Should you implement an integrated project management system across the enterprise or go with the best of breed?  Does this mean the enterprise pm model all over?

It’s not a new topic.  The idea of integrated enterprise-wide systems has persevered since long before the term ERP was coined.  Management must have some genetic memory of times when companies were all small enough that the patriarch who would manage them would know everything about everything going on in their shop. 

Business has moved on from that comfort level and now, even in mid-sized firms, project activity tends to move so quickly that it is difficult for anyone to keep up with developments across a myriad number of projects.

The desire for an enterprise-wide project management is almost universal now.  Management perceives that having the data for every project in a single database managed in one way would provide almost real-time knowledge. 

The big ERP vendors noticed this of course.  There seemed to be nothing more compelling to senior management types than the idea that all data in the organization would be linked from one spot.  From a project that seemed delayed, a manager would be able to see a range of perspectives, showing the impact on production, on inventory, on profits, on hiring, on resource availability and on the capacity to take on more work.  Marketing would be able to determine at a glance the delivery dates for existing clients and the capacity to do work for prospective clients.

Not just the ERP vendors but just about every project management vendor has a demonstration talking about this subject and the demo data is persuasive.

Well, if this is the case, why hasn’t virtually everyone switched to some centralized ERP structure?  What props sales of products like Microsoft Project?  Why do third-party software vendors who offer only one or a few aspects of this total solution continue to thrive? 

The answer is simple but disturbing.  First of all, it has become glaringly obvious to those who have selected corporate-wide ERP-type solutions that it is very difficult to be everything to everybody.  Getting compliance up and down an organization is tougher than just instructing people to comply.  Although management is often sold on the corporate-wide system concept, the middle-managers who are actually generating the work and the data that drive the company can often show that they can be productive only when they can use tools that are suited to the particular purpose. 

Project management has many facets and one type of tool isn’t often suited to take care of all of them. 

Imagine an organization where some project management occurs at the strategic level, looking forward in global terms to the kinds of projects the company should consider working on.  In this same company,  the IT department does its own project management, supporting resource-centric management of huge numbers of projects.  Yet another group in the same company is doing shutdown management of the plant – creating a 5-6 day project where the opportunity cost of the shutdown can exceed $100,000 per hour of lost production.  Nothing counts here but the schedule – how quickly can the plant be up and running.

Could one product support all these projects into one database?  Maybe – but should it?  The data is so different, that merging it together even at a summary level makes almost no sense.  This holds true not just for a single company with diverse scheduling needs but for all kinds of firms in different industries.

No surprise then that even the largest ERP vendors are trying hard to verticalize their markets.  No longer the omnibus project solution, partners like SAP and Oracle at the high-end and Microsoft at the low-end are finding a new, hot interest in partnering with smaller players.  Software publishers of everything from document management to timesheets are linking up with much bigger partners to provide a more rounded project management solution.  This is being fueled in part by a newfound interest in the large enterprise software vendors in the project management marketplace.  Microsoft’s latest entry, Project 2002 Server coupled with Project Professional has moved it up a level into the enterprise pm space from its huge desktop presence.  SAP’s latest version of PS, has it moving off of a strictly cost-oriented project perspective down into more of a project scheduling perspective. 

This has many players moving into more and more niche markets.  Market software vendors who have been around for years find themselves working back into vertical markets even when they have been trying to diversify.  They’re back in aerospace, or back in construction, or back in engineering – selling tools and services in areas they know best and linking those tools to other aspects of a total solution.

It brings us back to an age-old conversation – should you choose best-of-breed software or an integrated solution? 

The attraction to an integrated solution seems obvious at first glance.  There is one vendor, all data is tied together in one convenient location and can be maintained and analyzed at one time.

As we’ve said in this column before however, getting that data out of the system in real terms isn’t always so easy.  There can be many barriers to completing the deployment of an integrated project solution.  The easy ones are technical, getting the database and network to cooperate.  The tough ones are often the cultural barriers to having all data in one place managed in one way.  Not everyone will share accurate data when it’s to be managed centrally and the resulting structure is almost certain to be less effective than linking multiple systems.

It is these cultural corporate barriers that foster a best-of-breed solution.  Department or division level managers are willing to cooperate if they buy-in to the tools selected.  Tools chosen by people close to the actual work are almost always better suited to their purpose.  Determining how the data from these tools will integrate to the corporate systems could be more productive than spending time trying to convince these managers and their staff to adopt centralized software which is not perfectly tuned to their needs.