Project Portfolio Managment in a Recession Driven Economy - YR2002
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The document discusses how Buckman Laboratories was able to weather an economic recession through organization-wide process reengineering and global project portfolio management of its business systems. It implemented a single, flexible global business system using ERP software to gain efficiencies and consolidate reporting across its operations in over a dozen countries. This allowed the company to continue growing sales and avoid layoffs during the economic downturn, while other companies were cutting costs and projects. The success was attributed to executive sponsorship of the aligned initiatives and a professional approach to project management.
Project Portfolio Managment in a Recession Driven Economy - YR2002
- 1. From Boom to Bust and Back Project Portfolio Management & Organization wide Re-Engineered Process In a Recession Driven Economy Saji Madapat, CPIM, PMP, CIERP Buckman Laboratories PMI Professional Development Day - 2002
- 2. “ Irrational Exuberance” Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller In the era of economic boom: Exciting new investments and acquisitions! BIG PERKS! (e.g. private jets for executives; BMW’s as joining bonuses to programmers) “ Creative Accounting” (book cooking)
- 3. System Failure Has Corporate American lost its way? “ Investors Running Scared—NASDAQ 5 Year Low” (Wall Street Journal) “ Energy Firm Executive Kills Self” (Washington Post) “ Castro to US: I told you so— As U.S. stock markets wither, Cuban leader questions whether the world can sustain capitalism” (CNNFN July 26, 2002) Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 4. Party’s Over. . . What to do?
- 5. DUMP Strategic Projects Core Assets Strategic initiatives (R&D) Vendors Knowledge Capital -Employees Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller OR . . .
- 6. The Corporate Ship: High Tide Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller Inefficiencies
- 7. The Corporate Ship: Low Tide Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller Inefficiencies
- 8. The Corporate Ship: Busted! Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller Sell strategic units Layoffs Cut projects Strategic budget cuts Inefficiencies
- 9. “ Dump the Weight” Employee layoffs are routine . . . Budgets are cut to the bone . . . Strategic projects are cancelled . . . BUT the underlying inefficiencies aren’t touched! Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 10. Expose & Eliminate Inefficiencies Expose & Eliminate Inefficiencies
- 11. The Corporate Ship: High and Dry Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller STRATEGIC INVESTMENTS Inefficiencies
- 12. Is there really a “New” Economy? YES: There really is a GLOBAL market now, and national economies are more interconnected than ever YES: Leading corporations abandoned financial disciplines and well-grounded ROI (STAY TUNED ON THIS! NO: Same, rickety old management techniques! Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller The New Economy
- 13. New Economy continued. . . Technology = more choices for customers Technology = more information for customers (and competitors!) Speed to market is accelerating Unprecedented competitive intensity Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 14. GOOD TIMES ARE HERE; Better Times are Coming! “ Paradigm Shift” Take advantage of POSITIVE RISK Manage Stakeholder Expectations Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 15. “ Risk” Unplanned occurrences that can affect the project for good or bad (PMBOK definition) “ For bad” Sales declines; volume loss “ For good” Low cost of capital Slump produces: freed up time, skills, newly motivated employees, opportunities for integration, rationalization, and culture change! Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 16. Stakeholder Expectations Manage them! Customers: what’s more important, cost or features, or service level? Reevaluate! Management: politics, “SOP” Employees: perks, position/R&R, CULTURE CHANGE Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 17. “ How would you like to. . . see your organization weather the recession in excellent financial health . . .” with increased sales . . .” an improved competitive position . . .” and enhanced employee loyalty ?” How would you like to see costs for business system projects drop by over 70%? Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 18. It’s not a dream! It’s a CHOICE. Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 19. Examples from “Real Life” Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 20. Example #2: Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller Dedicated to Father of Knowledge Management “ Communications is human nature; Knowledge sharing is human nurture!”*
- 21. Who is. . . Buckman Laboratories? Provides specialty chemicals and solutions Employs 1300 loyal associates (no layoffs since its inception in 1945 ) Global operations (90+ countries) Speaks more than 15 languages ! Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 22. When Economy going South, One company’s strategy has paid off! 8% Sales Growth— in 2nd Qtr & record-breaking year across the board! Fifth Consecutive— Most Admired Knowledge Enterprise – ahead of other Global Hall of Fame members - GE, British Petroleum, HP, and Xerox. If you can believe. . . . Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller "My father taught me many things ... keep your friends close, but your enemies closer." - The Godfather
- 23. How ? “ Global Business System Point” ORP = Organization-wide Re-engineered Process & BS Project Portfolio Management : One Flexible Global Business System One Global Core Knowledge Project Team One Global Infrastructure Project Portfolio Management & Outsourcing non-core Business Processes. Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 24. Traditional Multinational Organization’s Business System: Run by a group of feudal Autonomous Managers. Each Organization sets its own objectives and business processes, using its own System. RESULT: fragmented data, lack of visibility, impossible to co-ordinate Organization as a whole. Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 25. Traditional Global Corporations vs. Buckman Labs Scenario Traditional Buckman* Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller Business System (BS) Islands One Global Project Portfolio Team Islands One Global BS Infrastructure Islands One Global BS Risk Management ??? One Global Integration and Consolidation Hell One BS
- 26. Buckman Laboratories’ Global Business System One Business System for one organization! Global Buckman BS Model Implemented through ERP – BaaN In Twelve nations around the globe Global Consolidation & Reporting (Hyperion) Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 27. Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller Buckman’s Global Business System Global BS PPM Team, Solution & Infrastructure Buckman Laboratories, Inc. Memphis, Tennessee, U.S.A. Buckman Laboratories, Inc. Cadet, Missouri, U.S.A. Buckman Laboratories, S.A. DE C.V. Cuernavaca, Mexico Buckman Laboratorios LTDA Campinas, Brasil Laboratorios Buckman S.A. Buenos Aires, Argentina Buckman Laboratories (PTY.) LTD. Hammarsdale, South Africa Buckman Laboratories PTE LTD Singapore Buckman Laboratories,K.K. Tokyo, Japan Buckman Laboratories PTY. LTD. Wagga Wagga, Australia Buckman Laboratories,LTD. Auckland, New Zealand Buckman Laboratories Italiana,S.r.l., LTD. Milano, Italy Buckman Laboratories Quimica, LDA Parede, Portugal Buckman Laboratories, S.A.M. Principaute de Monaco Buckman Laboratories, Iberica Barcelona, Spain Buckman Laboratories, S.A. Ghent, Belgium Buckman Laboratories,Gesellschaft Vienna, Austria Buckman Laboratories Gmbh Bad Homburg v.d.H.,Germany BaaN & Hyperion
- 28. Global Core Knowledge Project Portfolio Team Based in Memphis Supports the worldwide Buckman organization. Responsible for: developing a Global Business Model implementation, support and optimization Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 29. Global Infrastructure Business System server based in Memphis & taking the advantage of Time Zone differences by sharing: Concurrent Licenses Support Infrastructure Specialized Professionals. Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 30. Risk Management World Class Business Continuation plan developed even before 9/11. In case of Disaster, all our IT operations will shift to Philadelphia. Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 31. Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller ERP Project Scenario BOOM vs. Bust BaaN Implementation USA (1998) Canadian (Planned 2003) Cost of Capital (Fed Rt) Consultancy Expenses Hardware/software Project Duration Support, Maint., Optimization Implementation Team Customization Percent of Business Practices in Business System post-impl Bonus Systems Business Continuity Plans Probability of Success pre-impl Global Business System Global Consolidation & Reporting 7-8% +$3 M +$0.5 M 1.5 Years Many Consultants Inexperienced Heavy 70% Nil Nil 20-40% 9 SW systems* No 2-3% Nil Nil 4 months Internal resources Experienced Not needed 95% Hyperion etc.* Fully equipped 90% One system* Yes
- 32. Dig More about GBS & ORP? Please Visit “ The Mystery of Irrational Exuberance to Fast & Furious ” Journal Of Research Findings Of ERP Systems And Enterprise Resource Management , June 2002. “ Excelling in A Recession Driven Economy – Project Portfolio Management and Business System Investment ” : “ Milestone ”, Project Management Institute, Memphis, April 2002 issue . http://www.pmimemphis.org/files/milestone_0302.pdf " Organization-wide Re-Engineered Process (ORP) -RIP to ERP: Buckman’s Holistic Approach ,” Journal Of Research Findings Of ERP Systems And Enterprise Resource Management , June 2001. (Later published on CIBRES.COM as featured paper http://www.cibres.com/articles/20011001-rip to orp.htm.) "In the Whirlpool ERP Horror Stories: The Classic Buckman Success Story ,” Journal Of Research Findings Of ERP Systems And Enterprise Resource Management , January 2001. (Later published on CIBRES.COM as featured paper http://www.cibres.com/articles/20010501 .) Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 33. Wrapping Up. . . Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 34. “ The Moral” Executive Sponsorship : Alignment of project with strategic vision Project protected Small teams with aligned support personnel Professional project management Quick turnaround Dramatic results Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 35. The End Unpublished work,copyright 2002 Saji Madapat & Gertrude Moeller
- 36. About the Author Saji K Madapat CPIM, CIERP, PMP Saji has rich experience in most aspects of ERP including all major functionalities and Technical area in BaaN ERP & Hyperion. Before venturing into ERP, he was involved in Project Feasibility studies, Appraisals, Industry Analysis, Company analysis, Financial Reporting etc. areas. He has a BS in Production Engineering and MBA in Finance. He is certified in Project Management Professional (PMP) of PMI, CPIM of APICS and CIERP of CIBRES. He has represented or worked with leading Consulting firms including E & Y, Arthur Anderson, BaaN (Vanenburg) Business System and CroweChizek in leading ERP Projects in USA. Presently, he is working as Business System Specialist (BaaN & Hyperion) in International Business Division of Buckman Laboratories, Memphis, USA. He is responsible for BaaN Finance & Hyperion implementation/support of over a dozen Buckman Companies around the world. Saji is active in various PMI (Project Management Institute) and APICS activities. Unpublished work,copyright 2002 Saji Madapat