Weathering a Recession Driven Economy - Project Portfolio Management and Business System Investment

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Condensed version of my paper published in 2002 edition of The Milestone

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Weathering a Recession Driven Economy - Project Portfolio Management and Business System Investment

  1. 1. http://www.pmimemphis.org Memphis Tennessee Building professionalism in project management The Milestone A publication of the Memphis Chapter of Project Management Institute, Memphis, Tennessee Volume 3, Issue 02 February 2002 Points of interest: Weathering a Recession Driven Economy • You can now RSVP for meeting attendance on Project Portfolio Management and our updated, redes- igned chapter website! Business System Investment Also, find contact in- —Saji Madapat, CPIM, CIERP, PMP formation, events in- formation, archived Global Business Specialist, Buckman Laboratories newsletters, and more: How would you like to see a investing pattern of business system project that pmimemphis.org many organizations. cost $10 million during a boom Those organizations costs less than $2.5 million and managed by a group your organization weather the of autonomous feudal recession in excellent financial managers created r e- health, with increased sales, an dundant projects, dis- improved competitive position, parate data, ineffi- and enhanced employee loy- cient systems and alty? have become a bottle- No, it's not a dream. Buck- neck as organizations man Laboratories has done just race to grow and survive. PM concepts and tech- that--increased sales revenue But when the boom bubble niques, Buckman Laborato- Contents: by 2.5% overall (22.8% in Asia bursts, these organizations ries has positioned itself for alone), simultaneously main- quot;Fast & Furiouslyquot; started growth and success. Project Portfolio 1 taining stable employment with scrapping strategic projects, Management and high employee loyalty. More- selling off their core business Expose Inefficiencies over, Buckman has imple- units, laying off their most sig- If you imagine your or- Business System mented a world-class business nificant knowledge assets ganization as a ship, the Investment continuation plan so that IT (experienced employees), importance of this point operations can quickly be relo- slashing budgets in strategic becomes clear (illustration, PMP Exam Prep 2 cated in case of an emergency. areas like R&D and IT. This p. 2). During boom times, Course, February What's the secret? In a nut- is exactly the wrong strategy. your business floats in a 13-15 shell, it is the realization that A recession is the perfect tide of general prosperity; action taken in tough times will time to invest in Organization- your clients pay the price make the difference between wide Re-Engineered Process for any inefficiency in your Doing the Right 3 merely surviving the downturn (ORP) to develop a flexible business systems or project Thing: Vaughan (by destabilizing and damaging business system, sound infra- portfolio. When the boom Dewar Presents on the organization) or, by chang- structure and a knowledgable goes bust, it's not a seller's Following PMBOK ing gears, emerging out of the project team. Conceptually, market anymore, and your turbulent waves to become a ORP looks, acts, and feels a organization must accept Processes the cost of inefficiencies, business leader. lot like something we project The decade-long economic managers are becoming more reducing or even eliminat- SPECIAL INSERT: familiar with--Portfolio Man- ing profit. boom and the resulting ove r- Meet Your Board flowing coffers brought agement. As you'll see, by What to do? The conve n- Representatives quot;Irrational Exuberancequot; to the making effective use of key tional, reactive approach to (Continued on page 2)
  2. 2. VOLUME 3, I S S U E 02 http://www.pmimemphis.org PAGE 2 PMP Exam Prep Course, February 13-15 —Jackie Walters, PMP (VP Education and Certification, PMI Memphis Chapter) Prepare now to take the PMP Certification Exam and earn 24 of the 35 hours of project management education required for exam eligibility. PMI Memphis TN Chapter will host a PMP Exam Prep Course February 13-15 at the Hampton Inn Southwind on Hacks Cross Road. The three-day course will run from 9 am to 4 pm, and will include classes covering the nine knowledge areas, plus the new professional responsibility material. Starting March 2002, the 2000 version of the PMBOK Guide will be used as a reference for the PMP Certification Examination. Our course will cover both the 1996 and 2000 PMBOK versions. The course fee of $495 for PMI members ($525 for non-members) includes continental breakfast, snacks, and course materials. To register, call me at 901-434-7489 or email jlwalters@fedex.com. It would be helpful if you have your PMP Exam Application complete before taking the course, but it is not mandatory. (The Education and Certification Committee is discussing an additional, 12-hour course to assist you in preparing the application packet.) Portfolio Mgt (Continued from page 1) ing, the organization loses its opportu- and positioned to lead. a recession is to employ quot;dump the nity to progress toward its long-term My original paper breaks the approach weightquot; tactics--and the ax is wielded strategic goals. down into sixteen points. But for the ruthlessly on the organizational achieve- The Buckman approach to recession is purposes of this condensation, they are ments so far. Employee layoffs, busi- different. It is proactive, not reactive. summarized as two core strategies: ness unit sell offs, budget cuts, and stra- Rather than engage in dumping tactics, 1.Take advantage of positive risk tegic project Buckman has 2.Manage stakeholder expectations cancellations are carefully imple- all well-known mented a plan Take Advantage of Positive Risk earmarks of this to take adva n- PMI defines risk as occurrences which approach. tage of the quot;affect the project for good or bad.quot; unique internal Don't forget that risk can be positive! These quick investment op- The negative impacts of an economic fixes may re- portunities pro- slowdown are obvious, but what about store profitabil- vided by our the opportunities for expansion which ity temporarily, current eco- often go unexploited? Key resources but inefficien- nomic down- for strategic growth are available in cies in the sys- turn, maintain- quantity and/or quality unknown in tem aren't ing a steady more prosperous times. With good touched. Worse, focus on long- planning and management, you can the cuts can range business move your organization well ahead of backfire, leading strategy. The the pack by applying PM techniques to: to leakage and guiding princi- perhaps even to • Time Management: A business slow- ple is to expose down leaves time and resources free sinking of the and eliminate ship itself. At for project fast tracking. There is less ineff icie ncies, political resistance to management de- best the business while develop- is destabilized cision making, a greater availability of ing a global highly experienced consultants, and and employees and other stakeholders business system. This approach re- are demoralized (e.g. financial institu- more internal resources due to lower quires more focus and creativity, but the pressure in business. You can actually tions, shareholders, customers, suppli- payoff is enormous. In the short term, ers). Executives must realize that if make more, not less, progress toward the ship remains afloat--not by dumping strategically critical goals! they resort to such tactics, in this infor- resources, but by dredging the rocks of mation driven economy, the organiza- poor integration, flawed policy, inflexi- • Integration Management : While tion will lose some of its most crucial bility, and diseconomy of scale with the you're at it, utilize freed resources to knowledge assets--the most talented, help of ORP and Portfolio Management. research and correct inefficiencies, de- capable and creative employees--once In the long term, the organization fine organizational vision, and create the economic tide turns. Just as damag- emerges from the downturn stronger (Continued on page 3)
  3. 3. VOLUME 3, I S S U E 02 http://www.pmimemphis.org PAGE 3 Portfolio Mgt (Continued from page 2) long term strategic plans and ulti- Doing the Right Thing: Vaughan Dewar mately execution of portfolio manage- Advocates Following PMBOK Process ment. • Cost Management: The slowdown —Debbie Flaherty (VP, Programs) offers historically low rates on capital The February chapter meeting will eight years. He's experienced with (fed rate is at 1960's level), consult- include real-life examples of why we creating and technically evaluating new ants, training, hardware and software, should follow our PMBOK processes product designs using virtual designing, outsourcing, and maintenance/ and planning techniques. The examples feasibility studies and risk analysis. optimization. A business system pro- are from a research & development ject that would cost $10 million during Prior to Brother, Vaughan worked with environment involving engineering and the Corporate Research Group at Xerox. a boom costs less than $2.5 million manufacturing teams from multiple now. Leverage lower costs to invest in His work helped generate patents in companies across the globe. We'll also new technology for ink jet printing. His your company's future. cover some of the challenges and strong technical background enables • HR Management: Don't neglect your opportunities of merging Japanese and him to understand and question the golden opportunity to conduct team- American management methods to engineering teams' challenges during building and skills development activi- produce the quot;best of both worldsquot;. development stages of prototyping and ties with your highly motivated em- Highlights include strategies to obtain reliability analysis. ployees! Make use of any time freed resources in a matrix organization, the by sluggish production to create a He is a self-described quot;poet wanna-bequot; need for a defined communications and also works to educate the public stronger, more resilient, highly skilled management plan and project plan team. Remember, management doesn't about the benefits of proper nutrition approval stages, using lessons learned to and minimizing meat consumption. have much control over the squabbling improve future project performance, and that routinely takes place during a Vaughan avidly studies philosophy and the importance of systematic reviews physics and has recently given public boom, but in a bust, decision makers as and follow up activities. well as the project team are worried presentations on Einstein's Theory of Vaughan Dewar has been with the Relativity, and is de veloping an about their positions. This is the time Research & Development Group at introductory presentation for general to exert stronger control and imple- Brother International Corporation for audiences on Quantum Theory physics. (Continued on page 4) FREE PMP Exam Prep Toolkit® Download it now from www.cheetahlearning.com The PMP Exam Prep Toolkit is a unique 24 page handbook filled with highly useful information to coach you through the certification process from start to finish. The Toolkit includes many valuable insider tips and insights. Best of all, it’s FREE… And available immediately via download from the Cheetah Learning website. Visit www.cheetahlearning.com to find out why 30,000 professionals in project management have downloaded this toolkit. Pass The PMP Exam in Five Days -GUARANTEED! The Accelerated PMP Exam Prep Program is your most time and cost efficient path for exam preparation. Featuring proven accelerated adult learning techniques; it condenses 180 hours of traditional project management training into a unique five day learning experience. Candidates take the PMP exam on the last day as part of the course! *This course satisfies the required 35 hours of project management education that PMI requires to take the exam. PASS THE PMP EXAM REGISTER TODAY FOR THE COURSE IN YOUR AREA See our Website at www.cheetahlearning.com or call 888-659-2013
  4. 4. VOLUME 3, I S S U E 02 http://www.pmimemphis.org PAGE 4 Portfolio Mgt (Continued from page 3) hr for offshore projects). The Milestone ment organizational, rather than per- • HR Management: Employees are PMI Memphis Chapter sonal, objectives. very happy to have a steady job, so PO Box 383283 high dollar perks aren't necessary. Germantown, TN 38183-3283 Manage Stakeholder Expectations The influence of politically driven in- Don't forget that a recession alters efficiency is at its lowest level and stakeholder expectations. With effective cooperation with restructuring and management, the changes can yield tre- reorganization at an all-time high. Editor: Gertrude Moeller, PhD, PMP mendous benefits. For example: This is your best opportunity to make Phone: 901-434-7493 efficiency-increasing changes to proc- • Quality Management: Quality equals Email: gmoeller1@fedex.com ess, policy, and culture. Furthermore, customer satisfaction. A recession can lower customer status from quot;kingquot; to expectations of prospective employees http://www.pmimemphis.org quot;beggarquot; as competitors shed produc t are lowered, so acquire highly skilled features or even go out of business. We employees necessary for your strategic can easily delight the customer, whose vision now, at bargain rates. Train lowered expectations are surpassed by senior staff to mentor subordinates in our efficient business system and its required skill areas and cross train the enhanced products. staff for flexibility. Project Management • Procurement Management: Poorly This article condenses key points from Institute performing markets give us more nego- my paper, quot;The Mystery of Irrational tiating leverage. We may even be able Exuberance to Fast & Furious: Project to dictate terms to our business part- Portfolio Management and Business “Building professionalism ners. The astronomical rates charged in System Investment Strategy in a Reces- in project management” 2000 have been drastically reduced (e. sion Driven Economy.quot; For a copy, g. IT outsourcing is now less than $20/ email: skmadapatu@buckman.com. 2002 PMI Memphis Chapter Officers: Scheduled Meetings: Tuesday, February 5 President VP, Public Relations 6:00 pm John Schmitt, PMP Geary Hamm 434-7492 224-6912 Presenter: john_schmitt@yahoo.com gmhamm@fedex.com Vaughan Dewar, PMP VP, Communications VP, Publications (Brother International Corp) Rosemary Smith, PMP Gertrude Moeller, PhD, PMP quot;Advantages of Following 434-4327 434-7493 rose_marysmith@yahoo.com gmoeller1@fedex.com PMBOK Process and Plan- ning Methodsquot; VP, Education/Certification VP, Special Events Jackie Walters, PMP 434-7489 Pamela Payne, PMP a jlwalters@fedex.com 434-7496 plpayne@fedex.com Tuesday, March 5 VP, Finance 6:00 pm Angela Lester, PMP 433-2782 Frank Saladis angela.f.lester@ameritech.com “xxx” VP, Membership Dave Vansach, PMP 434-7495 CBU—650 East Parkway dmvansach@fedex.com Buckman Hall—Montesi Room (parking from Central Avenue) VP, Programs Debbie Flaherty Meeting Cost: $5 434-4658 Refreshments served dmflaherty@fedex.com Please RSVP by 8 am the Monday before the meeting!
  5. 5. Meet Your Board Representatives PMI Memphis TN Chapter 2002 Next time you see them, you'll know who they are. . . and what they've promised to accomplish. Don't hesitate to introduce yourself and share your vision for our future! John Schmitt, PMP Chapter President It’s not only a great privilege to be a member of the PMI Memphis TN Chapter Board of Direc- tors, it's also gratifying and personally rewarding. The gratification and rewards however, come at a price, the price being a lot of hard work. I don’t think any of last years' officers will dis- agree, the time and effort was well worth it. Last year we made terrific strides, increasing our PMPs from 22 to almost 60, holding two highly successful PMP Exam Prep courses, conduct- ing our first Professional Development Day, increasing attendance at our PDU-eligible activi- ties, increasing our cash-on-hand, and redesigning our chapter web site. For 2002, we plan to build on this solid foundation. My goals include: 1) Increase and sustain chapter membership at 250; 2) Host a full one day Professional Development Day (August) with 30+ vendors; 3) Conduct three PMP Exam Prep courses; 4) Establish a matching fund scholarship program with CBU; 5) Add at least 10 student members to our membership; 6) Establish an officer mentoring program (e.g., each offi- cer will recruit an “assistant,” who will work with the officer, learning about PMI, the chapter and the roles and responsibilities for that office); 7) Increase and maintain our cash-on-hand, to a minimum or $25,000. I count on each of our Board Officers to work toward making these goals a reality. Rosemary Smith, PMP VP Communications Stewart White has handed me the torch and I will keep it up and burning in 2002. Communica- tion is not only sending out information, but soliciting thoughts and ideals. One of my functions is timely distribution of information to and from Chapter members. Because the voices of our Chapter members count, occasionally I will solicit your thoughts regarding pertinent Chapter matters and communicate them to the Chapter membership. I will maintain and update the chapter email list for use in mailing chapter notes, newsletters, annual reports, and any other information that needs to be communicated to members. I will also partner with all Chapter Board members to insure that I received pertinent information for distribution. Jackie Walters, PMP VP Education/Certification I think of education as method, rigor and structure, but it is also freedom, flexibility and imagi- nation. One of my responsibilities is to provide members with professional workshops and seminars designed to improve development in the field of project management; this will be car- ried over from the wonderful job Kathy Arnold started last year. We will have two or three PMP Prep Courses this year and we are aggressively soliciting PMPs to teach the courses from the course work that has been developed. Currently our team (Kathy Arnold, Kathie Vetter, Paul Baker and myself) are diligently working on the format for 2002 based on the 2000 PMBOK. We are looking at each section to ensure they are consistent and that they meet the high standards set by PMI. Angela Lester, PMP VP Finance I have a passion for process and order which is one reason I enjoy the areas of finance and ac- counting. As Vice President of Finance I hope to continue to build upon the foundation of process and order that Greg Hausmann has built for the chapter finances. Greg has done the hard part. It is my intention to use this foundation to further solidify the chapter's balance sheet by practicing fiscal prudence and by exploring other ways of generating revenue to sup- port chapter functions. I want to be more than just the person that writes the checks. I hope to be a resource for the Board as they plan various chapter functions and a resource for the rest of the chapter as well.
  6. 6. Dave Vansach, PMP VP Membership Maintaining and increasing the membership is one of the most essential matters that the board faces. Referrals from members are always welcomed and appreciated, but do not reach every business in Memphis. My goals for the coming year include developing new promotional mate- rials, holding a membership quot;blitzquot; annually, working closely with the Public Relations VP to communicate membership benefits, allow first-timers to attend our meetings at no cost, obtain a list of new businesses in our area and send chapter information to them. I've set a goal of 25 new members for 2002. Each month, I'll target 5 non-members to receive the Chapter newsletter with a handwritten note from the President and an invitation to the next Chapter meeting. I would ap- preciate any constructive ideas that would aid in increasing Chapter membership. Debbie Flaherty VP Programs This year we have a Meeting Sponsorhip program, which will add to our catering budget. Sponsors can expect tabletop display, email announcement of sponsorship, and a five minute presentation on their company, product or service. If you know of a potential sponsor, please call me at 434-4658 or dmflaherty @fedex.com. Other exciting developments this year include a new slate of speakers for our meetings. We will hear from Frank P. Saladis PMP, Project Management Advocate with Cisco Systems Inc. and Renee Mepyans, our Region 5 Advocate with PMI. The program schedule is complete through June. If you have a suggestion for a tour or speaker for a chapter meeting, please let me know. We now have online meeting registration at http://www.pmimemphis.org/meetings.shtml, so meeting registration is easier than ever! Geary Hamm VP Public Relations Here are some of my goals and objectives for 2002: 1) Determine the strengths of our chapter by way of a demographic survey, and use the data from the survey as leverage to attract corpo- rate sponsorships, vendor participation at PDD and other events, and to attract speakers to monthly meetings; 2) Promote our cause more effectively to the local media (print, radio, tele- vision) with increased advertising of monthly meetings, PDD, PMP prep, etc. Establish rela- tionships with media members to increase amount of 'free' advertising; 3) Establish an employ- ment network with local business HR departments to make them aware of the talent pool avail- able within the chapter; and finally, 4) Market the PMI chapter to local universities in order to establish student chapters and/or to recruit student members to the chapter. Gertrude Moeller PhD, PMP VP Publications We had a great year for publications in 2001, with a monthly issue of The Milestone from Febru- ary to December, and very good support from the chapter Board members. With the assistance of dedicated chapter members, we also produced a promotional brochure and completed an up- date and redesign of our chapter website. For 2002, I plan to focus on continuing the monthly publication of our newsletter, wi th more content contributed by our general membership and more coverage of topical issues. A policy and process for website review and update will be de- veloped and implemented so that members can always be sure of getting the most current chap- ter information at www.pmimemphis.org. Pamela Payne PMP, PMP VP Special Events Professional development is an important opportunity. It not only enhances our careers but is also socially stimulating. I hope we all use chapter events and the annual Professional Develop- ment Day as learning experiences and networking opportunities to further our project manage- ment careers. During my tenure, I will work diligently with committee members to provide in- teresting, enlightening events for our Chapter. My plan includes a full-day, multi-session PDD with a variety of vendors (we already have a working Vendor Selection Committee). If anyone is interested in assisting with planning any aspect of chapter events or has suggestions, please contact me at 434-7496 or email plpayne@fedex.com. I truly look forward to this upcoming year.

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