apmcgreal 1014709 assignment bs3354 final copy

8/3/2019 APMCGreal 1014709 Assignment BS3354 Final Copy

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ROBERT GORDON UNIVERSITY

Course: Graduate Certificate in Project Management

Module Title: BSM3354 Projects - The Strategic Context.

Distance Learning (ODL)

Assignment: BT Case Study

Author: Andrew McGreal (1014709)

Module Coordinator: Dr. Ximing Ruan

Word Count: 3005

Submission Date: 21/03/2011


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Projects The Commercial Context

Page 3

Table of Contents

1.0 Introduction. .......................................................................................... 5

1.1 Overview. ........................................................................................... 5

1.2 Aims and Objectives. ......................................................................... 51.3 Scope. ................................................................................................ 6

2.0 Company Strategic Objectives. ............................................................. 6

3.0 How Strategy relates to Project Portfolio Management. ....................... 8

4.0 Strategic Project Portfolio Management Methods............................... 10

4.1 The Project Management Office (PMO). ......................................... 10

4.1.1 Overview. ............................................................................... 10

4.1.2 Method. .................................................................................. 11

4.1.3 Results. .................................................................................. 12

4.2 Operational Project Management Maturity Model OPM3

. ............. 134.2.1 Overview. ............................................................................... 14

4.2.2 Method. .................................................................................. 14

4.2.3 Results. .................................................................................. 16

4.3 The Selected Methodology. ............................................................. 18

4.3.1 Implementing the PMO. ......................................................... 19

4.3.2 SPPM vs. Managing Multiple Single Projects. ...................... 19

4.3.3 Success Criteria. ................................................................... 20

4.4 Creation of Value. ............................................................................ 21

4.4.1 Leadership. ............................................................................ 214.4.2 Human Resources (HR). ....................................................... 22

4.4.3 Team Management. .............................................................. 23

5.0 Conclusions. ........................................................................................ 24

6.0 Recommendations. ............................................................................. 25

7.0 References. ......................................................................................... 25

8.0 Bibliography. ....................................................................................... 29

9.0 Appendices. ........................................................................................ 31

9.1 BT Strategy Statement .................................................................... 31

9.2 BT Organisational Groups ............................................................... 32


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Tables and Figures

Table 1: PMO Review Criteria .......................................................................... 13Table 2: OPM3

Elements ................................................................................ 15

Table 3: Star Project Leader Qualities. ............................................................. 18

Table 4: SPM Metrics. ....................................................................................... 20Table 5: People Management ........................................................................... 24

Figure 1: BT Group Operational Makeup. ........................................................... 6Figure 2: BT Strategic Priorities .......................................................................... 7Figure 3: Strategic Links. .................................................................................... 7Figure 4: PMO Facilities. ................................................................................... 11Figure 5: OPM3

Elements ............................................................................... 15
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1.0 Introduction.

1.1 Overview.

"The emergence of PPM as a recognized setof practices may be considered the biggestleap in project management technology sincethe development of Program Evaluation andReview Technique and Critical Path Methodin the late 1950s." (Levine 2005)

Companies are increasingly using a strategic project

management approach in order to ensure that the

portfolio of projects undertaken by the company align

with its core business and the strategy set out in the

companys policy documents.

This portfolio of projects must be chosen carefully in

order to provide the best return on the invested capital

in order to further increase the companys wealth. Thisin turn satisfies the shareholders desire that the

company, and their own investment, should prosper.

1.2 Aims and Objectives.

The aim of this report is to identify the strategic

objectives of the company and to evaluate the methods

of Project Portfolio Management (PPM) which will

enable the company to drive the business forward at a

strategic level. The preferred option will be selected

and compared to the process of managing projects

individually. The roles of leadership, HR and team

management will be discussed in relation to supporting

the creation of value within the chosen method.


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1.3 Scope.

This report is based upon the companys annual report

(BT 2010) issued for 2010 and the combined learning

activity from the module.

The structure of the group is shown in Figure 1. and

details of each operational group are to be found in

Appendix 9.2. Each of the operational areas, BT

Retail, BT Global Services, BT Wholesale and

Openreach will have their individual strategic objectives

highlighted.

Figure 1: BT Group Operational Makeup.

Source: Author & BT.com (2010)

2.0 Company Strategic Objectives.

We will build a better future for BT through our

five strategic priorities (BT 2010). The annual

report highlights five strategic priorities,

displayed graphically in Figure 2.

BT GroupPLC

BT RetailBT GlobalServices

BTWholesale

Openreach


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When considering future projects for inclusion in the

companys portfolio, this relationship between

operational groups and strategic objectives can be

utilised to ensure that projects under consideration will

meet the primary criteria required for selection; does

the project align with the companys strategy?

All of the strategies outlined above reflect a desire to

build on present company successes, as such projects

wishing to be added to the strategic portfolio must be

Growth or Enhancement Projects and must meet the

prequalification guidelines (Levine 2005 p. 97) as set

out in the project portfolio management plan. The

company will then be able to accept or reject the

project accordingly to ensure strategic alignment.

3.0 How Strategy relates to Project Portfolio Management.

For a large organisation it is often difficult for project

managers to have a big picture view of how the

individual project aligns with business strategy. Projects

are worked on in isolation, but overall company

priorities are not necessarily supported. Consequently

...change, kill, or recover decisions are not made early

enough. (Crawford et al. 2008) leading to the possible

failure of strategic projects.

Traditional project management, existing at the

...tactical or operational level, and not an executives

concern (Callahan and Brooks 2005 p.24), has

advanced through project portfolio management into

Strategic Project Portfolio Management (SPPM). This

involves raising the project (or portfolio) to the


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executive level where C-level personnel (for example

CIO and CFO...) (Levine 2005 p. 161) can direct the

management of these projects according to the

company strategy. This ensures the portfolio of projects

tracks company strategy as modified by business

manoeuvres aimed at maintain competitive advantage.

SPPM has been defined by various authors and

organisations along comparable lines of aligning

projects with company strategy and enhancing

company wealth. However, it has also been proposed

that such definitions are lacking an additional

perspective relating directly to strategy, and its effects

on project selection, in order to gain a competitive

advantage over your competitors:

...the project perspective, direction, andguidelines on what to do and how to do it,to achieve the highest competitiveadvantage and the best project results.(Shenhar, Poli and Lechler 2000)

and

Strategic project management is themanagement of those projects which areof critical importance to enable theorganisation as a whole to havecompetitive advantage (Green 2006).

It is this competitive advantage that will be the

noticeable difference between companies operating in

similar fields of business.


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4.0 Strategic Project Portfolio Management Methods.

Two differing methods of SPPM are to be considered in

order to determine which method best suits the

company strategy, adds best value to the company and

increases the worth of the company (and therefore the

wealth of the shareholders). The two methods selected

are the Project Management Office (PMO) and the

Operational Project Management Maturity Model

(OPM3).

4.1 The Project Management Office (PMO).

Project portfolio management - thesystematic selection, prioritization, andevaluation of projects across the enterprise -cannot be effectively engaged in without aPMO (Crawford et al. 2008).

4.1.1 Overview.

In order to provide the required basic structure within

an organisation a Project Management Office should

be opened. Creating a PMO institutes an

administrative, knowledge-based, tactical or strategic

entity that will support project processes (Callahan and

Brooks 2004).

Several types of PMO are described by Callahan and

Brooks (2004 pp157-160), be it purely Administrative

Support, a Centre of Excellence, Managerial or a

Delivery PMO. It is the authors view that in order to

ensure implementation and execution of the companys


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practices that will set the organisation apart from its

rivals.

Table 1: PMO Review Criteria

PMO Review Criteria

Structure of the PMO.

Roles and responsibilities of each PMO member.

Challenges, issues, concerns and opportunitiesexperienced by PMO members.

Communication and promotion of the PMO throughout the

organization.

Resourcing and prioritizing projects.

Coordination and management of all organizationalprojects.

Development of a project management life cycle.

Development of all project documentation.

Development of all project management processes.

On-going reporting of project status.

Source: BIA (2011) & Author

4.2 Operational Project Management Maturity Model OPM3

.

Maturity in project management is the

implementation of a standard methodology

and accompanying processes such that there

exists a high likelihood of repeated

successes. (Kerzner 2009 p.58)

The maturity of an organisation is measured by the level

of advancement that the organisation has achieved in

any particular area or speciality. OPM3provides the


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mechanism by which this level of maturity can be

measured, (u)sing OPM3allows you to establish a

process with metrics that show how your strategy is

being translated into organizational reality by selecting

and performing the right projects. (Friedrich 2008)

4.2.1 Overview.

In the words of the Project Management Institute,

developers of OPM3Standard, Organizational project

management maturity is the ability to efficiently deliver

projects while driving your organizations strategy.

(PMI 2011) It should be observed that OPM3

presupposes that the entire process is carried out using

the PMI standard (Callahan and Brooks 2004 p.151)

requiring the organisation to implement the PMI

standard accordingly.

With this in mind it is possible for an organisation to

implement OPM3in order to successfully drive the

business forward as according to the Project

Management Institute (2011) ...OPM3will help

organizations align their strategic goals to the

successful completion of projects and understand their

organizational project management maturity.

4.2.2 Method.

The OPM3methodology provides the organisation

with three interlocking elements, Knowledge,

Assessment and Improvement as shown in Figure 5

and described in Table 2. These three elements, when


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appropriately implemented, allow the organisation to

grow from within and increase the potential of the

project staff.

Figure 5: OPM3

Elements

Source: Author

Table 2: OPM3

Elements

OPM3

Elements:

Knowledge: Provides access to Best Practice methods

and implementations. Drives assessment to

ensure knowledge applied correctly.

Assessment: Evaluates the organisations situation,

identifying areas for improvement. Drives

improvement. Successful completion of

assessments enables pursuit of a higher level

of maturity.

Improvement: The path toward a higher level of maturity.

Source: Author

The OPM3method provides five tiers of competency,

where level one is the baseline at which all

organisations implementing OPM3

will begin through

Improvement

Assessment

Knowledge


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As the process for assessment is laid out in the OPM3

standards, so a problem is laid bare. If all competing

companies implement OPM3 identically, then all

competitors will exist on a level playing field thus

minimizing the competitive advantage sought by C-

level executives. This is explained succinctly by Green

(2005 p. 6); If a number of firms all follow the same PM

standard, there is little scope for one organization to

outshine another over time, especially if the standard is

elaborate and gives a detailed, step-by-step,

logical approach, as is the case with OPM3. All of thismakes it easier to apply and hence easier to imitate.

In order to maintain the desired competitive advantage

the company will need to recruit, or if possible create

from within, a number of Star Project Leaders as

described by Green (2005 p.10) who have the ability to

greatly influence a companys project managementperformance.

These star project leaders will be experts in their field

and whilst they ...are familiar with the rules of good

practice, they no longer select and follow rules. Rather

they perform smoothly, effortlessly and

subconsciously. (Cooke-Davies and Arzymanow 2003

p.2) thus creating the edge required to assist in

maintaining the competitive advantage.

A summary of the exceptional qualities to be found in

these leaders is shown in Table 3.


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Table 3: Star Project Leader Qualities.

Star Project Leader Qualities

Long experience of managing projects and dealing with the

problems that they entail which gives them an ability to see

through complexity, and get to the heart of the matter

A desire to get things done, not out of a need for self

aggrandisement or affirmation but out of a desire to accomplish

something and make a contribution.

An ability to see through the eyes of others, and empathy for

others while not tolerating underperformance or poor team

contribution

Courage to break the rules, manage around the system, go the

extra mile, if that is what it takes to get things done

Break through organisation boundaries and silos through

forcefulness, personal energy, passion and enthusiasm.

Excellent political and diplomatic skills and judgement

The courage to call things as they really are and avoid self-

delusion and excessive narcissism in themselves and others

Optimism, little tolerance for negativity or lack of energy by

project team players, see problems as opportunities

Win loyalty from others through courage, personal charisma and

empathy not through people pleasing.

Source: Green (2005 p.10) & Author

4.3 The Selected Methodology.

In reviewing the two options discussed above it is the

authors belief that the most prudent course of action

would be to select the PMO as the preferred

methodology; indeed Crawford et al. (2008) claim that it

is not actually possible to effectively engage in project

portfolio management without deploying a PMO.


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4.3.1 Implementing the PMO.

...the early establishment of a projectmanagement office (PMO) during the project

management maturity process canaccelerate the realization of value (Kerznerand Saladis 2009 p.219)

In successfully implementing a Project Management

Office the organisation will gain value from a wide

range of methods and resources being made available

to the project team.

The processes and methods developed by the PMO

must conform to best practice, but should also be

sufficiently unique in order to retain a competitive

advantage over business rivals; a source of

competitive advantage is when you can do things better

than others. The better than is through the experience

and judgement and the knowledge which is built upover time of managing projects. (Green 2006)

4.3.2 SPPM vs. Managing Multiple Single Projects.

Project managers with many years experience will

need to grasp the concept that SPPM is more

concerned with strategically managing the portfolioprocess, rather than simply managing multiple single

projects. As stated quite clearly by Dye and

Pennypacker (2000) (c)urrently there exists a general

philosophy that all projects under way make up the

project portfolio. Unfortunately, a group of independent

projects does not make up a portfolio it is simply a

group of projects, consuming time and resources.


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4.3.3 Success Criteria.

Traditionally, projects were measured against the iron

triangle of Time, Cost and Quality (Stevens 2002 p.10-11) whereas in the realm of the strategic PM there

are various criteria by which project success may be

measured as shown in Table 4.

Table 4: SPM Metrics.

Strategic Project Management Metrics

Were completed within their budget constraints since theimplementation of the Enterprise PMO as compared to the

number of projects completed within their budget constraints

prior to the implementation of an Enterprise PMO.

Met or exceeded the customer requirements specifically

identified at the beginning of the project.

Aligned with corporate strategy (Alignment should be 100%).

Have successfully been managed (on-time, on-budget, met

customer expectations) after training of project managers andteam members as compared to projects managed by individuals

not formally trained.

Followed the prescribed Enterprise PMO project management

process and were completed successfully as compared to

projects that did not follow the prescribed Enterprise PMO

project management process.

Applied a risk management process with fewer crisis situations,

as compared to those projects that did not apply risk

management.

Realized a reduction in cycle time from order to delivery or from

product design to product launch.

Simplified by making transparent a complex project for the

customer, supplier and third parties.

Utilized staff with appropriate skill sets for the project.

Source: Stanleigh (2010) & Author


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4.4 Creation of Value.

An Effective PMO must deliver Value Added

Service to the entire organization. (Astrello 2009)

Implementing the PMO will create this additional value

within the business, with the following areas providing

support for the effort thus:

4.4.1 Leadership.

Strong leadership will be required to manage the

difficult transition from a group of projects being

individually managed to the essential structures and

methods required to strategically manage a portfolio of

projects in line with stated company strategy. In order to

do this, organisational barriers will need to be broken

down, ...as the walls begin to break down, significant

benefits will become evident, including better alignment

of projects with organisational objectives. (Callahan

and Brooks 2004 p.51)

Implementing a PMO, or any form of SPPM, is in itself a

project. As projects are the vehicles of change,

implementation of a PMO is nothing short of a ground-

breaking change. Executive support for the

implementation of the PMO must be widely expressed.

In order for this commitment to be understood

executives must be:

Vocal in their support of the process,Vigilant in carrying out the new process,Visible in their support of the process (PMSolutions 2010 p.7)


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The whole organisation must know that this is a change

in the fundamental principles of how the business now

operates and Employees must understand how they

can influence the successful execution of strategy.

(Bigelow Crawford 2005 p.2)

4.4.2 Human Resources (HR).

The planning of resources across a large organisation

is obviously problematic, especially as some resources

will be especially scarce.

The SPMO plays a role in this by matchingscarce resources to the right projects viaproject portfolio management, and bygrowing the project talent the organizationrequires via a well thought out professionaldevelopment program. (Crawford andCabanis-Brewin 2011 p.172)

It is the PMO that will validate business assumptions

about projects as to people, costs, and time

(PMSolutions 2009 p.7) through liaison with HR

management or by centralising resource planning and

allocation. (T)here is broad recognition, both on the

project level and on the executive level, that better

human resource management ... makes the difference

between success and failure. (Crawford and Cabanis-

Brewin 2005 p.2), therefore a consolidated HR effort will

assist in the attaining a successful outcome.

One of the most important issues on which you can

enlist the assistance of HR is how to measure the per-

formance of project personnel. (Crawford 2002).

Traditional methods of performance measurement may


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not be applicable to the project team and how projects

are managed as (t)here is a significant disconnect

between functional area measurements of performance

and appropriate performance measurement for project

tasks. (Crawford 2002)

4.4.3 Team Management.

When project managers and teams workwithin an organizational system that supportsthe project paradigm, the resulting work

environment is one that energizes people,achieves goals, and promotes flexibleresponses to organizational challenges andopportunities (Crawford and Cabanis-Brewin2005 p.5)

Thus it can be seen that effective management of the

project team is key to ensuring a productive project

office. The ability to be flexible in response to

organisational challenges will be key to implementing

the change to a fully strategic PMO.

The people management issues that best-practice

PMOs engage in fall under five interrelated categories

(Crawford and Cabanis-Brewin 2011 p.176) as shown

in Table 5.

In addition to the training and education services

provided by the PMO, mentoring will provide additional

support to project team members aspiring to progress

within the organisation, as confirmed by Jones and

Lucey (2007 p.4) in the statement ...training should be


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one of PMOs core functions in the form of mentoring

programs.

Table 5: People Management

People Management

Staffing: Candidate identification/selection and/oroutsourcing

Competency identification and assessment

Training (program development and administration)

Performance measurement and rewards

Career paths/leadership development

Source: Crawford and Cabanis-Brewin (2011) and Author

5.0 Conclusions.

Strategic Project Portfolio Management is required to

ensure that only projects which align with company

strategy are selected. The creation of a Centre of

Excellence Project Management Office is essential to

enable the company to fulfill this requirement.

Implementation of a PMO will bring additional added

value to the organization.

Executive support will be vital for successful

implementation of the PMO.

Strong leadership and effective team management will

assist in making the PMO successful.


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6.0 Recommendations.

The PMO shall be regularly assessed for maturity,

ensuring that this an iterative, ongoing process

following a pre-defined roadmap laid out to ensure

growth of the PMO in to a valuable business function.

However, the executive board must be aware that full

maturity may take considerable investment and will not

be achieved overnight. Although results may be seen in

less than a year, it may take five years or more to fully

deploy a PMO.

7.0 References.

ASTRELLO. J., 2009, Building a Value Added EffectivePMO Part I, [online] Available from

http://johnastrello.com/?p=377[Accessed on29/04/2011]

BT.COM, 2010, Our Profile, [online] Available from

http://www.btplc.com/Thegroup/Ourcompany/Company

profile/index.htm [Accessed on 19/03/2011]

BT.COM, 2010, Annual report & summary financial

statement, [online] Available fromhttp://www.btplc.com/Sharesandperformance/Annualre

portandreview/Annualreportandreview.htm [Accessed

20/03/2011]

CALLAHAN. K., and BROOKS. L., 2004. Essentials of

Strategic Project Management, Hoboken, NJ. Wiley.
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CRAWFORD, J.K. and CABANIS-BREWIN. J., 2011,

The Strategic Project Office, 2nd Edition, Boca Raton,

FL. CRC Press.

CRAWFORD, J.K. and CABANIS-BREWIN. J.,2005,

Optimizing Human Capital with a Strategic Project

Office [online] Available from

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ies%20-%20Optimizing%20with%20SPO(1).pdf

[Accessed 28/04/2011]

CRAWFORD, J.K., et al., (2008). Seven Steps to

Strategy Execution: Integrating Portfolios, Programs,

Projects and People for Organizational

Performance. Glen Mills, PA: Project Management

Solutions, Inc.

BIGELOW CRAWFORD. D., Making Strategy Work:How does a CPO help ensure its organizations

strategies are executed?[online] Available from

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ies%20-%20Making%20Strategy%20Work.pdf

[Accessed 29/04/11]

DYE, L. D. AND PENNYPACKER, J., 2000, Project

Portfolio and Managing Multiple Projects: Two Sides of

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ortfolio%20Management%20and%20Managing%20Mul

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COOKE-DAVIES, B. And ARZYMANOWC. A., 2003,

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GREEN. S., 2005, Strategic Project Management:

from maturity model to star project leadership,[online]

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GREEN. S., 2006, Strategic Project Management A

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PMSOLUTIONS.COM, 2010, Establishing a Successful

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PROJECT MANAGEMENT INSTITUTE, 2011, OPM3

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Wiley.
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9.0 Appendices.

9.1 BT Strategy Statement

We operate in a range of markets, providing

communications services to customers in the UK and

globally. To ensure those customers get the services

and support they deserve, our focus is on building a

better business. By building a better business, we will

also deliver a better future for BT, for our customers,

and for our shareholders.

Three areas - customer service delivery, cost

transformation and investing for the future - are

essential building blocks to making BT a better

business. They are linked: the better we serve our

customers, the less time and money we spend on

reworking and fixing faults. By continuing to transform

our cost base, we open up new opportunities to investin BTs future.

We are building a better future through our five

strategic priorities:

1. Broadband-based consumer services

2. The Brand for Business for UK SMEs

3. BT Global Services a global leader4. The Wholesaler of choice

5. The best network provider

(BT 2010)


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9.2 BT Organisational Groups

The groups organisational structure reflects the

different customer groups to which it provides

communications products and services via its four

customer-facing lines of business, supported by two

internal functional units. The four customer-facing lines

of business are the groups reportable segments and

generate substantially all the groups revenue. Their

operations are summarised as follows:

BT Global Services serves multinational corporations,

domestic businesses, government departments and

other communications providers across the world,

providing networked IT services.

BT Retail serves consumer customers and small and

medium enterprises (SMEs) in the UK, providing a

range of innovative communications products and

services. BT Retail also includes BT Ireland, which

operates across the major corporate, SME, consumer

and wholesale markets throughout the Republic of

Ireland and Northern Ireland, and BT Enterprises,

which comprises a number of individual

businesses including BT Conferencing, BT Directories,

BT Expedite, BT Redcare and BT Payphones.

BT Wholesale provides services to UK

communications providers through a diverse portfolio

ranging from nationally available broadband, voice and

data connectivity services and interconnect to bespoke,

fully managed network outsourcing and value-added

solutions.


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