PMI_TW電子報第六期_專欄文章

What is Project Success

“On schedule, within budget and with quality.” Any project practitioner can respond in no time. The answer to this question is so apparent that PMBOK Guide1 mentions the word “project success” nine times without giving it a formal definition. Is the former answer both necessary and sufficient to guarantee the success of a project? To answer this question, further investigation into what “project success” really means is needed. Firstly, let’s look at a typical project cycle model as shown in Figure 1. Figure 1: Typical Project Cycle Model From above figure, it can easily be found that “project success” depends on the perspectives of key project stakeholders. From the point of view of the customer, “project success” means that the product delivered by the project solves his/her problems, the organization judges the “project success” by the benefits delivered by the product created by the project, whereas the project team considers that they deliver the product on time, within budget and with quality a success. We can subdivide these different perspectives about “project success” into “project product success” and “project management success”, which can be defined as2: Project product success focuses on the effects of the project’s end-product, i.e., the value perceived by the customers and the performing organization of the project product. Project management success focuses on the project management process and in particular on the successful accomplishment of the project with regards to cost, time and quality. These three dimensions indicate the degree of the efficiency of project execution. Project results can be classified into four types by the combination of “project management success/failure” and “project product success/failure” as shown is Table 1. Table 1: The Project Results Types Case projects for each type in above table can be easily found in the internet. A search by the author is shown as below: Table 2: Case Projects pertaining to Different Project Results Type Type Project Title Project Management Project Product SS Guggenheim Museum Bilbao3 Schedule: on time (completed at October 1997) Cost: within budget (USD 100 million) Less than one year later, the Basque Museum had already received more than 1,300,000 visitors. FS Sydney Opera House4 Schedule: 10 years overtime (completed in 1973 vs. 1963) Cost: 14 times over budget (AUD 102 million vs. AUD 7 million) appointed as a UNESCO World Heritage Site on 28 June 2007 SF Tacoma Narrows Bridge5 built between November 1938 and July 1, 1940, it had been completed in record time, and its completion was called a triumph of man's ingenuity and perseverance collapsed on November 7, 1940 at 11:00 AM (Pacific time) FF Superconducting Super Collider6 Cost: USD 4.4 billion in 1987, USD 12 billion by 1993. canceled by US Congress in 1993 As project management practitioners, which type of project results should we pursue? There is a very good argument in an article written by Major Delano7 - “Delays in procurement or cost overruns are temporary problems that must be managed in order to keep the program alive. Those problems are forgotten once the system is fielded. The main concern of the ultimate user is if the system works well when deployed.” So, the answer is apparent - we should pursue SS as the first priority, FS as the second priority, and the remaining types are unacceptable. The problem lies in the time delay of validating if the product can really solve the customer’s problem and benefit the organization. At project completion, the product delivered is presumably capable of solving the problem of the customer and delivering benefits to the organization. Depending on the purpose of the project, the delay varies over a wide range. According to the extent of the delay, four primary project success categories as seen at project completion can be defined8 : Project Efficiency - Internal Project Objectives such as meeting time and budget goals. Impact on the Customer - Immediate and long-term benefit to the customer Direct and Business Success - Direct contribution to the organization (usually not observable until the medium term) Preparing the Future - Future opportunity (e.g. competitiveness or technical advantage typically expected in the long term.) According to above definitions, the relations between project success categories, project success, and time since project completion can be portrayed as shown in Figure 2. Figure 2: Project Success Categories vary with Time From above figure, it can be easily understood that whether the project is successful or not cannot be determined at the time of closure for projects belonging to categories 3 and 4. According to above discussions, we know that the product success is the key point to project success. The problem is how we can promise something which cannot be determined within the time frame of a project. The clue lies in Critical Success Factors (CSF) which is defined as below: “Those managerial factors, listed in order of importance, that when present in the project’s environment are most conducive to the achievement of a successful project.” Research has shown that attention to these factors will improve the probability of project success, and reduce the chances of failure. The project management literature abounds with critical success factors models. The most cited is Pinto’s 10-factor model9 shown as below: Pinto’s 10-factor model Project mission—Clearly defined goals and general directions. Top management support—Willingness of top management to provide the necessary resources and authority/power for implementation success. Schedule/plans—A detailed specification of the individual action steps for system implementation Client consultation—Communication, consultation, and active listening to all parties impacted by the proposed project PersonneL—Recruitment, selection, and training of the necessary personnel for the implementation project team Technical tasks—Availability of the required technology and expertise to accomplish the specific technical action steps to bring the project online. Client acceptance—Selling the final product to its ultimate intended users. Monitoring and feedback—Timely provision of comprehensive control information at each stage in the implementation process. Communication—The provision of an appropriate network and necessary data to all key actors in the project implementation process. Troubleshooting—Ability to handle unexpected crises and deviations from plan. However, there are cautions about the usage of CSF10: By simply adopting a list, managers never learn how to think in terms of CSF, and therefore CSF utility is minimized. The lists produced from the research tended to be stated as something other than an activity, and the lists deliberately eliminated any reference to CSF having a contextual flavor. Yet, any valid set of CSF for a manager will always be contextually relevant to that manager. A few conclusions can be drawn from above discussions as follows: Project success = Project Product Success + Project Management Success For some projects, project product success cannot be determined at the completion of the project. To assure project success, attention should be paid to CSFs. But beware of CSFs’ contextual relevance to the project environment A Guide to the Project Management Body of Knowledge, 3rd ed., ANSI/PMI 99-001-2004, Project Management Institute, Inc., Newton Square, Pennsylvania, USA, 2004. Adapted from Jugdev. K. and Muller, R., “A Retrospective Look at Our Evolving Understanding of Project Success,” Project Management Journal, Vol. 36, No. 4, December 2005, pp. 19-31. “Guggenheim Museum Bilbao - Bilbao, Spain,” http://www.paratusgroup.com/project_content_html?project_id=1&status=completed, retrieved on 6 August 2007. “Sydney Opera House,” http://en.wikipedia.org/wiki/Sydney_Opera_House, retrieved on 6 August 2007. “History of the Tacoma Narrows Bridge,” http://www.lib.washington.edu/specialcoll/exhibits/tnb/page2.html, retrieved on 6 August 2007. “Superconducting Super Collider,” http://en.wikipedia.org/wiki/Superconducting_Super_Collider, retrieved on 6 August 2007. Delano, K. J., “Identifying factors that contribute to program success,” Acquisition Quarterly, Winter 1998, pp. 35-50. Shenhar, A.J. and Wideman, R. M., “Optimizing Success by matching Management Style to Project Type,” April, 2002. Pinto, J.K, and Rouhiainen, P. J., Building Customer-Based Project Organizations, John Wiley & Sons, 2001. Dobbins, J. H., “Identifying and Analyzing Critical Success Factors,” Program Management, September – October 2001, pp. 46-49.

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PMI_TW電子報第三期_專欄文章

The Value of Project Management

Many brand-new PMPRs at Taiwan are enthusiastic about promoting project management in their company. But much to their disappointment, they often lacked support from their top management and were swamped by their colleague’s complaints, such as too many documents, too often meetings, daunting procedures, and, no time to do work, etc. After a while, their enthusiasm was dissipated and the project management implementation initiative just disappeared like ripples in a pond. Is there any solution to solve this problem? In my perspective, to communicate clearly the value of project management is the crucial point. Value does matter “Values are the basic convictions that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence. They contain a judgmental element in that they carry an individual’s ideas as to what is right, good, or desirable. Values tend to be relatively stable and enduring” According to the above quotation from the popular organization behavior textbook written by Robbins and Judge, we can infer that once the value of project management was established in an organization, the top management will consider the institutionalization of project management is right and they will commit the company resources to the implementation of project management for long rather than an impromptu as filed in various lessons learned. We can also infer that the project managers will recognize that running projects using the project management methodology is the norm rather than exception, and proper documents, meetings and procedures are necessary for the benefits of both projects and the company in the long run, and most importantly, they will persevere at running project with project management disciplines no matter how hard the environment is. By the same argument, the project team members will deem that following the project management procedures is what they should do, and appreciate that disciplined project management can help them do right things from the right start, avoid unnecessary rework and overtime, and they will cooperate with the project managers from their heart. The cognition gap Though we, project management practitioners, consider the value of project management is so apparent that there is no need to overemphasize it, a popular textbook written by Hill and Jones on strategy management doesn’t even mention the word “project management” once in the sections about “value chain”2. They clearly state the value creation roles of primary activities (research and development, production, marketing and sales, and, service) and support activities (company infrastructure, human resources, and, materials management). The above mentioned fact has a great influence on the cognition of the value of project management by top management. Because this textbook is used by many MBA programs, many top managers learned strategy management just from here. They had no idea about the value of project management, because the textbook doesn’t mention that there is any role played by project management in the value creation process of a company. All the project management practitioners know that projects are the main instruments in the company to integrate all these primary activities and support activities to produce products, services and results which are beneficial to the company stakeholders. Without projects most of the promises to the company stakeholders will be hard to be realized. This is the reason why we need to communicate the value of project management to the top managers. The environment here is even worse here than developed western countries. The companies at Taiwan are mostly medium to small size, and, are owned and run by family—the boss is the law. If we cannot convince the boss the value of project management, the promotion of project management is just like fighting a campaign without any hope of success. Numbers tell According to the survey (with 1,867 respondents) by Tomas et al3, they captured the following insights into the value placed on project management in today's organizations: 82% agree that project management is used to increase the likelihood of delivering successful projects While 60% agree, "projects are usually aligned with my company's strategic plans," 60% disagree that projects within their company are usually completed on schedule or on budget. 73% agree that project management enhances customer satisfaction 71% agree that project management enhances their firm's performance in non-financial ways. If the above figures are not convincing enough, the Center for Business Practices (CBP), the research arm of PM Solutions, has conducted industry-wide studies using a balanced family of measures that document the value of project management to organizations4. In those studies, 97% of the respondents say project management adds value to their organizations. By implementing project management improvement initiatives, organizations have on average returned the following value: What we should do next It can be expected that there are still some antagonists claiming the above data are not convincing because of the difference between cultures and environments. Truly, much of the quantitative data about the value of project management we can show now are from developed western countries, which are much more mature on project management than us. I suggest that PMI Taiwan chapter continuously sponsors graduate student research programs surveying Taiwanese companies on the value of project management, contrasting with western countries, and observing the trends. After a few years, we will have solid local data base to convince anyone the value of project management on Taiwanese companies and to obtain their commitment to implement it. Robbins, S. P. and Judge, T. A., Organizational Behavior, 12th Ed., Pearson Education Inc., Upper Saddle River, New Jersey, 2007, pp. 108-109. Hill, C. W. L. and Jones, G. R., Strategic Management: An integrated Approach, 4th Ed., Houghton Mifflin Company, New York, 1998, pp. 119-123. Thomas, J., Delisle, C. L. and Jugdev, K., Selling Project Management to Senior Executives: Framing the Moves that Matter, Project Management Institute, 2002. “The Value of Project Management: Validating the positive impacts of project management on organizations,” PM Solutions White Paper Series, Project Management Solutions, Inc., 2002.

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