defining organizational project management 2012
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Defining Organizational Project Management
Dr. Nigel L. Williams, PMP, Prince2( Twitter) @org_pm OPM COP/ University of Bedfordshire
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Organizational Project Management (OPM) COP
• PMI Online community that examines the strategic role of PM (http://opm.vc.pmi.org)
• Discussions• Content
– Webinars– Podcasts– White Papers
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Background
• Increasing importance of PM• Trillions of dollars spent in Projects Worldwide• Increasing investments in PM• PM emerging as a important profession ( >20
million PMs worldwide)
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• How do organizations create value?• What is the relationship between PM and
Strategy?• Why should organizations have a project
strategy• How can organizations craft a project
strategy?
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• Inside Out
– Resource Based
(Penrose 1959,
Barney 1991)
– Dynamic
Capabilities (Teece
et al., 1994)
How do Organizations create value?
• Outside-In
― Environmental and
Competitive Forces
Approaches (Porter
1980, Miller and
Friesen 1983)
― Entry Deterrence
(Shipario 1989)
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Projects, Strategy and Uncertainty
Pre 1960’s 1960-1990 1990 to Present
Pidd, M. (1996)
Environmental Uncertainty
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Puzzles
• No ambiguity about the problem• The issues and options are clear • PM for adjustment
– Type 1 projects(Turner & Cochrane, 1993 ): :Defined Method & Defined Outcome e.g Construction projects
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Problems
• Formulation of problem may be agreed• Variety of approaches to solving it.• PM for Adaptation
– Type 2: Defined Outcome NOT Method, eg Product development
– Type 3:Defined Method NOT Outcome, eg Software development
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Messes
• High ambiguity• No agreement about issues • PM as an organizing framework
– Type 4 Projects :Undefined Method AND Unknown Outcomes, e.g. Organizational Development
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Example: Widget Co
• Widget manufacturer• Identifies possible need for additional
capacity– Puzzle: Build facility– Problem: Build facility or outsource?– Mess: Do we need additional capacity? Where?
Dr Nigel L. Williams, PMP 10
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Current View (Outside- In): Projects are an instrument
StrategyProjects & Programs: Defined Outcomes
OperationsPortfolio:Strategic Objectives
Portfolio Adjustment
Business Impact
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Existing Perspective may be inadequate
• Greater role for PM in Organizations– Shorter horizon for strategy– Increasing numbers of Projects– Greater complexity of Projects
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What is Known about OPM?
• Evidence Based Approach• Dimension current knowledge• Understand major paradigms• Build research informed definition of OPM
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Research Method
• Systematic Review – Tool employed in Medicine: Cochrane Collaboration
(US)
– Policy EPPI Centre (UK)
– Management (Evidenceinformedmanagement.com)
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Systematic Review Process
• Identify keywords• Identify databases• Scan databases• Review abstracts• Create final list of studies for review
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Systematic Review of OPM
• Keywords– “OPM”, “OPM3”, “P3M3”,”P2M”,
“Organizational Project Management”, “Project Management AND Organizations”
• 79 Studies published from 1989 to 2011• Final group of 31 articles
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Paradigms of OPM
• OPM as Structure• OPM as Practice
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OPM as Structure
• Companies as collections of projects (Garies 1989,1990)
WidgetCo
Mkt Eng IT
Project A
Project D
Project B
Project C
Shared TechnologyShared ClientRelated Objectives
Traditional
Project Based Organization
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OPM as Structure
• Key company challenges: Integrating and Differentiating
IntegratingCombining
Project Outputs
DifferentiatingCreating new
projects to respond to
threats/ opportunities
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OPM as Structure: Change
• Organizational Change Management• Projects: 1st order change• Programs: 2nd order change
Widgetco Project
Programs
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OPM as Practice
• Maturity Models– Operations– Software
• Evaluate current activities against best practice
• Identify areas for improvement• Implement improvement actions
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Maturity Models Compared
Maturity Model GoalsAreas Assessed Classification
OPM3 (PMI)Align PM to Strategy
Projects, Programs, Portfolios
1 (standardize) to 4 (Continuously improve)
P2M- Japan Align PM to Strategy
Projects, Programs,
1 (haphazard) to 5 (optimization)
P3M3- UKImprove project practice
Projects, Programs, Portfolios
1 (awareness) to 5 (optimized)
Project Excellence Model
Improve project practices Projects
Continuous scale from 1 to 1000
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Linkages
• Structure- Practice• Organizations may create projects to
respond to opportunities– Projects may create new practices– If they are found to be superior, may become
best practice
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OPM Definition
Organizational Project Management is the systematic management and integration of temporary activities (projects, programs and portfolios) to enable the realization of strategic initiatives in enterprises
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Combination of Inside Out AND Outside In Approaches
• (Outside- In) PM supports the creation and modification of firm competencies– Facilitates adaptation to changing environment– Organizations may also influence the environment
for their own benefit (Oliver & Holzinger, 2008)• (Inside- Out) PM can also be used to redefine
organizations– Change programs– New technology– New business processes
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OPM( Combination of Outside in and Inside Out): PM Integrated with strategy
• Two way relationship between projects and strategy
• OPM’s role is greater than simply alignment
StrategyProjects & Programs: Defined Outcomes
OperationsPortfolio:Strategic Objectives
Portfolio Adjustment
Business Impact
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Formulating Project Strategy: Decision Areas
OPM
Positioning
Architecture
Performance Measures
Practices
Interfaces
Governance
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Positioning
• Role of Project Management in the Organization
• Driving Strategy – Project Driven Organizations/Project Based
Organizations: Construction, Consulting, Lean Startups
– Enabling Strategy: Companies undergoing large scale transformation
– Supporting Strategy : Projects to execute defined objectives
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Project PositioningPrimarily Inside- out
Primarily Outside- in
Strategy Formulation Perspective
Supporter Enabler Driver
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Architecture
• Configuration of Projects, Programs, Portfolio within a given company setting
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Project Architecture
• Number• Scale• Complexity• Project Type 1-4
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Governance• Systems for
managing responsibility for Projects/Program/Portfolio
• Systems for demonstrating accountability
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Governance Structures
• Project Manager• Project Office• PMO• EPMO
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• Linkages between Projects/Programs/Portfolio
• Linkages between PPP and Operations
Interfaces
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Interfaces
• Functional Interfaces (Iqbal 2009)– Integration between PPP
• Domain Interfaces– Integration with enterprise
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Practices
• Project/Program/Portfolio level activities
• Methodologies, Tools and Techniques
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Practices
• Current Practices• Rate of Improvement• Path of development
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Performance Measures
• Approaches used to evaluate Project /Program/Portfolio outcomes and processes
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Comparison of Project Based Organizations
• Project Based Organizations• Company 1: Engineering firm in energy
sector• Company 2: Construction firm
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Company 1(Engineering Firm)
PM is Strategic
ArchitectureType 1 Projects (Custom Manufacturing)Type 2 Projects (Product Development)
InterfacesFunctional (Shared
technology/resources)
PracticesDerived from PMBOK
Trajectory of development: Toward
higher maturity
GovernanceProject Team
Performance MeasuresFrom PMBOK
Output: Cost/Time/Quality
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Company 1
Domain Gaps Recommendations
Governance Lack of framework for monitoring multiple projects
Project Team supported by Integrating Information System
Practices/Performance Measures
Output oriented No measures for improvement/innovation
Incorporate input/process metricsIncorporate metrics for identifying new/improved practice
Architecture/ Interfaces
Multiple unconnected projectsFunctional Interfaces
Group projects by shared technology/Functions
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Company 2
PM is Strategic
ArchitectureType 1 projects (Construction)
InterfacesFunctional (Shared
resources)Domain (Finance/Marketing)
PracticesPMI
GovernancePMO
Performance MeasuresOPM3
Trajectory: Toward Higher level of maturity
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Company 2Domain Gaps Recommendations
Governance Low investment in training/developing PMs
Implement internal mentoring/PM competency development program
Practices/Performance Measures
Output oriented No measures for improvement/innovation
Incorporate input/process metricsIncorporate metrics for identifying new/improved practice
Architecture/ Interfaces
Functional/Domain interfaces Project dashboard providing views from both domains
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Future Research
• Empirical validation of OPM Elements• Process view of Project Management and
strategy; beyond life cycles• OPM Competencies
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Summary
• Organizations are engaging in increasing number of projects
• Project Managers need to go beyond deliverables
• OPM can link Projects with context• Provides view of organizations rooted in
Project Management
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Contact Information
Nigel [email protected],
[email protected]_pm (Twitter), OPM COP, OPM group on
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References• Barney, J. (1991). Firm resources and sustained competitive advantage.
Journal of Management, 17(1), 99–120• Gareis, R. Management by project: the management approach for the future,
International Journal of Project Management, (1989), Vol. 7, No. 4, pp. 243 - 249.
• Miller, D. and Friesen, P. (1983). Strategy-making and the environment: the third link. Strategic Management Journal, 4(3), 221–235.
• Penrose, E. (1959). The Theory of the Growth of the Firm. London: Basil Blackwell.
• M. Pidd (1996) Tools for Thinking: Modelling in Management science. Wiley, Chichester.
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References• Porter, M. (1980). Competitive Strategy. New York: Free Press• Shapiro, C. (1989). The theory of business strategy. RAND Journal of
Economics, 20(1), 125–137.• Teece, D. and Pisano, G. (1994). The dynamic capabilities of firms: an
introduction. Industrial and Corporate Change, 3(3), 537–556.