Turning Work Into Measurable Results.

• Author: Wilson, Janet

"Our strategic plan calls for growth through acquisition and more effective use of our ERP system," says the CEO of a midsize manufacturer. Yet, as he and his CFO acknowledge the need for improved corporate performance, the frustration level in the room is obvious. They are stuck in the midst of lost market share, increased costs of raw materials and labor and extensive fluctuations in distribution costs.

Everyone in the organization was singing the same tune: "We're working on it." Yet improvement in the month-to-month bottom line wasn't in sight. These executives needed a practical way to turn work into results. They needed a way to answer the question: "How can we tell what's going on?"

The "we're working on it" syndrome is not unique in today's corporate merger-mania economy. In many organizations, departmental functions are focused on solving more immediate problems, rather than long-term corporate issues. Their efforts lack integration at the enterprise level and frequently wander without specific objectives, then wind up costing more than they return.

A good example of "wandering" is the objective of producing a more effective forecast with improved accuracy. Sidetracking can easily take place if metrics have not been put into place to determine a measurable result or direction. If current effectiveness or accuracy is unknown, then it's not realistic to set goals such as "achieve a forecast in six weeks with 95 percent accuracy."

That's when the answer to "what's going on?" becomes a myriad of tactical, reactive operations rather than strategic, proactive improvements.

As the CEO and CFO describe their organizational strategy and management of the work efforts get underway, it's evident that the bot tom line is being held hostage by bloated project expenses and lagging lead times. These results are substantiated by industry statistics that indicate a 75 percent project failure rate due to disappointing results or abandoned projects, according to the Standish Group International, a research group. Stan dish also estimates the annual cost of these failures to corporate America at $80 billion to $145 billion.

With only seven available resources for every 10 requirements and an ever-climbing failure rate of projects, there's a critical need for determining the right projects to pursue with the right people.

Developing a PMO

That's when this manufacturer's CEO and CFO turned their attention to the benefits of developing a project...