Blurred Lines: Project management for SMEs

24 November 2017

Big companies have people, specific teams, and funds for external providers to manage their project portfolios. But what can SMEs learn from this experience, and what should be considered when running projects in smaller businesses? Here are five things to look out for.

  • Take a step back and understand priorities

An entrepreneurial, growing business is typically idea-rich but time-poor. Here are three basic questions to consider when starting and running a project:

  • Is it aligned to your strategy – yes / no?
  • Is it aligned to a current business need – yes / no?
  • Understand the objectives

The behaviours required to run a business or change a business are quite distinct in larger organisations, but these lines can become blurred in an SME.

Ensure that the objective and desired benefits are understood. Capture these in a Business Case, otherwise the risk of scope creep and unclear objectives becomes very real. For example, if you are doing an international market analysis the output needs to be a report or findings, not the decision to start work with a new partner overseas, and then contacting suppliers.

  • Think about the best way to deliver

It’s tempting to dive in and get on with it, but this carries the risk is that you start something then realise that another approach might have worked better. Take time to think about your approach and delivery plans. Make a plan with key actions, decisions, and milestones. Keep it short and clear.

Ensure the right level of resource available. Cost isn’t just £’s. Demands on time cost are as big a risk as spending overruns.

Get a second opinion. Projects need oversight, independent challenge, and ongoing scrutiny. Typically, this is provided by a steering committee at a bigger company. It’s no different in an SME, but there will likely be less people available. Involve NEDs and the financial director.

As you are completing a project, don’t get hung up on the line between the project and business as usual. If it’s successful, the project will complete as planned, or else become part of day-to-day Operations.

  • Use help (internal and external) 

After start up, the next challenge is to scale up. The additional demands on management as the business grows reduce the time available for project-type work.

Often in smaller business, those with operational roles “double up” as project managers. This can work. However, if you don’t think about points 1, 2 and 3, you can find it’s Friday night and you need to start looking at what you had planned as part of your project on Tuesday. That’s no good for you, your team, or the project. Make sure the resource you plan to use has the capacity, and understands their responsibilities. Pick team members who have the right skills, the desire, and ensure they are working to reasonable schedules. Reward them accordingly.

Self-reliant entrepreneurs and SME business owners like doing things themselves. They’re capable and like to keep control, and it’s cheaper. But as the business grows you’re likely to need the right kind of third party, so that your objective can be delivered faster, and to a higher standard.

Like all third party contracts, references and track record are vital to help you pick the right supplier. Use someone you’ve vetted and assessed. Ask tough questions and influence the contract to your advantage – utilising fixed costs and penalty clauses for late work, for example.

  • Be flexible and adaptable in managing your project portfolio

You may have aligned to strategy, set objectives and allocated resources when the focus of the business shifts to another issue. This is fine. Your business strategy will likely include phrases like “fix serious issues as they arise”, or better still “exploit opportunities as soon as they appear”. When the busy period is over you can always reassess.

For example, your strategy might have been to expand your customer base internationally but business is booming back home. If that happens, you can park a project and put a reminder in your diary to revisit in three months.

This blog is part of a series from My Financepartner. My Financepartner is a new accounting service for small and medium-sized businesses that puts you in control. You choose the services that you need, module by module, and we'll deliver them. Contact us at my.financepartner@uk.pwc.com

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