Whitepaper Rise of the Project Workforce

8/2/2019 Whitepaper Rise of the Project Workforce

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November 200

A TENROX WHITE PAPE

The Rise of the Project Workfo

Managing Proj ect s and Pein a Flat W


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1 Tenrox, All rights reserved.

Execut ive Summary

As organizations and managers find themselves with two feet plantedfirmly in a fully interconnected, truly global economy, one truth isevident for all enterprisesand parti cularly for project-dri venbusinesses that rely heavily on project teams and informat ion workers:

Our established ways of gett ing work done, of accounting forthis work, of monitoring compliance, and of analyzing work inprogress for intelligence that wil l help us do future work faster,bett er, cheaper and smarter are through. They are no longerenough.

In his seminal work Only t he Paranoid Survive, then Intel CorporationCEO Andy Grove coined what would become the de factophrase forpoints in t ime such as this: strategic inflection points. St rategicinflection points mark full-scale changes in the way business isconducted. The ways we work, t he ways we compete, and the wayswe win require a new approach, a new outl ook beyond simply makingour existing systems bigger, bet ter, faster. During st rategic inflectionpoints, businesses that get it and change, achieve unprecedentedgains; those that do not, stumble and fade.

Driving our current st rategic i nflection point is the underlying social,economic and world infrast ructure t ransformation of what globalizat ionguru, author and Pulitzer Prize winning New York Times columnistThomas Friedman call s a fl at world. In a fl at world, Friedmanexplained to Wiredmagazine s Daniel Pink, organizations compete on a level, global, Web-enabled playing fi eld that allows for mult iple formsof collaborat ion wi thout regard to geography or distanceor soon, even

language.

The problem? Today s business systems are not designed to plan,schedule, manage, audit and optimize work t hat gets done in a flatworld.

This whit epaper:

reviews the market dynamics that are creating our f lat world explores the new nature of work in this environment highlights why today s business and IT systems fall short , and int roduces Proj ect Workforce Management, a new breed of systems

designed to manage people and proj ects in a f lat world.


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The Rise of t he Proj ect Workforce

Business Must Change in a Flat World

In his book The World is Flat Friedman notes that computers, email, fiber optic

networks, teleconferencing and dynamic software all have irrevocably changed theface of business. Friedman writes, More people t han evercol laborate and compet ein real-time with more other people, on more different kinds of work, from moredif ferent corners of t he planet , and on a more equal foot ing t han at any previoust ime in the hist ory of t he worl d.

Futurist, trends and innovation expert Jim Carrol concurs in his book What I LearnedFrom Frogs In Texas, wri t ing about what he call s an era of unprecedented andrelentless change. As global izat ion and technological advances converge, Carrolnotes, Competit ion is changing overnight , and product l i fecycles oft en last for j ust afew mont hs. Permanence has been torn asunder. We are in a t ime that demands a

new agil it y and fl exibil it y: l eaders must have t he skil l and insight t o prepare f or afuture that is rushing at t hem faster t han ever before.

Globalization, the fragmentation of the enterprise (including the ever-increasing useof outsourcing), and real-time collaboration across the planet have enabledcompanies to reduce costs, leverage a global talent pool and execute challengingdeliverables with a dispersed yet incredibly connected workforce.

Regulatory Expansion Adds Complexi ty

With the increasing complexit y of labor and proj ect work dispersion also has come anunprecedented push toward the protective measures of regulatory oversight andcompliance. Companies are challengedin this dispersed labor and proj ectenvironmentto achieve and maintain compliance wit h regulat ions such as Sarbanes-Oxley, which directly impact project and workforce management and execution.These shifts are changing the way we work, collaborate and make business decisions.

The ways in which we manage work have remained largely the same, while thestructure of our organizations and natureof work have changed radically over thepast several decades.


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Market Dynamics That Challenge Tradit ional Project Management

The foll owing are major market dynamics that not only contribute to the flat tening ofthe world, but also challenge the management capabilities of the processes andsystems we use:

Globalization. At the start of t his shif t , organizations moved simple tasks li keassembly and manufacturing to developing countries where this work could becompleted more economically. In globalizations current wave, organizat ionsare outsourcing knowledge work as well. The Internet, fast networks and aglobally connected workforce are t he driving forces behind t his trend.

Regulatory scrut iny. As organizations have become more fragmented, t heyalso have become subject t o greater regulatory scrut iny. In order to comply,they need more thorough and expansive systems for assigning, t racking andmanaging accountabil it y for the work being done. This oversight protects

everyone: workers, customers, suppliers, the organization and its stakeholders.

Flatt ened hierarchy. In a f lat world, t op-down decision-making is replaced bybottom-up empowerment . Widely-distributed companies cannot use anauthorit ative command/ control st ructure. Instead, market leaders wil l f indways to remove the red tape shackles from their project teams and empowerthem to get work done and make local decisions.

Fragmented enterprises. Todays work is defined by atomized segments thatare delivered by specialized workers both inside and outside the company.Organizat ions assign work to int ernal or outsourced teams based on costs,

available talent, the nature of the work, and customer expectations.

A Flat World Demands Collaboration and Cooperation

The net result of a f lat world is an overriding need for collaboration and cooperat ion.The problem is that companies are not really all that adept at collaborat ing; t oo manyenterprises struggle with thinking innovatively about how they work, and fail tocreate processes and systems that support cooperative collaborat ion.

In What I Learned From Frogs In Texas, Jim Carrol reports the results of a survey by

Collaborat ive St rategies LLC that revealed 32%of t he time in a typical working weekis spent on helping others resolve quest ions. Of these quest ions, 54%have beenanswered before, yet the answers are not recorded in any type of accessibleknowledge base so that t hey can be inst it ut ionalized. Instead, organizat ions cont inueto waste time answering the same quest ions. This is despit e the fact t hat 81%ofthose in the survey believed it was important to share such knowledge.


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Often, the desire to collaborate is not supported by processes and systems that makecollaboration easy, or bett er yet , a natural part of the way work flows. Instead,entrenched roadblocks and business challenges get in the way. Some are l istedbelow.

Employees are working very long hours to deliver projects, but managementcannot report on the reasons why resources are so overloaded. As a result ,management also lacks the insight to create innovative long-term solutions forbalancing resource demand and resource avail abilit y.

Businesses lack tangible measures of the value versus eff ort of dif ferentinternal departments.

Manual data collect ion processes mean management receives reports onbil lable ut il ization and capacit y planning after month endtoo late t o makecorrections on work in process, and too late to take corrective act ion before

init iat ing new projects.

IT or engineering is unable to produce a report that shows the cost breakdownof effort across dif ferent types of proj ectssuch as research and development ,client and maintenance proj ectsso that work allocat ions can be opt imized tomeet the organization s goals.

Business report ing comes aft er the fact. Organizations do not havestandardized processes and systems for capturing the details of work. Theyoft en use pil lars of disconnected data that somet imes confl ict . For example,they track t ime using spreadsheets, mult iple informat ion systems or mult iple

t imesheet and expense report ing systems (one for payroll , another for proj ectt racking and another for billable work). The information in these systems doesnot always agree. Managers use manual entry (such as merging spreadsheets)to integrate the data for report ing and decision-makingwhich consumes t imeand people resources, and often results in inaccuracies.

Decentral ized shared resource pools, spread across business unit s, cit ies,countries, and time zones, often have no systems to enable the real-timecollaboration and data access their work requires.

Compliance costs are escalating as regulat ions become more str ingent, whilethe way work gets done becomes more fluid. The lack of process automationtied to compliance requirements results in high costs for internal and externalcompliance audits and process re-engineering (training, updatingdocumentation, and developing appropriate report ing methods, for example).


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The New Nature of Work

At the crossroads of a flat world and the heightened demand for collaborativeorganizations is the new nature of work.

Today, work is increasingly differentiated, meaning it is compartmentalized intounits of subject matter expert ise delivered by collaborating specialized workersboth inside and outside the company. While only a short while ago j ust 10%of anenterprises work was formed around collaborat ive projects and dif ferentiated t ime,today about 40%is, and experts expect this to climb to 70%three years from now.

This shif t in t he way work gets done requires organizations to track dif ferentiatedt ime and expenses, to all ocate costs (whether or not they are billable) t o the rightproj ects, and to examine and just if y spending and labor costs across both internal andexternal service units and engineering departments.

The flat tening of the world and the empowered collaborat ive workforce has asubstantial impact on how we track and measure work:

Work is delivered or centered on an init iati ve or a project. Companies areable t o quickly assemble a t eam of geographicall y dispersed, highly specializedprofessionals to execute a specif ic project. These teams are formed for varyingdurat ions depending on the nature of the project, and are dismantled just asquickly as init iat ives are completed. Some have called this the HollywoodModel of work: br ing together the best resources to make a movie, t hendisband and form other teams to make other movies.

It is no longer sufficient to analyze customers, projects, employees andfinancial data as separate ent it ies. These elements are too interdependent tobe tracked by different executives, each using their own tools and policies formonitoring and report ing. A new global system of record is required thatcombines the customer, the talent, and the project.


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Traditional Systems Prevent Progress in a Flat World

Inadequate and disconnected describe most of t he systems in use today.Tradit ional Enterpr ise Resource Planning (ERP) systems fail to provide a single system

of record that unifi es customer, project and workforce management. Whether or notthey use an ERP system, most organizations (and al l Global 2000 companies) havedeployed mult iple enterprise applications and heavy customizations, i ncluding but notlimited to:

Customer management systems, such as salesforce.com, SalesLogix, MicrosoftCRM, Siebel CRM or other softwares

Proj ect scheduling and proj ect collaborat ion software, such as MicrosoftProj ect, Primavera, Proj ect KickStart or other systems

Portfolio management solutions (such as Primavera or Computer Associate sClari ty) used by internal IT departments to priori t ize projects, to conductwhat -if -analysis, and to align projects with company objectives

Port al development and document management soft ware such as Microsoft sSharePoint or Captaris Alchemy

Time and attendance tracking software, whether ERP customizations orseparate systems from companies such as Kronos or Workbrain

Travel and entert ainment expense t racking software, whether ERPcustomizat ions or systems from companies such as Concur or Ariba

Bil lable t ime t racking software, whether ERP customizat ions or separatesystems such as Sage Carpe Diem

Business process management software (f rom companies such as Ult imus orLombardi) to automate internal or customer-facing business processes

Often these applications have their own databases, rules and policies. Sometimesthey are complet ely disconnected from t he companys ERP, account ing or payrollsystems. Disconnected systems mean dozens (and in large corporations easilyhundreds) of spreadsheets to track work, to import and export data and to report oncustomers, proj ects and workers.

In addit ion, spreadsheet-based tracking and report ing is used as cure all remaininggaps approach that creates a blizzard of assorted and often confl ict ing data.Disconnected or manually integrated systems, a mish-mash of unapproved data, and awild email exchange of spreadsheets leads to an environment that is ripe for revenueleakage, errors, fraud and systemic cont rol weakness.


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Project Workforce Management: A System for a Flat World

To operate effectively, businesses must combine:

Human capit al management Proj ect management Business process management Cost / revenue account ing into a synthesized solut ion called Project Workforce

Management.

The underl ying business process management workf low in this system adapts to eachprocess, proj ect, business unit and organization. It automates account ing for timeand expenses of a project workforceboth wit hin the company and without , t o

include its service providers. The software can be configured to work the way thecompany does, and fundamentally empowers individuals and decent ralizedorganizations.

Proj ect Workforce systems enable companies to meet the cooperative collaborat ionchallenges of a flat world. They establish a new system of record that int errelatesthe customer, the project and the workforce (talent ) t o ident ify interdependenciesand to simplif y priori ty sett ing and talent sourcing, while balancing projectprof it abil it y with customer satisfaction. Customer Relat ionship Management systems(where t he customer is the system of record), Proj ect Management systems (wherethe proj ect is the system of record), and Human Capital Management systems

(where the employee is the system of record) cannot accommodate theseinterdependencies.

Project Workforce Management Identifies Interdependencies

Proj ect Workforce Management l inks t he customer, t he project and t he talentt o create a global system of record.


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The global project izat ion and fragmentat ion of work in the f lat world hasresult ed in requirements a Proj ect Workforce Management solut ion ful f il ls:

Proj ect workforce management helps design and oversee t he process itself ,plusprovides real-t ime visibil it y into fi nancial implications. A Project

Workforce Management solution provides the modules that link into a singlesolut iona control hub for total visibi li ty and control. For example:

cost accounting for dif ferentiated t ime and expenses productivity analysis budget -versus-actual comparisons resource ut il ization trends, and

segmented reporting to fully understand the effectiveness and profitabilityof each separate proj ect, resource group, and customer.

Change is a constant. Proj ect Workforce Management solut ions make it easyfor managers to change processes as they learn more about a project , resourcegroup or customer. Process workf lows are depict ed graphicall y, and can bechanged using simple drag and drop features. Organizations also canstandardize t hese changes locally or worldwide if necessary.

Work has been broken down into smaller pieces that sometimes overlap:business units, countries, outsourced teams, cost centers, and individualresources must collaborate, cooperate and handle more than one proj ect at a

t ime. A Proj ect Workforce Management solut ion mirrors this reality bybreaking down work and organizational structure into micro-components thatcan be tracked and summarized in any combinat ion.

A Proj ect Workforce Management system provides an interact ive environmentfor the real-t ime t racking and analyzing of proj ect workforce data thatcomplies with established policies and best practices, and enables immediatedecision-making.


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Project Workforce Management Plans, Manages and Repor ts onDifferentiated Work with Interdependent Management

Cl ient B il li ng Cost Account ingCompleted

Projects

Compliance(SOX, SR&ED,

DCAA)

Reporting andLearning

d i f f e r e n t i a t e d w o r k

ProductivityProductivityDifferentiated

Time &

Expenses

Differentiated

Time &

Expenses

Best

Practices

Best

PracticesBudget

Vs.

Actual

Budget

Vs.

Actual

Resource

Utilization

Resource

Utilization

i n t e r d e p e n d e n t m a n a g e m e n t

Proj ect Workforce Management soft ware is designed to plan, manage, t rack and report on"dif ferent iat ed work" in an int erdependent and holist ic way. It helps companies remain compet it ive

and meet t he signif icant challenges of t oday's f lat world business envir onment.

The Underlying Workflow Platform

All Project Workforce processes are driven by an underlying business processmanagement (BPM) platform. This platform graphicall y represents people, proj ectsand financial processes so that workf lows can be designed, configured and changed byauthorized managers, without requir ing programming resources. The graphicalworkflow interface enables users to visuall y define, control, t rack and auditapprovals, routing, role-based assignments and notifications. All business processes

use the same graphical workf low concepts and management int erface. By leveragingthe same visual framework and concepts, users experience a consistent and intuitiveWeb interface that is easy to learn and use.


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The Functions

Proj ect Workforce Management centrally manages proj ect workforce related data,eliminat ing many of t he spreadsheets used to t rack projects, t ime and labor,expenses, interdepartmental charge backs, and bil lable work. Proj ect WorkforceManagement encompasses and integrates:

Time and Expense Tracking: Tracks all differentiated time and expenses,whether or not they are billable.

Cost and Revenue Account ing: At t ributes all revenue (and charge back),spending and labor costs to specif ic proj ects, and establishes a formal chargeback system for shared service depart ments such as IT and engineering.Formalizes and enforces a revenue accounting and recognition policy that is incompliance wit h regulat ions. Produce customer invoices, or charge back otherbusiness unit s, on a proj ect basis for all bil lable work, spending and laborcosts; or invoices based on a pre-defined bil ling schedule.

Workforce Planning: Handles competency and capacit y planning. Opt imallyschedules your workforce by locating the most optimal available resources toaccomplish specif ic roles in a proj ect.


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Project Process Management : Manages project processes, i ncluding proj ectinitiation, risk and issue reporting, and scope control using policy-based andenforced best practices.

Analytics: Provides a consolidated, real-time and dynamic view of thecompany's projects, processes and workforce, with a special emphasis onreporting the financial perspective.

Proj ect Workforce Management modules t ight ly integrate wit h account ing and payrollsystems. The same reviewed and approved costs/ expenses and dif ferent iated t imethat are used to update and report on project status can also be used to processpayrol l, reimburse expenses, invoice for any bil lable work and spending, and updatethe accounting system wit h summary or detailed cost / revenue t ransactions.

A Roadmap to Empowering Your Project Workforce

Most companies cannot (and generally should not) make massive and sudden changesto their IT and project/ workforce management infrast ructure. Large enterprisesoftware implementations (such as multi-year ERP implementations) are famous forhuge costs and highly quest ionable ROI, and for imposing an unacceptable level of riskon the organizat ion. After complet ing and deploying a large soft ware project,companies often become risk averse, resist change, and prefer the status quo. Theirexhausted IT organization no longer has the energy or desire t o innovate or to investin new upgrades and technologies.


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The Rise of the Project Workforce

A phased approach Proj ect Workforce Management enables organizations to establisha long term vision for t he companys enterprise soft ware st rategy and then to t akegradual steps to achieving this vision, with clearly defined milestones, obj ectives andROI requirements.

The diagram above shows a recommended roadmap to Proj ect WorkforceManagement . The roadmap shown here is a general case best practicerecommendation; your company may choose a dif ferent path and add to or skip some

of the processes and steps depicted.

First , a company can eliminate spreadsheets, manual processes and mult iplesystems (proj ect, payroll etc.) t ied to time and expense tracking. This firststep enables the company to track true proj ect costs in real-t ime based onenforced and audited time and expense reporting policies in a single system.

Addit ional automat ion such as cost and revenue account ing, workforce planningand analytics can occur once a company has made this first move towardeliminating spreadsheet-based, customized patchwork or in-house builtt racking methods and disconnected systems.


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Collaborat ion occurs through self -service dashboards. Portals display a variety ofoperational and compliance information such as:

budgeted versus actual t ime and expense proj ect and resource group cost , revenue (charge back) and margins project healt h indicators project issues and risks, scope changes resource ut il ization, resource gaps, skil l pool and availabil it y project and workforce f inancials

Considerable internal proj ect t eam collaborat ion on proj ect status and change controlcan occur aft er the cost and revenue account ing steps. Collaborat ion wit h externalclients requires additional controls and process maturity.

Summary

The flattening of the world has created a strategic inflection point that organizationsmust address to survive: the need to accomplish, account for, monitor, analyze andimprove work in this new era of the Proj ect Workforce.

Proj ect Workforces encompass dif ferent teams of specialized subject mat ter expertsboth inside and outside of an organization that collaborate and cooperate. These

teams achieve work t hat is differentiated, or compartmentalized, based on customerrequirements, talent availabil it y, project scope, and business rules and object ives.

Tradit ional business management systems, which often exist in disconnected sil os thatprovide narrow departmental or funct ional views, do not provide proj ect workforcesor business managers with the collaborative capabilities and integrated data theyneed to excel in this new business reality.

To address this need, Project Workforce Management systems have emerged. Thesesystems bring together t alent , work, and fi nances int o one process-managed system.The benefits are:

A common view for all decision-makers Real-t ime views of projects, resource groups, actual progress and issues More accurate decision-making since data is generated from approved,

compliant and automated processes


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In short , decisions that impact f inancial, team and project perf ormance are madefaster wit h bet ter informat ion and in collaborat ion wit h stakeholders. In a flat world,an empowered proj ect workforce can make faster localized decisions while gaining aglobal perspective.

About Tenrox

Tenrox is the leading provider of Proj ect Workforce Management soft ware. For moreinformation please call us directly at 1.877.4TENROX or visit www.tenrox.com.


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Whitepaper Rise of the Project Workforce

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