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Esc Strategic Management Final Project

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					   THE PURPOSES AND
 METHODS OF PRACTICAL
PROJECT CATEGORIZATION
   Russell D. Archibald, MSc
   Fellow PMI and APM/IPMA, PMP




      Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
               Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        1
 Objectives of This Presentation
• To discuss the purposes of and need for a
  project categorization system,

• To present a recommended approach to the
  systematic definition of project categorization
  and classification, and

• To describe the use of a Purposes/Methods
  Matrix for Project Categorization to facilitate this
  systematic definition.
               Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                        Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        2
                           The Need
  Significant differences exist between the
  large numbers of projects within:
• The total spectrum of actual projects in
  government, business and industry, and
• The smaller numbers of projects that are
  being planned and executed within one
  organizational entity.

            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        3
        Experience to Date
• Recognition that many PM principles and
  practices are common to all (or at least
  many) projects regardless of type,
            AND MORE RECENTLY
• Recognition that due to the inherent
  diversity of many projects they must be
  segregated in different ways for several
  important purposes.
           Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                    Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        4
The World of Project Management
1. Buyers (owners of projects)
2. Sellers (contractors or developers of
   projects)
3. PM software developers and vendors
4. Consultants in PM
5. Universities
6. Professional associations

            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        5
   Project Categorization Enables
          Improvements in:
How project buyers and sellers
• Strategically select and prioritize projects
• Operationally plan and execute their projects:
  – Individually
  – Within programs, and
  – Within project portfolios
• Determine their true maturity in PM
• Educate and train their PM people
• Develop and manage PM career paths
               Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                        Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        6
PM Maturity by Project Categories
• Research in Brazil:
  – http://www.maturityresearch.com/#
• Applying the Prado/MMGP maturity model
  to project categories shown later.
• Brazil: 180 million people, strong high-
  technology industries, 17 PMI chapters



            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        7
   Project Categorization Enables
     Improvements in: (Cont’d)
• PM software applications

• Consulting and training in PM services

• University offerings in PM

• PM Professional associations’ services

            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        8
        Categorization versus
       Classification of Projects
• Project categories:
  – A set of items with similar characteristics or
    properties (attributes)
  – Not mutually exclusive
• Classification criteria within categories:
  – A set of items with identical characteristics
  – A project fits only one class


             Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                      Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        9
De Facto Project Categorization
• Exists everywhere
• Can be seen in:
  – PMI SIGs
  – PMI PMBOKs and IPMA bodies of knowledge
  – Organization structures
  – Consultant specialization
  – University course offerings


           Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                    Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        10
              Specialized
         PM Bodies of Knowledge
• PMI:
  – Government extension
  – Construction extension
  – Automotive extension (in preparation)
• German/GPM (IPMA)
  – Investment: construction & systems engrg
  – R&D/Innovation


            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        11
              PMI Special Interest Groups
Aerospace & Defense                                                        Automation Systems
Automotive                                                                 Design-procurement-
                                                                             construction
Dispute Management                                                         E-Business
Environmental Management                                                   Financial Services
Government                                                                 Healthcare Project Management
Hospitality Management (major                                              Information Systems (software)
  events: Olympic Games)
Information Technology and                                                 International Development
   Telecommunications                                                         (infrastructure, agriculture,
                                                                              education, health, etc.)
Manufacturing                                                              Marketing and Sales
New Product Development                                                    Oil/Gas/Petrochemical
Pharmaceutical                                                             Retail
Service and Outsourcing                                                    Urban Development
Utility industry


                   Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                            Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        12
International Development Projects
• “Announcing the „Soft Launch‟ of the
  International Development Project
  Management Manual of Practice and
  Glossary Program.”
• See www.IDPMGUIDE.INFO

Source: Paul Giamolvo:
  http://www.pmforum.org/viewpoints/2005/070
  8_e.htm
            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        13
     Organization Structures
• Major design/construction firms are
  organized by category: power
  plant, highway/dams, commercial, high-
  rise, other

• IT/software/systems departments

• Other
           Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                    Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        14
Consultants Specialize by Category
• PMA:
  “Architectural, infrastructure, transportation
  , health care, power,” etc.
  http://www.pmaconsultants.com/proj/projh
  ome.htm
• BMC: “IT and IS Specific Services.”
  http://www.bmc-online.com/consulting-
  itisservices.htm
             Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                      Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        15
     Ad Hoc versus Systematic
      Project Categorization
• One approach: continue ad hoc
  categorization as in past decades
                     OR
• Systematic - A better approach:
  – Accelerate improvements in PM practices
  – Avoid duplicate efforts
  – Help to assure that all factors have been
    considered

            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        16
Various Categorization Parameters
                (Crawford, Hobbs, Turner 2002)
1.       Size, Complexity                                                2. Life Cycle or Sector
         and Familiarity                                                              –           Corporate strategic
     –     Size                                                                                   development
     –     Size & groupings                                                           –           Strategic importance
     –     Goals & methods                                                            –           Stage of the project (and
     –     Familiarity                                                                            product) life cycle
     –     Maturity                                                                   –           Industry sector
     –     Technical uncertainty                                                      –           Resource type
     –     System scope                                                               –           Geography
     –     Product & work                                                             –           International



                     Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                              Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        17
Various Categorization Parameters
    (Crawford, Hobbs, Turner 2002) (Cont’d)
3. Contract Type and Payment Terms
   – Contract terms and payment
   – Contract forms
   – Type of risk
   – Who controls the risk
   – Complexity




            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        18
          Attributes of Projects
         (Crawford, Hobbs, Turner 2004)
• Application area or                                            •        Timing
  product                                                        •        Uncertainty
• Stage of life-cycle                                            •        Risk
• Grouped or single                                              •        Complexity
• Strategic importance                                           •        Customer
• Strategic driver                                               •        Ownership
• Geography                                                      •        Contractual
• Scope

             Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                      Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        19
     Common Uses and Needs
        (Crawford, Hobbs, Turner 2004)


• A language for naming and discussing

• Facilitating communication

• Storage and retrieval of knowledge


           Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                    Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        20
       Specific Uses and Needs
•   Specific uses/needs
•   Research
•   Ontological definition
•   Comparability
•   Building on previous results
•   Professional organisations
•   Development of BoKs
•   Internal organization (SIG structure)
•   Market positioning
•   Practitioner organisations?
                Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                         Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        21
        Systematic Approach
• Analyze purposes and uses

• Systematize and prioritize them

• Relate them to project
  characteristics, attributes, and criteria



             Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                      Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        22
 The Purposes/Methods Matrix for
    Project Categorization/PC

• One axis: Purposes and Uses of PC

• Second axis: Methods of categorizing and
  classifying projects within the categories

• Enter codes to indicate which methods
  serve which purpose
            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        23
         Project Categorization Purposes/Methods Matrix

Methods > Market Share                              Project End                              Development                         Other
Purposes v & Strat. Intent                            Result                                      or
                                                                                             Deployment
1. Strategic
                                                   Indicate usefulness with codes

2. Operational


3. PM
Education


4. PM People
Development



                 Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                          Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author           24
          1. Strategic PM Uses
•   Project selection
•   Prioritize selected projects
•   Define project portfolios
•   Manage project portfolios
•   Allocate resources to portfolios & projects
•   Other:


              Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                       Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        25
        2. Operational PM Uses
•   Select/assign project managers
•   Design/select best project life-cycle models
•   Select/improve PM methods & systems
•   Select/develop best PM software systems
•   Build knowledge base of best practices
•   Improve risk management methods
•   Evaluate PM maturity level
•   Link success and failure factors
•   Select tools and management approach
•   Other
               Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                        Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        26
   3. PM Education & Training
• Improve educational & training courses

• Develop specialized case studies

• Organize speaker tracks at congresses

• Other
           Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                    Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        27
 4. People Development in PM
• Develop specialized certification of:
  – Project managers
  – PM support specialists
• Develop career paths for individuals
• Other




            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        28
       Further Work Needed

• Prioritize purposes and uses

• Consolidate and simplify purposes and
  uses




            Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                     Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        29
         Project Categorization Purposes/Methods Matrix

Methods > Market Share                              Project End                              Development                         Other
Purposes v & Strat. Intent                            Result                                      or
                                                                                             Deployment
1. Strategic
                                                   Indicate usefulness with codes

2. Operational


3. PM
Education


4. PM People
Development



                 Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                          Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author           30
Project Categorization Methods

• Project characteristics or attributes

• Place projects within categories

• Classify projects within categories


             Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                      Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        31
  A Useful Project Categorization
          Method Must:
• Provide appropriate category for any
  project to be encountered
• Permit classification within a category
• Provide insight into differences between
  projects in different categories
• Provide categories that can be readily
  translated across cultures and languages
     (Fern, 2004)
           Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                    Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        32
Market Share & Strategic Intent




        Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                 Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        33
          Strategic Intent
Products are developed to conform to the
requirements of one of three strategic
intents:
– technological excellence (TE),
– operational excellence (OE), or
– customer intimacy (CI).

Hammel and Prahalad (1989)

           Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                    Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        34
  Market Share/Strategic Intent
            Matrix
Using the four Boston Matrix classes as
rows and the three Strategic Intent classes
as columns, we might choose to define
projects in terms of their product
characteristics. This yields a total of
twelve theoretical project categories.

   Source: Fern (2004)
          Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                   Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        35
Categories Based on End Results
1. Aerospace/Defense                                            6. Information Systems
2. Business &                                                   7. International
   Organizational                                                   Development
   Change                                                       8. Media &
3. Communication                                                    Entertainment
   Systems                                                      9. Product/Service
                                                                    Development
4. Events
                                                                10. Research & Dev.
5. Facilities

          Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                   Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        36
Hierarchical and Multi-Dimensional
Category level
1          2        3        4
Major category
           Sub-category 2
                    Sub-category 3
                             Sub-category 4
Similar to P/WBS approach
           Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                    Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        37
           Example:
  Category 5. Facilities Projects
1. Facility decommissioning

2. Facility demolition

3. Facility maintenance & modification

4. Facility design/procure/construct
   1.Civil 2.Energy 3.Environmental 4.Industrial 5.Commercial 6.Residential
   7.Ships 8.Other:
5. Other: ?
                  Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                           Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        38
    Classifying Within Sub-Categories:
          Many possible Criteria
•   Project size
•   Major & minor projects
•   Project complexity
•   External or internal customer
•   Degree of customer involvement
•   Levels of risk, who takes responsibility
•   Stand-alone versus create supporting infrastructure
•   Standard versus transitional
•   Mega projects: not categorizable
•   Other: ? (See Crawford, Hobbs and Turner, 2002 and
    2004)

                 Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                          Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        39
                          Simple Example:
                        Category/Class Matrix
              Classifying Projects                                    Project          Major           Complex-          Customer             Customer      Risk
                     within                                            Size:          Project:            ity:                :              Involvement   Level:
              Project Categories                                        $M            YesNo             1 to 10          Int or Ext            Hi or Low   1 to 10
               & Sub-Categories

Category      Level 2                   Level 3
5. Physical
Facilities

              5.1 Decommissioning

              5.2 Demolition
              5.3 Maint &
              Modification
              5.4
              Design/proc/const

                                        5.4.1 Civil

                                        5.4.2 Energy
                                        5.4.3
                                        Environmental

                                        5.4.4 Industrial

                                        5.4.5 Commercial

                                        5.4.6 Residential
                                        5.4.7 Ships

                                        5.4.8 Other

              5.5 Other
                                    Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                                             Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author                         40
           Deployment versus
       Development Projects (Pfeiffer 2004)
        Deployment Project                                                           Development Project
•   Civil construction.                                                  •        Development of new products.
•   Installation of a system.                                            •        Organization of social change.
•   Advance measured by                                                  •        Advance aimed at reducing
    products.                                                                     uncertainties, measured by
•   “Final Product” relatively clear.                                             indicators.
•   Life Cycle generally in form of                                      •        Various life cycles possible.
    cascade.                                                             •        Leadership style focused on
•   Leadership style based on                                                     learning.
    command and control.                                                 •        Less formal communication
•   Highly structured information                                                 system.
    system.                                                              •        Human Resources need to
•   Task oriented organization of                                                 adapt and evolve in order to
    Human Resources.                                                              respond to changes.
•   Progress relatively Linear.                                          •        Processes very dynamic.

                     Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                              Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        41
                        Conclusions
• Need systematic approach to project
  categorization and classification
• Systematic approach must be:
   – Specifically related to prioritized purposes and needs
     of the organization
   – Hierarchical
• This appears to be a fertile field for further study
  and research with all members of the world of
  project management, including doctoral
  dissertation topics
                Institut Supérieur de Gestion Industrielle - Groupe ESC LILLE 5th International Workshop August 22 – 26, 2005
                         Re- Published in PM World Today -October 2006 (Vol. VIII, Issue 10) by permission of the Author        42

				
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