May 13, 2008

How to Manage Projects to Reduce Travel Costs

USA Today has an article about how rising airline ticket costs -- attributed to soaring fuel costs -- is leading businesses to try and find ways to cut their travel expenditures.

The article, http://www.usatoday.com/travel/flights/2008-04-30-jet-fuel-high-fares_N.htm, says thanks to fuel costs, which are 44 percent higher than last year, fares have risen at least 18 percent. More and more airlines are forced to introduce fuel surcharges to their increasing list of airfare costs. That means businesses -- large and small -- are finding other solutions to increase sales while at the same time mitigating travel expenses.

One powerful solution is teleconferencing and online presentations. Companies such as WebEx (now owned by Cisco) and ACT Conferencing have proven technologies that are now widely used to "meet over the web". And Nortel has a product called "Telepresence" that brings businesspeople together with a life-size, full-motion cinematic view and stereo sound. It's like IMAX and Dolby Digital for business meetings.

Here are some of the changes we made at Tenrox to try and reduce travel costs:

1. Onsite versus online services

Just two years ago, I would say more than 75 percent of our implementation work was done on site and face-to-face, whether they were done in New Tork, Sydney or London. Today, our on-site activity is down to 30 percent -- at most.  So what changed?

We started to communicate with our customers about the benefits of online instead of on site services. Today we go onsite to meet our customers, the project teams, to get to know one another, to understand their needs and their business. After the initial one or two face to face meetings we have established the trust and the relationship to do much of the remaining work online. Customers love it. More work gets done faster with remote online delivery; and we are able to handle a larger number of implementations with less staff since less time is wasted on travel. Our customers win by saving on travel costs and faster service delivery, and we win by having lower turnover rates on highly specialized consultants since less travel creates a more stable and a happier career life for our service teams.

2. Project meetings

Disconnected systems and management spreadsheets lead to oganizations that often require more face to face meetings to get things done. At Tenrox, we have agreed on and implemented role-based dashboards and key metrics per department. When I come to work, I log into my portal and I can see how every team is doing. The information I look at is not coming from the team leaders or their assistants. The reports I look at are derived from data entered directly from the project contributors; managers simply have to approve/reject the data entries. Therefore the business unit performance, project costs, revenue, issues, and change requests I look at are based on actual data reported by our staff.

These reports and dashboards have virtually eliminated status report meetings. We meet to discuss strategy, to celebrate wins/review losses, and yes to review project progress; but at least in any such meetings people are not showing up with manipulated spreadsheets or to verbatim repeat what I could get from the dashboards/reports I already have access to.

Dashboards, project management reports based on live data, online approval workflows, and online collaboration technologies have reduced our G&A travel costs by at least 50% over the last two to three years. Not to mention the reduction of time and energy we wasted going over "design your own" spreadsheets in management and review meetings.

3. Combine events

Like many other companies today, we have a highly dispersed workforce. Our employees and outsourced teams work from various offices and from home throughout three continents. To make sure all of our teams are aware of the company's mission and business plan we try and bring everyone together once or twice a year in Montreal, where the company was founded and where most of our R&D staff is located. In the last few years, we have combined such all hands meetings with performance evaluations, training, company parties and picnics to try and make the trips as fun, worthwhile and productive as we can make them to be; and to avoid additional travel costs we would incur if we did some of these events separately.

These are some of the travel cost savings we have come up with. Do you have any insights to share? What are you doing in your company to try and reduce travel costs?

May 05, 2008

H-1B Visas: Look to Small Town America Before Bangalore

Responding to record demand for foreign workers and the beating of the “I can’t find enough American talent” drum by Bill Gates and other prominent business leaders, Republicans in the U.S. House of Representatives are urging Congress to raise the H-1B visa cap.

H-1B visas allow foreigners to work in the United States for up to six years to fulfill specialty positions – usually tech-related – that require at least a bachelor’s degree. To keep the loss of American jobs to a minimum, the government imposes a yearly limit of 65,000 visas with an additional 20,000 allocated to foreigners with advanced degrees from U.S. universities.

Earlier in April, the government received 163,000 requests. That means filers have a 50 percent chance of getting an H-1B worker for next year, especially since the system is designed to be random. Literally, American companies have to win the lottery to get foreign talent.

With so much demand, America must really have a critical technology talent crunch, right? My answer is “No.”

Yes, India and other developing countries are outpacing us in the engineering department. And yes, some skill sets are hard to find here. But I believe there is far more talent in the United States than advertised. One needs only to look at the dot-com crash of the early 2000s. As American high-tech workers lost their jobs in droves, H-1B applications still poured in.

And this continues as the country is facing a weakening economy.

Proponents, however, say a weakening economy is when you need more – not fewer – foreign workers because American companies need to be extra competitive to survive. Large tech firms and groups such as the American Electronics Association are pushing for increased caps and new rules, saying American competitiveness is hurt because the country does not have enough high-tech workers. Said Gates to a recent House panel: “The current base cap of 65,000 H-1B visas is arbitrarily set and bears no relation to the U.S. economy’s demand for skilled professionals.”

As a result of the growing support, this could be the year when more liberalized H-1B laws are passed. There currently are several bills floating around, including the “SKIL Act,” which would raise the number of visas to 115,000 and increase the cap by 20 percent each year afterward.

That would be a mistake. Yes, we are living in a flat world and many companies have to bring in foreign talent. But another big reason why these companies want more H-1Bs is simply to import cheap labor. Rules on H-1B wages are hardly ever enforced. And employees from India and China are happy to work for wages below American standards.

In my recent travels across small-town America, I have seen first hand the high number of skilled workers – American workers – who want to be employed in technology fields. I see many of them who want to be designers, programmers and developers. There are states such as the hard-hit Michigan and Wisconsin that have plenty of young college graduates who would be great candidates for Microsoft, Google and other high-tech firms such as Tenrox.

Why do we want more workers from Bangalore? We should be looking to Detroit, Madison and Milwaukee first.

You want more students to take high-tech courses in school? How about offering fewer jobs to foreigners? Let’s send a message to young Americans that high-tech careers are safe – as safe as any job can be in a flat world – as long as they train to compete in that flat world.

What Microsoft and others should be doing is setting up more development centers in hard-hit markets – whether they’re hit by lost manufacturing jobs or the real estate crisis. Not only would those companies get a workforce willing to work, but they’d get employees cheaper than in places such as Redmond or Mountain View. Government can help by providing research and development tax incentives for companies that invest in small town America; just look at Canada's successful R&D tax credit program as an example of a model that can be adopted for America's hard hit states.

Global IT giant Wipro is taking a page of that strategy. The company – one of the world’s largest offshorers – is currently building software development facilities throughout the United States that will employ hundreds of recent college graduates. Wipro CEO Azim Premji, realizing that it’s good business to be developing in the places one is selling, trains the employees in intensive programs and puts them right to work. We’re not talking six-figure salaries here. But these are 20-somethings who are getting valuable educations.

So, what’s the best part of these two strategies? Premji would not be reversing a 20-year offshoring model if he didn’t believe it wasn't good for shareholders. Ultimately, though, more American IT workers will be entering the market. That means companies can rely less on going through government bureaucracy to find the world’s top talent and rely more on fostering technology talent right here in the United States.

I’d like to hear your thoughts. Do you think the United States really does have a critically-short amount of high-tech workers? Or do you think the claim is overblown? What do you think should happen with the current H-1B system in today’s flat world?

April 30, 2008

One-Tunnel Communication in Project Workforce Management

I enjoyed this blog post on the Lighthouse Consulting blog, originally written by author Larry Wilson, entitled, "The Two-Tunnel Trap."  Wilson tells the story of engineers digging a tunnel through a mountain: one team on one side, and one team on the other, with the objective to meet squarely in the middle.  If successful, these teams will dig one continuous tunnel--but if not, they will dig two tunnels leading into the middle of the mountain.

Wilson prescribes a formula of "simple, familiar, and dramatic" to help people avoid two-tunnel communications.  For regular speaking or writing, this is a winning formula for communicating new ideas.  And for the business communications that we generate in our project-based work, I add "organized" to the list. 

By "organized," I mean "ordered and structured in a fashion that allows team members to find what they seek."  Without organization, teams have no platform for sorting through or communicating the many events and messages that are part of a project.  This requirement is easy to grasp, but difficult to deliver without one centralized system.  I emphasize "one" because multiple systems are like multiple tunnels into the mountain.

In the extreme, multiple disconnected systems result in a MESS (meetings, email, and spreadsheets) that is (to use Larry Wilson's words) neither simple, nor is it familiar to all users--although the results can be dramatic in that they lead to chaos and drama in the workplace.

Even in our own company, we have seen many tunnels into the mountain. When each manager used to attend a status meeting with his or her own spreadsheet of project information, costs and revenue, each group was able to show success and profit.  However, in the aggregate, when you look at the consolidated picture it was never as rosy as the individual managers had painted it with their spreadsheets. It was amazing how people could interpret and manipulate the data.  As a customer put it: "Many business executives and project managers are experts at the movement of costs, but not the reduction of them."

This is just an example of how one centralized project workforce management system enables the members of a team to dig one, and only one, tunnel through the mountain.  A unified platform is the key to avoiding slow (or fast) death by manipulated spreadsheets; and making sure that communication--in the sense that we communicate in business--connects people on all sides.

April 28, 2008

Rise of the Project Workforce, Chapter 12: Travel and Entertainment and Expense Management

For more details about the benefits of enterprise travel and entertainment expense management as a part of Project Workforce Management, see Rise of the Project Workforce.

Travel and entertainment (T&E) is the second largest cost for most organizations, after labor. Yet it is frequently managed manually on paper and spreadsheets. Automating T&E not only reduces administrative effort, but it also simplifies the allocation of costs, expedites billing, and provides critical information for enterprise-wide reporting. Companies can save not just thousands, but millions of dollars in administrative costs and boosted productivity. But moreover, automated and integrated T&E helps prevent data entry errors and omissions, “rogue” spending, and even fraud and the resulting legal liability.

T&E expenses generally follow an expense management cycle, which consists of the initial recording of expense data, approval and review, forwarding to payroll/accounting for processing, reporting of billable expenses to the billing manager, reporting to A/P and A/R for financial reporting, and inclusion in executive dashboards and reports.

To ensure that this data gets reported appropriately, and that users at the appropriate levels see only the data they are authorized to see, an integrated and automated solution is key. Such a system can be configured to accommodate scenarios such as multiple levels of approval, late submissions and approvals, and automatic approvals of certain types of expenses. It can also accommodate line item approvals, and requests for expenditures, such as travel, that may need approval before the fact.

Automated T&E has become essential for companies that operate across multiple currency and tax jurisdictions. More frequently, employees, their employers, and customers are in different countries with different currencies, subject to different tax laws. The automated system facilitates reporting, reimbursement, and compliance issues that might otherwise become severely delayed when processed manually.

T&E systems, as a part of project workforce management, ensure that project accounting is accurate, corporate policies are followed, and office expense reports are accurate and timely. Offline as well as online expense reporting systems provide employees who travel with easy-to-use tools to avoid the frustration, delays, and inaccuracies of manual systems.

April 24, 2008

Simple Software: A Requirement for Project Workforce Management

I enjoyed this insightful article on SandHill.com, written by Anthony Deighton: "Simplicity: What's Next in Business Software."  Deighton explains that the simple and straightforward user interfaces that software users have come to expect on the web will, and must, influence enterprise software investments. 

Deighton explains that enterprise software (such as traditional ERPs) became complex by promising managers the ability to "command and control" the work environment.  But newer, smaller, "grassroots" applications are changing the end-users' expectations and behavior.  He writes:

The “consumerization” of enterprise software is rapidly underway. In today’s Web 2.0 and Internet-driven world, consumers download applications and use them on their own. Their expectations are that the software they use at work will be equally powerful, simple and engaging.

The world of Project Workforce Management is a collaborative one.  To be effective in deploying and managing these solutions, we promote and depend upon on very high end-user adoption--from the project workers who report their time, expenses, issues and project status, to the executives who analyze that data on their dashboards. 

Therefore, Deighton's message is a critical one: "Simplify or Die," and I agree.  The huge command-and-control enterprise systems with long, expensive implementations are already the dinosaurs of our industry. The software we use at work has to be fun, simple and should not require a user's guide. 

However, as Deighton states, simple does not equal "lite."  Vendors who can offer solutions that are simple and fun to use, yet powerful in their functionality--and the most effective at solving real business problems--will be rewarded in the software marketplace.

April 21, 2008

Microsoft Vista: Innovation for Innovation's Sake?

In BizJournals, Brad Patten warns that Microsoft will stop selling Windows XP on June 30.  He states that Microsoft is about to put many businesses between a rock and hard place, and I agree.  "...There is no compelling reason to upgrade. Vista isn't more stable, faster or easier to use."

Here is another article on CNN about how users are resisting the forced upgrade: http://www.cnn.com/2008/TECH/04/14/microsoft.xp.ap/index.html?iref=newssearch

XP has been stable and reliable.  Vista looks cute/fancy, but it does not provide enough new features to make a change from XP worthwhile.  In my opinion, Vista is an "innovation" that is driven only by the desire to appear innovative--not out of any solution to a compelling business need.  As a business person, it is difficult for me to justify the expense and effort involved in upgrading--except that Microsoft is forcing our hand.

As I discussed in this post about innovation among CIOs throughout the world, the "next new thing" is not always a good business decision.  The reluctance of businesses to embrace Vista further validates this observation.

While US companies resist the change from XP to Vista, companies in rapidly developing areas, such as China, will buy new PCs that are only available with the Vista operating system.  If you follow the same logic as Accenture did in its recent study, this indicates that Chinese are more innovative than we are.  But that logic is faulty.  When we meet the needs of our customer in the most efficient and cost-effective ways possible and we offer something worth investing in right now, that is true innovation.
 

April 18, 2008

Rise of the Project Workforce, Chapter 11: Enterprise Timesheet Management

For more details about the benefits of enterprise timesheet management as a part of Project Workforce Management, see Rise of the Project Workforce.

Enterprise timesheet management is the centralization and streamlining of all time data processing for an entire organization.  It covers both project and non-project work, and paid and unpaid leave.  Despite the many benefits of enterprise timesheet management—including reduction of compliance costs and administrative overhead, improved project visibility, and accelerated billing—automation of the timesheet management cycle must be approached carefully to ensure widespread adoption across the organization.

Enterprise timesheet management addresses the requirements of labor law compliance, managing leave time accrual, scheduling shift work, tracking project time as well as non-project time, streamlining billing, and providing analytics.  Through the use of differentiated time, also known as activity-based costing, time is recorded down to the task level, which provides the detail necessary to meet these requirements.

The main benefits of treating time and attendance as an integral part of Project Workforce Management are to provide a single system to track employee availability, skills, work time, pay, project and non-project work, leave, expenses, billing, and other related processes; it also centralizes reporting and and analysis across all work groups.  Other measurable benefits include reduced payroll processing time, reduced misappropriation, detection of absenteeism and erroneous entries, and reduced timesheet review time.  For project-based organizations, enterprise time management has the added benefits associated with project planning and project status reporting.

Managing time data is generally described by a cycle that describes how time is tracked, reported, approved, and processed:

  • Employees, consultants, and field workers enter time into the system.
  • The timesheet is sent to the appropriate person(s) for review.
  • Once approved, the timesheet is forwarded to payroll/accounting for processing.
  • Any billable work is reported to the billing manager for invoicing.
  • Project plans and schedules are updated to reflect the actual work done; project managers can measure earned value and actual project performance.
  • Detailed or summary cost is sent to accounting for financial reporting.

Only through an integrated, enterprise-wide system—integrated with workforce planning, project planning, payroll, billing, accounting, and CRM—is  the entire enterprise timesheet management cycle possible.  Furthermore, a configurable enterprise-wide system is necessary to accommodate the various timesheet approval processes and workflows required in today’s workforce.  These workflows may be simple or complex, and may include multiple review cycles, line-item approvals, and leave requests.

April 17, 2008

Wanted - Growth Opportunities

Jim Carroll, Futurist, and Trends and innovation Expert, who delivered the keynote at the Tenrox User Conference in the fall, has published a new document on his web site, entitled "Where's the Growth?"  This is a good read for project managers who are taking charge of their own careers and seek to keep their careers on the leading edge, even in the "economic downturn" that so many experts are forecasting.

Carroll outlines a number of industries and ideas that point toward growth in the coming months and years.  Whether the economic indicators point upwards or downwards, the skills for survival in a flat world remain the same.  They include the ability to learn new things, and to adapt to the ideas and skills where there is growth.

I continue to recommend that today's professionals should commit to projects and not to companies, even though a recession might tempt us to focus on the promise of a steady paycheck.  The real "steady paycheck" comes from your ability to deliver successful projects, not from your reliance on any one company. It makes sense to stay where you are as long as the projects you work on truly challenge you and make you more competitive.

April 14, 2008

Top Performing IT Groups Practice Project Workforce Management

A study by The Hackett Group, covered here on the CIO Magazine blogs, describes four qualities of a top performing IT department.  As is often the case, such studies validate the case for a Project Workforce Management approach in IT. 

The four qualities are (as excerpted from the CIO Magazine post by C.G. Lynch):

1) Investment allocation. The IT department invests less in existing infrastructure and utilities, and instead focuses on innovation and improvement.

2) Project pipeline. Top performers don’t invest in just any project. They are incredibly discerning, which allows them to keep the project list short and deliver projects on time.

3) Delivery performance. When a project gets started, it gets finished in the proposed time period.

4) Application portfolio management. You manage all of your existing systems well and efficiently (so well that they're just "there," rather than ever really being a problem or hindrance to the business). This allows you to focus on new, innovative apps that come down the pipeline.

Delivering on #2 and #3 depends on IT's ability to intelligently prioritize and select their IT projects, and then manage those projects to success, two popular topics on this blog and in Rise of the Project Workforce.

The mentions of "innovation" and "innovative apps" in #1 and #4 make an interesting contrast to Accenture's recent conclusion that many IT departments tend to lag in innovation--but the top performers will discern which innovations are appropriate and provide real benefits to their organizations.  Again, intelligent project prioritization and selection supports this effort.

Despite the many studies like this one, it is alarming how many IT departments and other project-based teams still manage their people and projects using the MESS (meetings, email, and spreadsheets), or use in-house developed or non-integrated point solutions.  Even for smaller teams, the emergence of on-demand Project Workforce Management solutions makes this technology accessible to IT departments who seek to be top performers.

April 11, 2008

Rise of the Project Workforce, Chapter 10: Project Planning

For more details about how to implement effective project planning using Project Workforce Management, see Rise of the Project Workforce.

Any nontrivial project needs a plan—especially if it requires complex tasks and resources.  The enterprise project planning component of Project Workforce Management interacts with workforce planning and time and expense tracking.  It also generates earned value reports, which measure the true value created during project execution in any given point in time.  Together, these features keep projects on track and on budget throughout their life cycles.

The project planning process begins after project initiation, during which requirements and scope are defined.  The deliverables of project planning include:

  • Project Work Breakdown Structure (PWBS): a hierarchical grouping of the project’s tasks and milestones.
  • Gantt Chart: A display of the PWBS showing task dependencies, scheduling constraints, task durations, percentage complete, and the critical path.
  • Resource Breakdown Structure (RBS): a hierarchical list of the personnel on the project, including functional groups , skill sets, and roles.
  • Reports: Real-time project earned value, project status, budget, and cost/revenue reports, based on data collected during project execution.

Earned Value

Earned value reporting provides simple but powerful answers to questions such as: “How much is it going to cost to finish the project based on current progress?” and “What are our problem areas? And why?”  Earned value analysis calculates many indicators that are used to directly answer these questions.  These indicators include: Budgeted Cost of Work Scheduled (BCWS), Actual Cost of Work Performed (ACWP), Cost Variance (CV), Schedule Variance (SV), and To-Complete Performance Index (TCPI).

Calculating these indicators provides a systematic method for comparing budgets to actual for the parts of the project that have actually been completed, so that performance can be measured throughout the delivery of the work.  When budgets and costs are attributed to each element of the PWBS, then these can be evaluated to determine which tasks and milestones are on track, and which need additional support—while it is early enough to take corrective action.  Earned value analysis can even calculate the amount of effort required to get a late project back on schedule, and where that effort needs to be applied.

Budget and Status Reports

The project planning tool allows the project manager to compare budgets, estimates and actual for individual tasks, milestones, or the total project.  Automated alerts, integration with timesheets, and a workflow engine are a few of the features that tool provides to keep project managers abreast of all aspects of the project’s progress. 

Through effort tracking (enabled by integration with timesheet data), estimated time to complete, and written status reports, project contributors can use the project planning tool to communicate their progress to the project manager.  The tool should also support schedule management that is based on milestones as well as deliverables.

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If your organization needs to know more about managing people and projects in a flat world, book Rudolf Melik for a keynote or seminar.

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