New project management standards for finance sector: just months after signing off on new complex project management competency standards for the finance sector, eight participating banks and insurers are starting to implement the new approach

Australian Banking & Finance, April 15, 2007

From April 2006 a group of senior managers and executives from competing banks, insurance and wealth management companies, together with the Australian Institute of Project Management (AIPM), worked to develop a new set of standards to improve the success of complex projects in the sector.

A 2005 international study * of 770 companies showed that only 53 per cent of those surveyed delivered all their planned benefits. And initial evidence in Australia places success at just 30 per cent **.

In an attempt to address this problem, AIPM saw the need to develop standards for handling complex projects starting with the finance sector, to be followed by telecommunications in 2007.

This initiative addresses complex project management issues across all industries and leverages work already undertaken in the defence sector. Common ground was found with a number of elements, including execution of complex projects, numerous overlaps in relation to industry needs and the essential requirement of developing leadership capabilities.

The working group has followed a staged approach to the development of the standards, beginning with an agreement on the terms of reference, followed by a series of one-on-one consultations before the standards were drafted, revised and then signed off in December 2006.

The new standards include three distinct components:

1 Categorisation--which helps to predict if a project will be complex;

2 Controls--what support the project can expect from the company; and

3 Competency--what competencies are required to deliver.

AIPM is forecasting five key outcomes:

*** Program managers will have more support from business owners and executives;

*** Companies are more likely to deliver project results;

*** AIPM will have a higher profile with corporations;

*** Industry standards will be supported and implemented in the Australian context; and

*** Project managers will have access to higher income levels.

The next steps for the competency standards process include the revision of AIPM standards; the creation of an industry-wide implementation plan and harmonisation with defence sector plans.

According to David Farley, ING Australia's executive director strategic projects and a participant in the working group: "It's a timely exercise for the financial services sector, in that the industry is continuing to change very rapidly through consolidation, more demanding advisers and customers, increased competition, rapidly changing legislation, greater regulator oversight and intervention."

Robin Wood, AXA program director and also a participant in the working group, said: "I think it's fair to say that, in the financial sector, our experiences with enterprise-wide systems like SAP and the implementation of major projects such as the GST and Y2K have pushed us up the maturity curve in terms of experiencing project management."

The project was facilitated by Helmsman International, which has worked within the finance sector for the past seven years in the delivery of complex and strategic programs.

* 2005 Financial Executives International Annual Report

** Australian Institute of Project Management