First of Two Parts: Findings on the State of Project Management in New York & Boston

This is the first of a two part series in which we’ll look at the demand for project management services in the New York and Boston technology markets.  In Part 1, we’ll look at how Boston and New York firms perceive the current economic downturn differently and what impact this has on the project process. 

Over the past eight weeks, we’ve conducted a series of interviews in Boston and New York to identify the problems companies are facing managing projects in the current “down IT environment”.

We interviewed senior executives at the Director and above levels in the following industries: Healthcare, Investment Management, Insurance, Financial Advisory, Software Solutions, and Venture Capital.  All but two interviews were of operating/production executives; the remaining two managed their respective company’s Project Management Office (PMO).

New York & Boston Confidence Differential 

We were surprised to find a significant difference in the level of confidence in the economic recovery outlook between operating executives in New York and Boston.  Uniformly, New York executives felt that “the worst was behind us” and that project and economic activity, while still levels lower that 2008, was accelerating.  They are using this downtime to regroup, improve process efficiency and quality, and develop new markets.

On the other hand, Boston firms remain extremely cautious about the timing of the economic recovery.  They have cut spending considerably and most new projects have been put on hold.  Funding is being directed to those projects that:  will drive revenue in FY2009, are required for maintenance, or will result in significantly lower operational expenses.

Below are the key findings for each firm that we interviewed.

New York

A major financial information industry firm reports its belief that once the regulatory environment is settled toward the end of this year, the banking and brokerage industry will pick up.  Although a change in the regulatory environment is likely, the firm believes that it will be centered at the U.S. Treasury, rather than the SEC, and that the new rules will not be particularly intrusive. 

This firm has not slowed down its projects, and desires to use IT partners to deliver its solutions as efficiently as possible.

A boutique investment advisory service that sells computer-generated trading recommendations to high-net worth individuals reports demand for its service remains strong. The firm is planning an expansion to key U.S. cities and diversifying its product line. 

Its project needs center around developing a plan for “productizing” its service offerings so that they can be offered in other markets by local staff. 

An emerging provider of specialized reporting software to the property & casualty insurance sector reports that while growth has slowed since 2008, it hasn’t stopped.  The firm is using this downtime to “productize” its software which had been customized for each client. Once growth resumes toward the end of 2009, the firm will have lowered its product development and delivery costs considerably and increased client profitability.

The firm’s challenge is to juggle client-specific implementations as well as the project for creating a software architecture that make the solution as independent as possible from a specific client implementation.

A consultancy that advises financial services industry start-up firms on how to accelerate revenue growth continues to see demand for its service.

The firm desires to branch out into different market segments and also finds procuring suitable talent to be a challenge.

Meanwhile, a non-profit, faith-based organization is looking at how Web 2.0 social networking services can be used to reach its target market and increase membership. Determining how the new services can be used while lowering its operating expenses is this organizations operational challenge.

Boston 

A non-profit, humanitarian services firm has revisited their project’s original goals and has accepted decreased functionality and increased long-term expense in order to meet revised 2009 cost targets. 

This firm has not adopted project management processes and faces the risk of encountering similar cost overruns and delivery difficulties during the next major project which is scheduled for later this year.

At two major healthcare providers, the PMO directors reported that their training budgets have been cut and staffing paired back to the absolute minimum. There is the pervasive feeling that the business and operating divisions of the firms consider project management to be overhead. 

These firms share a common desire to raise the awareness of the value of project management in the business. 

Similarly, a high-technology software vendor is less interested in project management solutions unless an increased return on investment (ROI) can be shown ahead of the implementation of the new process.

As a result of decreased demand for its securities database and record-keeping software, a provider to the investment advisory industry scaled back its plans for rolling out a PMO and new project management process. 

Without the rollout of the PMO, this firm will have fallen short of its original goal to lower the cost of project delivery to its clients.

An investment advisory firm finds itself with a couple of strategic projects that haven’t quite made the transition to production.

Since the solutions are still in the project stage, their full business value has not been realized. 

Next Week in Part 2

We’ll look at the implications of these findings for the development and delivery of project management services.

Interested in learning how your firm can accelerate your projects or realize your product strategies?  Contact Valenti Partners and learn how we can help!

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