It’s time for capital project executives to stop thinking of IT and Project Management as two separate line items
Our capital project delivery work and our technology are inextricably and irrevocably tied to one another; on a day-to-day basis, they are all but indistinguishable. To work on a capital project in 2018 is to engage with technology. It is our most important tool, hands down.
So why are our IT departments separate from our Project Management Offices? Most capital project management professionals don’t have the expertise to evaluate platforms and software/hardware solutions from a technical perspective. Most information technology teams don’t have the experience to evaluate capital project technology from a project execution standpoint.
I believe this disjuncture between the PMO and the IT department is a foundational problem in our industry, a problem that should be dealt with at the strategic C-suite level of any EPC or Owner organization. The traditional architecture of capital project organizations is holding us back. I’m calling for the establishment of Integrated Project Management Offices, or IPMOs, which amalgamate the work of both project management and IT under the direct supervision of business and with the clear mandate to serve capital project needs.
Gartner predicts that half of all large organizations will have such integrated (or enterprise) project management hubs by 2021. “Zombie project management offices will be slain,” Gartner V.P. and analyst Robert Handler says. “Proactive…leaders will find that they and their respective organizations have become change enablers focused on what matters most — investment management, resource management, and dependency management.”
In the capital project organization, the IPMO must have a powerful integration agenda. The critical first step to implementing this agenda is to bridge the historic gap between the IT department and the PMO.
The foundational charter of the new IPMO will be to refine the system for efficient digital project delivery and to set up that system for your teams. Done properly, it will become a true project management hub. I’ve pulled together a high-level overview of key structures of the new IMPO, as follows:
Independence and authority
The IPMO must have its own substantial budget and report directly to the CEO — not the CIO, CTO or VP of Projects, as none of these positions capture the breadth and depth of the project work undertaken by the IPMO. Reporting directly to the CEO establishes the important position of the IPMO in the overall organizational structure, and fiscal independence gives it the power to lead and act beyond departmental boundaries.
Provision of comprehensive, end-to-end support
The work of the IPMO will extend through the entire lifecycle, from business development and proposal to hand-over and beyond. It is responsible for the standardization of all project systems, from organizational charts to technology and procurement (more on this below). Crucially, the IPMO holds a centralized dashboard of all active projects in the organization as well as monitor all paths of construction (POCs). Using this comprehensive data, it publishes reports on the state of integration for each project, which obviate the need for outside assurance and supplant stage-gate and other contemporary processes that dictate the release of project funds.
A distributed team
The centralized IPMO has an integration advisor on every major project who supplies information and guidance around implementation of the systems the IPMO has established for project work. For example, the IPMO advisor will walk the project team through the process of adopting a new technology or a new process, collect feedback and help solve project problems by leveraging the tools and influence of the IPMO. It’s an embodiment for real-time innovation.
Creation of the digital ecosystem required for Advanced Work Packaging
The chief practical undertaking of the modern IPMO is to create the digital ecosystem for various project delivery requirements. Advanced Work Packaging, now widely regarded as an industry best practice for capital project work, should be on top of the IPMO agenda. Indeed, I’d recommend that your AWP lead be the very first seat on your IPMO. Creating the digital ecosystem for any project practice, from engineering to AWP, means that the IPMO becomes the source of technology procurement and recommendations across the entire organization. In addition to dictating the technology applications, the IPMO will set interoperability standards and measure the impact of the process and technology on project costs. Project teams will focus on delivering projects, the IPMO team will provide the enabling infrastructure.
Development of a strong knowledge architecture
One key benefit of an IPMO is that it creates an ideal environment for the development and execution of enterprise knowledge management. In-house knowledge architects, data scientists and analysts can establish protocols for the definition and collection of project data, and AWP Integration Managers refer to the IPMO for advice and guidance on optimal project work applications. A meaningful and cohesive application of best knowledge management practices helps facilitate better project decision-making and risk management.
Clear expectations for new entrants to the capital project industry
At present, most newly minted civil, chemical and mechanical engineers have no training in capital project management. Contrast this with young software engineers, who are fully versed in the application of agile and scrum management approaches to software development. The fact that young engineers are not prepared for the rigor of capital project development and collaboration is a direct result of our industry’s failure to integrate engineering, IT and PMOs. A bold move to IPMOs will support the systematic inclusion of project management methods and tools into engineering curricula.
In sum, I believe that, in the midst of the EPC digital transformation, integration is key to keeping costs under control, delivering projects on time and creating a healthier capital project economy. We must abandon our old paradigms and reimagine the way we form our capital project organizations, not just the way we staff our projects. The IMPO is part of the solution.
Olfa Hamdi is the co-founder of Concord Project Technologies and the former executive director of the Advanced Work Packaging Institute. She can be reached at email@example.com.