When David Gollan became group CIO at Perth health fund HBF, he discovered that the 25 projects delivered by IT each year took far too long, were over budget or schedule and could not demonstrate value to the business. Governance was also haphazard at best.
Recent changes to the HBF business model meant IT also faced doubling the number of projects they delivered in half the time. Time-to-market had now become critical.
HBF used a systematic diagnostic and targeted improvement approach that could get it past its current project delivery inertia and improve performance.
The approach had to meet Gollan’s fundamental belief that portfolio, program and project, resource management and strict governance should be in place.
It needed to cover these foundational capabilities without wasting time on less important matters such as maturity assessments, methodology reviews or compliance issues. It also needed to be quick and easy to implement.
Embarking on any PPM improvement program can be challenging for many reasons. For instance, the project management office (PMO) may not have created a strategic plan or be so mired in operational tasks that it has no time to spend on broader initiatives that improve project capabilities and results.
PMO leaders often begin with whatever they know best such as reporting, compliance, project management methodology or scheduling. But that approach is unlikely to produce either the thoroughness or the performance uplift that the CIO or the business requires.
Getting the basics right
In HBF’s case, Gollan and his team couldn’t map out specific objectives and initiatives until they knew where they were starting from. The first phase was about going back to fundamentals – getting the project environment to better align with the corporate strategy.
HBF undertook a comprehensive diagnosis that gave it an objective assessment of the project environment and the PMO’s performance. This analysis also helped it qualify and prioritise opportunities for improvement while focusing on PPM fundamentals.
The assessment quickly proved what Gollan already suspected – the project environment was far too costly to run, was taking too long to execute projects, and falling quite a way short of his performance expectations.
“We had to start out with a solid foundation that built credibility with the business,” says Gollan.
“That included changing our resource model, implementing a ‘fast track’ project approach on time critical projects, decreasing project execution costs, improving capabilities and streamlining the project environment.”
We had to start with a solid foundation that built credibility with the business.
The next phase
The second phase of HBF’s program targeted cost and complexity. Gollan consolidated and set performance targets for the project environment and the PMO, always focusing on capability in PPM fundamentals (governance, project, resource, demand and scheduling management), which avoided the long march towards “maturity”.
“It was essential to get the fundamentals right from the beginning if the business was to realise the full value of the projects in which it invested,” he says.
The environment did not hold a strategic operating view and employed far too many resources. The ratio of permanent members of staff to contractors was also too low, which added to operating cost and the burgeoning complexity.
“We needed capability in some fundamental areas and we needed it quickly. The PMO manager, Geoff Lim, the chief solutions manager, Pat Flynn, and I knew that focus and prioritisation were critical to reduce project environment running costs and improve outcomes.
Gollan says project staff deliberately put the business at the centre of everything they did. He advises other organisations embarking on PPM improvement initiatives to strike the right balance between the long term plan of improving foundational PPM capabilities and finding “quick wins”.
“Too often there is a focus that exclusively looks for easy quick wins, but never solves some of the fundamental issues,” he says.
“We knew that in the short-term, it was not realistic to become highly effective in every PPM discipline. Instead, we focused on not ailing in any discipline and chose the time-critical functional disciplines in which to be very effective.
“In our experience, the only way to do that is through reducing complexity, which is why a streamlined operating approach was essential,” he says.
Given the changes to HBF’s business model, speed-to-market became such a focus of Gollan’s new project environment that speed and flawless project execution became his prime messages.
Too often there is a focus that exclusively looks for easy quick wins, but never solves some of the fundamental issues.
Simplicity gets results
The last phase involved creating a more streamlined and integrated environment. Complexity had cost HBF time, money and most importantly, competitive advantage.
Restructuring the project environment produced several mutually reinforcing benefits. It increased project environment efficiency (and thus project execution success), reduced project head count, dramatically reduced environment operating cost and immediately uplifted capability in PPM fundamentals, improving the maturity of the project environment.
One project – dubbed Easy 8 – which bundled a number of insurance features into one innovative product – delivered several improvements. This complex initiative, involving multiple IT systems and complex legislative compliance requirements – was expected to take 9 to 12 months to execute. It was executed and the product was launched in just 11 weeks.
This enabled the company to get a jump on the competition with 3,000 product sales in the first 6 months – sales that wouldn’t have happened without speedy project execution.
The project used fewer resources and delivered to above agreed quality standards. It turned a potential slow-delivery disaster into a flagship project, and brought a significantly attractive product to the market at record speed.
David Gollan’s approach is powerful not because it contains any single new insight but because it assured the executive team that projects could deliver on what was promised.
“Starting with the diagnostic, we pulled together a comprehensive set of data that enabled us to understand the gap between our current performance and our full PPM potential,” said Gollan.
“From there, we set specific goals and launched improvement initiatives that drove the project environment and, ultimately, the company to achieve that potential.”
And the company’s stunning success with the Easy 8 project proved that.