Project management within the asset management industry is a complex affair, since the ground upon which the project team is building is always shifting. Attempting to determine whether a project has been a success or not is equally problematic.
The project management lifecycle usually operates like this:
Stage 1—Someone in the organisation recognises the need for change so a project is proposed including plans, resourcing estimates, timescales and provisional costs.
Stage 2—The proposal goes to a committee for approval or rejection. They review it and ask if it can be done in less time and/or at a lower cost, yet deliver the same or higher quality.
Stage 3—The proposal is revised to meet the committee’s view, even though the new plans are less realistic.
Stage 5—Execution, often involving one or more requests for additional time/resources.
Stage 6—Completion, i.e., the new system is judged to be “good enough, for now”.
One might ask, why is the evaluation of project success only performed on completion? Platforms and systems are introduced with the full intention that they will be in use for many years, not just a few weeks or even months. Asset managers should also be looking at the cost of using that platform over the following years, where they need to consider:
Resilience—How much does it cost to keep it operational in the years after implementation, to at least the same service level?
Efficiency—Many implementations are deemed finished at the point where the outstanding defects and enhancement requests can be accommodated by manual workarounds, i.e. it is “good enough”. Staying at that level means that not all envisaged benefits will be realised, and that cost and effort will need to be expended to meet actual requirements until such time as they are addressed and we move to “good” (assuming this stage is ever reached).
Adaptability— The business environment does not stay the same. Anything implemented today will need to be changed over time just to keep up with fluctuations in the business environment, let alone adapting to new products, regulatory developments, etc.
Put simply, the cost of running a platform or system over a number of years will usually outweigh the original cost of implementation by several orders of magnitude, so the decisions taken at the project approval and completion stages should always include consideration of the resilience, efficiency and adaptability over the intended lifetime of the system.
By their very nature, these factors are difficult to predict, but there are steps that can be taken during the project to minimise the long-term costs. And herein lies the problem, as the success of the project is decided at implementation and many asset management companies seem to struggle with the idea of investing their own money now for long-term gain.
Revisiting a project two to three years after completion can yield some valuable lessons. Unfortunately, to save money in the long-term it is usually necessary to spend some in the short-term and unlocking the corporate purse can be difficult. One might think that if any industry can recognise the value of investing now for future gains, it is asset management, but experience often tells us otherwise.