Friday, 16 May 2014

Does Effective PM = Positive Impact on P&L and Balance Sheets?

Most of us are all too familiar with the benefits of effective project management. Here's nine of them:
  1. Structured and consistent approach in managing and executing projects in line with project management triple constraints & customer / stakeholder expectations
  2. Delivering projects in line with Quality of Delivery, Cost / Budget, and Time, and aligning projects to business strategy, justifying business cases, and stakeholder buy-in
  3. Opportunity to expand and achieve better efficiency in delivering services
  4. Improved / Increased / Enhanced Customer Satisfaction
  5. Alignment of Projects with company strategy and business objectives
  6. Enhanced Effectiveness in Delivering Services
  7. Improved Growth and Development within your Project Management Teams
  8. Greater Standing and Competitive Edge
  9. Increased Risk Assessment, Strengthened Quality Control and Overall Quantity of Delivered Projects
But what about the impact that effective project management can have on a company's P&L? I believe this is a point that is often overlooked, and has become a source of contention about the justification of PMOs and their direct impact on the business. According to recent statistics, the average life-span of PMOs has regressed to just four years due to executive management's perception (rightly or wrongly justified) about their direct impact on business results and business objectives.

Long story short...


Effective Project Management can have a direct impact on:
  • Revenue (from service delivery projects)
  • Direct Cost of Sales (effective deployment and pricing of service delivery resources)
  • Indirect Cost of Sales (effective deployment of project management outsourcing / subcontracting)
  • Operating Expenses (effective mix of in-house project management resources, and outsourced project management resources in times of excessive demand to deliver projects)
  • CAPEX (ROI from capital asset project expenditures can be substantially increased through effective project, programme, and portfolio management)
What are your thoughts? Is the impact of effective project management on P&L and Balance Sheet transparent in your company?

We look, in our client engagements, to ensure that with increasing organisational maturity levels, Programme Offices, or PMOs, are fully integrated in the organisation, not only as project approving, monitoring, and executing bodies; but as functionaries & change architects / agents, as a catalyst and source of "out of the box thinking". It is an extended arm of the executive committee for strategy execution, and the arm of an organization that wants to have a direct impact on business results & objectives.
We help our clients implement project management globally or locally across the organization thereby creating a strategic value chain that enhances competitive advantage through:
  • Improved organizational effectiveness / responsiveness to change management, restructures, in delivering mission critical internal and external (customer) projects within time, scope, and cost constraints — higher levels of customer satisfaction and customer retention!!
  • Speed of execution of strategic initiatives, in post-acquisition integration of structures, systems, and processes - improved time to market!!
  • Improved skills of project management resources, effective organizational structures (e.g. PMO), project transparency, and project portfolios aligned to Strategy, and Business Objectives.
  • Improved basis for valuing, prioritizing, and assessing cost, risk, benefits of projects and programs.
  • Substantial savings in Operating Expenses in utilizing experienced PM-Partners certified project management resources on an "as needed" basis.
So what can our project management training, consultancy and delivery services do for your business? Get in touch today.
Lee Sargeant, p3m global

Lee Sargeant is the Managing Director DACH Region (Germany, Austria, Switzerland) for p3m global.