Projecting a sharper commercial edge

Singapore's companies, like the city-state itself, have a great reputation for reliability and efficiency. They get things done.

That reputation is a valuable asset. It gives Singapore an edge when competing for business in Asia—especially markets like China and India.

The problem is that getting things done in itself can be a problem, too, especially as companies spread themselves across many countries.

The danger is that project managers get tunnel vision. The only thing they see is the deadline. The project must be finished on time, at any cost.

Too often, the cost is not just about going over budget. Broader strategic aims can be subverted when project managers only think about their own individual operations.

In part, that can be due to a lack of training and awareness. But even project managers who want to know more about the company-wide financial implications of their decisions may not be able to find that information easily.

Capital programmes should be evaluated against the overall business goals of the company, and considered in conjunction with operating costs over the full lifecycle of the asset. By focusing simply on capital delivery, you might be making the wrong business decision.

So companies need to think bigger when considering projects — anything from building a shopping mall on the other side of the world, to marketing campaigns.

That's where commercially led project management is needed. In mature markets, it's common. Many of the world's largest multinationals adopt this approach. And it's becoming more popular for small- and medium-sized companies with big ambitions. It's another tool that Singapore companies can use to stay ahead.

So what's involved? The basic idea is simple, but implementing it can be tricky without external help.

In essence, commercially led project management means that every undertaking or proposal needs to be rigorously analysed centrally to see how it fits in with the company's broader business and financial objectives. No project should be considered in isolation.

An example: Your company might, for instance, be developing a hotel in Vietnam at the same time as refurbishing your regional headquarters in Brazil.

The chances are the two project managers would never talk to each other normally. They might not even speak the same language. But if you have the right management systems in place, you can identify similarities between the two projects, and look for efficiencies in procurement.

Delaying one project by a few weeks, and bringing forward the other by a month can also have beneficial effects.

Even changes within existing projects can be modeled and assessed. Should the retail part of a mixed-use development be opened before the rest? What would be the benefits of a soft opening for a commercial building?

So how do you put commercially led project management into practice?

The first steps are familiar: you still have to establish the need for a project and the strategic risks involved, and you must then to justify it commercially. Identify the operational, financial and functional changes needed, and create a base from which progress can be judged.

Three further steps: Define what constitutes success. This will provide confidence in delivery.

Identify the interfaces between different functions – i.e. finance, IT, HR, supply chain etc. These need to be carefully managed or you won't get the best results

Risk Management: Understand cause and effect, identify the issues and convert solutions back into requirements

This logically-linked approach will improve the returns on investment. More information means better decisions, and centring governance of a project on the benefits you want and need to realise will help you to correct problems on the way.

Richard Marriott, Partner at EC Harris, Singapore