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Page 11Current Drivers of Project Management

PowerPoint

Project management is no longer a special­need management. It is rapidly becoming a standard way ofdoing business. See Snapshot from Practice: Project Management in Action: 2013. An increasingpercentage of the typical firm's effort is being devoted to projects. The future promises an increase in theimportance and the role of projects in contributing to the strategic direction of organizations. Severalreasons why this is the case are briefly discussed below.

Compression of the Product Life Cycle

One of the most significant driving forces behind the demand for project management is the shorteningof the product life cycle. For example, today in high­tech industries the product life cycle is averaging 6months to 3 years. Only 30 years ago, life cycles of 10 to 15 years were not uncommon. Time to marketfor new products with short life cycles has become increasingly important. A common rule of thumb inthe world of high­tech product development is that a six­month project delay can result in a 33 percentloss in product revenue share. Speed, therefore, becomes a competitive advantage; more and moreorganizations are relying on cross­functional project teams to get new products and services to the marketas quickly as possible.

Knowledge Explosion

The growth in new knowledge has increased the complexity of projects because projects encompass thelatest advances. For example, building a road 30 years ago was a somewhat simple process. Today, eacharea has increased in complexity, including materials, specifications, codes, aesthetics, equipment, andrequired specialists. Similarly, in today's digital, electronic age it is becoming hard to find a new productthat does not contain at least one microchip. Product complexity has increased the need to integratedivergent technologies. Project management has emerged as an important discipline for achieving thistask.

Triple Bottom Line (planet, people, profit)

The threat of global warming has brought sustainable business practices to the forefront. Businesses canno longer simply focus on maximizing profit to the detriment of the environment and society. Efforts toreduce carbon imprint and utilize renewable resources are realized through effective project management.The impact of this movement towards sustainability can be seen in changes in the objectives andtechniques used to complete projects. See Snapshot from Practice: Dell Children's Becomes World's First“Green” Hospital.

Page 12SNAPSHOT FROM PRACTICEProject Management in Action: 2013

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© Frederic J. Brown/AFP/Getty Images

Businesses thrive and survive based on their ability to manage projects that produce products andservices that meet market needs. Below is a small sample of projects that are important to theircompany's future.

ORGANIZATION: PROCTER AND GAMBLEProject: Global Ordering, Shipping, and Billing Project

The project goal is to improve customer service, processes, and organization structure. The global teamrelied on virtual communication, while closely managing risk and milestone dates. The new system isdesigned to allow P&G to make real­time decisions, enabling the company to collect and respond toconsumer/retailer feedback to create more compelling promotions to increase sales. The system shouldalso improve efficiencies in supply chains by, for example, identifying the best warehouses to shipproducts to.

—PMI Today, 2012 PMI Project of the Year Finalists, December 2012, p. 7

ORGANIZATION: OAKLAND A'S BASEBALL TEAMProject: Cisco Stadium

In November 2006, the future of the Oakland A's looked bright as the team announced plans to build anew ballpark in Fremont, CA. Upon announcing plans to build a ballpark, the Oakland A's sold thenaming rights to the ballpark to Cisco Systems for $4 million/year over 30 years. The ballpark designmimicked classic ballparks of the past, while combining the most advanced technology in the world.Those plans have since been derailed as opposition increased from major retailers and homeowners nearthe stadium site. The A's have spent the past five years pursuing other options including building theballpark in Oakland, near the coliseum, or possibly in San Jose, CA. The A's need the new stadium toturn around lagging attendance, which has been at or near the bottom among major league baseball clubs.

—Oakland Tribune, 8/1/12

Page 13ORGANIZATION: CHINA SUNERGY CO., LTD

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Project: Sanliurfa Solar Park, Turkey

The Chinese company, Sunergy, has entered into a joint agreement with Seul Energy, a leading solardeveloper, to develop a 500kw solar park in Sanliurfa, Turkey. The plants will incorporate state of the arttechnology and new types of solar cells. The project is the beginning of an ambitious program designedto meet the expected growth in demand for energy in Central Asia.

—www.prnewswire.com/, accessed 1/5/13

ORGANIZATION: THE WALT DISNEY COMPANYProject: Star Wars Episode 7

Disney spent over $4 billion to purchase Lucasfilm, which included exclusive past and future rights tothe popular Star Wars franchise. Preproduction work on the newest Star Wars feature is scheduled tobegin in 2013 with a projected release date in 2015. The Star Wars investment is seen by industry expertsas an effort by Disney to broaden its pop culture reach and re­establish Disney films in the sci­fi/fantasygenre after the failure of space epic John Carter and Mars Needs Moms.

—businessweek.com, 11/11/12

ORGANIZATION: DISH NETWORKProject: Hopper

Dish Network made a splash at the 2013 Consumer Electronics Show by showing off the latestgeneration of Hopper, a whole­home HD DVR system. Hopper includes commercial skipping technologyand the ability to move programs onto iPads and other mobile devices. The announcement cementedDish's position as one of the leaders in the “TV Everywhere” movement in which favorite shows andmovies can be accessed from any device at any location. Dish is counting on Hopper and related productsto compete against DirecTV and deep­pocketed cable and telecom providers.

—Ces.cnet.com, 1/8/13

ORGANIZATION: BILL & MELINDA GATES FOUNDATIONProject: Drought­Tolerant Maize for Africa

The goal of the project is to help farmers in Sub­Saharan Africa living in drought­susceptible areasincrease their maize (corn) productivity. Getting the improved maize varieties into the hands of Africanfarmers is the product of over two decades of research and involves a broad coalition of partners, fromgovernments and NGOs to seed dealers and farmers. More than 2 million smallholder farmers in Africaare already realizing the benefits of higher yields. By 2016, the drought­tolerant maize project isexpected to boost maize yields by as much as 30%, benefiting up to 40 million people in Africa.

—gatesfoundation.org, accessed 1/9/13

ORGANIZATION: FIAT, ITALYProject: 2013 Fiat 500 EV

Available Spring 2013, the EV is a totally electric version of the popular Fiat 500 line. The EV sports a100­hp electric motor powered by lithium batteries with 87 miles of electric range. Fiat needs to provethat it is a forward looking company and provide another reason to buy the 500 other than styling or thesales curve will plunge once the cuteness fails. Success will depend upon overcoming customer rangeanxiety and the risk that governments will stop supporting electric vehicles with attractive subsidies.

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—caranddriver.com, accessed 1/20/13

ORGANIZATION: SONY, JAPANProject: Sony PlayStation 4 (PS4)

It's been seven years since Sony released the highly successful PlayStation 3, and the Internet is buzzingwith rumors of a fourth­generation PlayStation. The PS4 reportedly will feature a tablet­style controllerand state of the art graphics. At stake is Sony's position in the $10 billion­plus gaming industry.

—sonyps4.com, accessed 1/11/13

Corporate Downsizing

The last decade has seen a dramatic restructuring of organizational life. Downsizing (or rightsizing if youare still employed) and sticking to core competencies have become necessary for survival for manyfirms. Middle management is a mere skeleton of the past. In today's flatter and leaner organizations,where change is a constant, project management is replacing middle management as a way of ensuringthat things get done. Corporate downsizing has also led to a change in the way organizations approachprojects. Companies outsource significant segments of project work, and project managers have tomanage not only their own people but also their counterparts in different organizations.

Page 14SNAPSHOT FROM PRACTICEDell Children's Becomes World's First “Green” Hospital*

Dateline 1/7/2009, Austin Texas: Dell Children's Medical Center becomes the first hospital in the worldto receive platinum LEED (Leadership in Energy & Environmental Design) certification. Platinumcertification is the highest award granted by the U.S. Green Building Council.

Dell Children's occupies nearly one­half million square feet on 32 acres that were once part of Austin'sold Mueller Airport. Its environmentally sensitive design not only conserves water and electricity, butpositively impacts the hospital's clinical environment by improving air quality, making natural sunlightreadily available, and reducing a wide range of pollutants.

In order to receive LEED certification, buildings are rated in five key areas: sustainable site development,water savings, energy efficiency, materials selection, and environmental quality. Listed below are someof the accomplishments in each LEED category:

Sustainable Site

47,000 tons of Mueller Airport runway material was reused on site.

About 40 percent fly ash instead of Portland cement in concrete yields a drop in carbon dioxideemissions equivalent to taking 450 cars off the road.

925 tons of construction waste was recycled on site.

Water Efficiency and Water Conservation

Reclaimed water is used for irrigation; xeriscaped landscaping uses native plants, which require

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less water.

Low­flow plumbing fixtures.

Energy Efficiency and Energy Conservation

An on­site natural gas turbine supplies all electricity, which is 75 percent more efficient than coal­fired plants.

Converted steam energy from a heating/cooling plant supplies all chilled water needs.

Indoor Environment Quality and Lighting

Most interior spaces are within 32 feet of a window.

Motion and natural light sensors shut off unneeded lights.

Conservation of Materials and Resources

Use of local and regional materials saves fuel for shipping.

Special paints and flooring emit low levels of volatile organic compounds (VOCs).

“Even before the first plans were drawn up, we set our sight on creating a world­class children's hospital,and becoming the first LEED Platinum hospital in the world was definitely part of that,” said RobertBonar, president and CEO, Dell Children's Medical Center of Central Texas. “Our motivation to pursueLEED Platinum was not just environmental. Being a ‘green’ hospital has profound, measurable effect onhealing. What's good for the environment and good for our neighbors is also good for our patients.”

* Austin Business Journal, 1­11­2009; www.dellchildrens.net/.

Increased Customer Focus

Increased competition has placed a premium on customer satisfaction. Customers no longer simply settlefor generic products and services. They want customized products and services that cater to their specificneeds. This mandate requires a much closer working relationship between the provider and the receiver.Account executives and sales representatives are assuming more of a project manager's role as they workwith their organization to satisfy the unique needs and requests of clients.

Increased customer attention has also prompted the development of customized products and services.For example, 15 years ago buying a set of golf clubs was a relatively simple process: You picked out aset based on price and feel. Today, there are golf clubs for tall players and short players, clubs for playerswho tend to slice the ball and clubs for those who hook the ball, high­tech clubs with the latestmetallurgic discovery guaranteed to add distance, and so forth. Project management is critical both todevelopment of customized products and services and to sustaining lucrative relationships withcustomers.

Page 15Small Projects Represent Big Problems

The velocity of change required to remain competitive or simply keep up has created an organizationalclimate in which hundreds of projects are implemented concurrently. This climate has created a

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multiproject environment and a plethora of new problems. Sharing and prioritizing resources across aportfolio of projects is a major challenge for senior management. Many firms have no idea of theproblems involved with inefficient management of small projects. Small projects typically carry the sameor more risk as do large projects. Small projects are perceived as having little impact on the bottom linebecause they do not demand large amounts of scarce resources and/or money. Because so many smallprojects are going on concurrently and because the perception of the inefficiency impact is small,measuring inefficiency is usually nonexistent. Unfortunately, many small projects soon add up to largesums of money. Many customers and millions of dollars are lost each year on small projects in productand service organizations. Small projects can represent hidden costs not measured in the accountingsystem.

Organizations with many small projects going on concurrently face the most difficult projectmanagement problems. A key question becomes one of how to create an organizational environment thatsupports multiproject management. A process is needed to prioritize and develop a portfolio of smallprojects that supports the mission of the organization.

In summary, there are a variety of environmental forces interacting in today's business world thatcontribute to the increased demand for good project management across all industries and sectors. Projectmanagement appears to be ideally suited for a business environment requiring accountability, flexibility,innovation, speed, and continuous improvement. These environment and other factors have created thenecessity for major oversight of all organization projects.