Finance Sector Working Group |
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The objectives of the Complex Execution Working Group for the Financial Sector:
• Create a clear and concise categorisation standard to determine the level of complexity of a project
• Create a competency standard for a level 7 and 8 project manager in the finance sector
• Create a practical control evaluation standard to evaluate the level of support that a company’s infrastructure provides for projects.
From The Project Manager, August/September 2006. The article below is from the same issue.
These models are expected to be guides to benchmarking the maturity of the supporting controls within an organisation.
Individuals from competing banks and insurance companies across the financial sector are working together with the AIPM to create much-needed standards for managing complex projects.
The AIPM has recognised that input and ownership by key financial institutions is critical in ensuring the new standards are useful. Under the guidance of Bruce Ferguson, of Helmsman International, the Complex Execution Working Group for the Financial Sector met in June to kick start the work on these standards.
‘It’s a timely exercise for the financial services sector, in that the industry is continuing to change very rapidly through consolidation, more demanding advisers and customers, increased competition, rapidly changing legislation, greater regulator oversight and intervention,’ said David Farley, Executive Director - Strategic Projects, ING Australia, and a participant in this working group. ‘The very nature and frequency of these events means that most organisations will have a number of complex projects running at any one point of time.
‘Given the poor execution record of major change programs (throughout industry), there is a fair chance that about half of major projects will either exceed budget, have significant time slippage or fail to deliver the agreed benefits. ‘Whilst it is rarely one factor that brings a project ‘unstuck’, an important issue is around the calibre and experience of people who are responsible for the delivery of a complex project. By this I mean not only the content and process knowledge of a project manager but also the leadership qualities that will enable that person to deliver the agreed outcomes.’
‘I think it’s fair to say that in the financial sector, our experiences with enterprise-wide systems like SAP, and the implementation of major projects such as the GST and Y2K, have pushed us up the maturity curve in terms of experiencing project management,’ said Robin Wood, AXA Program Director, and also a participant in the working group.
‘This is an opportunity to think of project management and how it relates to the services sector, as opposed to the building industry where project management is entrenched.’ According to Wood, top management has driven the call for industry standards. ‘The competency of project delivery has caught the eye of senior management,’ he said.
‘Now we’ve got to rise to the challenge to deliver on their expectations. We have to respond by doing things better.’ So what is the current situation in finding good project managers?
‘Currently there is not an industry standard for the Financial Services Sector that adequately defines the attributes of a well rounded project manager that is likely to deliver complex projects successfully most of the time (more than 80%),’ said
Farley. ‘Because there is no specific standard, appointment is often through ‘word of mouth’ recommendations, past successes and a mandatory few grey hairs!’
According to Wood, program directors do have status and are paid accordingly in financial organisations. ‘There is growing recognition of their ability to add value,’ he said.
‘I think the industry would benefit through defining the attributes of a project manager for complex projects (levels 7 and 8) that not only captures the pre-requisites of project management methodology but provides qualitative assessment of leadership capability, emotional maturity and ability to drive for outcomes,’ said Farley. ‘This needs to be overlayed with an objective assessment of past experience. ‘It would also be beneficial if we could articulate a curriculum and ongoing
support system that would enable candidates to maximise their potential not only for themselves but for their employers and the industry as a whole.’
‘The participants (in the working group) are from eight of the top financial institutions so I’ve really enjoyed getting
together with my peers. We’re generally an inward-looking group so we don’t get this opportunity very often,’ said Wood.
The next planning workshop is in late August. The aim is to finalise and publish the standards by October 2006.
From The Project Manager, June/July 2006.
Corporate projects globally have shown a very high failure rate averaging 50%.
According to Bruce Ferguson, Corporate Relations Councillor, NSW Chapter and managing director of Helmsman International, the ones that fail more frequently are complex projects, such as mergers, the introduction of large computing
systems or the launch of new products.
In an attempt to address this problem, the AIPM has seen the need to develop standards for handling complex projects and so is forming a series of working groups with industries including finance, telecommunications and utilities.
The aim is to define competency-based standards of project management which will be specific to each of these industries and which will be ratified by the AIPM National Council.
The first of these working groups is the Finance Sector Working Group which is facilitated and chaired by Ferguson. Senior executives from the major banks, regional banks and insurance companies have accepted an AIPM invitation to assemble and help define these new standards.
Ferguson expects to receive input from more than 75% of the finance sector and will also canvas experts in the universities, as well as welcoming contributions from other AIPM members through their state council.
‘Everyone sees the benefit of participating in this group,’ said Ferguson. ‘It is not a competitive situation. The aim is to improve the success rate of projects within the whole finance industry, to make the management of complex projects
more consistent’.
‘Of course, our primary intention is to create value for AIPM’s members by helping projects and project managers to become more successful’.
‘Executives like nothing more than spending money to make more money. If this only happens 50% of the time, they are less likely to see the benefit of starting the project in the first place. If we can get better results for projects, more projects
will happen.’
It has been demonstrated that the results of complex projects are better when senior (ie. highly skilled) project managers are brought on board when required. ‘We are aiming to ‘establish the project executive’ by defining the need for these
roles at a senior executive level,’ said Ferguson. ‘We believe that these new standards will create demand for more experienced, capable project managers and will bring the most senior project managers into line with the salaries of CEOs and executives.
‘We’ve placed people in these roles already and they are earning good salaries. It has been proven that complex projects have much better outcomes when project managers are paid and treated as senior executives. Recent PMAA winners in these sectors would point to this as part of their success.’
Demand for high competencies is likely to lead to a longer career path for well-qualified project managers, with more money available at the top end. ‘Everybody wins. The demand for training and accreditation increases and the customers (ie. the institutions) get better results for their projects by delivering the financial benefits they are supposed to.’
The Finance Sector Working Group held its first meeting on 20 June 2006. It is scheduled to complete its work by October 2006. Return to SIGs
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