Bangkok--22 Apr--Spark Communications
Most companies are involved with projects to some extent. Whether or not projects constitute the core of the company’s profitability, most corporate leaders agree that efficient project management plays an important role in their business.
Projects can be defined in a number of ways, for example the development of a new product, the lifecycle of an oil field or to encompass not only a product lifecycle, but a customer order life cycle, or the lifecycle of a group of customer orders. Consider the case of an equipment engineering and fabrication firm that has traditionally served original equipment manufacturers (OEM) in the electronics industry, but also has some customers in the oil and gas industry. Management by project will track all the resources consumed by each group of customers, and this might reveal that the profit margin from OEM customers is in decline, due to falling volumes, while oil and gas-related customers, although providing a growth opportunity, could only be achieved by some staff retraining and the acquisition of new resources. Identifying and responding adequately to this opportunity would require enterprise software designed to facilitate a project-based approach.
Project-Based Solutions (PBS) provides a forward-looking view of high level project status information to actual staffing levels, resource and equipment requirements. For example, if a business has been managed using a more traditional approach, where direct labor hours were measured against agreed standards for each process and indirect labor applied as general overhead—then the differentiation of profitable customers from non-profitable becomes a challenge, and unlikely to drive optimization and profitability.
As a contractor managing projects on a regular basis, integrating PBS into the company’s core business processes can help improve profitability and gain a competitive edge.
Why use Project Based Solutions?
By focusing on centralising information about project status, resources, product data and customers, PBS supports consistent practices and increases visibility of the entire project.
In selecting a PBS enterprise application for management by project, it is important to ensure that the solution is integrated for the management of the supply and demand for all resources, and for incurred cost to flow up to financials, as well as up through the project, so you can see how each project is progressing over time.
Some enterprise application vendors claim to offer integrated project management, but it is often limited to accounting functions and it is really not tied into the rest of the applications. So it is important to look for the ability to connect your project functionality into other areas of the application, from the original contract through design into construction/manufacture and all the way to after-sale service, maintenance or decommissioning.
How Can Project-Based Solutions Help You?
Project based-solutions deliver the following benefits;
- Tracking of Front-end Costs; including engineering, the creation of documents and other time-driven costs that typically would be considered indirect or overhead
- Full project Enterprise Planning; ensuring the functionality is connected into the application’s planning engine, so production items (if you have them) show up on the project plan
- Standard Plan; Obviously, the goal of implementing management by project is to allow detailed management and analyse parts of the business as de facto projects. But even with those projects, some parts should be allowed to be shared commonly across multiple projects. Standard plan capabilities allow for example items such as fasteners to become common to multiple projects.
- Re-use; Organisations enter into contracts with customers when the final specification is incomplete. To reduce risk and improve the probability or right-first-time providing the ability to copy from a template of a similar project is essential.
- Swap (borrow and pay-back); The ability to change resource items from one project to another to maximise resource availability and at the same time reduce costs of holding items that are not required as originally planned due to changing priorities.
Many companies are organised in a departmental structure that at times can be rigid and territorial. Management by project requires human resources from various departments to be on loan for each project, creating a temporary organisation with its own profit and loss (P&L) account. It is also important for the technology to allow management to see whether certain resources in each department might be overloaded and to take those capacity issues seriously.
Project Based Solutions is truly opening a whole new world of software supporting the challenging markets of the 21st century. Technology can help to facilitate a project-based approach, but ultimately it is up to the management of each enterprise to take advantage of these capabilities and create a business culture that is agile enough to respond to today’s challenges.
For more information, please visit www.ifsworld.com/Solutions/Projects