Organizational project management is not a priviledge of large companies
try ISO 21500 and go visual
It is found that companies of all sizes spend roughly the same proportion of turnover on projects, but the smaller the company, the less they use project management and its tools. When organizations are small do require less-bureaucratic versions of project management, perhaps with different tool sets than the more traditional versions designed for medium-sized or large projects, and with different versions for medium, small and micro projects (J R Turner). This is the point where the research is now and where the authors wish to start from with these considerations.
After welcoming the new ISO 21500 in September 2012 that provides guidance for project management and can be used by any type of organization and for any type of project, irrespective of complexity, size, or duration, it can be said, after first experiences using it, that this ISO proposal to businesses seems to be a mean to breach barriers to both portfolio and project management practices in small and medium enterprises (SMEs). ISO new guidance is a lean document: It's simple to read and brings readers basic organizational project management concepts easy to adhere to and apply.
Taking inspiration from this publication and blending it with experience in real cases they every day deal with, authors modeled a lean approach thought for SMEs but easily adapting also to small-medium functional units inside larger companies. This approach aims to lead organizations to improve their “management by projects/project based management” abilities, considering the three main pillars of any organizational change: (a) people and organization; (b) process and methods; and (c) tools and techniques—and driving the organizational change on three parallel but interconnected streams: (1) portfolio of projects; (2) projects; and (3) education and culture.
Company and Authors Presentation
Nexen Business Consultants has been listed in the Project Management Institute's Consultant Registry since 2011. Nexen Business Consultants (www.nexen.it; www.nexenprojectmanagement.it) was founded under another name in 1995 by Gianni Fuolega, who initially managed it to serve the niche market of ERP systems consulting inside the larger Italian banking market. In 2005, he met Engineering that was seeking a qualified partner to join with in the banking industry and since then Nexen has become the consulting company of Engineering. Actually Engineering owns 95 percent of Nexen and Gianni Fuolega is the CEO.
Engineering (www.eng.it) employs 6,500 people and generates €750 million in revenue. It is organized into Directorates that serve different industries. Inside Engineering, Nexen acts as an agglomerate of more competence centres each of them cultivates a specific competence providing both presale and delivery activities. Competences Nexen grows and takes care of are (a) strategy and financial advisory; (b) enterprise governance and risk management frameworks and accounting systems; (c) business process management and reengineering; (d) project management and change management; (e) it governance and strategy. Nexen internal organization is by competence and each competence business unit is led by a Director who coordinates her/his team's efforts with other business units to serve at bests our customers.
Focusing on change and project management competence, Nexen, over the last seven years, has built a 35-person team specializing in project management and offers its customers different kind of services: (a) PMO teams supporting projects—traditional and agile; (b) PMO teams supporting divisions or directorates—traditional; (c) virtual PMO and project managers communities; (d) enterprise project portfolios initialization and management; (e) project managers certified; (f) consulting services in project and program management and in organizational project management; (g) training services, preparation for the Project Management Professional (PMP)® credential and the PMI Agile Certified Practitioner (PMI-ACP)® certification.
Part I – SMEs Scenario and ISO21500
Status of the Research on SMEs in the World
Small and medium enterprises are certainly one of the main contributors to the global economy in terms of numbers of people involved, generated added value, and innovation and growth.
As far as the European Union and Italy are concerned, SMEs can be divided into three categories based on the number of employees. We have “micro” (from 1 to 9 employees), “small” (from 10 to 49), and “medium-sized” companies (from 50 to 250). The classification criteria adopted in the United States are different because they group these categories into a more generic cluster named “small business.”
If we look at them from a quantitative perspective, these companies employ about:
- 50 percent of private sector workers in the United States,
- 60 percent in the European Union, and
- 82 percent in Italy.
But if we move to a qualitative perspective by considering the percentage of the GDP generated by the SMEs, the progression is even more meaningful:
- 48 percent of the United States,
- 59 percent of the European Union, and
- 74 percent of Italy.
These numbers are certainly a good reason for addressing the market of the SMEs, which is full of opportunities and spaces not yet occupied. They are also the reason of the strong interest we are experiencing in Italy—also through the PMI Northern Italy Chapter—for this population of companies that generate almost three-fourths of the Italian GDP.
On top of that, we must consider that this increasing share of our GDPs corresponds to an increasing share of our time spent on financing and developing projects in all kinds of industries. Using these words in the June 2013 issue of the Project Management Journal®, Hans Georg Gemünden, the editor, introduced the term “projectification” to identify a trend of society bearing out that planning and controlling projects will be “must-have” capabilities for the survival of many organizations. In this scenario, there is an emerging question that needs to be asked: How can A Guide to the Project Management Body of Knowledge (PMBOK® Guide)—Fifth Edition (Project Management Institute, 2013a) be deployed in companies where the number of employees is less than the number of processes, to say nothing of the over 70 inputs and outputs and almost 150 tools and techniques?
To answer this question, some Northern Italy project managers launched a research project involving a dozen entrepreneurs of Brescia, one of the country's most competitive Italian industrial districts. This initiative was developed in collaboration with a local consultancy firm (Oxigenio, www.oxigenio.com) and, thanks to the contribution of five round tables (“learning by listening”) and the implementation of two pilot projects (“learning by doing”), they had the opportunity of focusing on the following main critical success factors (CSFs) that must be taken into account for supporting SMEs in the improvement of their “management by projects/project based management” abilities.
• First, we must realize that every small business is a sort of “world” built upon and around the figure of the entrepreneur. This world must be respected because it is the expression of both a culture and an original capacity of innovation. So, it's essential to apply the main principle of the “ethnographic approach,” that is observation of a reality without trying to influence it in any way.
• Second, we must carefully evaluate the adoption of predefined models, thinking erroneously that the best way is to adapt, or even worse, simplify models applied to bigger and more complex organizations. In other words, what emerged is that it is not correct to consider a small business organization less complex than a big one. This is the reason why what emerged was the trend toward the adoption of an “extended” view of the project life cycle by including the “ex-ante” generation of ideas and the “ex-post” evaluation of benefits.
• Third, we must identify an “extensive” profile of the project manager, since this role is not present in the small organizations and so it is difficult to understand its importance. A common conviction we noticed is that all the people involved must be oriented to the project approach rather than identify just one single figure responsible for the project. In other words, we faced a “cultural” issue more than an “organizational” one. As further proof of this, entrepreneurs involved in our research said such a role can pass from one person to another in order to guarantee maximum competence and credibility of those in charge of a specific phase during the project execution. For example, when passing from the design to the industrialization process.
• Finally, we must keep in mind that the world of SMEs is very sensitive to the ISO standards, not only for the international brand recognition, but also for the contribution that ISO compliance tools provide to the quality recognition of SMEs’ products and services. In other words, the ISO is an essential element of the “arch bridge” that we need to build between Project Management and the SMEs.
When we approach the guidance, we immediately notice a few characteristics. These characteristics are not ranked but are presented in the order that they can be observed by flipping through the page of the document the first time.
Brand – The International Organization for Standardization logo dominates on the first page. The ISO logo instills trust, objectiveness, and effectiveness in readers and users.
Target – Target readership is stated in the Introduction. The three points clearly address groups of people normally interfaced: (a) senior managers and project sponsors; (b) project managers and project team members; and (c) developers of national or organizational standards.
|Target Readership||Reason of Interest||Related Standards and Frameworks|
|Executives and Governance |
• Senior managers
• Project sponsors
|To better understand the principles and practice of project management to facilitate providing appropriate support and guidance to their project managers and the project teams||The Standard for Portfolio Management (PMI, 2012); Organizational Project Management Maturity Model (OPM3®) (PMI, 2008) |
ITGI COBIT5 (ISACA, 2012)
• Project managers
• Project team members
|To have a common base of comparison of their project standards and practices with those of others||PMBOK® Guide (PMI, 2013a) |
PRINCE2 (Office of Government Commerce,
|PMO and Internal Processes and Policies |
• Developers of organizational standards
|To use in developing project management standards, which are consistent at a core level with those of others||Both the above|
Project Management Context – The Project Management Context is described in six full pages only.
The overview of project management concepts and their relationships open clause 3.
It shows how the organization strategy identifies the opportunities and the opportunities are evaluated and captured in the business case or other similar documents. It shows how selected opportunities can result in projects that provide deliverables, and how these deliverables can be used to realize benefits. The benefits can be an input again to organizational strategy.
The definitions of project and project management are supplied together with the definition of opportunity, benefits, and benefit realization analysis that bring to project initiation. At this point the guidance introduces project portfolio management and programme management and helps the proper understanding of the two worlds of projects and operations.
Exhibit 1: Project Manager Context
The last part of clause 3 is about stakeholders: stakeholders and relationships among stakeholders are presented using an exhibit we were familiar with in PMBOK® Guide—Third Edition (PMI, 2005). Then project management competencies are categorised into (a) technical competencies for delivering projects in a structured way, including the project management processes defined in this standard; (b) behavioural competencies; and (c) contextual competencies. Project life cycle and phases’ descriptions close clause 3.
Project Management Processes—“This standard identifies the recommended project management processes to be used during a project as a whole, for individual phases or both. These project management processes are appropriate to projects in all organizations. Project managers, in conjunction with other project stakeholders, are advised to carefully consider the processes identified in clause 4.3 and apply them as a high-level guide to include those processes that are appropriate to the project and organizational needs” (Guidance, page 14). The project management processes are organized into process groups (Initiating, Planning, Implementing, Controlling, Closing), and subject groups (Integration, Stakeholder, Scope, Resource, Time, Cost, Risk, Quality, Procurement, Communication).
Exhibit 2: Process Groups’ Interactions Showing Main Inputs and Outputs
Interactions among the process groups within the boundaries of the project including the main inputs and outputs of processes within the process groups are shown in only one figure that in our opinion is very effective to illustrate the project life cycle.
Annex A offers a final overview of interactions of the individual processes in each process group. “Not all process interactions are shown in Annex A figures. The arrows represent one logical sequence of processes and it is up to the organization, project manager, and/or project team to decide what processes are required and in what sequence the project will run. A recursion is possible from any process” (Guidance, page 39)
Exhibit 3 presents the point of view on clauses “3” and clauses “4.”
Exhibit 3: Point of View on Clauses “3” and Clauses “4”
Organizational Project Management
The PMBOK® Guide—Fifth Edition (PMI, 2013) introduces organizational project management as follows:
Organizational Project Management (OPM) is a strategy execution framework utilizing project, program, and portfolio management as well as organizational enabling practices to consistently and predictably deliver organizational strategy producing better performance, better results, and a sustainable competitive advantage. Portfolio, program, and project management are aligned with or driven by organizational strategies. Conversely, portfolio, program, and project management differ in the way each contributes to the achievement of strategic goals. (PMI, 2013, pp. 7–8)
The concept of organizational project management is based on the idea that an organization—not only a project, a program or a portfolio—operates better and better ensures the implementation of its designed strategy when good project management and program management practices and good portfolio processes are adopted.
“Projects are often the means to accomplish strategic goals” (Guidance, page 4) and OPM represents the integrated project-oriented approach of the organization to the implementation of its strategy.
Part II – The Approach to OPM Through the ISO21500 and Visual Tools
Taking inspiration from the ISO21500 publication and blending it with experience in real cases, authors modelled an approach to organizational project management for SMEs that can be easily adapted also to small-medium functional units inside larger companies.
Target – This paper tries to address the needs in organizational project management of SMEs as we introduced this term in the beginning of this paper. Saying SME, we focus on an organizational unit living around a single leader who is the entrepreneur: He or she designs and follows an organizational strategy to sustain its company growth and manages people and other resources to make the dream a reality. Beside SMEs we can also list an enough independent body or unit inside a larger organization as target of the approach we are going to present: for as example a 50–100 people global IT structure, an R&D unit inside a larger manufacturing company, or a call center for a hotel chain company. What is important to have is the role of a manager, top manager, or executive who is in charge for shaping the future of the organizational unit.
Conditions – The SME or the organizational body or unit should be in the situation of having some important conditions satisfied:
- The entrepreneur or manager should have basic knowledge of project management and enough consciousness of the distinction between projects and operations
- The entrepreneur or manager should be able to identify a portfolio of activities and projects that require prioritization and decisional actions
- The company or unit should be able to identify customers or users, either external or internal
- The company or unit should have the authority or responsibility of managing human resources and teams
The approach is presented in the form of:
- Suggested good practices and best sequence in the adoption of these good practices
- Main streams of investment/intervention
Suggested good practices and their sequence
Good practices are associated to the main resources that the company or unit should involve: (1) people and organization; (2) processes and methods; and (3) tools and techniques. The following is the sequence of good practices we found useful to introduce or enhance a successful organizational project management approach. The premise is counting on and exploiting the ISO21500 (Exhibit 4).
- PEOPLE: Obtain commitment to the ISO21500: Facilitating sessions, education on the guidance, workshops, meeting, benchmarking with other companies until the entrepreneur or manager and her or his staff feel confident on the contents of the ISO21500.
- TOOLS: Build a database of all company or unit projects, where each project was classified and its dimensions and other characteristics clearly stated. Take inspiration form ISO21500 (Chapter 3).
- PROCESSES: Introduce the habit of sharing projects prioritization decisions and any other consideration on projects performances, nomination of project managers, risks and risk management strategies.
- PEOPLE: Train staff on managing programs and projects using effective knowledge and skill transfer techniques like shadowing, workshops, and visual tools.
- PROCESSES: Draft design of a project management life cycle suitable for the company or unit and inspired by the ISO21500 processes (Chapter 4).
- TOOLS: Adoption of tools for projects and portfolio management.
- PEOPLE: Plan of any action of change inside the company or unit under the oversight of the entrepreneur or manager.
Main Streams of Intervention
Education—Project management culture diffusion is the first stream of intervention and without some kind of transfer of knowledge, terminology, and general best practices, talking about organizational project management will encounter difficulties. Education should involve also aspects of general management to ensure comprehension of matters like performance management, strategy design, goals setting, and strategy alignment.
Portfolio/Governance—The second stream of intervention to consider in our approach is the packaging of a portfolio of projects and other activities that are not enumerated as operations in order to delimit “the filed where we have to play”. The entrepreneur or manager should have clear consciousness of the “dimension of the effort” that is taken into consideration to be managed with portfolio, program, and project management coordinated good practices and the therefore the risk of any change that is going to be considered.
Project and Program Management Practices—The last stream of intervention is on “how better and more efficiently sustain the strategy and act” and is pertinent to best practices, processes, and tools and techniques to adopt. After creating basic project management culture and delimiting the portfolio of projects and activities of the company/unit to act on, the company or unit can move to define how to manage programs and projects. The needed support will be found in PMI standards and other project management related body of knowledge.
Exhibit 4 – Sequenced Good Practices to Introduce OPM in a SME or Organizational Unit in a Larger Company
The Importance of Tools: Better When Visual
ISO 21500 with its Chapters 3 and 4 is certainly a good basis for selecting and implementing a framework of best practices together with a set of support tools such as:
- Project charter
- Project plans
- Issue and change logs
- Risk register
- Stakeholder register
- Status report and other templates aiming to assure the communication within a single project and the whole organization
At the same time, we must take into account the peculiarity of the SMEs’ entrepreneurs, whose main expectations can be synthetized through these statements: “Don't add bureaucracy and keep the enthusiasm alive through the line and through people.”
Thanks to the pilot projects developed in collaboration with the Italian SMEs, we realized that, in addition to the “hard” aspects of communication covered by templates and structured tools, it's absolutely essential to address the “soft” aspects of communication in order to:
- simplify the adoption of the best practices through an intuitive and not specialized language;
- maximize the accessibility and sharing of the information at all levels of the organization;
- facilitate the cooperative work and the discovery of the so-called “tacit” knowledge;
- assure a permanent alignment between project goals and people behaviours; and
- privilege the collective leadership with respect to the individual one.
For satisfying these requirements, we promoted the intensive use of a set of “visual planning tools” and “information radiators” whose benefits were strongly appreciated by the entrepreneurs and their collaborators. Thanks to the use of sticky notes as the main communication tool, we could engage people and make them familiar with the “language of doing”, that is the project management language. These are some meaningful results of this teamwork experience:
- Project charters progressively built through a visual mind map containing the basic project questions (why?, who?, when?, what if?, etc.).
- Stakeholder grids aimed at positioning of each actor in terms of power and interest in order to identify the best engagement and communication strategy.
- Visual WBSs progressively built through a deliverable-oriented approach and then converted into network diagrams and responsibility assignment matrixes (RAM).
- Risk/probability matrixes aimed, not only at sharing the priorities of the risk response strategy, but also at facilitating the search of the so-called “plan B” that represents a sort of survival tool for the entrepreneurs of a SME.
- Large displays of critical information located in a spot where people can see it as they work or walk. The use of “information radiators” for visualizing the project portfolio and sharing the issue/change logs was very successful and therefore adopted as a permanent tool.
It's evident that most of the above mentioned tools are typically referenced in the agile (e.g. SCRUM) and lean project management approaches (e.g. Kanban). Since we don't consider these methods as an alternative to the traditional ones, we think that their integration within the ISO 21500 framework can be seen as an innovative solution for satisfying the peculiar requirements of the SMEs.
As a final consideration related to support tools, we cannot forget the impressive diffusion of social media that is revolutionizing the business world. In fact, new collaboration tools for project managers are emerging in order to support improvement of performance via real time communication, on-going team building and better management of distributed teams. This is certainly a challenge for all organizations but, in our opinion, it can generate the highest ROI within the world of SMEs.
Part III – Specific Benefits of Working With the Support of the ISO Guidance
Part III is dedicated to describe the benefits that both consultants and clients may have when they decide to use the guidance ISO 21500:2012 as a tool to support their activities in project management consulting.
Easy access the main project management concepts—The document is concise and easy to read – The document is a document of about 45 pages, Annex A included. Statements are very clear and understandable also for people whose first language is not English. Considering Clause 4, a clause you should only refer to when you want to examine in depth a single project management process, main organizational project management concepts are concentrated in the first 20 pages well supported by less than 10 figures. Executives, managers, consultants, and methodologists with basic knowledge of organizational theories and project management have “easy access” the main project management concepts.
One document, different target readership—It doesn't matter whether you are an executive with a specific interest in getting orientation on portfolio management and organizational project management or a project manager and/or a project management office (PMO) member who want to learn more on how to organize the management of a project, at high level of detail the document covers all these aspects.
Tailoring emphasized—Organizations and project managers must and can configure the methods they follow, tailoring the content of the guidance. In fact, the ISO says, “The processes described in clause 4.3 need not be applied uniformly on all projects or all project phases. Therefore, the project manager should tailor the management processes for each project or project phase by determining what processes are appropriate and the degree of rigor to be applied for each process. This should be accomplished in collaboration with the project team and in accordance with the relevant organizational policies.”
Process groups maps—Annex A provides a depiction of the interactions of the individual processes in each process group identified in clause 4.2.1 mapped against the subject groups identified in clause 4.2.2. The five maps support the actions of tailoring. The five maps bring organizations and project managers clear basic flows for project management activities.
Project management life cycle linked with main project management deliverables – Guidance's Figure 6 – Process groups’ interactions showing main inputs and outputs brings readers the whole flow of the management of a project.
After shortly introducing the world of SMEs, stating their relevance in the world economy and their need for project management competences, and shaping their main characteristics in terms of internal organization, the paper presents a possible approach to organizational project management for SMEs. The approach is mainly based on the ISO guidance 21500:2012 and on the combined adoption of visual tools beside the use of traditional ones.
Based on their experience and knowledge of Italian SMEs, authors offer suggestions and make relevant observations for consultants who are dealing with this emerging worldwide reality and want provide guidance toward introduction of organizational project management.
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©2013, Walter Ginevri, Maria Cristina Barbero
Originally published as a part of 2013 PMI Global Congress Proceedings – New Orleans, Louisiana