Global Mining Company
Restructuring resource capability pools and structuring project demand reduced project resource cost by 32%
|Client:||Global Mining Giant|
|Industry:||Mining and Exploration|
|Products used by this client:|
The IM division of a global mining company faced eroding value from project investment and ongoing problematic project. The project environment ran an impressive $5 billion of in-flight projects with 15 major programs making up 75 per cent of total project investment.
There was no clear line of project demand with projects originating from many sources within the business. Individual project managers undertook unapproved project work without consent of IT or the PMO and executives made project investment decisions without a holistic view of the organisation’s IT plan often resulting in duplicated infrastructure, applications and projects.
In addition, the client was considering outsourcing its entire project capability to improve project execution outcomes and better value (benefit) realisation. However, business lines argued that this costly option removed their direct access to project capability and were doubtful that one outsourcing company had the sophistication and bandwidth to manage the entire portfolio of projects.
As far as the business was concerned, the entire project demand process appeared woefully inefficient; the project environment appeared to be poor value for money and far from transparent and projects delivered less than scoped and cost more than agreed.
In the first phase of the work, PPM Global used the demand and resource modules of the PPM Health Check Accelerator™ to understand the performance of the IT project environment. It found that project demand originated from a number of sources within the business which had, at best, limited transparency into the progression of its project requests.
Just over 45 per cent of time and budget was spent on high-value projects with resources deployed at the project manager’s discretion. The situation was unsustainable and damaging the project environment’s ability to operate in the best interest of the business. Given the scarcity of skilled project resources in this city, it was clear that the just-in-time resource procurement approach was doomed.
Analysis revealed just three unique project environment capability challenges, mostly to do with how the project environment was structured:
Discovery 1: As part of the transformation, PPM Global worked with the IT project managers to agree to a project environment structure and resource model. This best-practice approach established capability pools within IT from which structured project demand could draw. This meant that the project environment drew on resource pools that were not embedded in projects which led to optimum resource utilisation. This was a major shift in how scarce, highly skilled IT capacity was used.
Discovery 2: A lean, highly prescribed Project Initiation process was introduced, enabling controlled, best-practice demand configuration across the entire enterprise. The business clarified ownership of any given request and was used to check on estimated time to complete vs. time taken.
As with all lean transformations, these process improvements alone were not sufficient.
Discovery 3: Applying our proprietary PPM Architecture (PPMA) approach, we helped the miner align the PPM environment with operations and IT. In the PPMA approach, we first defined all PPM capabilities. We then categorised these capabilities in two different dimensions: how specific they are to the business and how much business value do they help to create.
To foster a culture of continuous improvement, project managers and IT executives were trained to see themselves as coaches.
By implementing a structured Project Initiation process, demand came under the control of the EPMO. Overall, the IT project environment delivered a 32% decrease in resource capacity in 12 months and executed 20 per cent more projects than the previous year. The new Project Initiation processes and centralisation of resources using the EPMO freed significant resources to work on higher value projects.
Almost half of the time saved came from standardising IT capability pools and sharing best practices. The rest came from better planning, better use of management time and other adjustments to the entire Project environment.
Critically, and a major factor in getting buy-in for a second phase of the transformation, the entire IT environment was re-structured into discrete capability pools that reflected business needs rather than IT capability.
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