Why Executives Need Enterprise Project Portfolio Management
Guy Barlow, director - industry strategy, Oracle Primavera, on the three key considerations that drive value across an organization
Over the past few years, there has been a marked shift that has brought project management to the forefront of executives’ attention. Many factors have been driving this growing awareness, of which the most notable are the global financial crisis, heightened regulatory environments, and a need to more effectively “operationalize the corporate strategy,” or in other words, adopt operational planning and the best practical steps that the business should follow to execute its strategies.
Executives in India are no exception. They realize the need to build capacity, ramp-up production, and ensure that the right resources are in place to capture growth opportunities in India. This applies across industries from asset-intensive industries such as oil & gas, utilities, and mining, to manufacturing, the public sector, and services-based sectors, such as finance, telecom, and life sciences.
Compounding matters is a complex interplay between projects – big and small, complex and simple – as companies grow both in the domestic and international market. This trend has created the need for a standardized, enterprise-wide solution for project portfolio management (PPM). Failing to adopt PPM is akin to having two ERP systems, one to manage large invoices and the other to manage small invoices. It makes little sense to have a system that does not provide enterprise-wide visibility.
The imperative for executives is to understand the full range of their business commitments, the benefit to the company, current performance, and associated course corrections, if needed. Irrespective of the industry or use case – whether the company is building a power plant, launching a new financial service, or developing a new automobile – company leaders need to approach the value of enterprise project portfolio management (EPPM) through three critical areas:
- Greater financial discipline – Improved financial rigor and results through better governance and control is an imperative, given today’s financial uncertainty and greater investment scrutiny. For example, as India plans a US$1 trillion investment in the country’s infrastructure, how do companies ensure costs are managed? How do they control cash flow? Can they easily report this to stakeholders?
- Improved operational excellence – Increased efficiency and reduced costs through robust collaboration and integration is necessary for profitable growth. Upwards of 66 percent of cost variances are driven by poor supplier collaboration. As companies execute initiatives, do they have visibility into the performance of their supply base? How are they integrated into the broader program plan?
- Enhanced risk mitigation – Companies must manage and react to uncertainty through improved transparency and contingency planning. What happens if a company is faced with a skills shortage? How does it plan and account for geo-political or weather-related events?
Projects are not just the delivery of a product or service to a customer within a predetermined schedule. Completing a project on time is part of a contractual and moral obligation to company shareholders and stakeholders. Projects allow executives to demonstrate the organization’s capabilities and competencies with which it can meet and, whenever possible, exceed commitments to customers. Effectively developing and putting the corporate strategy into operation is the hallmark of successful executives, and EPPM allows them to achieve this goal. For more information around executive views on EPPM please visit www.oracle.com/ eppm/eppmboard.
(Mr. Guy Barlow has over 15 years of broad industry experience in manufacturing, financial services, and the public sector. He leads the go-to-market strategy for the Oracle Primavera Global Business Unit.)