Article
TPM: A New Direction in Project Based
Organizational Thinking
Written by: Phil Ventresca, M.B.A.
The Concept of TPM
The premise behind the concept of TPM is that an enterprise-wide approach to
developing a successful project management system is best supported in a
project-thinking organization. In a project-based culture, projects are aligned with
an organization’s corporate strategy and thus receive support from managers at all
levels. People, process and technology are the key drivers in this environment.
Excellent communication and collaboration must be developed as norms within the
organization. This style of management will drive accountability into the process and create a platform for
continuous corporate and individual performance improvement.
The model shown on the next pages illustrates the macro elements that provide an infrastructure for this
enterprise-wide management system.
When the model is set in motion along with the best practice standards such as communication protocols,
organizational and competency assessments, portfolio analysis, project methodology development, project
planning, application-based work management systems, as well as coaching/mentoring, it will produce an
efficient approach to achieving world-class project management attributes.
Why Implement TPM?
The evolution of project management from a competency into an industry parallels the evolution of the global
marketplace and the world economy. This transformation has created the marketplace we know today as the
new economy. The old school perceptions of business have changed, allowing the emergence of a new breed
of customer focused, quality driven, and ultimately more profitable companies.
Organizations such as these are not driven by, but are oiled with the lubrication of technology – e-solutions,
technical competence and most importantly, a belief that collaborating all we knew with what we know
results in time tested experience and optimum results.
Advanced Management Services, Inc (AMS)
960 Turnpike Street • Suite 2A • Canton, MA 02021
Phone: (781) 828-8210 • Fax: (781) 828-8216
E-Mail: [email protected] • Web: www.amsconsulting.com
© Advanced Management Services, Inc. (AMS) Total Project Management (TPM) Implementation Model
TPM will help to stabilize your business process during growth and begin to move the organizational norm to
one of refined efficiency and accountability. The following are some considerations around why organizations
are embracing the concepts of TPM:
Yesterday’s Environment: • Make it, it sells • Certainty • Reasonable cost • Large budgets • Stable technology • Waste: many resources • Quality is supplier-driven • Reasonable time to market Today’s Environment:
• Rabid competition • Uncertainty • Lowest possible cost • Optimizing budgets • Rapidly changing technology • Conservation: limited resources • Quality is customer-driven • Accelerated time to market Source:
Customer-Driven Project Management, Bruce Barkley and James Saylor, McGraw Hill, 1994.
Successful businesses in all segments have restructured and retooled to respond to the dynamics of a
competitive market place and rapid technological advances. In doing so, they have changed the perceptions
and guise associated with old school business. TPM and the system of management that it deploys will help
guide you through the changes.
Driving Change
Change is productive when implemented correctly, destructive when not. The methods that comprise TPM will
help to drive the process of change in a productive way. In fact, the concept of this system is built on the ideal
that change equals improvement. The following will help illustrate the difference between bad and good
change:
BAD CHANGE: • If it is not broken, don’t fix it • Functional orientation • Inspection of defects • Quality not important • Accept current processes • Development • Rigid organizational structure • Many organizational layers • Hierarchy • Individual performance • Strong management • Leadership only at the top • Individual merit reward system • Focus on profit GOOD CHANGE: • Continuous improvement • Systems view • Prevention of defects • Quality is critical • Reengineer processes • Innovation • Flexible organizational structure • Few organizational layers • Collaboration • Team performance • Strong management and leadership • Leadership everywhere in the organization • Team performance reward system • Driven by total customer satisfaction Source:
Customer-Driven Project Management, Bruce Barkley and James Saylor, McGraw Hill, 1994.
© Advanced Management Services, Inc. (AMS) 2 The implementation of TPM can save substantial cost associated with poorly executed planning activities, as
you will see illustrated in the scenarios below.
Scenario One:
Your project team consists of three full-time equivalences (FTE). The estimated duration of the project is six
months. The graphic below illustrates cost overrun and savings against the estimated mean. The average
annual wage for this model is $65,000.
Project Duration (Months)
Resource Cost
Cost Variance 4.5 5 5.5 6 6.5 7 7.5 $73,124.91
$81,249.90
$89,374.89
$97,499.88
$105,624.87
$113,749.86
121,874.85
- $24,374.97 - $16,249.98 - $8,124.99
$0
+ $8,124.99 + $16,249.98 + $24,374.97 The difference in finishing the project one and a half months early as opposed to one and a half months late is
a savings of $48,749.94.
Scenario Two:
Your project team consists of six full-time equivalences. The estimated duration of the project is three months.
The graphic below illustrates cost overrun and savings against the estimated mean. The average annual wage
for this model is $65,000.
Project Duration (Months)
1.5 2 2.5 3 3.5 4 4.5 Resource Cost
$48,749.94
$64,999.92
$81,249.90
$97,499.88
$113,749.86
$129,999.84
$146,249.82
Cost Variance -$48,749.94 -$32,499.96 -$16,249.98 $0
+$16,249.98 +$32,499.96 +$48,749.94 The difference in finishing the project one and a half months early as opposed to one and a half months late is
a savings of $97,499.88.
These scenarios reflect only wage cost. Other cost savings on your project may be higher depending on the
ancillary cost impact.
© Advanced Management Services, Inc. (AMS) 3 In addition to resource cost, a well-designed project support infrastructure and efficiently structured processes
have multiple other benefits, including:
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Clarified client expectations
Measurable processes for both the implementation of project work and continuous support
Performance measurement allowing for cross-functional consistency around reasonable
expectations
Human Resources becoming integral in resource availability and competency issues, thus
allowing the project manager to focus on the work at hand
Project portfolio which is guided more directly by the organization’s strategic initiatives
More accurate management of cost factors
More effective management of change
All of the aforementioned attributes are relevant to project success. In addition, they are also relevant to
organizational success in our rapidly changing global economy.
TPM encompasses all of the useful elements of time-tested management processes and practices and merges
them with forward-thinking solutions. This merger will incorporate collaborative thinking, tools, methods and
appropriate technology to create a synchronized and highly productive company.
For more information regarding this topic we can be contacted via phone or e-mail at [email protected]
© Advanced Management Services, Inc. (AMS) 4