Enterprise project management
flavor of the day or here to stay
by Paul C. Dinsmore, PMP, Contributing Editor
FREQUENTLY ASKED QUESTIONS (FAQs) about Enterprise Project Management reflect views ranging from overoptimistic euphoria to blatant cynicism. Some see the concept as a one-size-fits-all solution to deal with the pressures of projectdom and for getting products launched at the rate the voracious market screams for. Where does the truth lie: should the optimists reign high, will the cynics get the last laugh, or, yet, is this another classic case of “it depends”?
I hear from all sides in my travels and dealings with project professionals and corporate executives. Some pan the notion of managing an organization by projects, others think it's great, and yet others say it's a situational thing. I respond in this column to the FAQs, shining light from my viewpoint on the pros and cons of making project management a corporate way of life.
What about EPM? Is it “Eureka, we have finally found the answer!” or “Ho hum, here we go again”?
FAQ 1. What's Different About It? In essence, enterprise project management is strikingly similar to basic project management. It varies sharply, however, in the way it is applied and the emphasis given to each area of expertise. Whereas basic project management is aimed at answering “How can we get this project done effectively and efficiently?” enterprise project management poses the question, “How can we make this business more adaptive, responsive, and thus more profitable in a rapidly changing, multiproject environment?”
FAQ 2. What Is It Anyway? The enterprise approach to managing projects is an organizationwide managerial philosophy based on the principle that company goals are achievable through a web of simultaneous projects, which calls for a systemic approach and includes corporate strategy projects, operational improvement, and organizational transformation, as well as traditional development projects. The concept is based on the idea that prosperity depends on adding value to business, and that value is added by systematically implementing projects of all types across the enterprise. If those projects are managed effectively, then the company's bottom line will be greatly enhanced.
Paul C. Dinsmore, PMP ([email protected]), is a Fellow of PMI and author of seven books, including the AMA Handbook of Project Management [Amacom, 1993] and Winning in Business with Enterprise Project Management [Amacom, 1998]. He is president of Dinsmore Associates, with world headquarters based in Rio de Janeiro, Brazil. Please direct comments on this column to [email protected].
FAQ 3. What Does a Portfolio of Projects Mean? Under enterprise project management, organizations are seen as “portfolios of projects.” The aggregate results of an organization's projects become the company's bottom line. Missions, visions, strategies, objectives, and goals are transformed into companywide programs that translate corporate intentions into actions. Those programs are, in turn, broken down into projects that are managed by corporate staff or professional project management personnel.
FAQ 4. Isn't Process Management More Important? I heard this question repeatedly in May 2000 on a trip to Japan, where process management is the cornerstone for a highly successful national economy and global presence in major industries. Yet, even there, where project management is sometimes dealt with as a subset of production management, a stronger shift to project management is inevitable. Because of the inbred interdependence between process and project management, as processes proliferate, so does the need to manage projects related to those processes. That's why forward-looking corporations continue to move toward the management by project model. Process management continues to be highly relevant in most settings. The relationship between process and project management is complementary, much like the chicken and the egg: both are extremely important in order for companies to develop and maintain competitive advantage.
FAQ 5. What Are the Key Success Factors? In 1997 and 1998, I participated in an ad hoc group called the Fortune 500 Project Management Benchmarking Forum. The group of 30 project executives from best-in-class project management corporations discussed organization design criteria for successful multifunctional enterprises. Here are some of those criteria:
High qualification standards for project professionals
Strong executive management support for the project management approach
High level of authority and control of projects from concept through completion
High level of prestige and influence associated with the project management function.
Those factors continue to make sense in the year 2001 and beyond, since they reflect the essence of successful project management across an enterprise. Yet another factor becoming increasingly relevant is high-level stakeholder management.
FAQ 6. Does It Work? PMI's Research Membership Advisory Group commissioned in 2000 a special research project to statistically ascertain the value of applying project management in organizations. Previous attempts had been made, yet no conclusive results had been produced. Last year's study is not yet available, and, to my knowledge, no other such data exists. The primary indication that supports the thesis of managing organizations using a projectized approach is the strong trend of best-in-class organizations that continue to reinforce their capabilities in that direction. Companies like Unisys, Proctor & Gamble, IBM, EDS, Citibank, AT&T, Lucent, and American Express have long since signed on to managing major parts of their business by project. Abundant literature is appearing on the subject and related topics like the project office are in great demand on the seminar circuit. Although there is no statistical proof that enterprise project management is effective, the many companies that are pursuing their objectives using the approach are obvious believers.
FAQ 7. What Are the Roadblocks? The roadblocks for moving an organization projectward are invariably the stakeholders. Although lack of resources can also be an obstacle, it's people that present the major challenges. Principle stakeholders for enterprise project management implementation are top management, project managers and team members, functional managers, internal change agents, and consulting support personnel (internal or external). If the initiative is top-down, starting with upper management, then the effort of getting buy-in from the rest of the organization must be taken on. If, on the other hand, the idea is filtering from the bottom upward, the sometimes-monumental task of getting top management to provide the support for the effort calls for skillful articulation and great persistence.
FAQ 8. Does It Have to be Implemented Across the Board? Enterprise project management can be applied to a business unit, a department, or across an entire corporation. As long as there is a multifunctional environment that requires the simultaneous management of numerous projects, then the concept is valid. This means that an IT department could well use such an approach and continue to interface with the rest of the functional organization without the corporation undergoing a full conversion to the concept.
FAQ 9. What's the Best Approach for Making Enterprise Project Management a Reality? Practice the preaching of project management! That's the way to implement EPM in an organization. In other words, the classic steps are required, including definition of strategies and scope for the change project, planning out the details for making it happen, and then following up to see that the plans are actually accomplished. A detailed work breakdown structure for the change project is fundamental for defining scope and perceiving the overall dimension of the change project [see “Up & Down the Organization,” PM Network, June 2000].
FAQ 10. Do We Need to Trash Our Other Management Programs? Managing by projects is consistent with most other management philosophies, such as quality programs. In fact, it takes good project management to implement the innovations and changes needed in any management setting. Even in organizations where process management is the reigning philosophy, projects are key to implementing and upgrading ever-evolving new processes.
FAQ 11. What Are the Potential Causes for Failure? Failure is generally triggered by a combination of factors; such as lack of top level support, underestimate of the dimension of the change project, lack of methodology for managing projects, insufficient efforts for developing competent project professionals, bad timing, and inadequate management of the change project. Any one of these factors can be enough to set askew an effort to implement the enterprise project management concept.
FAQ 12. What Alternative Approaches Are There? In fast-paced times, where all depends on transforming new ideas and strategies into practice and reality, projects are bound to be on center stage. After all, that's how ideas become reality. Yet there may be ways of carrying out the processes other than using an enterprise project approach. In new product development settings, while the methodology is definitely project related, the terminology used is sometimes different. IT/IS settings also look at projects from differing angles, often using models such as the Software Engineering Institute's Capability Maturity Model. Some quality programs have a component that is highly supportive of implementing projects. In some cases, similar approaches are used under different names; for instance, modern project management, projectized organizations, project-driven organizations, program management, and MOBP—managing organizations by projects.
THERE ARE GOOD REASONS for optimism and equally good justifications for questioning when it comes to proposing enterprise project management as a managerial creed for keeping up with the whirlwind changes in business and staying a leap ahead of the competition. While certainly not a one-size-fits-all solution, it does, however, ensure that a results-based approach, founded on the principles of cost, schedule, and budget, permeates the organization, starting with strategic projects and extending to operational projects. Whereas managing organizations by projects might not be right for everyone (highly process-oriented companies in very stable industries, for instance), for most companies being buffeted by the monsoons of quantum change, enterprise project management is an option worth examining. ■
February 2001 PM Network