cathara consulting insight september 2013 issue 1

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+61 8 6316 4416 http://catharaconsulting.com

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Level 29, The Forrest Centre 221 St. George's Terrace, Perth WA 6000

Welcome to the first edition of INSIGHT.

INSIGHT is a collection of articles, information, and lessons learned from the team at Cathara Consulting, their respected colleagues and specialists.

The purpose of INSIGHT is to share knowledge, tips and lessons learned on specialist areas, including business analysis, testing, PMO and project management, right through to providing you with some insight into the economy and industries in focus.

We will also be providing updates on happenings at Cathara Consulting, as well as profiling one of our team members in every issue.

If you are interested in learning more, of if there is anything you would like to see featured in future editions, email the Editor at [email protected], or call us on +61 8 6316 4416.

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Issue 1 September 2013

Inside

Welcome The Cathara Consulting Team

Prospering In Uncertain Economic Times There are strong signs that the good times in are coming to a close. Find out what’s happening, and what changes you need to make to ensure that your business adapts and prospers in the new economic environment.

The Benefits of Project Categorisation A purpose of projects should be to benefit the business. If they don’t, get rid of them.

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Become the kind of leader that people would follow voluntarily, even if you had no title or position.

- Brian Tracy

Inspire

Cathara Consulting is currently offering a special on PMO Health Checks. We utilise the Portfolio, Programme, and Project Management Maturity Model (P3M3®) as a guideline to perform the health check and compile an assessment. This has become a standard amongst maturity models, and provides a framework within which performance can be assessed and improvement plans implemented. Contact us at [email protected] or +61 8 6316 4416 for further information. P3M3® is a registered trade mark of the Cabinet Office

PMO Service Offering

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Prospering in Uncertain Economic Times Graeme Woods

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In the past decade, Western Australia has seen an unprecedented economic boom as a result of demand for iron ore, gold and natural gas to meet the needs of Asia, particularly China.

This has driven massive capital investment in mining equipment, processing plants, gas pipelines and infrastructure by resources companies in order to meet demand, resulting in strong demand for human resources and a thriving economy.

Iron ore demand has been driven largely by China’s requirements for steel for construction and building infrastructure as the Chinese population has become urbanised. The Chinese government has promoted this development for some years, but continued growth at the current level is unsustainable.

Natural gas is primarily exported to Japan

The extended investment cycle is at an end and the economy has turned, although the full impact is yet to be

realised.

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and Korea for power generation. Coal seam gas, sourced at a relatively low cost from the USA, is becoming an alternative to the offshore gas in Western Australia.

Global supply of gas and iron ore has increased as capital investment projects have come to completion.

Falls in commodity prices due to increased supply and limited demand, combined with high costs in Australia - Perth in particular - and resources super-taxes now make many projects uneconomical.

The extended investment cycle is at an end and the economy has turned, although the full impact has is yet to be realised.

We are seeing the effects of this in Perth. Major resource companies are letting contractors go as projects come to an end and as they decide not to embark on new

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projects. There is an increased focus on reducing costs and getting the most out of existing capital investments.

How should your business respond to this significant market change? There are two aspects of adapting to change:

1. Outward adaptation: how you respond to customers, and

2. Inward adaptation: the changes needed in your own business.

If your business is reliant on capital investment, you should reposition it to focus on achieving business results from existing capital investments or operations. This means helping your customers achieve efficiencies and cut costs by looking at their supply chain, operational processes and human resources. This may involve helping customers properly use capital investments that you have helped put in place.

As customers become more cost sensitive and demand decreases, you should emphasise the value of your goods and services. In addition, you will need to provide information that helps customers understand the value proposition and why they should choose your company over competitors. You must differentiate yourself from competitors and actively market to potential customers rather than waiting for them to come to you.

In your business, you need to take the opportunity to drive value from your operational processes and people.

This means:

• Identifying and removing inefficiencies, and

• Adapting your business towards

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delivery of value added services rather than capital investment or project work.

In most businesses, human resources are a major input. In the event of a downturn, you need to understand who adds value, and who doesn’t - this ensures you retain the most valuable people. You need to have a way of objectively measuring and understanding the contribution of each staff member.

A downturn makes it necessary to remove people who are unproductive or unprofitable, require a lot of management time, who are troublesome or demanding or who are overpaid relative to their contribution. Previously, they may have added enough value in a prosperous market with resource shortages to justify employment, but when the economic outlook changes, your employee mix needs to change as some people will now be loss makers.

At the same time, a downturn allows you to more easily acquire talented employees from other organisations. You need your game plan in place for both situations.

A company that denies the early signs of change will suffer financially. By being adaptable, recognising the new reality and acting accordingly, you can position your business for profitability in the new business environment.

In the event of a downturn, you need to understand who adds value, and who doesn’t - this ensures you retain the

most valuable people.

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The purpose of a project is to benefit the business. It should do so by improving the supporting ICT environment, the organisation’s business processes, parts of the organisation, or the organisation as a whole. If it doesn’t, get rid of it.

Depending on the maturity of the project environment within an organisation, projects are either started as individual initiatives within a compartmentalised environment, or initiated and groomed within a more structured project / program setting where they can be prioritised against other initiatives within the wider organisation. Whichever the case; every project should go through a lifecycle of evaluation and awareness, from initial conception through to project initiation and execution, continuously justifying its existence until closure.

An often-underestimated exercise in this process is project sizing - or project categorisation. Even before a project becomes a project, it is worthwhile assembling the major stakeholders to take stock of what an initiative, if it is to become a project, really entails.

Project categorisation is best done by determining the complexity of the project from the perspective of the stakeholders involved. Answering questions concerning project value, the level of risk, strategic importance, resource requirements, and so on, will provide an initial and realistic overview of the impact a project could have on the organisation and stakeholders involved.

Project categorisation is best done via a dedicated project categorisation model, using objective weighting criteria (complexity factors) and a maximum of three complexity levels (low / medium / high) for each factor. Each factor is then accompanied by explanatory text to indicate what should be included in the weighting.

Ask questions

Make no assumptions - ALL Programs need strong leaders who question the information they are presented with. Communicate clearly Regular, clear communication helps programs succeed, and helps to improve information flow and transparency. This prevents surprises, gossip and misunderstandings along the way. The end result is clarity across the board – everyone is on the same page. This leads to good morale within the project team, and satisfied stakeholders. Foster strong relationships With strong relationships comes trust, cooperation, and the willingness to help. Program Managers need this to achieve the desired results. A Program Manager is responsible for establishing and managing the Program/s, the establishment of governance arrangements, through to the delivery of new capabilities and the realization of benefits.

How to be an Effective Program

Manager

The Benefits of Project Categorisation What Does Your Project Really Entail?

Tom Crijns

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Cathara Consulting is a value driven consulting firm, with these values underpinning our business model.

Our Values

Respect for the individual Reflected in our management of our people and our engagement with clients.

Simplicity We see to the core of a problem and remove complexity from the lives of our clients

Delivering Value Ensuring we add to our client’s business and provide high quality services at a value price. Part of the value we bring to each engagement is from our industry knowledge.

Hands on Management Actively working with our analysts (to mentor and develop each person) and our clients (keeping on top of each engagement and building our relationship with each client). We have a flat organisational structure, which means our leaders are readily available to clients

Long Term Relationships We build long term, mutually beneficial relationships that come from continually delivering value rather than aiming for short-term profit.

Constant Learning We learn as individuals and as a consulting firm through formal training, mentoring and capturing insights, which are then shared with our clients.

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Take “Cost / budget” as an example. Cost / budget could be explained as:

Cost / Budget should:

1) Cover the entire lifecycle, from pre-project, through delivery to project closure,

2) Include procurement, legal and resource costs, as well as recurrent costs post-delivery of the project (for the first 12 months); and

3) Include all contract and internal staff.

The complexity levels would then be assigned specific values. In this case we could assign 1) < $1 Million; 2) > $2 Million < $3 Million; or 3) > $3 Million.

For every factor, each level would carry a standard weighting. Once the appropriate level for each factor was determined, the weightings would be accumulated to indicate whether the project was of a high, medium or low complexity nature. Dependent on the complexity, the organisation could then determine the levels of resource effort, documentation, governance, and stakeholder engagement needed.

A project categorisation model is not so much project-specific as it is organisation-specific. Each organisation has its own projects and deals with them in a different way, using different processes and governance. The model therefore needs to be tailored to the requirements of each organisation.

The benefits of using a tailored categorisation model are:

• It is easy to use;

• The weighting criteria and complexity levels provide an early insight into project impact and consequences;

• The end result determines the level of category-specific, effort-based processes, saving time and resources;

• It can be adjusted throughout the life of the project, allowing for changes and associated actions;

• It is an excellent high-level baseline for a business case and can serve as a managerial and auditing report.

About the writer: Tom Crijns worked in Europe and Asia as a consultant and project manager before moving to Western Australia in 2006, where he has worked as a strategic and ICT consultant to both the Government and private sector.

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Copyright © 2013 / Cathara Consulting Pty Ltd. / All Rights Reserved

About Cathara Consulting

With deep roots in Perth as a fifth generation Western Australian, Graeme is a director of Cathara Consulting, whilst helping clients deliver projects by managing large and complex projects and through business analysis.

With over 20 years working in project roles, Graeme started in banking, where he worked in retail and investment banking, information technology and organisational project delivery, before moving to consulting. He has extensive experience in financial services, health, oil and gas and mining, with a blue chip list of clients.

In 2011 Graeme co-founded Cathara Consulting, and together with Lainey Murphy is actively involved in the day-to-day management of the firm. He is also the chairman of a hedge fund start-up and currently leads the fund’s offshore development team based in Europe.

In Profile: Graeme Woods


w: http://catharaconsulting.com

Cathara Consulting was conceived as a new type of consulting firm that provides quality work, deep insight into IT and business focus.

Our vision is to provide true value and quality to our clients, coupled with the specialist knowledge and access to skills found only in tier 1 firms. We achieve this by investing heavily in the training, mentoring and development of our people. This focus on skills distinguishes us from our competitors.

Our focus is on quality delivery and results, not simply charging hours. Our clients pay for the results we produce. We offer a money back commitment to delivering on our promises.

Our name comes from the Greek word katharos, denoting purity, simplicity and straightforwardness. This word symbolises our goals of ethical business dealings, partnership with our clients and integrity as well as a single-minded focus on the interests of those we work for.

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cathara consulting insight september 2013 issue 1

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