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BUSINESS FOCUSED PROJECT

MANAGEMENT
By Dennis Comninos & Enzo Frigenti
Synopsis
This article addresses the concepts and issues of business project management. It aims to assist
organizations in making the shift from a narrow, strong, technical focus on project management to
a broader, more business-oriented focus. The authors introduce the reader to three important
concepts and components that underpin the philosophy of the business of project management.
These components combine to form an approach that allows projects to make things happen, and
to be the ‘engines of growth’ for organizations.

The Business of Project Management
In today’s highly competitive and fast-paced environment, the rapid creation and delivery of high
quality products and services is critical to business survival. Organizations are having to focus their
energies on being highly innovative – delivering products and services involving greater technical
complexity and requiring a greater diversity of skills. Moreover, this must be done with leaner
organisations and tighter budgets while maintaining the highest quality standards.
To meet these demands, modern businesses need to operate at high performance levels,
harnessing the full power of their resources to focus on strategic and business objectives. In this
environment, general management approaches alone no longer suffice. The management
processes used in the past to enable the delivery of new products and services are no longer
effective.
A project is defined as being a ‘temporary endeavour undertaken to create a unique product or
service’ and the process of achieving a successful project as project management. The need to
deliver new and unique products and services (projects) usually arises from organization strategy
and business plans. Therefore, to achieve superior delivery performance, the management
approach must build on organisation strategy, integrate with business imperatives, and focus on
the objectives (the projects).
Traditional project management tended to focus primarily on the processes of managing projects to
successful completion. To manage projects from their inception through to actual delivery of the
Tel: 011 447 7470 • Fax: 086 686 8425 •
Website: w ww.a lusa ni.co.za • Po st: PO Box 2844, Sa xonwold, 2132

A sound understanding of how an organization’s portfolio of business programmes and projects is managed through prioritisation and selection is required. A business focused project management approach can bridge this gap between strategy and detail action plans. projects seldom exist in isolation. The struggle of many organisations to implement and apply project management has demonstrated that the classical. but there must also be an understanding of the more detailed aspects of project implementation. organisations must consider a wide range of issues and follow a process that enables the correct projects to be undertaken in support of organisation strategy. highly structured. If projects are to be focused on the business then the linkages between the organisation’s strategic and business plans need to be placed in context and their importance recognised.co. in order to achieve that. a different project management approach is needed. engineering/construction approach does not meet the project management needs of business projects. they have to ensure that projects are efficiently delivered and effectively integrated into the business. These issues include:  upper management support for project management  cross-functional interface with projects  project selection and prioritisation  portfolio management  upper management interface with project managers  the project support office (PSO)  project manager career paths  the learning organisation. and service improvement create management challenges that require a more flexible and organic approach. As organisations need to convert their strategies into reality through programmes and projects.business enabling objectives. where the work is done to realise strategic and business objectives.a lusa ni. where projects are often initiated to deliver strategy. business redesign. Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww. 2132 . In developing a business focus for projects.za • Po st: PO Box 2844. Business projects originate as a result of change initiatives arising from the organisation’s strategic and business plans and. Project management must be equally at home in the boardroom. Sa xonwold. Project management needs to become part of the business and. exist alongside operations and within a portfolio of other projects. as such. organisations need to come to terms with the business of project management. The Need for Strategic Linkages Within business enterprises. as it is at the coal face. Projects in the field of social and culture change.

Business Focused Project Management is the application of project management to projects linked to the organisation’s strategies in order to effectively deliver those strategies in an Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww.Organisations that do not adequately address these issues or do not formalise the linkages between strategies and projects find that projects seem to pop up across the organisation in an uncontrolled manner. Linking projects and strategy gives projects a strategic and business focus that goes a long way towards resolving many of these problems.  doing the “wrong things.  the apparent absence of a business process for selecting the projects. Combining a strategic focus with a business process for selecting and prioritising projects is an important step in creating an environment for successful projects.  projects being seen as black holes into which money and people disappear and from which.a lusa ni. with a bit of luck. scope and benefits of the projects being undertaken The arising confusion and project failure rate results in:  project participants feeling that they are working not only on many unnecessary projects but also at cross-purposes with other areas of the business. something may emerge.za • Po st: PO Box 2844. 2132 .co. This results in confusion and resultant failure to achieve the desired project results. while integrating closely with the requirements of executives and upper managers. right”. to achieve effective management of corporate projects from their conceptualisation through to the delivery of the desired business outcomes. Sa xonwold. What is Business Focused Project Management? Simply put.  a general weariness with projects and a lack of motivation to complete them (project fatigue)  a misunderstanding of urgency vs. Confusion and failure arises from:  a lack of clarity as to how projects align and link to the organisation’s strategy. Business Focused Project Management (BFPM™).  project priorities constantly changing  upper management’s apparent lack of awareness of the number. right” instead of doing the “right things.  doing “less with more” rather than doing “more with less”.  organisations attempting too many projects outside of their capacity and capability. The authors have developed an approach. priority. BFPM™ takes an organisation-wide view of project management – focusing on the needs of the project owners.

2132 . Benefits and advantages experienced by organisations applying BFPM™ include the following:  A more goal or objective-oriented organisation. These programs are. managing the organisation by projects. This mindset permeates through the organisation from the strategic level.  The dynamism of the organisation is facilitated through the provision of the means to adjust project strategies to changing scenarios through project selection and prioritisation. and goals are transformed into company-wide programs that translate corporate intentions into actions. Paul Dinsmore. execute. through the tactical level.” BFPM™ subscribes to this definition and implements it through the Wrappers™ model and the ODPM™ project management process. Sa xonwold. in an article “Toward Corporate Project Management” (PM Network.  A strengthening of the project environment by providing structures and processes to effectively conceive. objectives. It means the company is project-driven.  Allows for the measurement of both project performance and progress towards achieving strategic goals. “Managing Organisations By Projects is an organisational mindset.a lusa ni. and validate projects. The following table highlights the major differences between BFPM™ and traditional Project Management: BFPM™ Project Management Strategic Tactical Integration.” Therefore. visions.za • Po st: PO Box 2844.effective manner – in effect. strategies. organisations are “portfolios of projects. the aggregate result of an organisation’s projects becomes the company’s bottom line. He goes further to say “From the MOBP view.  A speeding up of and greater contribution to the implementation of the organisations strategic objectives.co. including operational improvement and organisational transformation programs as well as traditional development projects”. that corporate goals are targeted and achieved by managing a web of simultaneous projects. in turn broken into projects to be managed by corporate staff or professional project management personnel. Mission. project manager and author. March and June 1996). coordination and control of multiple The management of a project (singular) projects (Plural) Organisation-wide and cross-functional Project-wide and not necessarily crossfunctional An operating environment or framework A discipline A business philosophy A specialist function BFPM takes an organization-wide view of project management by focusing on the needs of project Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww. to operations. It is a way of thinking about business.  Allows all levels of management and the core project team to contribute to the achievement of the organisation’s strategies. describes this philosophy as.

 Strategic planning at the organisation level results in a set of organisation imperatives.co. Project Selection and Prioritisation Project selection is the process of evaluating individual projects or groups of projects and then choosing to implement some of them so that the strategic objectives of the organisation will be achieved. Strategy. and the Project Portfolio. Since these can change depending on changing scenarios. the authors have adopted the following terminology in this article. while integrating closely with the requirements of executives. Organisation and business strategies are essential to BFPM™.a lusa ni. Sa xonwold. For clarity and simplicity. upper managers. 2132 . If they are not present or well defined. then there cannot be projects focused on the business.za • Po st: PO Box 2844. Project prioritisation is the ranking of the selected projects into some order of importance or urgency.owners. and the project management environment. the project selection and prioritisation processes need to be applied continuously against all projects in an organisation whether initiated or not. concepts. Strategy Strategic effectiveness is achieved by setting the right objectives or goals and implementing them. It is based around the two major components. It defines the projects’ order of execution and prioritised demand on the organisation’s resources such as people and money. These two components fit together to provide the philosophies. the Wrappers™ Model and Objective Directed Project Management (ODPM™). The portfolio is managed in a manner similar to that of an investment Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww. Basic Concepts and Definitions In order to gain a better understanding of BFPM™ it is necessary to define three basic concepts. Project Selection and Prioritisation. Some form of strategic planning of this nature is done at all levels of organisations. Project Portfolio The project portfolio represents those projects that best meet the strategic/business needs of an organisation.  These are converted into business strategies by the business managers. The projects contained in the portfolio arise from the Project Selection and Prioritisation processes. The criteria against which projects are tested for selection and prioritisation are derived from the organisation and business strategies in place at the time. processes.  Business strategies are in turn carried out through projects whose strategy is the project approach or plan. and tools used to enable Business Focused Project Management.

Sa xonwold. This core is then ‘wrapped’ with a series of interrelated layers. templates. Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww. Other than providing a framework for integration. At the core of the model is the Objective Directed Project Management (ODPM™) process. tools. business. The following sections explain each wrapper layer in the model. replaced. dashboards. 2132 . and project management levels. each of which adds functionality to the next until the overall functionality of BFPM™ is provided.a lusa ni.co. it forms a complete methodology for Business Focused Project Management.  when populated with processes. and terminated in accordance to the value or expected business impact the portfolio delivers to the organisation. and systems.za • Po st: PO Box 2844.  indicates what metrics must be in place to effectively measure the delivery of results and  achievement of goals. The Wrappers™ Model The Wrappers Model shown in figure 1 is a model that provides a framework that integrates the organization’s strategic.  provides a discipline for the delivery of strategic objectives through the execution of projects. projects are added.  places all the components of a business-focused project management approach into context and perspective  shows the path to be taken for the effective and fast transformation of strategies to business outcomes and project outputs. the model serves a number of additional purposes as follows.portfolio. The Project Portfolio is continuously monitored and evaluated as well as continuously being passed through the Project and Selection and Prioritisation processes. The model:  provides a framework for the building of an enterprise-wide project management environment.  shows how projects are progressively elaborated from concept to delivery. “invested” in. techniques.

drives the mission.za • Po st: PO Box 2844. and states which objectives/outcomes are necessary for success. Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww. Sa xonwold. goals.a lusa ni. who are responsible for setting organisation strategy. An organisation’s strategic planning develops the vision. 2132 .co. mission. Organisational strategy is converted into action through business strategies (general approach/direction).Figure 1: The Wrappers™ Model The Strategic Wrapper The outer wrapper is the Strategic Wrapper representing the organisation’s vision. which in turn enable goal setting and identification of a potential portfolio of projects. and objectives and is primarily owned by the executive level of the organisation.

and participating functional managers. comprising representatives of the executive and upper management. This ownership is of utmost importance to successful project delivery. The Business Wrapper The middle wrapper is the Business Wrapper and is owned by upper management. The result of the selection and prioritisation process is a portfolio of projects. The project manager and core team members primarily manage this level.a lusa ni. Subject to the functional managers’ mandate. It receives project proposals from operations and functions. planned. and executed. opportunities. These proposals are prepared in support of the organisation’s strategic imperatives and are generated by departments or at the executive level. 2132 . The Project Wrapper The next wrapper is the Project Wrapper. as well as the selection and prioritisation process and the development of proposals and business cases is discussed later.co. Authority to implement resources is given to the sponsor by the executive.The Strategic Wrapper further defines the relationship between the organisation and its environment. manages the project portfolio. weaknesses. political/public perceptions and operational and legal aspects of the organisation’s functions (STEEPOL). It is here that projects are initiated. technical. In the absence of organisational strategic planning. The context includes social. projects will deliver results that are not aligned with desired business outcomes. economic. and environmental issues. The executive or board sanctions the portfolio of projects. and considers them in a selection and prioritisation process. The SWOT and STEEPOL analysis forms an integral part of organisational strategic planning. The Chief Executive Officer (CEO) champions the complete portfolio. Portfolio and project performance measures will exist in a vacuum created by the lack of strategic direction. and the sponsor is accountable to the executive for the project results. while executive members or upper management sponsors have the responsibility for ownership of individual projects. project managers. It is jointly owned by the project sponsors. and threats (SWOT). thus committing organisation-wide resources. Portfolio Council members usually own the organisation-wide resources required to deliver the projects and therefore have a strong interest in ensuring that only well scrutinized (selected and prioritised) projects are approved. and project results integrated into the business.za • Po st: PO Box 2844. A Portfolio Council. Project manager authority to manage the Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww. Sa xonwold. core team members represent their functional areas and co-ordinate project work in their respective areas. identifying the organisation’s strengths. The role of the Portfolio Council and the important interface it creates between the executive and the project level. representing the project management level.

which in turn contribute to the intended business outcomes. The ODPM™ process is activated when the project sponsor appoints the project manager. tools. an environment is created where each person on the project understands what he or she must deliver and how their performance will be measured. the outer wrappers of strategy and business belong mainly in the client’s domain. These results are objective directed and link to the performance measures to give direction to team-level planning. Organisations have different business planning needs. It crystallises cross-functional authority and performance accountability. Using the Wrappers™ Model Projects making up the portfolio reflect upper management’s decisions on the combination of initiatives that will best enable the organisation to achieve its strategies. This avoids the uncertainty that often permeates a project as it approaches critical delivery times. The project Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww. Proposals become projects once they enter the portfolio and a project sponsor is appointed to oversee the project at upper management level.za • Po st: PO Box 2844. which belongs at team level. and how their individual performance is measured. Through ODPM™.a lusa ni. especially when team members come from various functional areas of the organisation.co. The entire Wrappers™ approach does not have to be applied to all projects. 2132 . These deliverables lead to project results. Team members can now focus on the work required to achieve the deliverables. The sponsor in turn appoints a project manager responsible for managing the project process. depending on the industry and market segment in which they operate. Outputs from the application and management of this process will be project deliverables that are to be handed over to the Project Wrapper and ultimately to the Business Wrapper to be integrated into the business or operationalised. and techniques sequenced in a systematic and logical manner. This approach integrates the project deliverables and clearly demonstrates contribution towards business outcomes. An essential component of the BFPM™ approach is a project planning process that focuses on measurable results and not on detailed planning.project is derived partly from the sponsor and partly from interpersonal influences. For purely project organisations such as software development companies and contractors. Sa xonwold. The ODPM™ Process At the heart of the Wrappers™ model is the Objective Directed Project Management (ODPM™) process consisting of a series of interrelated steps. Project managers and team members expand these results to the next level — the task deliverables. Team members take on the responsibility for planning the work to achieve the deliverables. From this planning will flow an understanding of what each individual contributes towards a deliverable.

a lusa ni. prioritisation. Performance Measures across the Wrappers™ Performance measures are drawn from organisation objectives and goals. while business project managers are Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww. BFPM™ is capable of delivering business-focused results from projects in a fuzzy to clear manner. but it is the stakeholders’ perception of value to the organisation that determines overall success. Project performance measures require consideration in terms of the project management process as well as project results. ultimately leading towards the achievement of strategy. within cost. The results delivered by the ODPM™ process are assimilated into the business by moving from the core of the sphere outwards. These flows ensure that upper management and the executive are kept informed. Sa xonwold. Delivering projects on time.  product produced to functional specification. The conceptualisation. Through the progressive elaboration nature of the Wrappers™ concept. as do the control mechanisms. Project business performance measures include outcome focused measures such as:  project results achieved and integrated into the business. These measures guide the project team and give direction to results-focused planning. This indicates efficiency. 2132 .co. and to specification is only part of the picture. as they strive to convert strategies into projects into outcomes.  contribution to organization goals.  stakeholder satisfaction with process and results. Although a balance of both is required. There is a danger in imposing project management methodologies that direct team members to measure how well the project management process is delivered (efficiency) rather than how well the project business results are being achieved (effectiveness). Likewise. Technical project managers tend to focus more on process.za • Po st: PO Box 2844. which is also the basis of the ODPM™ process.  budget versus actual costs. and built into the project business case. Process performance measures are typically output focused such as:  timeliness of deliverables.management wrapper enveloping the ODPM™ process and the ODPM™ process itself are the most relevant to contracting organisations. monitoring and reporting move outward from the core. objectives. and initiation of projects move from the outside of the sphere inwards. Other organisations need to apply all the levels of the model. Such reporting enables the organisation to assess project progress against business cases. project success is determined by stakeholder perception of success. selection. and strategies.

This is often the case where only operations are in a position to achieve the business results. and the project team becomes a new operations section. but relatively little to their implementation through projects. 4. a balance between the two is required. This could consist of the following measurements: 1. Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww. The business focused project management processes represented by the Wrappers™ model are vital and should not be ignored if an environment conducive to successful project management is to be created.a lusa ni. quality. Upper management. Ideally. Strategies need to be rapidly translated into daily work if they are to have any effect. market share. However. economic value-add. Client measures such as satisfaction. An approach to the measurement of both business and process-focused attributes is the use of a Project Balanced Scorecard. and systems. The project core team should guard against accepting responsibility for delivering results that they cannot achieve. return on capital employed. Measuring business results will ensure that both the project core team and functional managers focus on what is important to the organisation. Projects achieve strategies but do not create them. the project team effectively hands over to themselves. Project process measures such as cost/time performance. retention. 3. organisation culture. There are exceptions. 2132 . As a model. productivity. etc.more concerned with business results. Summary Strategies and projects go hand-in-hand.co. determined by the project type. Sa xonwold. cost savings. training. 2. empowerment. Financial measures such as growth. The Wrappers™ model cannot effectively operate in an organisation that does not value and support project management as a key managerial competency. Learning and development measures such as motivation. etc. must ask for project measures that are wider than the usual process measures. Many organisations devote much time and effort to formulating strategies and business plans. etc. team satisfaction. it is the responsibility of the project team to deliver to operations the products that will enable them to achieve the business results. use of product. particularly where a project creates a new product or service. In this case. Reporting to key stakeholders will become more meaningful and build a positive perception. Wrappers™ lives through the sincere and honest actions of upper management and the committed support of project and functional managers. Projects can only be initiated as a result of business needs and strategies. use of resources. The ability to execute strategic initiatives quickly and effectively is fast becoming a critical business attribute as companies respond to a rapid pace of change.za • Po st: PO Box 2844. new clients. and specifically sponsors. etc. Building an environment that supports project management is essential for organisations that are serious about converting their strategies into reality.

2132 .co.Reference: Frigenti E and Comninos.a lusa ni. Sa xonwold. 2002 The Practice of Project Management – a guide to the business-focused approach Kogan Page © Denzo Limited 1989-2006 Tel: 011 447 7470 • Fax: 086 686 8425 • Website: w ww.za • Po st: PO Box 2844.