Utilities that depend on efficient capital portfolios for their bottom line also depend on efficient project management to make their projects successful. Getting there doesn’t happen from experience alone, though. It’s a journey that requires dedicated teams working toward common, definite objectives. Project management may present a significant challenge for utilities that are learning to adapt to today’s competitive playing field. Those that formerly relied on market limitations or yesterday’s business practices to thrive are finding they can no longer rely on those attributes to be successful. Companies are now faced with delivering the very best in efficiency to customers — and to do it better than their competitors.
Greater infrastructure and technology demands at regional or even global levels, rather than local levels, have promoted an evolution to the business environment. Solutions are no longer sourced solely from within, and cost overruns may easily make a utility noncompetitive in this new setting. Instead, emerging solutions are providing options and efficiencies to end users who have a choice on where to spend their money.
Government deregulation is a good example of this type of evolution, with programs such as Federal Energy Regulatory Commission (FERC) Order No. 1000 issued in July 2011. Other than specific exceptions of the order, this program eliminated the first right of refusal for utilities. Based on the order, no utility “owns” the right to construct and/or operate transmission facilities. Any qualified entity, private or public, can bid on construction and/or services. Utility revenues are also feeling the pressure from reduced energy throughput caused by distributed energy resources and energy efficiency.
There is no longer a space for executing projects without efficiency as the goal. It is no longer enough to deliver safe, reliable energy to customers; there is now an ever-increasing focus on delivering on-schedule, on-budget projects. This new competitive climate means that companies need to establish sound business processes, plan their future with customers in mind, and keep costs in line. This may seem like an insurmountable challenge for many, given their current perspective on project portfolio execution. The establishment of a Project Management Office (PMO) can be the first step to a gradual, but steady, path to the summit of project success.