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    Maximising value through quicker project execution

    Synopsis

    Daniel Walsh, a US-based project management expert, says Delays in execution of projects can be changed through real-time assessment of risks and targeted aversion of the really serious ones.

    TNN
    Delays in execution of projects strain finances of companies, other firms and governments, especially defence outfits, across the globe. The cost of lost opportunity due to project delays can be immense for even large and diversified companies. One-project companies, including start-ups, can die out of such delays and they often do. With the unleashing of global finance capital, increasingly, dearth of finance is a less frequent reason for such costly delays. Projects get delayed/abandoned as time runs out, severing or stultifying the link between the product/service and the market scenario. In India, such catastrophic delays are so common that they don’t make headline news these days. At the other end of the scale, we have companies and businesses that grew at a scorching pace by virtue of prompt or even quicker project implementation.

    According to Daniel Walsh, a US-based project management expert, a lot of this can be changed through real-time assessment of risks and targeted aversion of the really serious ones. He has developed and applied a new (improved) project management paradigm called Critical Chain Project Management (CCPM) across industries and claims to have achieved “breakthrough successes”. Mr Walsh, consultant to US Marine Corps, Boeing, Lockheed, US Navy, etc., spoke of his techniques and also discussed their utility in the Indian context. Excerpts:

    How does CCPM improves upon the conventional project management models?

    At a broader level, CCPM goes by the Theory of Constraints, which is based on the premise that every organisation would have one key constraint that undermines its performance relative to its goal. In most firms, processes (relating to execution of a project) are not synchronised; in fact, they often work at cross purposes. We address this problem using the scientific method of ascertaining cause and effect linkage. The aim is to the maximise value and value can be profitability enhancement or some cost avoidance, depending on the nature and objective of the organisation/project.

    One major aspect of our methodology is that we have brought a new dimension to the project management technique by attaching a lot of importance to having the resources (mainly manpower) in time and readily available where it is required for avoiding delay. We ensure that in the long chain of cost, no crucial task would be precariously resource-dependent. We sequence the tasks and also manage the resources in conformity with the sequencing. Rather than focusing on how much work has been completed, we tend to assess how much more time is required for execution of the project.

    How exactly do you identify the risks?

    The principal technique we employ to manage time is to accord the protection at a higher level of risk concentration — the systems level — where it is actually needed. This has been found to immunise the project against any time overrun.

    At the lower level (the task level), there is a lot of variability/uncertainty and the management of many of them may not be a dire necessity in the overall scheme of things. So the risks are aggregated at a certain level where they can be managed rather easily. Simply put, we identify the problems that can really hurt the project. In fact, it has been found that interventions when they are not really needed could even adversely impact the project.

    Our focus on the more concentrated areas of risks are very useful in their real time assessment. We have been able to achieve completion of projects not only on-time but also up to 50% ahead of schedule in certain cases.

    Most of your clients are big companies. Is CCPM more suitable for them, rather than small and mid-cap firms?

    Not really. The basic principles of our technique remain the same, irrespective of the size of the firm or the industry it belongs to. We have worked with many Fortune 500 and Fortune 1000 companies but also have very small firms as clients.

    Minor modifications and adaptations required to suit the size of the company or the industry. It is a matter of scaling, one could say. Up to a certain level of growth, an entrepreneur will be able to manage projects himself without any hassle. But at a certain higher level, normally during transition from mid-cap to a large capital base company, CCPM can function as a wonderful bridge.

    Certain industries, by their very nature, undertake riskier projects and are more vulnerable to rapid market flux. Knowledge-based industries like IT and biotech, for instance.

    True. We have worked with many biotech firms and pharmaceutical firms doing things like clinical trials of drugs. Our intervention has been helpful for them to fully use IPR-enabled rapid market realisation. In case of software manufacturing firms, the products have dangerously small market life, and project delays are often catastrophic. CCPM responds to such situations.

    In India, there is now a policy emphasis on building infrastructure through the PPP route. Rather than money, lack of project implementation expertise is an issue. Haven’t consultants like you got a role to play here?

    Indeed. Massive investments are being planned in infrastructure industries in India. These will increasingly materialise in the coming years. My firm Vector Strategies, working with our Indian partner, Avenir, is looking at offering CCPM solutions for India’s core sector projects. We can give valuable inputs for the bidding process for awarding such projects.

    You work for public sector companies and projects too — US Navy and US Marine Corps, for instance. Indian government is doling out huge money for social sector projects and the administrative machinery it uses is slothful. Sophisticated project management tools might be of help.

    CCPM lays emphasis on empowering people engaged in execution of projects. We ensure that these people have accurate and timely information which enables them to take prompt decisions. Experience shows that this can immensely benefit government sector ventures.
    The Economic Times

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