Description
Project management is the discipline of planning, organizing, motivating, and controlling resources to achieve specific goals.
A Hybrid Approach to Organizational Project Management
Abbas Ehsanfar, Mehran Sepehri
Abstract—This paper provides a new approach for hybrid use of Project (Organization) Excellence Model and OPM3 to project organizations. This approach gives an effective and reliable cycle of continuous improvement in organizations whereby will get benefits of both models. So, it will be beneficiary for goal of continuous improvement which is speculated in the final level of organizational maturity model. It could assure stakeholders from repeatable success of project management in future. We are trying in this paper identifying and filling current space between Organizational Excellence and Maturity Models in which some organizations feel the obligatory of changes in a proactive and predictable approach to a reliable and self-progressing Project based Organization.
W
I. INTRODUCTION
hat do we mean by “organizational project management maturity model”? First, “organizational” increases the domain of project management beyond delivery of the single project, which is the subject of the Project management Institute’s “A Guide to the Project Management Body of Knowledge”. The use of the word “maturity” implies that capabilities must be grown over time in order to produce repeatable success in project management. The Random House College Dictionary defines “maturity” as full development or perfected condition. "Maturity" also connotes understanding or visibility into why success occurs and ways to correct or prevent common problems. “Model” implies change, a progression, or steps in a process. We would like to design a model in which the processes indicated in Organization Excellence Model can be developed to Organizational Project Management and simultaneously the criteria determining fundamental concepts of organizations be considered. We can talk about organizational project management in terms of processes: Process of planning strategies Process of chartering projects Process of prioritization of projects Process of managing the program and project portfolio Process of individual project management Process of managing the environment
We learned from quality movement that process performance improves when processes are standardized, measured, controlled, and continuously improved. These are fundamental levels of OPM3 and we would like to pass them in a predictable and gradual manner to the criteria and processes incorporated in Organization and Project Excellence Models. We provide an approach by which the organizational processes incorporate the three domains of OPM3 (Portfolio, Program, Project), the organizational management and results include most of criteria developed in excellence models, the organizational self-assessment and feedback approach known as RADAR is considered, the organizational improvement cycle in OPM3 and finally the interactive effects are all integrated. II. BACKGROUND The Project Management Maturity Model (ProMMM) has been developed to meet these needs, drawing on established concepts from existing models such as the Capability Maturity Model (CMM) from CarnegieMellon Software Engineering Institute (Paulk et al. 1993, 1995) and the EFQM Excellence Model from the
Abbas Ehsanfar is currently with the Graduate School of Economics and Management, Sharif University of Technology, Tehran, Iran. Dr. Mehran Sepehri is currently a faculty member of Graduate School of Economics and Management, Sharif University of Technology, Tehran, Iran ([email protected] ).
European Foundation for Quality Management (EFQM, 1999). It also draws on a previously published model developed to assess organizational risk management capability (the Risk Maturity Model—see Hillson 1997). The basis for ProMMM is practical and pragmatic, based on the empirical experience of its developers in providing project management consultancy across a wide range of industries over many years. After this model the Project Management Institute (PMI) developed the Organizational Project Management Maturity Model (OPM3). Whether an organization is fully projectized or not, OPM3 provides guidance regarding how to: Articulate project success Measure project performance Make the delivery of projects more predictable Help projects work together instead of against each other in a multi-project environment Best Practices + Processes = Integrated model design A. OPM3 There has been rapid growth in so called “maturity models” which claim to measure degrees of capability in various disciplines, aiming to help organizations become “more mature”. The Project Management Institute (PMI) has developed his own Organizational Project management maturity model (OPM3) in response to a perceived demand from business who need to understand their capability and improve it in a structured way.
FIG II. ORGANIZATION DOMAINS IN RELATED TO STRATEGY AND VISION BASED ON OPM3 MODEL
This totally new standard from PMI, which is now nearing its testing phase in the market, contains three different ‘views’ of the whole range of project related management processes. OPM3 purpose To develop a global standard for organizational project management for use by organizations of various size and types, in various industries and cultures, to guide the development of capabilities necessary to execute organizational strategy through successful projects OPM3 mission: To develop a maturity model that provides methods for assessing and developing capabilities that enhance an organization’s ability to deliver projects successfully, consistently, and predictably in order to accomplish the strategies of the organization and improve organizational effectiveness OPM3 vision: To create a widely and enthusiastically endorsed maturity model that is recognized worldwide as a standard for developing and assessing project management capabilities within any organization Because maturity’s constituent parts include improvement and the steps leading to improvement, many maturity models make use of the well-established stages of Process Management as a basis for organizing and presenting their content. The Stages of Process Improvement, listed from most basic to most advanced, consist
FIG III. EFQM EXCELLENCE MODEL INCORPORATING TO PARTS: A. ENABLERS B. RESULTS [18]
of the following: Standardize Measure Control Continuously Improve The OPM3 model, too, uses the logic of these stages. Doing so allows an organization to see which Best Practices are specifically associated with organizational project management maturity, where the organization falls on the continuum of maturity, and how it might embark on the journey to organizational improvement. However, OPM3 does not use only the Process Improvement stages to organize its content. It also builds upon the process framework for Project Management, as defined in the PMBOK® Guide, and extends that framework to the additional domains of Program and Portfolio management. This framework permits further refinement of the model so users can understand the implications of every Best Practice in terms of its potential applications to any or all of these three domains that, as a whole, comprise organizational project management.
FIG I. ORGANIZATION DOMAINS IN RELATED TO ENVIRONMENT
B. EFQM and Project Excellence Models The EFQM model highlights the role of leaders in raising awareness of QM concepts and in establishing management systems that support a culture of excellence. The EFQM now has the following structure:
“Enabling” Criteria a) Leadership b) People c) Policy and strategy d) Processes e) Partnership and resources f) Processes “Results” Criteria: g) Key performance results h) People results i) Customer results j) Society results The EFQM criterion of “people” put emphasis on planning and managing human resources and providing reward and recognition. The parameters of excellence in the area of “policy and strategy” are set to measure how the organization “formulates, deploys, reviews, and turns policy and strategy into plans and actions” (British Quality Foundation, 1998). The revised EFQM model criterion “partnership and resources” introduced partnership as a new content. The concept of stakeholder involvement in projects incorporates stakeholders both internal and external to the organization. And in the latter case stakeholders are often managed through partnerships. The “processes” criterion in the EFQM model encompasses process management methods, with an emphasis on customer-focused processes. The four result criteria in the EFQM model (customer/ people/ society/ key performance results) encompass activities for managing performance indicators and measuring performance key outcomes [12]. III. PROBLEM DEFINITION A framework describing a process whereby something desirable can be developed or achieved, i.e. capabilities. Encountering project-based organizations is just satisfied with considering a project management based approach. This approach doesn’t work as a single prescription for all organization, but describes a framework for our approach. Key concepts of OPM3 should be incorporated in these applications: Since every organization is unique, and since every organization undertakes unique projects, there is no “one for all size” answer for project management [19]. Project management, defined as a set of activities that is carried out to manage any given project, is increasingly described as a set of interdependent processes. That is how both the world’s leading project management standard (PMI’s PMBOK Guide) and the world’s most widely adopted project management methodology (PRINCE2) describe project management. How repetitive these management processes are in any organization is likely to depend on two other considerations: what types of projects are typically undertaken, and what perspective the organization typically adopt. So the first consideration is, ‘What are the important groups of project-related management processes?’ and the second ‘Which processes of project management are sufficiently important to our organization’s strategic goals for us to want to improve their maturity? When we are reviewing the maturity of processes there are many different candidates. There are at least three different sets of processes combine to make successful a project organization, an immaturity in any of them can inhibit the rewards repeated from investment in any others: Project management processes – as we have already seen, both the PMI’s PMBOK Guide, Program management processes and Portfolio management processes which are to manage the dynamic interaction between projects that compete for the same resources or share the same deliverables. The role of each of these and their relative importance should be considered so as to define the possible scope of any attempt to improve maturity. Process maturity related to individual exercise The concept of process maturity was born in the total quality management movement, where the application
of statistical process control (SPC) techniques showed that improving in maturity of any technical process leads to 2 things: reduction in variability inherent in the process, and an improvement in the mean performance of the process. This has been further refined and has led, for example, to technique such as ‘six sigma’, which use ‘fact-based data-driven process improvement’ as the basis of improved corporate performance. The continuous gradual performance improvement as processes mature is in sharp correlation with the way organizations acquire excellence in project management. What kinds of maturity model should we consider? the maturity models that are available today and that cover project-related management processes can be divided into three approximate types relating primarily to the maturity of: project, program, and portfolio management processes and the total organization. They differ from one another in terms of both the scope of what is covered, and their central focus. The approach also includes a description of those critical processes that define what is necessary to progress from one level to another. In the final category, Organizational Maturity, there are currently such general models as the “business excellence” and “project excellence” models from the EFQM and International Project Management Association (IPMA). This allows individual organizations to assess the maturity of processes on an individual project. EFQM Excellence model includes the whole organization at its scope, but is not specifically concerned with projects. It applies equally, well to functionally organized transaction-based businesses. The one eagerly awaited new comer to this rank is PMI’s OPM3. It can be broadest in the scope of project-specific maturity models, and will point the organizations not only to their current maturity, but also to which they need to do to advance towards their chosen target level. It is conceivable that specifying a particular maturity level using a specified maturity model as a part of a solicitation process might allow you better control over the time, cost and quality of your procured assets. The approaches the EFQM model uses differs from most approaches found in the field of project management and in general, most of the literature in this field focuses on organizational aspects. For example, the PM Body of Knowledge [17] describes nine essential knowledge areas and management processes. This link between knowledge areas and management processes is unclear. On the other hand, the IPMA has developed a “Project Excellence Model” which helps a project team to reflect on its own straights and potential improvement areas, but not for a project-based organization needing the alignment and the systematic management of the projects, programs and portfolios to achieve strategic organizational goals. In order to develop an approach for project-based organizations which links the organization management and projects, programs and portfolios, a more flexible approach seems appropriate. This more flexible approach lies in using clusters of possible success criteria developed by EFQM excellence model and IPMA Project Excellence Model, and the processes of Maturity Model, known as OPM3, whereby an organization can develop or achieve something desirable, such as a set of capabilities or practices. IV. PROPOSED APPROACH
Project Organization Management Strategic Management
Results Key Performances & PPP Results
Leadership
Organization Processes Portfolio Processes
Resources Program Processes
Customer/Client People/Personnel Stakeholders
Partnership
Stakeholder
Project Processes
Users Partners
Approach (Plan and development) Fundamentals
Criteria Results (Required)
Performance view and adjustment
KPI
Identifying Outputs
Implementing Improvement
Strategy Business goals
Capabilities
Benchmarking & Best Practices Plan to Improvement
OPM3 and business performance baseline
Industry Recognizes the OPM3 best practices
Assessment & Review
Evidence of what is happening in the organization.
FIG IV. A HYBRID APPROACH INTERACTING BOTH OF EXCELLENCE AND MATURITY CYCLES
TABLE I THE APPROACH ELEMENTS DESCRIPTION
No . 1
Organization area Leadership
Explanation How the behavior of all managers of and within the project “Project Excellence” inspires, supports, and promotes. It has to demonstrate how all these managers: set a credible example for "Project Excellence", effectively promote and actively support improvements within the project, and care for clients, suppliers and other organizations. What are the goals and how are they accomplished in the organization. Combining the interest of stakeholders into an end-product. How does the organization interact with various stakeholders. The co-operation of the project organization with external parties determines the place of the project in its environment. Resources have to be utilized in an effective and efficient manner in order to achieve maximum benefit to the stakeholders involved. Each project organization establishes contractual relationships. The choices of contracts and partners evolve around the tasks at hand and the competencies of contracting parties. How important processes within the project, program and portfolio are identified, checked and changed, if necessary according to the organizational strategic management. What the organization is achieving in relation to its planned performance. It may be due to the implementation of Organizational Project Management Maturity Model which have lead to a predictable benefits. Key Performance Indicator. Represents the means to measure, quantitatively or qualitatively, whether the outcome associated with a Capability exists or the degree to which it exists. An Outcome and the correspondence Capacity can be aligned with a project, program, or portfolio. Fundamental concepts of excellence which is incorporating: Results Orientation Customer Focus Leadership & Constancy of Purpose Management by Processes & Facts People Development & Involvement Continuous Learning, Improvement and Innovation Partnership Development Corporate social responsibility Accomplishing an excellence organization needs a pervasive commitment of management to these concepts - Appreciation by the client The client initiates the project to fulfill a specific need. What aspects and factors does the client value in judging the success of the project. - Appreciation by the project personnel The workers of the project will be concerned with reaching their personal goals as well as a good working atmosphere. - Appreciation by users Users are concerned with their general influence in the projects and the functionality of the end product. - Appreciation by the contracting partners Contracting partners try to make a profit at the project. They are also concerned with getting new
2 3 4 5 6
Strategy Management Stakeholder Management Resources (staff & people) Contracting (Partnership) Project /Program/Portfol io Management Processes Project /Program /Portfolio key performance and Results KPI
7
8
9
Fundamentals
10
General Results
orders and learning possibilities. - Appreciation by stakeholders Those parties those are not directly involved in the project but have a large influence. For example environmental groups, citizens and government agencies. These parties manage their specific interests. 11 12 13 Criteria Outcome Capability Basic indexes for assessment in performance and developing means for finding outputs related to capabilities in the organization Evidence of a Capability, a tangible or intangible result of a applying capability, a capability may have multiple outcome. The degree to which an outcome is achieved is measured by a KPI. A capability in a specific competency that must exist in an organization in order for it t execute projects management processes and deliver project management service and products. Capabilities are incremental steps to leading up to one or more Best Practices. A Best Practice is an optimal way currently recognized by industry to achieve a stated goal or objective. For organizational Project Management it includes the ability to deliver the projects successfully, consistently, and predictably to implement organizational strategies. Assessment and Review are grouped together because they are seen as parts of a single process to assess the effectiveness of both Approach and Deployment without learning from that assessment and making improvements. This is the motor for initiating change and thus improving Results. It is concerned with learning activities, communication of Best Practice and also prioritizing actions to implement change. The documentation of which Capabilities the organization does and does not have - including the dependencies among them - permits a ranking of needed Capabilities and Outcomes according to their priority for the organization. This information opens the way to develop a specific plan to achieve the Outcomes associated with the Capabilities of the relevant Best Practices. This step is where organizational change will take place. The organization implement the plan over time, i.e., execute requisite organizational development activities to attain the needed Capability and advance on the path to increased organizational project management maturity. The Business Excellence Model is concerned with continuous improvement and so there is a requirement to measure the start and finish state for each cycle of improvement. "Results" is a shorthand description for this process of measuring. At the beginning of adopting the Business Excellence Model it may seem strange to start with "Results" but this only reflects the need to assess where you are before setting a course to get to where you want to be. This area of the RADAR measurement system is concerned with whether the way things are done (within a given sub-criterion) are the result of planned and coherent management or are merely chance outcomes. Generally, assessment exercises will be looking to find a clear link from top level MISSION and VALUES statements through strategic direction to tactics and processes that support and deliver outcomes that meet the objectives enshrined in the MISSION and VALUES of the organization. Following from consideration of the Approach is measurement of Deployment. This just means asking the two questions. Is the Approach implemented (do the managers and people DO what they say they DO)? Is the implementation systematic (does it cover all relevant areas of the organization)? It is no use having good strategies, tactics and processes if no-one is following them. Is a method of scoring when using the Excellence Model, Results – Approach – Deployment – Assessment & Review
14
Benchmarking & Best Practices Assessment & Review
15
16
Plan to Improvement
17
Implementing Improvement Results (required)
18
19
Approach (Plan and Development)
20
Deployment
21
RADAR
Interactive value proposed here consists of some steps in an organizational manner provide: a) Finding and estimating how much fundamentals are satisfied, using Project Organization Management and Results. Table II shows the correlation between criteria and fundamentals which is derived from the EFQM excellence model b) Finding criteria incorporated in judging the KPIs c) Determining KPIs interesting organization processes and Criteria d) Identifying Outputs and then Capabilities via KPIs e) Finding the Best Practices incorporating the Benchmarking resulted from OPM3 cycle if already applied f) Assessment and Review considering Results which is Part of OPM3 and Excellence cycles g) Determining Results required in the organization derived from Excellence models h) This Part incorporates two distinct but related functions: i. Planning for development or the Approach ii. Plan to improvement based on OPM3 and business performance i) Implementing and Deployment part which includes two parts as well: i. Deployment as an excellence cycle derived from RADAR in which all Project Organization Management parts are influenced ii. Implementing improvements which are planed based on OPM3 in previous part j) Benchmarking derived from OPM3 cycle, also finding and modifying Best Practices incorporating already determined Capabilities in step (d) k) Continuing the process by going to step (a) Project Organization Management part’s activities include such strategies as developing portfolio and program and project management to ensure that all work done by projects delivers some aspects of the organization’s strategy, is appropriately funded and tracked to deliver the benefits outlined in the project’s business case. V. PERFORMANCE MEASURE
Some benefits provided by this approach is as follows. Self Assessment against the Excellence Model allows an
organization to identify clearly its strengths and those areas in which improvements can be made. It is also an effective means to co-ordinate an organization’s quality initiatives to form a cohesive and structured approach
TABLE II. ORGANIZATION FUNDAMENTAL IN INTERCONNECTED TO CRITERIA [18]
Management
Stakeholders Partnership Leadership Customers Criteria Fundamental Concepts Resources Processes
Results Stakeholders PPP Results
Strategy
Result Orientation Customer Focus Leadership & Constancy Purpose Management by Processes & Facts People Development & Involvement Continuous learning, Improvement Partnership Development Corporate social Responsibility
L L H L L H L M
H M L M M M M H
L L L L H M L M
L L L L L L L H
H L L L L M L M
M M L H L M M L
H H L H L L L L
H L L H L L L H
H L L H L L L L
People
Social
H L L H H L L L
H L L H L L H L
based on project organizations to business excellence. Some of the identified top benefits are as: Development of clear, concise action plans Clear and more focused leadership Better and more focused policy and strategy Process improvement enabling achievement of an organization’s objectives Improved prioritization of resources Greater motivation and satisfaction of an organization’s personnel This approach satisfies some considerations: Incorporating OPM3, Project Excellence Model, and EFQM as a large body of knowledge Opportunity to improve one domain of organizational project management but not all domains Allowing the management to make intelligent trade-off decisions easily regarding the organization’s path to improvement. Finding where you are today and the routs available to get you to where you want to be Assessing initial condition Identifying the trade-offs or what-if scenarios Enabling choices A continuous upgrading approach and self-assessment for doing the best and making Project Management successes repeatable Assessing and examining the performance incorporated in this approach is due to more papers and implementation of it. VI. CONCLUSION This approach provides some advantage due to the lack of an integrated approach in organizational project management. Additionally it incorporates some relevant but isolated models in an interactive manner as could be seen in speculated scheme. To the author’s mind, further survey about upgrading and improving this approach might create some ideas about best practices currently implemented in many organizations. More competition and fluctuation in environment, more demand of change as a real-time approach applicable to the whole organization. However, these circumstances don’t assure a fixed cash flow for organizations to be satisfied, so they should be in change and get approaches to projects continuously. REFERENCES
Barnes NML, Wearne SH. The future for major project management. International Journal of Project Management 1993;11(3):135–42. Morris PWG. Researching the unanswered questions of project management. In: Project management research at the turn of the Millennium: Proceedings of PMI Conference 2000. PMI, PE; 2000. p. 87–101. PMI Standards Committee. A guide to the PMBOK. PA, USA: Project Management Institute I;1996. Lim CS, Mohamed MZ. Criteria of project success. International Journal of Project Management 1999;17(4):243–8. PWC. Boosting business performance through programme and project Management. Connected Thinking. PriceWaterhouse Coopers, 2004. IPMA, International Project Management Association, www.IPMA.ch J. Schlichter, “Organizational Project Management Maturity Model Program Plan” , OPM3 Program Plan, Version 1.3, 2000. Organizational Project Management Maturity Model (OPM3) Knowledge Foundation, PMI, Inc, Newtown Square, Pennsylvania USA, 2003. L. Bull, “An Introduction to OPM3 and Supporting Models”, EFCOG Project Management Working Group, PMI, NM, 2007. T. Walenta,“PMI OPM3 Standard”, PMI Frankfurt Chapter e.V., www.pmifc.de S. M. Dahlgaard, “Reviewing The European Excellence Model from a Management Control View”, The TQM journal, Vol. 20, No. 2, p,98-119, 2008.
[6] [7] [8] [9] [10] [11]
[12] D. J. Bryde, “Modeling Project Management Performance”, International Journal of Reliability and Quality Management, Vol.
20, No.2, p.229-254, 2003.
[13] J. Davies, “Integration: is it the key to effective implementation of EFQM excellence model”, International Journal of Reliability
& Quality Management, Vol. 25, No.4, p.383-399, 2008.
[14] D. Hillson, “Benchmarking project management capability “, Director of Consultancy, Project Management Professional
Solutions Limited.
[15] J. Schlichter & G. Skulmoski, “Organisational ProjectManagement Maturity: New Frontiers”. Proceedings of 15th IPMAWorld
Congress on Project Management, London, 22–25 May 2000.
[16] J. Schlichter, “Surveying Project Management Capabilities”.PM Network, 13 (4), p. 39-40, 1999. [17] Project Management Institute, “A Guide to the Project Management Body of Knowledge (PMBOK® Guide)” - 2000 Edition.
Newtown Square, PA: Project Management Institute.
[18] EFQM, “The EFQM Excellence Model”— e-mail: [email protected], website: www.EFQM.org, 1999. [19] J. Schlichter, “Achieving Organizational Strategies through Projects: An Introduction to the Emerging PMI Organizational
Project Management Maturity Model”,PMI EUROPE 2002.
[20] E. Westerveld, “The project success mode: linking success criteria and critical success factors”, International Journal of Project
Management, Vol. 21, p. 411-418, 2003.
[21] J. Schlichter, “Using OPM3 to implementing PMO”, OPM Experts, LLC, 2004.
Abbas Ehsanfar is now with Graduate School of Management and Economics, at SUT(Sharif University of Technology), he is currently studying MBA under supervision of Dr. Sepehri. His interests is Project Management, Finance and Financial Economics. Email: [email protected]. Tell: 09126388911 Dr. Mehran Sepehri is currently a faculty member of Graduate School of Management and Economics at SUT. Email: [email protected]
doc_137194684.pdf
Project management is the discipline of planning, organizing, motivating, and controlling resources to achieve specific goals.
A Hybrid Approach to Organizational Project Management
Abbas Ehsanfar, Mehran Sepehri
Abstract—This paper provides a new approach for hybrid use of Project (Organization) Excellence Model and OPM3 to project organizations. This approach gives an effective and reliable cycle of continuous improvement in organizations whereby will get benefits of both models. So, it will be beneficiary for goal of continuous improvement which is speculated in the final level of organizational maturity model. It could assure stakeholders from repeatable success of project management in future. We are trying in this paper identifying and filling current space between Organizational Excellence and Maturity Models in which some organizations feel the obligatory of changes in a proactive and predictable approach to a reliable and self-progressing Project based Organization.
W
I. INTRODUCTION
hat do we mean by “organizational project management maturity model”? First, “organizational” increases the domain of project management beyond delivery of the single project, which is the subject of the Project management Institute’s “A Guide to the Project Management Body of Knowledge”. The use of the word “maturity” implies that capabilities must be grown over time in order to produce repeatable success in project management. The Random House College Dictionary defines “maturity” as full development or perfected condition. "Maturity" also connotes understanding or visibility into why success occurs and ways to correct or prevent common problems. “Model” implies change, a progression, or steps in a process. We would like to design a model in which the processes indicated in Organization Excellence Model can be developed to Organizational Project Management and simultaneously the criteria determining fundamental concepts of organizations be considered. We can talk about organizational project management in terms of processes: Process of planning strategies Process of chartering projects Process of prioritization of projects Process of managing the program and project portfolio Process of individual project management Process of managing the environment
We learned from quality movement that process performance improves when processes are standardized, measured, controlled, and continuously improved. These are fundamental levels of OPM3 and we would like to pass them in a predictable and gradual manner to the criteria and processes incorporated in Organization and Project Excellence Models. We provide an approach by which the organizational processes incorporate the three domains of OPM3 (Portfolio, Program, Project), the organizational management and results include most of criteria developed in excellence models, the organizational self-assessment and feedback approach known as RADAR is considered, the organizational improvement cycle in OPM3 and finally the interactive effects are all integrated. II. BACKGROUND The Project Management Maturity Model (ProMMM) has been developed to meet these needs, drawing on established concepts from existing models such as the Capability Maturity Model (CMM) from CarnegieMellon Software Engineering Institute (Paulk et al. 1993, 1995) and the EFQM Excellence Model from the
Abbas Ehsanfar is currently with the Graduate School of Economics and Management, Sharif University of Technology, Tehran, Iran. Dr. Mehran Sepehri is currently a faculty member of Graduate School of Economics and Management, Sharif University of Technology, Tehran, Iran ([email protected] ).
European Foundation for Quality Management (EFQM, 1999). It also draws on a previously published model developed to assess organizational risk management capability (the Risk Maturity Model—see Hillson 1997). The basis for ProMMM is practical and pragmatic, based on the empirical experience of its developers in providing project management consultancy across a wide range of industries over many years. After this model the Project Management Institute (PMI) developed the Organizational Project Management Maturity Model (OPM3). Whether an organization is fully projectized or not, OPM3 provides guidance regarding how to: Articulate project success Measure project performance Make the delivery of projects more predictable Help projects work together instead of against each other in a multi-project environment Best Practices + Processes = Integrated model design A. OPM3 There has been rapid growth in so called “maturity models” which claim to measure degrees of capability in various disciplines, aiming to help organizations become “more mature”. The Project Management Institute (PMI) has developed his own Organizational Project management maturity model (OPM3) in response to a perceived demand from business who need to understand their capability and improve it in a structured way.
FIG II. ORGANIZATION DOMAINS IN RELATED TO STRATEGY AND VISION BASED ON OPM3 MODEL
This totally new standard from PMI, which is now nearing its testing phase in the market, contains three different ‘views’ of the whole range of project related management processes. OPM3 purpose To develop a global standard for organizational project management for use by organizations of various size and types, in various industries and cultures, to guide the development of capabilities necessary to execute organizational strategy through successful projects OPM3 mission: To develop a maturity model that provides methods for assessing and developing capabilities that enhance an organization’s ability to deliver projects successfully, consistently, and predictably in order to accomplish the strategies of the organization and improve organizational effectiveness OPM3 vision: To create a widely and enthusiastically endorsed maturity model that is recognized worldwide as a standard for developing and assessing project management capabilities within any organization Because maturity’s constituent parts include improvement and the steps leading to improvement, many maturity models make use of the well-established stages of Process Management as a basis for organizing and presenting their content. The Stages of Process Improvement, listed from most basic to most advanced, consist
FIG III. EFQM EXCELLENCE MODEL INCORPORATING TO PARTS: A. ENABLERS B. RESULTS [18]
of the following: Standardize Measure Control Continuously Improve The OPM3 model, too, uses the logic of these stages. Doing so allows an organization to see which Best Practices are specifically associated with organizational project management maturity, where the organization falls on the continuum of maturity, and how it might embark on the journey to organizational improvement. However, OPM3 does not use only the Process Improvement stages to organize its content. It also builds upon the process framework for Project Management, as defined in the PMBOK® Guide, and extends that framework to the additional domains of Program and Portfolio management. This framework permits further refinement of the model so users can understand the implications of every Best Practice in terms of its potential applications to any or all of these three domains that, as a whole, comprise organizational project management.
FIG I. ORGANIZATION DOMAINS IN RELATED TO ENVIRONMENT
B. EFQM and Project Excellence Models The EFQM model highlights the role of leaders in raising awareness of QM concepts and in establishing management systems that support a culture of excellence. The EFQM now has the following structure:
“Enabling” Criteria a) Leadership b) People c) Policy and strategy d) Processes e) Partnership and resources f) Processes “Results” Criteria: g) Key performance results h) People results i) Customer results j) Society results The EFQM criterion of “people” put emphasis on planning and managing human resources and providing reward and recognition. The parameters of excellence in the area of “policy and strategy” are set to measure how the organization “formulates, deploys, reviews, and turns policy and strategy into plans and actions” (British Quality Foundation, 1998). The revised EFQM model criterion “partnership and resources” introduced partnership as a new content. The concept of stakeholder involvement in projects incorporates stakeholders both internal and external to the organization. And in the latter case stakeholders are often managed through partnerships. The “processes” criterion in the EFQM model encompasses process management methods, with an emphasis on customer-focused processes. The four result criteria in the EFQM model (customer/ people/ society/ key performance results) encompass activities for managing performance indicators and measuring performance key outcomes [12]. III. PROBLEM DEFINITION A framework describing a process whereby something desirable can be developed or achieved, i.e. capabilities. Encountering project-based organizations is just satisfied with considering a project management based approach. This approach doesn’t work as a single prescription for all organization, but describes a framework for our approach. Key concepts of OPM3 should be incorporated in these applications: Since every organization is unique, and since every organization undertakes unique projects, there is no “one for all size” answer for project management [19]. Project management, defined as a set of activities that is carried out to manage any given project, is increasingly described as a set of interdependent processes. That is how both the world’s leading project management standard (PMI’s PMBOK Guide) and the world’s most widely adopted project management methodology (PRINCE2) describe project management. How repetitive these management processes are in any organization is likely to depend on two other considerations: what types of projects are typically undertaken, and what perspective the organization typically adopt. So the first consideration is, ‘What are the important groups of project-related management processes?’ and the second ‘Which processes of project management are sufficiently important to our organization’s strategic goals for us to want to improve their maturity? When we are reviewing the maturity of processes there are many different candidates. There are at least three different sets of processes combine to make successful a project organization, an immaturity in any of them can inhibit the rewards repeated from investment in any others: Project management processes – as we have already seen, both the PMI’s PMBOK Guide, Program management processes and Portfolio management processes which are to manage the dynamic interaction between projects that compete for the same resources or share the same deliverables. The role of each of these and their relative importance should be considered so as to define the possible scope of any attempt to improve maturity. Process maturity related to individual exercise The concept of process maturity was born in the total quality management movement, where the application
of statistical process control (SPC) techniques showed that improving in maturity of any technical process leads to 2 things: reduction in variability inherent in the process, and an improvement in the mean performance of the process. This has been further refined and has led, for example, to technique such as ‘six sigma’, which use ‘fact-based data-driven process improvement’ as the basis of improved corporate performance. The continuous gradual performance improvement as processes mature is in sharp correlation with the way organizations acquire excellence in project management. What kinds of maturity model should we consider? the maturity models that are available today and that cover project-related management processes can be divided into three approximate types relating primarily to the maturity of: project, program, and portfolio management processes and the total organization. They differ from one another in terms of both the scope of what is covered, and their central focus. The approach also includes a description of those critical processes that define what is necessary to progress from one level to another. In the final category, Organizational Maturity, there are currently such general models as the “business excellence” and “project excellence” models from the EFQM and International Project Management Association (IPMA). This allows individual organizations to assess the maturity of processes on an individual project. EFQM Excellence model includes the whole organization at its scope, but is not specifically concerned with projects. It applies equally, well to functionally organized transaction-based businesses. The one eagerly awaited new comer to this rank is PMI’s OPM3. It can be broadest in the scope of project-specific maturity models, and will point the organizations not only to their current maturity, but also to which they need to do to advance towards their chosen target level. It is conceivable that specifying a particular maturity level using a specified maturity model as a part of a solicitation process might allow you better control over the time, cost and quality of your procured assets. The approaches the EFQM model uses differs from most approaches found in the field of project management and in general, most of the literature in this field focuses on organizational aspects. For example, the PM Body of Knowledge [17] describes nine essential knowledge areas and management processes. This link between knowledge areas and management processes is unclear. On the other hand, the IPMA has developed a “Project Excellence Model” which helps a project team to reflect on its own straights and potential improvement areas, but not for a project-based organization needing the alignment and the systematic management of the projects, programs and portfolios to achieve strategic organizational goals. In order to develop an approach for project-based organizations which links the organization management and projects, programs and portfolios, a more flexible approach seems appropriate. This more flexible approach lies in using clusters of possible success criteria developed by EFQM excellence model and IPMA Project Excellence Model, and the processes of Maturity Model, known as OPM3, whereby an organization can develop or achieve something desirable, such as a set of capabilities or practices. IV. PROPOSED APPROACH
Project Organization Management Strategic Management
Results Key Performances & PPP Results
Leadership
Organization Processes Portfolio Processes
Resources Program Processes
Customer/Client People/Personnel Stakeholders
Partnership
Stakeholder
Project Processes
Users Partners
Approach (Plan and development) Fundamentals
Criteria Results (Required)
Performance view and adjustment
KPI
Identifying Outputs
Implementing Improvement
Strategy Business goals
Capabilities
Benchmarking & Best Practices Plan to Improvement
OPM3 and business performance baseline
Industry Recognizes the OPM3 best practices
Assessment & Review
Evidence of what is happening in the organization.
FIG IV. A HYBRID APPROACH INTERACTING BOTH OF EXCELLENCE AND MATURITY CYCLES
TABLE I THE APPROACH ELEMENTS DESCRIPTION
No . 1
Organization area Leadership
Explanation How the behavior of all managers of and within the project “Project Excellence” inspires, supports, and promotes. It has to demonstrate how all these managers: set a credible example for "Project Excellence", effectively promote and actively support improvements within the project, and care for clients, suppliers and other organizations. What are the goals and how are they accomplished in the organization. Combining the interest of stakeholders into an end-product. How does the organization interact with various stakeholders. The co-operation of the project organization with external parties determines the place of the project in its environment. Resources have to be utilized in an effective and efficient manner in order to achieve maximum benefit to the stakeholders involved. Each project organization establishes contractual relationships. The choices of contracts and partners evolve around the tasks at hand and the competencies of contracting parties. How important processes within the project, program and portfolio are identified, checked and changed, if necessary according to the organizational strategic management. What the organization is achieving in relation to its planned performance. It may be due to the implementation of Organizational Project Management Maturity Model which have lead to a predictable benefits. Key Performance Indicator. Represents the means to measure, quantitatively or qualitatively, whether the outcome associated with a Capability exists or the degree to which it exists. An Outcome and the correspondence Capacity can be aligned with a project, program, or portfolio. Fundamental concepts of excellence which is incorporating: Results Orientation Customer Focus Leadership & Constancy of Purpose Management by Processes & Facts People Development & Involvement Continuous Learning, Improvement and Innovation Partnership Development Corporate social responsibility Accomplishing an excellence organization needs a pervasive commitment of management to these concepts - Appreciation by the client The client initiates the project to fulfill a specific need. What aspects and factors does the client value in judging the success of the project. - Appreciation by the project personnel The workers of the project will be concerned with reaching their personal goals as well as a good working atmosphere. - Appreciation by users Users are concerned with their general influence in the projects and the functionality of the end product. - Appreciation by the contracting partners Contracting partners try to make a profit at the project. They are also concerned with getting new
2 3 4 5 6
Strategy Management Stakeholder Management Resources (staff & people) Contracting (Partnership) Project /Program/Portfol io Management Processes Project /Program /Portfolio key performance and Results KPI
7
8
9
Fundamentals
10
General Results
orders and learning possibilities. - Appreciation by stakeholders Those parties those are not directly involved in the project but have a large influence. For example environmental groups, citizens and government agencies. These parties manage their specific interests. 11 12 13 Criteria Outcome Capability Basic indexes for assessment in performance and developing means for finding outputs related to capabilities in the organization Evidence of a Capability, a tangible or intangible result of a applying capability, a capability may have multiple outcome. The degree to which an outcome is achieved is measured by a KPI. A capability in a specific competency that must exist in an organization in order for it t execute projects management processes and deliver project management service and products. Capabilities are incremental steps to leading up to one or more Best Practices. A Best Practice is an optimal way currently recognized by industry to achieve a stated goal or objective. For organizational Project Management it includes the ability to deliver the projects successfully, consistently, and predictably to implement organizational strategies. Assessment and Review are grouped together because they are seen as parts of a single process to assess the effectiveness of both Approach and Deployment without learning from that assessment and making improvements. This is the motor for initiating change and thus improving Results. It is concerned with learning activities, communication of Best Practice and also prioritizing actions to implement change. The documentation of which Capabilities the organization does and does not have - including the dependencies among them - permits a ranking of needed Capabilities and Outcomes according to their priority for the organization. This information opens the way to develop a specific plan to achieve the Outcomes associated with the Capabilities of the relevant Best Practices. This step is where organizational change will take place. The organization implement the plan over time, i.e., execute requisite organizational development activities to attain the needed Capability and advance on the path to increased organizational project management maturity. The Business Excellence Model is concerned with continuous improvement and so there is a requirement to measure the start and finish state for each cycle of improvement. "Results" is a shorthand description for this process of measuring. At the beginning of adopting the Business Excellence Model it may seem strange to start with "Results" but this only reflects the need to assess where you are before setting a course to get to where you want to be. This area of the RADAR measurement system is concerned with whether the way things are done (within a given sub-criterion) are the result of planned and coherent management or are merely chance outcomes. Generally, assessment exercises will be looking to find a clear link from top level MISSION and VALUES statements through strategic direction to tactics and processes that support and deliver outcomes that meet the objectives enshrined in the MISSION and VALUES of the organization. Following from consideration of the Approach is measurement of Deployment. This just means asking the two questions. Is the Approach implemented (do the managers and people DO what they say they DO)? Is the implementation systematic (does it cover all relevant areas of the organization)? It is no use having good strategies, tactics and processes if no-one is following them. Is a method of scoring when using the Excellence Model, Results – Approach – Deployment – Assessment & Review
14
Benchmarking & Best Practices Assessment & Review
15
16
Plan to Improvement
17
Implementing Improvement Results (required)
18
19
Approach (Plan and Development)
20
Deployment
21
RADAR
Interactive value proposed here consists of some steps in an organizational manner provide: a) Finding and estimating how much fundamentals are satisfied, using Project Organization Management and Results. Table II shows the correlation between criteria and fundamentals which is derived from the EFQM excellence model b) Finding criteria incorporated in judging the KPIs c) Determining KPIs interesting organization processes and Criteria d) Identifying Outputs and then Capabilities via KPIs e) Finding the Best Practices incorporating the Benchmarking resulted from OPM3 cycle if already applied f) Assessment and Review considering Results which is Part of OPM3 and Excellence cycles g) Determining Results required in the organization derived from Excellence models h) This Part incorporates two distinct but related functions: i. Planning for development or the Approach ii. Plan to improvement based on OPM3 and business performance i) Implementing and Deployment part which includes two parts as well: i. Deployment as an excellence cycle derived from RADAR in which all Project Organization Management parts are influenced ii. Implementing improvements which are planed based on OPM3 in previous part j) Benchmarking derived from OPM3 cycle, also finding and modifying Best Practices incorporating already determined Capabilities in step (d) k) Continuing the process by going to step (a) Project Organization Management part’s activities include such strategies as developing portfolio and program and project management to ensure that all work done by projects delivers some aspects of the organization’s strategy, is appropriately funded and tracked to deliver the benefits outlined in the project’s business case. V. PERFORMANCE MEASURE
Some benefits provided by this approach is as follows. Self Assessment against the Excellence Model allows an
organization to identify clearly its strengths and those areas in which improvements can be made. It is also an effective means to co-ordinate an organization’s quality initiatives to form a cohesive and structured approach
TABLE II. ORGANIZATION FUNDAMENTAL IN INTERCONNECTED TO CRITERIA [18]
Management
Stakeholders Partnership Leadership Customers Criteria Fundamental Concepts Resources Processes
Results Stakeholders PPP Results
Strategy
Result Orientation Customer Focus Leadership & Constancy Purpose Management by Processes & Facts People Development & Involvement Continuous learning, Improvement Partnership Development Corporate social Responsibility
L L H L L H L M
H M L M M M M H
L L L L H M L M
L L L L L L L H
H L L L L M L M
M M L H L M M L
H H L H L L L L
H L L H L L L H
H L L H L L L L
People
Social
H L L H H L L L
H L L H L L H L
based on project organizations to business excellence. Some of the identified top benefits are as: Development of clear, concise action plans Clear and more focused leadership Better and more focused policy and strategy Process improvement enabling achievement of an organization’s objectives Improved prioritization of resources Greater motivation and satisfaction of an organization’s personnel This approach satisfies some considerations: Incorporating OPM3, Project Excellence Model, and EFQM as a large body of knowledge Opportunity to improve one domain of organizational project management but not all domains Allowing the management to make intelligent trade-off decisions easily regarding the organization’s path to improvement. Finding where you are today and the routs available to get you to where you want to be Assessing initial condition Identifying the trade-offs or what-if scenarios Enabling choices A continuous upgrading approach and self-assessment for doing the best and making Project Management successes repeatable Assessing and examining the performance incorporated in this approach is due to more papers and implementation of it. VI. CONCLUSION This approach provides some advantage due to the lack of an integrated approach in organizational project management. Additionally it incorporates some relevant but isolated models in an interactive manner as could be seen in speculated scheme. To the author’s mind, further survey about upgrading and improving this approach might create some ideas about best practices currently implemented in many organizations. More competition and fluctuation in environment, more demand of change as a real-time approach applicable to the whole organization. However, these circumstances don’t assure a fixed cash flow for organizations to be satisfied, so they should be in change and get approaches to projects continuously. REFERENCES
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Abbas Ehsanfar is now with Graduate School of Management and Economics, at SUT(Sharif University of Technology), he is currently studying MBA under supervision of Dr. Sepehri. His interests is Project Management, Finance and Financial Economics. Email: [email protected]. Tell: 09126388911 Dr. Mehran Sepehri is currently a faculty member of Graduate School of Management and Economics at SUT. Email: [email protected]
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