Five ways to make Programme Management Offices work smarter during COVID-19

Daniel Granger

Director

UK

In a world learning to live with COVID-19 and its socio-economic effects, it can be sometimes difficult to look for silver linings.

However, COVID-19 has undoubtedly created a window of opportunity to assess how global real estate programmes can get fit and work harder for businesses that want to capitalise on opportunities in a post lockdown world; the key question is how?

The pandemic has led many global real estate owners to refocus the remit of what their Programme Management Office (PMO) delivers now and in the future.

In this new world order, the PMO is increasingly acting as the unofficial chief operating officer for many global directors of real estate. Why? These established functions and teams have the data, the visibility and the ability to help programmes adapt to meet new priorities.

To seize this opportunity, there are five challenges that you should set your PMO:

1. Assemble and validate your data

COVID-19 has forced clients to quickly examine their entire portfolio, assess where projects are in their lifecycle, validate their data and work out how to use it. They have had to agree which projects can be stopped, which can be paused and which ones need to continue.

Some businesses will have found this process very difficult through lack of consistent, reliable data. If you have had to ask your supply chain (either internal or external), they will invariably have given you an edited version of the true picture – what they think you want to hear.

It is far more reliable to ask your PMO to collate, verify and present such data. If you have found the short term data collation stressful and have had to make decisions without having 100 percent confidence in your data, then now is the time to fix this and set yourself up more effectively for the future.

2. Improve your supply chain relationships

Most clients rate their relationship with their key supply chain as healthy. This assessment may well hold true in fine weather, but how will that relationship fare post lockdown as pent up demand causes conflict?

As we ask suppliers to remobilise, what will their response be? Will they prioritise our projects and will they be able to meet our demands? The actions and behaviours that clients take now with their tier one contractors, in particular, will undoubtedly influence how partners react as workload comes back on-stream.

Clients can help protect and improve relationships in three areas:

  1. make payments in a timely fashion and consider accelerated payments
  2. work together to understand the challenges contractors’ material supply chains may face – reworking schedules collaboratively where necessary
  3. provide decent visibility about pipeline and outlook.

Some businesses may want to go further to support their supply chain. In the coming months as insolvencies bite, we expect to see clients consider direct acquisition or integration where criticality presents issues. One of our major banking clients is preparing to step over the line to support suppliers using these means. We are currently triaging projects and helping them put together a realistic capital plan for next year while testing the strength of their supply chain.

3. Plan, test and re-plan

The reality is that there will be some businesses that may need, or elect, to pursue aggressive and accelerated delivery plans. They should be stress testing and evaluating potential scenarios now. Is the schedule realistic and what risk does it present?

An enlightened client will engage with consultants and suppliers now to test multiple scenarios. The other extreme will likely see condensed schedules and the potential to take a transactional and adversarial approach which will increase risk.

A global industrial conglomerate that we are currently working with is taking the opportunity to carry out a comprehensive re-baseline of all their major projects to improve cost and schedule certainty ready for post-COVID ramp up – an action that will pay dividends as they look to accelerate post lockdown.

4. Sprint, pause, adjust and sprint again

With many clients considering the acceleration of delivery plans post lockdown, we expect to see a market that initially enters sprint mode. However, this strategy relies heavily on external factors post lockdown. Real estate clients will need visibility over supply chain stresses and wider market confidence and – if necessary – be prepared to pause, adjust and sprint again.

An agile approach is very important as there will be significant physical challenges to remobilisation and repatriation of physical space, particularly in the short term. Corporate occupiers in city centre locations need to be particularly responsive in coming weeks, focussing on bringing a variety of disciplines together to enable solutions that balance the short-term need and long-term opportunity.

5. Re-centralise

Clients need to understand whether their current operating model gives them the right level of agility.
An extremely decentralised model, where decision making is largely local, is likely to make it more difficult to be truly agile; it is also likely to leave clients more susceptible to the specific challenges and vagaries of certain markets when they recover.

Wholesale change to operating models is not necessarily required but short term adjustment to facilitate a degree of central control may be necessary. The PMO should be well placed to help make adjustments and oversee implementation.

We can already see evidence of how this kind of agility has defined the commercial success stories recently reported – the way that some global FMCG businesses have been able to successfully and quickly repurpose their global real estate portfolios, re-tooling manufacturing plants, and changing production practices to meet consumer demand.

What is certain is that there is no magic bullet and there will be as many failures as successes as the real estate world adjusts to our new normal. Whatever the part of the real estate market a client operates in, the ability to implement increased control and agility will define success post lockdown. Addressing these five challenges will help clients to position their PMOs to provide the best possible support in facing the issues that lie ahead.

Further resources

Please visit our COVID-19 response page for all of our resources relating to the impact of COVID-19 on the construction sector.

For further information contact:

Daniel Granger
Director

t: +44 (0)20 75444000
e: