Country project management maturity

Vice President of Ambithus and President of PMI Portugal Chapter

Nigel Williams, PhD, PMP

Council Chair of the PMI Organizational Project Management Community of Practice and Researcher at Bournemouth University, UK

Abstract

This paper uses information from a project that is currently underway in Portugal, presenting a methodology to develop a country-level evaluation of project practices. It introduces the concept of developing “Project Management Country Capability,” which is being developed, based on 100 organization case studies, based on PMI’s The Organizational Project Management Maturity Model (OPM3®). The organizational maturity models that are used these days are presented, and OPM3® main concepts and history are also presented. The relevant literature is reviewed. The OPM3 Portugal project is described in detail and benefits and next steps are introduced.

Project Management as a Country Capability

Project management is seen as a key capability enabling firms to adapt to changing circumstances (Cooke-Davies, Crawford, & Lechler, 2009). Improvement in the ability to deliver projects therefore is critical to survival in the current, dynamic global environment (Pache & Santos, 2010). In addition to firms, it may also be a useful capability for a country, supporting the successful implementation of new initiatives (Rodrik, Grossman, & Norman, 1995). However, before improvement interventions can be designed, an evaluation needs to take place to determine the current level of performance. While these tools are available at the individual organizational level (Andersen & Jessen, 2003), no process exists to evaluate project management capability at the country level.

Using information from a project that is currently underway in Portugal, this paper presents a methodology to develop a country level evaluation of project practices. First, a range of organizations are selected, drawn from economic sectors that are currently important or have the potential for economic growth. Next, a company maturity model, OPM3® is used to evaluate multiple organizations within each sector. The findings will be synthesized first within and then across sectors to create a country level measure of project management. The outcomes have several benefits for a range of stakeholders. For policymakers, it provides a useful indicator of the types of projects that can be feasibly implemented. For investors or business owners, a country level measure of project management may form an input in choosing to locate economic activities.

Portugal's Development Challenge

Country resource environments vary by their ability to support organizational activity, as distinctive resource allocations, infrastructure, and institutions all influence the development of firms in a particular location (Mariotti & Piscitello, 2001). Resource-rich environments increase opportunities for organizations to implement strategic actions by affecting the quantity and quality of resources available to them (Covin & Slevin, 1989). While Portugal is currently experiencing economic and financial difficulty, it also exhibits positive trends. The country belongs to a strategic region and its wealth of historical, cultural, and diplomatic linkages can generate value in the new era of globalization. The country has set the following goals:

1. Positioning Lisbon internationally as an intermediary space, taking advantage with regard to accessibility of the metropolis’ roads, railways, sea and air, actual or projected.

2. Strengthen institutional cooperation to ensure sustainable development of the region. This problem is particularly acute at the level of inter-municipal cooperation without which a dynamic region cannot be sustained.

3. To build a dynamic R&D system. Currently, cooperation between the various entities involved in the R&D system is rather weak, particularly in terms of business-university partnerships.

4. Combat pronounced deficits in human resource development. The region suffers from high dropout rates, and failure remains a persistent problem in the school system.

To meet these challenges, the region requires active agents (i.e., public entities, associations, and private organizations to cooperate around the key issues of development).

However, governance is a major strategic challenge of modernization in Portugal (Syrett & Silva, 2001). There are extensive suburban and urban concentrations, along with a persistent tradition of irrational decision making, poor public oversight, and a weak civil society (Fidelis & Pires, 2009). In a scenario like this, good projects do not take off only by their own merit and they require a supporting context (Besner & Hobbs, 2008). However, before this system can be developed, there needs to be an assessment of the current capacity of the region to execute and deliver projects. The next section looks at tools for assessing project management capabilities.

Literature Review

In order to improve the efficiency and effectiveness of activities, organizations have adopted maturity models. These frameworks evaluate aspects of organizational activities through identification and comparison with an external standard or benchmark. Although the use of maturity models has been established in the operations field, they are relatively new to project management, only having emerged in the last 20 years (Andersen & Jessen, 2003).

The origin of these frameworks is in the quality management domain of operations management. Their use was subsequently expanded to business processes and software and more recently, project management. Exhibit 1 provides an overview and identifies three paradigms of maturity models: the process control, system and integrated organization, and system perspective:

Overview of maturity models

Exhibit 1 – Overview of maturity models

Process Control Perspective

Preliminary approaches to maturity management were drawn from the quality management domain. The focus at that time was the identification, documentation, control, and optimization of production processes. The intended outcome was the reliable and efficient performance of operations.

System Perspective

As software systems increased in complexity, the production process approach faced limits to improving outputs. The Software Engineering Institute expanded the view of maturity beyond process only to entire systems (Cleland & Ireland, 2006). This perspective was expressed using the domains of process improvement and process integration. The former had similar goals to earlier quality models, whereas the latter examined the degree to which processes are consistently applied.

Organizational Perspective

More recently, integrated maturity models have emerged, which evaluate processes, systems, and contextual organizational factors (Zqikael, Levin, & Rad, 2008). They have particular strengths in assessing practices and performance measures in organizations and provide a means of evaluation beyond process and system perspectives (Yazici, 2009). The next section examines the application of such models in the area of project management.

Organizational Project Management Maturity Models

The previous section examined the evolution of maturity models from examining processes in isolation to a holistic view that incorporates process, systems, and context. This section examines the application of such models within the domain of project management. The following maturity models are examined: P2M (Japan); P3M3 (UK); Maturity by Project Category Model (Brazil); Project Excellence Model (Europe), and PMI’s OPM3®.

1. P2M

The Japanese project management association has created a Project Maturity Management within the P2M framework (Ohara, 2005). In this process model, maturity is classified into the following five levels:

Level 1 — Haphazard: Projects are managed informally with a high failure rate

Level 2 — Systematic: Dedicated project teams are formed; improved success rate for familiar projects.

Level 3 — Scientific: Quantitative data are used to support project planning and delivery.

Level 4 — Integrated: Company-wide systems are implemented to manage multiple projects in a systematic manner

Level 5 — Optimization: Projects are aligned with corporate strategies and company is recognized as an industry leader in project management.

2. P3M3

The UK Government, through the Office for Government Commerce, have also created a framework for managing project activities in organizations, the Portfolio, Programme and Project Management Maturity Model or P3M3 (Snowden, 2010). This integrative framework contains three components: The Portfolio Management Maturity Model (PfM3), the Programme Management Maturity Model (PgM3), and the Project Management Maturity Model (PM3).

P3M3 evaluates each component using a nine-question instrument to classify organizational activities into five levels of maturity:

Level 1 — Awareness of Process: Organization recognizes the existence of projects, programs, and portfolios and attempts to run them in a different manner than operations.

Level 2 — Repeatable Process: Organization ensures that individual programs and projects are run with their own processes to a specified standard.

Level 3 — Defined Processes: Organization-wide process implemented for projects, programs, and portfolios.

Level 4 — Managed Processes: Data are used to improve organization-wide process.

Level 5 — Optimized Process: Continuous improvement of organization wide processes.

3. Maturity by Project Category Model

This model has been used to evaluate firms from Brazil (Prado, 2011). Using a 40-question instrument, it also classifies project maturity into five levels using six project dimensions (Exhibit 2).

Maturity by Project Category Model

Exhibit 2 – Maturity by Project Category Model

4. IPMA Project Excellence Model (Europe)

The IPMA Project Excellence Model (IPMA, 2010) is a maturity model inspired by Total Quality Management (TQM). The framework consists of two elements: (1) The project management element examines the types of projects and the methods used in project management; (2) The project results element assesses the outcomes and benefits derived from the project. The framework allocates 1000 points according to the scheme shown in Exhibit 3.

IPMA Project Excellence Model

Exhibit 3 – IPMA Project Excellence Model

In contrast to the distinct stages of previous models, the Project Excellence Model can rank organizations based on points out of 1000.

5. OPM3®

OPM3® focuses on the comparison of organizational activities to best practices, defined by Project Management Institute (PMI) as the optimal method of meeting a particular stated objective (Crawford, 2006). OPM3® assesses best practices in project, program, and portfolio management by analyzing:

• Capabilities – Presence of specific organizational activities that have been identified as parts of a best practice

• Outcomes – The beneficial results that organizations obtain from performance of those activities.

• Key Performance Indicators (KPIs) – Measures that are used to determine the existence and strength of a capability.

Organizations can then be classified into four stages of development in each process area at the project, program, and portfolio levels:

Standardize: Structured processes are adopted

Measure: Data are used to evaluate process performance

Control: Control plan developed for measures

Continuously Improve: Processes are optimized

These frameworks all reflect the distilled knowledge of the practitioner community and can be prescriptive in nature (Ahlemann, Teuteberg, & Vogelsang, 2009). A review of the previous frameworks indicates that they vary in goals and approaches.

Goals

OPM3®, P2M, and PMMM seek to align project management to organizational strategy through creation of an overarching framework. By contrast, P3M3 assumes that, although areas are connected, there are no interdependencies between each model. Strategic alignment is only considered at the level of the project, program, or portfolio. In this way, each area can be assessed independently and improvement efforts are focused on particular areas. The project excellence model does not explicitly evaluate alignment between projects and organizational strategy. The Project Excellence Model makes no specific claims to strategic alignment and focuses on the execution of project activities.

Approach

OPM3® draws upon a database of 600 best practices and can provide defined actions for any areas of weakness. PMMM and P3M3 are far less comprehensive, basing their assessments on 40- and 27-item questionnaires, respectively. The Project Excellence Model incorporates a national focus and compares project performance both within and across countries. The dimensions of project performance assessed exhibits similar variation. Due to this variation in approach, findings from these assessments are not directly comparable.

These frameworks provide assessment of an organization's capability to deliver projects and extending their findings beyond this context is of limited value. In order to examine a country's capacity for project management, an approach is needed that goes beyond the organizational context to integrate findings across public and private stakeholders.

Methodology: Country Level Project Maturity

As discussed earlier, project management capabilities can enable countries to adapt to changing circumstances through implementation of complex initiatives. However, no framework currently exists that examines a country's ability to execute and deliver projects. This section presents such a methodology in the form of the OPM3® Portugal Project. This project seeks to perform a comprehensive analysis of the state of Portuguese industry with regard to the degree of maturity in the adoption of project, program, and portfolio management methodology. It integrates participation of a range of knowledge and reputed partners with origins in the scientific and technological organizations, including Portuguese universities and the project management research and development organization, Ambithus, which leads the project.

The OPM3® Portugal Project

The OPM3® Portugal Project was chartered based on the need that the project organizers found to improve the way Portuguese industry initiate, choose, manage, control, and close their projects. The understanding of this need was very helpful to taking the proper actions and taking advantage of an established system for research incentives for these kinds of projects, supported by European Union funding.

The OPM3® Portugal Project consists of a comprehensive analysis of the state of Portuguese Industry with regard to the degree of maturity in the adoption of project, program, and portfolio management methodology, using PMI’s OPM3® maturity model.

Throughout the research, the study will also produce impacts on the case studies: The companies that are the subjects of the study, because it will be built and validated with organizational improvement plans that can be adopted by the participating companies.

The project intends to follow a four-step approach as shown in Exhibit 4.

IPMA Project Excellence Model

Exhibit 4 – IPMA Project Excellence Model

Planning and Organizing

In this stage, all generic procedures and structured management and control of the project are defined, as well as more detailed planning activities and processes. A cross-functional team consisting of representatives from Academia, OPM3® consultants, and company representatives was formed to manage project delivery. Particular attention will be paid to documenting lessons learned, identifying areas of good practice, and possible ways to improve future projects.

The team also created specific information systems for this project. A management information system was created for company assessments and a website was created for registration and online management of all research. This was necessary to be able to properly structure and organize research, increasing the efficiency of the more than 20 researchers directly involved. This system was designed by Ambithus researchers and will collaborate in drawing researchers and academics.

Company Assessment

For the company assessments, OPM3® (Organizational Project Management Maturity Model) was selected (PMI, 2008). The advantage of OPM3® is its flexibility and comprehensiveness because it contains hundreds of organizational best practices, assesses current capabilities of the organization, and maps the steps needed to improve organizational performance. OPM3® also enables the generation of useful outputs to owners and managers at an early stage of research. As a maturity model, OPM3® provides a method for organizations to understand their processes and measure the skills as they prepare to improve their internal procedures. It also enables organizations to develop a vision of the way forward to improve performance, whether in project management or portfolio management or in program management. These outputs from OPM3® can help to maintain organizational commitment to the project and support subsequent data collection by researchers.

One hundred organizations were selected that engaged in either a large number of projects or had to deliver products and services that were the outputs of complex projects. Another important condition is that the company's top management must fully support the study. The process begins with the signing of a protocol of cooperation, which is specified in the objectives and deliverables. This set of rules should specify the name of the internal promoter (project manager) within the company or organization involved and the entity name of the organization from the scientific and technological system that participates as a partner, and the name of the OPM3® consultant appointed by Ambithus. The objective is to address 100 organizations—55 addressed by the scientific community and 45 addressed by Ambithus directly.

The initial process of the intervention includes:

1. Preliminary meeting between the managers and the project sponsor;

2. Meeting with top management;

3. Meeting with the program manager (or who defines the strategy);

4. Meeting with the portfolio manager (or whoever decides to devote resources);

5. Meeting with the manager of the PMO (or who appoints the project managers);

6. Meeting with other organizational enablers (e.g., commercial managers, financial managers, marketing managers, and others);

7. Meetings with project managers; and

8. Meeting with team members.

This intervention process sequence is OPM3® compliant and all the actions are coordinated by senior consultants. Consistent input and elimination of interviewer bias are guaranteed by the established quality control process, which will work preventively by assuring that all collected data are properly recorded in the information system.

Following this fieldwork, a status report for the OPM3® maturity will be generated and shall be present to directors and top managers. This presentation of the report will be the working basis for the design of the improvement plan, which will be presented and delivered to the company management, and employees understand that management should participate in this process.

Organizations will be selected from the following sectors:

Government

These organizations provide services to the public and private sectors. They are a key part of the enabling infrastructure of the Portuguese business environment.

Multinational Firms

Owing to its favorable location, Portugal has attracted a number of multinational firms. These organizations are significant employers and developers of talent in Portugal.

Information Services

This is a fast growing sector that is an export success story for Portugal. It is formed of new organizations and is seen as a source of future economic growth for the country.

Construction

This sector, formerly dominant in Portugal, is now struggling due to changes in the domestic economy and increasing competition.

Knowledge Intensive Enterprises

These organizations create high-margin products with a high technological content. They engage in complex R&D projects to develop new products and improve existing ones.

Financial Institutions

These public and private sector organizations directly manage a number of companies, which they have acquired in Portugal.

Telecommunication Firms

This is a group of relatively large firms that have expanded from their home in Portugal to operate subsidiaries in multiple countries.

Sector Level Assessment

On completion of the company assessment, workshops will be conducted to disseminate and discuss interim results by industry sector. This will be done so that both the companies participating in the study and the overall market will have information on the overall development of the study. It will also serve to confirm research findings and identify additional organizations for study.

Once company level assessments are completed, the findings will be summarized to create industry sector level measures of project management capability. Following the analysis and validation of the results achieved, an industry sector improvement plan will be presented and discussed during seven to nine thematic workshops. The integrated improvement plans will be validated in these events through discussion with sector stakeholders.

Country Level Project Management Level

On completion of the sector assessments and improvement plans, a country level assessment will be produced. Findings from the sectoral level will be compared to identify areas of strengths and weakness. These data will be used to create inter-sector improvement plans in which sectors with relative strengths will be encouraged to share data on practices, tools, and techniques with relatively weak areas. The data will also be synthesized to create an overall measure of country project management capability.

Benefits of the Proposed Methodology

Overall, this assessment exercise is meant to create multiple benefits to country stakeholders. For organizations, the intent is to improve the relationship between strategic planning and execution, extending the results of projects, making them more predictable, reliable, and consistent. Other benefits include the identification of best practices that can support organizational strategy for implementing successful projects and the identification of specific skills that the organization has and which can be “best practices.” For policymakers, a country level measure of maturity can assist in the design of future interventions. Sectors with a low level of maturity can receive additional support for executing projects and can be encouraged to form partnerships with more mature sectors. Several other benefits have been identified:

1. The development of a specific methodology for intervention in companies with regard to the verification of organizational maturity level.

2. The development of an information system to manage administration of OPM3® interventions at a country level. The data can be used to assess the effectiveness of improvement actions as well as shared with countries seeking to perform a similar exercise.

3. Lessons learned from the project can be applied in a similar manner to the information system discussed earlier.

4. Information system that integrates the methods of intervention and might be exploited commercially.

The OPM3 Portugal project is one amazing opportunity to further develop the knowledge of how organizations use methodology, processes, people development, and established standards to improve the way projects, programs, and portfolios are being finish up. The multi-sector and multi-dimensional approach allows that new knowledge be collected and presented; thus, there will be many opportunities to publicly recognize the project results.

Ahlemann, F., Teuteberg, F., & Vogelsang, K. (2009). Project management standards: Diffusion and application in Germany and Switzerland. International Journal of Project Management, 27(3), 292-303.

Andersen, E. S., & Jessen, S. A. (2003). Project maturity in organisations. International Journal of Project Management, 21(6), 457-461.

Besner, C., & Hobbs, B. (2008). Discriminating contexts and project management best practices on innovative and noninnovative projects. Project Management Journal, 39, S123-S134.

Cooke-Davies, T. J., Crawford, L. H., & Lechler, T. G. (2009). Project management systems: Moving project management from an operational to a strategic discipline. Project Management Journal, 40(1), 110-123.

Covin, J. G., & Slevin, D. P. (1989). Strategic management of small firms in hostile and benign environments. Strategic Management Journal, 10(1), 75-87.

Crawford, L. (2006). Developing organizational project management capability: Theory and practice. Project Management Journal, 37(3), 74-86.

Fidelis, T., & Pires, S. M. (2009). Surrender or resistance to the implementation of Local Agenda 21 in Portugal: The challenges of local governance for sustainable development. Journal of Environmental Planning and Management, 52(4), 497-518.

Mariotti, S., & Piscitello, L. (2001). Localized capabilities and the internationalization of manufacturing activities by SMEs. Entrepreneurship & Regional Development, 13(1), 65-80.

Ohara, S. (2005). P2M Guidebook. Retrieved from http://www.pmaj.or.jp/ENG/index.htm

Pache, A.-C., & Santos, F. (2010). When worlds collide: The internal dynamics of organizational responses to conflicting institutional demands. Academy of Management Review, 35(3), 455-476.

PMA. (2010). Project Excellence Model Retrieved from http://www.ipma.ch/awards/projexcellence/Pages/ProjectExcellenceModel.aspx

Prado, D. (2011). Maturity by Project Category Model Retrieved from http://www.maturityresearch.com/novosite/en/index. html

Project Management Institute. (2008). Organizational Project Management Maturity Model (OPM3®)—Second edition. Newtown Square, PA: Author.

Rodrik, D., Grossman, G., & Norman, V. (1995). Getting interventions right: How South Korea and Taiwan grew rich. Economic Policy, 10(20), 55-107.

Snowden, R. (2010). P3M3 Model. London: Retrieved from http://www.p3m3-officialsite.com/P3M3Model/P3M3Model.aspx.

Syrett, S., & Silva, C. N. (2001). Regional development agencies in Portugal: Recent development and future challenges. Regional Studies, 35(2), 174-180.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2013, Pinto & Williams
Originally published as a part of the 2013 PMI Global Congress Proceedings – Istanbul, Turkey

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