Value-Driven Project Management
August 2009, ©2009
In the traditional view of project management, if a project manager completed a project and had adhered to the triple constraints of time, cost, and performance, the project was considered a success. Today, in the eyes of the customer and the parent or sponsoring company, if a completed project did not deliver its anticipated value, it would be seen as a failure.
Today's changing economic climate, marked by an increasingly competitive global environment, is driving project managers to become more business oriented. Projects must now be viewed from a strategic perspective within the context of a business or enterprise that needs to provide value to both the customer and the organization itself. As a result, project managers are now required to possess the skills to complete a project within certain specifications, and also know how to create and deliver value.
Responding to the needs of today's project managers, Value-Driven Project Management begins by changing the paradigm of project management. Rather than judge the success of a project from the perspectives of time, budget, and quality, the authors demonstrate why success is only achieved when planned business values are met, including:
The authors also offer best practices that allow you and your organization to create additional value in efficiency, customer satisfaction, and enhanced products and services. Finally, the book helps you incorporate value into clearly defined business objectives and "sell" the value-driven process to executives.
Throughout the book, helpful illustrations clarify complex concepts and processes.
Assigning valuable resources to projects that don't provide some tangible form of value to the organization and to the client is poor management and poor decision-making. On the other hand, selecting and implementing projects that will deliver value and an acceptable return on investment is effective management and decision-making, but is very challenging, especially when a project may not provide its target value for years to come. With Value-Driven Project Management in hand, you'll discover the tools you need to ensure that projects deliver true value upon their completion.
International Institute for Learning, Inc. (IIL) xii
Chapter 1: HOW PROJECT MANAGEMENT HAS CHANGED 1
Why Traditional Project Management May Not Work 2
Today’s View of Project Management 8
Changing Views of Project Management 16
Recognizing the Need for Change 46
Chapter 2: CHANGING OUR DEFINITION OF PROJECT SUCCESS 49
Changing Times 50
Not Meeting the Triple Constraint 52
Defining Project and Program Success 54
Redefining the Triple Constraint Success Criteria 56
Definition of Success 58
Chapter 3: THE IMPORTANCE OF VALUE 61
Types of Value 64
Return on Investment (ROI) 66
Types of Business Values 68
Changing Values 70
Chapter 4: THE STAKEHOLDERS’ VIEW OF VALUE 103
Stakeholder Perception 104
Classification of Stakeholders 106
The Sydney, Australia, Opera House 108
Apple’s Lisa Computer 112
Denver International Airport 116
Balancing Stakeholders’ Needs 120
Traditional Conflicts over Values 122
Project Management Value Conflicts 124
Value Perceptions within a Project 126
Chapter 5: THE COMPONENTS OF SUCCESS 129
Four Cornerstones of Success 130
Categories of Success 132
Categories of Values 134
Deciding on the Quadrant 138
Internal Values 140
Financial Values 142
Future Values 144
Customer-Related Values 146
Reasons for Internal Value Failure 148
Reasons for Financial Value Failure 150
Reasons for Future Value Failure 152
Reasons for Customer-Related Value Failure 154
Antares Solutions 156
General Electric (Plastics Group) 158
Asea Brown Boveri (ABB) 160
Westfield Group 162
Computer Associates Technology Services 164
Convergent Computing 166
Automotive Suppliers Sector 170
Banking Sector 172
Commodity Products (Manufacturing) Sector 174
Large Companies 176
Small Companies 178
Chapter 6: SUCCESS AND BEST PRACTICES 181
From Values to Best Practices 182
Two Components of Success 184
Redefining Value Metrics (CSFs and KPIs) 186
The Need for Changing Metrics 188
Project Management Office Involvement 190
Discovery of Best Practices 192
The Debriefing Pyramid 194
Disclosure of Best Practices 196
Levels of Success in Obtaining Values 198
Project Management Knowledge 200
Project Management Benchmarking 202
Sharing Values during Benchmarking 204
Intellectual Property Cost versus Value 206
Implementation Failures 208
Chapter 7: THE VALUE CONTINUUM 211
The Timing of Values 212
The Value Continuum 214
Barriers along the Continuum 216
Activities to Speed Up the Value Continuum 218
The Value Continuum and the Project
Management Maturity Model 220
Value Management Life-Cycle Phases 222
Value Identification Phase: Business Case 224
Business Drivers Phase: Business Drivers 226
Measurement Phase: Key Performance Indicators 228
Value Realization Phase: Value (Benefits) 230
Customer Satisfaction Management Phase:
Continuous Improvement 232
Chapter 8: ASSIGNING VALUE THROUGH OBJECTIVES 235
Types of Performance Reports 236
Benefits and Value at Completion 238
Determining Benefits (Value) at Completion 240
Establishing the Business Objectives 242
Estimating Approaches 246
Project Plans 248
Business Plans 250
Canceling Projects 252
Marrying Project and Program Management 254
Chapter 9: VALUE LEADERSHIP AND SENIOR MANAGEMENT 257
The Evolution of Leadership 258
Measurements and Triggers 260
What Executives Want to Hear 262
Critical Issues for the Selling Process 264
Threats that Executives Face 266
Project Management Success versus Maturity 268
Harold D. Kerzner, Ph.D., is Senior Executive Director at the International Institute for Learning, Inc., a global learning solutions company that conducts training for leading corporations throughout the world. He is a globally recognized expert on project, program, and portfolio management, total quality management, and strategic planning. Dr. Kerzner is the author of bestselling books and texts, including the acclaimed Project Management: A Systems Approach to Planning, Scheduling, and Controlling, Tenth Edition.
Frank P. Saladis, is a Senior Consultant and Trainer for the International Institute for Learning, Inc. and editor of the allPM.com newsletter, a global project management publication. Mr. Saladis was awarded the 2006 Linn Stuckenbruck Person of the Year Award by the Project Management Institute. The award recognizes people who have made significant contributions to the Institute as leaders in project management. Mr. Saladis is the originator of International Project Management Day, held each year to celebrate and recognize project managers from around the world.
International Institute For Learning, Inc. (IIL) is a global leader in professional training and comprehensive consulting services in the areas of project, program, and portfolio management, PRINCE2®, business analysis, Microsoft® Office Project and Project Server, and Lean Six Sigma. IIL is an IIBA- endorsed education provider, a PMI® charter global registered education provider, and a member of PMI's Silver Alliance Circle, and Corporate Council.
Over the past five decades, there have been evolutionary changes in the way projects are managed. Project management has now matured into a business process as well as an organized product and service delivery process. As such, project objectives are now aligned with business objectives in addition to technical objectives. The definition of a successful project has also changed from technical success criteria to business-related success criteria — specifically, on time, within planned cost, at the desired performance level, and with formal customer acceptance. For professionals that need the latest project management insights and best practices, John Wiley & Sons, Inc. has aligned with the International Institute for Learning, Inc. (IIL) to publish books to keep professionals up to speed on project management methods and technologies. The first three titles are set to publish this month, and they cover everything executives and managers need to know about project management. Using the IIL’s successful Kerzner Approach® to project management, this series of books also acts as a supplement for IIL course offerings.
VALUE-DRIVEN PROJECT MANAGEMENT (September 2009; $24.95) is the first book in the new series and it is written by the best-selling project management authors Dr. Harold Kerzner and Frank Saladis. The book focuses on fundamentally changing the way project management is viewed and implemented within corporations, covering the traditional approach of planning, scheduling, and controlling, as well as how to view each project by its value to the corporate and business strategy as a whole.
The second book, WHAT EXECUTIVES NEED TO KNOW ABOUT PROJECT MANAGEMENT (September 2009; $24.95), focuses on teaching the basic principles of project management to top managers who need an understanding of the benefits and how it fits into the overall business strategy, but not necessarily the step-by-step processes. Today, project management skills are becoming more business-oriented skills. Many executives now believe that they are managing their business as though it is a series of projects, and project managers are expected to make decisions that are in the best interest of both the project and the business or company.
The third release, WHAT FUNCTIONAL MANAGERS NEED TO KNOW ABOUT PROJECT MANAGEMENT (September 2009; $24.95), covers the basic principles of project management to mid-level managers who need an understanding of the benefits and how it fits into the overall business strategy, as well as knowledge of the step-by-step processes. As with the previous two titles, this book contains the entire IIL course, both text and accompanying images, in easy and accessible language and format.
When project management is implemented correctly, it works, and it works well. But there is sometimes resistance to change introduced by project management. Some people put their own personal aspirations for power and authority ahead of what may be in the best interest of the company. The result can be a very slow maturity process. This set of new releases helps professionals break through the resistance and use project management efficiently and effectively.
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Our core businesses publish scientific, technical, medical and scholarly journals, encyclopedias, books, and online products and services; professional/trade books, subscription products, training materials, and online applications and Web sites; and educational materials for undergraduate and graduate students and lifelong learners. Wiley's global headquarters are located in Hoboken, New Jersey, with operations in the U.S., Europe, Asia, Canada, and Australia. The Company's Web site can be accessed at http://www.wiley.com. The Company is listed on the New York Stock Exchange under the symbols JWa and JWb.
About International Institute for Learning, Inc. (IIL)
International Institute for Learning, Inc. (IIL) is a global leader in professional training and comprehensive consulting services in the areas of Project, Program, and Portfolio Management, PRINCE2™, Business Analysis, Microsoft® Office Project and Project Server, and Lean Six Sigma. In addition to its many course offerings, productivity tools, and professional certification pathways, IIL leads the way in customized course development. Its Many Methods of Learning™ enable IIL companies in more than 18 major countries around the world to deliver innovative, effective, and consistent training solutions via a variety of learning platforms (traditional classroom, virtual classroom and on-demand training). IIL is an IIBA endorsed education provider, a PMI® charter global registered education provider, a member of PMI’s Silver Alliance Circle member, and PMI’s Corporate Council. For more information and free webinars visit http://www.iil.com or call 800-325-1533. Also visit IIL’s PM portal www.allPM.com.
ABOUT THE AUTHORS:
HAROLD KERZNER, PHD is Senior Executive Director for Project, Program and Portfolio Management at the International Institute for Learning, Inc. (IIL), a global learning solutions company that conducts training for leading corporations throughout the world.
FRANK P. SALADIS, PMP, is a senior consultant and trainer for the International Institute for Learning Inc. (IIL) Mr. Saladis was awarded the 2006 Linn Stuckenbruck Person of the Year Award by the Project Management Institute. The award recognizes a person who has made a significant contribution to the Institute as a leader in project management. Mr. Saladis is the originator of International Project Management Day, held during November each year. IPM Day 2009 will be celebrated on November 5th. For more information, go to http://www.iil.com/ipmday2009.
WHAT FUNCTIONAL MANAGERS NEED TO KNOW
ABOUT PROJECT MANAGEMENT
Published by John Wiley & Sons, Inc.
Publication date: September 28, 2009
$24.95; Hardcover; 256 pages; ISBN: 978-0-470-52547-0
WHAT EXECUTIVES NEED TO KNOW ABOUT PROJECT MANAGEMENT
Published by John Wiley & Sons, Inc.
Publication date: September 7, 2009
$24.95; Hardcover; 304 pages; ISBN: 978-0-470-50081-1
VALUE-DRIVEN PROJECT MANAGEMENT
Published by John Wiley & Sons, Inc.
Publication date: September 7, 2009
$24.95; Hardcover; 288 pages; ISBN: 978-0-470-50080-4