Organizational Design of Integrated Project Management Company, Inc.: Business Model Analysis

Organizational Design of Integrated Project Management Company, Inc. 

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Organizational Design of Integrated Project Management Company, Inc. 

Organizational Design of a company can be defined as the processes that have a direct link with the company’s strategy as they are the key sources that deliver value to both internal as well as external customers (Kunc, 2018). Thus, Organization design is the main factor that determines the performance of an organization and the way people work together in that organization (Burton & Obel, 2018). This paper closely looks at the Organizational design of the company ‘Integrated Project Management Company, Inc.’ wherein it will dissect its Organization profile. It will find out the Value Proposition, Revenue Streams, Key Resources, Key Activities, Key Partnerships and Cost Structure.

Overview

The pressing need for bringing out excellence in the project execution made C. Richard Panico establish Integrated Project Management Company, Inc. in the year 1988. The main focus of the company was to manage projects of the companies that were struggling to execute their strategies efficiently (IPM Inc., 2018). Rich found out that most of the consultancies focused on providing solutions and company strategies rather than execution, basis which he founded a value-based and ethical company the main focus of which is to provide motivational culture based on the foundations of ethical percepts, honesty and integrity. Thus, IPM Inc. came into being as a business consulting firm that provides leadership qualities to transform strategies into solutions to a sustainable model (IPM Inc., 2018)

Value Proposition 

Richard Panico (1988) states, “Culture and quality, have been, are and will always remain IPM’s highest priorities”, basis which the company started its service lines. The company has been focusing on select few service lines that are highly valued in their respective sectors. Life Sciences is one of the key sectors the company offers services in and besides it there are Centers of Excellence (CoEs) on important service lines. These CoEs have been created to set deeper subject knowledge expertise in areas that are significant as per market requirements and opportunities. Not only do the CoEs provide structure, centralized knowledge, dedicated employees in various domains but also impart resources, tools, templates, training materials for the project management consultants. Additionally, there is continuous enhancement of CoEs through research and knowledge enhancement. On the whole, IPM offers 10 services in the four major domains, namely, Life Sciences, Industrial products, Consumer products and Healthcare. 

Revenue Stream

The nationwide revenue of IPM has seen a rise in 62% from 2013 to 2017 with annual revenue per consultant risen up to 50% higher than the national comparison. Life Sciences is the major revenue stream that has grown up by around 80% from Financial Year 2013 to 2017. Besides this value addition, the revenue generation from the new clients surpassed the goal of 18% rise from 13% of total revenue in the Financial Year 2016 to 27.7% in Financial Year 2017. 

The current liquidity ratio of IPM, which is the company’s ability to pay both long and short term obligations is 6.1 above the benchmark of 1.5. Likewise, EBIDTA was 9.6% in Financial Year 2016 which was competitive with the benchmark of 9.1%.  

Key Resources

There are over 180 employees at the IPM working in a non – union environment. The Company has two main divisions, namely, Operations and Corporate Services. The Management is divided into the Executive Team, Senior Management and Management. Project Management Consultants being the ones working at clients’ sites, are divided into four levels on the basis of experience and expertise. The Consultants have the Subject Matter Expertise who constantly enrich their knowledge and experience thereby lead to value addition for both clients and the company. The Workforce profile of patients is such that Males account to 63% and Females comprise 37% of the total employees. The employees under the Operations segment include 78% of the workforce and the rest of them (22%) belong to Corporate. Of these, 98% are Bachelor’s by educational qualification, 51% are Master’s and over 7% are PhDs. The Ethnicity profile of the employees varies from being White (78%) to Asian (12%), African (6%) to Hispanic (1%) and Islander (1%).

Key Activities

  The Key Activity of IPM is Project leadership. The core competencies for the leadership involve applying processes, planning and execution and together they deliver excellent project leadership business consulting services in 10 service lines that are under four main domains, namely, Life Sciences, Industrial products, Consumer products and Healthcare. IPM is a relationship-driven company (Malcom Bridge National Quality Award, 2018) and they acquire relationships with their clients through activities like social media, networking, meetings, to name a few. IPM has offices in St. Louis, Parsippany, New Jersey, San Francisco, Minneapolis, Chicago and Boston.  

Key Partnerships

  IPM does not have partners or suppliers to rely upon for its consulting services. Instead, they rely on their full time employees who make up their supply chain. For this, the company has to have good employee retention and aggressive recruitment program being deployed at IPM. 

Cost Structure

At IPM, the Days Sales Outstanding (DSO), which is calculated as an average of 12 –Month Accounts Receivable has been decreasing for the past few years (IPM, 2018) as there has been better negotiation terms. However, the operating cost per hour in the form of salary hike was rising from Financial Year 2013 to 2015. However, cost per hour stabilized from 2015 to 2017 as the revenue per hour also increased during these financial periods. Whereas, cost per hour increased a bit but the average revenue per consultant also raised significantly, thereby making IPM operations highly profitable. As there are no partners or suppliers involved, the IPM profits are solely theirs. The bid-to-win ratio exceeded the benchmark and so had the Proposal acceptance rate exceeded the benchmark of 48% by up to 65% in 2017. All these have placed IPM above 95th percentile. As far as new clientele development growth is concerned IPM saw a 300% growth in the new customer volume from 2013 to 2017.

All in all, IPM is a highly profitable venture with strong leadership consulting abilities.

References

Burton & Obel (2018) The science of organizational design: fit between structure and     coordination. Journal of Organization Design. Available at  https://jorgdesign.springeropen.com/articles/10.1186/s41469-018-0029-2 

Integrated Project Management Company, Inc. (2018) Malcolm Baldrige National Quality  Award Application. Available at 

Integrated Project Management Company, Inc. (2018) Malcolm Baldrige National Quality  Award. Available at 

https://hhprodpublic.s3.amazonaws.com/media/attachments/28d5d933/integrated_project_management_company_inc_1.pdf 

Kunc, M. (2018) Organizational Design. Researchgate.net. Available at 

https://www.researchgate.net/publication/328265003_Organizational_Design