Archive for April, 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.

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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.

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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.

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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.

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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.

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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.

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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.

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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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Offshoring Tech Jobs: Opportunities for the Innovative Workforce

An article from the W.P. Carey School of Business at Arizona State University, entitled "What Job Shortage? Firms Go Begging for High-Tech Talent," addresses the surprising trend that fewer students are enrolling in IT programs:

Nationwide, [Randy] Guthrie [Microsoft academic relations manager] maintains, enrollments in college-level computer science programs have dropped as much as 70 percent compared to enrollments of 10 years ago. "Information systems are down a similar degree."

It follows, according to the article, that the demand for entry-level IT workers is outpacing supply:

"Every employer I’ve talked to says they can’t find enough people to hire," [Robert] St. Louis [professor of information systems at the W. P. Carey School of Business] maintains. "There are internships that aren’t getting filled … new positions that aren’t getting filled. Every employer says programs like ours are not turning out enough people."

The dramatic drop in the workforce pipeline is being attributed to the fear that all IT jobs get offshored, and that the career offers no job security.  This trend is particularly alarming as the bulk of the current IT workforce ages and retires. 

However, not all IT jobs are in computer programming, and not all jobs are offshore-able–companies need analysts and managers who can solve business problems, not just code:

Employers, [St. Louis] maintains, need people who can handle "management of technology in business. It requires all the leadership skills, strategic vision and project management ability used in any management career." (emphasis mine)

In an earlier post I asked if offshoring would threaten innovation. I expressed my hope and belief that the market will value innovation. It does seem that the job market is slowly, perhaps clumsily, responding to the need for innovation. Offshoring can help companies get deliverables produced once project requirements are carefully spelled out. But identifying and solving business problems cannot be summarily "outsourced" and "offshored".

The companies who need innovators and schools who need students need to keep getting the word out–that the smart jobs, the innovating jobs, are aplenty.

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The Customization Money Pit

Recently I posted my commentary about Accenture’s recent assumption that the US is falling behind in its technology leadership.  Their assumption is based on a study in which CIOs did not state a strong preference to adopt new technologies, relative to their counterparts in other countries.  The news of that study happened to coincide with my own contemplation about how companies try too hard to “innovate” their business processes by adopting or creating new technology.

I frequently see companies get caught up in a compelling, but sometimes incorrect assumption that “new,” “high quality,” and “appropriate to my business” are equal.  IT projects such as implementing enterprise software systems, like Project Workforce Management, are usually major investments of time and money.  For many companies and situations, it is wise to mitigate the risk of these investments by selecting proven technologies and products, and ensuring that they will solve the company’s real business needs.

I often see a similar phenomenon when companies develop home grown applications or customize an existing enterprise system.  Some companies try too hard to create their “dream” solution, especially if they are automating for the first time.  Like kids in a candy store, they get excited about each new possibility that some custom application development might offer.  They request customizations that are so detailed and complex that the last 5% of functionality costs them more than the entire implementation budget.  Their ideas are innovative, but they are very specific to a specific resource group or the company’s ideal business processes–which are not necessarily best practices. 

These customization projects become almost living organisms. The allocated budget creates employment for consultants or internal resources who work on the new new thing. These same groups eventually become special interest groups that resist any innovation, always choosing their own self-interest and job security over improving the company’s competitive standing.

In too many cases, these customization projects fail.  I have seen companies who spent a lot of time dreaming, evaluating, and tire-kicking, sometimes for years—and finally accomplishing very little in terms of value creation.  If they had just saved their money and rolled out a product with its out-of-the-box functionality and very limited, highly selective customizations, instead of paying for a consultant to take them through a long specification process, they would have accomplished so much more and become more efficient than they were ever before, for far less of an investment.

Innovation and dreaming big are critical to our growth–as people, companies, and nations–but they have their place.  Dreams must be followed by action.  And to be actionable, a dream must be backed up with proven experience.  Otherwise, dreams can cause us to over-complicate our plans.  As project managers, we know that a complicated plan, which relies on unproven tactics or technology, is not as likely to succeed.

My advice to companies who seek positive change: stick to the basics.  Start with the proven experiences and offerings, and then innovate as you grow.  Adopt technology out-of-the-box as much as possible, customize but very very selectively, and adapt your business processes accordingly.

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