Investigation of potential classification systems for projects

Dr. Lynn Crawford, Project Management and Economics Program, University of Technology, Sydney
Dr. J. Brian Hobbs, Professor in Project Management, University of Quebec at Montreal Business School
Dr. J. Rodney Turner, Professor of Project Management, Erasmus University Rotterdam

The development of generic project management knowledge and practices that can be applied to most projects most of the time has been a significant factor in the rapid growth of interest in project management and its application to all areas of industry and to activities in society at large. While a generic core of knowledge and practices is important in defining project management as a specific field of practice, discipline, or profession, recognition of differences in project types, contexts, and management approaches is vital to further growth and maturity. As a basis for ongoing research and development of project management practice, there is a need for a shared understanding of ways of recognizing and classifying different types of projects and characteristics of projects.

To date, the challenge of classifying projects for a variety of purposes has been met by practitioners and researchers in different ways. In the absence of any generally agreed system or systems for classification of projects, practitioners have taken pragmatic, ad hoc approaches to meet specific needs, such as the matching of project management skill profiles to project types or modification of project management methodologies to suit different types of projects. Amongst the project management research community, there is general acceptance in the literature that the nature and context of projects are important factors to be considered, and a number of classification systems have been proposed. However, considerably less attention has been given to identifying the potential uses for classification systems, considering the intended or unintended consequences of classification or providing guidance as to choice of system.

Recognizing the need for enhanced understanding of the need for classification of projects, potential classification systems and their implications, the Project Management Institute (PMI®) Project Management Research Program initiated an investigation that is due for completion in November 2003. This paper presents the proposed methodology for this investigation, a review of classification theory and of classification systems that have been developed for projects, and results from a number of focus groups conducted with organizations in North America and Australia. These focus groups were intended to identify the approach, needs, and practices of organizations concerning classification of projects.

Background

In undertaking this research, the primary aim was to provide guidance to organizations, professional associations, and researchers concerning:

• The implications of classification

• The choice of project classification systems.

In order to contribute to these higher-level aims, the project proposes to:

• Identify project classification systems

• Identify potential uses of project classification systems

• Evaluate project classification systems and their implications against identified uses

• Develop a preliminary model for guiding the choice of classification systems.

Underlying assumptions of the investigation are:

1. That one or more classification systems can be developed for projects that will be useful to project management practitioners, organizations, and researchers as a basis for:

• Shared understanding of the nature of different projects and contexts

• Selecting and assigning project personnel to projects

• Selecting appropriate project management methodologies

• Selecting and establishing project governance arrangements

• Project management competence and career development

• Analyzing the performance and outcomes of projects

• Analyzing and managing an organization's portfolio of projects

• That the selection of classification systems will be largely dependent upon the specific intended use.

Methodology

Research Design

The investigative approach adopted is essentially qualitative, seeking richness and depth of data from a relatively small sample (six core collaborating organizations, thirty participating organizations, and approximately three hundred projects). The investigation will cover three regions: North America, Europe, and Australia.

Needs and potential uses for classification systems will be drawn from a review of literature and comparisons will be drawn between classification of projects and classification systems used in other fields. Project classification systems used in practice, and the needs for classification systems for projects will be explored in focus groups conducted with the six core collaborating organizations.

Findings from the initial literature review and focus groups will form the basis for a web-based questionnaire that will be completed by personnel from thirty organizations in the three regions covered by the investigation. This questionnaire will be used to validate initial findings concerning needs for classification and classification systems in use.

Project classification systems criteria will be developed and used to select or design a number of classification systems that will then be applied to a spectrum of projects in each of the six core collaborating organizations.

Classification systems will then be evaluated to assess their value and implications for use by individuals and organizations for the purposes identified in the initial needs analysis. A preliminary model will be developed for guiding the choice of project classification systems.

Data Collection Strategy

Each researcher has established contacts with organizations in their regional area that have diversified portfolios of projects suitable as test sites for this research. The selection of organizations has been guided by the need to ensure a wide range of classification needs as well as project types is represented in the study.

Organizations have been selected on the basis that they will be able to provide fifty or more projects of varying characteristics as a basis for testing of classification systems and evaluation in relation to the identified project classification needs of the organization. Limiting the number of organizations for study, while still including some 300 projects in testing and evaluation enables a higher level of richness in data collection. This richness of qualitative data is considered important in ensuring that the relevance, utility as well as implications and consequences of classification can be explored and captured.

Classification Systems

What Is Classification and Why Do We Classify?

Classification, essentially, is a means of making things more manageable. It is “not only a way of representing entities but is also a way of imposing order on them” (Kwasnik 1992, 63). Some writers, (Bowker and Star 2000, 285), even suggest that the need to classify, label, and group things is an innate part of human nature and note that the modern bureaucratic state achieves much of its work through assigning things, people, and action into categories.

Although, in practice, we often refer to “classification” into “categories,” and classification and categorization are used interchangeably (Jacob 1991, 77; Gardner 1987); strict interpretation (Jacob 1991, 78) draws a distinction between classification, as the “slotting of objects, events, or properties … into mutually exclusive classes within the hierarchical structure imposed by an arbitrary and predetermined ordering of reality” and categorization, as a “process of dividing the world of experience into groups—or categories—whose members bear some perceived relation of similarity to each other.” While the authors of this paper will use the terms classification and categorization interchangeably, the strict interpretation and distinction is useful in that Jacob's (1991) definition of categorization may be considered pragmatically more applicable to projects than that given for classification. Jacob (1991, 78) says that while the process of classification is both rigorous and absolute, the process of categorization is “flexible and creative,” providing a means of “simplifying the environment, of reducing the load on memory, and of helping us to store and retrieve information efficiently” (Markman 1989, 11). This assistance in recognition of similarities between potentially dissimilar entities can assist in making sense of the environment and in storing and making use of past experience.

Why we classify can be as varied as what we classify. Classifications can be used to provide easier access to items, provide a context or system through which to interpret an area or to define and establish the boundaries of an area. The purpose behind the development of a classification scheme has a lot to do with shaping the actual system. It is the purpose of the classification that determines what attributes of the entity being classified are significant for determining the difference between it and other entities and this principle has been important in designing this investigation of potential classification systems for projects. A function of a classification system is to reduce complexity, as it enables a comprehensible and accessible view of a field of knowledge. The classification system allows a field of knowledge to become more accessible and transparent, and provides a navigable system for those utilizing the field. As a structure of knowledge, a classification system places similar concepts within a structured pattern. It is this feature of a classification system that can aid in efficiency and effectiveness in communicating knowledge and the way a field of knowledge fits together and within the environment. Placement of like fields within classes or groups creates a more workable framework for those encountering the system. The classification system itself can operate as a mechanism for generating ideas and tools, as the layout of knowledge will provide scope for conceptualization and development of tools in the given domain. Tools developed and selected will be relevant to the classification system.

Types of Classification Systems

Classification systems have been developed for a number of purposes, including the classification of knowledge, the classification of objects, and the classification of work.

Examples of classification systems for knowledge include cataloging systems for libraries, including the Dewey Decimal Classification (DDC) system and the Library of Congress Classification (LCC) system. The DCC system is used in 135 countries and has been translated into over thirty languages since its initial publication in 1876. The DDC is divided into ten main classes covering all categories of human knowledge. The LCC system was developed specifically to categorize the collection of the Library of Congress although it is now used in many academic and university libraries, largely due to the online availability of LCC records. The LCC is split into twenty-one branches of knowledge with further subdivisions. However, whether or not a library uses the DDC or LCC matters little to a patron trying to locate a particular reference. For the most part, outsider access to both systems is first done through the library's computer or card catalog where searches can be made for the item by keywords, author, title, or subject. The library catalog therefore serves as a backup classification scheme for the sake of the library's management of its collection and provides an example of the concurrent use and layering of classification systems to meet different needs.

Not all classification systems need to be so general as to cover the entire range of human knowledge. Most are very specific and applicable only to a limited field. This is certainly the case for the myriad of different classification techniques used in archaeology. As distinct from history or anthropology, archaeology is the study of material evidence, of objects, of artifacts and their context (Doran and Hodson 1975, 4). As such, classification is a vital tool and significant concern of archaeology, with some authors estimating that it can consume up to eighty or ninety percent of an archaeologists time (Chang 1967, 71). Classification serves archaeology as both a means of summarizing data for descriptive purposes as well as a basis for generating “fruitful hypotheses” (Doran and Hodson 1975, 159).

Work, as a site for classification, is complex in that it involves knowledge and activities as well as modes of communication and documentation. Similarly, the functions of a system classifying work can be equally varied. Aside from making access to the knowledge base of the profession easier, classification also helps to define a profession and make visible many of its attributes that might otherwise be taken for granted. The Nursing Interventions Classification (NIC) is a system that describes the treatments nurses perform as part of their duties. It is a comprehensive, standardized language that is applicable in all areas of nursing work. The range of interventions covered by the system is wide and varied with such psychosocial things as “humor” and “hope installation” included alongside more common, physiological nursing activities such as “bleeding reduction,” as well as indirect measures such as “emergency cart checking” and the promotion of health in the community. In all, there are 486 interventions that are organized into thirty classes and seven domains. Each intervention is given a unique numerical code to facilitate easy access via computer.

Implications and Consequences of Classification

In relation to work practices, classification enables the development of standardized language around the work practices being classified. This can lead to the development of a body of knowledge as well as a community of practice wherein the developing discourse can be shared between the members. In this sense a classification system can allow for the development, growth, and entrenchment of a profession, whose members will use the standardized language as a basis for their work practices and new innovations in their field. Bowker and Star (2000) have argued that a classification system operates as a regulatory scheme, as it “attempts to regularize the movement of information from one context to another; to provide a means of access to information across time and space.” Development of a classification scheme therefore enhances communication between the participants within and across communities of practice.

Classification also invokes professional autonomy as it encourages and embeds the key attributes of a developing field or profession. The classificatory system allows for further research and the development of educative programs to target specific areas that have been highlighted within the classificatory scheme. Professionalization occurs as members of the community of practice accept and embrace the scheme as an authority for the way they work and how to improve skills associated with their field of experiences. A Guide to the Project Management Body of Knowledge (PMBOK® Guide) and other project management “standards” may therefore be seen as classification systems for project management methodologies while PMI's Specific Interest Groups (SIGs), Certificates of Added Qualification (CAQ), and PMBOK® Guide Extensions provide tacit recognition of classifications or “associations between and among entities based upon the recognition of similarities” (Jacob 1991, 78).

Classification models are not exempt from critique however, and there are important problems associated with their development.

A problem with classification systems is that users will tend to take the classes as an objective truth. This can lead to the reification of the classification system: regarding or treating the classification system as if it has concrete or material existence. This can reduce the flexibility and developmental capacity of the system. Users can therefore become too dependent on the classification system, which inhibits depth of understanding of the area upon which the classification system is based.

Exhibit 1. Classifications of Projects by Size, Complexity, and Familiarity

Classifications of Projects by Size, Complexity, and Familiarity

A classification system, if closed, can prevent growth of the area and cause stagnation of the discipline. Maltby and Marcella (2000, 26) have argued that it is necessary to recognize the underlying theory to a particular classification system, arguing that there can be no justification to a classification system if “its whole theoretical basis is simply quasi-philosophical intellect-stretcher intended to give additional academic rigour.” Their main concern therefore is that the classification system may be acting as a mechanism of professionalization, creating the illusion rather than the reality of a distinct field of knowledge. Therefore there are problems with classification systems where there is a lack of a substantial foundation to their formation. This can be rectified by ensuring that the classification system is meaningful for users.

Parsons and Wand (1997) argue that because there are many ways of conceptualizing and then labeling classes, they are by their nature transitory and historically constructed. This is to say that the “class” is not an objective phenomenon waiting to be discovered, the class is a construct that provides the most coherent meaning to its users. A class structure therefore is “dependent upon human experience” and the corollary of this is that differing people and cultures will form different conceptualizations and class structures as their experiences differ (Parsons and Wand 1997, 7). Class structures can be modified, using the same information but presenting it in a different structure, in order to adjust it for the understanding of the varying cultures. Therefore the classification system is transferable yet adjustable in accordance with its users requirements.

Exhibit 2. Classifications of Projects by Life Cycle or Sector

Classifications of Projects by Life Cycle or Sector

Exhibit 3. Classifications of Projects for Contract Type and Payment Terms

Classifications of Projects for Contract Type and Payment Terms

Albrechsten and Jacob (1999, 93) have stated that a “classificatory structure cannot follow a one-size-fits-all paradigm but must evolve in cooperative interaction” between the users and contributors to the classification system. As such, the classification system should be able to cope with differing viewpoints, where the structure does not merely represent consensus, but has scope to accommodate dissent among the communities interacting with it.

Boundary issues will arise from the drawing of demarcation lines between categories within a classification scheme. For instance, decisions will need to be made concerning level of detail (how many categories) should be identified as well as what should be defined and what should remain invisible within the scheme.

This leads to political and ethical concerns. An ethical issue associated with boundaries arises as each category will valorize a point of view and silence another and this can be perceived as an ethical choice (Bowker and Star 2000, 5). Decisions concerning what is to be made “visible” by inclusion in the classification system, and what will be excluded and therefore “invisible,” can be seen as a political dimension. “Once a system is in place, the practical politics of these decisions are often forgotten” (Bowker and Star 2000, 45). Also, the “loosest classification of work is accorded to those with the most power and discretion who are able to set their own terms” (Bowker and Star 2000, 46), whereas a tighter classification requires stricter and detailed application and therefore the discretionary scope lessens with the detail.

Design of Classification Systems

When designing a classification scheme, Bowker and Star (2000, 231) identify three parameters that should be taken into account: comparability, visibility, and control. Comparability refers to the ability for the classification scheme to provide “comparability across sites to ensure that there is a regularity in semantics and objects from one to the other, thus enhancing communication.” Visibility is concerned with the problem that whilst knowledge remains invisible it cannot be classified. Control indicates that complexity needs to be harnessed in order to provide some form of understanding of the intricacies developing in the classification scheme. There is a tension between freedom and structure but some form of control is required to make sense of information (Bowker and Star 2000, 232). As Bowker and Star (2000, 232) have stated: “From the point of view of design, the creation of a perfect classification scheme ideally preserves common-sense control, enhances comparability in the right places, and makes visible what is wrongly invisible, leaving justly invisible discretionary judgment.”

Project Classification Systems

To date, classification systems for projects have been developed on an ad hoc basis for various uses.

Exhibit 1 shows a range of classification systems based on the size, complexity, or groupings of projects. These systems have been developed to provide guidance on the adoption of appropriate management systems, or the selection of project personnel, or the choice of project organization. What we see is that in different circumstances the size and complexity of projects is determined by:

• The scope and span of the project

• The number of functions or skills involved

• The location and source of risk

• The level of technical complexity

• Whether the project is stand alone or part of a larger system or program.

Another approach has been to classify projects by industry, sector, geographic region, by stage in the product or project life cycle, or by the strategic importance to the parent organization, as seen in Exhibit 2. This is usually for the selection of appropriate project management procedures. However, it is also useful for choosing the type of project organization appropriate to the project, or for ensuring the proper level of senior management support. Youker (1999) has pointed out that often what is important is not so much the sector that the project takes place in as the resource types that it draws on. An information systems project undertaken by a construction company will have the features of an information systems project rather than a construction project. However, all projects taking place in the public sector will take place against the background of the culture of the public sector, and so will be different from projects in the private sector. Similarly with projects from different geographical regions, we can identify a project as occurring in a given country, but Turner (1999) points out that it will be different depending on whether the client or contractor or both is in an alien country.

A classification approach used for centuries is in the selection of appropriate forms of contract and contract payment terms, usually dependent on the risk associated with a project or its complexity, as seen in Exhibit 3. This set of classifications draws on much of the previous.

These classifications are used for several purposes, including:

• Selection of an appropriate project management methodology

• Selection of an appropriate project organization

• Selection of appropriate project personnel

• Definition management and assignment of risk

• Certification of project personnel

• Definition of project data requirements

• Selection of appropriate key performance indicators

• Focus on appropriate success criteria and success factors

• Choice of appropriate legal, cultural, and philosophical systems

• Choice of appropriate contract and payment terms

• Transfer of knowledge.

Research Results

To date, focus groups have been conducted with four organizations, two in North America and two in Australia. All four of these organizations have a strong engineering basis and could be described as project based. Two are public sector organizations, one responsible for infrastructure and the other for utilities. Both of these organizations focus on internal clients. The other two organizations are private sector consulting firms, focusing on external clients. One of these offers engineering consulting services and the other is emerging from construction focused project management consulting to offering of project management consulting services for projects ranging from construction to organizational change.

Two-hour focus group sessions were conducted with each organization and participants were asked to address the following issues:

• Project context

• Attributes of projects

• Project classification systems in use

• Needs for project classification

• Perceived benefits and problems of project classification.

Project Classification Systems in Use

Organizations were found to have multiple project classification systems in use, some formally recognized and others informally applied. Three of the participating organizations had a clear understanding and recognition of and acceptance of project classification and have systems in place that are both multidimensional in that they can be classified on several dimensions simultaneously and hierarchical in the sense that within a classification, subcategories exist that are specific to a class of projects.

Participants representing the fourth, and smallest of the organizations, the project management consulting firm, were resistant to the concept of project classification. Language used throughout the focus group reinforced a shared concern that classification of projects would undermine their autonomy, create barriers that would impede coordination and would reduce their ability to market their services to the widest possible spectrum of clients. It became apparent, however, that a number of implied and tacit classification systems exist and that some, although not initially recognized as classifications, are extremely important in both market focus and management to conduct their work. In fact, the primary project classification used by the firm is by client, which may be seen as a form of classification by sector. They also classify projects by strategic importance to the firm itself, including market positioning, profit potential, and risk exposure.

The other, and larger of the two consulting firms, although far more comfortable with the concept of classification of projects, also addressed sector, in the form of national or international focus, as their primary project classification level. One of the two public sector organizations identified source of (government) funding as a primary formal classification factor which can be considered as strategic, and the other classified first according to scope, which also includes budget and therefore funding issues.

Other project classifications in use by the four organizations, either formally, informally or by implication covered factors identified in Exhibits 1 to 3, including size (cost, value, duration); complexity and familiarity (simple, repetitive, technology, risk, number of disciplines, recurring assignments/similarity/“repeaters”); sector (specialization, market, national/international, public/private sector, client); life cycle; strategic positioning; and contract type. Product of the project was also an important classification in use.

It is notable but perhaps not surprising that the primary level of project classification of the three largest of these four project based firms also formed the primary basis for their corporate structure.

The Need for Classification Systems for Projects

Needs for classification of projects were evident both as primary needs or key drivers of classification system in use, and as secondary needs. Primary drivers included:

• Allocation of project to responsible department

• Strategic positioning, including profit and funding issues

• Matching of project manager to project

• Specialization/discipline

• Resource allocation

• Management needs of different contract types

• Marketing, including credibility with clients.

Secondary needs identified and generally addressed at lower levels of hierarchical classification, informally or tacitly included:

• Reporting, including dissections for multiple purposes

• Benchmarking, performance evaluation, and improvement

• Knowledge capture, transfer, and retrieval (including a common set of keywords to facilitate benefit from past experiences)

• Common/shared language

• Definition and management of interfaces

• Aligning to and tracking of contribution to achievement of business goals (including prioritization)

• Budget allocation

• Basis for adaptation of processes and tools to projects.

Issues, Implications, and Problems Associated with Classification Systems for Projects

Loss of Autonomy

Bowker and Star (2000, 232) point out that those with the most power and discretion is likely to have the “loosest classification of work.” This assertion was supported by the very clear differentiation of responses of focus group participants from the smallest firm in the study (less than 200 people), a privately owned project management consulting firm. Due to the size and ownership of the firm, the focus group participants were all professionals, operating in a fairly autonomous manner, with considerable independence. Strong personal relationships and credibility with clients, external to the firm, are seen as a major factor in corporate profitability. Reporting requirements and systems are relatively “loose” and flexible. This group was resistant to the concept of classification of projects, seeing it as potentially undermining their autonomy. They were reluctant to accept any formal approach to classification, preferring to operate on the basis of “tacit understanding,” where decisions (concerning classification) are “debated and understood, not rule bound.” They believe strongly that project managers should be matched to clients (rather than projects) although one participant remarked that effectively, “people matching is a subliminal classification of projects” used in the firm, and that selection of a project manager on the basis that they have “done this type of project before” is an “implicit classification.”

Significantly, focus group participants from the three other organizations in the study, all firms with over 1,000 employees, two of them in the public sector, had a good understanding and acceptance of the need for project classifications and of formal and informal project classifications used in their organizations.

Creation of Barriers or Silos

The focus group participants who were reluctant to embrace project classification and were concerned about consequent loss of autonomy, were also concerned that classification would create “barriers or silos,” impede “coordination across boundaries,” and undermine their ability to market their services to as wide a client base as possible. Concern about potential for creation of “silos” was however shared by focus group participants from the other engineering consulting firm who had experienced the effects of “confusing multiple interfaces for clients” and “management of customer interfaces.” Related concerns expressed by participants from several organizations included potential for classification and consequent specialization to impede mobility and create difficulties relating to integration.

A consequence of the development of shared internal language through classification is the potential for creation of barriers with external stakeholders, particularly clients, who may not understand the language.

Visibility

Projects can be made visible by inclusion in a classification system or rendered invisible by exclusion (Bowker and Star 2000). This issue was raised by focus group participants, and may be a result of the project-based nature of the four organizations interviewed to date. Without prompting, a number of the participants pointed out that classification had the positive effect of making a project visible and therefore enhancing ability to gain access to resources. This was seen as particularly valuable for “niche and support” areas. The reverse of this coin is that projects that are not classified, such as those conducted for internal improvement or infrastructure, administrative and change projects do not receive the attention and resources necessary to assist in effective and timely delivery. An interesting variation on this theme is that “some projects such as systems development get hidden in the main project” and are similarly neglected to their detriment.

Summary and Conclusions

This paper introduces the PMI funded research project into classification systems for projects. We have described the background to the research and methodology adopted.

A survey of the literature of classification systems shows that there is a difference between classification and categorization. A classification system is a class of mutually exclusive sets to which members of a population are assigned to distinguish between them, whereas a categorization system is a class of overlapping sets to which members of a population are assigned to reflect perceived relationships between the members of the population. Here we are strictly discussing a categorization system, but we have used the terms interchangeably in this paper.

We presented some (but by no means all) of the common ways of categorizing projects. We showed that these led to three broad groupings:

• Projects by size, risk, or complexity

• Projects by strategic importance, stage of the life cycle, or sector

• Projects by contract form, payment terms, or risk ownership.

Also the purpose of categorizing projects could be shown to be for:

• Selection of an appropriate project management methodology

• Selection of an appropriate project organization

• Selection of appropriate project personnel

• Definition management and assignment of risk

• Certification of project personnel

• Definition of project data requirements

• Selection of appropriate key performance indicators

• Focus on appropriate success criteria and success factors

• Choice of appropriate legal, cultural, and philosophical systems

• Choice of appropriate contract and payment terms

• Transfer of knowledge.

We then presented the results of focus groups, demonstrating that organizations do categorize projects for management convenience and business need. However, sometimes this is subliminal rather than overt, and is often affected by and influences the corporate structure. We found that the organizations interviewed used some of the above categorizations suggested in the literature, as well as others, including:

• Marketing and the interface with customers

• Categorization by product of the project

• The assignment of project finance.

We found that the categorization was often hierarchical and lower levels of categorization were contingent on the higher levels.

The categorization of projects is beneficial and useful to organizations, but it needs to be practically and not theoretically oriented. Focus groups confirmed that there are intended and unintended consequences of that need to be considered in development of classification systems, such as loss of autonomy, creation of barriers and silos, and effects of visibility or invisibility due to inclusion or exclusion from a classification system.

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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.

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