Should you Adopt Standards for Project Controls and Procurement?

I was visiting a client yesterday helping them get started with some new projects they were planning. They’re a fairly new client and are still working through some of their internal processes with respect to how they’re going to take full advantage of this enterprise software they’ve just adopted. They were engaged in a very productive, but heated dialogue about how to manage this transition. The challenges they face are similar challenges that most companies would in this situation, so I thought it’d be worth writing about.

To start with, they’re a mid-sized EPCM that is growing fast and taking on bigger and more complex projects. They’d long outgrown the spreadsheets they had been using for project management, project cost controls, procurement and estimating. It was a critical business choice for them to adopt a robust software system that’s designed to take on those activities – otherwise they would have been severely limited in their ability to grow.

Still, despite adopting powerful technology, they still had some decisions and challenges to tackle.  As the director of projects put it, “This software will do everything we need and much more. It’s great, we’ll have lots of room to grow to take advantage of its full capability. The problem we have is: us. We pose our own biggest risk to ourselves. We need to establish the processes and the rules and standards so that we don’t create a big mess in this software.”

It was good to hear him say that because it’s a message we continuously reinforce with clients new and old. As the consultant in the room, I often try to take the role of helping facilitate the conversation towards people discovering the answer themselves. This guy obviously didn’t need my help; he figured that one out on his own. It’s so tempting when you get a new technology toy to want to go bash away at it and start seeing some results. The need for a bit of patience and planning when it comes to enterprise software, however, is critical.

His biggest worry was that they have about eighteen project managers with varying levels of skill and experience. “Twelve of these guys,” he said, “I trust completely to do the right thing and create fantastic results. The other six – well, I’m not so sure. Those ones need continuous supervision.”  This is another very common problem that growing organizations face: how do you manage the oversight of the more junior or less-skilled members of the team?  The reality is that there has to be some rules and standards established around all aspects of project cost management, procurement, change management, client reporting, project controls, etc.  To also look at best practices and standards on:

1. WBS Template
2. Cost Codes
3. Procurement: requisitions, RFQ, expediting, invoicing, etc.
4. Estimating
5. Internal reporting
6. Client reporting
7. etc.

The other message we communicate to clients is that standards around these functions don’t have to be reinvented. They already exist and work on many projects big and small. So this does not have to be a large undertaking to build standards & rules around using project cost controls software & procurement management software.

As the meeting progressed, the whole team became much more comfortable and confident that they had a plan in place to best utilize the software and manage the oversight of their staff. One of the senior project managers pointed out, “We had this problem before we got the software. But now that everyone is using the same system, there’s a lot more transparency and visibility into what people are doing. There is built-in oversight and collaboration with this software. Before we got this software, we had guys building their own spreadsheets for a WBS, using reporting formats they used from a previous job, inventing their own formulas for forecasts, etc.; and most of the time we never even knew they were doing it. That can’t happen anymore.”

I have to say, I was pretty happy to hear him say that!