Defining Organizational Project Management

Dr. Nigel L. Williams, PMP, Prince2( Twitter) @org_pm OPM COP/ University of Bedfordshire

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

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)

• 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?

• 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)

Projects, Strategy and Uncertainty

Pre 1960’s 1960-1990 1990 to Present

Pidd, M. (1996)

Environmental Uncertainty

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

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

Messes

• High ambiguity• No agreement about issues • PM as an organizing framework

– Type 4 Projects :Undefined Method AND Unknown Outcomes, e.g. Organizational Development

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

Current View (Outside- In): Projects are an instrument

StrategyProjects & Programs: Defined Outcomes

OperationsPortfolio:Strategic Objectives

Portfolio Adjustment

Business Impact

Existing Perspective may be inadequate

• Greater role for PM in Organizations– Shorter horizon for strategy– Increasing numbers of Projects– Greater complexity of Projects

What is Known about OPM?

• Evidence Based Approach• Dimension current knowledge• Understand major paradigms• Build research informed definition of OPM

Research Method

• Systematic Review – Tool employed in Medicine: Cochrane Collaboration

(US)

– Policy EPPI Centre (UK)

– Management (Evidenceinformedmanagement.com)

Systematic Review Process

• Identify keywords• Identify databases• Scan databases• Review abstracts• Create final list of studies for review

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

Paradigms of OPM

• OPM as Structure• OPM as Practice

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

OPM as Structure

• Key company challenges: Integrating and Differentiating

IntegratingCombining

Project Outputs

DifferentiatingCreating new

projects to respond to

threats/ opportunities

OPM as Structure: Change

• Organizational Change Management• Projects: 1st order change• Programs: 2nd order change

Widgetco Project

Programs

OPM as Practice

• Maturity Models– Operations– Software

• Evaluate current activities against best practice

• Identify areas for improvement• Implement improvement actions

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

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

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

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

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

Formulating Project Strategy: Decision Areas

OPM

Positioning

Architecture

Performance Measures

Practices

Interfaces

Governance

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

Project PositioningPrimarily Inside- out

Primarily Outside- in

Strategy Formulation Perspective

Supporter Enabler Driver

Architecture

• Configuration of Projects, Programs, Portfolio within a given company setting

Project Architecture

• Number• Scale• Complexity• Project Type 1-4

Governance• Systems for

managing responsibility for Projects/Program/Portfolio

• Systems for demonstrating accountability

Governance Structures

• Project Manager• Project Office• PMO• EPMO

• Linkages between Projects/Programs/Portfolio

• Linkages between PPP and Operations

Interfaces

Interfaces

• Functional Interfaces (Iqbal 2009)– Integration between PPP

• Domain Interfaces– Integration with enterprise

Practices

• Project/Program/Portfolio level activities

• Methodologies, Tools and Techniques

Practices

• Current Practices• Rate of Improvement• Path of development

Performance Measures

• Approaches used to evaluate Project /Program/Portfolio outcomes and processes

Comparison of Project Based Organizations

• Project Based Organizations• Company 1: Engineering firm in energy

sector• Company 2: Construction firm

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

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

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

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

Future Research

• Empirical validation of OPM Elements• Process view of Project Management and

strategy; beyond life cycles• OPM Competencies

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

Contact Information

Nigel WilliamsNigel.williams@vcleader.pmi.org,

nigel.williams@beds.ac.ukOrg_pm (Twitter), OPM COP, OPM group on

Linkedin

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.

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.