents evaluated 76 percent of the programs being studied as "above average" in terms of complexity, while identifying 84 percent as "mission critical." They said they are, more than ever, required to engage with a broad base of stakeholders on a frequent basis, and these stakeholders want innovative solutions to difficult problems, without lapses on time or budget.

To highlight the difficulty program managers are facing, one agency reported that in just two years, it logged a tenfold increase in the number of projects while budgets on some of the projects increased from $50 million to $5 billion.

Yet despite the challenges, some programs are achieving success. PMI identified the four major success factors common to these programs: active high-level executive support, a culture of communication, stakeholder engagement and agility. Combining these factors with a foundation of technical expertise creates a "ripple effect" of increased team morale and better interdepartmental collaboration, the study found.

And respondents gave concrete examples of actions other managers can employ to meet these more nebulous best practice goals. Here are a few examples:

To Create a Culture of Communication:

• Conduct monthly project management meetings to share and pilot program management tools.
• Use collaboration tools such as SharePoint to communicate each project's status across the organization. (One study participant even used closed-circuit television to broadcast project status and information throughout the organization.)
• Develop a project management council that meets monthly to review project documentation and discuss lessons learned. Extend membership of this council to all stakeholder groups.
• Make collaboration activities a part of your program/project charter and schedule.

To Garner High-Level Executive Support:

• Show the program's connection to the organization's overall vision, strategy and goals.
• Given that there are almost always stakeholders higher up the ladder than the executive sponsor for your program, leverage the executive sponsor as a connection point to these stakeholders.[[
• Once you have executive support, leverage it to encourage professional development for program management leaders and support staff and, of course, to produce continued funding.

To Garner Stakeholder Engagement:

• Start with the customer in mind. (Ask him or her to define the problem or issue to be solved. Check back with him or her about technical requirements and again when you think you have a solution.)
• Draw up a formal list of stakeholders, their groupings, requirements and dependencies.
• Develop detailed roles and responsibilities for stakeholders and include these in the program plans.

• Embrace risk management and embrace risks.
• Use a statement of objectives (SOO)-driven service contract approach that allows contractors to specify the best manner to address program objectives. (This allows for flexibility throughout the program execution.)
• Don't make project management processes so rigid that they are counterproductive and don't account for inevitable external forces.