Mighty River Power energises project portfolio management with new set of applications

A new system implemented in October has improved project selection procedures

Mighty River Power, which is installing a $30 million turbine generator at its Penrose plant in December, is getting good value out of its project management system, says Tim Lockie, who runs Mighty River Power’s programme management office.

Previously, the government-owned electricity company used spreadsheets to keep track of its projects.

“[But] we realised we weren’t very good at project-portfolio management, [for example] selecting projects for the wrong reasons and not managing them very well,” says Lockie. “We needed to raise our capability in that area.”

To enhance its project management competency, Mighty Power River had to get staff enthused and on-board. It also needed to get management processes in place and it needed automation tools, says Lockie.

The company issued an RFI and ended up choosing Microsoft’s Project Professional and Project Server from eight possible alternatives.

The system was implemented in October and it has delivered “pretty much what we thought it would”, says Lockie.

“We are selecting better projects and then carrying them out [more efficiently]. Without the technology we would not have reached this level,” he says.

Generally, the company now puts priority on the right project, he says.

“The portfolio management side of the system helps us to do auto-simulations and trade-off analyses, and to identify different potential portfolio configurations — what combinations of projects can be done in what order.”

However, the system does not take the politics out of the decision-making process.

“What the technology does keep people honest after the decisions have been made,” he says. “It’s a good repository for recording and communicating the decisions around priority, timing and resources. But, as far as the politics are concerned, I don’t think any piece of software is ever going to fix that.”

Lockie says the programme management office typically has around 30 projects running at the same time. Most of these are IT projects, but the system is being expanded to include engineering projects, too, he says.

The project management system provides a common view across all the projects and also gives easy access to project information, says Lockie.

“We … use the system as a standard document-repository system, getting data out of shared folders or, worse still, unshared folders into a common structure using SharePoint,” he says.

It also allows the 20 project managers to open and view each others’ plans, which has helped in identifying risks before they become issues, he says.

In addition, the system is useful for project accounting, says Lockie. Mighty River Power chose to not use the time-sheet system that was included with the product but to create its own integrated time-sheet system that sits on top of the overall system.

“We liked that [we were able to do that], and it was one of reasons why we bought this system,” he says.

The system lends itself quite easily to customisation, he says, which has been a benefit for programme-level status reporting.

“It used to be a manual process to pull together the status reports and so on, [whereas now] we have customised the tool so that it does affiliate projects into programmes and we can roll things up pretty easily,” he says.

Resource management used to be a problem, with “projects grabbing resources from each other”, says Lockie. The new tool allows the company to create an enterprise resource pool, which balances the 40 hours per week staff have available between projects.

“This helps us to be more effective in our resource utilisation,” he says. “So much so that we have found that we have overbooked people because we didn’t put enough time there for unexpected things like sickness,” he adds.

Lockie says that the main challenge when implementing the system was to get the staff to buy into it and use it properly.

“You have got to demonstrate the value [of the system] to people, otherwise they will go along with it for so long but then they will sort of drop out.”

He also says that throwing technology at a problem does not solve it; it’s essential to put work into making that technology into a success.

The Microsoft solution was the cheapest of all the options Mighty River Power looked at, says Lockie.

“We have bought 164 licences and it was quite economical at that level,” he says.

The next step will be to implement Project Portfolio Server 2007, when it is released, says Lockie.

Mighty River Power provides nearly 22% of New Zealand’s total electricity and supplies more than 320,000 business and domestic customers.

The company has 650 staff.

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