The need for agility in business grows ever more pressing. Reacting in real time is vital, and time is a commodity always in short supply. Many companies are currently heavily focused on financial measures, especially how the numbers look at the end of accounting periods. While financial reports are important, relying on them too heavily can lead to a business geared to analyze the past rather than one driven to manage the present and prepare for the future. If your business is driven by accounting periods alone, then it is poorly equipped to react as dynamic situations unfold. Reacting to financial results is like reading the newspaper—you can see what has happened, but it is much too late to do anything about it.
Traditional organizational structures and systems can make understanding real-time operational situations almost impossible, delaying corrections, costing the business money, and—in a downturn—even threatening its survival.
The criteria for business success are normally measured in financial terms, but the day-to-day management to ensure these monetary goals are met needs to look beyond pure historical financial-reporting. Today, success is all about the difference between measurement and management.
Cost, time, resources, cash, and risk have long been the five fundamentals of project management. These performance indicators need to be observed and controlled in real time in order to manage and deliver a successful project. Projects typically cross departmental—and often company—boundaries, and they always have a start and an end. In today's business climate, there is much that can be learned from this approach to help manage the whole organization through the downturn and beyond—even for businesses that do not see themselves as operating in traditionally project-driven sectors. Project management techniques, applied across the board, can help an organization evolve into a true project-centric business.
In today's globalized business environment, a project-centric approach means putting together the best mix of resources—people, production, design, sales, marketing, service, and so forth, both from within the organization and from the extended enterprise—for each product and service offered by the business in order to ensure the best chance of success. This may mean moving away from traditional thinking. Traditionally, production has always been done in house, with certain products tied to specific locations. Today, for instance, a manufacturer must make a business case whether to make or buy a component or an entire product. If you have the right information in real time, you can make the necessary strategic decisions about which resources to use, where to locate elements, and whether to perform various tasks in house or through subcontractors, outsourcing, or offshoring.
The right mix to deliver success can often change. The benefits of yesterday's cost-driven decision to offshore manufacturing to China might be offset by tomorrow's increase in delivery costs due to rises in the price of oil. A historical perspective on costs is no longer enough to manage the business. Moreover, cost savings must be balanced against nonfinancial measures, such as quality, skills availability, and environmental concerns, as well as risks such as the potential impact on brand and reputation. The focus must shift from backward-looking financial measurement based on accounts and cost centers, to company-wide management of cost, time, resources, cash, and risks, supported by real-time information.
This project-centric concept needs to be instilled throughout the business, at all levels and across all departments. Many managers and executives are left with systems that don't provide easy access to performance metrics in real time. It is often these individuals that regard a project as something that delivers a specific service or tool to the business, and who don't see it as a fundamental approach to delivering the core goals of growth and profitability. By compartmentalizing the role of projects, those management teams are missing out on a very efficient approach to running the complete enterprise. Structuring the whole organization on an integrated set of projects enables success to be clearly identified, measured, and communicated. As we approach the back end of the 21st century's first decade, the project-centric approach is evolving into a clear structure for the modern, agile business.
Project management techniques should no longer be the reserve of specific industries or departments. Setting precise goals, with a defined budget, to be reached within a specified time frame, is now more common than ever before. The fundamentals of project management are now core to companies specializing in areas such as contract manufacturing, construction, and contracting, as well as in the service and traditional asset management industries. These sectors are likely to have taken a project-centric approach to running major parts of their business some time ago.
Traditional organizational structures and systems can make understanding real-time operational situations almost impossible, delaying corrections, costing the business money, and—in a downturn—even threatening its survival.
The criteria for business success are normally measured in financial terms, but the day-to-day management to ensure these monetary goals are met needs to look beyond pure historical financial-reporting. Today, success is all about the difference between measurement and management.
Cost, time, resources, cash, and risk have long been the five fundamentals of project management. These performance indicators need to be observed and controlled in real time in order to manage and deliver a successful project. Projects typically cross departmental—and often company—boundaries, and they always have a start and an end. In today's business climate, there is much that can be learned from this approach to help manage the whole organization through the downturn and beyond—even for businesses that do not see themselves as operating in traditionally project-driven sectors. Project management techniques, applied across the board, can help an organization evolve into a true project-centric business.
In today's globalized business environment, a project-centric approach means putting together the best mix of resources—people, production, design, sales, marketing, service, and so forth, both from within the organization and from the extended enterprise—for each product and service offered by the business in order to ensure the best chance of success. This may mean moving away from traditional thinking. Traditionally, production has always been done in house, with certain products tied to specific locations. Today, for instance, a manufacturer must make a business case whether to make or buy a component or an entire product. If you have the right information in real time, you can make the necessary strategic decisions about which resources to use, where to locate elements, and whether to perform various tasks in house or through subcontractors, outsourcing, or offshoring.
The right mix to deliver success can often change. The benefits of yesterday's cost-driven decision to offshore manufacturing to China might be offset by tomorrow's increase in delivery costs due to rises in the price of oil. A historical perspective on costs is no longer enough to manage the business. Moreover, cost savings must be balanced against nonfinancial measures, such as quality, skills availability, and environmental concerns, as well as risks such as the potential impact on brand and reputation. The focus must shift from backward-looking financial measurement based on accounts and cost centers, to company-wide management of cost, time, resources, cash, and risks, supported by real-time information.
This project-centric concept needs to be instilled throughout the business, at all levels and across all departments. Many managers and executives are left with systems that don't provide easy access to performance metrics in real time. It is often these individuals that regard a project as something that delivers a specific service or tool to the business, and who don't see it as a fundamental approach to delivering the core goals of growth and profitability. By compartmentalizing the role of projects, those management teams are missing out on a very efficient approach to running the complete enterprise. Structuring the whole organization on an integrated set of projects enables success to be clearly identified, measured, and communicated. As we approach the back end of the 21st century's first decade, the project-centric approach is evolving into a clear structure for the modern, agile business.
Project management techniques should no longer be the reserve of specific industries or departments. Setting precise goals, with a defined budget, to be reached within a specified time frame, is now more common than ever before. The fundamentals of project management are now core to companies specializing in areas such as contract manufacturing, construction, and contracting, as well as in the service and traditional asset management industries. These sectors are likely to have taken a project-centric approach to running major parts of their business some time ago.
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