What project dimensions need to be common across a major corporation?
Projects & Portfolio Director, Refining and Marketing Digital Communication Technology, BP
In a major corporation such as BP, there are many different types of projects, ranging from multi-billion dollar capital construction projects to small IT enhancement projects costing a few thousand dollars, and everything in between! Is there benefit in trying to standardise project management processes and the approach to developing capability across different disciplines of project management? Are there sufficient similarities to be able to leverage knowledge and expertise or are the differences so radical that any attempt at reaching commonality is likely to fail? This paper proposes that there are three dimensions where organisations can benefit from introducing common approaches; a gated decision making process, common financial approval processes and the development of high quality project management capability.
Over the last few years BP has developed three key dimensions of project management that have increased in currency across the corporation and are now recognised as the standard for all projects. The first two of these are probably quite familiar and recognisable to many project practitioners as well as being found in many corporations; a gated decision making process and a common approach to financial approval. The third dimension, the need to develop high quality project management capability, is one that has received a lot of focus within BP in the engineering and IT project domains. These three dimensions form a common approach and provide a common language with which projects can be judged, lessons learned shared and project excellence developed further. This paper expands on these three dimensions.
The three common dimensions
A gated decision making process
Within BP a gated decision making process has been developed over a number of years and is now mandated as a standard across the majority of project domains (Engineering, Construction, IT, etc.). It is a high level process, not a methodology. Each project management domain has developed more detailed processes and adopted methodologies, relevant to their domain, to underpin it. The core framework is recognisable as you examine quite different projects in engineering, construction, IT infrastructure as well as IT software development. This methodology is known as the Capital Value Process (CVP), reflecting its origins in supporting major capital projects. However it is applicable across the project spectrum, from simple desktop support projects to major Exploration and Production construction projects. The methodology is underpinned by BP's project principles. The key elements of CVP are five stages, Appraise, Select, Define, Execute and Operate, two key roles, the Single Point of Accountability and the Gatekeeper and, most critically, a clear articulation of the decision that has to be made by the Gatekeeper at the end of each stage. Each stage focuses on a critical output. The objective of Appraise is to produce a business case; Select looks at the technical and business options for the project; Define is about the detailed design of the project outcome and Execute is all around creating the product or service that is unique to that project. The last stage is Operate, a critical stage which focuses on running the asset in steady state operations and ensuring the benefits identified earlier in the process are being realised.
Common financial approvals
This dimension would appear self-evident. However the application of a consistent financial approval process is imperative to ensure that projects are all treated equally in terms of allocation of funds and that a level playing field is created for comparative purposes. This needs to be supported by an agreed economic evaluation methodology that allows the assessment of opportunities on their own merits and in comparison with others. Included in this methodology are a set of financial indicators that allow inter-project evaluation on a common basis, helping to develop an optimum, risk balanced, high value portfolio of projects.
A consistent approach to project management capability
To deliver projects consistently well across the organisation you need a consistent approach to developing Project Management Capability. The basic project KPI's of on time, on budget and to customer satisfaction can only be delivered by sound processes. In turn, those processes need to be underpinned by individual project managers and supporting staff who have the capability to execute the projects effectively. Within BP we provide a series of training materials and support offerings built around the CVP gated decision making process‥ Key elements are the Project Management College (PMC) and the Digital Academy (DA). These are Intranet-based training colleges for engineering and IT projects respectively. Both offer a full curriculum of courses centred on CVP and the PMBOK. Courses can be classroom-based, web-based or self study. This material is supplemented by a network of senior project personnel who are tagged as professional advisors, a variety of project assessment tools and a well-established process for project peer assists. For advanced practitioners, BP has developed the Projects Academy in conjunction with the Massachusetts Institute of Technology (MIT). This is a six week residential programme at MIT run over a 12 month period, with inter-term project work. We are also working on developing more BP specific programmes as part of the PMC. For example a new training offering, ‘Projects – the BP Way', was piloted in November 2006.
So what would happen if we did not have these three common elements? Firstly and most importantly, the organisation would not have a consistent process for calculating project benefits and therefore would be unable to compare projects on a level playing field so that maximum dollar benefits can be derived from the funds available.
The CVP dimension allows common approaches and decision making criterion to be applied across projects thereby freeing project personnel to focus on project management rather than the governance structure needed for decision making. The capability dimension ensures that a stream of high quality personnel is available to deliver complex projects on time and to schedule
These three dimensions, when combined, allow an organisation to pursue projects that deliver maximum benefits from the funds available. Consistent application of a gated decision making process, supported by a common financial approval process, underpinned by a cadre of world class of project management staff who have access to excellent resources that enable them to continue to develop their skills and knowledge, provide us with a great bench strength of project management capability.
© 2007, P J Spiers, BP
Originally published as a part of 2007 PMI Global Congress Proceedings – Budapest
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