8 minute read 26 May 2016
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How a holistic approach to program management can improve success

By

EY Global

Multidisciplinary professional services organization

8 minute read 26 May 2016
Related topics Advisory Tax transparency

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Good program management requires the balance of governance, process and technology.

Project and program management have been around for millennia, going back as far as the Giza Pyramids in 2570 B.C. It was not until the early 1950s and 1960s, with the creation of the critical path method (CPM) and the formation of the Project Management Institute (PMI), that formalized methods and techniques were applied to project management. [1]

As technologies and markets advance and programs become more complex, however, it is becoming more and more difficult to keep track of all the moving parts and gain insight into all areas of a major program. As a consequence, in order to support this rate of change, the number, complexity and costs of programs are also demonstrating a significant increase. Over 50% of executives, however, feel that corporate effectiveness is limited by the lack of delivery in major programs.[2] Even in an age where technology solutions claim to be the ultimate answer for solving project execution problems, program and project managers continue to stumble on the same obstacles that have plagued their profession since it began:

  • Problem 1: lack of program transparency
    Executives often do not have the visibility into the programs that they need or do not have access to a single source of truth. Without readily available information that is up-to-date and accurate, executives struggle to make decisions based on the current status of the program.
  • Problem 2: lack of alignment and collaboration
    Organizations often struggle with a lack of program alignment and collaboration among teams, leading to decreased effectiveness. In fact, nearly 75% of cross-functional teams are dysfunctional and fail in at least three out of five categories: meeting a planned budget, staying on schedule, adhering to specifications, meeting customer expectations and maintaining alignment with the company’s goals. [3]
  • Problem 3: lack of confidence and agility
    Without clear insight into accurate and up-to-date information, executives are often forced to make decisions that are not based on facts. In addition, decisions are sometimes delayed while executives wait for reports. Given this situation, program executives often have a lack of confidence in meeting the program’s stated objectives to overall leadership.

A holistic approach provides the solution

To mitigate the aforementioned problems and ultimately improve the likelihood of success, executives should seek to implement a more holistic approach to their program management efforts that employs governance, process and technology. This includes starting with a governance structure that facilitates decision-making, establishing processes that enable disciplined execution, and enabling a common technology platform that drives stakeholder collaboration and helps realize the intended benefits.

A balanced fusion of the three key elements to achieve execution excellence

Technology:
  • Established program management and governance methods help drive program alignment with overall organizational strategy.
  • A holistic approach to program management helps deliver optimal outcomes and benefits.
Processes:
  • Increased automation helps result in greater consistency and standardization of program management processes.
  • Dashboards and reporting help provide enhanced collaboration and transparency.
Governance:
  • The right structures, processes and culture help enable business acceptance and stakeholder buy-in.
  • A holistic perspective for managing the people elements within transformation helps enable a sustained realization of the desired program benefits.

Solid governance structures lay the foundation for collaboration and success, because people entering the program know exactly where they fit in.

Start with governance

Before work on any major program begins, the governance structure needs to be defined. The essential element of this is a clear articulation of the roles, responsibilities and decision-making authority for all relevant programs and portfolios.

Not only does sound governance structure aid in decision-making, it also helps drive accountability within the program. With the right governance in place, authority is highest at the leadership level, while the majority of the day-to-day decision-making is owned at the project level. Project managers have the ability to succeed knowing that the decisions made at the program level are supported and enforced by the leadership, while program leaders save time and energy by enabling project-level decisions to be made at the appropriate level.

Governance structures can also provide a key link between the program and the overall organization strategy and initiatives. As the business changes strategic direction or introduces new initiatives, the governance structure provides a clear path for shifting program priorities. For example, if the company’s budget situation changes, the program executive leadership can work with the organization’s leadership to expand or reduce scope, as the budget allows, and is able to report those decisions down the command chain.

Additionally, as programs grow and new groups, vendors or partners are brought in, the governance structure clearly lays out how the new additions will interact and make decisions. Solid governance structures lay the foundation for collaboration and success because people entering the program know exactly where they fit in. New project managers know who they report to, and new vendors can quickly understand the decision-making authority of the program.

Program management processes allow for communication and information to flow naturally, instead of the myriad of meetings that are put in place to solve communication issues.

Use processes to advance performance

Program management processes are guidelines that provide structure and consistency to the program’s operation. These embedded processes allow for communication and information to flow naturally, instead of the myriad of meetings that are put in place to solve communication issues. Through standardization, a program is able to facilitate two-way accountability between project managers and executive leadership.

On the one hand, project managers use program management processes to control the planning and implementation of work approved by executive leadership. If unmanageable problems are encountered by the team, project managers use escalation paths established within the processes to gain support from executive leadership. On the other hand, executive leadership uses program management processes to manage the portfolio of projects. Processes contain reporting capabilities that grant executive leadership visibility into the projects’ key performance indicators, which keeps project managers accountable for the realization of the benefits of their projects.

The effectiveness of this two-way accountability relationship is based on the adoption of the program management processes. For this reason, it is critical that appropriate change management techniques are put in place to increase acceptance. Adoption can be gained by gradually maturing the processes to match the capabilities of the people and technology supporting the program. A highly advanced process can overburden the program team if they do not have the skillset or effective technology to execute it, whereas a program with weak processes results in a more reactive environment that leads to unmanageable issues, as opposed to a proactive environment that mitigates risks ahead of time.

As the business changes strategic direction or introduces new initiatives, the governance structure provides a clear path for shifting program priorities.

To further enable the maturity of the processes, technology can be used to automate process flows. Automation will eliminate user error, causing an increase in consistency and standardization. Furthermore, technology can be used to enhance the collaboration and transparency of these processes through the use of dashboards.

Implement technology to harness operational efficiency

With the abundance of information and data flowing through organizations today, the use of tools and technology can help in its analysis, providing meaningful information to assist in decision-making.

Yet tools and technologies alone can never be sufficient. Too often, project and program managers place emphasis on technology, believing that reports and charts will rescue a failing project. The right processes and people are needed to enable these tools. Many organizations have found themselves in the situation of having invested millions of dollars in a tool that is underutilized because of failings in change management, poor integration within the program’s processes or a lack of expertise and skills among team members.

Effective program management needs collaboration and communication.

With the right training, processes and people, these tools could enable organizations to benefit from rapid and effective decision-making, as well as provide the confidence that the desired business outcomes will be achieved. The right technology should provide insightful analytics, transparent communication, seamless collaboration, meaningful reporting and timely information.

The ingredients for success

  • Defined end goal: organizations should have their end goal defined and in mind before undertaking major complex program management and solutions. With program management solutions, one size does not fit all. Depending on what is needed, the solution may differ.
  • Simple solutions: organizations should avoid over-engineered program management solutions that are difficult to adopt.
  • Effective change control management: this goes hand in hand with any program management solution adoption. Businesses should focus on maturing the process, technology and their people’s skill level, over time, to match the landscape of the organization.
  • Cognizance of constraints: organizations should be fully aware and mindful of the various constraints that might exist before adopting a program management solution. These could range from resource or financial constraints to a lack of program management maturity in the organization.

Key take aways

  • A holistic approach to program management requires the balance of governance, process and technology.
  • A sound governance structure identifies decision-making paths that enable effective management of the program.
  • Efficient processes not only facilitate standard execution, but also mature as the capabilities of the program evolve.

Technology requires the coupling of knowledgeable people and streamlined processes to gain meaningful use.

  • Footnotes

    1. D. Haughey, “A brief history of project management,” Project Smart, 2010, https://www.projectsmart.co.uk/ brief-history-of-project-management.php, accessed March 2016.
    2. EY survey of major capital construction projects of Fortune 500 companies, a US Government survey and The Gartner Group survey.
    3. B. Tabrizi, “75% of cross-functional teams are dysfunctional,” Harvard Business Review, 2015, https://hbr.org/2015/06/75-of-cross-functional-teams-are-dysfunctional, accessed March 2016.

Summary

When program management works, the benefits can be tangible and measurable. Yet, so often, the expected efficiency gains fall significantly short of the mark. The obstacles to effective program management recur all too often, and this is compounded by the effects of advancing technologies that lead to increasing numbers of complex and expensive projects. A holistic approach to program management can mitigate the usual pitfalls and improve the likelihood of success.

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By

EY Global

Multidisciplinary professional services organization

Related topics Advisory Tax transparency