Project Business Management – The Construct, The Framework, and The Model
Globalization of the marketplace is a fact. Local markets within countries now also face regional as well as global competition. Global and regional business pressures have resulted in growing numbers of enterprises needing to develop more projects having an enterprise-wide impact and necessitating a faster time to market. Therefore, the global economy is driving enterprises to establish better means and methods for managing projects and their associated project-programs and project-portfolios.
The “Y2K” debacle of 2000 impacted information systems and technology and pushed project management into the arena of business. Project management’s involvement during the following fifteen years, in managing the projects producing the newest technology products and services, has cemented its place in business and has pulled project management into the field of commerce.
In addition, about twenty-five percent of all the goods and services produced in human history were produced in the last ten years (Angus Maddison; UN; The Economist). The additional requirements necessary to handle the associated projects on an expedited basis exacerbated the issues already associated with the normal ways many enterprises were and still are conducting business. Therefore, business pressure has continued to mount for executive management to apply formal business management principles, practices, processes, and methodologies to the projects in their business portfolios.
During this period of change, other key challenges have been emerging for businesses that affect their ability to more effectively prioritize and manage their projects and programs to achieve desired business results and value. Those challenges needing to be addressed include, but are not limited to:
- Growing complexity of projects, project-programs, and project-portfolios;
- Needing to perform projects on an enterprise-wide basis;
- Condensing the time allotted for projects and programs to be vetted, and changes to be accommodated;
- Handling the business tension between agility in the marketplace and the overall stability of the enterprise;
- Coming to understand many programs and projects fail because of poor coordination, limited resources, faulty assumptions, not being the right project at the right time, or mid-management in-fighting;
- Recognizing the need to apply the same portfolio / program / project management principles, practices, and processes to the projects located within the operations side of the business;
- Ensuring, at the executive level, that all projects and programs align with existing strategies and support the enterprise’s mission and vision; and
- Growing recognition that successful multi-project management within programs and portfolios is one of the major factors establishing enterprises as foremost leaders in their markets.
In addition, we see the practice, discipline, and organizations of project management as constantly evolving as the physical and mental capabilities of humankind increase. These increased capabilities now allow an enterprise to attempt to plan and complete a greater number of projects and undertake even more complex projects, in shorter periods of time.
These challenges indicated a need to blend of the principles, concepts, and processes of project management with those of general business management and operations business management. We addressed this need by developing the concept, framework, and model of Project Business Management and the governance philosophy of the Project Business Management Organization (see Chapter 2).
Project Business Management is an integrated business approach to managing all the projects, project-programs, and project-portfolios within an enterprise. We created the term Project Business Management to eliminate any confusion and to suppress the reader's assumptions as to what the term “Project Management” might mean when used within a business context. Therefore, we use the term Project Business Management, and its acronym PBM, in the above context throughout this book.
The related functional business unit, which enterprise’s need to charter to implement integrated Project Business Management practices and processes, is the business function we call the Enterprise Project Business Management Organization (Enterprise PBMO) or, more commonly in the literature, the Enterprise PMO. Project Business Management and the use of a Project Business Management Organization are ubiquitous business approaches to managing the project-related business of an enterprise.
Interest in developing and deploying “Project Management Organizations” of one type or another has continued to expand. The number of articles and books related to project management organizations/offices (PMOs) continues to blossom as the growth of the project, project-program, and project-portfolio management professional practices continue worldwide. However, useful information on how PMOs are providing value and benefits to their enterprise, how those PMOs function as a business unit, how they are structured, and what makes a PMO sustainable has been lacking. In addition, a larger set of business related questions exists concerning PMOs, which are of interest to the project management profession at-large and business executives in general.
Only a few enterprises currently employ project management as a successful business function at the executive level. However, we believe this will become a standard practice of future enterprise organizational models. Executives and business unit managers in today’s most forward-thinking enterprises are already taking project management disciplines beyond handling specific projects in manufacturing, product development, services, and information technology. They are adopting its powerful methods enterprise-wide. The practices of project, project-program and project-portfolio management are applicable to any type of enterprise, whether it is a for-profit company, a non-profit company, or a governmental agency. Therefore, the principles, processes, methods, and techniques recommended in this series of articles are aimed at existing enterprises with established business operations and defined functional organizations.
Executives and business unit managers require answers to key questions before they agree to implement project business management on an enterprise-wide basis. These questions, some of which we will answer in the following sections of this article, fall into several categories:
How can I tell if my enterprise is already doing some project management?
What is an enterprise project management organization (EPMO)?
What factors affect the structure of the EPMO and its positioning within the enterprise?
What are the business benefits of creating an EPMO?
How difficult is it to implement an EPMO?
How can project management be seen as a business function?
Why is project management seen as a competitive business weapon?
What are the factors leading to enterprise-wide project management and EPMO success?
Where do I position the EPMO within my enterprise?
What actions do I take to establish our EPMO?
How do I streamline some of the project related business operational processes?
How do I successfully integrate project management processes with operations management processes?
What does an enterprise-wide project methodology include?
What kind of policies, plans, processes, and procedures are needed to support enterprise-wide project management?
How can I define the knowledge and skills required by portfolio, program, and project managers?
How can I assess the enterprise’s capabilities in managing portfolios, programs and projects?
How can I establish a career path program that will help train and retain skilled portfolio, program and project managers?
What are the elements of an effective education and training program that will develop program and project manager skills, knowledge, and practice capabilities?
Planning and Execution:
How do I fold project management business oriented processes into the business management operational processes in planning business objectives?
How do I oversee management of project-portfolios, project-programs, and projects from the executive office level?
What roles and responsibilities do the EPMO and project business management play in strategic, tactical, and operational planning and management?
What process are used to authorize, initiate, plan, execute, monitor and control, and close project-portfolios, project-programs and projects?
Sustainability / Maturity:
How should enterprise-wide project management maturity be measured, evaluated, and improved?
How do I control enterprise operational cost levels (and profits if applicable) while implementing the EPMO?
What are the issues common to most enterprises who implement a PMO or EPMO?