PROJECT

CATEGORIZATION
SYSTEMS
Aligning Capability with Strategy
for Better Results

Project Management Institute

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86911$CHFM 09-07-05 10:22:57
 PROJECT
CATEGORIZATION
SYSTEMS
Aligning Capability with Strategy
for Better Results

Dr. Lynn Crawford

University of Technology, Sydney
Dr. J. Brian Hobbs
University of Quebec at Montreal
Dr. J. Rodney Turner
Erasmus University, Rotterdam

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ISBN: 1-930699-38-7

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 Table of Contents

Executive Summary ix

Chapter 1: Introduction 1
What is a project categorization system? 1
The Organization of the Report 3

Chapter 2: The Nature of Categorization 5

Classification versus Categorization 5
Introduction to the Nature of Categorization 6
Principles of Categorization System Design and
Management 7
Limitations 10
Politics of Categorization 11
Categorizing Projects 12
Conclusion 15

Chapter 3: Methodology 17
The Literature Review 17
Focus groups to investigate project categorization systems in
Organizations 17
Web-based questionnaire to validate and expand on results
from the small preliminary sample 19
Development of a preliminary model based on a synthesis of
the results to date 19
Validation of the preliminary model with the organizations
from phase two 19
Analysis of the results, modification of the preliminary model,
and writing of the final report 20

Chapter 4: Presentation of Results 21

Project Categorization Systems are Not Immediately
Visible 21
The Formalization of Project Categorization Systems 24
Purposes and Attributes 26
The Pervasiveness of Project Categorization Systems 27
Attributes used to Sort Projects into Categories 27
Attributes, Labels and Definitions 28
Attributes Not Linked Directly to Purposes 29

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 Construction of Complex Categorization Systems 30
Difficulties with the use of Project Categorization Systems in
Organizations 36

Chapter 5: Presentation of the Model 45

Organizational Purposes Served by Categorization
Systems 45
Variation of Usage with Organizational Context 49
The Attributes used to Categorize Projects 50

Chapter 6: A Guide to the Use of the Model by

Organizations 55
Evaluation and Validation of Project Categorization
Systems 56

Chapter 7: The Use of Project Categorization by Other

Stakeholders 59
The Use of Project Categorization by Project Management
Researchers 59
The Use of Project Categorization by Libraries and
Documentation Centers 60
The Use of Project Categorization by Professional
Associations 60
A Single List of Attributes 60
Differences among Stakeholder Priorities 61

Chapter 8: Discussion and Conclusion 63

Standardized Categories of Projects 63
Implications for Research 64
PMI’s Role in Standardization 65
Project Categorization and Portfolio Management 65
Sorting Things Out 66
Implications for Practitioner Organizations 66

Appendix A: Three Examples of Categorization from Other

Fields 69
The Classification of Knowledge 69
The Categorization of Objects 71
The Categorization of Work 72

Appendix B: Focus Group Protocols 77

Who to Invite 77
Draft Letter of Invitation 78
Objectives 78
How to Set the Scene 78
Questions to Ask 79
How to Record and Share and Use/Analyze Findings 79

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Appendix C: Web-Based Questionnaire 81

Appendix D: Protocols for Validating the Project Categorization

System Model 91
Goals of the participating organization: 91
Goals of the research team: 91
Preparation of the validation sessions 91
Validation Protocols 92

Appendix E: Categorization Validation Meeting Question

Sheet 95

Appendix F: Descriptions of the Use of Project Categorization in

Organizations 99
Introduction to the descriptions that are to follow 99

Appendix G: The Detail of the Organizational Purposes

Map 135

Appendix H: The Detail of the Map of Attributes for Building

Project Categorization Systems 147

Bibliography 167

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86911$CHFM 09-07-05 10:22:57
 Executive Summary

T his document is the final report of a research project initiated

and supported by the Project Management Institute. The results
reported here are the product of an investigation of systems for
categorizing projects. The primary focus is the study of project cate-
gorization systems as they appear and are used in organizational con-
texts.
The response to the question, ‘‘What types of projects does your
organization do?’’ would be a set of labels that describes the content
of your organization’s portfolio of projects. These labels are project
characteristics that you use to name the different types of projects.
This is a project categorization system. All organizations that man-
age an appreciable number of projects have a system of categories
for describing and managing their set of projects, whether the system
be explicit and formalized or implicit and informal.
The expression ‘‘project categorization systems’’ has immediate
meaning for some practitioners, but not for others. When first
approached, many of the participants in this study stated that their
organizations did not have project categorization systems. However,
following a very brief discussion of what is meant by ‘‘project catego-
rization systems,’’ including a few examples, all participants were
able to identify systems within their organizations. Some systems
were formalized and others were informal.
Two distinct aspects of project categorization systems have been
investigated and form the backbone of this report: 1) the organiza-
tional purposes served by such systems and 2) the attributes or char-
acteristics used by organizations to divide their projects into groups
or categories. The study revealed that project categorization systems
are used for a large number of different purposes that include the
grouping of projects in order to identify the level of approval they
require, the competencies and training needs of project management
personnel, the methods and techniques that will be appropriate to
apply to their management, which budget will fund them, and their
alignment with organizational strategy. The study also revealed that
a great variety of attributes are used to divide projects into categories.
These include size, level of complexity, geographical location, and

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technical discipline. All the organizations studied have complex
project categorization systems based on multiple attributes that they
use for a large number of different purposes.
The primary product of this study is a model that is comprised of
two ‘‘maps.’’ By map, we mean a hierarchically ordered presentation
resembling a decision tree. The first map presents the multiple orga-
nizational purposes served by such systems. The second map pres-
ents the many different attributes or characteristics organizations
use to divide their projects into groups or categories. The report
concludes with a discussion of the implications for researchers and
practitioners, as well as for the Project Management Institute.

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 CHAPTER 1

Introduction

T his report is a presentation of the methodology and the results

of an investigation of project categorization1 systems that was
initiated and supported by the Project Management Institute (PMI).
The organization of both the research project and the present report
was designed to answer the following questions:
1. What can be drawn from the philosophy of science literature
and from examples of categorization in other fields that could
be useful in the study of project categorization systems?
2. How has the subject been treated in project management liter-
ature?
3. How do practitioner organizations categorize projects?
4. What purposes does project categorization serve in:
a. Practitioner organizations?
b. The project management research community?
c. The Project Management Institute?
The primary focus of this research project has been the study of
project categorization systems as they are used in practitioner organi-
zations.

What is a Project Categorization System?

If you work in an organization that manages many projects and
someone asks you to describe the organization’s project work, how
would you respond? Would you describe each project separately?
No, of course not. You would identify the ‘‘types of projects’’ your

1
The terms ‘‘classification’’ and ‘‘categorization’’ are very often used interchangeably.
The term ‘‘categorization’’ has been used in this document for the reason explained
at the beginning of Chapter 2.

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organization does. You would use names to identify the types of
projects. In so doing, you would use an explicit or implicit categoriza-
tion system to describe the organization’s portfolio of projects. In
order to make sense of the organization’s work, the members of the
organization use systems of labels for naming their projects. When
they use different labels, they are attempting to communicate the
perceived differences among the various projects.
This system of labels can be viewed in different ways. If the
project categorization system is viewed as part of an organizational
language for talking about projects, then the phenomena can be seen
from an interpretive perspective. The language develops over time
and is shared by a community of organizational members. People
invent, adopt, and adapt and use labels to describe the organization’s
projects as they perceive them. The utilized labels become the filter
through which the projects are seen and discussed. Over time, the
system of labels becomes ‘‘naturalized,’’ that is, the organizational
members use the labels without questioning. The labels’ very exis-
tence can become invisible to those who live in the culture, as they
become taken for granted. In many of the organizations studied
during this research, the people did not see, at first, that their organi-
zation had a system for categorizing projects. However, after a few
examples were given of what such a system might include, they
were able to describe their organization’s system in detail.
Only groups of projects with a name are discussed in the conver-
sations within the organization. Other possible groups of projects
are not discussed and may even be difficult to perceive. From the
point of view of the everyday workings of the organization, it is as
if they did not exist. From a phenomenological point of view, the
groupings only exist because people can see them and talk about
them.
For all of the people participating in this study, the projects are
seen as objectively having the characteristics that the labels identify
and bring to our attention. The groupings are also seen as existing
in objective external reality. This is very much a positivist point of
view. But even from a positivist point of view, the choice of groupings
is somewhat arbitrary, for projects have a very large number of char-
acteristics or attributes that could be used alone or in combination
to identify almost innumerable groupings. However, organizations
use only a small set of all the possible labels for grouping and describ-
ing their projects. This choice of names brings certain groups and
features to the forefront and ignores others. Therefore, even from a
positivist perspective, there is a question of choice among a large
number of possible categorization systems.

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 In the organizations that participated in this study, systems for
categorizing projects were mostly seen as products of the organiza-
tions’ history. This was particularly true in organizations where the
system had been in place for some time and was seen as a functional
part of its operating system. A project categorization system is thus
seen as specific to an organization, its context, and its history.
Like a language, an organization’s system of labels for describing
its projects is dynamic. In some very dynamic contexts, such as the
telecom industry in recent years, language evolves quite quickly to
capture new realities, new understandings, and new meanings. In
other, more stable contexts, the system of labels changes very slowly.
Some labels come from outside an organization, from the profes-
sional field or industry in which the organization operates. In some
cases, project categories are seen as authoritative and external to the
organization. They have been standardized in much the same way
that a dictionary authoritatively presents accepted words, meanings,
and usages.
The study of an organization’s project categorization system,
therefore, consists of identifying the labels that are used to name
groups of projects, and the usage that is made of these groupings.
This is what was done during the empirical investigation of the
research project. During this investigation, no organization with an
appreciable number of projects was found that did not have a system
for categorizing its projects, whether it was formal or informal.

Organization of the Report

Following the introduction, this report is organized into seven more
chapters. The second chapter discusses the nature of categorization
in general, including the implications and potential consequences
of categorization, as well as project categorization systems proposed
within project management practice and literature. This is followed,
in the third chapter, by a presentation of the research methodology
that was used for this study. The fourth chapter presents an overview
of the research results, while the fifth chapter presents and discusses
the model that was developed during this project. The sixth chapter
features a discussion of the use of the model in organizations, while
Chapter 7 presents a discussion of the use of project categorization
(and of the model) by other stakeholders. Chapter 8, the final chapter,
identifies the implications of this study for researchers, for prac-
titioner organizations, and for PMI.
The objective in writing this report has been to present findings
in a way that will appeal to both the practitioner and research com-
munities. The content of the report’s main body has been chosen
with the practitioner in mind. Additional information that would

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be of greater interest to the research community has been included
in the appendices. These include examples of categorization systems
from other fields, along with a detailed presentation of the methodol-
ogy, including a presentation of the research instruments (i.e., focus
group protocols, validation protocols, and questionnaire). Examples
of the use of project categorization in organizations are also presented
in the appendices. These examples may be of interest to both the
practitioner and research audiences.

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 CHAPTER 2

The Nature of
Categorization

Classification versus Categorization

F or the majority of authors, as well as those employing the rhetoric

of the topic, classification and categorization are more often than
not used interchangeably (Jacob, 1991, p. 77). Even in major dictionar-
ies such as the Oxford English Dictionary, the Merriam-Webster
Dictionary, and the Macquarie Dictionary, one term is often used
to define the other:
Classify: to assign to a category (Merriam-Webster Diction-
ary, 2003)
Categorize: to place in a category or categories; to classify
(Oxford English Dictionary, 2003)

However, writers such as Jacob (1991) have a stricter interpretation

and draw distinctions between the terms:
Classification entails a one-for-one slotting of objects, events,
or properties, based upon the apperception of a core of neces-
sary and sufficient characteristics, into mutually exclusive
classes within the hierarchical structure imposed by an arbi-
trary and predetermined ordering of reality. Categorization,
on the other hand, refers to the process of dividing the world
of experience into groups–or categories–whose members bear
some perceived relation of similarity to each other. In contrast
to the process of classification, the process of categorization
entails neither that membership within a category is deter-
mined by the apprehension of a set of definitive characteristics

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 nor that inclusion within one category prohibits membership
within another category.
(Jacob, 1991, p. 78. Emphasis added).

If Jacob’s definitions are taken as a reference point, it is very clear

that the organizational practices observed during this investigation
were examples of project categorization, and not the classification
of projects into rigid and mutually exclusive grouping or classes.
Project categorization is a much more flexible practice that allows
for considerable managerial judgment in its application. For this
reason, the term categorization will be used exclusively in this docu-
ment, except when making direct quotations.

Introduction to the Nature of Categorization

What is categorization and what are its implications for a profession?
It is such an entrenched part of our lives, and indeed the way we
think, that it is very often taken for granted. Writers such as Taylor
(1999) and Bowker and Star (2000) even go as far as to suggest that
the need to categorize and organize is an innate part of our nature.
Very little of the world around us is not categorized, and many of
the categorizations we make are an unconscious part of our thought
processes. Categorization, essentially, is a way of making things
more manageable. As Kwasnik (1992) puts it, we ‘‘create classifica-
tory schemes to organize our knowledge of the world in such a way
as to be useful’’ (p. 63).
Classification, essentially, is a means for making things more
manageable. There are few, if any, areas of human experience that
have not been ‘‘pigeon-holed’’ into some sort of category. Similarly,
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 differ-
ences between it and other entities.
Categorization plays an important role in many scientific and
professional fields. The book Sorting Things Out (Bowker & Star,
2000) presents several examples of categorization systems used in
different professional contexts, as well as a synthesis of literature
on the nature and use of categorization systems. Summaries of three
examples from this book are presented in Appendix A: categorization
of knowledge with the Dewey Decimal and Library of Congress

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systems, categorization of objects taken from anthropology, and cate-
gorization of work involving nursing intervention.
In the project management context, Wideman (2002) offers a
simple definition of classification: ‘‘the bringing together into classes
of elements that are similar, such as the grouping of costs, samples,
tests, types of work, etc.’’ To be pedantic, the label of ‘‘project’’ can
itself be considered a categorization. It distinguishes project work
from ongoing operations. Those who work in projects are also catego-
rized, first as team members, etc., and then into various team roles.
While this process of categorizing by functional role is not unique
to project work, it is indicative of the pervasiveness of categorization.

Principles of Categorization System Design and

Management
Designing a categorization system presents numerous challenges,
the first of which is where to begin. As previously mentioned, catego-
rization systems seek not only to organize a field, but also to do so
in a way that is of use to those whom it affects. In short, categoriza-
tions serve a purpose, and this purpose is responsible for shaping the
system. The scope of the system, its hierarchy, and what is consid-
ered significant in distinguishing between its entities all derive from
the system’s objectives. Similarly, the success of a categorization
system can be measured by how well it achieves these ends.
Much like a project, a categorization system must be designed
and managed against several performance criteria and constraints.
We will use this analogy between the two as a way of presenting
issues involved in the design and management of categorization
systems to members of the project management community who
are already very familiar with the former. But, it is only an analogy
and is, therefore, not a perfect representation.
The triple constraints of cost, time, and quality/performance
(and the necessary trade-offs among them) are well known to the
project management community. The design and management of
all projects must deal with these issues. However, this representation
is a simplification. There are other performance criteria and con-
straints. These include: product fit for purpose, and not just meeting
specification; client satisfaction; satisfaction of other stakeholders;
safety; environmental impact; and social/economic impact. The situ-
ation is further complicated by changes in the need to be filled and

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in the project context over the life of the project.2 There are many
trade-offs among these additional performance criteria and with ele-
ments of the triple constraint. The triple constraint can be repre-
sented as a triangle with trade-offs along its sides, as seen in Figure
2.1. The richer set of performance criteria cannot.

Figure 2.1 The Triple Constraint

Bowker and Star (2000, p. 231) state that there are three key
areas of challenge in developing a categorization system for a work
setting: comparability, visibility, and control.3 First, a categorization
scheme must provide comparability. To do this, there needs to be
some standardization of the language used to describe work activi-
ties. This greatly aids communication, ensuring understanding
among users. A standardized vernacular also means that people can
move between projects, even internationally, without having to learn
new terminology. Additionally, comparability makes it possible for
practitioners to draw on the lessons learned from similar projects,
facilitating knowledge management and increasing the likelihood
of success. Researchers also benefit, in that increased standardiza-
tion–and the comparability it brings–helps ensure that the entire
range of project experience could be drawn upon for examination
and analysis, thereby giving a more holistic picture of the field.
Professional associations could also enjoy these advantages.

2
This list may not be complete and our intention is not to contribute to this debate
in the project community, only to provide a reference point with which the reader
is more familiar.
3
The presentation here draws upon but adds to and modifies that of Bowker and Star.

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 Standardization does, however, pose its own set of challenges.
Reducing the variety and complexity of reality to a small set of
categories requires a considerable degree of simplification. In addi-
tion, rigid adhesion to a set of categories and rules for categorizing
can lead to inappropriate decisions.
The second challenge is visibility. Categorization greatly
enhances visibility. When something is categorized, it becomes visi-
ble; similarly, entities that are not identified by the categorization
scheme can be ignored, and become invisible. There are several
issues associated with visibility. For example, what territory is cov-
ered by the categorization system? In a project context, this means
deciding which activities will be included or excluded from the
system. Will non-project activities (such as operations and mainte-
nance) also be included? Which projects should be included or
excluded? Which types of projects are sufficiently different to merit
identification within the system? Which attributes should be used
to identify these differences? The system needs to identify projects
that are different and attributes that differentiate, in other words,
to identify ‘‘differences that make a difference.’’
The third challenge in constructing a categorization scheme is
control of the system’s application. Having control of the system
means being able to exercise discretion with respect to the interpreta-
tion of the rules of categorization. A categorization system is a repre-
sentation of reality. As such, it is necessarily a simplification.
Designing and using a categorization system always requires some
degree of judgment. Designing requires judgment in the identifica-
tion of the categories and the rules for categorizing. Since the rules
will never be perfectly unambiguous, some judgment or discretion
will be necessary in their interpretation and application. During
use of the system, judgment must also be exercised to account for
unforeseen or changing circumstances. In short, some discretion
will be necessary. Exercising discretion, in turn, will require both
judgment–which is often based on experience and training–and orga-
nizational power.
These three challenges can also be represented as a triangle, with
trade-offs being necessary along the sides as shown in Figure 2.2.
In a perfect scheme, these three areas are balanced in such a way
that the benefits of each are enhanced without any one area yielding
ground to another. However, such a balance is a practical impossibil-
ity, since each of the three areas trade off against the others and
cannot be advanced simultaneously. High levels of comparability
and visibility negatively impact on user discretion, thus affecting
the manageability of the system. Increased user control takes away
comparability, as it introduces variance among users. Increasing the

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Figure 2.2 The Three Challenges of Categorization Systems

number of categories and the number of attributes reduces standard-

ization and comparability. The interplay between control and visibil-
ity is complex. For anything to be controlled, it must be visible;
therefore, making things visible also makes them potentially con-
trollable. Part of the ‘‘game’’ of control is played out by selectively
making other people’s activities visible, and by making some of one’s
own activities visible while hiding others. An understanding of the
interactions and trade-offs among comparability, visibility, and con-
trol is essential to the design and management of a categorization
system. The effectiveness of the system will depend to a large extent
on the interplay of these issues.

Limitations
In the same way the triple constraint does not indicate all constraints
and performance criteria that projects must be managed against,
several other issues must be dealt with when designing or using a
categorization system. Some of these issues have to do with the
manageability of the system. For it to be of use, it must be parsimoni-
ous. It must have a limited number of categories with simple rules.
The cost of designing, implementing, and using the system—includ-
ing the managerial effort required for adaptation and control—must
also be realistic.
Outside of design, a system must be accepted by those whom it
affects for it to work effectively. Implementing or changing an exist-
ing project categorization system is an organizational change. As
such, its success depends on issues of ownership, process, and per-
ceived interests. The system must accurately reflect the participants’
real-world experiences. This is not always easy, since everyone’s
experiences vary; as such, different users may have different percep-

10

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tions of the system and its fit with work practice. This can result
in a fracture where ‘‘the messy flow of bodily and natural experience
must be ordered against a formal, neat set of categories’’ (Bowker &
Star, 2000, p. 68). A categorization system must use terminology
and categories that are present in the organizational culture. There
is often a tension between clear, consistent, and scientifically based
categories, on the one hand, and intuitive, common sense, and well-
accepted terminology on the other hand.
By nature, categorization systems seek to describe something as
it exists at a particular moment in time. As such, a scheme designed
to categorize a complex and evolving field runs the risk of excluding
future changes and developments. In a work context, this is of partic-
ular concern as the nature of the whole set of projects and their
context evolve, and as new tools and techniques are introduced to
address current managerial needs. If the scheme is not relevant to
current work practices, it will not be used.

Politics of Categorization
It was previously noted that the purpose, or needs, of a categorization
system are the primary factor in shaping that system. A system
having multiple users with different needs can result in conflicts
that, if not resolved, can become embedded in the system and, there-
fore, affect its functionality. However, in the resolution of these
conflicts, the system’s effectiveness may be compromised.
In the development of any categorization system, decisions have
to be made with regard to choosing categories and what is to be a
visible part of the system. Decisions must also be made with respect
to discretionary decision-making. Interests and biases are at work.
As Bowker and Star note, ‘‘the spread or enforcement of categories
. . . involves negotiation or force’’ (2000, p. 44). What is considered
significant in differentiating between the entities of the system is
subjective and dependent on one’s perspective, on the need one has
for the system, and the impact the system will have on one’s position.
People responsible for financial management, strategic planning,
human resource management, and project management methodol-
ogy will all have different points of view and different needs. Some
sort of compromise will need to be negotiated during the system’s
development. Alternatively, where no negotiation takes place, a cate-
gorization is imposed on users who have their own purposes and
needs, which they then must try and address through a potentially
ill-fitting system.
Practicalities can also be a force in selecting categories. To cate-
gorize every entity in the scope of a system is impractical. What is
included and what remains outside the system is reflective of politics

11

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and power relationships. A system will not be used unless it is
practical and functional, and an overabundance of categories can
cause confusion as well as reduce the effectiveness of the system.
Necessarily, a line must be drawn and the decision as to where it
is drawn is indicative of where the power lies in the development
of the system. This can be dangerous as ‘‘each category valorizes
some point of view and silences another’’ (Bowker & Star, 2000,
p. 5). However, without proper negotiation and consideration, exclu-
sion can occur, thereby rendering some things wrongly invisible and,
as such, negatively impacting on the effectiveness of the system.
Too strict a categorization can lead to the loss of user discretion,
particularly in a work setting. This may result in a loss of understand-
ing, particularly among new users, as the system’s categories are
taken as objective truth. This can also affect potential development
of the system. Such over-governance and loss of autonomy is gener-
ally not evenly distributed across the categorized site where ‘‘the
loosest [categorization] of work is accorded to those with the most
power and discretion who are able to set their own terms’’ (Bowker
& Star, 2000, p. 46).

Categorizing Projects
Kwasnik (1992) and Doty and Glick (1994) argue that categorization
systems can be considered as theories. Categorizations, like theories,
are tools with which to make sense of a situation. As previously
indicated, a categorization system is shaped around a purpose, in a
similar way that theories are built around desired ends. Similarly,
in order to build a theory, it is necessary to organize the field in a
meaningful way. As Doty and Glick state, ‘‘when typologies are
properly developed . . they are complex theories’’ (1994, p. 1).
Shenhar and Dvir (1996) lament that in spite of the widespread
application of project management in organizations, there has not
been corresponding development of project management theory. The
explanation they provided for this is that, for the majority of project
management literature, there is a tendency to assume that all proj-
ects are essentially the same and, as such, that similar management
techniques can be applied to all projects. It therefore follows that
the development of a comprehensive categorization of projects could
potentially lead to the emergence of theories of project management
and, ultimately, to improvement in the effectiveness of projects.
There has been a tendency within project management to ‘‘paint
all projects with the same brush’’ (Wirth, 1996). Payne and Turner
(1999) note that many organizations employ a common approach to
all the projects in a program in the belief that it offers advantages;
such perceived advantages include consistency in reporting, stream-

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lining the calculation of resource requirements, allowing people to
move between projects, and affording new managers the opportunity
to use smaller projects as preparation for larger projects. However,
in a review of project managers’ real-world experiences, it was discov-
ered that there was greater success when procedures were tailored
to project type than when a common approach was used. Payne and
Turner (1999) also discovered that it was possible to adapt manage-
ment style without sacrificing the advantages offered by the common
approach. As such, the identification of project type should be consid-
ered an important part of project work.
To date, project management literature dealing with the topic
of categorization has been sporadic and disjointed. Most writers
engaging the subject have done so independently, often in a way
unique to their particular environment, resulting in the lack of a
unified view on the subject. This is counterproductive, since one of
the key benefits that categorization can offer project management
is standardization and adherence to international practice and dis-
course. Similarly, the current lack of a consistent approach to catego-
rization means that the resultant systems are of less benefit to
researchers and professional associations, as they provide no means
for adequate comparison across industry sectors or geographic loca-
tions. Practitioners may also find these ‘‘one off’’ categorizations to
be a hindrance when it comes to moving between organizations and
countries. Evaristo and van Fenema (1999) add that agreement on
how to determine project type is a necessary step in developing new
methods and tools for project management that are effective on
different types of projects.
Given the pervasiveness of categorization and the benefits it can
provide a profession, an array of various systems have been proposed
within the project management literature. These have ranged from
all-encompassing systems that can be applied to all projects to sug-
gestions for practitioners regarding what attributes should be consid-
ered significant in particular types of projects. Turner and Cochrane
(1993) have suggested a 2 x 2 matrix in which projects are grouped
based on how well defined are the goals and methods for achieving
them. This results in four categories that the authors feel provide a
boon to practitioners in selecting start-up and management tech-
niques. These four categories include the following: Type 1: goals
and methods are well defined; Type 2: goals are well defined, methods
are not; Type 3: methods are well defined, goals are not; Type 4:
neither goals nor methods are well defined. Bubshait and Selen
(1992), in examining the relationship between project characteristics
and management techniques, present a categorization where projects
are grouped based on industry sector and application area. This cate-

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gorization is an obvious one for researchers, professional associa-
tions, and organizations dealing with a wide variety of different types
of projects; however, there is little benefit to practitioners who would
tend to deal mostly with projects from the same sectors and areas.
Youker (2002) suggests that the most important and useful break-
down of project type is by the product or deliverable of the project.
Projects grouped based on their product, Youker contends, bear hig-
hly similar characteristics and, therefore, require similar approaches.
This system assists in estimating, as well as selecting methods and
managers. Floricel and Miller (2001) present a categorization of engi-
neering projects based on their strategic systems for coping with
risk. Approaching projects in this way allows for the unexpected,
and helps ensure the implementation of project governance struc-
tures that are suitably flexible and robust. Many organizations, in
order to better facilitate reporting and access information on past
projects, use numeric tagging systems as advocated by Peart (1971).
Peart recommends the use of a unique numbering system, including
prefix digits to denote project types (e.g., export work, government
work, and private research) that can be further subdivided with things
such as contract type, etc. (1971, p. 147).
A significant contributor to the area of categorization in project
management has been Aaron Shenhar. In his individual work (1991;
1992; 1993; 1996; 1998), as well as in collaboration with other writers
such as Max Wideman (1996; 2002) and Dov Dvir (1996), Shenhar
has developed a multi-dimensional categorizing scheme for projects.
The Shenhar model has been through three stages of development.
Initially, a one-dimensional categorization was used that separated
projects into four categories based on the level of technology
involved: low-tech, medium-tech, high-tech and super high-tech
(Shenhar, 1991). Coming from an innovation and technology man-
agement background as it did, this model was most applicable to
new product development projects. By Shenhar’s own admission,
this model excluded many projects–including research projects–and
comprised ‘‘only projects that combine materials, components, infor-
mation and methods into a new piece of hardware, a service, a new
process or a new organization’’ (p. 11). In its second stage of develop-
ment, the dimension of system scope was added at three levels:
assembly projects, system projects, and array projects (or programs).
Again, this categorization was focused, essentially, on new product
development projects (Shenhar, 1992). Thirdly, the dimension of
pace was introduced, since the time frame of a project influences
the way in which it is managed. This model was known as the
UCP Model (uncertainty, complexity, pace); specifically, uncertainty
pertained to technology, complexity to system scope, and the new

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dimension of pace (time) was added. The model could be said, on
the whole, to be concerned with risk since ‘‘as one moves further
out on each dimension, the risk involved in the project increases’’
(Shenhar, 1996, p. 2). Shenhar and Wideman (2002) further expanded
on this model by differentiating between ‘‘craft’’ products and ‘‘intel-
lect’’ products.
Literature on categorization within the field of project manage-
ment has, for the most part, focused on tailoring management prac-
tice to suit project type (Pinto & Covin, 1989; Shenhar & Wideman,
1996; Shenhar & Nofzinger 1997; Dvir et al., 1998; Shenhar, 1998;
Payne & Turner, 1999; Besner & Hobbs, 2004). An organization
adopting one of these project categorization systems would do so
for the purpose of identifying the project management practices that
are best suited to each of the different types of projects. There has
been very little in project management literature that addresses other
organizational uses for project categorization systems.
A notable and recent exception has been the literature on project
portfolio management. The grouping of projects into categories is
an essential step in the project portfolio management process (Cooper
et al., 1997; Dye and Pennypacker, 2000; Archibald, 2001; Aalto,
2001). Archibald (2001) breaks the project portfolio process into
twelve basic steps, the first three of which are: to define the project
portfolios required within the organization, to define the project
categories within each portfolio based on uniform criteria for the
entire organization, and to identify and group all projects into catego-
ries and programs.
Managing a portfolio of projects very clearly requires the group-
ing of projects into categories. The purpose for these groupings is
quite different from the groupings in the above-referenced literature.
Portfolio management focuses on project selection, allocation of
financial and other resources, the alignment of the portfolio with
organizational strategy, monitoring and controlling the attainment
of strategic goals, balancing the portfolio, maximizing value to the
organization, and providing visibility to upper management.

Conclusion
The examination of non-project management-related material on
categorization has identified two important points. First, categoriza-
tion systems are driven by the purposes they serve–and categoriza-
tion can serve many needs. Second, the design and use of a categoriza-
tion system in a professional or organizational context brings many
interrelated issues into play. Project management literature has
focused on a limited set of uses to which project categorization
systems could be put. In addition, there has been little interest in

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project management literature on the use and impact of project cate-
gorization in organizational settings. This study aims to fill these
relative voids by focusing on the organizational purposes served by
project categorization and the dynamics of their usage. The next
chapter presents the steps through which the research project was
executed.

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 CHAPTER 3

Methodology

T here were six phases in the life cycle of this research project
from the time the proposal was accepted until the writing of
the final report. The phases were as follows:
1. Literature review.
2. Focus groups to investigate project categorization systems in
organizations.
3. Web-based questionnaire to validate and expand on results
from a small sample.
4. Development of a preliminary model based on a synthesis of
the results to date.
5. Validation of the preliminary model with the organizations
from phase 2.
6. Analysis of the results, modification of the preliminary
model, and writing of the final report.

Literature Review
Reviews of three distinct sets of literature were conducted. These
included: a review of the theoretical basis for categorization systems,
including implications and potential consequences of categorization;
a review of categorization in fields other than project management;
and a review of project categorization systems proposed within proj-
ect management practice and literature. The results of the literature
review, which were presented in the previous chapter of this report,
also appear in Appendix A.

Focus Groups to Investigate Project Categorization

Systems in Organizations
The literature review identified the characteristics of categorization
systems, the potential uses they serve, and the impacts their usage

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could have. Focus groups were organized with a small sample of
organizations in order to validate the results of the literature review
and, more importantly, to gather first-hand information from project
management organizations. The focus group protocol that was devel-
oped is presented in Appendix B.
The objectives of the focus group sessions were to:
● Gather information on the categorization systems that are in
place in the participating organizations
● Determine the uses (needs) for project categorization systems

● Gain insight into the understanding of project management

practitioners and other organizational representatives concern-
ing the nature of different projects and contexts, and the extent
to which such differences need to be recognized (categorized)
and addressed
● Identify the essential qualities project categorization systems

should possess
● Identify the problems and benefits arising from project categori-

zation systems.
The original intent was to conduct focus groups with six organiza-
tions. However, the results from the early sessions were so rich and
varied that two more sessions were conducted. Each session brought
together eight to ten representatives of different groups within the
organization, including individuals from project and program man-
agement, project management office, human resources, and any
other group with an informed view on the topic.
The participating organizations are from Australia, North
America and Europe. The sample is comprised of: two financial
institutions (a mutual bank and a private bank), three engineering
and construction divisions of large public utilities (in the rail, road,
and electric power sectors), two consulting firms (one offering project
and business management services, and the other offering engineer-
ing and project management services), and the project management
arm of an international aid organization.
A further opportunity arose to conduct a focus group comprised
of single representatives of different organizations. Thus, nine focus
groups were conducted in all. This provided a rich description and
analysis of project categorization systems as they exist and as they
are being used in several different organizations. A summary of the
information collected from these organizations during both the focus
groups and the validation sessions conducted in phase five is pre-
sented in Appendix F.

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Web-Based Questionnaire to Validate and Expand on
Results from the Small Preliminary Sample
The results of both the literature review and the nine focus groups
were analyzed. Based on this analysis, a Web-based questionnaire
was designed to validate and complete the data gathered during the
first two phases of the study.
The questionnaire was designed primarily to gather the following
information:
● Demographic information of respondents, their organizations,
and their projects
● The need for and existence of categorization systems

● Their level of formalization

● Benefits provided to the organization

● Management of the project categorization systems

● Attributes used to categorize projects

● Factors that are essential to a functional categorization system.

Project management personnel from around the world were invited

to complete the questionnaire, and a total of 119 usable responses
were received. The Web-based questionnaire is presented in Appen-
dix C.

Development of a Preliminary Model Based on a

Synthesis of the Results to Date
The authors got together for a working session with all the data
from the literature review, the focus groups, and the Web-based
questionnaire. During this working session, a preliminary version
of the model and the research results presented in this study were
developed. A strategy and protocols for the validation sessions with
the eight organizations that had participated in the focus groups in
phase two were also developed.

Validation of the Preliminary Model with the

Organizations from Phase Two
Validation sessions were held in seven of the eight organizations
that had participated in the focus groups of phase two. In one of
these organizations, it was not possible to bring the participants in
the original focus group together for a face-to-face meeting, so the
validation process was done with each person individually. Also,
because several people had moved to different positions or organiza-
tions, it was not possible for all those who participated in phase two
to participate in the validation sessions of phase five. However,
sufficient participation was obtained to ensure that the session objec-
tives were met.

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 For the research team, the objectives of the validation sessions
were to confirm that:
● The model is easy to understand and use

● The model has no major omissions, either in terms of the

purposes that categorization systems fulfill or the attributes
that are used to group projects/programs
● Its use is perceived as creating value when evaluating current
categorization systems, or when modifying or creating such sys-
tems.
Generally, the purpose of validation sessions was to receive com-
ments on the model, its ease of use, and its usefulness. The validation
session protocols are presented in Appendix D. These were presented
to the participants in the form of a questionnaire that is presented
in Appendix E.
The validation sessions were a rich source of information. Sev-
eral useful comments were received regarding the way the model
was presented. Additional information was also gathered regarding
the organizational reality that surrounds the project categorization
systems used by organizations. A summary of this information has
been integrated with the results of the original focus group report
to form the descriptions presented in Appendix F.

Analysis of the Results, Modification of the

Preliminary Model, and Writing of the Final Report
The research team came together again to analyze all the data that
had been collected. The literature review, results of the original focus
groups, and results of the Web-based questionnaire and validation
sessions were all revisited in light of the comments received during
the validation sessions. Several minor modifications were made to
the model, particularly modifications in its presentation format. The
results of this analysis form the content of this report.

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 CHAPTER 4

Presentation of Results

T his chapter presents many of the research findings. These lay

the foundation for the model that is presented in the follow-
ing chapter.

Project Categorization Systems Are Not Immediately

Visible
In response to the question, ‘‘Does your organization have a project
categorization system?’’ the majority of practitioners respond in the
negative, even after a short explanation of what is meant by the
term. Paradoxically, after further examination, accompanied by
examples, all the participants in this study could clearly identify the
project categorization systems in use in their organizations. We argue
that any organization with a significant number of projects must
have some way of labeling the types of projects they do and that this
is, in fact, a categorization system, though possibly an informal one.
There are two explanations for this difficulty in recognizing the
systems in place:
● Categories in use are taken for granted
● Categorization is an abstract concept.

Labels for project categories come from two sources. They come
from within the organization, and can also come from the industry
or activity sector of the organization. For example, engineering con-
sulting firms often use the same systems of categories to identify
the types of project services they offer. The same terms are often
encountered in different organizations, and these typically refer to
the type of artifact being designed: process plant, civil works, office
buildings, etc. Contract type is also used very often in this industry
to identify different categories of projects. Examples include Engi-
neering, Procurement, and Construction Management (EPCM),

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design-build, cost-plus, etc. The terminology varies from one firm
to another in relation to the exact mix of services being offered. The
terminology has been learned through participation in the industry
and is frequently taken for granted. Organizations in the same geo-
graphical area and the same sector of activity tend to form a relatively
homogeneous cultural group sharing many traits, including the
terms used to identify the types of projects they perform.
Within organizations, people invent, adopt, and modify termi-
nology in an effort to make sense of their organization, its activities,
and its environment. Through their usage over time, terms used to
identify and describe the organization’s projects become an artifact of
the organizational culture. When visiting an unfamiliar organization,
one is very often struck by the ‘‘peculiar’’ use of terms that, once
explained, make perfect sense. For example, the expression ‘‘dusk-
to-dawn-projects’’ in a transportation infrastructure company refers
to projects in which execution activities must be done at night while
the transportation system is not in use, and that must return the
system to operational status by dawn each day. The term is widely
used and understood by organizational members, but when asked
whether they have a project categorization system, they might not
think of this term as a category of projects. It is simply a term that
is used in everyday life in the organization. It may be formalized in
organizational policies, procedures and documentation, or it may
not.
There is a dynamic interplay between the language used in each
organization (or organizational unit) and the language used in the
industry and the geographical location in which the organization
operates. Both emerge over time through usage; both can also become
part of the culture and might not come to mind when one is asked,
‘‘Does your organization have a project categorization system?’’
The other reason that people have difficulty identifying the cate-
gorization systems in their organizations is that the concept is quite
abstract. The question, ‘‘What types of projects do you do or does your
organization do?’’ can be answered quite readily. Yet the questions,
‘‘Does your organization have a project categorization system?’’ and
‘‘What categorization system is in place in your organization?’’ draw
negative responses, blank stares, and questions as to what we are
referring. The term ‘‘project categorization system’’ is a term not
often used by practitioners in their everyday lives, and thus has no
immediate and clear meaning for them.
In addition, responding to the question, ‘‘How does your organi-
zation categorize projects?’’ requires that the basis for categorization
be abstracted from the terminology being used. For example, a firm
might have ‘‘major expansion projects,’’ ‘‘development projects,’’

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and ‘‘operations and maintenance projects.’’ Although the meanings
may be obvious to organizational members and even outside observ-
ers, it is not clear at first glance what is the basis of this categorization
of projects. After further discussion, it becomes evident that the
projects in this case are being financed from different budgets and
that the system of categorization is based primarily on the source
of funding. However, the deliverables in each case are different, so
the system could also be seen as a grouping by product type. Projects
in theses categories also vary as to their strategic importance, size,
number, and allocation of responsibility for their approval and man-
agement. Analyzing the situation to determine the basis of categori-
zation involves dialogue with organizational members to determine
the meaning behind terminology and its use. Using such terms in
the everyday workings of an organization does not require this level
of abstraction. People use terms in a community in which others
understand the meaning without analyzing the underlying basis of
the meaning. However, when the underlying basis is brought to the
forefront through discussion, the meanings become quite visible and
can readily be identified and discussed. This has happened in many
individual conversations and group discussions on organizational
categorization systems throughout the life of this research project.
The Web-based questionnaire queried respondents on project
categorization in their organizations. Responses to the question,
‘‘Does your organization categorize projects?’’ are distributed as
follows:

Table 4.1 Does your organization classify projects?

Apparently, the majority of those who have chosen to respond to

the questionnaire feel that some form of project categorization is
taking place in their organizations. Some, however, see no such
activity. The results of the questionnaire are undoubtedly biased in
the sense that people not seeing the relevance of project categoriza-
tion would not likely respond to the questionnaire. In a random
sample of project practitioners, it is likely that a large percentage
would indicate that no project classification system existed in their
organization. The lack of immediate visibility makes the obtaining
of a reliable measure of the percentage of organizations with a project
categorization system methodologically challenging. A survey ques-

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tionnaire would not produce reliable data. As was stated at the begin-
ning of this chapter, discussions during the focus groups and a large
number of discussions with practitioners throughout the world during
2002–2003 have lead us to the conclusion that any organization with
a significant number of projects must have some way of labeling the
types of projects they do, and this is, in fact, a categorization system—
though possibly an informal one. The next section discusses the factors
that are associated with the systems’ formalization.

The Formalization of Project Categorization Systems

The respondents to the questionnaire were queried as to the nature
of their systems. The responses are presented in Table 4.2.

Table 4.2 Nature of project classification system

As can be seen from this data, there is considerable variation in the

extent to which categorization systems are consistent throughout
the organization vs. departmentally-based and variable, and in the
extent to which they are formalized or not. Some respondents added
the comment that, although a system existed, it was ‘‘not always
well used.’’
A question was then posed as to the origins of the systems. The
responses are as follows:

Table 4.3 How did the system develop?

Organizations develop their categorization systems internally. The

development can be based on an ad hoc process through which an
organization’s system is likely to be the product of the organization’s

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history. The majority of systems, however, are developed intention-
ally and specifically for project categorization.
The three questions in the Web-based questionnaire were asked
sequentially, and the number of respondents indicating that their
organization has ‘‘no system’’ decreased from 16% to 9.2% to 5.9%.
This indicates a gradual recognition of the existence of project catego-
rization systems, whether formal or informal, that the researchers
experienced while face-to-face during the focus groups.
The research identified three factors that were asssociated with
the level of formalization of the project categorization systems found
in organizations: size of the organization; public vs. private; and
degree of centralized decision-making.

Size Contributes to Formalization

The relationship between organizational size and level of formaliza-
tion is the longest standing and most often verified relationship
found in organizational research (Mintzberg, 1979). Not surprisingly,
the same association was found during this research project. Of the
eight organizations participating in the focus groups, seven readily
identified their project categorization systems as relatively formal.
These organizations all had more than one thousand employees
involved in project work. The other organization with which a focus
group was organized had more difficulty identifying the way it cate-
gorized projects, and when the system was identified, it was very
informal. This is an entrepreneurial firm with one hundred and
eighty employees spread out across several cities. In this organiza-
tion, the categorization of projects was not seen as important. Project
categorization is a tool for dealing with multiple projects and, not
surprisingly, as the number of projects increase‘‘ and the set of proj-
ects becomes more stable, the use of categorization becomes more
formalized.

Public versus Private

There is some indication of a relationship between the public/private
nature of the organization and the formalization of its project catego-
rization system. There seems to have been a phenomenon of self-
selection among respondents to the Web-based questionnaire. The
percentage of respondents from the public sector was high (79%).
This may simply mean that a greater proportion of employees of
public sector organizations felt strongly enough that the issue of
categorization was important enough to respond to the question-
naire. However, no systematic variation was found between respon-
dents for public and private organizations. There is a general percep-
tion that public organizations are more formalized. This may be

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true of project categorization in public organizations. However, the
evidence of a relationship between the public/private nature of the
organization and the formalization of its project categorization sys-
tem is inconclusive.

Centralization of Decision-Making
In both financial institutions participating in this study, the project
categorization systems were put in place as part of a move to central-
ize investment decisions. In each there was a clear link between
categorization and investment decisions, with decisions being made
at a very high level. These organizations were using categorization
to manage the portfolio of projects and to align investment decisions
with strategy. When the researchers returned to one of the organiza-
tions after several months, a new CEO had been named who was
emphasizing decentralization of investment decisions. The project
categorization system was being used in a much more ad hoc fashion
and was perceived as less important than had previously been the
case. These are illustrative examples and nothing indicates that this
phenomenon is restricted to the financial sector. These examples
are indicative of a relationship between the centralization of project
approval and of budgeting and investment decisions, and the
increased formalization and visibility of project categorization.

Purposes and Attributes

This study makes a clear distinction between the purposes served
by project categorization systems in organizations and the attributes
that organizations use to sort projects into groups. By ‘‘purposes,’’
we mean answers regarding what the categorical systems are used
for in an organizational context. Examples include the grouping of
projects in order to identify the level of approval they require, compe-
tencies and training needs of project management personnel, meth-
ods and techniques that will be appropriate to apply to their manage-
ment, which budget they will be funded from, their alignment with
organizational strategy, etc. There are many reasons organizations
categorize projects. These will be presented in detail in a follow-
ing chapter.
By ‘‘attributes,’’ we mean the characteristics that are used to
sort projects into groups or categories. These include: size, level of
complexity, geographical location, technical discipline, etc. Here
again, there are many different characteristics or attributes that are
used to sort projects into groups or categories. These will also be
presented in detail in the following chapter.
The difference between purposes and attributes is important and
will form the basis for much of the presentation of the results of

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this research project. However, this distinction is again an abstrac-
tion, one that practitioners find difficult to use in a consistent fashion
while discussing their project categorization systems. The confusion
between organizational purposes served by categorization systems
and attributes used to sort projects adds to the difficulty in clearly
identifying an organization’s system.

The Pervasiveness of Project Categorization Systems

Participants were asked during the first round of focus groups to
identify the organizational purposes served by their categorization
systems. In each case, a short list of organizational purposes was
identified. These were combined to form the more exhaustive list
or map of organizational purposes that is presented in the following
chapter. When the researchers returned to the focal organizations
to validate the list, the participants were asked if they could identify
the purposes their systems served in their context and whether any
omissions could be identified. The participants went through the
list, and gave concrete examples of many of the usages found in the
list, including many that they had not identified in the original focus
group in their organization. Respondents from different parts of the
organization gave concrete examples of a different subset of the
usages identified in the list. There was a marked difference between
the short list of purposes served by categorization systems identified
in the original focus group sessions and the extensive lists of organi-
zational usages found during the validation sessions.
An organization’s project categorization system is typically seen
as serving a limited number of primary purposes. It may well have
been set up expressly to serve these purposes. However, over time,
different groups in the organization come to use the system for very
different purposes. From this, we conclude that the impact of project
categorization systems is quite pervasive in the sense that it perme-
ates the organization and can have many diverse impacts on the
organization. Those designing a project categorization system or
analyzing the workings of an existing system would be well advised
to look beyond the immediate purposes and uses of the system.

Attributes Used to Sort Projects into Categories

The literature review produced an extensive list of attributes that
have been used to sort projects into categories. The attributes used
by participating organizations, as identified in the original focus
groups, were added to this list to produce a more complete list of
attributes. The expanded list is presented in the following chapter
of this document.

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 During the validation sessions with the focal organizations, the
list of attributes was presented to the participants, who were asked
to examine the list to identify any possible omissions. As the partici-
pants examined the list, they identified many more attributes used
to qualify and categorize the projects in their organization than had
been the case during the original investigation. Many of the attri-
butes were fields to be filled in when a project was registered in the
organization’s management information system. In some organiza-
tions this is referred to as tagging. Certain attributes are sometimes
used when making specific decisions, such as the decision to sign
a contract and commit the organization to doing a project. Other
attributes were used in monitoring projects during execution. Many
of these attributes do not come immediately to mind when people
are asked what attributes are used to categorize projects. However,
projects are being qualified using this expanded list of attributes
and many examples were given of projects being grouped in many
different ways for different purposes based on different sets of attri-
butes. There are, therefore, multiple categorization systems in place
in organizations, many of which do not come immediately to mind
when one inquires about the organization’s categorization system.
A thorough investigation of an organization’s project categorization
systems may well reveal that many different attributes are being
used to categorize projects in different parts of the organization and
for different purposes. It is, therefore, not a simple task to identify
all the attributes being used to categorize projects. Here again, we
conclude that the categorization of projects is much more pervasive
than might initially have been thought.

Attributes, Labels, and Definitions

An organization’s system for categorizing projects can be seen as
comprised of attributes, labels, and definitions. By attribute, we
mean the underlying characteristic that is being used to categorize
projects. A simple example is size. Labels are the names that the
organization uses to identify the different groups of projects. An
example might be: large and small. In some instances, the label is
self-explanatory, as are many of the categorizations by geographic
location. In others, a definition must be given in order for the label
to have meaning. An example might be: larger than or smaller than
1 million US dollars.
An examination of the many examples of systems of categories
found in the literature and in the organizations participating in this
research reveals many commonalities in the attributes being used,
but significantly less commonality in the specific groupings and
labels, and in the definitions. For example, many organizations group

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their projects by geographic location, but each system is specific to
the locations covered by the organization. Size is another attribute
commonly used to group projects into categories. However, what is
a large project for one organization may be very small for another
(Payne & Turner, 1999; Turner, 1999). It is possible to imagine more
universal definitions for size such as percentage of revenue generated.
But none of the organizations investigated used such abstract defini-
tions. Those that used the attribute of size utilized a simple defini-
tion that was well suited to their context. There are, thus, many
commonalities at the level of the attributes being used to categorize
projects, but the categories being used by organizations tend to be
very specific to their context. This question will be addressed further
in the following chapter that gives a detailed presentation of attri-
butes.

Attributes Not Linked Directly to Purposes

One of the hypotheses of this research project was that there would
be a relationship between the purposes an organization is pursuing
with the use of its project categorization system and the attributes
it would (or should) use to sort its projects into categories. In other
words, an organization pursuing purpose A would choose attributes
X, Y, or Z, but not N, M, or P. Inversely, organizations categorizing
their projects with attributes X, Y, or Z would be using the categoriza-
tion for purpose A, but not B. Although the idea is intellectually
appealing, it is unsupported by our investigation. Within a specific
organizational context, a clear link exists between organizational
purpose and the categories in use. However, attempts to map pur-
poses to attributes and vice versa across several organizations have
failed. Just with the small sample from the nine focus groups, many
examples were found of the same purpose being pursued by different
organizations using different attributes to categorize their projects.
Likewise, many examples were found of different organizations using
the same attributes for different purposes.
For example, the common attribute of geographical region is
used by many organizations for many purposes. Some use it to indi-
cate which regional office will do the work, others use it to adapt
to differences in regulatory frameworks, and others again use it to
align their market penetration strategy. These are but a few exam-
ples. Likewise, many organizations group projects into categories in
order to develop specific tools and methods for each category. Many
different attributes are used for this purpose. It all depends on the
relevant sources of variation among an organization’s projects. For
some organizations, the product type or technology is the primary
source of variation; for others, it is again the geographical division,

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with international projects being managed differently from domestic
projects; for yet other organizations, the variation may be primarily
by contract type or complexity, or level of risk or size.
As can be seen from these examples, there is no direct and sys-
tematic relationship between the organizational purpose served by
the project categorization system and the attributes that have been
chosen to group projects into categories. The relationship between
the organizational purposes served by the systems and the attributes
that are most relevant is very context-specific. Two organizations
pursuing the same objective in different contexts will use different
attributes to categorize their projects. This divorce between organiza-
tional purposes and attributes makes model building in this field
more complex. The model will need to make considerable allowance
for adaptation of the organization’s specific context.

Construction of Complex Categorization Systems

None of the organizations studied had a simple project categorization
system based on a small number of attributes. The project activity of
organizations is multi-dimensional and complex, and organizations
develop project categorization systems that match important ele-
ments of this complexity. The complexity of the systems is certainly
not an end in and of itself. To the contrary, the complexity of the
systems can be a source of difficulty, as will be discussed later.
The analysis of several project categorization systems has led to
the identification of several ways in which organizations introduce
complexity into their systems using a set of attributes as building
blocks. Four dimensions have been identified and are discussed
below: hierarchical systems, parallel systems, composite attributes,
and exceptions.

Hierarchical Systems
Many of the categorization systems that were analyzed are hierarchi-
cal. An organization’s projects are divided into groups using one
attribute, and then each of the groups is further divided into sub-
groups. The sub-groups are often each further divided using different
sets of attributes. The hierarchical breakdown can continue for sev-
eral levels, often in an asymmetrical fashion.
Of the organizational responses to the Web-based questionnaire
that consistently recognized having a project categorization system
(n⳱100), 54% claim that the project categorization is hierarchical.
Figure 4.1 presents a simple example taken from the engineering
and construction division of an electric power utility that partici-
pated in this study. The system divides first by size in dollar
amounts, and divides twice by product type. As can be seen, the

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sub-divisions of product types are specific to each branch and the
system is asymmetrical, having different levels of detail in the differ-
ent branches. This system is not particularly complex, but illustrates
how organizations build complex systems of categories.
Several of the organizations that participated in the focus groups
have systems for categorizing projects that are primarily hierarchical.
Each category of projects had clear subcategories, sometimes to two
or three levels. These systems described all the organizations’ many
diverse projects in one system. The system took some time to
describe because of all the detail, but was clear and well understood
by the participants.

Parallel or Overlaid Systems

Once this hierarchical system had been described to the researchers,
the participants added that they also used other attributes to catego-
rize. These additional attributes were overlaid on the primary system
in a complementary fashion. Each of the ‘‘additional attributes’’ dealt
with an important aspect of the projects and their management.

Figure 4.1 A hierarchical project categorization system

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 The hierarchical system by size and by product type is the pri-
mary organizing principle for much of the work in this organization.
However, other ways of categorizing projects are also in use. In this
organization, the next most important categorization is by project
phase, as illustrated in Figure 4.2. The categorization by phase is
overlaid on the hierarchical categorization by size and by product
type. The system becomes a little more complex when it is noted
that doing several phases of a project in one mandate is not the same
as doing each phase as a separate mandate.
Many organizations have more than one overlay on their primary
categorization system. In this example, the distinction between proj-
ects for other divisions of the utility and projects for outside custom-
ers is the next most important categorization. This is very difficult
to illustrate graphically.
As another example, the engineering consulting firm that partici-
pated in this study has a hierarchical categorization system based
on type of product or service quite similar to that of the power
utility. The products are different, but it has the same basic structure
of products and sub-products broken down asymmetrically as in the
previous example. In addition to–and parallel to–this basic structure,
projects are also categorized by:
● Geographic region: The most important distinctions are

between international projects and those in the domestic mar-

ket. Many aspects of the projects and their management are
quite different in these two markets.
● Contract type: The bulk of this organization’s work has tradi-

tionally been in cost-plus type contracts. They are currently

doing more and more work under fixed-price contracts. The
latter are scrutinized much more severely both at the time of
contract signing and during execution. In addition, the amount
of risk being carried under fixed-price contract is carefully mon-
itored.
● Size: Two sets of policies and procedures exist in the firm’s

ISO system, one for large projects and another for small projects.
Many project management practices are thus influenced by the
size category into which the project falls.
Projects of several different product types can be found in each of
the groups produced by these three ‘‘additional attributes.’’ The
‘‘additional attributes’’ produce an overlaid or four-dimensional
matrix system. The organizations participating in the focus groups
identified several such ‘‘additional attributes’’ that are used in par-
allel.
In addition to the short list of ‘‘additional attributes’’ identified
during the original focus groups, the use of many more attributes

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Figure 4.2 A hierarchical categorization with an overlay by
phase

was identified during the validation sessions conducted in phase

five of the research project. When provided with detailed lists of
attributes, participants in the validation sessions provided many
concrete examples of the use of many different attributes for many
different purposes. Thus, upon a more thorough investigation, it
became evident that the total number of attributes used to categorize

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projects for different purposes in different parts of the organization
is quite considerable.
All of the attributes used to describe and group the organization’s
projects are not organized into one coherent and comprehensive
system. Quite to the contrary, multiple parallel systems are in place
in organizations. Respondents do not see this as dysfunctional. It
is seen rather as necessary to manage the organizations’ projects
effectively.

Composite Attributes
Some organizations use composite variables to categorize projects.
The most common example encountered was the attribute of com-
plexity. Some organizations use complexity as a single attribute, but
others define complexity using multiple characteristics to create
composite attributes. In responding to the Web-based questionnaire,
those who stated that their organizations used complexity to catego-
rize projects (n⳱57) indicated that they used an average of five attri-
butes to characterize complexity; see Figure 4.3. The frequencies

Figure 4.3 Number of attributes used to characterize

complexity

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with which different attributes were reported as being used as compo-
nents of complexity is reported in Table 4.4.

Table 4.4 Attributes used to characterize complexity

One of the participating organizations has a scale for measuring

the complexity of its systems modification projects. The ten-point
scale is built up from the following attributes: number of design
elements involved, procurement method (fixed price or not), uncer-
tainly of system requirements, reliability of data on the system’s
current operations, presence of specific technologies deemed as
sources of risk, and reliability of the contractors being used. The use
of such composite attributes is, itself, a means of simplifying the
representation of complex situations. However, their usage is more
complex than that of simple single-dimension attributes.

Exceptions
Most organizations have systems that are flexible enough to allow
for exceptions. The systems are built to handle most projects, but
the managers reserve the right to make exceptions where appro-
priate.4 This is often done as a way of making a simpler system work
most of the time, but it adds an element of complexity to what
would otherwise be a simpler system.
In the example presented in Figure 4.1, the organization uses a
division by size as defined by the monetary value of the projects as
the highest level in its hierarchical structure. In this system, small
projects are given to the department responsible for maintenance
projects, while large projects are given to departments responsible

4.
This is an important part of the control dimension discussed in Chapter 2 and
represented in Figure 2.2.

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for the design and construction of large complex systems. Each of
these product departments has sophisticated technologies and proj-
ect management methods that are well suited to the products they
deliver. The categorization system works because most maintenance
projects require simpler technologies. When a component of a main-
tenance project requires a specific input related to a sophisticated
technology, assistance is sought on a specific issue from the product
departments. However, occasionally a smaller project is undertaken
in which the majority of the content is related to a sophisticated
technology available in the product departments, and where this
technology represents the primary source of uncertainty. The organi-
zation simply makes an exception to its rules, by putting this small
project in the relevant product category and giving the project to
that department.
This example is quite simple, but multiplying the number of
exceptions does add complexity. There is somewhat of a paradox in
designing project categorization systems. Some of the aspects of
these systems that can be seen as sources of complexity are used to
keep the system simple. The use of composite attributes and allow-
ing for exceptions allows the organization to use a simpler system
but, in turn, introduces a level of complexity in the description and
usage of the system. The complexity of the categorization systems
may be another reason why people have difficulty in answering the
question, ‘‘How does your organization categorize projects?’’

Difficulties with the Use of Project Categorization

Systems in Organizations
Both the focus groups and the Web-based questionnaire identified
problems respondents saw with the use of project categorization in
their organizations. Figure 4.4 presents the list of problems with
scores indicating that the percentage of respondents to the Web-
based questionnaire who identified this item was a potential prob-
lem. As can be seen in this figure, the respondents were almost
unanimous is reporting potential problems with the use of project
categorization systems. This indicates that project categorization is
associated with problems, but does not necessarily indicate that it
is a problem area in organizations. In several cases, the participants
in focus groups were unanimous in their portrayal of their organiza-
tion’s project categorization system as long-standing, widely used,
well-adapted, clear, legitimate, and creating value. Even in these
organizations, the participants could readily identify problems asso-
ciated with the use of their categorization systems. Therefore, the
high scores for percentages of respondents reporting problems does

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not mean that a high percentage of respondents feel that the system
in their organization needs to be changed significantly or removed.
Responses to the questionnaire have been grouped into the seven
problem areas presented in Figure 4.4: 1) ambiguities, inconsistenc-
ies, and multiple interpretations; 2) bureaucratization and organiza-
tional rigidities; 3) manipulation of the system; 4) lack of visibility
of projects outside of the categories; 5) confusion at the customer
interface; 6) impact on innovation; and 7) legitimacy. The relative
frequencies with which they were mentioned in the questionnaire
are indicated in Figure 4.4. Each is discussed below.

Figure 4.4 Summary of potential problems with

categorization systems for projects

Ambiguities, Inconsistencies, and Multiple

Interpretations
A very large number of respondents to the Web-based questionnaire
(65%) reported problems of differing interpretations. Part of the diffi-
culty may stem from the level of complexity of the systems, which
33% of respondents indicate is a source of problems. This is consis-
tent with observations in the focal organizations. Even in organiza-
tions with well-established and well-accepted categorization sys-
tems, we observed differences in the meanings that were attached
to terms and cases where people said they did not know the precise

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meaning of a term that was used quite widely. In organizations where
the system was less well established the differences in interpretation
were considerable. On several occasions, the researchers observed
participants in focus groups discussing the meaning of important
terms and not being able to come to an agreement.
As has been discussed on several occasions in this document,
the expression ‘‘project categorization systems’’ can evoke different
organizational realities to different organizational members in differ-
ent contexts; witness the difficulty respondents had in answering
the question, ‘‘How does your organization categorize projects?’’ and
the variability in responses to this question as the context changed
and more information was supplied. The invisible, taken-for-granted
nature of the categories and the abstract nature of project categoriza-
tion both contribute to creating a situation where multiple percep-
tions and interpretations abound.
Some of the problems of multiple interpretation or misinterpre-
tation occur at the interface between members of the organizational
community and the outside world. In communities where the terms
are used freely among participants in the organization, the meanings
are taken for granted. However, when participants from the organiza-
tion interface with outsiders, including customers, they tend to use
the terms with which they are familiar without realizing that outsid-
ers may not understand or may ascribe different meanings. An exam-
ple of this was encountered in one of the focal organizations that is
a supplier of projects to other divisions of the same organization. The
expressions ‘‘summary and detailed feasibility study’’ and ‘‘detailed
design’’ have very clear and precise definitions that are well under-
stood by the personnel of the supplier organization. However, these
expressions are either ambiguous or have different meanings for
personnel from the other customer divisions. We have all felt the
sense of discomfort upon hearing what seems to us a peculiar use
of terminology. Complaints are often heard concerning the use of
jargon, which was identified by 10% of respondents as a specific
problem area. The use of jargon often alerts us to difficulties in
understanding. The situation where people are unaware of differ-
ences in meaning is potentially more problematic in that the differ-
ences in understanding go unrecognized.
Much to the researchers’ surprise, the project categorization sys-
tems in several of the focal organizations included non-project activi-
ties such as routine maintenance or operations, either as activities
within categories or as separate categories. As indicated by a third of
the respondents to the questionnaire, helping to make the distinction
between projects and operations is one of the benefits of categoriza-
tion. It is somewhat paradoxical that routine maintenance and opera-

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tions should be included in some project categorization systems.
This likely contributes to the lack of clarity surrounding project
categorization in organizations.

Bureaucratization and Organizational Rigidities

Well over half of the respondents to the questionnaire (73%) reported
problems related to bureaucratization and organizational rigidities.
Dividing into categories creates boundaries and, as such, increases
the level of structure in any situation. In addition, the use of categori-
zation increases the level of formalization in an organization, as the
categories are integrated into the information system, into forms
and procedures, and into decision-making processes. This, by defini-
tion, is bureaucratization.
Bureaucracy is not something that people enjoy. Even very well
adapted and efficient bureaucracy can be seen as a problem. There-
fore, some of the reporting of bureaucracy as a problem area may be
attributed to a general reaction to formalization. However, the focus
groups and questionnaire provide evidence of undesirable effects
directly attributable to the use of project categorization systems.
The perception of over-bureaucratization is probably related to the
perception that the systems are too complex, as has already been
mentioned.
In several of the organizations participating in this study, the
categorization of projects into specialist product or technology group-
ings corresponded with the breakdown of the organizational struc-
ture. In these situations, projects are allocated to a category and
to an organizational unit at the same time. The specialization of
organizational units through the development of technologies and
project management methods adapted to their lines of business was
reported as a major organizational strength. However, these special-
ist organizations can develop into silos and, as such, introduce orga-
nizational rigidities that lead to many difficulties, including a lack
of resource mobility. A large number of respondents (23%) reported
that the creation of barriers and silos was a problem.
A significant percentage of respondents (20%) reported that their
organization’s project categorization system was putting too much
emphasis on the wrong things. This problem may be related to inap-
propriate choices or to problems regarding measurement. Dividing
projects into categories requires that the attributes used to categorize
be measurable, at least qualitatively. As with any organizational
situation involving measurement or evaluation, some things are
easier to specify and measure than others. This results in the bureau-
cratic dysfunction of not measuring the right things. Another possi-
ble explanation is related to the system’s rigidity. In quickly changing

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environments, any formal system has difficulty adapting to change.
There is no reason to think that project categorization systems would
not have this problem as well.
If a project categorization system is applied too rigidly, it may
categorize projects inappropriately. Any system needs to be flexible
enough to allow for exceptions, as previously discussed. Systems
investigated in the focus organizations provided examples of organi-
zational systems that allowed such flexibility. However, as the level
of bureaucratization tends to increase with size, there is every reason
to believe that categorization systems handling larger numbers of
projects would have less capacity to manage exceptions and, thus,
might lack the necessary flexibility to place projects in the most
appropriate categories.

Manipulation of the System

It is often advantageous to have one’s projects in one category rather
than another. It may be a question of access to resources including
funding, of prestige and visibility, of looser performance require-
ments, of professional mobility, of access to organizational rewards
including remuneration, and many other advantages or disadvan-
tages. As was discussed in Chapter 2, there is a temptation to manipu-
late both the construction of the categorization system and the allo-
cation of specific projects to categories. A significant number of
respondents (31%) indicates that this was a problem in their organi-
zation.
People in upper management are certainly in the position to
influence the structure of the categorization system. In addition,
responses to the questionnaire indicate that in the vast majority of
cases, people in management positions are making the decisions as
to the placement of specific projects into categories. As these people
have considerable organizational power, the project categorization
process has an unavoidable political dimension.
Anyone in an organization can manipulate information and per-
ceptions to their advantage. A project categorization system defines
what it required for a project to be placed in a particular category.
This information can be used to identify the most advantageous
way to present a project, which could be perceived by others as
manipulating the system. Any organizational system defines the
rules of the game, and any game can be played to one’s advantage.

Lack of Visibility of Projects outside of the Categories

Several of the focal organizations and 35% of respondents reported
problems that projects not identified in the project categories do not
receive adequate attention, resulting in poor performance. The most

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common examples of this were internal and administrative projects,
in organizations that only considered mandates from outside cus-
tomers to be projects that legitimately could be captured by their
project management systems. The decision to manage a project that
does not fit in a project category as a project is somewhat arbitrary,
in that these are exceptions to the rules. Some of the organizations
reported doing this in a satisfactory manner. Others reported unsatis-
factory results. An interesting example was supplied by one of the
participating organizations. Obtaining the organization’s first ISO
certification was identified as a project, which meant that project
management methods were applied, and that project management
acquired visibility. The project to be recertified, on the other hand,
was not identified as a project, and encountered the opposite effects.
As a result, the former was a success and the latter failed to deliver
satisfactory results.
The problem of lack of visibility can be seen from the point of
view of the organizational culture and the system of categories as
part of that culture. In any culture and in any language community,
that which is named is visible, and that to which no label is ascribed
is difficult to see and to discuss. If seen at all, it may be perceived
as irrelevant. This issue was discussed in Chapter 2.

Confusion at the Customer Interface

Customers typically appreciate having a stable interface, that is to
say always dealing with the supplier organization through the same
department and the same people. The supplier organizations in our
sample had organizational structures and project categorization sys-
tems that were based on stable relationships through which the
customer organizations, whether they were internal to the overall
organization or outside the organization, acquire similar products
and services over long periods of time. This arrangement is well
suited to a stable environment in which customers’ requirements do
not vary between categories of projects. However, when a customer
needs a product or service from another project category that is
delivered by another department, the continuity of the relationship
is broken. This problem was raised during the focus groups with the
supplier organizations. Confusion at the customer interface was also
reported by 8% of respondents to the questionnaire.

Impact on Innovation
There is no consensus among the respondents to the questionnaire
as to the impact of project categorization systems on innovation. A
small, but non-negligible percentage (12%) of respondents indicated
limiting innovation as a problem area. In addition, there is likely a

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link between the issue of bureaucratic rigidities and innovation.
However, the open question (Question 37) asking for perceptions of
the impact on innovation received many differing responses that can
be summarized, as in Table 4.5. This essentially supports the results
of the previous question, in which 12% of respondents indicated
limiting innovation as a problem area, since only a slightly higher
percentage (14.3%) indicate that they consider categorization as
likely to have a negative impact on innovation. A much higher
percentage (31%) indicated that they believed categorization would
have a positive impact on innovation, while an even higher percent-
age (42%) indicated that they believed it would have no impact.
Several respondents made the point that the impact on innovation
would depend on the quality of the system and its use. Others indi-
cated that innovation depended on organizational culture.

Table 4.5 Impact of categorization on innovation

Many respondents linked the impact of project categorization

systems on innovation to project selection and funding. The opinion
of one respondent that echoes that of several others is ‘‘Rightly
classified, adequate attention and investment is made in appropriate
projects. Wrongly classified, or unclassified projects get neglected.’’
Several others noted that if selection criteria eliminate risky projects,
this would hinder innovation, yet some said that a more systematic
application of project management methodologies should support
innovation. It is, therefore, safe to say that in the eyes of the respon-
dents to this survey, the jury is still out on the impact of project
categorization on innovation.

Legitimacy
The combined impact of all of these problem areas, including the
impact on innovation if it is perceived negatively, undermines the
legitimacy of an organizational categorization system. A significant
number of respondents (26%) specifically indicated that the lack of
acceptance was a problem. As we do not have a benchmark of the
level of acceptance of other organizational practices, it is difficult
to judge to what extent this is of serious concern. However, it is

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evident from this data and the many contacts we have had during
this study, that project categorization systems are not an aspect of
project management that is well understood and very widely
accepted. Hopefully, this research project will contribute to improv-
ing the situation. The following chapter is based on results that were
developed during this research project.

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86911$$CH4 08-30-05 12:48:00
 CHAPTER 5

Presentation of the Model

T he lack of a simple relationship between organizational purpose

and the attributes used to categorize projects has led to the
development of a model with two separate components: one for
purposes and another for attributes. We have called these the Organi-
zational Purposes Map and the Attribute Map, respectively.

Figure 5.1 The Basic Model

The fundamental idea behind the model presented in Figure 5.1

is that the design, analysis, or modification of a categorization system
would require that these two distinct, but interrelated, aspects be
examined. We find that difficulties are encountered when only the
system of attributes for sorting the projects into categories is consid-
ered. Difficulties are also encountered if the two aspects are confused.

Organizational Purposes Served by Categorization

Systems
The focus groups and the Web-based questionnaire identified a large
number of different purposes that categorization systems serve in
organizations. The organizational purposes and the frequency of their
identification by respondents to the Web-based questionnaire are
indicated in Table 5.1.
In further support of the use by organizations of project categori-
zation systems for various purposes, 81% of respondents to the Web-
based questionnaire indicated that personnel are chosen according to
project type; 48% indicated that their organization provides training

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Table 5.1 Organizational purposes served by categorization
systems

programs to develop skills relating to different types of projects, and

over 75% indicated that projects are executed and financial resources
are allocated to projects according to their type (see Tables 5.2 and
5.3).
The many purposes that project categorization systems serve in
organizations, as identified in the focus groups and the Web-based
questionnaire, have been used to develop an Organizational Purposes

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Table 5.2 Financial resources allocated according to type

Table 5.3 Method of execution determined by project type

Map. The aim in producing the map is to present a set of organiza-

tional purposes that is both complete and logically organized. If the
set is complete, an organization could identify all the possible uses
it might make of a project categorization system. Organizing the set
in a logical fashion makes the information easily available. The
information has been organized in a hierarchical fashion as shown
in Figure 5.2.
As can be seen in the model, the organizational purposes have
been sorted into two primary, high-level purposes: strategic align-
ment and capability specialization. Many more detailed usages have
been grouped under these two headings.
Usages grouped under strategic alignment are focused on assur-
ing that the organization is doing the right set of projects, in that
the projects undertaken are aligned with the organizational strategy
and with the organization’s capacity to undertake and complete
projects.
Usages grouped under capability specialization are focused on
doing projects right. The focus is on identifying groups of projects
whose successful management requires similar capabilities and prac-
tices. Organizations create categories of projects where it is felt
that differences in the way the projects are managed will make a
difference to project performance; for example, organizations will
often have a simple set of procedures for smaller projects and a more
elaborate set for larger projects. This is because managing these
different types of projects with different procedures will make a
difference to project performance. In other words, these are ‘‘differ-
ences that make a difference.’’ Specialization of capabilities can be

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Figure 5.2 The Organizational Purposes Map

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seen both as an immediate short-term need to ensure that current
projects are being appropriately managed, and as a longer-term
requirement to develop the capabilities to appropriately manage the
organization’s projects in the future and to promote these capabili-
ties. This is represented by the breakdown of this branch of the
model into capability alignment and capability development.
In addition to the two important, high level organizational pur-
poses under which most other uses can be grouped, another perspec-
tive was identified that was best dealt with separately. This is the
third branch of the map: promoting a project management approach
in the organization. None of the organizations undertook to imple-
ment a project categorization system primarily for this purpose.
However, several organizations implemented a project categoriza-
tion system as a part of a larger initiative to implement or reinforce
a project management approach in the organization. Fifty-five per-
cent of respondents to the Web-based questionnaire reported that a
project categorization system formed part of their organization’s
project management methodology.
Definitions and discussions of the many organizational purposes
have been inserted into The Organizational Purposes Map. We have
decided not to present this detail in the body of the text. This infor-
mation is integrated into the Map in the form of notes attached to
each branch and sub-branch. The Map is presented in Appendix G.
Note: The Map and all its detailed notes can be presented in
several formats. It can be presented in MindManager威, HTML and
Microsoft Word威 formats. HTML format allows for easy navigation.

Variation of Usage with Organizational Context

The results of the focus groups and the Web-based questionnaire
revealed wide variations in the usages made of project categorization
systems in different contexts. Very significant differences were
observed, on the one hand, between supplier organizations executing
projects that have been selected either through a bidding process in
the market or that are requested of them by other divisions of their
parent organization, and, on the other hand, organizations that
finance their own projects. A contractor, consultant, and engineering
and construction division of a utility or manufacturing organization
would be examples of the first of these. Any organization making
decisions relative to the allocation of scarce resources to projects to
meet its own needs would be an example of the second. The financial
institutions in our sample are examples of the second.
In the financial institutions, the project categorization system
is very much focused on the usages grouped under strategic align-
ment. The usages grouped under capability specialization were also

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present, but as a secondary consideration. Supplier organizations,
on the other hand, see project categorization primarily as an issue of
capability specialization, both in the short-term view of appropriate
management of current projects and in the longer-term view of capa-
bility development.
The distinctions among strategic alignment, capability align-
ment, and capability development are not watertight. For supplier
organizations, and to some extent for other organizations, strategy
is very much about appropriate allocation of scarce resources—
including key personnel—and choosing which capabilities to
develop and market. Supplier organizations do use project categories
for purposes of planning, tracking, and reporting. However, the con-
text of each organization dictates to what extent project selection
is an issue. In the engineering and construction division of a large
organization, the project selection decisions may be largely outside
of their area of responsibility. In a contractor organization, selection
may be largely a question of opportunistically bidding on jobs where
the market determines which projects are actually allocated to the
firm. However, in one contractor organization in our sample, the
issue of exposure to risk was critical. This issue came into play in
two ways. First, the project management procedures specify what
constitutes a high-risk project that requires senior management
approval. Second, the company very carefully manages its exposure
to risk by restricting the total amount of exposure it will accept at
any one time. This is achieved by controlling the projects for which
it has contracts that are fixed-price with performance guarantees.
As can be seen by these examples, the organizational purposes served
by project categorization systems are greatly influenced by the orga-
nization’s context and strategy.

The Attributes Used to Categorize Projects

Systems of project categories in organizations can be very complex.
Table 5.4 presents 37 attributes that were identified from the litera-
ture review and focus groups for use in categorizing projects. The
data provided in this table is from the Web-based questionnaire.
There is a strongly similarity, but some slight difference in order-
ing, between the ten attributes identified as most commonly used
and the ten attributes considered most important to the organiza-
tions whose representatives responded to this survey. These attri-
butes are shown in Table 5.5 in their order of frequency of use and
frequency of identification as most important, respectively.
On average, respondents to the Web-based questionnaire identi-
fied 8 attributes as being used to categorize projects. The distribution
of responses is presented in Figure 5.3.

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Table 5.4 Attributes used to categorize projects

The attributes organizations use to categorize projects can be

seen as building blocks from which elaborate constructions can be
built. The authors have attempted to identify these fundamental
building blocks from which organizations can and do build their

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Table 5.5 Comparison of most common and most important
attributes

Figure 5.3 Number of attributes used to categorize projects

categorization systems. These are presented in Figure 5.4 as 14 major

building blocks. Examples of the kinds of categories used as a basis for
each of the 14 attributes indicated below are provided in Appendix H.
Note: The Attributes Map can also be presented in several for-
mats. We have found the MindManager威 format useful for producing
the graphic in Figure 5.4, but too cumbersome for use in exploring

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Figure 5.4 The Map of Attributes for Building Project
Categorization Systems

the detail it includes. HTML is much easier to consult. It could also

be presented as a text document in Microsoft Word威.

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86911$$CH5 08-30-05 13:02:19
 CHAPTER 6

A Guide to the Use of the

Model by Organizations

A n organization could use this model to analyze its existing proj-

ect system in order to better understand its functioning. The
model could then be used to guide the redesign of the system. This
would be the most common usage because almost all organizations
already have a project categorization system, in whatever state of
formalization it might be. The model could also be used for the design
of a new system in a greenfield situation. A complete description of
a categorization system would need to cover both the organizational
purposes served by the system and the attributes used to group
projects into categories. The two would, of course, need to be inte-
grated together in a coherent fashion.
The design or redesign of a system would logically start with
the identification of the organizational purposes the system was to
serve. This would naturally start at a high level and work down
to the detailed level. The organizational purposes map provides a
structured set of possible uses and is designed to be used in this
way. First, the organization would need to choose from the map the
primary uses it wished to make of the system. The next logical step
would be to select the attributes that would be the most appropriate
for the intended usage given the specific context and objectives of
the organization.
Because project categorizations are used for many different pur-
poses in different parts of the organization, and in different stages
of the project life cycle and the organization’s planning and reporting
cycles, it is important to verify that the attributes that have been
chosen will be useful for these various purposes. It is difficult to

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imagine that this might be done in isolation from user groups. Quite
to the contrary, experience with focus groups during the data gather-
ing and validation phases of this research project indicate that focus
groups are a powerful tool for gathering information, achieving com-
mon understandings, and validating designs.
Validation of the proposed system should proceed in two steps.
First, a conceptual verification by the design team and second, a
validation with organizational stakeholders that will use the system
or be impacted by its use. Here again, the focus group is a powerful
tool. A set of validation criteria derived from the research is pre-
sented below.
The analysis of an existing system might well start from the
opposite side of the model. It could start with a search for the ways
in which projects are currently categorized within the organization
and the uses that are currently being made of the categorizations.
Both the current uses of categorization and the attributes that are
currently being applied will most likely be at the detailed level.
Moving up the hierarchy in either the organizational purposes or
the attributes maps requires a certain amount of analysis and abstrac-
tion. The description and analysis will require many cross-valida-
tions between the purposes and the attributes, in order to complete
a description of the existing system. Once the description of the
system has been completed, it can then be evaluated with the inten-
tion of making minor improvements or redesigning the system. The
criteria for the evaluation would be very similar to those for validat-
ing a new design or a redesigned system. These are discussed in the
following section.

Evaluation and Validation of Project Categorization

Systems
Both the characteristics of quality project categorization systems
and the potential problems associated with their use were identified
through the focus groups and the Web-based questionnaire. From
these, a framework was developed for the evaluation of the existing
categorization systems in the focal organizations. The framework
was used during the validation sessions with the focal organizations.
Following the validation sessions, minor adjustments were made.
The modified framework is presented below.
A Framework for Evaluating Project Categorization System(s):
a. Is the description of the organizational purposes the system(s)
serves in the organization clear and complete?
b. Is the list of categories complete?
c. Are the categories of the current system(s):
i. Easy to use?

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 ii. Linked to organizational strategy?
iii. An effective tool for communication?
iv. Unambiguous (i.e., is the fit of projects into categories
unambiguous)?
v. Free of jargon (using terminology that is well understood
by users)?
vi. Well accepted/legitimate (within the organization)?
vii. Customizable/flexible
d. Does the current system(s) take all relevant projects into
account?
e. Does the current system(s) make a clear distinction between
projects and ongoing operations?
f. Is the link between project categories and organizational pur-
poses clear and complete?
g. Is the current system(s) used consistently?
h. Does the current system(s) facilitate summarization of project
information for use by executives?
i. Is clear and concise documentation on the system and its use
available to personnel?
During the validation sessions, this framework proved to be a
useful tool for exploring the aspects of the system(s) that our research
has shown are significant. The questions are relatively self-explana-
tory.
The focus of this research project is on the use of project categori-
zations in organizations that manage significant numbers of projects.
In the following chapter, we briefly discuss the use of project catego-
rization systems by other parties.

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86911$$CH6 08-30-05 13:03:34
 CHAPTER 7

The Use of Project

Categorization by Other
Stakeholders

T he focus of the present study is on the use of project categoriza-

tion systems in organizations. However, other stakeholders use
project categorization systems. These include project management
researchers, libraries and documentation centers, and professional
associations. A systematic investigation of the use of project catego-
rization by these stakeholders was not undertaken. However, a sum-
mary examination based on the authors’ understanding of these sec-
tors of activity is provided here.

The Use of Project Categorization by Project

Management Researchers
As was shown in the literature review in Chapter 2, the use of
project categories by researchers is based on the belief that different
categories of projects are (or should be) managed differently. This
may be presented as a description of aspects of project management
that vary by type of project. The researcher may be seeking to explain
differences in outcomes based on differences among differing types
of projects. Alternatively, the type of project can be seen as an inter-
mediate variable between project management practices and out-
comes. Typically, the researcher is seeking to identify and explain
significant variations by project type. In other words, researchers
are concerned with the identification of differences that make a
difference.

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 Researchers, individually and collectively, are concerned with
the comparability of results from one research endeavor to another.
If each researcher uses different categories of projects, or if research-
ers fail to report on those characteristics that have been shown to be
associated with important variations, then it is difficult to interpret,
verify, or replicate results. The research community is also con-
cerned with the issues of knowledge accumulation, cataloguing, and
retrieval. If each research project introduces different ways of catego-
rizing projects, then it is very difficult to accumulate and retrieve
knowledge. These concerns create a strong interest in the research
community for the use of standards for categorizing projects and
project knowledge.

The Use of Project Categorization by Libraries and

Documentation Centers
Libraries and documentation centers wish to have project categoriza-
tion systems for accumulating information and making it accessible.
In this respect their interests are similar to those of researchers.
Accumulation and accessibility would be facilitated by standardized
categorization systems. Libraries and documentation centers may
also use project categorization systems to identify the markets they
serve and to communicate this information. Identifying the types
of projects they deal with can be used as a basis for specialization.

The Use of Project Categorization by Professional

Associations
Professional associations share the interest in project categorization
systems for purposes of fostering the development, accumulation,
and retrieval of project management knowledge. These would all be
facilitated by standardized categories of projects. They can also use
project categories as a basis for specialization and market positioning.
Additionally, project categories can be the basis of internal organiza-
tion, as with many of PMI’s Specific Interest Groups.
These three groups of stakeholders have very similar uses for
project categorization systems. Theirs is a very important but short
list of uses for project categorization systems, compared to the multi-
ple uses found in organizations that manage projects.

A Single List of Attributes

Although the uses of project categorization vary considerably
between the three groups of stakeholders discussed in this chapter
and organizations that manage projects, the attributes used to catego-
rize projects do not. For this reason, and because of the lack of a
consistent relationship between purposes and attributes discussed

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earlier, only one map of attributes was developed. This map incorpo-
rates attributes used by all stakeholders. This results in a model that
can be represented graphically as in Figure 7.1:

Figure 7.1 A High-level Presentation of the Entire Model

Differences Among Stakeholder Priorities

The necessary trade-offs among comparability, visibility, and control
were presented in Chapter 2 and Figure 2.2. Different stakeholder
groups tend to have different priorities. Researchers place the highest
priority on comparability and communicability of methodologies
and results. They value clear and precise definitions of categories
and attributes. The definitions are often based on abstract concepts
that will apply in many different specific contexts. It is important
that the definitions be communicated clearly. They wish others
would follow standard methods of categorizing projects, while at
the same time maintaining their own academic freedom exercised
through discretion in the choice and definition of project categories.

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 Organizations that have a role of storing and retrieving informa-
tion are very concerned with standardization and with issues of
visibility, as can be seen from the discussion of library catalogue
systems presented in Appendix A. They must be able to store and
retrieve all of the relevant material in a very standardized fashion.
Discretion must be very carefully controlled.
The interests and priorities of project practitioner organizations
contrast somewhat with those of researchers and organizations that
store knowledge. Practitioner organizations put a high priority on
adaptation to the reality of their context. This means if the standard
categorization will result in inappropriate action, discretion is used
quite freely by allowing exceptions to rules and by calling upon
alternative categorization criteria. They do recognize that compara-
bility is important for knowledge accumulation and for communica-
tion purposes. However, categories are often defined less rigorously
than in libraries and in research activities. Categories in practitioner
settings are often intuitive. They are part of the organizational cul-
ture, but may not have a rigorous written definition that people refer
to. Discussion in some of the focus groups revealed that people
who used the same terminology and thought that they had shared
meanings discovered that the meanings were, in reality, slightly
different and/or more flexible. This is analogous to the use of lan-
guage in everyday life, in which we use words flexibly. We do not
often verify that others attribute the same meaning to the words,
but when we need to, we can refer to an authoritative source, such
as a dictionary. Project categories are often used quite loosely in
organizations. Project categories are not used as frequently as many
words in the spoken language. There are, therefore, fewer occasions
to test the commonality of understanding. Their meanings go
unquestioned until some incident occurs that highlights the lack of
clarity or consistency. The focus groups provided such an occasion
and several ambiguities and inconsistencies were discovered, even
in organizations where the project categorization systems were long-
standing, well understood, and well accepted.

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 CHAPTER 8

Discussion and Conclusion

Standardized Categories of Projects

‘‘C lassification and standards are two sides of the same coin’’
(Bowker & Star, 2000). The idea of standardized categories
of projects is quite appealing. It would certainly facilitate the devel-
opment, accumulation, storage, and retrieval of knowledge, which is
so central to the concerns of researchers and knowledge management
organizations.
Practitioner organizations are also interested in comparability.
As was indicated in Table 5.1, a significant number (26%) of respon-
dents to the questionnaire indicated that ‘‘enabling better compari-
son and benchmarking across projects, divisions, and organizations’’
was one of the benefits of using their project categorization system.
Comparability across projects, programs, portfolios and organiza-
tional units is, therefore, a benefit seen by many and is within the
scope of what an individual organization can accomplish. However,
as was reported in Table 4.3, existing systems in organizations have
almost all been developed internally. The categorization systems in
the focal organizations are all very specific to the organization, its
context, its history, its portfolio of current projects, and its strategy.
Our experience with benchmarking activities outside the scope of
this research has shown us that, despite the strong interest in com-
parisons through benchmarking and the difficulty organizations have
identifying comparable categories of projects, there is no consider-
ation given to changing the internal categorization systems that are
seen as tightly linked to the organization and its strategy. A tension,
therefore, exists between the desire for comparison and the desire
for adaptation to the specifics of the context.

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 The Web-based question also contained a question as to whether
project categorization systems must be specific or generic. The
responses are presented in Table 8.1. Nearly 20% of respondents to
the Web-based questionnaire claimed that a project categorization
system should be organization-specific, but a total of over 80% indi-
cated that a project categorization system could be generic, with the
bulk of responses in favor of organization-specific categorization of
projects aligned to a generic system.

Table 8.1 Must classification system be specific or generic

This result indicates that respondents see the benefits of building

an organizationally specific system from a generic system, if one
existed. At present, no such reference exists, but this result points
to the acceptability of a recognized generic standard.
The comparison of any organization’s project data with that of
any outside source, barring the adoption of external standards, would
require the mapping of the organizational categories with those of
the outside source. If the outside sources used common categories,
it would make the importing and comparisons much easier, even
for organizations that refuse to adopt the standards for their internal
project categorization system. Therefore, these organizations would
also benefit from the adoption of standard project categories in the
research and knowledge management communities.

Implications for Research

There has not been a very significant amount of empirically founded
research in the project management tradition. Some of the most
interesting and most valuable research has centered on identifying
differences that make a difference; that is to say, differences among
project management practices that have empirically demonstrable
impacts on outcomes. A significant variation of this general line of
investigation is the identification of variation of project practices
among different types of projects that have demonstrable impacts
on outcomes. This requires the categorization of projects into types.
Researcher could use the Attributes Map presented in Appendix H
to identify relevant project categorization systems when undertaking
research projects and programs.

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 Research is one of the activities that would benefit the most
from standardization of project categories; however, individual
researchers and the research community as a whole are not organized
to influence the standardization of categories of projects significantly
in the short term. The research community would benefit if some
other stakeholder took the lead in establishing project categoriza-
tion standards.

PMI’s Role in Standardization

PMI is a very influential organization within the project management
community. It has the opportunity to influence the standardization
of project categorization systems. Our research has shown that there
is very significant variation among the many categorization systems
in practice, and that the use of any one of them by practitioners is
greatly influenced by the specific context. The literature on categori-
zation has shown that any standard involves some degree of arbitrari-
ness and that the somewhat arbitrary nature of standards does not
prevent them from filling useful roles in the relevant community
(Bowker & Star, 2000). Despite the necessarily arbitrary nature of
such a standard, we feel that the project management community
should pursue the benefits of standardization and that PMI is well
placed to play a leadership role. We, therefore, recommend that the
PMI Standards Program consider initiating a standards project on
project categorization.
The objective of a standards project would be to provide the
project management community with a reference that researchers,
documentation center managers, and practitioner organizations
could use in the interests of comparability and knowledge manage-
ment. The present research report and, particularly, the Attributes
Map could be the basis of such a project. All of the high-level attri-
butes in the Attributes Map are widely used in both the research and
practitioner communities. These would be logical starting points.
Through volunteer participation and the exposure process, the proj-
ect management community could be called upon to contribute to
and validate a proposed standard.
A widely usable project categorization system would be based
on more fundamental and universal categories than many of the
concrete examples found in practitioner organizations. The attri-
butes and categories would, therefore, be necessarily more abstract.

Project Categorization and Portfolio Management

Project portfolio management is currently a very popular topic in
project management literature. Structuring an organization’s portfo-
lio of projects into categories that are relevant to the organization’s

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context and strategy is recognized as an essential step in the portfolio
management process. However, very little guidance is given as to
what these categories might be and how they might be derived. The
present research report may partially fill this need.
Project categorization systems in the context of portfolio man-
agement need to be tailored to the organization’s specific context and
strategy. For this reason, there is less possibility of using standardized
systems of categories for this purpose. However, our research has
shown that project categorization systems are used for many differ-
ent purposes within any organization, and that creating multiple
parallel systems in any one organization adds to complexity and
confusion. Therefore, the design of a project categorization system
for portfolio management should take into consideration the other
uses to which the system may be put; this document should be of
assistance with that task.

Sorting Things Out5

There is a clear and important distinction between the purposes a
categorization system in meant to serve and the categories the sys-
tem sorts things into. This distinction is clear in the literature on
categorization in general (Bowker & Star, 2000), but not in the project
management community. To a large extent, the project management
community centers what little attention this topic receives on the
identification of appropriate categories into which projects should
be sorted, without addressing the issue of what purposes the sorting
into categories might serve. This approach is fundamentally flawed
and unlikely to produce useful results. It is our intention that this
document will help sort out the distinction between purposes on
the one hand, and categories and attributes on the other. Such a
distinction is necessary if progress is to be made in this area by both
researchers and practitioners.

Implications for Practitioner Organizations

The model presented in this document was primarily designed for
use in practitioner organizations for the analysis and design of project
categorization systems. It is our belief that the understanding of
categorization systems requires the sorting out of both the organiza-
tional purposes the systems are intended to fill and the categories
into which the projects will be sorted. The two maps in the model
are designed to provide structured approaches to each of these issues.

5
This is the title of the Bowker and Star book (2000) that the authors have used as
a reference for the literature on categorization in general.

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Our aim has been to produce work that members of the project
management community will find useful.

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86911$$CH8 08-30-05 13:06:54
 APPENDIX A

Three Examples of
Categorization from Other
Fields

A ppendix A presents three examples of categorization in fields

other than project management. These summary descriptions
are based on material from Bowker and Star (2000). The three exam-
ples are:
● The categorization of knowledge with the Dewey Decimal and

Library of Congress systems

● The categorization of objects from anthropology
● The categorization of work involving nursing interventions.

The Classification6 of Knowledge

Even something as vaguely defined and broad as the entire range of
human knowledge can be organized and classified. Libraries around
the world classify their collections for ease of access and organiza-
tional reasons. Given that an abundance of information exists and
is ever expanding, a libraries system of classification must be all
encompassing and adaptable while, at the same time, be clearly
defined and easily understood by the library’s patrons.
The Dewey Decimal Classification (DDC) system is used in
libraries in over 135 countries and has been translated into over

6
Throughout this example, the term ‘‘classification’’ is used extensively because the
systems aim to ‘‘classify’’ documents into groups that are mutually exclusive. In
principle at least, a document should fit into one group and only one.

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thirty languages. Although DDC has been employed for various other
purposes (such as a browsing mechanism for the internet) its use in
libraries remains its principle function. It was conceived by Melvil
Dewey and was first published in 1876, a time when knowledge was
expanding at a rapid rate and the public library system was becoming
more open, and provided an organizational scheme to deal with these
changes (Irwin, 2001). DDC undergoes continual development and
maintenance in the Decimal Classification Division of the Library
of Congress.
DDC is divided into ten main classes that cover all the categories
of human knowledge. These main classes represent the first digit of
the three-digit number assigned to an item. Each main class has ten
divisions that represent the second of the three digits and in turn,
each division has ten sections that make up the last digit. For exam-
ple, 500 indicates natural sciences and mathematics, 530 represents
general works on physics, while 531 denotes classical mechanics,
532 fluid mechanics and 533 gas mechanics, branches of physics
(Online Computer Library Center, 2003). Numbers occurring after
the decimal point serve to further specify the content of a particular
item. Some of the numbers for divisions and sections have yet to
be used.
Patrons of a library using DDC can find the ‘‘call number’’ of
the item they are searching for in the library’s computer or card
catalogue. The shelves of the library are organized by these call
numbers and so it is relatively easy to locate the individual item
amongst the vast multitude of other information packages. Not only
this but, as the call number is assigned to the item by its subject
matter, it also serves as a collocation device. Information packages
that are related in content are stored together thus allowing patrons
to browse related items in a specific area (Irwin, 2001). Despite the
obvious advantages of this system, it is limited inasmuch as different
types of information packages (books, journals, video and audio cas-
settes) are shelved in separate areas and, as such, a browsing patron
may miss relevant information.
An alternative system of library classification is the Library of
Congress Classification (LCC) system. It differs from DDC inasmuch
as it is not a universal classification. Whereas DDC categorizes all
human knowledge in a top down approach, LCC was developed
specifically to categorize the collection of the Library of Congress
(hence the amount of space dedicated to military and naval science).
LCC is used in many academic and university libraries throughout
the United States as well as the rest of the world. This is owing, for
the most part, to the availability online of LCC records. The tech-
nique known as ‘‘copy cataloguing’’ means that libraries can dow-

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nload records for new items in their collection for immediate use.
Since many other libraries now use it, its development is no longer
limited to the Library of Congress itself (Diekema, 1997).
The LCC system is split into 21 branches of knowledge and is
further divided by the addition of one or two more letters as well
as a set of numbers. Also included in the notation are the first one
or two letters of the author’s name and numbers which place the
item alphabetically as well as the year of publication. Like Dewey,
LCC shelves information packages by call number so patrons can
locate similar items with relative ease.
Both DDC and LCC have been suggested as a means of classifying
information on the Internet. This has merit, as both systems are
adequately expansive in their scope to categorize the abundance of
information available on the Internet. Also, it has the potential to
provide a shared context and cohere information retrieval systems
(Irwin, 2001).
Whether or not a library uses DDC or LCC matters little to a
patron trying to locate a particular book. For the most part, outsider
access to both systems is first done through the library’s computer
or card catalogue. Here, individuals can search for the item by key-
words, author, title or subject and be given the call number and
other information to locate the desired article. As such, the library
catalogue serves as a ‘‘back-up’’ classification scheme so that those
unfamiliar with the system used by a particular library can still
easily access and use it.

The Categorization of Objects

Not all categorization 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 categorization techniques used in archaeology.
As distinct from history or anthropology, archaeology is the study
of material evidence, of artifacts and their context (Doran & Hodson,
1975). As such, categorization 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, p. 71). Categorization serves archaeology as both a means of
summarizing data for descriptive purposes as well as a basis for
generating ‘‘fruitful hypotheses’’ (Doran & Hodson, 1975, p. 159).
An example that illustrates both the significance as well as the
specific nature of archaeological categorization systems is the Classi-
fication of Medieval Nubian Pottery Wares (hereinafter referred to
as the Nubian Typology). Developed by William Adams after a series

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of excavations in 1959, the Nubian Typology went through three
basic stages of development and use.
The initial objective of the typology, as Adams’ interest was not
in pottery, was simply to organize the multitude of ceramic shreds
found at the excavation site into simple groups and, as such, ‘‘free
up’’ some of the baskets that were being used to contain the artifacts.
It was not until later that other applications became evident. Due
to the arrangement of an archaeological site (the more recent items
towards the surface, on top of older artifacts), and the fact that
Adam’s knowledge of the pottery was limited, the first means for
differentiating the wares was by date. This served not only as a
method for grouping but created a chronological sequence by which
the various strata of other medieval Nubian sites could be dated.
‘‘. . . if I could learn systematically to differentiate the pottery
wares from different levels [of the site], they might furnish a
useful tool for dating any other medieval Nubian sites in
which the same wares might later be found’’ (Adams &
Adams, 1991, p. 100).

As the Nubian typology evolved the a priori assumptions that

were initially used in the grouping of the wares became inadequate
and attributes other than temporal significance were included. Vessel
shape, design and probable use became integrated into the typology
making it suitable for cataloguing the wares and not merely providing
a timeline of the site. Dating, however, still remains the principle
function of the Nubian Typology (Adams & Adams, 1991, p. 103).
Due to the highly specific nature of the Nubian typology its use
is limited. Archaeologists focusing on the medieval period of Nubian
history are the most likely to draw upon it along with students
studying the period. It is possible, however, that an individual out-
side the field of archaeology might employ the typology, for example,
to date a piece of pottery they believe originated in medieval Nubia
through its shape and patterns. Essentially though, the Nubian typol-
ogy is a tool of measurement for use in a particular area.

The Categorization of Work

Work, as an object of categorization, is complex in that it involves
knowledge and activities as well as modes of communication and
documentation. Similarly, the purposes for which a system of catego-
rizing work can be used are equally varied. Aside from making access
to the knowledge base of the profession easier, categorization also
helps to define a profession and make visible many of its attributes
that might otherwise be taken for granted.

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 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.
NIC began development in 1987 at the Center for Nursing Classi-
fication (CNC) at the University of Iowa College of Nursing. It was
developed using a myriad of research techniques including focus
groups, content and hierarchical cluster analysis, multidimensional
scaling and field-testing. NIC has been reviewed by over 40 nursing
organizations that have assisted in intervention development and
validation (Center for Nursing Classification, 2002a). As with most
other categorization systems, NIC undergoes continual review and
development. This ensures that the system reflects current clinical
practice and research. When new interventions are proposed, the
CNC checks them against the existing interventions in order to
determine the percentage of activities different to existing related
interventions. If 50% or more of the activities are unique then a
new intervention is created. Should a proposed intervention fail to
contain sufficient new activities then it is categorized as a type of
a more general intervention.
The basic role of NIC is to standardize nursing practices for ease
of transference and comparability so that a nurse fully understands
the requirements and scope of each task they perform, however, it
also serves a number of other purposes. The standardized language
that NIC seeks to establish potentially makes it easier for nurses to
move between hospitals and between areas of nursing in that previ-
ous experience is utilized and no new system of communication is
required. The need for standardized communication is also empha-
sized as patient records increasingly become computerized and
shared between hospitals. NIC also lends itself to the development
of a reimbursement system for nursing services.
It’s main purpose though, and the primary driver behind its devel-
opment is to make visible the profession of nursing. Exactly what
is involved in being a nurse has been hidden to date in the general
category of health care. By comprehensively documenting the vari-
ous duties, responsibilities and procedures involved in being a nurse
NIC makes it clear what is involved in the profession and defines

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its parameters. This combined with a standardized language also
serves as a basis for a scientific body of knowledge for nursing.
Aside from defining nursing within the medical profession NIC also
provides a means to allow the easier communication of the nature
of nursing to the public.
The NIC is beneficial to, not just nurses, but all medical profes-
sionals in that it makes clear the duties and responsibilities of a
nurse. As such, those whose duties may concur or overlap with
certain nursing interventions are aware of what is required of them
as well as what has already been or remains to be done by the nurses.
NIC also has the potential to be used by hospital administrators as
a means for assessing staff and equipment needs. Administrators
could also draw on NIC as a means to gauge the effectiveness of
nursing interventions and examine the costs of nursing care. Aca-
demically, NIC has applications in the development of nursing the-
ory, in addition to providing a means through which educators can
ensure that nursing curricula better reflect current clinical practice.
Closely related to NIC is the Nursing Outcomes Classification
(NOC) that describes patient outcomes relating to nursing interven-
tion. NOC also serves to ensure the involvement of nursing in clini-
cal evaluation science along with other health professionals (Center
for Nursing Classification, 2002b). Similarly, the North American
Nursing Diagnosis Association (NANDA) leads the way in the devel-
opment and categorization of nursing diagnosis and the identifica-
tion of key concepts in nursing science. As such, NANDA has been
a major contributor to the development of nursing knowledge (North
American Nursing Diagnosis Association). One of the great benefits
of NIC is the fact that it has been linked with both NOC and
NANDA. This means that between the three systems a relatively
holistic picture of what is involved in nursing is created which serves
to clearly define nursing as a profession and provides uniformity of
nursing care and practices.
NIC has been criticized as being scientifically outmoded and
inflexible in its attempt to create an all encompassing standardized
system. It has been suggested by others actively researching the
subject, such as Grobe (1992), that the requirement that nurses adopt
a standardized language is unnecessary and places too much responsi-
bility on nurses to ensure the system functions properly. Instead,
Grobe believes that the onus for a common language should be
on the computer systems that link hospital and other care giving
facilities. NIC researchers defend the system saying that a standard-
ized language facilitates comparability and makes movement
between organizations and agencies easier for nurses (Bowker & Star,
2000, p. 243).

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 The NIC is an American system of categorization, developed to
address the needs of American nurses and care giving institutions
with regard to American cultural values. As such, it is not appropriate
for a system of international categorization. Clark (1999) notes that
simply translating a categorization system into different languages is
insufficient for international categorization, since ‘‘nursing concepts
such as self-care which reflect the cultural values and norms of
American society may be differently perceived in other (e g., Asian)
cultures,’’ and adds that an international system must avoid cultural
imperialism. With this in mind, the International Council of Nurses
(ICN) began work in 1990 on the International Classification for
Nursing Practice (ICNP) Project. Like NIC, ICNP seeks to develop
a standardized vocabulary, dealing with interventions, outcomes and
diagnosis that can be used across clinical settings. Rather than being
a separate, overriding system, ICNP would serve to link existing
categorization schemes and provide sufficient resources for the
development or adoption of appropriate categorization systems
where there is not one.
Though categorization often occurs on an unconscious level as a
means through which we understand and identify things, the formal
development of a categorization system for an area has many benefits
such as those mentioned in the examples above. Categorization is
an organizing tool, usually with a number of applications, which
amongst other things, serves to make the areas it is applied to easier
to access, understand, interpret, control and manage.

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86911$$CH9 09-07-05 11:55:28
 APPENDIX B

Focus Group Protocols

K ey points:
● Who to invite
● Draft letter of invitation
● Objectives

● How to set the scene

● Questions to ask

● How to record and share and use/analyze findings

Who to Invite
The goal of focus groups is to gain information on a particular topic
based on the views and experiences of individuals somehow con-
nected with that topic. As such, for our purposes the group should
be comprised of those who stand to benefit from the research as well
as those who might have already formed opinions on or have specific
experience with the topic of project categorization such as:
● Individuals involved in human resource management

● Project and program managers

● Individuals involved with the project/program support office
● Anyone else in a position that provides a unique and informed
view on the research topic.
They should be drawn from across the organization so that they
represent different interests, perspectives and potential needs for
categorization of projects. Focus groups are usually comprised of 6-
10 members who, ideally, do not know each other (McNamara, 2003)
though this may be difficult or impossible to achieve as we intend
conducting focus groups within ‘‘partner’’ organizations.

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Draft Letter of Invitation
It is both a matter of practicality and ethics to provide each partici-
pant in the focus group(s) with a brief summary of the research or
more specifically what it is you hope to achieve through the research.
It is also important to make known how the information gathered
in the sessions will be used and who will have access to it. Ideally
the invitation explains how the research is relevant to the partici-
pants and how their contribution will benefit the field. Gibbs notes
that the opportunity to be part of the decision-making process and
to be valued as experts can be empowering to participants and helps
the group work well (Gibbs, 2003).
See Draft Letters of Invitation for (a) Organizational Groups and
(b) Mixed Groups.

Objectives
It is important, especially for the moderator, to have established a
clear set of goals/objectives prior to conducting the focus group. This
is to give parameters to the session and prevent members of the
group moving discussion too far from the research topic. Objectives
in this case are:
● To gather information on the categorization systems that are

in place in the participating organizations

● To determine the uses (needs) for project categorization systems
● To gain insight into the understanding of PM practitioners and

other organizational representatives concerning the nature of

different projects and contexts and the extent to which such
differences need to be recognized (categorized) and addressed
● To identify the essential qualities project categorization sys-

tems should possess

● To identify the problems and benefits arising from project cate-

gorization systems.

How to Set the Scene

After welcoming the group participants, it is best to review some of
the information that they would have already received with their
invitation (i.e., what the research hopes to achieve, how the informa-
tion from the session will be used, and the value of their contribu-
tion). It should also be pointed out exactly what goals you have for
the session so that the participants have a clear understanding of
what it is you hope to get from them. If the participants are not
familiar with each other, then it is best that they introduce them-
selves to the group prior to beginning the questioning so that individ-
uals are less inhibited about speaking up.

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Questions to Ask
Gibbs, in defining focus groups, points out that they are distinct
from a standard or group interview in that, rather than the emphasis
being on questions and responses, the focus group relies on interac-
tion within the group based on issues provided by the researcher
(Gibbs, 2003). As such, the role of the moderator is highly significant,
requiring good levels of group leadership and interpersonal skill.
Ideally, in a focus group participants take initiative discussing issues
salient to their ‘‘real world’’ experiences rather than following a
predetermined plan. McNamara (2003) suggests that the session
should run for roughly one to one and a half hours, as a result
the moderator is provided with only enough time to ask about 5-6
questions. As such, questions should be ‘‘open-ended’’ and ‘‘neutral’’
in nature, providing the moderator with the opportunity to direct
the discourse in a) the direction most relevant to the research b)
the most information rich direction. It is also important that the
questions be open-ended and neutral, so as not to influence answers
and allow respondents to choose their own terms when answering.
Suggested questions:
1. What are the attributes of the various types of projects under-
taken by your company? Does the context in which the project is
carried out affect its type?
2. Why, if at all, do you need to categorize projects undertaken
by your company? (Consider different needs you may have for catego-
rization of projects.)
3. What, if any, categorization system(s) for projects are used in
your place of business? What factors led to its/their development
and implementation?
4. What factors would you consider essential to a project catego-
rization system? Why?
5. What problems or benefits, if any, can you see arising from
a project categorization system or systems being put in place in
your company?
The focus group session should appear to be relatively
unstructured, however, it is important that the moderator retains
sufficient control to see that the group addresses all desired issues
and that the goal of session is met (Nielson, 1997).

How to Record and Share and Use/Analyze Findings

Each of the focus groups will be moderated by a researcher, who
will take some notes during and particularly immediately after the
sessions. In addition, a research assistant will be present to take
notes on both the verbal and non-verbal content of the meetings.

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 The majority of writers on the subject of focus groups agree
that tape recording (either as audio or video), complemented with
moderator notes as well as notes on the notes (observations, ideas,
etc) is the best means for recording a focus group session. Given the
nature of this project, namely that the information acquired through
the focus groups is to be shared between researchers in three regions
(Europe, North America and Australia/Asia/Pacific)–most likely via
e-mail, we should each employ audio tape recording. It is a key
ethical consideration to inform all participants of the focus groups
that they are being recorded, and with whom the information will
be shared.
A report shall be written on each focus group. The following
headlines shall be used to structure each report:
● Identification of the group: organization, location, date, and

time
● Identification of participants
● A brief description of the organization and its history
● A description of the project categorization systems found

within the organization

● The essential qualities of a project categorization systems
● The benefits of using a project categorization system
● The problems relating to the use of the project categorization

system
● Concluding comments.

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 APPENDIX C

Web-Based Questionnaire

T he questionnaire was made available online at: http://www.

zoomerang.com/survey.zgi?L222BKBXYDJZJDR89S6EW8Y0
Questions marked with an asterisk (*) are mandatory.
Part One: Background Information
1.These details are requested to avoid duplicate responses and to
provide demographic information required for analysis of results.

Name

Company Name:

Business Unit/Division:

City/Town

State/Province:

Country:

E-mail Address

2. Would you like to receive feedback on the results of this ques-

tionnaire?
● Yes

● No

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 3. Industry Sector of your organization:
● Arts/Entertainment/Broadcasting

● Automotive

● Business Services

● Constructing
● Consulting

● Defense and Aerospace

● E-commerce
● Education/Training

● Electronics
● Environment/Waste/Sewerage

● Financial Services

● Health/Human/Social Services
● Information Systems (including software)
● Information Technology

● Insurance
● International Development
● Manufacturing
● Petrochemical

● Pharmaceutical
● Resources
● Telecommunication

● Transportation

● Urban Development

● Utilities
● Other

4. *Is your organization in the public (government) or private

sector?
● Public Sector (Government)
● Private Sector

5. *What are the main application area(s) of projects undertaken

by your organization? (Select as many as apply.)
● Arts/Entertainment/Broadcasting

● Automotive
● Business Services
● Constructing

● Consulting

● Defense and Aerospace

● E-commerce
● Education/Training
● Electronics

● Environment/Waste/Sewerage
● Financial Services

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 ● Health/Human/Social Services
● Information Systems (including software)
● Information Technology

● Insurance

● International Development
● Manufacturing

● Petrochemical

● Pharmaceutical
● Recreation

● Resources
● Telecommunication

● Transportation

● Urban Development
● Utilities
● Other

6. *Are the clients of your organization’s projects internal or exter-

nal to the organization?
● Mainly internal clients
● Mainly external clients
● Both internal and external management

7. *Which of the following best describes your role in your organiza-

tion?
● CEO

● Senior Management
● Project/Program Director
● Project Manager

● Project Team Leader

● Project Team Member

Part Two: Classification–Please answer these questions in relation

to projects in your organization.
8. *Does your organization classify projects?
● All projects are classified

● No projects are classified

● Some projects are classified

9. *Is there a need to classify projects in your workplace?

● Some projects, but not all, could benefit from an organized
classification system
● Classification is definitely needed
● There is no need to classify because. . .

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10. *What type of project classification system is in operation at
your workplace?
● Formal system of classification for projects that is used through-
out the organization
● Formal system of classification for projects exists, but varies
between departments
● Informal classification system for projects that is used through-
out the organization
● Informal classification system for projects exists, but varies
between departments
● No project classification system exists

● Other, please specify

11. *How did this system develop within your organization?

● Internally developed system–developed in an ad hoc or arbitrary
manner as need arises
● Internally developed system specifically designed to meet orga-

nizational needs
● Externally developed system applied to organization
● Don’t know, a system just evolved by itself
● Other, please specify

12. *Does the system provide benefits to the organization?

● Yes
● No
● On some projects

13. *What are some of these benefits? (Mark all that apply.)
● Aids in risk assessment
● Aids in selection/adaptation of management methods to suit
project
● Aids resourcing and planning
● Allows for modification of pricing structure, approach, etc. to
suit context
● Assists in allocation of projects to business units/divisions

● Assists in budget allocation

● Assists in business development
● Assists in distinguishing between projects and operations
● Assists in estimating

● Assists in managing interfaces

● Assists in selecting Key Performance Indicators

● Enables better understanding of customers

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 ● Enables comparison and benchmarking across projects, divi-
sions, organizations
● Enables development of expertise and specialization

● Enhances credibility with clients

● Facilitates ability to draw on past experience

● Facilitates knowledge capture, storage, and retrieval

● Facilitates matching of resources to projects

● Facilitates matching of skill sets/project managers to projects

● Facilitates tracking of investment

● Facilitates prioritization of projects

● Helps convince client of need for suitable approach

● Helps sponsors see what is important

● Highlights key issues/concerns

● Increase visibility of projects
● Standardizes language of projects

● Streamlines reporting
● Other, please specify

14. *Who determines what classes projects are put into?

● CEO

● Senior Management

● Project/Program Director
● Project Manager
● Project Team Leader
● Project Team Members

● Other internal or external parties, please specify

15. *Is the way a project is executed determined by its type?

● Yes
● No
● Sometimes

16. *Does the project type change over the life cycle of the project?
● Yes
● No
● Sometimes

17. If the project type changes over its life cycle, in what ways does
it change and why?

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18. *What are some of the attributes that are used to classify projects
in your organization? (Select all appropriate answers.)
● Application area of project
● Benefit to the organization
● Clarity of goals/objectives
● Client/Customer
● Complexity
● Contract type
● Cost
● Degree of customer involvement in the project
● Degree of familiarity with project type (e.g., new versus
repeat projects)
● Discipline
● Geographical location
● Impact
● Importance of time (e.g., time to market)
● Level of risk
● Main driver or Key Project Success Factor
● Market uncertainty
● Nature of/relationship with client (e.g., new client vs. repeat
client, big prospect vs. small prospect)
● Nature of work in the project
● Number of internal or external organizations involved
● Payment terms
● Priority
● Product of project (deliverable)
● Project phase/stage in project life cycle (e.g., feasibility, imple-
mentation, commissioning)
● Resources
● Sector (e.g., specialization, market, national/international, pub-
lic/private, client)
● Size
● Source of funding
● Stage in product life cycle (e.g., research, new product)
● Strategic importance to the organization
● Technological uncertainty
● Technology
● The project manager (e.g., Toni’s projects, Vladimir’s proj-
ects, etc.)
● Time (duration)
● Type of risk
● Who controls the risk
● Other, please specify

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19. *Is there a hierarchy within these attributes?
● Yes

● No

20. * Which attributes are usually considered the most important

in your organization? (Select as many as are applicable from the
following list.)
● Application area of project

● Benefit to the organization

● Clarity of goals/objectives
● Client/customer
● Complexity

● Contract type
● Cost

● Degree of customer involvement in the project

● Degree of familiarity with project type (e.g., new vs. repeat proj-

ects)
● Discipline
● Geographical location
● Impact
● Importance of time (e.g., time to market)
● Level of risk

● Main driver or Key Project Success Factor

● Market uncertainty
● Nature of/relationship with client (e.g., new client vs. repeat

client, big prospect vs. small prospect)

● Nature of work in the project

● Number of internal or external organizations involved

● Payment terms
● Priority
● Product of project (deliverable)

● Project phase/stage in project life cycle (e.g., feasibility, imple-

mentation, commissioning)
● Resources
● Sector (e.g., specialization, market, national/international, pub-

lic/private, client)
● Size
● Source of funding
● Stage in product life cycle (e.g., research, new product)

● Strategic importance to the organization

● Technological uncertainty
● Technology
● The project manager (e.g., Toni’s projects, Vladimir’s proj-

ects, etc.)
● Time (duration)

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 ● Type of risk
● Who controls the risk
● Other, please specify

21. If COMPLEXITY is used in your organization as an attribute for

the sorting of projects, what factors are used as indicators of
complexity? (Select as many as apply in your organization from
the following list.)
● Scope/span of project
● Number of sites, locations, countries involved

● Number of functions or skills involved

● Number of internal or external organizations involved

● Clarity of goals/objectives

● Level of uncertainty and ambiguity

● Location and source of risk

● Level of technical complexity

● Stand-alone or part of a larger system or program
● Familiarity
● Organizational impact
● Other, please specify

22. *What factor(s) do you consider to be essential to a functional

project classification system? List as many as you feel necessary.
● Recognizes technical vs. cultural issues

● Easy to use
● Simple
● Linked to organizational strategy
● Addresses success criteria/factors (e.g., time, cost, quality,

urgency, etc.)
● Address appropriate business type
● Useable throughout the project life cycle

● Must be able to draw on experience

● Customizable
● Familiar

● Worldwide

● Iterative
● An effective tool for communication
● Other, please specify

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23. *Do team members have clearly defined roles that are under-
stood within the project?
● Yes, everyone’s role is understood by everybody

● Everyone has a clearly defined role, but other team members

may not know what it is
● There are clearly defined roles, but they are not always filled

● No, people just ‘‘fill in’’ where and when they’re needed

● No, there aren’t clearly defined roles, but everybody knows

what everyone else is doing
24. *Are project personnel chosen in accordance with the type of
project?
● Yes
● No

25. *Does your organization provide training in project manage-

ment?
● Yes
● No

26. *Does your workplace implement training programs to develop

skills relating to different types of projects?
● Yes

● No

27. If yes, are these beneficial in learning new skills? If not, would
you consider skills development relating to different types of
projects a beneficial way to improve project delivery in your
organization?
28. *How are project leaders chosen? (e.g., are they chosen because
of experience in the project type or because of seniority?)
29. *Do you consider that a project classification system must be
specific to an organization or can a generic classification system
be used?
● Must be specific to an organization

● Can be generic
● Organization-specific, but aligned to a generic system

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86911$CH11 08-30-05 13:37:35
 APPENDIX D

Protocols for Validating the

Project Categorization
System Model

Goals of the Participating Organization:

● Clarify vision of existing categorization system(s)
● Possibly gain new perspectives or ways of envisioning project
categorization systems and their usage
● Evaluate the existing categorization system of the participating
organization.

Goals of the Research Team:

● Validate that:
● The model is easy to understand and use
● The model has no major omissions either in terms of the

purposes that categorization systems fulfill or the attributes

that are used to group projects/programs
● Its use is perceived as creating value when evaluating current
categorization systems or when modifying or creating such sys-
tems
● To generally receive comments on the model, its ease of use,
and its usefulness.

Preparation of the Validation Sessions:

● Invitation of as many of the participants in the original focus
group at Phase 2 as are available
● Distribution of a letter of invitation providing a summary of

the validation protocols

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 ● Distribution of the results of the focus group in Phase 2. Partici-
pants will have already received this document, but it is sent
again to ensure availability. Participants are asked to reread
the document and to note any errors, omissions or changes
since the original focus group was conducted. They are advised
that the first item on the agenda of the meeting will be to
collect and discuss these points.

Validation Protocols:
The steps in the validation session are as follows:

1. Validating the description of the organization’s current proj-

ect categorization system(s) through discussions with key per-
sonnel. Participants are asked to share any errors, omissions
or changes that they have identified since the original focus
group. These are discussed by the group in order to arrive at
a consensus as to the current state of the organization’s project
categorization system(s). It is important that all those
involved have a clear and shared perception of the existing
systems before going further. This may require considerable
discussion.
2. Evaluation of the current system(s) of the participating organi-
zation.
a. Are the purposes the system(s) serve in the organization
clear?
b. What are they?
c. Are the categories of the current system(s):
i. Easy to use?
ii. Linked to organizational strategy?
iii. An effective communication tool?
iv. Constant (i.e., Do projects change category through-
out their life cycle)?
v. Unambiguous?
vi. Well understood?
vii. Free of jargon?
viii. Well accepted/legitimate?
ix. Customizable/flexible?
d. Does the current system(s) take all relevant projects into
account?
e. Does the current system(s) make a clear distinction
between projects and ongoing operations?
3. The researcher presents the Organizational Purposes Map in
MindJet MindManager威 format. Here, only the purposes that

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 categorization systems serve are presented. The researcher
asks for clarification questions.
4. After it becomes clear that the Map is well understood, the
researcher asks for opinions as to:
a. Whether the participants can identify the purposes that
their current system(s) serve by using the Map. The
researcher notes what these are.
b. The ease of understanding of the Map.
c. Whether any purpose drawn from the organizational con-
text has been omitted.
d. Whether examining the current system(s) using the Map
produces a clearer vision of the role of the systems in their
organizational context.
e. Whether reference to the Map has been useful in thinking
about and reviewing the organization’s categorization
system.
5. The researcher distributes the list of attributes and categories,
and asks for questions of clarification.
6. The researcher asks:
a. If the lists are clear and easy to use.
b. If participants can identify attributes or categories used in
the organization that are not on the list.
7. The researcher asks if the participants were given the mandate
to revise the current system or develop a new one, and
whether they would use the model to guide them. The
researcher then asks what are the strengths and limitations
of the model in use as perceived by the participants.
Notes:
1. The participants in the validation session should be the same
as in the focus groups of Phase 1.
2. For organizations that do not have a well documented and
understood system, the first 2 steps could take at least an
hour and a half. It may be worth doing the session in 2 parts
with these organizations. An alternative would be to work
with a single person or a very small group to validate the
description of the organization’s categorization systems.
3. The agenda for the validation session was transcribed into an
agenda/questionnaire that was distributed to participants of
the sessions. The participants noted scores and comments on
the questionnaire, which was collected by the researcher at
the end of the session. This questionnaire is reproduced as
Appendix E.

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86911$CH12 08-30-05 13:38:54
 APPENDIX E

Categorization Validation
Meeting Question Sheet

Organization:
Division/Unit:
Date:

1. Confirm and clarify information concerning your current project

categorization system(s), as gained in the initial Focus Group
session (please review the attached report from this session).

2. Note any omissions, changes or developments in project categori-

zation system(s) that may have occurred since the initial Focus
Group session.

3. Evaluate your current project categorization system(s):

a. Are the purposes the system(s) serve in the organization clear?

b. What are the purposes the system(s) serve in the organization?

c. Are the categories of the current system(s):

i. Easy to use?

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 ii. Linked to organizational strategy?

iii. An effective tool for communication?

iv. Changeable (Do projects change category throughout their

life cycle?)

v. Unambiguous (Is the fit of projects into categories unam-

biguous?)

vi. Well understood?

vii. Free of jargon (Is the use of terminology well understood

by users?)

viii. Well accepted/legitimate (within the organization)?

ix. Customizable/flexible?

d. Does the current system(s) take all relevant projects into

account?

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 e. Do(es) the current system(s) make a clear distinction between
projects and ongoing operations?

4. Present and seek feedback on the draft Project Categorization

System Model that has been developed from research to date.

a. The Mindjet MindManager威 Map of Purposes of Categoriza-

tion Systems
i. Can you identify the purposes of your current system(s)
by using the model?

ii. Is this model easy to understand?

iii. Has any purpose drawn from your organizational context

been omitted? If so, please specify.

iv. In examining your current categorization system(s), does

this model help you to gain a clearer vision of the role of
the systems in their organizational context?

v. Has reference to this model been useful to you in thinking

about and reviewing your project categorization sys-
tem(s)?

If yes, in what ways has it been useful?

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 b. The list of attributes and categories
i. Do you have any questions about this?

ii. Are the lists clear and easy to use?

iii. Can you identify any attributes or categories used in the

organization that are not on the list?

5. If you were given the mandate to revise the current system in

your organization, or develop a new one, would you use the model
as a guide?

6. What do you see as the strengths and limitations of the proposed

model in use?

STRENGTHS:

WEAKNESSES:

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 APPENDIX F

Descriptions of the Use of

Project Categorization in
Organizations

Introduction to the Descriptions

The project categorization systems of eight organizations were inves-
tigated during the Project Categorization Research Project. A focus
group organized with members representing different stakeholder
groups in each organization was the primary source of information.
In addition, a focus group was held with a group of people represent-
ing different organizations. In each of the cases, a report was returned
to the participants for validation.
In seven of the eight focal organizations, a second focus group
was organized. During this second session, which was held up to
one-and-a-half years later, the participants were asked to identify
changes that had taken place, to evaluate their current categorization
system against a framework provided by the researchers, and to
comment on and evaluate the preliminary version of the model that
is presented in this research report. During the discussions at the
second set of focus groups, additional information was gathered con-
cerning the project categorization systems and their usage. For a
description of the focus groups, please consult Chapter 2, which
presents the methodology; Appendix B, which presents the detailed
protocols for the focus groups; and Appendices D and E, which pres-
ent the validation sessions.
A description for each of the eight organizations is included in
this appendix. The case studies describe the project categorization

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systems in these organizations and their usage. The participating
organizations are from Australia, North America and Europe7. The
sample is comprised of: two financial institutions (a mutual bank
and a private bank); three engineering and construction divisions of
large public utilities (in the rail, road, and electric power sectors);
two consulting firms (one offering project and business management
services, and the other offering engineering and project management
services); and the project management arm of an international aid
organization. A report on the focus group with representatives from
different organizations has not been included.
The documents have been altered to make them anonymous,
without fundamentally changing the descriptions of the project cate-
gorization systems or their usage in the organizations.

Report on the Use of Project Categorization Systems

in the Credit Union
Contextual and methodological note:
In February 2002, this organization was approached as a potential
participant in the first round of data collection through focus groups.
At that time, the organization was in the middle of a major reorgani-
zation. The organization declined the invitation saying that the topic
was too ‘‘hot,’’ as can be seen from the description that follows. In
May 2003, the organization was approached and agreed to participate.
The description that is provided here reflects the state of the organi-
zation’s project categorization system at the time of the validation
session held in September 2003.
A Vice-Presidency of Integrated Planning and Project Manage-
ment was created as part of the new structure. This vice-presidency
is composed of two units: one responsible for Project Planning and
Methodologies and the PM Unit responsible for the management of
most major projects. The information summarized in this report
was obtained through working sessions and consultation with the
employees of the first of these units, and was validated with their
vice-president. This group is responsible for the redesign of the proj-
ect portfolio and program management process, including its catego-
rization system.

7
All monetary information has been converted to US dollars in order to maintain the
anonymity of the organizations and their members.

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 The Organization
The Credit Union is a network of institutions offering financial
services with 40,000 employees and total assets of 60 billion US
dollars. Its heart is a network of approximately 620 individual credit
unions, but also includes wholly owned subsidiaries mainly in insur-
ance, and investment brokerage. Following considerable growth and
consolidation of the network a major business re-engineering effort
was undertaken in 1995. Following this, a major reorganization was
undertaken, starting in 2000.
Prior to the reorganization, the individual credit unions were
grouped into regional federations that, in turn, were federated into
a central confederation. With the reorganization, the old network of
regional federations and a central confederation has been replaced
by one central federation, which will be referred to as ‘‘The Federa-
tion’’ in the balance of this document. The Federation is the ‘‘head
office’’ of the cooperative network of individual credit unions. Its
role includes advisory services to individual credit unions, the devel-
opment of products and systems for the network of individual credit
unions, as well as strategic planning and governance functions for
the whole network. It is also responsible for the strategic integration
of the subsidiaries. The Federation has 3500 employees. The new
structure was officially put in place in 2001.
The Federation is responsible for the management of the portfo-
lio of all the projects in the network of credit unions. Recently, the
Federation has become involved in the integration of major projects
in the subsidiaries with the strategic initiatives of the whole net-
work. This represents a significant centralization of project coordina-
tion. Projects were previously approved and coordinated in a much
more decentralized fashion.
As the new structure was being elaborated and put in place,
the major revision of business processes was continuing and being
operationalized. The need for a better articulation of horizontal pro-
cesses was a central part of this reform and the need for a better
development process was one important element. ‘‘Development
process’’ refers to the process of developing new products and sys-
tems and implementing them throughout the network, clearly a
project delivery system.
One of the elements of the new development process was the
need to develop a process for managing project portfolios and pro-
grams, the express aim being to 1) better align investments with
strategic planning, 2) to better align the portfolio with the Federa-
tion’s capability to deliver projects, and 3) to better align the projects
being delivered with the network’s capacity to absorb the new prod-
ucts and systems.

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 The basis for the new development process was approved in
December 2002 and has been in the detailed design phase since then.
As part of the new development process, a Development Priority-
setting Committee, composed of executive vice-presidents, has been
created. As of September 2003, the new portfolio and program man-
agement process had not yet been fully developed and approved. Its
implementation was scheduled for the fall of 2003.
The Project Categorization System in Place Since 2000
As part of the reorganization, a typology was implemented that
divides projects into five types:
1. Strategic positioning projects: projects that define strategy.
These projects are then implemented through projects of one of the
four other types
2. Projects to develop business solutions
3. Projects to reconfigure the distribution network
4. Specialized development projects whose deliverables are con-
centrated in one specialized domain
5. Projects that are internal to the Federation
The vast majority of projects in categories 1, 4 and 5 are managed
directly by the specialized units involved. Projects in categories 2
and 3 that 1) have significant strategic implications and impact, 2)
are large (more than 30 person/months or $200,000 US, and 3) have
significant impacts on the network of individual credit unions and
their members and require an implementation strategy and support
are managed by a project manager from the PM Unit mentioned
above. There are presently 66 projects being managed by the 30
project managers of this unit, for a total value of $30 million US.
The portfolio of projects being managed directly in the different units
includes approximately 300 projects for a value of $80 millions US.
However, as the entire portfolio has not yet been consolidated, it is
difficult to estimate its scope with great accuracy.

Program Management
Over the last few years, a need has been felt to manage certain
very large projects or collections of projects as program. Following
the architectural design phase of some large systems projects, it
became evident that the scope of these multi-year projects was very
large and difficult to manage as a single project. A few of these very
large projects were converted into programs of related projects. The
projects within a program share common content, strategic goals,
and levels of risk and complexity. The projects in a program are also
very interdependent. In late 2002, the idea of managing by program

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was formalized. There are presently four such programs underway
containing an average of ten projects each.

The Proposed New Project Categorization System

In line with the goals stated above, the Federation has invested
considerable effort into the development of a program and portfolio
management process and the accompanying categorization system.
They have been coming to grips with the implications of program
and portfolio management both in principle and in practice. The
system has not yet been implemented in its entirety. It is, therefore,
not possible to come to a final conclusion as to its ultimate form
and impact on the organization. That may take another year or so
to sort out. However, the design and implementation are sufficiently
advanced to give us a reasonably good idea.
At a high level, the organization’s projects are broken down into
three major categories: 1) system evolution and major maintenance
projects, 2) major strategic initiatives and 3) other development proj-
ects. This grouping of projects is based on sources of funding, size
and strategic impact. (See table F.1 below.)

System Evolution
Other and Major
Major Strategic Development Maintenance
Initiatives Projects Projects
Funding Development Development Operational
Size More than $8M $400K–$8M Up to $400K
Strategic
Impact Very high High to moderate Low
Table F.1 Three major of project groupings

There are two sources of funding for projects: the development

budget and the operational budgets. All development projects are
funded from the development budget. The debate on portfolio man-
agement and the project categorization system is largely centered
on the organization of these projects. System evolution and major
maintenance projects are funded out of the operational budgets.
There is consensus as to the organization of system evolution
and major maintenance projects. These are the responsibility of the
different organizational units and are funded out of their operational
budgets. They are managed as projects but the budgets from which
they are funded also cover non-project operational activities. They
are clearly the responsibility of the organizational units and are
grouped accordingly. This way of grouping projects is a continuation

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of the way projects have traditionally been authorized and managed
within the Credit Union.
There is also a consensus that major strategic initiatives will be
organized as programs of related projects. There will never be more
than a very small number of these programs each of which will come
into existence after considerable strategic thinking and planning.
The content of these programs will be determined with each new
major strategic initiative.
Organizing the Portfolios of Development Projects
The most difficult aspect of the design of the new project catego-
rization system has been the organization of development projects
other than those that are included in programs of major strategic
initiatives. The solution that has being decided upon is to organize
these projects into portfolios of inter-related projects. The portfolios
can be based on either line of business or functional unit.
The Credit Union has three basic lines of business: personal
banking, business banking and e-business, with executive vice-presi-
dents responsible for each. Most of the Federation’s personnel are,
however, located within large functional units. The grouping of proj-
ects into portfolios takes this organizational reality into account.
Some of the portfolios of projects are under the responsibility of
executive VP’s of lines of business and others are the responsibility
of functional units. At the time of this investigation, the other devel-
opment projects have been organized into ten portfolios as described
in table F.2.

Number of portfolios
Personal Banking 1
Business Banking 2
e-business 1
8
Services to Credit Unions and Operations 3
9
Internal to the Federation 3
Table F.2 The Distribution of Portfolios of Development
Projects
8
Portfolios of Services to Credit Unions and Operations are portfolios of projects that
make major changes or additions to systems and process in place in the network of
individual credit unions. These portfolios are normally under the responsibility of
the Executive VP of Human Resources and Operations.
9
The portfolios that are internal to the Federation are the responsibility of the relevant
executive VP. At the present time these portfolios are the responsibility of the execu-
tive VPs of Finance and Administration and of Information Technology.

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 Prior to the reorganization, projects had been authorized and
managed in a decentralized fashion within organizational units. The
objective of the present reorganization is to get away from this very
decentralized way of doing business, with the goals of developing
better horizontal processes and of aligning projects with strategy,
delivery capabilities and the absorption capacity of the network. The
implementation of the project categorization system is part of a
broad initiative to modify the way in which projects are approved
and monitored. A priority-setting committee composed of several
executive vice-presidents has been set up and has overseen the devel-
opment of the categorization system and other initiatives. This com-
mittee is decisional with respect to the authorization of projects
within the development project portfolios. In addition, the same
committee examines each of these portfolios each semester. Both the
priority-setting committee and the senior management committee
monitor the major strategic initiatives each month. The later is
decisional on these programs. This method for authorizing and moni-
toring projects provides increased visibility at senior management
levels for projects with the greatest strategic impact. It also brings
multiple perspectives to bear on the programs and portfolios as they
are scrutinized by executives from different parts of the organization
bringing different concerns and perspectives. The new project catego-
rization system and the system for approving and monitoring are
certainly in line with the objectives the organization set for itself. It
is too early, however, to evaluate the impact this will have over time.

Researcher’s Comments
1. This organization manages a very large number of projects,
about 300 according to estimates. Acquiring an overview of such a
large number of projects requires the identification of ‘‘programs,
portfolios and categories of projects.’’ Each of these ideas is rather
abstract and none of them was well established within the organiza-
tion at the outset. During the development and implementation of
the new project approval and monitoring structure, members of the
organization were having difficulty coming to grips with these ideas
and the implications of their use. A better understanding of these
concepts and of the system that was to be put in place evolved
over a period of several months. Although the system can now be
described in rather simple and straightforward terms, its develop-
ment and implementation were neither simple nor straightforward.
2. The focus of this description has been on the development
of a high-level system for authorizing and monitoring projects. This
system and its categories of projects is not the only example of
project categorization to be found within this organization. During

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the validation session, the participants identified many other ways
in which projects are categorized. Many of these categorizations are
used for tracking projects during execution. Two important examples
of project categorizations for tracking are the categorization by proj-
ect phase and by status. Projects within the Federation are grouped
according to five phases: 1) approved but not yet started, 2) start-up,
3) system architecture, 4) execution, 5) trial and test. Indicators
have and are being used to qualify different dimensions of project
performance or status. These indicators are used during tracking to
sort projects into groups. These are but two examples of other ways
projects are grouped into categories in this organization.
3. This description of the development of the project categoriza-
tion system has focused on using the system for purposes found
within the strategic alignment portion of the organizational purposes
map. However, during the validation session, the participants exam-
ined the purposes map and identified many purposes for which cate-
gorization was used in the organization, several of these can be found
in the capability specialization branch of the purposes map. Several
examples were given of different project management methods being
applied to different types of projects.
4. The relationship between the drive to develop a project cate-
gorization system and the centralization of project approval and
monitoring is evident in this case. This is particularly interesting
when put in relationship with the observations made at the other
financial institution that participated in this study. There too a clear
relationship was observed between the level of centralization of
these decisions and the importance of project categorization. It is
reasonable to think that this relationship is found not only in finan-
cial institutions, but rather that it is likely to be prominent in all
organizations making decisions to allocate investment capital.

Description of the Use of Project Categorization in

the Electric Power Utility
The Organization
The organization that participated in this research is the Engi-
neering, Procurement, and Construction Division or EPC Division
of a large public power utility, referred to here as ‘‘The Electric Power
Utility.’’ The Engineering, Procurement and Construction Division,
has 3000 employees and manages in excess of $1 billion in projects
a year. It is an engineering organization. It does no construction
with its own resources, but manages construction work executed
by contractors. It also supplies engineering, and project management
services to the other divisions of The Electric Power Utility.

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 For the last 12 years, the division’s structure has been organized
on the basis of its basic products. The participants see this organiza-
tion by product as also being organized on the basis of customers. A
particular customer will usually deal with only one of the Division’s
departments. Since 1990, the division has had a role similar to that
of an engineering consulting firm in its relationships with the other
customer divisions. Before 1990, it was very much a functional orga-
nization.
Through several reorganizations, the names of the different units
have changed and units have been brought together and separated,
but the work and its basic organization have not changed. The partici-
pants portray this situation as basically stable and satisfactory.
The participants in the focus groups were:
● 3 project managers from different product lines
● The chief contracts administrator

● A representative from the human resource department

● The head of planning
● A regional maintenance program manager
● A project control officer

The Project Categorization System

The participants have all worked in the division for many years.
In fact, many of the employees of the division have a long experience
of the division, its projects and its way of operating. The project
categorization system is clear, well known to the participants, and
functional. The project categorization system is closely related to
the organizational structure. It is perceived, along with the structure,
as being part of the Division’s customer orientation. The project
categorization system is seen first and foremost as the basis for
allocating a projects to the department that will be responsible for
its execution. It is also seen as the basis of specialization and adapta-
tion to the specific requirements of each type of project.
Projects are categorized primarily according to three parameters:
scope, product, and phase. This system is represented in Figure F.1.

Projects Less Than $400,000 US

If the project budget is less than $400,000, it will be handled by
the Maintenance and Buildings Department. There are some excep-
tions to this rule when resources are unavailable or when the project
requires very specialized knowledge. In this latter case, the project
will be allocated to the corresponding product department. There is
a major difference in the stakeholders involved with these smaller
projects; for example, the Network Planning Group does not get

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involved. This division by scope allows for the adaptation of project
management processes and tools to the needs of the smaller projects.
Projects of less than $400,000 are executed for all of the other
divisions of The Electric Power Utility and are located throughout
the territory served by the organization. Given the geographic cover-
age of the department, its internal structure is organized by region
and its projects are also classified by region.
Projects Greater Than $400,000
Projects larger than $400,000 are categorized by product. These
mandates are executed primarily for the other divisions of The Elec-
tric Power Utility. With the exception of building projects, the proj-
ects within each product department are almost always delivered to
the same customer. In addition to internal customers, projects are
also executed for customers outside The Electric Power Utility, on
both the national and international markets. Within each product
type a separate and specific project categorization system is in place.
The products and their project categorization systems are as follows:
1. Electricity production equipment for the Electricity Produc-
tion Division
● Projects divided into two groups
● New installations

● Refurbishment of older equipment

● Projects are further divided by technology (hydroelectric,

gas turbine, wind power). However, the vast majority are

hydroelectric.
● When a major project is undertaken, a new organizational

unit is created to manage it. ‘‘Major projects’’ is, in fact,

another project category.
2. Electricity transmission for the Energy Transmission Divi-
sion
● Transmission projects are divided into two groups:
● Transmission lines
● Power stations
● Here, too, there are new installations and rehabilitations of

older equipment, but these are not used as important project

categories and the department is not structured along these
lines. When a new project is started up and the project man-
ager is assigned, it is at this time that an attempt is made to
match project characteristics to available project managers.
3. Automated controls for the Energy Transmission Division
● The discussion did not identify any clear categories that are

used systematically within this department. However, the

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 following types were mentioned: special power station proj-
ects and major automated control projects.
4. Telecommunications for the Energy Transmission Division
● The discussion did not identify any clear categories of tele-
communications projects.
5. Building projects for all the divisions of The Electric Power
Utility, including administrative buildings as well as those
required for electricity production, transmission and distribu-
tion.
● All building projects are managed by the Maintenance and
Buildings Department regardless of their scope.

Administrative Projects or Internal Mandates

Certain projects will not be placed within this product structure.
These projects are called ‘‘internal mandates’’ which are undertaken
to provide tools that support the overall activities of the organization.
Examples include, implementing SAP, obtaining ISO certification
and converting the interface of their internal computer systems to
Windows. For these projects to be recognized as such they must be
of considerable scope.
Other smaller mandates are considered as administrative activi-
ties. The organization does not consider them to be projects despite
the fact that they have all the necessary characteristics. In the same
manner, a mandate given by one organizational unit to another
within the context of a project is not considered to be a project, even
though it has all the characteristics and is considered to be one by
both the person giving a mandate and the one receiving it.

Project Phases
In addition to scope and product, projects are also classified by
phase. All projects have the same five phases. However, a mandate
given to the division may only cover part of the project life cycle.
Certain customers regularly do the first two phases in-house before
giving the project to the EPC Division. The categorization of a project
by phase determines the nature of the deliverable to be produced
and methods to be used to produce it.
The five phases are:
1. Summary study
2. Preliminary study
3. Basic engineering and impact studies
4. Optimization
5. Detailed engineering and construction
The participants stated that all projects always have the same
five phases. However, a variety of terms were used to name the

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phases. The moderators did not pursue the issue. It is, therefore, not
clear how uniform the content and the naming of the phases is
in reality.
The participants used the qualifiers ‘‘global’’ and ‘‘partial’’ to
identify the number of phases covered by a mandate. Including sev-
eral phases within the same mandate changes the nature of the
project. For example, a mandate that covers basic engineering and
construction will be managed differently from two separate man-
dates, one for basic engineering and another for construction. The
participants used the expression ‘‘the globality of the mandate’’ to
identify this aspect of projects.
Overall the categorization of projects identifies the organiza-
tional unit to which it will be allocated as well as the nature of the
deliverables and the processes to be followed in producing them.
This system is presented in an exhibit at the end of this report.
Projects for External Customers
A small minority of mandates come from outside The Electric
Power Utility, from both the national and the international markets.
Projects from external customers are distributed amongst the catego-
ries of products for internal customers. The definition of the delivera-
bles and the processes to produce them are built upon those used
for internal customers. Executing mandates for external customers
requires that some activities be more highly developed and that
others be added. For example, risk analysis is more extensive and
project financing is often part of the mandate. International projects
generally require more modifications and additions to normal pro-
cesses than projects for the national market. External projects have
processes, which are specific; for example, approvals and payments
are quite different. More stakeholders are generally encountered in
external mandates. External customers often have needs that are
not as well defined than those of customers within The Electric
Power Utility.

Other Categorization Criteria

Participants mentioned several other categorization criteria.
During the investigation, these criteria did not receive as systematic
a treatment as those already presented.
The overall contract strategy has an important impact on the
way projects are managed. The proportion of work that is contracted
outside also has important impacts. A performance contract will be
managed quite differently from a traditional contract. With a design-
build contract undertaken in consortium with a contractor, a sig-
nificant part of the project’s management is done outside The Electric

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Power Utility. The participants mentioned many such examples of
types of projects that required important adaptations to normal ways
of doing business. However, these ‘‘types of projects’’ are not grouped
as clearly into categories as the traditional projects.
‘‘Project-program’’ were also mentioned. These are programs in
which a project will be repeated several times, for example, a modifi-
cation to be done to several power stations.
A division between projects with well-known or new technolog-
ies was also mentioned. Projects with technologies the division does
not master are usually given out as turnkey contracts.

The Benefits of Using a Project Categorization System

(The participants see the organization as already reaping these
benefits)
● Allows for the organization of lessons learned and the analysis

of results
● Standardized post-mortems and comparability of similar projects

● Accumulation of knowledge
● Faster execution of projects by drawing on accumulated experience
● A common language

● Allocation of projects to the right unit

● Development of expertise and specialization

● Clear and simple relations with customers, continuity in cus-

tomer relationships
● Better knowledge and understanding of customers, stable

interfaces
● Adaptation of management methods to the particular needs of

each type of project

● Adaptation of the organization, its personnel and tools and

techniques to the needs of the mandate

● Evaluation and documentation of processes

● Taking legal aspects into consideration, people in each area

know the issues involved and can take them into consideration
● Management of the volume of business and analysis of the

market for the allocation of resources

Problems Encountered in Using the Project Categorization

System
● Becoming too specialized and creating silos
● Specialized careers creating problems of mobility of current
resources and difficulties recruiting and integrating new per-
sonnel
● Lack of flexibility in the use of tools, for example, in the product
departments the methods were developed for large projects.

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 Their methods are, therefore, poorly adapted to the manage-
ment of small mandates.
● Problems of language; the classification defines the activities
to be executed and the characteristics of the deliverables to be
produced. Internal resources have a clear and shared under-
standing of the meaning of the classifications. However, people
from outside, customers in particular, do not always have the
same understanding. People tend to presume that because they
are using the same words they mean the same things. This is
not always true. As terms are used very frequently people are
less aware of risks of misunderstanding. Expressions such as
‘‘summary evaluation’’ or ‘‘detailed design’’ can have very dif-
ferent meanings for different people in different contexts. This
is a good example of the ‘‘taken-for-granted’’ nature of catego-
ries in use. The solution proposed by the participants is a valida-
tion of the understanding of the mandate with the client at
the outset.
● Internal mandates that are not recognized as projects do not

get managed as projects and this can affect their performance.

The participants gave an example of this. The original ISO
certification was identified as a project and project management
methods were applied to its execution. The project was a suc-
cess. The renewal of their certification was not identified as a
project and project management methods were not applied.
The last time the researchers met with the participants they
expressed doubt as to the success of this project that they attrib-
uted to the lack of a project management approach.

Researcher’s Notes
The project categorization system in this organization has been
in place for some time. Its use is well established and well accepted.
The customer focus of which the project categorization system is
an element is seen as contributing significantly to the organization’s
success. The participants are well aware of both the advantage the
use of their categorization system provides and the difficulties that
can result from its use.
Participants in the focus group with this organization answered
the question, ‘‘how does your organization categorize projects’’ with-
out any hesitation. In contrast to some other organizations, the idea
of a system for categorizing projects was not an abstract idea at all,
quite to the contrary.
During the validation session, when the participants were asked
to examine the organizational purposes map, they reacted by saying
that the capability specialization branch was a very good representa-

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tion of the purposes served by project categorization in their organiza-
tion. They reported, however, that the strategic alignment branch
was irrelevant in their context. This is understandable because proj-
ect selection decisions are made in the customer divisions. Questions
concerning the alignment of projects with strategies and the selec-
tion of appropriate projects are outside the mandate of the division
in its project management role. This subset of organizational
purposes is therefore not relevant to their system for categorizing
projects.

Figure F.1 Project Categorization System for the Electric

Power Utility

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Description of the Use of Project Categorization in
the Engineering Consulting Firm
The Organization
The organization is an engineering consulting firm active in
both the national and international markets. In the balance of this
document the firm will be referred to as ‘‘Engineering Consultants’’.
It has approximately 1300 employees. The seven participants in
the focus group are directors and senior project managers whose
experience covers the range of projects that the firm undertakes. The
firm is organized into sectors that correspond to the different markets
they serve. The participants represent the following sectors: energy,
environment, industrial, forestry, and training.
Up until the early 1980s, Engineering Consultants’ organiza-
tional structure and categorization of projects mirrored the structure
of its primary customer, the state power utility. Later, the firm
adopted a functional departmental structure. This was followed by
a geographic structure based on the cities in which the firm had
offices. Today, both the firm’s organizational structure and its pri-
mary categorization of projects are grouped by sector of activity.
This categorization is based both on the groups of products and
services it delivers and on the markets and customers it serves.

The Project Categorization System

Engineering Consultants has a project categorization system that
is clear and well understood by the participants in the focus group.
This system is multidimensional and hierarchical. It is multidimen-
sional in the sense that projects can be categorized on several dimen-
sions simultaneously. It is hierarchical in the sense that within a
category subcategories exist that are specific to the type of projects.
First of all a project is categorized as either national or interna-
tional. International projects are then categorized according to the
geographic region in which the project will be executed.
Projects for the national market are categorized by sector of
activity. There are five sectors of activity: training, energy, environ-
ment, industrial and forestry. Certain administrative projects are
not categorized within the sectors. These are projects that the firm
undertakes for its own benefit, for example, ISO certification or
renovating the ventilation system in the building.
Within each sector, projects are categorized differently, as
follows:

Training Sector
Training projects are categorized along two dimensions: the type
of mandate and the size of the project.

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 Types of mandates are as follows:
● Consulting (feasibility studies and studies of human resource
needs)
● Development and diffusion of training sessions

● e-learning
The monetary value of a project has less impact on its categoriza-
tion than the effect the project will have on human resource needs.
Long-term overseas projects will typically be contracted out rather
than relying on company resources.
The subsidiary’s human resources are multi-skilled; several are
able to work on all three types of mandates. Resources work generally
on several projects at the same time and move relatively freely
between national and international mandates. The flexibility of
resources makes resource allocation complex.

The Energy Sector

There is very little categorization of projects within the energy
sector. Most mandates are traditional engineering mandates to
design electricity production facilities. However, a new class of proj-
ects is emerging, the design-build contract in consortium with con-
struction contractors. This new class of projects requires different
procedures and is associated with significantly greater need for
financial control.

The Environmental Sector

Projects in the environmental sector are categorized according
to the type of mandate as follows:
● Primary mandate or secondary mandate from another sector
● Mandates that are specific to a particular project or mandates

to study an entire industrial sector

● Expert advice

● Training
● Small-scale studies of environmental impact or repercussions
The distinction between national and international mandates is
important, particularly for the resources involved.

The Industrial Sector

Projects in this sector are first categorized according to the type
of contract that includes:
● EPC (engineering, procurement and construction)
● EPCM (engineering, procurement, and construction manage-
ment
● Management support (monitoring of cost, schedule, and/or

quality)

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 ● Long-term partnering relationships with a single customer,
often the result of outsourcing
● Engineering
Engineering mandates are subdivided using two dimensions:
● Single discipline or multidisciplinary projects
● Industrial process projects or building projects
Building projects are further subdivided into two groups:
● Private
● Public or institutional
The type of contract is important in choosing the processes and
procedures particularly because of variation in financial risk and the
need for budgetary control.

The Forestry Sector

Within the forestry sector, projects are categorized as follows:
● Studies (forest inventory, expectation plans. . . .)
● Technical or institutional assistance

● Training

There generally are two distinct groups of resources, one for

national projects and another for international. Until recently, these
resources were under different vice presidents.
Globally, Engineering Consultants’ categorization system is
based on the distinction between national and international projects,
and at the same time, a division by sector of activity, with a different
way a grouping projects within each sector. In addition, the focus
group participants identified three additional axes along which proj-
ects are categorized. These axes are applicable to the whole set of
the company’s projects. These are:
1. Project phase (feasibility study, preliminary design, prelimi-
nary engineering, detailed engineering, procurement, construction,
site surveillance)
2. Type of mandate or contract
3. Financial scope which impacts the level at which approvals
must be obtained
The project categorization system is used first and foremost to
determine which organizational unit will assume responsibility for
its execution. It therefore reproduces the organization structure that
is based on sectors of activity. Each sector is an anonymous profit
center with its own resources, customers and operating procedures
and methods. Even the support functions of accounting and human
resources are structured by sector.

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 The Benefits of Using a Project Categorization System
(The participants see the organization as already having these
benefits.)
● Allows the allocation of the project to the appropriate organiza-
tional unit. The categorization system is structured the same
way as the organization is. The projects are therefore allotted
to the appropriate sector.
● Allows for the development and use of different methods and
procedures. Each category of projects has its own set of methods
and procedures. The third and most detailed level of work
instructions within the ISO system is organized by sector.
● Knowledge management or knowledge retrieval. Limits the loss

of knowledge due to turnover and the tendency to keep on

reinventing the wheel.
● Allows for the development of specialized human resources

within each sector

● Supports business development and customer relations. Better

knowledge of customers. Specialized marketing by sector.

● Facilitates the evaluation of the profitability of sector profit

centers. Expenses are easily traceable to the sector.

● Permits adjustment of the price structure to meet specific mar-

ket conditions, both nationally and internationally.

● Allows for adjustments to ways of approaching customers and

of doing business in different countries and regions.

Problems Related to the Use of the Project Categorization
System
● The categorization by sector can create redundancies in human

resources. For example, four mechanical engineering groups,

one per sector.
● The division into national/international and the division into

five sectors creates a problem of multiple entry points for a

project or a customer. The five sectors are like five different
companies within Engineering Consultants, upon which a divi-
sion between national and international markets has been
superimposed. The problem of multiple entry points arises
when a customer is seeking services not provided by the sector
with which it normally does business. This occurs during the
development of a proposal for the customer. It happens that
two teams will work on proposals for the same project for the
same customer in the national market, without knowing it. In
the international market, two teams may be working in the
same country or for the same customer, without knowing it.

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 The problem is typically recognized and solved at the time the
contract is negotiated and signed.
● The preparation of multidisciplinary proposals poses problems
in coordination.
● The sectors are responsible for business development. A man-
date requiring the expertise of another sector poses problems
with respect to the management of the customer interface. It
can also pose problems with respect to the just distribution of
profits given the costs and effort invested in developing and
maintaining the customer relationship.
● The categorization of projects by sector involves the issue of

the division of profits when more than one sector is involved.

● Multi-skilled and specialized human resources each pose par-

ticular problems. The allocation of multi-skilled resources is

very complex to manage. Specialized resources pose problems
of mobility.
● With the autonomy of each of the sectors, they often do not

know what the other is doing. This can cause integration prob-
lems. It can even lead to conflicts of interest. For example, the
environmental sector may be supporting a government minis-
try in the evaluation of project proposals, while at the same
time; another sector may be developing a proposal on the same
project for a private customer. There is, therefore, a conflict of
interest between these two mandates.
● The division by region rather than by sector for international

projects can lead to problems of adequate and equitable develop-

ment of projects from several sectors given that the persons
responsible may be much more comfortable with projects from
their own area of expertise. Coordination and communication
problems can also arise between international projects and
national market sectors. A common solution is to leave all the
technical aspects of the mandate to the national sector.
● Knowledge management is facilitated by a single uniform proj-

ect categorization system. In engineering firms, the production

of project summaries at project completion is a common prac-
tice. These project summaries are an important part of the
knowledge management system in these firms. Project summa-
ries are typically accompanied by a set of keywords. A uniform
set of keywords is not presently in use at Engineering Consul-
tants. This makes the search for information inefficient and
ineffective. Several years ago, an attempt was made to standard-
ize keywords. However, this system was not updated and is
not being used. Updating and using a system of standardized
keywords for project summaries would be an expedient and

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 effective way of facilitating access to past experience. A system
of keywords should be based on the project categorization
system.
Researcher’s Notes
The project categorization system at Engineering Consultants
has been in place for some time. It is well known and well accepted.
The members of the firm are well aware of both the advantages
the system procures for the firm and the adverse effects its use
can produce.
The reaction at the beginning of the first meeting with members
of the firm was quite interesting. At first several of the participants
did not understand what was meant by the expression, ‘‘project
categorization system.’’ Several argued that the firm did not have
one. It took almost twenty minutes of discussion with examples
before all the participants realized what the expression refers to.
After this initial difficulty, the issue never came up again. Through-
out, it was very evident that all the participants knew the organiza-
tion’s system and how it is used. This incident is a very good illustra-
tion of the difficulty people have understanding the expression ‘‘proj-
ect categorization system’’. This is an abstract notion, even in an
organization where such a system is as well known and long standing
as in Engineering Consultants.
During the validation session, the researcher presented both the
organizational purposes and the attributes maps. The participants
identified many examples of the categorization system being used
for purposes from the capability specialization branch of the purposes
map. They identified fewer purposes from the strategic alignment
branch. This was expect because the project selection process in a
firm supplying project services operates largely through the market,
where the firm most often undertakes the projects for which it suc-
ceeds and getting contracts.
However, the use of the categorization system for balancing their
project portfolio and particularly for managing exposure to risk was
highlighted. In recent years, the firm has been doing more projects
in which they have considerable exposure to financial loss. These
are often turnkey projects with performance guarantees. It is impor-
tant for the firm to control its exposure by limiting the number and
the size of projects of this type that it undertakes at any one time.
When the participants examined the list of examples of attributes
used by organizations to categorize projects, the participants identi-
fied many examples of attributes their firm uses in different contexts.
Participants were able to give examples of the use of most of the
attributes in the model for different purposes in different contexts.

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Many attributes are used as fields in the company’s project registry,
which is part of its management information system. Projects and
their attributes may be recorded in more than one system. The
participants gave the example of the system for recording and analyz-
ing projects at the proposal stage being different from the system
into which projects are registered after the contract has been signed.
A different set of attributes is used to describe projects in each.
Attributes identified in the project registries can and are used to
select out certain types of projects for different purposes. Using the
project registries and the information they contain, projects can be
grouped in many different ways in addition to the main project
categorization system described above. The phenomena of project
categorization is therefore much more widespread than the partici-
pants in the focus group realized when responding to the question,
‘‘how does the organization categorize projects?’’

Report on the Use of Project Categorization Systems

in the Professional Services Firm
The Organization
The organization is a leading professional services firm specializ-
ing in project management, management consulting, property,
events and technology across a broad range of industries. Their core
areas of business are:
Building and Construction Project Management
● Project and program management services for building, con-

struction and infrastructure.

Business Project Management
● Program management, project management, strategic portfolio
definition, business consulting, performance improvement,
change management, knowledge and information manage-
ment.
Urban Development and Property
● Property development management and packaging, urban land

development, land disposal, master planning management, fea-

sibility analysis and finance modeling, property work outs,
negotiation and environment remediation.
Established in 1989, the firm has built a successful national and
international management services business encompassing 180
employees. It is a management-owned organization, driven by lead-
ers in industry who have successfully delivered projects and solu-
tions for over 30 years.

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 Context and Attributes
The organization is a private sector Project Management consult-
ing firm. The firm’s origins are in construction however it has devel-
oped a marketing position of management of all types of projects
including organizational change however a strong construction foun-
dation remains. The following is a list of the industry sectors in
which the firm undertakes project work:
● Building and construction

● Financial services
● Government–federal, regional and local

● Professional services

● Environment

● Defense
● Health

All projects are carried out for external clients.

Categorization Systems
There is a sense in the organization that categorization of projects
is an informal process. Projects are categorized on the following basis:
● It is recognized that each case client has different wants and
needs and that these form the basis of the categorization. The
firm has identified different client bases and matches project
managers and teams to these bases reflecting individual special-
izations. Some projects with the same name (e.g., ‘‘fit-outs’’)
will be different for each client and so the individual project
managers will be matched to the client not to the project type.
So it can be said that the client is categorized rather than the
project. The initial step is to identify and confirm the client’s
needs and then find and allocate the appropriate resources
within the company. For example the firm does projects that
can be categorized as health projects however depending on
whether the client is from the public sector or the private sector
will impact on the form the project takes. In this way the client
drives the categorization.
● Context of the project is important. Although the company

prides itself on being able to manage all project types it is

recognized that individual project manager’s experience in a
particular project context will go towards determining who
will manage it etc. The example is given of someone who has
extensive experience in construction projects who will have
the general project management skills required for managing
a change project but may not necessarily have the contextual
skill that only comes from experience.
● Matching personnel within the firm with client requirements.

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 ● Project recurrence and the history with the client and the expe-
rience of the Project Manager is a basis for categorization within
the firm. Matching Project Managers to the client creates good
synergy where there is an established history of successful proj-
ects. People-matching is a subliminal categorizing of projects.
Categorization allows a way to build on existing knowledge
within the company. A form of implicit categorization occurs,
for example, by saying someone has done this type of project
or job before and a referral to previous and similar projects.
● Projects are categorized on a dollar basis. This is not a formal
process but one based on judgment and experience.
● Projects are also rated according to importance on a scale of

one to five, which doesn’t necessarily reflect dollar value, as a

project may be small but strategic. This is balanced by the risk
involved to the company when taking on new projects. Risk
judgment is debated and understood not format or rule bound.
● Categorization is largely market driven. As an example there

was an opportunity to enter the health market. The firm started

in a single nursing home and evolved to work on larger projects
such as major hospitals. Lookingfor new markets lead to the
health market.
● There is categorization according to specialist areas. Whilst

there are specialized skills the project manager must also be

able to move into a different type of project to maintain a
flexible workforce.
● Categorization is used as a marketing tool. The firm markets

to the client a perception of specialization. That is from the

perspective of the client looking in. As was mentioned during
the focus group every client wants to believe they are working
with a specialist who has intimate knowledge of their particular
situation and unique problems. From the internal view of the
organization there are not formal groupings or categorizations
of project manager specialists. A reason given for this is that a
flexible workforce needs to be maintained so that individuals
can work on a project-to-project basis as the need arises. A
participant stated ‘‘we categorize when we pitch to potential
clients, but internally we are really, I think, seeing ourselves
across the board.’’ Projects are, however described or catego-
rized internally. For example, terms used to characterize a proj-
ect would be a ‘‘fit-out’’ or ‘‘construction’’ or ‘‘relocation.’’
● Categorization seems to be of project management roles rather
than project type. Categories recognize manager skills for the
job and people and are judgmental rather than formal bands or

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 levels. Knowledge and skills of the project manager make each
project different.
● Categorizations have been built around divisions driven by
individuals using skill sets and contacts. They may have com-
mon clients but there is no coordination across divisions,
encouraging a Silo mentality.
● Can categorize according to the point of the cycle in which
project takes place. For example ‘‘due diligence’’ is a discreet
project in itself but falls within a larger project. Individual
project managers might be specialists in a specific area or phase
of a project within its lifecycle. Projects within projects. They
can do whole lifecycle of a project with specialists at different
phases and levels.
● Cell structure set up on a categorization system. Cells are busi-

ness units based on the experience of leaders usually from

market sectors.
● Value and size of the job.
● Strategic categorization by market sector.

Needs for Project Categorization Systems

The overall consensus seemed to be that the organization did
not need to categorize projects formally however it was recognized
through further discussion that they did in fact categorize projects
on an informal basis. A point of interest is the gap between perception
of categorization and the reality. Some participants were against the
idea of categorization because of a perception that it confines or
binds the individual project manager. As can be seen from the list
of categorizations above, the organization in reality has a very strong
and complex system of categorization except that they don’t recog-
nize it as such or call it a categorization system. They call it specialty
areas and areas of expertise.
The following statements were suggested as reasons of need for
a categorization system:
● To allow easy access to information on projects. An internal

system based on knowledge capture and sharing.

● To match the experience of the project manager to the type
of project.
● Even though every project is different a system of categorization
would tie everything together in the interests of maintaining
a certain level of quality and consistency across the company.
● To categorize stages or phases of the project.

● People-matching is easy in a small organization; however, it

becomes more problematic as the organization grows. As such,

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 there is a need to be able to capture the knowledge and skills
for the organization.
● Need was identified to set up a business system that promotes
a common way of planning, issuing and reviewing the project
work. Planning and execution depends on type of project and
is modified to meet the needs of the client. There is no formal
process within the firm, the process being tacit and based on
experience.
● Categorization for internal reporting needs and review pro-
cesses.
● Any categorization system should be seen as a tool rather than

something that binds. Not an all or nothing mindset. A balance

between systems and autonomy of the individual needs to be
struck in any proposed categorization system.

Benefits of a Categorization System

● Support continuous learning and corporate learning. Not rein-

venting the wheel with each project. Allows the company to

build on existing knowledge.
● Categorization system would help benchmarking which is not

currently done in a formal manner.

● The firm has a strong entrepreneurial spirit however the prob-

lem is trying to capture the knowledge in people’s heads. Could

use a process or system that matches skill sets to work opportu-
nities.
● To make the implicit categorization within the organization

explicit.
Problems Associated with a Categorization System
● Categorization goes against the grain of autonomous workers.
Can be seen as creating barriers or silos.
● Cross-fertilization of skills and knowledge increases flexibility.

It is perceived that categorization or labeling will place limits

on continuous evolution and change.
● Recognized that the silo mentality is bad for macro-organiza-
tional growth. Categorization promotes a silo style of thinking
which is not advantageous to the organization. The comment
was made that projects should be looked at as business opportu-
nities rather than categorized by industry or type.
● Unspoken perception that categorizing the project type also
categorizes the project manager thus reducing the project man-
ager’s flexibility and autonomy.
● The question of the need to categorize a project was raised
given that as the client defines the project, each project will

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 be different and so one needs to adapt to each project on its
own terms.

Researcher’s Notes
We were unable to run a validation session for this organization
as they were unable to bring people together again for a further
meeting due to pressure of work. This report is therefore based only
on the initial focus group conducted in 2002. As such, we were
unable to get participant reactions to the purposes map or have an
opportunity to have a more informed discussion about the organiza-
tion’s use of categorization.

Report on the Use of Project Categorization Systems

in the Public Civil Infrastructure Group
The Organization
The organization is a subsidiary of a regional government depart-
ment and is one of the regions major suppliers of civil construction
works and related services. It has a workforce of more than 2,000
employees and operates from 15 locations throughout the region.
As a group of businesses, it is responsible for turnover in excess of
US $200 million.
The 1999–2000 financial year was the first full year of trading
since becoming a commercial business unit in November 1998. Dur-
ing this time the group of businesses consolidated and moved
towards achieving its strategic objectives.
To ensure efficiency in the delivery of infrastructure, the overar-
ching government department has separated the functions of
‘‘owner/purchaser’’ of the asset from the ‘‘provider’’ of construction
and maintenance and associated services.
The objectives of the ‘‘owner’’ are to plan and manage the net-
work in accordance with the government’s economic, regional devel-
opment, environmental and social justice objectives, which impact
on the lifestyle of everyone in the region. Employees involved in
this activity are grouped in ‘‘Corporate’’ units across the region.
The employees involved as ‘‘providers’’ of infrastructure and
associated support functions have been grouped into ‘‘Commercial’’
units and their objective is to provide services in a competitive
manner. These include:
● Engineering Consultancy
● Asset Maintenance
● Plant Hire
● Capital Works

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 The Project Categorization System
Participants were able to identify the following categorizations
in their organization:
● Coarse categorization system based on revenue and small tasks
for support team
● Revenue–operational
● Non revenue–non operational/strategic
● Contested or preferred supplier

● Complexity dependant on capital or maintenance projects

● Customers categorizations–Capital Vs Recurrent

● Design–Major Vs minor

● Asset–Major Vs minor

● Risk
● Contract type–alliance, contractual arrangement, or by con-

tract type
● Business related–market /ties with govt./external and internal
● Project won or lost

● Are projects meeting KPIs?

Budgets were also categorized into three different levels–corpo-

rate, capital and recurrent.
Tags are attached to monitor all projects with tenders in the
tender register. All major projects are recorded, however minor proj-
ects are only recorded according to need. Some of the flags attached
to projects within the register are not known throughout the organi-
zation.
Projects Vs non-projects are determined by size and complexity,
and also type of work involved where routine business is not consid-
ered a project.
The priority for reporting is budget area and practical completion.
Categorization system is used to determine level of PM required
for project.
Categories assist in deciding whether projects should go ahead.
Essential Qualities of a Project Categorization System
Participants considered the following aspects to be essential to
any categorization system used in their organization:
● It has to be common throughout the organization

● It must have an agreed framework

● It must be derived from organizational strategy

● It has to match business processes
● It must be flexible, but manageable
● It must recognize all levels within a project

● It must be understood and accepted by intended audience

● Its purpose must be clear

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 Benefits of Using a Project Categorization System
● Determine the level of project manager required for a project

● Improved reporting

● Aid risk profile

● Monitor performance
● Can be used for diagnostic purposes
● Can provide ways of accessing and using project knowledge

Problems Relating to the Use of a Project Categorization

System
● May not be properly understood by everyone and, as such,

makes some people’s job more confusing or causes resentment

towards the system
● May reduce flexibility
● Could complicated operational processes

When presented with the purposes map the focus group partici-
pants were readily able to relate it to their own categorization system.
Both the strategic alignment and capability specialization branches
received similar recognition with a few exceptions specific to the
nature of the organization. Respondents felt that the project approach
branch, though applicable, was more of a categorization for the busi-
ness as a whole rather than for projects specifically

Researcher’s Notes
The focus group for this organization was done in one meeting,
rather than an initial interview followed by a validation session.
Whilst this had the benefit of ensuring that same people were present
for both parts of our questioning it did also mean that the respondents
had quite a lot of information to take in. To those for whom the
concept of categorization was highly abstract this may have been
daunting and as such prevented them from contributing as much as
they could have during the interview. However, as found in other
Case Studies, those in public sector organizations are more attuned
to categorization and more likely to recognize its existence and value
than those in private sector organizations.

Report on the Use of Project Categorization Systems

in the Public Transport Infrastructure Group
The Organization
The public transport infrastructure group owns and maintains
a regional public transport network on behalf of government and
provides access to passenger and freight operators.

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 Within the group, different departments look after different proj-
ects. The people chosen for the focus group reflect some of the
different components within the group.
The different areas represented were engineering/construction,
telecommunications, information technology (IT), human resources
(HR) and finance. As one might surmise at the outset, they were
involved in different types of projects.
The Project Categorization Systems
For the most part, the categorization of projects within the orga-
nization is done within the overall financial system with various
systems used in each of the divisions. The attributes of each project
that are taken as significant in establishing different categories obvi-
ously vary depending on the individual requirements of each divi-
sion.
It was noted in the initial interview that some of the categories
projects were put into arose through work practice. As mentioned
previously, despite the changes to the structure of the organization
most of the focus group participants felt that the work had not
changed significantly in the last thirty years. As such, the well-
established work processes gave rise to a ‘natural’ system of categori-
zation.
All projects (as well as some operations) are loaded into the
organizations overall financial system and a project number gener-
ated. Work orders are also included in the system to ensure the
meeting of delivery requirements.
The system references projects by number and relevant projects
can be viewed from a number of perspectives depending on the
project manager’s structure as set up within the financial system.
For example, an individual working on a project can enter the work
order into the system and view a description of the activity including
its cost as well as the time taken. This applies at all levels involved
within the project.

Engineering and Construction

Within Engineering and Construction projects an established
system of categorization exists. Here work is divided into three main
categories, Major Periodic Maintenance (MPM), Capital Projects
(which is concerned with acquisitions and building new assets) and
Routine Maintenance (RM). Due to its continual nature, RM is not
considered to be a project; rather it is an ongoing process.
At the time of the initial Focus Group, the organization was
involved in developing a system to further break down MPM and
Capital projects that sees projects sorted into four categories:

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 Type A: Simple, repetitive
Low tech, low risk
Type B: Simple process,
Some tech
Type C: Complex one-off
design issue
Type D: Multidisciplinary
Higher risks
In the validation sessions a more complex breakdown of these
four types was revealed. Each type has a description of the work
involved in the project as well as the additional categorization of
asset type (e.g., electrical, signal, land, etc.).
Telecommunications
Within the telecommunications department, projects are put
into one of three basic overarching categories depending, for the
most part, on cost. However, the cost of the project is weighted
against other factors such as risk, duration and strategic importance.
The three categories are as follows:
Major: $200,000 and over
Minor: $50,000—$200,000
MACs: moves and changes
These categories represent a ‘‘natural categorization’’ which has
developed over time. As such the system has developed to suit the
work rather than projects being forced into preconceived categories.
During our validation session, one on one interviewing revealed
a more sophisticated system than was previously described. Whilst
the major, minor and MACs system was still in use, projects were
also categorized according to their level of complexity. These two
systems of categorization form a matrix used to determine the neces-
sary course of action in gaining approval for a project. This system
is represented in Figure F.2.
In this system complexity is divided into ten grades, each of
which has a description detailing how much of the work is new and
how much is repeated, how many elements are involved, etc. The
different colors in the table above represent what necessary require-
ments and approvals must be met in the project as cost and complex-
ity increase.
The project’s complexity also has direct impact in the level of
project management chosen for the project. Simple projects are often
assigned to a project coordinator. For complex projects, a project
manager is always engaged at the beginning of the project. For large,
complex and expensive projects a project director may be appointed
for overall control.

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Figure F.2 Representation of telecommunications
categorization using cost and complexity–
0.1 (Simple project) and 1 (Complex project)

Information Technology
Within the IT division work is divided into development and
implementation projects. However, projects can also be grouped
according to some of their other attributes. These include the cost/
benefit to the organization as well as the technology required to
execute the project. Also, time frame is important. In order not to
diminish the effectiveness of an IT project it must be delivered
quickly. The speed in which the project is delivered is easily affected
by changes to scope and client requirements.
Human Resources
The work of HR is, for the most part, dependant on the demands
of the market, organizational requirements, technology as well as
relevant laws and standards. As such the work can be difficult to
class. HR projects are more often than not sorted according to organi-

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zational roles such as industrial relations, employee relations, occu-
pational health and safety and payroll.

Essential Qualities of a Project Categorization System

When questioned about what factors they considered essential
to any categorization system put into place in the organization, the
following responses were given:
● It needs to identify whether projects are single or multi-disci-
plined
● It must have an agreed framework
● It must be unambiguous with clear breakpoints
● It must have a clear benefit to the organization

● It has to match business processes

● It must be transportable
● It mustn’t constrain project delivery

● It must recognize all levels within a project

● It must be easily accessible

● Its purpose must be clear

● It has to be common throughout the organization

Benefits of Using a Project Categorization System

● Facilitate resources
● Streamline reporting
● Aid resourcing and planning
● Tailoring of project management system
● Assist in budget allocation

● Manager to suit project

● Increased visibility
● Develop career paths

● Give value for money (through prioritization)

Problems Relating to the Use of a Project Categorization

System
● May result in some things being forced into categories that
they do not comfortably fit
● Boundaries may be a limitation
● May result in loss of flexibility
● May result in additional cost
● If not structured properly may result in more work and repeti-
tion
● Cost of shuffling to suit new system
● Could complicate organizational processes
● May marginalize activities/staff outside the project categoriza-

tion system

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 When presented with the purposes map, the respondents were
able to identify current as well as potential applications of the various
systems in their organization in all three branches of the model. The
most weight, however, was given to the strategic alignment branch.
This is most likely due to the fact that for many projects in the
organization, the methodologies and client needs do not change.

Researcher’s Notes
This organization was originally interviewed as part of the first
round of data collection in March 2002. In this initial focus group,
all relevant parties were present at once and worked cooperatively
to answer our questions and to think about the purposes and uses
of their categorization systems. These same circumstances, however,
were not possible when we conducted our validation sessions in
September 2003 and so participants were interviewed separately.
This did have the benefit of allowing each participant sufficient time
to fully articulate their views on the categorization system as well
as explore how it affects them directly. However, unlike the first
session, participants were not able to ‘‘play off’’ each other and use
others’ ideas as a catalyst for their own.

Report on the Use of Project Categorization Systems

in the Financial Institution
The Organization
The financial institution began as a private business over 200
years ago. The organization has, over the years, grown considerably
through a series of mergers with various other finance and insurance
companies and has since become a leader in its field employing
nearly 80,000 people.
The organization has also been active in setting up overseas
branches and establishing new markets and has a presence in 27
countries with 17 million customers and continues to expand.
The participants were from various sectors of the organization
including IT, Business change, Banking as well as Policy and Stan-
dards.

The Project Categorization Systems

Initially, the focus group respondents felt that there was essen-
tially a ‘one size fits all’ approach to projects in their organization.
This approach was however modified by pragmatism. If projects were
at all categorized, the respondents originally claimed, then it was
done to track investment.
However, upon further investigation it was realized that the
organization did in fact differentiate between projects. Small and

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medium projects are separated into ‘income driven’ and ‘fast and
reactive’ projects. Further prompting still revealed that in fact all
projects had to be categorized in order to assign priority, funding
and human resources as being either:
● Mandatory (responding to legislation)
● Business Strategic

● Business Critical
It was also discovered through further inquiry that the organiza-
tion also categorized projects by:
● Level of technology
● IT projects

● Property

● Business
● Division
● IT and Operations

● Retail
● Insurance and Investments
● Wholesale and International
● Group Finance

● CEO
● Complexity
● Small, in one department

● Cut across departments

● Group aggregated risk

There was also discussion of some projects ‘being labeled’ in

particular ways in order to get funding and to prioritize projects.
Prioritization frameworks vary between divisions and there is very
little work shared between divisions.

Needs for Project Categorization Systems

● It must be of sufficient size to cover the entire scope of work

● It must be complex enough to address competing attributes

● It must be related to business strategy
● It must conform to applicable legislation

Benefits of Categorization
● Help determine where to invest
● Highlight what is important
● Prioritize investments
● Aid resource allocation
● Help track investment

● Help aggregate risk

● Help asses complexity
● Assist in selecting appropriate methodology

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 ● Benefit delivery
● Help complete implementation
● Clarify understanding

Problems Associated with a Categorization System

● May be bureaucratic
● May be too complicated and cause confusion
● May be misinterpreted

● May emphasize the wrong things

● Could potentially be abused or have people hide behind the pro-
cess
● May not be accepted by internal customers

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 APPENDIX G

The Detail of the

Organizational Purposes Map

The Organizational Purposes Map

The Project Categorization Research Project undertaken for the Proj-
ect Management Institute identified a large number of different orga-
nizational purposes or usages served by project categorization sys-
tems. This large set of organizational purposes has been hierarchi-
cally organized into the structure that is presented here. The aim is
to present a set of organizational purposes that is both logically
organized and as complete as possible.
The map can be read from left to right, starting with high-level
organizational goals and selecting appropriate paths through the
structure to the relevant operational uses. Inversely, the map can
be read starting at the right and first identifying the more detailed
and more operational uses. The map is designed to provide a link
between the high-level and the operational-level organizational
usages of project categorization systems.
The organizational purposes have been grouped under two pri-
mary high-level purposes or goals: strategic alignment and capability
specialization. In addition to the two important high level organiza-
tional purposes under which most other uses can be grouped, another
perspective was identified that was best dealt with separately. This
is the third branch of the map: supporting the development and
visibility of a project management approach in the organization.
Neither the high-level nor the operational-level organizational
usages that are identified in the map are mutually exclusive catego-
ries, but categories that are suggestive and that make sense in many

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organizational contexts. The use of the map will require adaptation
to the specific context and goals of each organization. The presenta-
tion of this set of organizational purposes served by project categori-
zation systems does not imply that an organization should use proj-
ect categorization for these purposes. The aim is to present a set of
possible uses in a way that facilitates the identification of that which
is relevant in a specific context.

Figure G Organizational purposes map

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Notes
Heading
1. Strategic alignment
1.1 Selecting/prioritizing of
projects/programs
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Comment
Doing the right projects
Usages grouped under strategic
alignment are focused on
assuring that the organization
is doing the right set of projects
in that the projects undertaken
are aligned with the
organizational strategy and
with the organization’s capacity
to undertake and complete
projects.
Selecting and prioritizing
projects and programs is a very
important element of the
alignment of projects and
programs with organizational
strategy. This can be
undertaken at a macro level
through the analysis of the
entire portfolio of the
organization’s project/program
or a significant part thereof.
Grouping projects/programs
into categories is an important
step in the structuring of the
portfolio.
Individual projects/programs
are also the object of selection
and prioritization decisions.
Here too, determining in which
category a project/program
belongs is an important step in
the decision-making process.
Organizations that do projects
to change their own
organization, whether it be by
changing the current offering of
products and services or by
changing organizational

1.1.1 Aligning commitment
with capabilities
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processes, and organizations
that finance their own projects
tend to be very much
concerned with strategic
alignment from the perspective
of portfolio management.
Organizations that do projects
for outside customers who
provide financing tend to be
more concerned with the
decision to pursue or to execute
particular projects.
Organizations that execute
projects for other divisions of
their parent organization tend
not to be as concerned with
selection and prioritization as
these decisions are often made
in the customer divisions.
Both the management of the
project portfolio and decisions
relative to the initiation,
continuation, cancellation or
modification of individual
projects require the alignment
of project commitments with
the organization’s capabilities.
Aligning commitments with
capabilities requires knowledge
of what types of projects
require which capabilities. This
can entail the alignment with
present capabilities or the
selection of capabilities to be
developed through a strategic
capabilities approach to
strategic planning. In smaller
organizations, the key human
resources are often the key
strategic resources. In such
cases, assignment may be a
strategic alignment issue.
 1.1.2 Managing risk/
Controlling exposure
1.1.3 Allocating budget
1.1.4 Balancing portfolio
1.1.5 Identifying approval
process
1.2 Planning, tracking,
reporting of . . .
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Projects of different types have
different types and different
levels of risk. This information
is used in decisions whether to
undertake an individual project
or not, and under what
circumstances. This
information is also useful for
managing the organizations
overall exposure to risk through
its portfolio of projects.
Projects are funded from
budgets. Inversely, budgets are
allocated to projects. A
categorization system links
projects to budgets.
Managing exposure to risk and
aligning commitments with
capabilities are both related to
balancing the organization’s
portfolio of projects. However,
portfolios may need to be
balanced against many other
considerations. What these are
will depend on the
organization’s strategic
position.
Projects of different types can
have different approval
processes. This may include the
level of authority needed for
project approval.
The planning, tracking and
reporting of large numbers of
projects requires some sort of
grouping.
Criteria and methods for
planning, tracking and
reporting may vary according to
project type.
 1.2.1 Resource usage
1.2.2 Performance, results,
value
1.2.3 Investments
1.2.4 Comparability across
projects, divisions,
organizations
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Projects of different types can
have different resource
requirements, both in terms of
the types and quantities of
resources. Projects resourced
from different sources may
need to be tracked separately.
Reporting on the relationship
between resource usage and
groups of projects can be
important in both planning and
tracking.
A differential exists among
project types with respect to
their contribution to value
creation. Planning and tracking
performance and value creation
are central to developing and
sustaining a link between
organizational strategy and
project performance.
Organizations that invest their
own resources in projects are
concerned with planning and
tracking these investments.
This may involve separating
out the projects that should be
looked upon as investments or
sorting projects into groups that
are relevant from an
investment perspective.
Sorting projects into
standardized groupings
facilitates comparisons among
projects that are similar in any
one setting and across
organizations, departments,
regions, etc. Comparability of
this nature facilitates
benchmarking, both internally
(within an organization) and
externally (between
organizations).
 1.3 Creating strategic
visibility
2. Capability specialization
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For organizations with large
numbers of projects,
establishing the link between
organizational strategy and
projects requires either
selecting the small number of
projects that are strategically
significant or grouping and
naming a significant proportion
of the organization’s projects in
a way that is strategically
significant. Often it involves
both. In either case,
appropriately grouping and
naming projects contributes to
their visibility.
Doing the projects right
Different types of projects need
to be managed differently.
Many organizations undertake
several different types of
projects, each of which has
different managerial and
technical requirements. These
organizations often develop
project categorization systems
around sets of projects that
require similar competencies
and methods. These
organizations develop several
areas of specialization and
organizational units are often
created to house the
capabilities and the projects.
The whole organization is not
specialized in one type of
project because several types
are undertaken. Specializing in
different categories of projects
requires some degree of
stability in demand. There
must be sufficient projects in

2.1 Capability alignment
2.1.1 Choosing risk
mitigation strategy
2.1.2 Choosing contract type
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each category to merit the
development and maintenance
of specialized competencies.
Organizations create categories
of projects where there is a
difference that makes a
difference to project
performance. Specialization of
capabilities can be seen both as
an immediate short-term need
to ensure that current projects
are being appropriately
managed and as a longer-term
requirement to develop the
capabilities to appropriately
manage the organization’s
projects in the future and to
promote these capabilities.
If a project is assigned to an
appropriate category, the
resources and methods that
will be applied to its execution
will increase its chances of
success. This is an operational
issue of assignment. A project
that is assigned to a category
will benefit from an inter-
related set of methods and
competencies.
Having the appropriate risk
management tools and
strategies applied to a project
can have an important impact
on its success.
The contract strategy that is
chosen for a project has a
profound impact on many
aspects of its management.
Organizations that do projects
under different types of
contracts recognize this
 differentiating effect and create
methods for each type of
contract.
2.1.3 Choosing project Different types of projects may
organization structure require different organizational
structures and different
organizational arrangements
with other units inside and
outside the parent organization.
2.1.4 Choosing methods and Choosing risk mitigation
tools strategy, contract type and
organizational structure are all
important examples of choosing
methods and tools for
managing projects differently.
There are many other examples
of tools and methods that are
differentiated by project type
including tools for initiating,
planning, monitoring,
controlling, closing, and
handing over projects. Project
management methodology and
governance may also be
adapted to suit project type.
2.1.5 Matching of skill sets to Human resources often have
projects specialized training and
experience in certain types of
projects. By assigning projects
to the appropriate category
these competencies are brought
to bear on their execution.
2.1.6 Allocating project to In organizations that have units
organizational unit that are specialized in certain
types of projects, assigning a
project to a category also
assigns it to an organizational
unit with its specialized
knowledge, skills, and methods.

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 2.1.7 Setting price Price structures often vary be
type of project, both in terms of
how prices are determined and
relative profitability.
2.1.8 Enhancing credibility A customer’s perception that
with clients the supplier is specialized in
the type of project that it
requires can increase the
supplier’s credibility. This in
turn can lead to more success
in closing a deal, in obtaining
better conditions, and in
reassuring the customer.
2.2 Capability development In the medium to long-term,
organizations develop the
capability to do certain
categories of projects well and
to promote that capability.
2.2.1 Developing methods and Identifying the types of projects
tools an organization will undertake
in the future allows it to
identify the tools and methods
that will be necessary to
manage these projects well.
2.2.2 Managing knowledge Categories of similar projects
greatly enhance the ability to
capture and draw upon past
experience. This experience can
be codified in explicit tools,
techniques, methods, and
procedures and in the implicit
knowledge of skilled personnel.
Knowledge is often stored in
databanks, which are used for
estimating, risk management,
business development, etc.
Some form of categorization is
essential for any capture,
storage and retrieval of
knowledge.

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 2.2.3 Developing human
resources
2.2.4 Adapting to market/
customer/client
3. Promoting a project
approach
3.1 Providing a common
language
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Knowing the categories of
projects an organization will
undertake in the future helps
identify the competencies that
will be required of the
organization’s personnel. This
can be used to determine
training needs, career paths,
recruitment strategies, etc.
There are many ways that
project categorization can
support business development
and adaptation to the market.
Marketing strategies and
materials, as well as
promotional activities can be
focused on developing certain
types of projects in particular
markets, if the organization can
identify the types of
opportunities it wishes to
pursue. Organizational
arrangements, including the
assignment of responsibilities,
can be aligned with the
customer interfaces. Pricing
strategies can be adapted to the
opportunities for different types
of projects in different markets.
There are few if any examples
of systems of categories that
were designed specifically for
the promotion of a project
management approach.
However, several organizations
have implemented a project
categorization system as part of
a project management system.
A common set of categories
facilitates communication
across the organization. Project
categories are often rich

3.2 Distinguishing projects
from operations
descriptors that carry a great
deal of information.
In organizations with large
quantities of routine
operational activities, project
categorization helps to clarify
the differences between project
and non-project activities,
contributing to project
visibility.

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 APPENDIX H

The Detail of the Map of

Attributes for Building
Project Categorization
Systems

Attributes for Building Project Categorization

Systems
This is an inventory of attributes used as building blocks for develop-
ing project categorization systems. The content of this has been
drawn from both a review of the project management literature
and from data gathered during the Project Categorization Research
project undertaken on behalf of the Project Management Institute.
The inventory provides both high level attributes and examples
of more detailed categories. The high level attributes are widely used
in many contexts for a range of purposes, but the actual categories
used tend to be context-specific. These attributes are used in combi-
nation to create hierarchical systems for categorizing projects. The
attributes can also be combined to produce composite categories.
Most of the categories presented in this document are simple catego-
ries, but some examples of composites have been provided.
The information has been organized in a hierarchical fashion
with attributes followed by examples. All 14 attributes at the highest
or most general level are used widely in organizations and by
researchers; however, at the lower or more detailed levels of attri-
butes and more specific examples of categories, researchers tend
to use more abstract categories, while organizations tend to use
categories that are meaningful in their context.

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Figure H Categorization attributes map

Notes

1. Application Area/Product of Project

1.1 Example from Turner (2000)
● Arts/Entertainment/
Broadcasting
● Automotive
● Business Services
● Information Technology
● Insurance
● International Development
● Manufacturing

● Constructing ● Petrochemical

● Consulting ● Pharmaceuticals
● Defense and Aerospace ● Recreation

● E-Commerce ● Research and Development

● Education/Training ● Resources

● Electronics ● Telecommunications
● Environmental/Waste/ ● Transportation

Sewage ● Urban Development

● Financial Services ● Utilities

● Health/Human/Social ● Other

Services
● Information Systems

(including Software)
1.2 Example from Crawford (2001)
Engineering & construction
● Constructing
● Defense and Aerospace
● Environmental/Waste/Sewage

● Petrochemical

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 Engineering & construction ● Resources
(cont.) ● Transportation
● Urban Development

● Utilities

Information and ● E-Commerce

telecommunications ● Information Technology
● Information Systems
(including Software)
● Telecommunications

Services ● Arts/Entertainment/
Broadcasting
● Business Services

● Consulting
● Education/Training

● Financial Services
● Health/Human/Social Services

● Insurance
● International Development
● Recreation

Industrial processes ● Automotive

● Electronics
● Manufacturing
● Pharmaceuticals

● Research and Development

1.3 Recommended project categories/subcategories, with each

category (or subcategory) having similar project life cycle
phases and one unique process management process. (Archibald
& Voropaev, 2003)
Aerospace/Defense Projects ● Defense systems
(e.g., New weapon system;
major system upgrade).
● Space

(e.g., Satellite development/

launch; space station mod).
● Military operations

(e.g., Task force invasion).

Business and Organization ● Acquisition/Merger
Change Project (e.g., Acquire and integrate
competing company).

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 Business and Organization
Change Project (cont.)
Communication Systems
Projects
Event Projects
Facilities Projects
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● Management process
improvement
(e.g., Major improvement in
project management).
● New business venture
(e.g., Form and launch new
company).
● Organization restructuring
(e.g., Consolidate divisions
and downsize company).
● Legal proceeding
(e.g., Major litigation case).
● Network communications
systems
(e.g., Microwave
communications network).
● Switching communications
systems
(e.g., 3rd generation wireless
communication system).
● International events
(e.g., 2004 Summer Olympics;
2006 World Cup Match).
● National events
(e.g., 2005 Super Bowl; 2004
Political Conventions).
● Facility decommissioning
(e.g., Closure of nuclear power
station).
● Facility demolition
(e.g., Demolition of high rise
building).
● Facility maintenance and
modification
(e.g., Process plant
maintenance turnaround).
● Facility design/ procurement/
construction
Civil
(e.g., Conversion of plant for
new products/markets).
 Facilities Projects (cont.)
Information Systems
(Software) Projects
International Development
Projects
People and process-intensive
projects
In developing countries,
funded by The World Bank,
regional development banks,
US AID, UNIDO, other UN,
and government agencies; and
Capital/civil works intensive
projects
Often somewhat different
from Facilities Projects, since
they may include, as part of
the project, creating an
organizational entity to
operate and maintain the
facility, and lending agencies
impose their project life cycle
and reporting requirements.
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86911$CH16 09-07-05 13:36:22
Energy
(e.g., New gas-fired power
generation plant; pipeline).
Environmental
(e.g., Chemical waste cleanup).
High rise
(e.g., 40-story office building).
Industrial
(e.g., New manufacturing
plant).
Commercial
(e.g., New shopping center;
office building).
Residential
(e.g., New housing subdivision).
Ships
(e.g., New tanker, container,
or passenger ship).
(e.g., New project management
information system).
(Information system hardware
is considered to be in the
product development category.)
● Agriculture/rural development
● Education
● Health
● Nutrition
● Population
● Small-scale enterprise
● Infrastructure
(e.g., Energy [oil, gas, coal,
power generation and
distribution], industrial,
telecommunications,
transportation, urbanization,
water supply and sewage,
irrigation)
 Media & Entertainment
Projects
Product and Service
Development Projects
Research and Development
Projects
1.4 Example from Wirth (1996)
● Construction
● Information Systems
● Pharmaceuticals
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86911$CH16 09-07-05 13:36:22
● Motion picture
(e.g., New motion picture
[film or digital]).
● TV segment
(e.g., New TV episode).
● Live play or music event
(e.g., New opera premiere).
● Information technology
hardware
(e.g., New desktop computer).
● Industrial product/process
(e.g., New earth-moving
machine).
● Consumer product/process
(e.g., New automobile, new
food product).
● Pharmaceutical product/
process
(e.g., New cholesterol-
lowering drug)
● Service (financial, other)
(e.g., New life insurance/
annuity offering).
● Environmental
(e.g., Measure changes in the
ozone layer).
● Industrial
(e.g., How to reduce pollutant
emission).
● Economic development
(e.g., Determine best crop for
sub-Sahara Africa).
● Medical
(e.g., Test new treatment for
breast cancer).
● Scientific
(e.g., Determine the
possibility of life on Mars).
● Manufacturing
● Utilities
 1.5 Example from Cooke-Davies (2000)
Construction Design and build new physical
assets such as plant, highways,
buildings, or water mains. No
distinction is made between
construction and civil
engineering and any
accompanying mechanical and
electrical engineering works.
Refurbishment Refurbish existing buildings
and/or other facilities.
Hard Systems Hardware and the associated
software to operate it. Projects
include infrastructure IT
projects, electronic control
systems and telephone systems.
Soft Systems Includes changed business
processes, usually supported by
new or modified software.
New Products Specification, design and
manufacture of new products.
May include electronic
systems, aerospace products,
telephone products and
financial services products.
1.6 Example from Shenhar & Wideman (1996)
● Administrative ● Event or relocation
(e.g., a new accounting (e.g., a sporting event)
system) ● Maintenance
● Construction (e.g., of a petrochemical plant)
(e.g., a new road or building) ● New product development

● Computer software (e.g., a new drug)

(e.g., a new computer ● Research
program) (e.g., defense product)
● Design ● Other

(e.g., engineering plans) (e.g., a feasibility study)

● Equipment or system

installation
(e.g., a new computer
system)

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 1.7 Type of resource and/or technology used
From Case Study Case Study organizations
organizations categorized projects by
Application Area/Product in
ways that were meaningful for
their purposes.
Specific to the organization Projects may be grouped
and industry according to specific disciplines
applied or products produced by
the organization.
1.8 Product and Work (Shenhar & Wideman, 2002; Youker,
2002)
Set A ● Product is Tangible
Physical deliverable
● Product is intangible

Abstract deliverable
● Work is craft

Repetitive effort
● Work is intellect

Requires creativity
Set B ● Tangible-craft
(e.g., building)
● Intangible-craft

(e.g., writing a book)

● Tangible-intellect

(e.g., new product

development)
● Intangible-intellect

(e.g., developing a theory)

2. Stage of Life Cycle

2.1 Example (Project Life Cycle) from Turner (1999)
● Research ● Commissioning
● Development ● Operation
● Feasibility ● Maintenance

● Design ● Decommissioning
● Procurement ● Audit
● Delivery

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 2.2 Example (Project Life Cycle) from Dixon (2000)
● Opportunity identification ● Hand-over
● Design and development ● Post project appraisal
● Implementation

2.3 Example (Project Life Cycle) widely accepted categorization

of project life-cycle phases
● Initiation/Concept ● Implementation/Execution
● Planning/Development ● Finalization/Commissioning/
Handover
2.4 Example (Project Life Cycle) from Archibald & Voropaev
(2003)
● Concept ● Realization
● Development ● Closing
2.5 Example (Product Life Cycle) from Turner (1999)
● Research ● Testing
● Marketing ● Product launch
● Business analysis ● Product relaunch
● Development

3. Stand-alone or Grouped
3.1 Example from Dixon (2000) & Turner & Müller (2003)
Project Temporary agency for change
Program Several projects, single goal
Portfolio Projects grouped for
convenience
3.2 Example from Turner & Keegan (2000)
Large project Few projects, few customers
Program Many projects, few customers
Portfolio Many projects, many customers
Small project Few projects, many customers
3.3 System Scope
Example from Shophar (1998)
Assembly Single component
System Complex assembly
Array or program Dispersed systems

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 4. Strategic Importance
4.1 Strategic importance–Example
● Repositioning ● Survival
(e.g., New product (e.g., Response to legislation)
development)
● Renewal
(e.g., Maintenance)
4.2 Strategic importance–Example
● Mandatory ● Business critical
● Business strategic
4.3 Strategic importance–Example
● Strategic ● Capital expansion
● Operational ● Product and market expansion
4.4 Strategic initiatives
Specific to the organization
4.5 Impact on business
● Generates income ● Core vs. peripheral business
● Saves expenditure

5. Strategic Driver
5.1 Example from Cooke-Davies (2000)
● Time ● Process
● Cost ● Contingency
● Quality (i.e., the strategy was dictated
● Relationships by specific circumstances not
covered by any of the previous
five drivers).

6. Geography
6.1 Example–Number of sites from Evaristo & van Fenema
(1999)
● Single project, single site ● Distributed program
● Distributed project ● Multiple distributed projects
● Single program, single site ● Multiple distributed program

● Many projects, many sites

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 6.2 Example–Geographic distribution from case study company
● Domestic
● International
6.3 Example–Geographic distribution from Crawford (2001)
● One city or region ● International
● National
6.4 Example–Geographic location From Turner (2000)
● Europe ● Indian subcontinent
● Russia and FSU ● Far East
● North America ● Australasia

● Latin America ● Pacific

● Middle East ● Arctic and Antarctic
● Africa sub-Sahara

7. Project Scope
7.1 Size–Example from Turner (1999)
Small Shared resources, ⬍$1 million
Medium Shared resources, ⬍$10 million
Large Complex mix of activities
Major Many sub-projects
7.2 Size–Example from Payne & Turner (1999)
Small Cost 0.1% of company
turnover
Medium Cost 1% of company turnover
Large Cost 10% of company turnover
Major Cost company turnover
7.3 Size–Example from www.pmcompetence.net
Small $0–$1,000,000
Medium $1,000,001–$3,000,000
Large $3,000,001–$10,000,000
Very Large $10,000,001 and over

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 7.4 Functions/organizations involved from Morris (1992)
● Single function ● Several organizations
● Many-function, single ● Several countries
company
7.5 Number of internal and external organizations involved.
From Case Study organizations and Web-based questionnaire
7.6 Example (Composite) from Archibald & Voropaev (2003)
Minor projects One project manager to manage
two or more minor projects
simultaneously;
Less than the full application of
the complete project
management process for the
project category (selected basic
forms, approvals, plans,
schedules, budgets, controls,
reports, less frequent project
review meetings, with less
detail required in each).
No formal assignment of an
executive Project Sponsor;
sponsor role retained within
line organization.
Major projects Designation of an executive
Project Sponsor.
Assignment of a full-time
Project (or Program) Manager.
The full application of the
project management process
specified for the particular
project category for major
projects (all specified forms,
approvals, plans, schedules,
budgets, controls, reports,
frequent project review
meetings, with substantial
levels of detail in each).
Mega projects or programs ‘‘Mega’’ Projects or Programs
are extremely large, complex
projects (or programs) that areso
unique in their size, scope,

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 Mega projects or programs risk and duration that they
(cont.) require specially designed
organizational arrangements
(usually joint ventures, often
including both private
companies and governmental
agencies). As these are broken
down into their component
elements it is usually practical
to identify a number of major
and minor projects within one
or more categories that
comprise the mega-project/
program.

8. Project Timing
8.1 Project duration–Example from Cooke-Davies (2000)
● ⬍ 1 year ● ⬎3 years
● 1 to 3 years
Project duration–Example from www.pmcompetence.net
● Up to 3 months ● More than 1 year
● 3 months to 1 year
8.3 Pace
● Regular ● Blitz-Critical
● Delays not critical ● Time is critical to success,
● Fast-Competitive crisis project
● Time to market is a

competitive advantage

9. Uncertainty, Ambiguity, Familiarity

9.1 Familiarity–Example
● Virtually routine ● Some components familiar
● Runners ● Strangers
● Elements are repeats ● Totally new and unfamiliar

● Repeaters ● Aliens

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 9.2 Familiarity–Example from case study organization
● Major periodic maintenance ● Routine maintenance not
● Capital projects categorized as projects
(e.g., acquisitions, create new
assets)
9.3 Technical familiarity–Example from Shophar (1998)
Low-technology Well known mature technology
Medium-technology Adaptation of familiar
technology
High-technology First use of new technology
Super-high-technology Development of new
technology
9.4 Technical familiarity–Example from case study
organization
● Type A: Simple, repetitive; ● Type C: Complex one-off
Low tech, low risk design issue
● Type B: Simple process; ● Type D: Multidisciplinary;

Some technology Higher risks

9.5 Level of Certainty/Clarity from Turner & Cochrane (1993)
and Obeng (1994)
Goals/Product and Methods/ Type 1, earth, painting by
Process certain/clear numbers
Goals/Product clear, Methods/ Type 2, water, making a picture
Process uncertain/unclear
Goals/Product uncertain/ Type 3, fire, going on a quest
unclear, Methods/Process
certain/clear
Goals/Product and Methods/ Type 4, air, fog
Process uncertain/unclear
9.6 Level of ambiguity
Although not precisely the same as Uncertainty or Lack of
Clarity, these attributes may be used to characterize level of
ambiguity.

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 10. Risk
Individual attributes as well as composites of attributes are
used as the basis for characterization of Risk. Included here are
examples of attributes that are primarily used alone or in
combination with others as a basis for Risk categorization.
Links are also provided to attributes such as Scope, Timing,
Level of Uncertainty, Ambiguity and Familiarity and Number
of Sites that are commonly used as a basis for categorization for
other purposes. As Complexity is considered as a major source
of Risk, all attributes listed and referred to under Complexity
can also be used for characterization of Risk.
10.1 Example
● Project Scope ● Number of sites
● Speed and urgency of ● Uncertainty of market
delivery ● Source of risk

● Level of Uncertainty,

Ambiguity, Familiarity
10.2 Source of Risk Example from Turner (2002) and Turner &
Cochrane (1996)
● None ● Process
● Product ● Both
10.3 Example from Turner (1999)
● Negligible ● High
● Risk insignificant ● Risk 10% of project value
● Low ● Severe
● Risk 0.1% of project value ● Risk of total failure
● Medium
● Risk 1% of project value

10.4 Example (Composite) from www.pmcompetence.net

Low Possible low negative impact
on customer experience
Low impact on operations (new
technology, business
procedures, policy, etc.)
Project development length 1-3
months
Project staffing level 1-4

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 Medium Possible medium negative
impact on customer
Medium impact on
corporations (new technology,
new business procedures,
policy, etc.)
Project development length 4-6
months
Project staffing level 5-15
High Possible extensive negative
impact on customer
Extensive impact on operations
(new technology, new business
procedures, policy, etc.)
Project development length ⬎6
months
Project staffing level ⬎15
10.5 Example (Composite) from Archibald & Voropaev (2003)
● Degree of newness of the ● External customer (project
project type to the under contract) or internal
organization. customer and their overall
● Duration and urgency of importance to the
completion organization.
● Higher risk if short duration ● Contractual terms

with fixed end date, or if ● Penalties, guarantees, foreign

long duration with likely exchange.

unpredictable economic or ● Regulatory surveillance and

political changes. approvals required.

● Complexity ● Degree of customer

● Technology involvement in the project.

● Degree of innovation and ● Market volatility.

uncertainty regarding the ● Availability of scarce

product technology or its resources

production process. ● Skilled, experienced people;

specialized facilities.

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 11. Complexity
Individual attributes as well as composites of attributes are
used as the basis for characterization of Complexity. Included
here are examples of attributes that are primarily used alone or
in combination with others as a basis for Complexity
categorization. Links are also provided to attributes such as
Scope, Timing and Number of Sites that are commonly used as
a basis for categorization for other purposes.
11.1 Example
● Project scope ● Level of Uncertainty,
● Project timing Ambiguity, Familiarity
● Number of sites

11.2 Example (composite) from Archibald & Voropaev (2003)

● Diversity inherent in the ● Sources of technology
project objectives and scope ● Sources of funding.
● Number of different internal

and external organizations

involved, which is usually an
indication of the number of
required specialized skills
11.3 Example (Composite) from www.pmcompetence.net
Low Simple functions/processes
Simple technology
requirements
Simple Interface with other
systems/services /products
Medium Average functions/processes
Average technology
requirements
Average Interface with other
systems/services /products
High High functions/processes
High technology requirements
High Interface with other
systems/services /products

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 12. Customer/Supplier Relations
12.1 Market segmentation from Case Studies specific
to the organization
12.2 Nature of relationship with customer–Example
● Internal
● External
12.3 Nature of relationship with customer–Example from
Cooke-Davies (2000)
● In-house ● Procurer
● Supplier ● Prime contractor
12.4 Name of the customer
● Specific to the organization
● Organizations with a small number of major customers may
group projects by customer. If your customers are divisions of
the parent organization, projects may be grouped accordingly.
12.5 International cooperation. Widely accepted categorization
in International Development field.
● Client host, alien contractor ● Both alien
● Contractor host, alien client

13. Ownership/Funding
13.1 Ownership. Grouping by these various forms of ownership
was found in Case Study organizations.
● Business area ● Project manager
● Project owner ● Person or department gaining
● Person or department business benefit
providing finance ● Internal or external client
● Project sponsor or champion

● Person or department
gaining organizational/
business benefit.
13.2. Source of funding from Turner (1995)
● Parent company–revenue ● Limited recourse financing
● Parent company–capital ● Project financing

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 13.3 Budget allocation. The budget from which the project is
financed is often a basis for grouping.
● Budgets of divisional units ● Research and development
● Company wide development ● Special purpose funds
budget

14. Contractual Issues

14.1 Terms of payment from Turner (2002)
Fixed price on detail design
on functional specification
on cardinal pointsTarget price
Cost plus % fee
fixed fee
incentive fee
Alliance gain share
Remeasurement schedule of rates
bill of quantities
bill of materials
Guaranteed maximum price
Time and materials to budget
14.2 Contract Strategy from Cooke-Davies (2000)
● Fixed price ● A partnering strategy
● Target price ● (i.e., based on partnering
● Flexible price arrangements with suppliers,
● (i.e., time and materials, or that specify overall terms and
some variant of it) conditions for these and other
● A hybrid strategy projects)
● (i.e., combining elements of ● An alliance strategy
the first three) ● (i.e., based on pain- and gain-
sharing arrangements that
treat suppliers as equity-
holding partners in the
project).
14.3 Scope of supply from Turner (2002)
● Scope design ● EPC
● Detail design ● Design, build, operate
● Build only ● Concession
● Design and build

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 14.4 Management forms
● Construction management ● Management contracting
● Design and management ● Prime contracting
14.5 Who controls risk from Turner (2002)
● Client
● Contractor
● Both

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