The opportunities and challenges of project management in city councils, as well as practical tips for its successful implementation, were discussed by specialized experts from Mariupol and Kryvyi Rih City Councils, which have experience in implementing this area in practice.  

Wartime and post-war times require Ukrainian cities to develop new tools for managing and responding to challenges. It is not enough to return the appearance of our cities to the “as it was” state; we need to build, invest in new identities and make them successful in the long run. The situation is the same with management. It is not enough to return to the “way it was” level — we need to make the best use of time, available human resources, and limited funds.  

To help the state become stronger at the local level, the Transparent Cities program of Transparency International Ukraine conducts research and develops practical advice on how to implement good governance at the local level. To date, we have already published materials on the neighborhood approach as a tool for the economic and social cohesion of communities, on the peculiarities of involving residents in the reconstruction process, and on the use of project management in municipal administration.  

This time, the analysts of our Program had a conversation with Oleksandr Khoma, a freelance advisor to the mayor of Kryvyi Rih; Ihor Koval, advisor to the mayor of Mariupol; and Yulia Dovhaliuk, chief specialist of the project management department of the Mariupol City Council in 2017-2018. These experts have practical experience in implementing project management in cities. This interview is also an integral part of the study of effective approaches and principles in the field of municipal management.  

On the importance of project management in cities

Please tell us what project management and Project Management Offices (PMOs) in the municipal governance system are.

Oleksandr Khoma, Kryvyi Rih City Council: Our city, like many others, has its own Development Strategy and plan for its implementation. This document defines a strategic vision of development in the medium or long term. In practice, activities within the framework of such a plan differ from operational work. The main difference lies in the management approach. Operational activities are more related to the implementation of cyclical, similar tasks that involve certain resources and reasonable, often unlimited timeframes. A project, on the other hand, is the creation of a unique product or result that contains many factors of influence, such as limited finances and time. Given this, it becomes clear that it is impossible to manage projects using only operational tools. This approach creates a negative phenomenon that our team calls the cross-functional gap. This is when the project does not have a single center for managing and monitoring the achievement of the goal. There are those responsible for the processes, but there is no single motivated project team.

This problem is solved by creating a unit such as the Project Management Office (PMO), which includes separately trained employees who have a desire for personal development and the skills to solve complex problems to achieve project goals.

Ihor Koval, Mariupol City Council:  In more “technical” terms, it is the project management system that allows you to change the management algorithm and implementation of individual processes in the face of constant internal and external changes, but at the same time maintain the efficiency and effectiveness of a team or organization.

A project management system is a systematic activity in which project goals are defined and achieved. The key success factor of project management is the clarity of a predetermined plan, minimization of risks and deviations, and effective change management. It is a system that ensures openness, transparency, online reporting, a control system, etc.  

The functions and responsibilities of the PMO are much broader than those of a single project team. The PMO can manage both purely strategic projects and the planning, scheduling, and control of a large number of smaller projects. In fact, it is a link between projects and the implementation of the City Development Strategy.  

What are the benefits of project management for local governments?  

Oleksandr Khoma, Kryvyi Rih City Council: The advantages can be divided into two categories — short-term results related to operational tasks and the annual budget cycle, and long-term results that are strategic. In addition to optimizing time and resources, local authorities get a more systematic and manageable picture based on the principles of project portfolio management.  

We also started using Microsoft software to monitor project statuses more efficiently. Local authorities were able to track the status of tasks online. One example shows that the duration of meetings to discuss projects has been reduced from several hours to 30 minutes.

Ihor Koval, Mariupol City Council:  “Speaking specifically about our results, the project management system allowed us to reduce the project implementation time by 40% in 2 years. Thus, thanks to timely change management, it was possible to more accurately predict the timing of the completion of work. Moreover, the number of successfully completed projects increased by 50%. And finally, thanks to more accurate and rational planning, we reduced costs by 35%.

Speaking in terms of city management, the advantages of implementing project management are quick management decisions in times of crisis, increased efficiency, reduced costs, and increased resource capacity through transparency and control of activities.  

Is there a difference between PMO in business and PMO in city councils? If so, what is it?  

Ihor Koval, Mariupol City Council: In general, the approach to management is the same, we only consider internal processes, regulations, and procedures. State institutions are more limited in their actions in terms of national legislation, which, unlike commercial organizations, does not allow them to be flexible in decision-making. At the same time, both areas require active people who are motivated to do this work.  

Yulia Dovhaliuk, Project Management Department of Mariupol City Council (2017-2018): The management system in cities is built on a functional principle. It is based on a clear division of functions between departments and the preservation of a multi-level management structure. However, this approach does not have stable effectiveness in the context of competition, scale, the need to operate in a strict legal framework, and to be focused on social effect rather than profit.

 From a theoretical perspective, a project management office in the city council is no different from an office in business. But in practice, we face large-scale challenges. 

• First, the PMO should be created to support the project management system at the level of the entire municipality.
• Secondly, a completely new way of managing communications must be created, with clearly defined areas of responsibility for the distribution of information about project activities.  
• Thirdly, the Office must have sufficient administrative weight to regulate, control, and manage all participants in project activities.  

About the launch of project management in city councils

Why did you decide to use project management in the activities of the city council? 

Oleksandr Khoma, Kryvyi Rih City Council: Initially, we had the idea to create a PMO that would be in charge of project management, but six months later, we changed our approach and developed a model in which the PMO manages project teams. This allowed us to avoid attracting additional resources, but did not affect efficiency. Currently, the PMO has 7 managers who served 24 strategic projects and 114 operational projects before the war.

Ihor Koval, Mariupol City Council:  First, we identified the tasks and challenges they faced. The main needs at the time were to increase investment and lending programs, strengthen interaction with businesses, and address community needs. In addition, we realized that we could not meet project deadlines and budgets, human resources were not used efficiently, there was low interstructural interaction, and the highest priority projects were not always implemented.  

Previously, our team had quite a successful experience in project management in business. We realized that managing one type of project would not solve the complexity of managing the dynamic socio-economic system of local government. Therefore, we took on the responsibility to build an adaptive system that would suit the city council and solve the tasks set.  

How did you start implementing PMO? What key stages did you have to go through and what difficulties did you face?  

Oleksandr Khoma, Kryvyi Rih City Council:  The implementation began with an analysis of the problems. The next stage and, in my opinion, the most important one was the selection of the team. We decided to invite young professionals from the network of municipal enterprises for an interview. Thus, the first candidates were selected. At the same time, I taught the team basic project management skills, as I am a PMP-certified specialist of the American Management Institute (PMI). 

Subsequently, we developed the structure of the Office, which was tested for suitability and flexibility throughout the year. During the same year, the PMO began to support both large infrastructure projects of the city and operational projects. A year later, we actually had a proven model that was very effective.  

If we talk about difficulties, it is always people. We are all so different, and we all have our own expectations and motivations. The challenge was to unite different people into one team that strived to achieve its goals.  

Yulia Dovhaliuk, Project Management Department, Mariupol City Council (2017-2018): Speaking about the technical part of the implementation, I propose to pay attention to our first object of the PMO implementation — the Department of Housing and Municipal Infrastructure. First, we studied the external environment and understood how that unit of the city council was perceived by key beneficiaries. We also analyzed the organization of work within the Department, the status of project implementation, the prospects for their successful and timely completion, and the available resources. This made it possible to understand the direction in which to move. In this case, we came to the conclusion that we needed to preserve the organizational structure and build a more efficient management model. And we succeeded!

As for the difficulties, there were certainly some. For example, there was a desire to leave everything as it was because “we don't need it,” “it's complicated,” “it doesn't suit our institution,’ or “it's additional work not provided for by the position.” But if management at any level took a leadership role in the process of implementing the project management system, all adaptive problems were solved quickly and efficiently.

The transition to project management requires funds. Could you please tell us how you managed to find funding?

Oleksandr Khoma, Kryvyi Rih City Council: When we decided to create a PMO, we realized that we needed to use internal resources (both financial and human). Therefore, our office now consists of the city council and municipal enterprise employees. Different levels of specialists were involved in training and setting up the software, but it was not a сonsiderable expense for the organization.

Ihor Koval, Mariupol City Council: The implementation of project management in the Mariupol City Council was carried out at the expense of the local budget. Currently, there are many opportunities for communities to receive funding through grants, and a lot of partners are ready to consider funding options for cities and municipalities.

Many municipalities cannot finance project management through their budgets. However, the effectiveness of implementation in small communities will be much higher than in cities, where there is already a clear understanding of managing large and medium-sized projects. In addition, a project management system can be a catalyst for attracting investment.

Implementation of new approaches to governance, including PMO, is impossible without training people. How did this process take place in Kryvyi Rih and Mariupol city councils?

Oleksandr Khoma, Kryvyi Rih City Council: After the team for the PMO was selected, we conducted a test to understand the level of knowledge of future team members. Then we developed a training program for both the members of the PMO (PMO manager, PMO administrator) and project team members. The team was trained for a year and then provided with resources for self-development. Project teams were trained for each project individually. After 1.5 years, many city council employees already had basic experience in project management.

Yulia Dovhaliuk, Project Management Department, Mariupol City Council (2017-2018): After “diagnosing” the enterprises, we prepared a training program adapted to the knowledge of the employees. The programs were individualized for each group of people: for line employees of the enterprise who would directly work systematically in the implementation of projects and for the city leadership, where the focus was on the basic principles of system management. The training consisted of a theoretical part, and practical and homework assignments with feedback.

Tell us about the results you achieved by implementing project management in your management system. And what were the first successes?

Oleksandr Khoma, Kryvyi Rih City Council: The first success was that our team implemented two projects that had the status of those “stalled.” Both of them involved cooperation with the EBRD. They lasted more than two years and did not have the desired result. By changing the approach to project implementation, we completed them in 6 months. That was the impetus for the start of the implementation of the PMO.

The main results also include the creation of a system for evaluating, planning, implementing, and monitoring a large number of different projects. These include the reconstruction of city districts, the construction of a solid waste plant, and more. Since the outbreak of russia's military aggression against Ukraine, the Office has been performing tasks related to the requirements of martial law.

Yulia Dovhaliuk, Project Management Department, Mariupol City Council (2017-2018): The implementation followed an adapted methodology for project management in cities. The first results were the creation of basic project plans and templates, daily actual data display, and the ability to monitor the process for management. At the same time, the global result was that we received a tool that allowed us to implement, manage, and monitor processes in the city's pilot MEs as part of the project management system.

If we talk about quantitative indicators, then, for example, one of the enterprises managed to improve the quality of implementation of socio-economic development programs by 30%.

Benefits of implementing PMO and tips for Ukrainian cities

Could you please tell us how will Ukrainian cities benefit from the PMO both in the long and short term — in wartime and post-war period?

Oleksandr Khoma, Kryvyi Rih City Council: First and foremost, PMO is the only tool today for effective process management to achieve complex goals. We all need to start thinking about creating sustainable development strategies that have a long-term perspective.

At this difficult time for Ukraine, many international partners are ready to support Ukraine, but they cannot do so effectively. One of the main problems is the inability of communities to ensure the effective use of the resources provided, namely transparency and process management. That is the main task of the PMO.

Yulia Dovhaliuk, Project Management Department, Mariupol City Council (2017-2018): The challenges the authorities of various levels face are very large-scale. In addition, there are no ready-made solutions, as there was no previous experience in solving such issues in a limited period of time. And let's not forget that there is a lack of funds and human resources. Large amounts of modernization, construction, and renovation of cities are needed. There are also problems from the pre-war era, including delays in project implementation, underutilization of budget funds, problems with interaction within teams and with external contractors, and unsystematic project management.

In turn, a project management system will help consider the specifics of strategy development, planning, and implementation, and simplify access to international markets and donors. PMO provides an integrated approach to rebuilding the country and implementing a large number of projects in a limited time with the possibility of control by both the customer and communities.

What tips can you give for Ukrainian cities, especially those that are hesitant to implement PMO or have started to do so but have given up due to failures?

Oleksandr Khoma, Kryvyi Rih City Council: I can only advise one thing: the speed of change is very high, and the PMO is just being implemented to manage these changes. I strongly recommend not to hesitate because you can “not only miss the last carriage, but not get on the train at all.” Donors will choose those who know how to plan, meet deadlines, and be proactive.

Ihor Koval, Mariupol City Council: Creating a PMO is like changing a way of life.  Adjustments and innovations occur gradually. If you fail the first time, you need to take corrective measures. First, track the actual state of activity, then analyze and measure progress to understand where the deviations were and why. And finally, plan and implement actions aimed at accomplishing the tasks in accordance with the plan or with minimal deviation from it.

The steps described above will allow learning how to manage changes, one of the components of project management. You need to be able to plan and adjust your goals and approaches promptly.

This process is not quick, and to be ready for the global challenges of the future, you need to start making changes today. Of course, something new always causes fear and doubt, but if you move gradually, ensuring the consistency of steps, you will eventually be able to build an effective project management system.

And, most importantly, nothing is impossible! Everyone can manage projects. You don't need to be a professional project manager. If you follow some rules and recommendations, follow the implementation plan clearly, and implement all the necessary measures, then with the help of teamwork, the likelihood of getting a successful system is very high.”

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The Transparent Cities program (Transparency International Ukraine) works to help Ukrainian cities become stronger. This necessity has become much more important during the war. Our cities are facing many challenges now, and to successfully confront them, we need to look for new effective business models.

Project management is the tool that will allow local authorities to achieve their goals, successfully implement the projects they have launched, and significantly improve the development of their city. In addition, this approach allows maintaining efficiency in the face of limited financial and human resources.

This interview describes different experiences in implementing the PMO approach in practice. However, the conclusion is the same: its application significantly improves the quality of management, and performance of local authorities and their subordinate structures. It has a positive impact on the development of the city and its residents. We believe that Ukrainian cities will take a proactive stance on the implementation of project management, as there are all the prerequisites for this: successful experience, theoretical materials, and teams of experts ready to help and teach.

Article prepared by Viktoriia Onyshchenko, analyst of the Transparent Cities program (Transparency International Ukraine).

Source: Decentralization.