The Power of Enterprise-Wide Project Management

Authors: Dennis Bolles , Darrel Hubbard
Pub Date: 2007
Your Price: $24.95
ISBN: 0814474047
Format: Hardcover

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Preface

Project Management Is a Business Function

There is a growing recognition in business management circles that project management is an emerging business function that enables enterprises to become world-class leaders in their markets. There is also a growing pressure on large enterprises in the marketplace to more formally apply the business management of projects to their programs and portfolios. Meeting and exceeding customer expectations by consistently completing projects successfully is also a goal of every enterprise and is the basis for receiving excellence awards from most customers. These are just some of the driving forces influencing enterprises to establish project business management and an enterprise-wide project management office.

If projects are an integral part of the business, it stands to reason that there should be a clear understanding of what is and is not a project, what is required to complete projects to the customer’s satisfaction, and how projects are combined into programs and portfolios to meet the enterprise’s strategies and business objectives. Properly implemented project management principles, processes, and practices can have a significant impact on an enterprise’s time to market, cost to market, and quality to market and on customers’ recognition of the enterprise as a world-class leader. If executives and business unit heads can recognize that managing projects has a significant impact on an enterprise’s bottom line and that their ability to successfully manage projects depends on the proper application of specific project management processes, knowledge, skills, tools, and techniques, then it makes sense to establish such an important business function at the executive management level of the enterprise. How else can executive management ensure that limited funds and resources are effectively applied across the enterprise to only those projects that support business strategies and objectives and that those selected projects are given the best opportunity to succeed from the very start?

Enterprise-wide adoption of project management processes and best practices also calls for single ownership of an enterprise project management office (EPMO) function. Establishing common processes and practices across an enterprise is very difficult, if not impossible, without establishing exclusive ownership of the EPMO. The EPMO must be recognized as an independent business unit function at the highest level of the enterprise. This recognition provides the EPMO’s executive management with the authority, acceptance, adoption, and autonomy required to establish, monitor, and control the distribution of the resources required to successfully apply project business management best practices enterprise wide.

Establishing project management within an enterprise is a significant undertaking and may meet with resistance at various levels for many reasons. One major reason behind some resistance is the most obvious, but it is seldom given sufficient consideration. People generally resist changes because they do not understand why the changes are necessary or what impact the changes will have on them. Most prefer the status quo to something new, especially when it involves how they perform their work. So, communicating the benefits of establishing project management as a functioning business unit enterprise-wide at all levels is a critical step in making project management an integral capability within the enterprise.

Relevance to Management

Most books on project management discuss the concepts and problems that affect the development of enterprise project management and project management offices. Several other good books and articles discuss the importance of establishing project management as a business function, but they primarily address only issues and problems associated with the effort. Most of the books on project management are written primarily for project and program managers.

This book is written primarily for executives and senior managers who recognize project management is a business function and want to establish project management as a core competency enterprise-wide within their organization. It is a sequel to the Bolles’ book Building Project Management Centers of Excellence, which describes the value of implementing project management best practices as a core competency.

Throughout this book, the authors strive to answer the following questions regarding project management as a business function that are frequently asked by executives and senior managers:

• What does project management have to do with the overall management of the enterprise?
• How can project management be related to the enterprise’s business operations?
• How can project management processes be incorporated or integrated into the business management processes?
• How can project business management benefit the enterprise?
• How can a project management functional organization be incorporated into the enterprise’s organizational structure?
• How can mature project business management practices and processes add value to the enterprise’s operations?

Unlike other publications, this book provides practical how-to information that enterprises of all sizes can use immediately to establish an EPMO and implement project business management enterprise-wide. Knowing what specific actions are required and how to proceed after executive management gives the go-ahead is the basis for this book. The success of an EPMO as a project management center of excellence and the institutionalization of project business management processes enterprise-wide is the end goal.

This book also helps the reader understand that acquiring executive recognition of project management as a business function is the critical first step in establishing project management as a core business management competency. The authors have developed basic models that are useful in helping the reader successfully establish an EPMO as the vehicle to integrate project and business processes, thereby creating and establishing project business management. Project business management is a new approach to managing the project-related business of an enterprise.

Terminology

This book blends terminology from the vocabularies of both general business management and project management, which allows the discussions to be easily understood by business executives, business unit mangers, and portfolio, program, and project managers.

In keeping with that purpose, the authors have defined and developed the term project business management (PBM) that is used throughout this book. The use of PBM is meant to eliminate any confusion and suppress the reader’s assumptions as to just what the term project management means when used in a business context. The principles and concepts of project-related portfolio, program, and project management is complex, and the management processes involved are many. The blending of these principles and concepts with the principles, concepts, and varied processes of general business management motivated the authors to develop the concept of Project Business Management. In addition to the term PBM, the authors extensively employ the following additional conceptual terms throughout this book.

Project Business Management (PBM): The utilization of general business management and project management knowledge, skills, tools, and techniques in applying portfolio, program, and project processes to meet or exceed stakeholder needs, and to derive benefits from and capture value through any project-related actions and activities used to accomplish the enterprise’s business objectives and related strategies.

Enterprise Project Management Office (EPMO): The organizational structure within the enterprise that will institute and manage the project business management processes for portfolios, programs, and projects. To be effective in managing the initiating, authorizing, planning, controlling, and executing processes of project business management, the EPMO is located at the executive level of the enterprise.

Enterprise-Wide Project Management (EWPM): The application of project business management practices and processes on an enterprise-wide basis, using an enterprise-wide project management office as the business unit to support management of the enterprise’s portfolios, programs, and projects.

Business Unit: Any sized functional organization within the enterprise that is chartered to perform a relatively well-defined business support operation, such as accounting, a service center, product production, sales, human resources, marketing, or a project management office.

Project Business Management Maturity: The maturity of an enterprise’s policies, plans, procedures, organizational governance, management personnel, and project business management methodology and processes that identify, plan, implement, control, accomplish, and communicate the enterprise’s business strategic initiatives and related business objectives and supporting portfolios, programs, and projects.

Enterprise Project Business Management Governance: The organizational governance used in performing project business management that is a blend of several governance methods, especially those of executive, operations, portfolio, program, and project management. It is employed at different decision-making levels of the enterprise and at different stages within the PBM methodology to support implementation of specific business objectives and their related business strategic initiatives.

There are four additional significant terms (enterprise, organization, enterprise environmental factors, and organizational process assets) used throughout the book, which have been defined by the Project Management Institute (PMI^®). These will help the reader better understand the project business management processes developed within the book:

An Enterprise is defined as:

An enterprise is a company, business, firm, partnership, corporation, or governmental agency.

This includes associations, societies, for-profit entities, and not-for-profit entities.

The PMI^® defines Organization as:

An organization is a group of persons organized for some purpose or to perform some type of work within an enterprise.

This includes business unit, functional group, department, division, or subagency.

The PMI^® defines Enterprise Environmental Factors as:

Enterprise environmental factors are any or all external environmental factors and internal organizational environmental factors that surround or influence the project’s success. These factors are from any or all of the enterprises involved in the project and include organizational culture and structure, infrastructure, existing resources, commercial databases, market conditions, and project management software.

The PMI^® defines Organizational Process Assets as:

Organizational process assets are any or all process-related assets from any or all of the organizations involved in the project that are or can be used to influence the project’s success. These process assets include formal and informal plans, policies, procedures, and guidelines. The process assets also include the organizations’ knowledge bases, such as lessons learned and historical information.

The meaning of other project management related terms used in the book are as defined in the PMI^® Combined Standards Glossary, Second Edition (ISBN: 1-930699-49-2).

Organization

This book is organized into six sections that describe the Enterprise-Wide Project Management House of Excellence. The house of excellence has the four major elements, or pillars, and the related foundation that forms the framework of this book. This integrated framework and foundation is required to build a structurally sound enterprise-wide project management capability and is requisite to building and sustaining a successful EPMO, as represented by the roof of the house of excellence.

The various components of the house of excellence, which are used to organize the contents of this book, are as follows:

Roof - Section One - Overview: Is a view of project business management from an executive’s perspective. It addresses enterprise-wide project management as a business concept, project management as a business function, and the EPMO as a business organization.

Pillar One - Section Two - Governance: Presents the EPMO as a management method and addresses setting policy, establishing charters, and providing an organizational model for the business management of projects, programs, and portfolios.

Pillar Two - Section Three - Standardization: Examines identification and integration of processes and practices, development of standardized project business management processes, and documentation of enterprise-wide portfolio, program, and project management process methodology models, including their associated policies, practices, and procedures.

Pillar Three - Section Four – Capability: Describes assessing the enterprise’s abilities, develops a project management competency model, lays out an education and training program, establishes a career path progression plan, and outlines various key enterprise environmental factors.

Pillar Four - Section Five - Execution: Discusses strategic business planning, tactical business planning, business objective (project) prioritization, selection, and initiation, stage-gate reviews, and portfolio, program and project execution planning.

Foundation – Section Six –Maturity: Talks about project business management process and practice maturity, how to evaluate mature institutionalized project business management best practices enterprise-wide; and summarizes a best practice benchmark study survey that developed the four pillars supporting the Enterprise-Wide Project Management House of Excellence.

Initiation and Authorization Theme

Emphasis is placed on the start-up processes for portfolios, programs, and projects. Executives and senior management need to be aware of the impact these processes have on their business practices. The importance of initiation and authorization is evidenced by their positioning in the first two of the five common “process groups” in portfolio, program and project management. It is during those initiating and supporting planning processes, starting with identifying a single strategic initiative down through planning a project, that will accomplish the initiatives where up to 80 percent of the value and benefit of the desired outcome can be created. It is also during these initiating and authorizing processes that executive and senior management’s involvement and decision making will have its maximum impact.

Appendices

This book has three appendices that provide links to relevant documents. Appendix A lists the forms, tools, and templates introduced throughout the book; Appendix B introduces the Project Business Management Maturity Model question set; and Appendix C explains the PMO Case Study Survey form that was used to compile a benchmark Case Study Report. The Appendices provide directions on how to obtain copies of these files from either the authors’ or the publisher’s website. Note that files are provided in Acrobat PDF file format; the publisher’s url is listed at the bottom of page xiv and on the back flap of this book. If you would prefer a Microsoft Office 2003 version of the files, which are editable, please contact the authors.

© 2007 Dennis L. Bolles and Darrel G. Hubbard.
All rights reserved.
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