CHAPTER 26
Managing Multiple Projects: Balancing Time, Resources, and Objectives

LOWELL DYE, PMP, TRICON CONSULTING

Corporate downsizing, organizational restructuring, changes in technology, and many other factors have required that most employees become skilled multitaskers and almost all project managers become multiproject managers. On the surface, this may not seem too much of an issue because everyone at some time or another has handled several activities simultaneously. However, because customers, management, and other key stakeholders want immediate response and are typically focused on the short term, there is constant pressure to reduce cycle times and introduce new products and services faster and faster. There is also a natural tendency for achievement-oriented organizations and motivated project managers to want to start more projects than can logically be accomplished given the time and resource constraints often found in today’s business environment.

The terms program management, project portfolio management, multiproject management, and multitasking are becoming more and more commonplace as projects are continually added, modified, and removed in response to internal and external business activity and changing economic conditions. In fact, a growing part of the project management software industry is around the creation and integration of tools, techniques, methods, systems, etc., for prioritizing and managing the myriad of projects and their associated activities.

Therefore, project managers must be familiar with several aspects of managing multiple projects:

• What is multiple project management?

• Cultural, political, and organizational elements that affect the management of multiple projects

• Roles and responsibilities in a multiple project environment

• Planning, staffing, and resource allocation considerations

• Project reporting and managerial decision-making

• Achieving success in a multiple project environment.

WHAT IS MULTIPLE PROJECT MANAGEMENT?

To be competitive, organizations regularly make hard choices about which projects to start, which to continue or modify, and which projects to terminate. This difficulty is made even worse by the fact that management is often unable or unwilling to label one project more or less important than another project. As a result, there is an unrealistic expectation that the sharing of resources, especially critical resources among “high-priority” projects, can be accomplished with little or no impact to the resources or the organization involved.

It is not uncommon to find program management, project portfolio management, and multiproject management being used synonymously. The management of multiple projects and portfolio management are in fact different. In the purest sense, portfolio management has two major components: a strategic element and an operational element. The strategic element involves project selection and prioritization—making sure the right projects are undertaken that are aligned with organizational goals and objectives. At the other end, managing multiple projects is more concerned with day-to-day operational management and resource allocation of the projects within the portfolio. Table 26-1 illustrates the major differences of multiple project and portfolio management.¹

TABLE 26-1. HIGH-LEVEL COMPARISON OF PROJECT PORTFOLIO MANAGEMENT AND MULTIPLE PROJECT MANAGEMENT

Add to the mix programs, strategic projects, and other independent projects and resources become even more stressed. The Project Management Institute defines a program as: “A group of related projects managed in a coordinated way. Programs may include elements of related work outside the scope of the discrete projects in the program.”² Programs have a major deliverable or objective to accomplish that determines which projects are undertaken in order to meet that objective—for example, the building of an aircraft carrier or the overhaul of an IT infrastructure within a large global corporation. In the purest sense, a program is a portfolio of multiple projects with a single focused major goal that requires several separate and unique, but integrated, projects to produce the program elements.

Because programs generally have an overall program manager, a common objective, and defined interfaces, some of the issues faced when managing several independent projects each with its own, and sometimes competing objectives, may not arise or be as obvious, such as the management of project resources.

Strategic projects are typically highly visible corporate undertakings that often become a high priority and pull resources from other projects and programs. An example of a strategic project is the roll out of a corporate-wide project management-training curriculum that has been directed and sponsored by the President or CEO.

It is important to remember that regardless of the initiation source, all of the programs and projects in the portfolio are generally competing for the same resources. The occasional exception being an environment in which resources are dedicated to specific projects. When dealing with multiple project environments, all stakeholders need to clearly understand that resources should go to those projects with the higher priorities as determined by their urgency with respect to time, cost, and ever-changing customer requirements.

Unfortunately priorities are not always established or maintained because of political, cultural, and other organizational factors, as well as a short-term, profit-driven focus that almost forces a special emphasis on maximizing resource at 100 percent.

Cultural, Political, and Organizational Elements Affecting the Management of Multiple Projects

How many times have you heard it said, “That sounds fine in theory, but in real life we don’t have the option of refusing or even delaying projects,” or “Within our company, we don’t have the luxury of dedicating any resources to a single project, let alone a project manager.” The common view of management is that typical projects are not large enough, complex enough, or economically significant enough to warrant a dedicated project manager or project team.

While resource constraints may be a fact of life in a business environment, many companies fail to realize that committing resources to multiple projects does not speed up delivery, but may actually delay project completion. Without some type of control, projects compete for limited resources, generating much shifting and coordination of resources, thereby causing throughput to go down. Companies often operate under the misconception that a project manager can be given five or more projects, with each project receiving an allocation of twenty to thirty percent or less of the project manager’s time. For project team members, the allocation is even worse. Having team members assigned five to ten percent of their time to many projects provides very little actual time for real work. In addition, management often fails to recognize that not only are project resources shared among several projects, each of these members generally have “nonproject” related responsibilities as well, such as internal committees, company-sponsored community activities, professional development and training, etc. The additional commitments may be important to the company, but take energy away from assigned projects.

A study on multitasking published in 2001 in the Journal of Experimental Psychology, discovered that when switching from one task to another, there are “time costs” in terms of productivity, efficiency, concentration, etc., and that these costs increase with task complexity.³ Another 2001 study of 1,003 workers conducted by the Families and Work Institute revealed that 45 percent of those surveyed felt that they had too many tasks to work on simultaneously and experienced frequent work interruptions, resulting in difficulty focusing on the work to be done.⁴ Logic, experience, and common sense show that the more projects that have to be juggled, the less efficient people are at performing any single task; and the longer it takes to return to the interrupted task, the harder it is to reengage in the previous activity.

Obviously, some managers are better at balancing multiple projects and their related tasks than others depending upon their experience and individual abilities—some are not. In such environments, it is important that a flexible process for resource allocation, for setting realistic milestone dates and delivery schedules, and for adding new projects into the existing pipeline be established. It is also important to have a well-defined and established project selection and prioritization process and a good mechanism for communicating those priorities. Within the project management industry, there has been much attention to resource allocation with companies spending great financial resources to implement sophisticated resource management software. But, if the organization is allocating resources to the wrong projects, then does it really matter how sophisticated the software?

A key element to managing multiple projects is the culture and support structure established by project sponsors and senior executives—one that emphasizes honesty and clear accountability for decisions and results. Sometimes the greatest bottleneck in a multiple project environment is senior management or the management team. When dissatisfied with project results, one of the first things some companies do is reorganize the project team or replace the project manager, since these are relatively easy solutions. This type of activity is also dangerous if senior managers do not fully understand the many interactions among multiple projects.

The senior and executive management team needs to set the culture, values, and systems that enable the effective management of multiple projects. In most companies there is a certain amount of “gamesmanship” in the creation of project budgets, schedules, and resource requirements. Add to this the sharing of responsibilities between functional managers and project managers—both jockeying for leadership—and things get more complicated. What saves projects in this environment are dedicated and hard working project teams that are willing to go above and beyond the call of duty to ensure that project goals and objectives are satisfied.

Organizational structures, political factors, and cultural influences affect the ability to manage multiple project activities and resources, regardless of the corporate culture, the number of parallel activities, or that there are a number of things that can be done to make the management of multiple projects more manageable. Complete alignment of the management team is essential and one of the best ways is to achieve this is by having clearly defined roles and responsibilities.

ROLES AND RESPONSIBILITIES IN A MULTIPLE PROJECT ENVIRONMENT

It is important that all key stakeholders, especially project managers, sponsors, and functional/resource managers, understand their individual roles and responsibilities and are fully committed to corporate, portfolio, and project objectives. If roles and responsibilities are not aligned, each stakeholder could allow personal agendas to interfere with project decisions and negatively impact project success due to potential infighting and competition for scarce resources.

Project managers must be diligent and proactive in order to identify problems and take appropriate action. Project and functional managers need to work together so that project team members and the project managers themselves are not overloaded. Both have the responsibility to provide skills necessary for project success and, when possible, to put team members in positions that will encourage and enhance professional and personal development. Project managers have the responsibility to coordinate resources among their projects and provide team building for team members. Functional managers have the responsibility to ensure that resources are available when the project manager needs them. With shared responsibility, conflict and confusion can be created for team members if they are unclear about their roles and whose authority to follow and trust. This conflict can be reduced if levels of authority with respect to resource allocation, decision-making, reporting requirement, corrective actions, and baseline management are clearly defined. This is especially true when managing more than one project or in a matrixed organization.

Senior and executive management need to be actively involved with project decisions and the balancing of resources among active and potential projects. However, management involvement should be at an appropriate level and should not be trying to assume the role of the project manager through micromanagement. Senior management’s role is primarily to ensure that projects are linked to long-term business strategy. This role includes ensuring that projects are properly prioritized, project teams are adequately staffed, obstacles to success are removed, cross-project conflicts are resolved, and so on. Senior management also has the responsibility to ensure that methods and tools are available for sharing project information among all the project managers, team members, and other key stakeholders.

As stated earlier, effectively managing more than one project is only possible if project managers and team members can stay focused. The challenge is in how to separate their individual responsibilities for each assigned project, as well as nonproject work. In a single project situation, the project manager is often the technical or subject matter expert. In a multiple project environment, it is even more unlikely that the project manager will be a technical expert in all elements of all projects. Since all projects are done for business reasons, it is not necessary for the project manager to be the technical expert, but the project manager does need to understand the technical elements of the project.

Project team members also are assigned to projects because of their knowledge and expertise. Team members may include full-time staff members, part-time employees, or subcontractors. The more specific the skills and knowledge required and the more projects involved, the more important and difficult the allocation process. Because the number of team members is generally limited, there is a tendency to overcommit these resources for the sake of keeping them fully engaged. Team members may have assigned responsibilities that are outside their areas of expertise, creating additional pressure and stress.

Planning, Staffing, and Resource Allocation Considerations Among Multiple Projects

One of the major frustrations for project managers is how to effectively and efficiently plan and schedule project activities in a resource-limited, multiproject environment. Managing multiple projects can create many potential problems for the project manager, stakeholders, and ultimately the customer. If there are too many projects to be handled in a timely manner with the desired quality, several costs could be incurred, such as the following:

• Costs resulting from late deliveries because of resources working on too many projects are not available to accomplish the scheduled work.

• Costs resulting from assigned resources being underutilized because of bottlenecks created by overcommitted resources.

• Costs, both tangible and intangible, resulting from team member burnout, reduced quality due to over-commitment, and so on.

The overall process for handling multiple projects is fundamentally the same as that for handling single projects or programs. Project managers and their teams need to develop a detailed management plan for each project using an accepted project management methodology. The establishment of approved technical (scope), schedule, cost, and resource baselines is essential. The integrated planning of each single project should not only look at the internal task dependencies but external dependencies with other projects as well. External relationships also include the influence of functional organizations, vendor and subcontractor activities, and customer interfaces.

This comparison to single project management should not be considered an attempt to oversimplify the handling of multiple projects. While similar, basic planning and control methods and techniques may not be sufficient. Managing multiple projects is a challenge because organizational practices often ignore or underestimate the significance of establishing and adhering to project priorities, defining project standards and acceptance criteria, and integrating project data. The problem increases with the complexity of inter-project links, overlapping schedule and resource requirements, and the fact that project resources cannot be concentrated on multiple projects to the extent they can be dedicated to a single major project or program. There is also a shared misconception among executives and project managers that if someone is skilled at managing one or two projects, they are also skilled at handling many projects.

To optimize time and resource in a multiple project environment, the use of good project management software is beneficial. In many circumstances, software may be required to properly develop a resource-loaded schedule and clearly identify time and resource conflicts. The number of projects and the size of each may determine the level of software sophistication and functionality required. If projects tend to be small, relatively simple, stand-alone projects, then something as simple as a spreadsheet or Gantt chart may be all that is necessary. For programs, large complex projects with many external dependencies, or a large number of small projects with shared resource pools, then an enterprise system that integrates all projects into a master file may be necessary. A word of caution—do not let the use of a software package replace good project planning and decision making.

During the past several years, companies have turned to a myriad of resource planning and optimization techniques with varying degrees of success. Some of the most common include resource planning, scheduling, and optimization techniques such as queuing theory, capacity requirements planning, theory of constraints, resource leveling techniques, and critical chain project management.

One of the best ways to manage resource allocation among multiple projects is to improve the quality of project effort and duration estimates. The value of valid estimates is often overlooked within many organizations. Realistic and supportable estimates can make or break project planning. Estimates, based on a well-defined work breakdown structure, provide the foundation for good time, cost, and resource planning. The importance of good estimation in a multiple project environment is in determining resource task assignments and the creation of each project’s critical path. If management clearly understands the requirements of each project and the amount of flexibility available to them, then logical decisions can be made relative to the priorities, value, and contributions of all the projects.

Some of these may be difficult decisions and may go against established norms. For example, if projects are undertaken based on their contribution to the organizations strategic goals and objectives and their benefit to the overall project portfolio, then the highest priority projects should be fully staffed first. The second priority project is fully staffed next, and so on. If sufficient resource capacity is not available, then lower priority projects should not be started. When a project is finished and capacity is again available, the next priority project can be staffed and started.

Many projects are started because of an external customer request or other profit potential. These projects are the most obvious and the ones that get the most attention with respect to resource utilization. But, many projects that compete for limited resources are not as obvious, nor do they get the attention deserved, such as upgrades and enhancements, process improvement and cost reduction projects, internal research and development, infrastructure systems deployment projects, facilities start-up projects, and many more. Sometimes these “nonprofit” projects are started in response to a real customer or market need, but often they are initiated by management.

Granted, these projects may be well meaning attempts to strengthen a company’s position within the marketplace; however, because organizations typically do not have enough visibility into total capacity requirements, management could operate under the misconception that these projects are simply a means of optimizing resources. But, without defined and integrated portfolio and project management methodologies, resource requirements estimates and the subsequent resource allocation may be determined somewhat arbitrarily.

When handling multiple projects and balancing their associated resource, time and cost constraints, there are several things a management team can do:

1. Increase capacity relative to demand. Increase project team members and support staff; add new planning and management tools or enhancing existing tools; reduce nonvalue added work, such as collateral assignments and meetings that take away from direct project work; provide training to team members, functional managers, and other stakeholders; and cross-train project team members in projects skills outside their area of expertise.

2. Reduce demand relative to capacity. Reduce the number of projects during peak demand periods, limit features, and reduce requirements if possible. Demand management is a key principle in project selection and prioritization as part of an overall portfolio management process.

3. Implement appropriate management and control systems. As defined in the broadest sense, systems may include a variety of tools, methods, and processes that enable management to establish realistic project/program management plans and enable project and functional manager to react quickly to changes in resource demand or project delivery times.

In addition, having a common set of forms, templates, tools, and approved guidelines that can be re-used and that is shared and communicated throughout the organization will help with the planning and integration of project resources. The forms and templates may include work breakdown structures, common activity lists, schedules, resource pools and skill sets, estimating guidelines, and standardized WBS and resource coding/naming conventions. Shared templates help to expedite the planning process, relieve some of the administrative burdens on the project manager allowing more time to actual project management, and provide confidence on the part of management that the project management process is being consistently applied across all projects and programs.

PROJECT REPORTING AND MANAGERIAL DECISION MAKING IN A MULTIPLE PROJECT ENVIRONMENT

Managers, especially when handling multiple projects, have to make difficult decisions with respect to project priorities, resources, conflicts, and so on. To make effective project decisions, project and functional managers need to have a good understanding of individual project resource commitments, how resources are shared among all the projects in the active project portfolio, and where adjustments can be made. This assumes that responsible managers have the authority and experience to shift/reallocate resources from one project to another and, if necessary, adjust activity delivery dates. However, no matter how skilled the manager, if customers and sponsors continually make scope changes or second-guess a project manager’s decisions, then it is extremely difficult to efficiently plan activity timelines and resource requirements.

To effectively make logical decisions, it is important that managers be able to quickly analyze the impact of changing, adding, or removing a project and that they be able to respond appropriately. Such analysis requires that project data be accessible, reliable, and timely. There are many reporting tools and techniques of differing levels of sophistication, such as dashboards, scorecards, and variance reports, which provide stakeholders with project status information in an organization’s portfolio. The information provided by these tools can be used to make timely decisions, resolve conflict, and respond proactively—not reactively—to the changing conditions.

Project information requirements are essentially the same for all stakeholders, whether communicating information for a single project or multiple projects. However, the amount of detail and the communication mechanism is dependent upon the stakeholder and how the project information will be used. For example, project managers need to see a project performance against the detailed work schedule and budget. If managing more than one project with shared resources, project managers need to make sure that they have current information for each individual project. Functional managers need insight into how resources are being utilized across all projects and programs, and the resource requirements projections are so they can manage their staffing plans and ensure that project managers have the resources when they are needed. Senior managers and executives require much higher level information that is more strategic, such as portfolio-level data showing how projects and programs in the aggregate are contributing to corporate goals and objectives.

Regardless of the stakeholder, it is important that the recipient have confidence in the reported data and that they be able to see the big picture. Earned value management and variance analysis reporting for programs and major programs have been used to report progress against approved baselines since the 1960s. More recently, organizations have also added Project Dashboard reporting to their toolkit. Dashboards are simply reporting tools that present a consolidated view of the active projects and/or programs in a portfolio. Dashboard reports typically provide project status, baseline and revision status, project budget and schedule information, etc. Dashboards typically use a color-coding structure to graphically report status—Green (on budget, on schedule, no significant issues); Yellow (potential budget or schedule variances, issues need to be addressed); and Red (severe budget or schedule problems, significant issues could impact project success). Management may require that all projects be reported regardless of status, or reporting may be done on an exception basis—only “Yellow” or “Red” projects will be reported. Dashboards or some other type of consolidated reports may be managed by a program manager, a centralized project management/control office, or the responsibility may be shared by the project managers. In either case, data reporting must be consistent. As project management and enterprise software become more sophisticated with respect to features and functions, dashboard generation and data accuracy is becoming much easier.

ACHIEVING SUCCESS IN A MULTIPLE PROJECT ENVIRONMENT

While there are challenges in any environment, the establishment and use of good performance metrics and measurement criteria can lead to effective management of multiple projects and can position the organization to be competitive in a dynamic environment. The creation and implementation of good management practices are important.

In a multiple project environment, it is impossible to please all of the stakeholders all of the time, but it is possible and crucial to be honest and upfront regarding capabilities and capacity. For example, when a customer complains about late deliveries, the first reaction is to push project teams to work harder and faster—to be more productive. The problem is that they are already working on a dozen other projects. In reality, what customers and all stakeholders actually want is a realistic plan and logical deliver dates that can be met. Most customers understand that unexpected events occur and are generally willing to be flexible. Customers and related projects or programs often have activities of their own that must be coordinated with expected activity delivery or project completion dates in order to meet their objectives. If an integrated approach is taken to project planning and control, then managing customer and stakeholder expectations will be much easier.

A best practice in the management of multiple is to avoid the temptation to start more projects than the organization has resources for or can coordinate and manage effectively. This concept challenges common practice for many reasons, many of which were addressed previously.

There is no single “right answer” for how to manage multiple projects, the best software to use, the right organizational structure, or how to properly engage senior managers. What is important is for management to establish a culture that encourages open and honest communication, proactive decision making, accurate documentation, and timely reporting of all project and resource information.

REFERENCES

¹ Pennypacker, J. S., and Dye, L. D., Project Portfolio Management and Managing Multiple Projects: Two Sides of the Same Coin? Proceedings of the Annual Project Management Institute Seminars & Symposium, 2000.

² Project Management Institute. A Guide to the Project Management Body of Knowledge, Fourth Edition. Newtown Square, PA: Project Management Institute, 2004.

³ Rubenstein, J. S., Meyer, D. E., and Evans, J. E., Executive Control of Cognitive Processes in Task Switching. Journal of Experimental Psychology: Human Perceptions and Performance, 27 (2001).

⁴ Galinsky, E., Kim, S. S., and Bond, J. T., “Feeling Overworked: When Work Becomes Too Much Executive Summary,” retrieved June 25, 2004, from Families and Work Institute, 2001.

FURTHER READING

Brown, Alex. “Of Benchmarks and Scorecards: Reporting on Multiple Projects,” in Proceedings of the Annual Project Management Institute Seminars & Symposium, Newtown Square, PA: Project Management Institute, 2002.

Daw, Catherine. “Managing Multiple Projects is Much Like Raising Teenagers … Managing Resources Over Multiple Projects,” in Proceedings of the Annual Project Management Institute Seminars & Symposium. Newtown Square, PA: Project Management Institute, 1999.

Ireland, Lewis R. “Managing Multiple Projects in the Twenty First Century,” in Proceedings of the Annual Project Management Institute Seminars & Symposium, 83–89. Upper Darby, PA: Project Management Institute, 1997.

Levy, Nino, and Globerson, Shlomo. “Improving Multiple Project Management by Using a Queuing Theory Approach.” Project Management Journal, 1997: 40–46.

Milosevic, Dragan, and Patanakul, Peerasit. “Secrets of Successful Multi-project Managers,” in Proceedings of the Annual Project Management Institute Seminars & Symposium. Newtown Square, PA: Project Management Institute, 2002.