METHODS OF PRACTICAL PROJECT CATEGORIZATION
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1 THE PURPOSES AND METHODS OF PRACTICAL PROJECT CATEGORIZATION Russell D. Archibald, MSc Fellow PMI and APM/IPMA, PMP 1
2 Objectives of This Presentation To discuss the purposes p of and need for a project categorization system, To present a recommended approach to the systematic definition of project categorization and classification, and To describe the use of a Purposes/Methods Matrix for Project Categorization to facilitate this systematic definition. 2
3 The Need Significant differences exist between the large numbers of projects within: The total spectrum of actual projects in government, business and industry, and The smaller numbers of projects that t are being planned and executed within one organizational entity. 3
4 Experience to Date Recognition that many PM principles and practices are common to all (or at least many) projects regardless of type, AND MORE RECENTLY Recognition that t due to the inherent diversity of many projects they must be segregated in different ways for several important purposes. 4
5 The World of Project Management 1. Buyers (owners of projects) 2. Sellers (contractors or developers of projects) 3. PM software developers and vendors 4. Consultants in PM 5. Universities 6. Professional associations 5
6 Project Categorization Enables Improvements in: How project buyers and sellers Strategically select and prioritize projects Operationally plan and execute their projects: Individually Within programs, and Within project portfolios Determine their true maturity in PM Educate and train their PM people Develop and manage PM career paths 6
7 PM Maturity by Project Categories Research in Brazil: Applying the Prado/MMGP maturity model to project categories shown later. Brazil: 180 million people, strong hightechnology industries, 17 PMI chapters 7
8 Project Categorization Enables Improvements in: (Cont d) PM software applications Consulting and training in PM services University it offerings in PM PM Professional associations services 8
9 Categorization versus Classification i of Projects Project categories: A set of items with similar characteristics or properties (attributes) Not mutually exclusive Classification criteria within categories: A set of items with identical characteristics A project fits only one class 9
10 De Facto Project Categorization Exists everywhere Can be seen in: PMI SIGs PMI PMBOKs and IPMA bodies of knowledge Organization structures Consultant specialization University course offerings 10
11 PMI: Specialized PM Bodies of Knowledge Government extension Construction extension Automotive extension (in preparation) German/GPM (IPMA) Investment: construction & systems engrg R&D/Innovation 11
12 Aerospace & Defense Automotive Dispute Management PMI Special Interest Groups Environmental Management Automation Systems Design-procurementconstruction E-Business Financial Services Government Hospitality Management (major events: Olympic Games) Information Technology and Telecommunications Manufacturing New Product Development Pharmaceutical Service and Outsourcing Utility industry Healthcare Project Management Information Systems (software) International Development (infrastructure, agriculture, education, health, etc.) Marketing and Sales Oil/Gas/Petrochemical Retail Urban Development 12
13 International Development Projects Announcing the Soft Launch of the International Development Project Management Manual of Practice and Glossary Program. See Source: Paul Giamolvo: 8_e.htm 13
14 Organization Structures Major design/construction firms are organized by category: power plant, highway/dams, commercial, high-rise rise, other IT/software/systems departments Other 14
15 Consultants Specialize by Category PMA: Architectural, infrastructure, transportation, health care, power, etc. com/proj/projh ome.htm BMC: IT and IS Specific Services. itisservices.htm 15
16 Ad Hoc versus Systematic Project Categorization i One approach: continue ad hoc categorization as in past decades OR Systematic - A better approach: Accelerate improvements in PM practices Avoid duplicate efforts Help to assure that all factors have been considered 16
17 Various Categorization Parameters (Crawford, Hobbs, Turner 2002) 1. Size, Complexity 2. Life Cycle or Sector and Familiarity Size Size & groupings Goals & methods Familiarity Maturity Technical uncertainty System scope Product & work Corporate strategic development Strategic importance Stage of the project (and product) life cycle Industry sector Resource type Geography International 17
18 Various Categorization Parameters (Crawford, Hobbs, Turner 2002) (Cont d) 3. Contract Type and Payment Terms Contract terms and payment Contract forms Type of risk Who controls the risk Complexity 18
19 Attributes of Projects (Crawford, Hobbs, Turner 2004) Application area or product Stage of life-cycle Grouped or single Strategic importance Strategic driver Geography Scope Timing Uncertainty Risk Complexity Customer Ownership Contractual 19
20 Common Uses and Needs (Crawford, Hobbs, Turner 2004) A language for naming and discussing Facilitating communication Storage and retrieval of knowledge 20
21 Specific Uses and Needs Specific uses/needs Research Ontological definition Comparability Building on previous results Professional organisations Development of BoKs Internal organization at o (SIG structure) Market positioning Practitioner organisations? 21
22 Systematic Approach Analyze purposes and uses Systematize and prioritize them Relate them to project characteristics, ti attributes, and criteria 22
23 The Purposes/Methods Matrix for Project Categorization/PC i One axis: Purposes and Uses of PC Second axis: Methods of categorizing and classifying projects within the categories Enter codes to indicate which methods serve which purpose 23
24 Project Categorization Purposes/Methods Matrix Methods > Purposes v Market Share & Strat. Intent Project End Result Development or Deployment Other 1. Strategic Indicate usefulness with codes 2. Operational 3. PM Education 4. PM People Development 24
25 1. Strategic PM Uses Project selection Prioritize selected projects Define project portfolios Manage project portfolios Allocate resources to portfolios & projects Other: 25
26 2. Operational PM Uses Select/assign project managers Design/select best project life-cycle models Select/improve PM methods & systems Select/develop l best PM software systems Build knowledge base of best practices Improve risk management methods Evaluate PM maturity level Link success and failure factors Select tools and management approach Other 26
27 3. PM Education & Training Improve educational & training courses Develop specialized case studies Organize speaker tracks at congresses Other 27
28 4. People Development in PM Develop specialized certification of: Project managers PM support specialists Develop career paths for individuals Other 28
29 Further Work Needed Prioritize purposes and uses Consolidate and simplify purposes and uses 29
30 Project Categorization Purposes/Methods Matrix Methods > Purposes v Market Share & Strat. Intent Project End Result Development or Deployment Other 1. Strategic Indicate usefulness with codes 2. Operational 3. PM Education 4. PM People Development 30
31 Project Categorization Methods Project characteristics or attributes Place projects within categories Classify projects within categories 31
32 A Useful Project Categorization Method Must: Provide appropriate category for any project to be encountered Permit classification within a category Provide insight into differences between projects in different categories Provide categories that can be readily translated across cultures and languages (Fern, 2004) 32
33 Market Share & Strategic Intent 33
34 Strategic Intent Products are developed to conform to the requirements of one of three strategic intents: technological excellence (TE), operational excellence (OE), or customer intimacy (CI). Hammel and Prahalad (1989) 34
35 Market Share/Strategic Intent Matrix Using the four Boston Matrix classes as rows and the three Strategic Intent classes as columns, we might choose to define projects in terms of their product characteristics. This yields a total of twelve theoretical project categories. Source: Fern (2004) 35
36 Categories Based on End Results 1. Aerospace/Defense 6. Information Systems 2. Business & 7. International Organizational Development Change 8. Media & 3. Communication Entertainment Systems 9. Product/Service Development 4. Events 10.Research & Dev. 5. Facilities 36
37 Hierarchical and Multi-Dimensional Category level Major category Sub-category 2 Sub-category 3 Sub-category 4 Similar to P/WBS approach 37
38 Example: Category 5. Facilities Projects 1. Facility decommissioning 2. Facility demolition 3. Facility maintenance & modification 4. Facility design/procure/construct 1.Civil 2.Energy 3.Environmental 4.Industrial 5.Commercial 6.Residential 7.Ships 8.Other: 5. Other:? 38
39 Classifying Within Sub-Categories: Many possible Criteria i Project size Major & minor projects Project complexity External or internal customer Degree of customer involvement Levels of risk, who takes responsibility Stand-alone alone versus create supporting infrastructure Standard versus transitional Mega projects: not categorizable Other:? (See Crawford, Hobbs and Turner, 2002 and 2004) 39
40 Simple Example: Category/Class Matrix Classifying Projects within Project Categories & Sub-Categories Project Size: $M Major Project: YesNo Complex- ity: 1 to 10 Customer : Int or Ext Customer Involvement Hi or Low Risk Level: 1 to 10 Category Level 2 Level 3 5. Physical Facilities 5.1 Decommissioning 5.2 Demolition 5.3 Maint & Modification 5.4 Design/proc/const Civil Energy Environmental Industrial Commercial Residential Ships Other 5.5 Other 40
41 Deployment versus Development Projects (Pfeiffer 2004) Deployment Project Civil il construction. Installation of a system. Advance measured by products. Final Product relatively clear. Life Cycle generally in form of cascade. Leadership style based on command and control. Highly structured information system. Task oriented organization of Human Resources. Progress relatively Linear. Development Project Development of new products. Organization of social change. Advance aimed at reducing uncertainties, measured by indicators. Various life cycles possible. Leadership style focused on learning. Less formal communication system. Human Resources need to adapt and evolve in order to respond to changes. Processes very dynamic. 41
42 Conclusions Need systematic approach to project categorization and classification Systematic approach must be: Specifically related to prioritized purposes and needs of the organization Hierarchical This appears to be a fertile field for further study and research with all members of the world of project management, including doctoral dissertation topics 42
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