Project Management Services Matter

In the biopharmaceutical industry, outsourcing many facets of development, approval, and manufacture is as commonplace as it is practical. In this young industry, few companies possess all the internal capabilities or experience in every specialty required to discover, create, and commercialize a new product. The use of contract services is often driven by the desire to manage costs and enhance or maintain productivity. Project management is less commonly outsourced because the potential application and impact of doing so is misunderstood. However, firms that have retained professional project managers realize significant value, such as reduced time to market, less costly manufacturing processes, and better information flow among worldwide R&D teams.

C. Richard Panico

TOO MANY STAKEHOLDERS

Start-ups and big pharmaceutical companies alike recognize the potential to generate beneficial new drugs. However, like the large molecules with which biotech firms work, biotech ventures and partnerships are complex — and their complexity increases exponentially with the number of players. The addition of third-party manufacturers, CROs, contract analytical labs, co-development partners, and other parties makes it much more difficult to control budgets, maintain timelines, facilitate decision making, and ensure effective communications.

While technically proficient in their respective areas of expertise, biotech firms often lack an ingredient necessary for success — strong project management experiences and leadership skills. Biotech projects require leaders who can bring together both internal and external stakeholders to reach a common objective. This is why the project management function is absolutely critical: Someone needs to keep an eye on the big picture while tracking the details. It takes experience and discipline to create and manage the project plan, track follow-up, communicate status and issues, resolve conflicts, mitigate risks, verify compliance to requirements, and coordinate different experts with potentially conflicting priorities and agendas.

Coordination between senior management, contract manufacturers, external consultants, bench-level scientists, and other stakeholders increases productivity, job satisfaction, and ultimately the probability of project success. This role cannot be the part-time job of a technical team lead (or even the full-time job, depending on the person's qualifications). Project management is a specific set of skills and processes administered to meet the specific complexities of a project. In today's increasingly competitive environment, excellence in execution becomes even more critical.

GIVE PROJECT MANAGEMENT ITS DUE

The first step is evaluating your company's current ability to accomplish its priorities. Is your staff already over-committed? How often are strategic initiatives or tactical projects behind schedule or over budget?

It is no surprise that for many companies the answers are "yes" and "too often." These stumbling blocks can be at least partially overcome through sophisticated project management practices. Some further questions that can help you assess the project management expertise within your organization include:

• Does your organization have a clearly defined process for managing tasks?

• Do you recruit and dedicate staff specifically to manage projects?

• Are your project managers formally trained and involved in continuing skill improvement?

• Have you collected and analyzed empirical data that categorize and describe projects and identify project management costs?

It is unlikely that your company has taken its internal project management to this level. Your focus is on your core competency, biotechnology, which is no guarantee of excellence in managing teams or coordinating and executing strategies — the forte of a trained, professional project manager.

The reality at many corporations is that project management is relegated to engineers, scientists, or researchers; it is assigned on the basis of availability; and it is often added on to a technical staffer's other daily tasks. The problems can multiply: if internal staff members (even internal project managers) are spread too thin, execution suffers as commitments are missed and timelines get pushed back. Companies of all sizes can suffer from this misalignment between their staff's skills and the requirements of the roles they are asked to fulfill.

However, if you hire a professional, full attention will be paid to your project without the encumbrance of other responsibilities or internal politics. Professionals also bring business management expertise to the table, along with tested protocols and facilitation experience. Facilitation depends on leadership — character, behavior, and attitude — which is as important as methodology. Leadership is a different skill than organizational ability — one more reason that project management should not be left in the hands of the untrained.

Project management is a means to an end. Fully developed, the knowledge, tools, skills, and protocols necessary for successful coordination and completion of any project make project management a profession in its own right — especially when practiced as a core competency.

LOCATING THE RIGHT PROJECT MANAGER

You can find general information about project management service providers on the Internet, or you can consult professional publications and organizations such as the Project Management Institute (PMI;

www.pmi.org

). Your network of colleagues can be a good resource as well.

Because the vast majority of firms provide project management as one of many services, there is currently no freestanding listing of project management companies under the North American Industry Classification System (NAICS). Search larger categories if you are interested in hiring a firm for a particular type of project. For example, for a construction project, research data on architectural and engineering firms. For help with a product launch, seek consultants that offer project management services as part of product development. But be advised — this method will help you find an engineer or a consultant, not a project manager in the purest sense.

Next, narrow your search to your geographic location and other basic criteria, such as experience and type of clients. Then dig deeper. Many companies stop their evaluation too early, asking only about costs and experience specific to their industry. Additional criteria are discussed below.

Values and Philosophies. The firm you select should have a culture, values, and philosophies similar to those of your own company. This aspect of the evaluation is frequently missed because many companies view project management one-dimensionally, as a skill. Project management is a leadership role, and you are bringing in a new resource who will significantly influence and catalyze your team. Certainly, this new resource will have to work effectively within your culture. Therefore, your search for a project manager should extend well beyond technical competence. Much like your choice of caretaker for a child: you would not hire someone strictly based upon their educational or theoretical grasp of child psychology. You would most likely place great emphasis on their values, character traits, and other behavioral factors that will undoubtedly influence your child.

Quality and Experience of Personnel and Management. You'll want proven project managers at the helm who are backed by a strong management group and a solid support staff — all of whom will take responsibility for the success of your project. Ask how the firm assures it has the right personnel. How does it evaluate potential hires? How many "leaders" has it hired within the past five years? Next, check hiring and retention rates. Companies that hire and fire based on the amount of work available likely aren't interested in nurturing and retaining qualified project managers. Look for firms that focus on long-term retention of their project managers. You'll need consistency, especially once a project is started. Finally, consider staff development. The firm you select must invest in its people to provide leading-edge services.

Processes and Protocols. Choose a firm with a well-defined business process guide that explains how the company operates on every project, from start to finish. For example, what are the first steps taken on a project? A formal process should dictate how you will work together to identify your objective, your business justification, and the project scope — all in measurable terms. Next comes developing your strategy, budget, and resource plan. This process should address assumptions — factors outside of the project that may influence its success.

After the firm has explained how this process works, ask for proof of its application and its flexibility to meet your specific needs. Look at reports from past projects, especially any that closely resemble your own. Do the steps taken follow the purported business process? What comments about results and overall performance did past or existing clients make?

Key Proficiency Measurements. Project management service providers should offer a standardized set of metrics. In a scientific environment, it can be challenging to produce baseline measures of the most common project management variables — scope, budget, and schedule — but it can be done. Several other factors are important to consider when assessing the cost of services and the value of achieving specific goals, including:

• Return on investment (cost savings, cost avoidance, revenue generation)

• Value of early or on-time completion

• Quality and timely communication with stakeholders

• Resource utilization and optimization

• Team management

• Measuring and reporting internal customer satisfaction

• Cultural impact.

Self-audit Process. Ask how quality of the service is controlled. The best firms audit and improve their own business practices. Feedback helps a company improve and create more value for the next project. Progressive firms capture "lessons learned" and apply them to their process. It goes without saying that the firm you select should be dedicated to developing and maintaining best practices.

Business Strategy. Any firm providing project management services ought to have an outstanding business plan of its own. Ask each firm to share the highlights of its strategic and annual plans. Ask how performance is measured. Make them prove that their own plan is applied to deliver results. If they can't do that, move on.

Cost vs Value. Rates from different service providers can be deceiving. Ask exactly what the hourly rate includes. In some cases, firms offer what may seem to be relatively low rates, but, in reality, you will be billed for additional charges for administration services and other hard or soft costs. Be sure to get all of the details up front.

Compare the full package of what each firm is providing, including both the tangible and intangible measures of success and the caliber of the firm's processes. You should hit the targeted budget and timeline and see the hard-dollar return on your investment, but you should also consider the value of improvements in communication — the fact that all team members have a detailed understanding of their responsibilities and progress is regularly documented. Beyond simply improving communication, the firm's facilitation and other practices will have a long-term impact on your culture and how future projects are managed.

In other words, fees should be viewed in relation to the ultimate value that project management services will contribute to your business. Professional project management helped a leading biopharm company avoid a seven-month delay on a highly critical project, get their drug to market on time, and realize $77 million in additional earnings. In this case, the value of the services was worth far more than their cost.

RETAINING THE RELATIONSHIP

After you have engaged a provider, lived with the service, and are satisfied with its value, you want to retain this advantage. Frankly, few companies emphasize retention of their outsourced partners. Most believe it is sufficient to consider the partner for additional engagements without any real commitment. Unfortunately, these same companies often expect to receive special treatment when they have a pressing, high-priority project. They see the relationship as merely a buyer-supplier arrangement. However, most high performers want more than a paycheck. They want the recognition and security that comes from customer commitment to partnership building. The following factors are key to building that relationship.

Build and Maintain Trust. Relationships require individuals who trust each other and who are truly interested in mutual success. Relationships are about challenging each other to improve and grow, to learn from mistakes, and to make work an enjoyable social and personal endeavor. It is no secret that the greatest accomplishments occur when people who trust and respect each other come together for a common cause; they work harder, they work smarter, and they have more fun.

Preempt the Project Management "Threat." An outside project manager's performance and successes can, ironically, be threatening to an organization. Unlike those whose technical or other skills may be purchased periodically, project managers contribute leadership. This can be extraordinarily threatening to internal managers who may lack confidence and interpersonal skills. Recognize the potential for your organization to react this way and sponsor acceptance of the project manager's leadership. Don't let parochialism and insecurity stand in the way of organizational improvement. Recognize, reward, and share the lessons in leadership.

Eliminate the Term "Contractor" or "Consultant." These terms imply "from the outside in." Project managers organize, coordinate, inspire, and facilitate on the inside. Leaders become attached to their organizations, even when the organizations are assembled temporarily to accomplish a specific objective or project. Legitimate project managers don't act as outsiders and shouldn't be treated as such.

Recognize the Difference Between Rate and Value. Too often, rate becomes the sole criterion for assessing value. Recently, a client who fully acknowledged outstanding performance, results, and achievement of over $2 million in cost savings (accounting for fees) using one project management firm chose a provider with a lower rate that had already demonstrated a history of performance problems. How would you like to get fired after being recognized for outstanding results and for delivering extraordinary value, just because some shortsighted manager used you as a cost-cutting target?

Remember Inclusion. Be concerned about the success of your service provider's business. It's easy to forget that they too have a desire to prosper, to expand their reputation, and to provide for the health and welfare of their employees and extended families. Consider the impact of your decisions on your trusted partner.

Remember that your project management partner will make honest mistakes, as we all do. Judge them at least as much on how they manage the mistake as on the fact that a mistake was made. If you are truly a values-based company, you shouldwork with service providers who share your values.

MULTIPLE BENEFITS

You can partially or fully outsource project management or blend the services with your internal team, depending on your resources and needs (Table 1). Whichever model you choose to engage a project management firm, retaining professionals can provide multiple benefits. Projects will be completed more effectively and cost-efficiently. Results and performance will be documented. Qualitative improvements will be realized. The firm you select will be available as needed, eliminating the need to provide internal staff for a fluctuating workload.

Table 1. Project Management Alternatives

As your confidence grows, you will begin to see the possibilities for applying project management practices on a larger scale throughout your company — for faster development of new products, for optimizing a host of business processes, for developing strategy, and more. When practiced by professionals, project management can literally transform the way companies think, behave, plan, execute, and succeed.

C. Richard Panico is president of Integrated Project Management Company, Inc., Suite 220, 200 South Frontage Road, Burr Ridge, IL 60527, 630.789.8600, fax 630.789.7945. crpanico@ipmcinc.com.