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The State of Project Management

The State of Project Management

Projects that run over schedule, over budget or underperform aren't exclusive to the public sector, but the need to be open and accountable makes successful project management even more challenging for government CIOs.

The "90/90 Rule" of project schedules goes like this: the first 90 percent of a project takes 90 percent of the time and effort; the remaining 10 percent of the project takes the other 90 percent of the time and effort.

This axiom of project management was quoted by Dr Peter Shergold, secretary of the Department of the Prime Minister & Cabinet (PM&C), to a joint meeting late last year of the Australian Graduate School of Management and the Harvard Club of Australia.

The "Ninety-Ninety rule" was complemented, he said, by other immutable truths. The first is that implementation is inherently difficult and that no one has yet found a way to repeal Sod's (or Murphy's) Law: if anything can go wrong, it will.

"The First Corollary, of course, is that it will go wrong at the worst possible time. And, from my personal experience, there's also the Unspeakable Law: as soon as I mention something good to the Prime Minister it goes bad; if I foreshadow something bad, it happens on schedule."

Corollaries and truths aside, Shergold takes a more serious tone on public service attitudes: "If there were a single cultural predilection in the Australian Public Service that I could change, it would be the unspoken belief of many that contributing to the development of government policy is a higher order function - more prestigious, more influential, more exciting - than delivering results. Perhaps it is because I have spent so much of my career in line agencies, learning to deliver indigenous, employment, small business, and education programs that I react so strongly against this tendency."

The Prime Minister himself has hopped on this particular bandwagon, answering a question at the press conference to launch the new Department of Human Services in October 2004 with: "I think one of the things we lack in the public service both at a Commonwealth and a state level is a consolidated focus on the efficient and timely and sympathetic delivery of services. We tend to look at service delivery as an afterthought rather than as a policy priority."

When the leaders of both the political and the bureaucratic wings of government make the same statement, you know that project management, that discipline responsible for ensuring that good policy leads to good outcomes, is going to be in the spotlight.

The Problem with IT Projects

The problem with project management, particularly with IT projects, is it doesn't have a particularly good reputation. Tales, cries and complaints of over-budget, over-schedule and under-performing, if not outright cancelled projects, are rife in both the public and private sectors, and add grist to the media mill. This is particularly so with IT projects.

From a project management perspective, the problem with IT projects is that they're too visible. The argument that there should be more appreciation for IT because it is an enabler of virtually every element of commercial and bureaucratic activity is also its biggest downside. When IT fails, everybody knows about it.

According to a 2001 OECD report, as little as 28 percent of IT projects undertaken in the US were successful in relation to budget, functionality and timeliness. An equivalent number of IT projects were cancelled. The OECD recognized that problems with IT projects represented a significant economic, political, efficiency and effectiveness risk to government, and that IT implementations that do not achieve their objectives put at risk e-government initiatives. More recent reports have substantiated this view.

But as dire as the picture concerning IT projects is concerned, many believe the real problem lies with project management in general. Rob Thomsett, principal of the Thomsett Company, which provides consulting and education programs in project management, believes that non-IT or general business projects easily outperform - or underperform - IT projects in terms of success rates.

Prior to his consulting activities, Thomsett spent 14 years in policy roles in the Australian public sector, working in IT project management. He says the problem is IT has traditionally shone a light on its own operations. "They have a better understanding of costs and returns than business projects, and that includes projects within finance sections."

Bob Webb, first assistant commissioner of the Australian Taxation Office's Change Program, agrees. "IT project management in the public sector has generally been ahead of the 'business' side of public sector management in rigour and professionalism."

Exactly by how much IT outshines its business colleagues, no one seems to know. The light that shines on IT projects is very dim when it comes to non-IT projects. What is clear is that there are a lot more business projects than there are IT ones. For every IT project, Thomsett says, there are at least 10 business projects "that fall under the radar". He quotes the CSIRO, which has 60 IT projects and about 2000 business ones.

"The typical government department has 1000 projects on any one day, of which about 80 percent are not running properly [to budget, schedule or performance]."

However, Webb does see a benefit arising: as the business side "increasingly gets its project management act together in agencies, it will provide a stronger drive for the IT support projects and greater accountability on IT teams to deliver effectively as part of the business projects". Sort of a mutual boot-lacing to improve performance all round.

Public Service vs Private Sector

Of course, projects that run over schedule, over budget, under-perform or never reach the finishing post at all are not exclusive to the public sector. There are just as many poor performing IT and business projects in the private sector. It's just that we don't get to hear about a lot of them; it is the "private" sector, after all.

But the need to be open and accountable to the public (and the press?) is just one of several differences between the sectors. Shergold lists six "implementation challenges" for successful project management in the public service:

» The barriers to implementing policy are often not adequately identified and addressed when new government initiatives are first discussed.

» The development of policy is sometimes insufficiently informed by the experience of those who deliver programs.

» Conversely, those who implement programs often pay insufficient attention to whether their administrative processes of delivery align with the government's policy goals.

» Broad appreciation for the role of project management, particularly as it relates to the delivery of services, is insufficiently developed.

» Cross-agency initiatives can founder on the "hidden rocks" of departmentalism.

» Too frequently delivery can be hindered by costly bureaucratic red-tape beyond the measures that are necessary to ensure effective accountability.

Some of these apply just as readily to the private sector, particularly the first (the unforeseen barriers which lead to scope creep) and the third (the perennial issue of alignment with the business).

Thomsett agrees that the biggest single challenge is getting executives to understand how important project management is. He adds that the private sector is intrinsically internal looking; it doesn't give stakeholders much of a look in with a project ("That's why they're called stakeholders - they're the outraged ones holding the stakes at the end of the project.").

The prime motivation for private sector projects is profit and increased share price through improved services, greater efficiencies or increased offerings, hopefully aligned with overall business direction. The public service, on the other hand, has similar methodologies although the motive is primarily efficient delivery of policy/service, and certainly the target market is much more mixed and involved (or thinks it should be).

Project management is more complex in government than in the private sector, Thomsett says. Higher demands because of size, stakeholder engagement, political imperatives, relatively poor levels of project governance, excessive dependence on outsourcers, complex contract and tendering processes, difficult HR practice and relatively immature financial management demand expert project management.

The concept of project management experts - which Thomsett says few government agencies have - is highlighted by what he says is a more fundamental difference with the private sector, and that is the level of experience and the continuity of project managers and their teams. "The public sector is going through a generational change, from the baby boomers to Generation X, and a lot of what was learned by previous generations has not been passed on," Thomsett says.

Thomsett also claims there is a discontinuity between the generations, citing that none of the departments he works with has a corporate history of project management. "In the public sector, project management in general constantly rewrites history," he says.

In the 70s and 80s, Thomsett says, the typical project team was for the whole of life; the team reported to a project manager and the team stayed together. Since the 1990s, it has been marked by more ad hoc teams - team members reported to others outside of the team, allegiances were to themselves or their home departments or units."I talked to one project manager who was the only permanent member of the team," he says.

This means that a lot of people doing project management lack what Thomsett calls "life experience". He quotes a study by Bacon and Fitzgerald which indicates that highest productivity comes from those aged 50-70, "the old fart zone" of battle veterans who, Thomsett insists, have a lot to add but are increasingly not being well-used, if at all.

Drawing on his own private sector experience - 15 years in management positions in manufacturing and resources - Webb endorses the view that "historically the private sector has been more effective on the management of financial cost and benefits associated with projects, from initial business case through to ensuring the benefits are realized. It has also been more ready to bring in the external expertise it needs."

The market drive provides a very obvious focus on client needs as well as pressure for delivery, he adds.

"I worked for major manufacturing and resource organizations in the first half of my career and the client focus and project professionalism brought to bear was automatic.

"By their nature the government sector projects, and particularly policy projects, typically have had a far more diverse range of objectives and trade-offs associated with them. This often makes the clarity of project intent more diffuse and complex, and indeed investing upfront in clarifying the intent has been one of the major priorities for the ATO in recent years. In public sector projects there can also be a tendency to focus on delivering on time rather than quality, especially where there are tight and immutable legislative deadlines and requirements."

Having said this, Webb says he can see gradual convergence between public and private sector practices. For example the government clearly expects good project governance such as formal business cases, he says, and a clear focus on delivering to the government's policy intent, and the community demands increasing quality of delivery.

The CIU: The PM solution?

Shergold adds two false assumptions to his list of project management woes: that it's not necessary to concern ministers with the details of implementation, and that we don't need to worry about how we will implement policy until after we have decided what it is.

Enter the Cabinet Implementation Unit.

Established in late 2003 and located within the Cabinet Division of the Department of PM&C, the Unit has as its remit to encourage earlier and more effective planning for implementation of public policy decisions delivered through government programs and services. The unit's staff is small, and while drawing on the policy expertise within PM&C, significantly the members themselves have been drawn from both within and outside the Australian public service. Cabinet acts as a project "gateway", with Cabinet policy submissions now required to address implementation in addition to policy alone. Proposals for significant changes that involve moderate to high risk now need explicitly to address the scope, milestones, risks, impacts and governance arrangements which provide the delivery framework.

"Part of the unit's work involves reporting back to the decision makers," Shergold says. "After the Cabinet's decisions are taken, we require (for key decisions) a detailed implementation plan. On the basis of these plans, we report progress against milestones quarterly to the Prime Minister in 'traffic light' format. Amber and red lights apply to measures which are at risk of running significantly behind schedule and, most importantly, focus attention on what can be done to bring them back on track."

The unit also undertakes retrospective reviews of selected key initiatives particularly those that involve the coordinated activity of a number of agencies. The objective, Shergold says, is not only to provide assurance to government that initiatives are being well-delivered but also to identify lessons that can be transferred to other projects.

Webb believes that the CIU is an example of strong leadership drive, providing a further focus for public sector management, "but of course it is not enough by itself; the drive has to also be at the individual agency level".

The ATO has recently established a Project Management Improvement Unit, which will supply corporate support for better practices, training and tools. Similarly, the Commonwealth Department of Family and Community Services set up a Project Management Integration Office (PMIO) some years ago and has developed a comprehensive Project Management Framework (see "Putting FaCS in Order", CIO Government, July/August 2004).

Meg Smith, director of FaCS's PMIO, says that many agencies are now establishing project offices in order to develop and implement consistent project management methodologies and disciplines. As a flow effect, she says, staff who have responsibility for progressing project management are now developing strong formal and informal networks to share their work, their experiences and lessons learned.

"Feedback through these networks suggests that it is still very early days for many agencies. Of course, this isn't surprising as the operating environment for agencies varies significantly. This means that the need and speed for embracing a project management approach varies from agency to agency. For some, the mechanics of transitioning project management, from the traditionally accepted IT environment to policy, will be difficult."

The magnitude of this change is often significantly under-estimated, she says. Project management language is broadly included in everyday conversation yet its meaning, as part of specific business discipline, is frequently misunderstood.

"This appears to be an early stumbling block for many organizations. One of the first things needing to be addressed is breaking down preconceived notions about what is a project, what is project management and what does a project manager do. This is much harder than it sounds."

She admits it will take "a number of years" for project management skills to be universally acknowledged across the Australian public service, as "many agencies are still in their infancy with this cultural change".

Thomsett is more critical of the efforts to engender expert project management skills in the public service. He quotes Centrelink, DIMIA and CSIRO as having made efforts in this direction, but is more dismissive of other agencies (without mentioning the ATO or FaCS).

While he supports the establishment of the CIU, he sees it as a tactical measure. Ultimately, he believes more strategic measures are required - the demise of amateurism ("Bob, it's your turn to be project manager") and the rise of the professional project manager.

"There must be a serious debate about the implementation of a separate project management career stream within the government. In a period of unprecedented change, the ability of the public sector to innovate and deliver cost-effective policy and services is completely dependent on its project management capability.

"Degrees, certification and membership of professional bodies are a start but the best learning is from other practitioners. Project management cannot be taught. It is learnt through blood, sweat, tears and bitter experience."

Considering the oft-quoted success or failure rate of IT and non-IT projects, there should be plenty of those qualities to go around.

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