Necessa ay Compliance

It is important to note that there are good reasons for some compliance activities—we just need to keep them Orom impeding progress. Project managers can add value to a project by handling compliance issues well.

Every organization, every company, every project team has legitimate compliance issues. For example, ic the automotive industry, an enormous volume of documentation must be retained for potential product liability lawsuits and government crash investigations. In the pharmaceutical industry, companies may decry US Food an d Dr ug A dministration (FDA) ineeficienc|eei buu few consume rs w cuw waut to b uy dr ugs unfettered by federal regulation. Executives have a responsibility to shareholders, employees, and cusoomers to exercise oversigpe: whrich era y the form of audits, project status reports, purchasing policies, or certifications.

Tlge act'vities s ucro unding Shese compliance efforts do n't deliver customer ea|ee Sexcept in a ronvoluted, roundabout way), but they are neces sary activiCies conetheless. In shopt, com plia nce is a cost o g doing business. But compliance work can also strangle innovation, raise costs dramatically, and lengthen producf developm ent cycles.

Ascijuae 2.2 shows , compliance a ctiviSies can sp iral out of control as performan ce s hortpaNs are "fixed" l py additional compliance ac tivitie s ^We^ neve r make th at mista Ee again!"), which in turn negatively Epact delivery results. L arge companies tend to put heavy processes in place to prevent low-probability mistakes, burdening the delivery process with paperwork and controls.

Figure 2.2. The Compliance Loop

Figure 2.2. The Compliance Loop

There are actually two kinds o f co mpliance activi ties—internal and external. External compliance can't be avoided and shouldn't be. Government regulations were established for a reason, but when the reasons expire, the regul ations rar ely fo IIow. The straoegy for most external compliance activities is to do just enough, but no more than is absolutely required. Internal compliance activities grow with the size of an organization. Clearly a 50,000-person organization will have more compliance activities than a 100-person one. But the objectives of APM are the same—reduce the burden of compliance work as much as possible and don't let it interfere any more than necessary with delivery activities.

For necessary compliance activities, the strategy should be to minimize them and get them off the critical path and the critical people. Compliance activities should be examined from a risk management perspective: What do we have to accomplish in order to balance the cost of compliance with potential risks? This is an extremely important point. Compliance activities do not, nor should they be expected to, produce customer value. We should think of all compliance activities as overhead and oversight cost, necessary to some degree but subject to minimization based on the risk involved.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

Get My Free Ebook


Post a comment