The most significant bottlenecks faced by project managers are time, competition and allocation of resources. These restrictions directly impact customer satisfaction, timely delivery and profit potential. Clients can be especially demanding as deadlines and milestones approach. This is especially applicable to the high-technology sectors including: information systems; architecture and construction site management; engineering; and advertising and marketing. When time and available resources begin to drive the project, profitability suffers.
The key to ensuring profitability and timely delivery is producing an accurate estimate of time and resources; not just once, but every time an estimate is generated. It is neither practical nor productive to use stand-alone non-integrated solutions with multiple contributors, each working on their specific piece of the puzzle. Managing the system becomes far more complex and labor-intensive from an administrative perspective. Delays are inevitable in cost analysis, manpower hours expended, direct and indirect charges and similar tasks that must be absorbed as overhead. This is generally an irrevocable cost once a certain threshold is reached. At this point, the cost of waiting for reports and input from a number of various departments is eating into the profit margin and can price the project out of an otherwise competitive position.
Implementing an effective Enterprise Resource Planning (ERP) system will resolve most integration-oriented issue and improve the likelihood of higher profitability. An ERP specifically tailored for the tasks of project management will be able to handle the entire life-cycle of a project, from inception through execution, covering all the requisite milestones from initial estimates to the deliverable results of the project.
There are five basic concepts which must be addressed. They are:
1. Identification and selection of the ERP platform.
There are a number of options to consider when selecting an ERP platform. Is it able to support various hardware and project accounting software technologies? Is it portable as new technologies emerge with minimal intervention and costs? As an example, the Microsoft Enterprise Application Suite provides the project manager and staff with the tools required to integrate data while maintaining accuracy, real-time processing speeds, while not sacrificing the flexible familiarity of the MS Office environment. This leads to shorter learning curves and can eliminate manpower-intensive downtime for extensive retraining.
2. Reduction of administrative overhead
Overhead costs can be significantly reduced by a fully-integrated ERP solution like Microsoft dynamics GP. Data sharing, auditing and security considerations, interfacing with the accounting department, analysis of project status, budget analysis and resource allocation all lead to faster response while reducing the need for staff intervention. Concise and accurate reports, generated in a timely manner prevent surprises. The need for project troubleshooters and contingency handling staff is reduced or wholly unnecessary.
3. Generate real-time results to eliminate redundancy
Wide area network – Internet – and local area network – in-house Ethernet – integration are essential to effective project management. With centralized data entry, changes are promulgated and propagated through the entire system, enhancing real-time responses, resource reallocation and updating project status as near-instantaneous events, the results immediately accessible via the network. With web-based applications, access to the ERP is possible whether in the office, out in the field, on the road, at the project sites. Wherever the Internet is available, the ERP can be accessed by authorized users allowing dynamic integration of emerging data. The “overtaken by events” situation is virtually eliminated.
4. Design of a collaborative network
Centralization of information and data distribution enabled by a collaborative network are essential to timely and accurate results. Definition and identification of the decision makers and their levels of responsibility and authority are critical to realizing optimal performance from project field staff and in-house operations and financial departments. Multiple level filtering and selection criteria allow only the data required by specific individuals or necessary for supporting staff to perform a function reduces complexity and improves efficiency.
5. Realization of potential
It is not enough to simply have ready access to data. Raw statistics are meaningless without a solid contextual framework. By implementing a functional and practical ERP, potential problem areas can be more readily ascertained and a solution can be effected, often before the problem manifests. A project manager can analyze information in context instead of attempting to manipulate multiple sources of asynchronous input data. Real-time analysis based on instantaneous integration of project transactions can yield serendipitous results, with the potential of unanticipated cost-savings, staffing requirements, enhanced productivity and can lead to increased profits. In conjunction with ad hoc inquiry, certain Key Performance Indicators (KPI) point to specific areas of opportunity for enhanced operations without sacrificing vital security and confidentiality constraints.
The implementation of a tailored project management ERP/EAS will lead to increased profit potential by:
- Reduction of costs associated with longer than necessary lead times
- Maintenance and adherence to milestones and budget constraints.
- Improved allocation of manpower and materiel resources
- Supporting tools ensuring timely and accurate response from the accounting department
- Accurate identification and recognition of revenue streams
- Lower overhead expenses from project operations and administration
- Enhanced communication within the project between members and supervisory staff
- Portable applications for integration of related corporate and joint venture networking
- Immediate real-time access from by authorized users via the collaborative network
Posts
