Saturday, June 6, 2015

Are Service-oriented Firms More Suited for PMs?

You may be thinking that if you are in the Information Technology (IT) space, that EVERYONE is in the services industry. That may not be very accurate and the reason why is that if you are a project manager (PM) in a large corporation’s IT group, you may not necessarily be in a “services” group. We can argue that point of view during another blog. However, what I would like to ask you is this: Do you believe a service organization is a better place for a PM? What I mean is this: is a service organization more like a consulting organization rather than a professional services organization, and is it a better organization for a PM to use his/her skill set? In a service oriented organization that has a strong Professional Service Organization (PSO) the focus for the PM is a bit different than a Project Management Organization (PMO).
It seems that service organizations need good quality PMs because of the increased emphasis on project budget. A downside may be the number of projects a good PM may have to manage at one time. And let’s not forget resource scarcity. So let’s take this one at a time.

Budget Emphasis
In a service organization, the focus on budget is intense, and not just for expenses. The reason a service organization is in place is to provide specialized service for the client at a profit for the service organization. So, like other projects, this project must be on budget or under budget. If there is a possible budget over-run, the PM must communicate that risk to the client and convince and commit the client to a change request that adds to the budget and possibly the scope and timeline, while keeping the project green.

This is not easy since this project is to generate not only revenues, but most importantly, profits. The PM in a service organization MUST know the difference between those two terms and must be in line with the profit-generating mind-set. If not, that PM is looking at possible failure within the project and most likely within the organization.

Project Resource Emphasis
Service organizations are historically “lean and mean” to promote profits. That makes it additionally hard for a PM to attain and keep project resources. I can’t tell you how many times a resource manager has come to my desk in the middle of my project and said, “Oh by the way Benny, we have to take Jane away from you for XYZ project.” If you hear a scream, that is me. We can all say, “Then why doesn’t that organization staff to the project?” Good question. Mainly because, the organization may go through economic phases where they may have a good pipeline and times where they have a very shallow pipeline. Some service organizations may staff with third-party consultants. However, what service organizations don’t want to so is “home grow” their competition. So having third-parties may be both a blessing and a curse.

So how does a PM keep an important resource? Make that resource important to the client they are servicing and most likely that client will compliment the resource to the senior management team of the service organization. In that case, the management team wants “return business” from this client and the last thing they want to do is make the client unhappy.

Number of Projects that a PM Manages
Service organizations historically are known to keep their staff size small. So a PM in a service organization may have to work on more than the desired number of projects (5-8 projects depending on the size). However, in a service organization, that number may jump to 10 projects. If that happens, it is up to the PM to discuss this with management and provide input to the term “diminishing returns.” However, the PM must be prepared when having this discussion. The PM must come with proof that he or she has performed admirably in the past and now the PM's work is compromised because of the quantity of projects, NOT because of the quality. Perception is reality here and the PM must focus on the past quality of work to management so that the quality of the PM's work is never in question.

I have used this term in the past and it serves to repeat it: the PM walks a tight-rope in this situation because of perception. Once the PM proves that he/she can do the work with the right staff and number of projects, the PM has the ammunition to discuss issues with management. However, if a PM is considering working in a service organization, that PM must know  going in that a service organization is a challenging place to work because of budgets, resources, and the number of projects. 

I am open to discussion at any time on these blogs or anything else related to project management you would like to explore. If you would like to comment about this blog, please do so by posting on this blog or by responding in an email at Benny A. Recine. You may inspire a blog article. I look forward to your comments.


  1. Quality concerns are (or should be) especially high in a service organization. That's because the primary focus of such organizations is to satisfy clients. It's too expensive to such organizations to lose a client. Therefore, a good PM infrastructure can be very budget friendly by working to maintain high quality.

  2. All good points, Benny, and any CIO can relate as the same balancing act applies to their role.

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