PwC proposes new Transformation Framework

Date: 30-10-2007
Source: PrimeNewswire

In its new report, 'Creating Competitive Advantage,' PricewaterhouseCoopers today proposed a new balanced framework to help aerospace and defense companies transform program management. While the defense industry remains robust and growing, program execution is still one of the biggest challenges for companies in the industry.

A number of widely reported cost overruns, schedule delays and quality issues have led to marketplace pressures, including Congressional demand for higher standards of program management. There is an opportunity for companies throughout the industry to raise the bar on program execution as they try to elevate their program management effectiveness in order to meet these heightened expectations. While many of the defense industry's top-tier companies have recognized program execution challenges and taken steps to address program management and team issues, there is little indication that the rest of the contractors and their supply chains are moving systemically to develop and foster effective program management structure, culture and discipline. Additionally, increasing complexity in program management extends beyond the defense industry, affecting the commercial side as well.

"The issue is not whether companies can manage programs, but whether they can manage those programs effectively enough, given the challenges they are facing. Competitive advantage and market capitalization are at stake and the risks of penalties, cutbacks or even program termination have never been higher," said Glenn Brady, partner, PricewaterhouseCoopers. "Company management and their program managers need a balanced framework to guide them in transforming culture, processes, and technology in order to support successful execution of existing programs. Program management effectiveness must be elevated across the entire supply chain and should link to a strategic management approach."

The framework, proposed by PricewaterhouseCoopers, is supported by five principles that enable management to develop a holistic, effective model that involves a company's organizational, cultural and business process aspects and aligns it for program success:

Shared Goals
- Alignment through shared goals helps establish common metrics and objectives so that separate team members can make decisions in a unified context to support overall program execution.

- Companies and their partners need to align tactical program decision-making with strategic planning, both at the corporate and local level.

Open Communication
- An effectively managed program depends on open lines of communication, which foster a collaborative environment and empower individuals to give their best efforts to meet program needs.

Integration
- All program facets must be integrated, especially planning elements such as cost budgets, task schedules, and technical accomplishment milestones. Risk management, strategy and planning must also be integrated into program planning.

Proactive Mindset
- Unlike reactive approaches or crisis management, proactive program planning makes sure the analytical framework is in place from the onset to quantify trade-offs and impacts, and to deploy resources on long-term strategic organizational imperatives instead of just meeting the needs of the moment.

Knowledge Management
- The key is to capture, harvest, communicate, learn from, and retain knowledge and use it as a basis for collaboration - and to make all those activities embedded and continuous parts of the culture and operations of the company and its business partners.

"Developing a more effective program management mindset and the necessary supporting tools is no longer an option," said Brady. "Industry leaders have embraced plans to transform and/or improve their program management approach, and they're increasingly demanding the same of those they work with."

To download a full copy of 'Creating competitive Advantage,' visit www.pwc.programmanagement.com.