Cutbacks and scrutiny As you might expect, a lot of the feedback pointed to a reduction in new investment and projects. Another trend that is inevitable in these difficult times is increased scrutiny of current projects and a greater focus on the dollars. Cutbacks

  • North America – While layoffs have occurred in Canada’s oil patch in recent week, most were in the area of field services or engineering. Drilling rig counts have dropped and major oil sands project have been deferred or shelved. I have yet to hear of layoffs or contract cancellations that affect PM consultants or project managers. It?s early January, and oil prices continue to drop. However, it seems that PM positions, both full-time and contract, may be decreasing in number as companies cut back on spending and protect their budget resources. Despite the slowdown, government organizations are still hiring in their PMOs as they try to catch up to the industry after years of rapid growth.
  • Europe – Due to insecure times, no new project are started, so the pipeline could dry up, which may cause problems in Q2/Q3
  • North America – Current projects unaffected, but customers planning stage projects are slowing down as they sort out their corporate lifespan issues (autoindustrie).
  • India – Due the slowdown in the economy, it is possible that some projects will be slowed by customers and further investments may be delayed/ shelved.
  • North America – The effects of working for an oil/gas company have been quite stark. It was assumed that oil would cost $60/barrel when projects were being budgeted. This was back when oil was more than $100/barrel. Oil is now well below the $60 mark, which has impacted flexibility in terms of resources. We are no longer able to bring together project members from all over the globe. Instead, we use video or teleconference or sometimes reduce the scope and/or delay the project.
  • Asia – Multiple projects are put on hold
  • North America – Capital funding has been cut to almost nothing in my industry (forest product), so many projects have been halted or start dates extended indefinitely. PM?s are fortunate to have jobs.
  • India – I believe the most significant impact has not been the financial problems but the dramatic fall in commodity prices. Our clients are mainly oil, gas mining, petrochemical and petrochemical companies. They have put off or put on hold approximately half of their projects. I suspect there will be more problems as the US stops outsourcing so much work and tries put people back to work.

Financial Scrutiny

  • India – Focus on forecasting
  • North America – Many companies quickly reacted and put all projects on hold. Some companies have reviewed their finances, project lists, and needs since the beginning of the year and started to revive needed projects.
  • Latin America – Latin America has more priority in deciding which projects to execute, more scrutiny on training and costs, and more resource cutbacks make a difficult task of staffing projects appropriately. There is more emphasis on support projects than on innovation projects.
  • Europe – tighter budget control, better prioritization of must-haves and nice to haves
  • North America – More controls.
  • Europe – The “return of the Business Case?” Too often, the returns of a project are neglected or become less important during the process. A project must now?prove? its viability. It must prove its viability. New projects must also have a return on investment within 6 to 9 month.

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