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Neuigkeiten vom PMI in Süddeutschland | News from PMI in Southern Germany | # 9-2018
Project as Profit Centers: Must We
Go Back to Square One Again?
Effektives Projektmanagement mit
Positive Leadership
Chapter-Wiesn 2018 und
PM-Summit
Fachartikel
Chapter-News
Terminhinweise
# 9-2018
Inhalt
Editorial: Strategische Änderungen und ihre Gründe – Strategic Changes and their Reasoning (Jörg Glunde) ..... 3
Projects as Profit Centers—Must We Go Back to Square One Again? (Oliver F. Lehmann) ........................................ 5
Project Business Management: An Executive Overview (Darrel G. Hubbard) ............................................................ 13
Effektives Projektmanagement mit Positive Leadership (Filiz Scarcella) .................................................................... 33
Claim Management – der Schlüssel zum Erfolg (Berthold Hümbs) .............................................................................. 35
So wickeln Sie Ihre Dienstleistungsprojekte durchgängig ab – vom Angebot bis zur Rechnung (Johann Strasser) ..... 37
Freie Fahrt auf der „Projekte-Autobahn“ (Dr. Andrea Cerny) ..................................................................................... 44
Chapter-Wiesn 2018: Sponsored Event des PMI Southern Germany Chapter e.V. ..................................................... 48
English Speaking Dinner Meeting, June 2018: Agile & Digital Transformation Talks (Francesco Miglietta) ............... 50
Informationen zu Chapter-Veranstaltungen ............................................................................................................... 50
Veranstaltungen unserer Sponsoren & Partner .......................................................................................................... 50
Impressum .................................................................................................................................................................. 51
PMI SG Live – Seite 2
# 9-2018
Editorial:
Strategische Änderungen Strategic Changes and
und ihre Gründe their Reasoning
Liebe Mitglieder, liebe Freunde des PMI Southern Dear friends and members of the PMI Southern
Germany Chapter, Germany Chapter,
Das PMI – unsere Mutterorganisation – hat im Jahr 2017 Our mother organisation PMI has changed its overall
seine Strategie geändert, wie im aktuellen Strategic Plan strategy in 2017, as it is obvious in the actual strategic
ersichtlich. Ein Zitat von Mark A. Langley, PMI President plan (s. https://www.pmi.org/about/leadership-
and CEO, weist auf den wesentlichen Charakter hin: governance/strategic-plan). A citation of Mark Langley,
„Our strategy is simple: deliver value, be relevant, grow. PMI President and CEO, shows the future way of PMI’s
(…)” (ebd., S. 2) strategy: “Our strategy is simple: deliver value, be
relevant, grow. (…)” (ibid., p. 2)
PMI hat sich dazu entschieden, sich nicht mehr wie
gehabt auf drei Märkte auszurichten (akademisch, PMI decided to narrow its focus from three markets
Organisationen und Praktiker), sondern den Fokus auf (academic, organizational and practitioner) to one: the
den Nutzen (value) für das Individuum zu konzentrieren value for the individual. “PMI will offer project
und zu verengen. professionals all the skills they need to advance in their
project management careers.” (ibid., p. 8)
Um diesen einen Markt zu bedienen, um in Projekten
Beschäftigten die benötigte Kompetenz vermitteln zu To enable this strategic change, PMI recognized three
können, wird die Strategie in Zukunft auf diese drei different pillars of work where we will expect changes:
Eckpfeiler ausgerichtet, in denen Maßnahmen zu
erwarten sind:
Von entscheidender Bedeutung bei dieser In my opinion, the focus on the customer, on the single
strategischen Neuausrichtung ist meiner Meinung nach individual, is important for this new strategic direction.
die Konzentration auf die einzelnen Projektmanager,
also das Individuum. Also, we as chapter board want to focus more on the
single member, on his or her needs, on his or her
benefits.
PMI SG Live – Seite 3
# 9-2018
Auch wir als Chapter-Vorstand wollen uns mehr auf Therefore, we defined the following target customer
den einzelnen einstellen, auf seine Bedürfnisse, auf groups within the membership according to PMI as we
seinen Nutzen. Dazu haben wir in Anlehnung an PMI met us to the first strategic meeting after the elections:
im ersten Schritt auf unserem ersten Strategietreffen
nach den Wahlen folgende Zielgruppen im Rahmen der PM-Professionals
Mitgliedschaft definiert: Next Gen Project Managers
Project Management Offices
PM-Professionals Volunteers
Next Gen Project Managers
Project Management Offices People who are interested in project management, but
Volunteers which are not members, are side target groups within
the above-mentioned target customer groups. But we
An Projektmanagement Interessierte ohne want to win also those people as members in our
Mitgliedschaft beim Chapter sind aus unserer Sicht chapter. Hence, we have to offer similarly services and
eher eine Randzielgruppe, die wir aber innerhalb der products also to them.
vorgenannten Gruppierungen als Mitglieder gewinnen
wollen. Insofern werden sie gleichermaßen bedient To serve members and interested persons in line with
werden müssen. their demand, we probably must use offerings from
the market or we must consider partners. We will also
Um aber Mitglieder und Interessierte bedarfsgerecht need a network of partners to deliver benefits and
mit entsprechenden Angeboten bedienen zu können, value to our customers, and furthermore those
müssen wir wahrscheinlich auch Angebote vom Markt partners will also have partners.
nutzen bzw. Lieferanten hinzuziehen. Schnell werden
wir so auch ein Netzwerk von Partnern benötigen, und For performing such a partner management,
wahrscheinlich haben diese dann auch wiederum approaches of a discipline might help, which was
eigene Partner. recently recognized as an important but long forgotten
discipline and which will be focused in this volume of
Bei diesem Partner-Management können uns Ansätze our chapter magazine: Project Business Management.
aus einer Disziplin helfen, die gerade eine (Neu-) In a nutshell, the main purpose of project business
Entdeckung erfährt und hier im neuen Chaptermagazin management is to utilize the partner network
vorgestellt wird: Project Business Management. Dabei performing in so called customer projects in such a
geht es im Wesentlichen darum, sein Partner-Netzwerk way, that at the end a high value will occur for all
so einzusetzen, dass bei Projekten für Kunden (sog. participating parties. How this could happen – you may
Customer projects) sich für alle Beteiligten ein experience it in this chapter magazine.
möglichst großer Nutzen einstellt. Wie dies erfolgreich
umgesetzt wird, können Sie mittels des Fokusthemas Happy reading!
dieser Ausgabe erarbeiten.
Nun wünsche ich Ihnen viel Spaß beim Lesen dieser
Ausgabe!
Ihr/ Yours
Jörg Glunde, PMP, PMI-ACP
President PMI Southern
Germany Chapter e.V.
president@pmi-sgc.de
PMI SG Live – Seite 4
# 9-2018
Projects as Profit Centers—Must We Go Back to Square
One Again?
Oliver F. Lehmann, MSc., PMP, Trainer, Oliver F. project to a contractor. In some projects, his new
Lehmann Project Management Training company was just the only contractor. In others, it was
part of complex Project Supply Networks (PSNs) that no
The Specific Challenges Customer of Projects one fully overlooked, understood, and managed. These
PSNs were continuously changing, and a company that
Jack Miller1 had been an internal project manager for was a subcontractor today could later turn into the role
more than 15 years. of a prime contractor, and vice versa.
He had introduced hardware and software in the Jack took over a complete project performed directly for
company, in which he was employed. He developed a customer.
new products and services and brought major change to
the organization. Being on time, on budget and Jack felt well prepared for the new project. He had
delivering what was expected were among the criteria enjoyed a good qualification in project management,
against which he was measured. Others were was even certified, and had many years of experience.
organizational disruptions—the projects were It came as a shock for him, that he found out that he was
essentially cost centers, the profit was made by others not well qualified for them at all. He faced many new
in the company—and how well or poorly the projects and unexpected problems, among them:
integrated themselves into the functional organization.
- The unknown customer organization: Jack’s
Mao Zedong once famously said, “A revolutionary must success so far was built on his great understanding
move among the people as a fish swims in the water”, of the company and its structures. He had been
and Jack, considering a project manager a kind of employed there for years and was familiar with the
disruptive guerrilla, moved inside his organization with people involved. He had observed their interests,
confidence and success. He furthermore changed this desires and fears and was aware of friendships but
organization: Over the years, it had turned into a also hostilities among employees and how these
modern, effective, and highly efficient operational led to good and bad decisions. When he needed
powerhouse, and this was to a major part owed to his support, he knew where to find it. He securely
work. He considered himself a man of success. navigated in the complex system of trust and
distrust that any organization is.
Then he had to change his job. In his next company, he
was again project manager, but was assigned with In the customer organization, to whose project he
managing contractual projects. The company made was assigned, he had no such knowledge. He had
money by performing projects for customers, and Jack to learn through trial and error the lines of
was tasked with doing one of them. For some direction and communications, threatened the
customers, the company provided resources that had to project by trusting the wrong people and lost time
be integrated with the customer’s own resources. In and opportunities by distrusting people, who
others, the customer actually farmed out the entire would have been worthy of his trust. He failed to
1This is the case story of a seminar attendee before he attended
one of my classes. The name has been changed.
PMI SG Live – Seite 5
# 9-2018
see the build-up of resistance by customer - The specific project lifespan: Initiating an internal
employees as much as he failed to utilize support project is a business decision by the performing
that would have been at hand for him. organization, and so is ending it. Some companies
- Different success metrics: Working in customer formalize the process, most do it ad-hoc, when a
projects for his new employer, Jack was measured manager sees the need for a new project.
by the results of two tasks: Bringing money home
and making the customer happy. For a customer project, starting the project
includes a series of difficult business decisions that
involved a number of stakeholders, and so is
The income generated by the project secured the
ending it. Jack was not familiar with the number of
company’s immediate survival including its ability
stakeholders involved in this process in the own
to pay wages to Jack and his colleagues. It was also
organization, including business development,
necessary to keep the organizational functions
sales, and the legal department. He also had to
working and maintain the company’s assets, that
learn how these stakeholders were mirrored by a
are basis for its ability to do projects for customers.
purchasing department and corporate counsels on
customer side. While he came into the project
The happy customer was necessary to safeguard
when the contract was signed, many key decisions
the company’s future. Jack’s employer had the
had already been made by that time, and no one
intention to become the incumbent provider for
had been in a position to validate whether these
projects to the customer, which makes it easier
decisions were feasible or not.
(and cheaper) to win future business. The customer
would also be a valuable reference customer to win
business with other customers and their projects. The ending side of the project also included a
number of business decisions before the contract
Often, Jack found his project in a situation that he could be concluded finally, and apart from
could be good in only one of the two metrics, when warranties and after-project services, the business
making the customer happy meant to go the extra could be considered fulfilled. Or terminated.
mile, whose additional costs impacted the profit
from the project. Image 1 shows this lifespan which includes more
steps than that of an internal project.
Image 1: The lifespan of the customer project, including business development and after-project service. 2
2Taken from my book „Project Business Management” (Lehmann,
2018)
PMI SG Live – Seite 6
# 9-2018
Benefit realization: It is true for the majority of Jack was instead used to have the benefits lying in
customer projects that the last payment ends the the future, and in his old company, most
benefit realization from the project ends with the discussions about the project focused on this
last payment. Benefits not generated by that time outlook (see Image 2). Considering the payments
will not be generated in the future, at least on the from the customer the main benefit, at least for the
monetary dimension. own organization, was an unfamiliar concept for
him.
Image 2: The
Image 1: benefit realization
The benefit lifespan
realization of of
lifespan ananinternal
internalproject
project(with
(with or
or without stageddeliveries)
without staged deliveries)isismostly
mostlyin in
thethe future.
future. Benefit
Benefit
generation
generation from
from a customerproject
a customer projectgenerally
generally ends
ends with the
thelast
lastpayment
payment.
- The need to ensure liquidity: In Jack’s internal a while to learn that documentation was not a nice
projects, project documentation was mostly add-on to the essential deliverables of the project
considered secondary. Often necessitated to meet but an vital part of the survival strategy of his
legal requirements, but definitively not something employer needed to limit the amount of outlays for
to go the extra mile for on top of formal the customer project.
requirements. - Conflicting business interests3: In an internal
In his customer project, documentation was the project, there is just one business interest: that of
basis for invoicing. Late documentation of work the performing organization. In a customer project,
and progress led to late billing by the contractor. there are at least two interests to consider, the
This in turn caused delays to payments by the customer’s and the contractor’s, and at times in
customer and finally stretched the contractor’s Jack’s customer project, they were congruent, but
credit lines. there were other moments, when they were hard
to reconcile.
Being customer oriented to the marrow, Jack
needed to be reminded from time to time that the In complex Project Supply Networks (PSNs), each
contractor was his employer. It was the contractor, additional company involved came with its own
who sent him his monthly pay checks. It took Jack business interests. This added a level of complexity
to the project that was so far unknown to Jack.
3In research conducted by me in 2017 on the frequency of causes compasses on the second rank and by incompatible egos on the
of conflicts in PSNs, conflicting business interests ranked first. This third (Lehmann, 2017).
was followed by diversity of cultures, legal systems and moral
PMI SG Live – Seite 7
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- The legal character of a contract: An internal Jack was not fully aware of the contents of the
project in crisis ends as a worst case with a decision project contract. There are various common
by management to terminate it. If the project is reasons why a project manager would be
purely internal, it is likely that the failure of the unmindful of it:
project will be never be published. The
embarrassing fiasco will instead be rather swept o The project manager has never seen the
under the rug. contract.
A customer project is done under contract and by
o The project manager has seen the contract, but
definition, this means the worst case is that it can
given pressing timeframes, never took the time
end at a court. Court cases about projects may
to really read it.
seem rare, but when they occur, they consume a
lot of time and money, but also management
o The project manager read the contract, at least
attention, a company’s most scarce asset, which
partially, but written in cryptic legalize, did not
will then be lacking to do the business. In addition,
understand it.
they make the public aware of the project failure.
o The project manager read the contract, but
Some contracts include clauses for ADR (alternative given the ever-changing requirements on the
dispute resolution), such as arbitration or person, forgot important obligations laid down
mediation. ADR may avoid the publicity aspect for in it at an early time.
the failed project, but it also consumes time,
money, and management attention. - A different understanding of the task: For a while,
Jack rejected the understanding that he shares
Jack had to learn that in every communication, he responsible for the profitability of the project. The
had to consider how it could be used in such a price agreed with the customer was negotiated by
worst case scenario by any of the parties. sales people, and his job was to deliver. If the price
- Dependency on the customer: Customer projects was too low for a profitable project, it was not his
are high risk business for all parties involved. In fault. Time and again, he strongly insisted that he
order to proceed with the project as scheduled and was a project manager, not a business pro.
bill the work done, Jack’s company often had to
rely on the customer meeting obligations timely in Jack had to learn that profitability, as much as
form of provisions (deliveries by the customer to liquidity and customer happiness, were in his
the contractor) and enabling services (provided to domain of responsibility. By trial and error, he
the contractor). learned over the years that by managing a project
It was a new experience for Jack to find that the for a customer, one becomes a project business
customer was often late with meeting such manager, and as such has responsibilities beyond
commitments and that this became an obstacle to those of internal project managers.
project success both technically and commercially
that was hard to overcome. Jack was actually The trials costed money, but particularly the errors
seasoned in effective risk management, but he had became very expensive.
never come across this type of risk before.
There were many more problems that Jack faced in his
- The significance of the contract: The contract in a
first customer project. Problems that came as surprises
customer project is the single most important
to him despite his vast experience in managing
document. Together with potential amendments
projects. His experience was just limited to projects of
and addenda, it constitutes the part of the
another type, internal projects, and when he formerly
agreement between customer and contractor that
talked of a “customer”, he meant in “internal
will be assessed first in the worst case of legal
customer”. An internal customer is just a model that
action.
may sometimes be helpful, but he had to learn that a
real customer is an entirely different thing.
PMI SG Live – Seite 8
# 9-2018
One can condense the difference by saying that Jack was similar hypes, but they are generally discussed as topics
well qualified to manage projects that were cost internal to the organization. Ignored are development
centers, but in his new job, he was supposed to manage that extend over the limitations of a corporation such as
profit centers. He was unaware of the specific customer projects, performed to bring money home.
terminology of the business, of the tools and techniques
that are appropriate in a customer project such as Professional education has similar limitations.
Benefit Engineering, of the different requirements that Congresses, catalogues of training providers, and also
he was expected to meet, and of the differences offerings in Academia show a general ignorance (or
regarding his role as a project manager. avoidance) of the commercial aspects of customer
projects and of the connective qualities that the leaders
Table 1 (below article) gives an overview of the major of these projects must have.
differences between the two types of projects.
In literature, apart from my book on “Project Business
As Professionals in Project Management, Where Management”6, I know of only one other book on the
Do We Stand? topic, Bruce Hornby’s “Commercial Project
Management”7.
Project management across literature, standards,
association lectures and discussions, and professional Therefore, while there are many offerings for the
qualification has a clear focus on internal projects. qualification of project managers to manage internal
projects, project managers in customer projects must
An example is Table 1-1 in the Guide to the Project develop the specific skills and knowledge purely by trial
Management Body of Knowledge (PMBOK Guide) 6th and error. An expensive way with many private risks,
Edition4. It describes factors that lead to the creation of but also business risks.
a project. The signatures under a contract by a
contractor and a customer to do a project against I wondered whether customer projects are something
payment is not among them5. exotic, a market too unattractive to be addressed with
offerings for professional education. To know more
In literature, the general focus is on internal projects about that, I did two surveys asking project managers
with their strategic contribution to the future of the what kind of projects they are currently performing or
organization. Commonly used buzzwords today are have recently finished, one survey in 2015, the other
“Agile transformation”, “Servant leadership”, “VUCA” one in 2018. Image 3 shows the results.
(Volatility – Uncertainty – Complexity – Ambiguity) and
4(PMI, 2017) estate, and the income will be generated by operations, not the
5I was recently pointed to the seventh factor in the table, which project.
names “customer request” as such a factor. In the example of the 6 (Lehmann, 2018)
PMBOK Guide, this is however an internal project, that will allow 7 (Hornby, 2017)
for an operational service, providing electricity for an industrial
PMI SG Live – Seite 9
# 9-2018
Image 3: Responses to two surveys asking for the percentage of internal project managers vs. those in customer projects with N = 245
(2015) and 325 (2018).
In the first survey (2015, inner circle), there was a small also for their expectation for the future. Responses
dominance of customer projects over internal projects. could be made on a seven-step scale from -3 (Make
In the second survey done almost 3 years later, the chosen more often) to +3 (Buy chosen more often).
dominance had grown significantly.
For both, recent experience and future expectations,
This trend confirmed the results of another survey I there was a significant dominance of Buy chosen, as
made in December 2016. I asked project managers for shown in Image 4.
their recent experience in Make-or-Buy decisions, and
Image 4: Trends in Make-or-Buy decisions per Dec. 2016, n = 590.
When the Make-or-Buy decision is answered with such companies, which will then build a Project Supply
Make, the result will likely be an internal project. A Buy Network (PSN).
response will instead lead to a customer project for
another company, the contractor, or for a number of
PMI SG Live – Seite 10# 9-2018
Project Business Management Lehmann, O.F. (2017) 'Leading Project Teams Across
Corporate Borders', PM World Journal, VI (11), November
Project management must add business knowledge to [Online]. Available from:
its portfolio of knowledge areas to be able to https://pmworldjournal.net/article/leading-project-
professionalize customer projects like internal ones. teams-across-corporate-borders/ (Accessed: 28 August
Business understood here as the activities that happen 2018).
between two or more organizations, commonly as
paying customers and delivering contractors. Lehmann, O.F. (2018) Project Business Management,
Boca Raton, FL, USA: Taylor & Francis.
The companies that do customer projects should invest
more in the qualification of project managers, and it is Lipman-Blumen, J. (1996) The Connective Edge: Leading in
not enough to teach them project management, an Interdependent World, Hoboken, NJ, USA: Jossey-Bass
classical or agile or any other method. They need to be Publishing.
prepared for the specific demands that customer
project pose on them and have to learn to address them PMI (2017) A Guide to the Project Management Body of
proactively or deal with issues, problems, and possibly Knowledge - PMBOK Guide, 6th edition, Newtown Square,
crises when they occur. PA, USA: PMI - The Project Management Institute, Inc.
The same is true for customer-side project managers. It
is not sufficient to get some education in procurement
management. Project Supply Networks are growing
larger and more complex. They span over cultures, time
zones, legal systems and business interests. Project
managers need to learn to engineer them, which
involves Connective Leadership beyond the borders of
the organization.8
As educated project managers, we do not need to go
“back to square one”. The knowledge that we have
obtained for internal projects will be helpful for
customer projects too. However, as the case story with
Jack shows, we need to develop further skills: Business
acumen and the ability to lead outside the own
organization.
A corollary of that need is the necessity to qualify
educators and other enablers to teach this specific
knowledge. How will we finance that? Given the high
costs of trial-and-error, particularly of the error part,
gives an easy business case to invest in personnel for
Project Business Management.
References
Hornby, R. (2017) Commercial project management: A
guide for selling and delivering professional services, 1st
edition, London, UK: Routledge.
8I recommend the work of Jean Lipman-Blumen on Connective
Leadership ( (Lipman-Blumen, 1996).
PMI SG Live – Seite 11# 9-2018
Table 1: Differences between internal projects and customer projects
PMI SG Live – Seite 12# 9-2018
Project Business Management: An Executive Overview
Darrel G. Hubbard, P.E., President & CEO, D.G.Hubbard Management concepts and constructs on an enterprise-
Enterprises, LLC wide basis.
Note from the Magazine Editor: This article uses a different In addition, during our continuing research we delved
definition of the term “Project Business Management” than into the constructs, organizational concepts, and
the previous one. frameworks of employing project management and
implementing PBMOs within an organizational business
Introduction context. PMI has come to call this management arena
“Organization Project Management.” However, we
The scope of the discipline of modern Project named it Organizational Project Business Management
Management has grown and matured during the past (OPBM), to emphasize the many business management
70 years. That growth has facilitated the ongoing aspects within our concept of organizational project
integration into Project Management of many management.
methodologies and processes from General Business
Management and Operations Management, which can Again, to validate this OPBM construct and concept we
be directly related and applied to the enterprise's solicited and received a set of eight extensive PMO case
business management of its projects, project-based studies. We compiled those research results in our
programs, and project-based portfolios. latest book, A Compendium of PMO Case Studies –
Volume II: Reflecting Project Business Management
The broad concept of Project Business Management Concepts {Hubbard & Bolles 2016}. These results
(PBM) was developed in conjunction with Dennis Bolles validated our Organizational Project Business
through our multi-year research into various aspects of Management concepts and constructs on an enterprise-
operations and business management within the field wide basis. This work also illustrates that
and discipline of Project Management. During our Project/Program/Portfolio Business Management
research we analyzed and deconstructed the various Organizations – or generically the Project Business
models, frameworks, organizational concepts, and Management Organizations (PBMO) – have become
operational aspects of, what is commonly called, the keys to business successes within major enterprises..
Project Management Office (PMO). Based upon our
research, we named this functional organization the Project Business Management: Construct, Model,
Project Business Management Organization (PBMO).
and Framework
The book The Power of Enterprise-Wide Project
The principles and concepts of project-portfolio
Management {Bolles & Hubbard 2007} laid out our
management, project-program management, and
overall concept of Project Business Management, based
project management are complex, and the
upon our research and eighty-years of combined
management processes involved are many, as are the
experience. Reviewers and users of the book asked
organizational concepts and integration necessary to
what specific actual cases we could share that
provide the actual management. Our PBM verbal
supported the books PBM concepts. Since our work had
construct, graphic Model, and associated Framework
been confidential, we proceeded to solicit a current set
are based upon our research of, case studies for, and
of PMO cases using the books PBM constructs as the
models of project/project-program/project-portfolio
basis for the case study solicitation. We documented
organizations and the application of enterprise-wide
those research results in our book, A Compendium of
project business management to generate enterprise
PMO Case Studies – Volume I: Reflecting Project
business value and benefits.
Business Management Concepts {Hubbard & Bolles
2012}. The results validated those Project Business We developed the concept of "Project Business
Management" and created its acronym "PBM'' {Bolles &
PMI SG Live – Seite 13# 9-2018
Hubbard 2007; Hubbard & Bolles 2007} to eliminate any
confusion – and suppress the reader's assumptions – as
to what the generic term "project management" might
mean to a reader, when used it in a business context.
We developed our initial Project Business Management
(PBM) concept in 2002, expanded it into a construct and
model in 2006, and documented it in our second book
{Bolles & Hubbard 2007; Hubbard & Bolles 2014}.
Project Business Management (PBM), stated in business
terms, is the business strategy and management
framework, underlying Organizational Project Business
Management (OPBM). It drives the use of integrated
general business management and project
management knowledge, skills, tools, and techniques
Exhibit 1: Project Business Management (PBM) Model
when applying project-portfolio, project-program, and
project processes, methodologies, and procedures
within an enterprise's business context and structure to
meet or exceed stakeholder and customer needs. Key Our Enterprise-wide Project Management House of
business purposes of employing Project Business Excellence Model is composed of a roof [the PBMO], five
Management within an enterprise are to: major support pillars, and a foundation [Sustainability].
The pillar-components are not standalone stove-pipes
• Achieve the enterprise's strategic initiatives and in construct, because each of those structural elements
effectively accomplish the related business objectives, relies upon the others to carry their portion of the PBM
which are implemented via specific projects: and load for the enterprise, and they all rest on sustainable
project business management practices. Therefore,
• To thereby derive benefits from, and capture they conceptually, and in reality, must be interrelated
value through, any project-related actions and activities and integrated, because they are part of the same
utilized to accomplish the enterprise's strategic Project Business Management support structure. In
initiatives and related business objectives. addition, the supporting management domains of
resource management, strategy management, and
The PBM construct was updated in 2008 to initiate
objectives management are also addressed when
additional research in support of our Volume I PMO
implementing Project Business Management at an
Case Study solicitation process. We refined and detailed
enterprise-level or division-level within an enterprise.
the construct in 2012 and finalized our related PBM
Model; as shown in Exhibit 1 below: We finalized our PBM Framework in 2015, based upon
our refined PBM Model, to support the research process
for Volume II of our PMO Case Studies. That Framework
is shown in Exhibit 2 below:
PMI SG Live – Seite 14# 9-2018
needs, and to derive benefits from, and capture value
through, any project-related actions and activities.
Project Business Management Organization
(PBMO) – Roles in Organizational Project
Business Management (OPBM)
Organizational Project Business Management
(OPBM)—as is true with Accounting Business
Management—requires a formal functional
organization to perform its implementation and sustain
its application. That functional organization needs to
report to the enterprise's executive level to provide,
implement, and maintain the necessary infrastructure
of the project management discipline within the
enterprise. For OPBM, that functional is the Project
Exhibit 2: Project Business Management (PBM) Framework Business Management Organization (PBMO).
Operations management and project management In this context of business management, the PBMO can
must coexist within the enterprise’s overall be understood as a corporate business-unit function,
organizational structure and needs to support the with a title and responsibility similar to traditional
various business aspects and strategies of the business functions; such as finance, engineering,
enterprise. The PBM construct provides this holistic marketing, sales, manufacturing, information
business view of the various aspects of project technology, etc. – which provide leadership and have
management, when coupled with the related business ownership of their respective functional disciplines
aspects of operations management. {Hubbard & Bolles 2012 & 2016}.
The lines between many portions of operations It should also be noted that what is commonly referred
management and project management have become, to as a PMO was actually a physical office. The term
and will remain, blurred and interlaced. The discipline of project management office is an archaic remnant from
Project Management now encompasses the the field-site offices employed by the engineering and
management aspects of project-program management construction profession. The PMO, in business, is a
and project-portfolio management. Therefore, if all functional organization within an enterprise. An office is
projects are to be planned and managed to provide the only a physical location associated with an enterprise
desired benefits and value to the enterprise, then where a person can go—whereas an organization
project management and operations business performs a business purpose within that enterprise.
management must be integrated within the enterprise.
The supporting organizational and management
To address this, the construct of Project Business structure of the PBMO facilitates the business-based
Management provides for the utilization of integrated identification, selection, prioritization, and execution of
general business management, project-portfolio, projects to effectively and efficiently accomplish the
project-program, and project management knowledge, enterprise's strategic initiatives, and related business
skills, tools, and techniques in applying project- objectives that each project represents to the
portfolio, project-program, and project processes. enterprise. The PBMO is a key component in
Project Business Management also places an emphasis establishing a sustainable competitive business posture
on the start-up processes for projects, project- and culture within both the enterprise and
programs, and project-portfolios, making executives Organizational Project Business Management.
and senior management more aware of the impact
these processes have on their business practices. The The purpose of the PBMO within Organizational Project
underlying objective is to meet or exceed stakeholder Business Management (OPBM) is the development and
PMI SG Live – Seite 15# 9-2018
implementation of OPBM. It is the organizational Five general types of project business management
business function, inside the enterprise, that institutes organizations are:
and manages the Project Business Management
processes and methodologies for project-portfolios, - Division-Level PBMO
project-programs, and projects. - Business-Unit PBMO
- Project Management Center of Excellence (PMCoE)
The Enterprise PBMO provides executives with a
management oversight capability that keeps all project - Basic Project Business Management Organization
teams, business units, departments, and divisions (PBMO)
aligned with the enterprise’s strategies and related - Project & Program Support Organization (PSO)
business objectives. The Enterprise PBMO facilitates the
integration of the project, program, and portfolio Establishing an Enterprise PMO reporting to the
management processes with the operational business executive level is the only way to successfully achieve
management processes employed by its other business the benefits derived from instituting project
unit organizations to implement the enterprise’s management as a business function across the
strategic business plans. enterprise. Exhibit 3 below shows the various ways that
the five types of organizational structures might be
Once the executive management team adopts Project established.
Business Management practices as a way to do
business, specific changes in some operational business
processes and the addition of supportive business
policies are necessary. Applying project business
management processes, to manage the daily business
operations related to projects, requires the application
of specific knowledge, skills, tools, and techniques that
are often new and foreign concepts within an
enterprise’s current cultural environment.
A cookie-cutter solution for implementing enterprise-
wide project management does not exist, because each
enterprise is different. However, the required
processes, techniques, and tools that make up the
pillars of the PBMO Model can be customized and
implemented by an Enterprise PMO. These features are
common to enterprises who have successfully
established enterprise-wide project management
operations.
The Project Business Management Organization
(PBMO) is an integral part of the organizational-based
management philosophies called Project Business
Management (PBM) and Organizational Project
Business Management (OPBM) These constructs place
project management and its associated functional
organizations within the overall management arena of
the business enterprise and its operations.
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Exhibit 3: Enterprise PMO Structure-Related Management Roles
Various Structuring of PBMOs to Implement OPBM
This OPBM implementation by PBMOs—within a difficult, if not impossible, without first establishing
business context and on an enterprise-wide or division- exclusive ownership of the PBMO at the
wide basis—of the practices and processes of the enterprise's corporate level; and
project management discipline, has been shown to keep - Positioning the PBMO within the top of the
an enterprise’s strategic initiatives on track in a wide enterprise's hierarchical organizational structure
array of industries. The PBMO utilizes an integrated establishes its autonomy and thus "ownership" for
project management approach across the enterprise to setting up, distributing, supporting, and managing
design, develop, and deploy a common project the application of OPBM.
management governance, methodology, capability and
the planning and execution processes for OPBM Our research shows the deployment of a PBMO has
implementation that will ensure project, program, and become a primary business and organizational function
portfolio success. in implementing OPBM. PBMOs are not only being
utilized to successfully initiate and manage projects,
The single ownership of the business-oriented PBMO, at project-programs, and project-portfolios, but also to
the executive-level of the enterprise, must be solve the larger business issues associated with those
established to implement Organizational Project projects, programs, and portfolios. The PBMO provides
Business Management. This increased executive-level support to executive management in the business
ownership of the planning, implementation, and on- management planning process that converts the
going management of an enterprise's PBMO is current and future needs of the enterprise into business
supported by our PMO case studies. Two specific plans and business cases. It is also instrumental in
reasons are: transforming those business plans and cases into
strategic initiatives.
- The establishment of common project
management processes and practices across an These various organizations perform and oversee the
enterprise, as embodied within the construct of management of projects, project-programs, and
Organizational Project Business Management, and project-portfolios as applicable within a given
gaining enterprise-wide adoption at all levels is
PMI SG Live – Seite 17# 9-2018
enterprise. The relationships among these PBMO types Based upon the above constructs and concepts a
can be complex, multilayered, and as varied as the general business oriented definition for Organizational
combination of industries and enterprises and their "Insert a Discipline-Name" Management for any
associated organizational, cultural, and political management discipline can be stated as follows: It is the
contexts, as evidenced by the eight PBMO framework of organizational strategies with requisite
organizational structures described in our second set of capabilities that utilizes a "Discipline-Name" Business
PMO case studies, and as illustrated in Exhibit 3 on Page Management Framework and a "Discipline-Name"
5. However, each actual configuration within an Business Organization Model to provide the systematic
enterprise supports that enterprise's specific business-oriented management of an enterprise's
implementation and application of Organizational "Discipline-Name" specific tasks and work. Therefore,
Project Business Management. Organizational "Insert a Discipline-Name" Business
Management organizationally facilitates the business-
General Concepts, Constructs, and Frameworks based identification, selection, prioritization, and
of Organizational Management in Business execution of "Discipline-Name" specific tasks and work
to efficiently accomplish the enterprise's strategic
Business Administration, as studied at colleges and initiatives, and related business objectives—and to
universities and pursued within enterprises, is establish a sustainable competitive business posture
composed of multiple areas of management within an and culture.
enterprise. The names of the most common
management fields or disciplines include: Financial As an example, Organizational Accounting Business
Management; Quality Management; Production Management always utilizes a functional organization,
Management; Manufacturing Management, commonly titled as the Accounting Organization, to
Engineering Management, Information & Technology provide, implement, and maintain the necessary and
Management; Operations Management; Accounting associated accounting infrastructure within the
Management; and Project Management. Each of these enterprise. Therefore, based upon the preceding
unique disciplines contains the requisite knowledge, discussions, the following graphical representation
skills, and means to govern, direct, supervise, manage, example of the construct and framework for
and control the conduct, performance, and execution of Organizational Accounting Business Management, as
the associated tasks and work within that management shown in Exhibit 4 below can be seen as an explicit
discipline. analog for Organizational Project Business
Management, as shown in Exhibit 5 on Page 8.
In most major enterprises, those organizations are
created for a specific business purpose, employ most of The blue-clouded area, within the Venn diagram of the
the common processes, techniques, and methodologies Organizational Accounting Business Management
of Business Administration. In addition, each of those Framework in Exhibit 4 below represents the selection
management disciplines is implemented and deployed and integration of just those specific portions of all that
within an enterprise by a specific functional business- is known about accounting management, about all the
oriented organization whose organizational name possible accounting organizational structures, and
usually reflects that discipline. Each of those functional about all of the specific enterprise's operations
organizations is created for the purpose of organizations and operations management. It
organizationally instituting that specific management represents the specific subset that has been determined
discipline, on an enterprise-wide basis or division-wide to be necessary and sufficient to define an enterprise's
basis. Which is to say, that each management discipline specific implementation of Organizational Accounting
has an "Organizational Management" aspect, which is Business Management and its related implementing
employed to establish the requirements, design, Accounting Business Management Organization.
implementation, and operational organizational
strategy, for that specific management discipline, within
each specific enterprise.
PMI SG Live – Seite 18# 9-2018
Exhibit 4: Organizational Accounting Business Management (OABM)
A Construct with Framework
Organizational Project Business Management: project management business or technical services and
Concepts, Construct, and Framework support, on an enterprise-wide or division-wide basis.
Our studies of integrating various methodologies and Therefore, Organizational Project Business
processes from General Business Management and Management (OPBM) can be defined, in business terms,
Operations Management into Project Management led as the framework of organizational strategies with
to the construction of our Organizational Project requisite capabilities that utilizes a Project Business
Business Management (OPBM) Framework. Management Framework and various Project Business
Management Organization Models to provide the
Organizational Project Management is a specific systematic business-oriented management of an
business management construct or concept just like enterprise's project-portfolios, project-programs, and
Organizational Accounting Management, or any of the projects and related work. Exhibit 5 below graphically
other management disciplines and provides specific illustrates this concept and construct for OPBM.
Exhibit 5: Organizational Project Business Management: The Construct with Framework
The cube-like graphic on the right-hand side of Exhibit 5 which underlays OPBM, is considered to be composed
is the model for the PBM construct that was presented of three specific interrelated sub-disciplines or
in Exhibit 2. The discipline of Project Management, branches, to wit:
PMI SG Live – Seite 19# 9-2018
- Managing projects, where a project is a temporary and its related implementing Project Business
endeavor, having constraints, undertaken to create Management Organization (PBMO).
a unique product, service, or result;
- Managing programs composed of projects and Therefore, the enterprise must first establish its
other related work, which includes identifying, business-based strategies for instituting Organizational
prioritizing, authorizing, managing, monitoring, Project Business Management (OPBM) and then define
and controlling the included projects and other the capabilities that must either exist, or need to be
related work, to achieve the enterprise's specific acquired, to support those strategies. These actions
related strategic initiatives and business objectives include identifying the existing Organizational Process
and obtaining the associated benefits and value; Assets that support the OPBM strategy and defining the
and missing Assets that must be created, prepared, or
acquired and then implemented. The process of
- Managing portfolios, which includes identifying,
creating the enterprise's specific OPBM Framework and
prioritizing, authorizing, managing, monitoring,
PBM Model includes identifying the existing Enterprise
and controlling the included projects, project-
Environmental Factors that support the enterprise's
programs, and other related work.
established OPBM strategy and then defining the
missing Factors that must be developed, cultivated,
Operations Management and Project Management
ameliorated, or addressed.
must coexist and cooperate within the enterprise's
organizational structure and must support the various
Our studies of the integration of methodologies and
business aspects and strategies of the enterprise. OPBM
processes from General Business Management and
through a PBMO can integrate the role of project
Operations Management into Project Management led
management into the enterprise's business operations
to this construction of our Organizational Project
and can explicitly address implementing strategic
Business Management (OPBM) framework.
initiatives, tactical objectives, business requirements,
and stakeholder needs; thereby, supporting the
Project Business Management Organization
Organizational Project Business Management
(PBMO) Implementations of Organizational
construct.
Project Business Management (OPBM)
Similar to what was presented in Exhibit 4, the blue-
outlined cloud area, within the Venn diagram of the The evolving nature of Organizational Project Business
OPBM Framework of Exhibit 5 on Page 8, represents the Management (OPBM) has made it necessary for an
identification, selection, and integration of just those: enterprise's management to assume a direct role in the
executive management of the implementation and
- Specific components from all that is known about desired functionality of OPBM and the associated
the project management discipline; Project Business Management Organization (PBMO).
- Specific organizational structures from all the Enterprises have addressed specific opportunities to
possible project management organizational improve the alignment of their planning and execution
forms; and of corporate strategies and objectives with the
- Specific elements from all the enterprise's enterprise's mission and vision, by employing OPBM
operations management and operations and using executive-level PBMOs. A sample
organizations, which must interface and cooperate Organizational Project Business Management
with each other and the Project Business implementation showing some typical organizational
Management Organization. functions and management capabilities that could be
undertaken by an Enterprise-level PBMO is shown in
These items are that subset of management, Exhibit 6 on Page 10.
organizational structures, elements, and components,
which is determined as being necessary and sufficient to The deployment of a Project/Program/Portfolio
define an enterprise's specific implementation of Business Management Organization (PBMO) at the
Organizational Project Business Management (OPBM) enterprise's executive-level to implement
PMI SG Live – Seite 20# 9-2018
Organizational Project Business Management has, for - Reports to an executive management level position
many enterprises, become an important business and independent of other functional groups;
organizational methodology for successfully achieving - Provides support directly to portfolio, program and
desired business results in their management of project managers and their staff, or provides the
projects, project-programs, and project-portfolios. managers from within the Enterprise PMO staff;
Exhibit 6 below shows an example.
- Is responsible for developing, implementing, and
monitoring the consistent application of a Project
OPBM utilizes the Enterprise PBMO as the centralized
Business Management Methodology across the
business function, within the enterprise, to manage the
enterprise; and
requisite project management business practices,
processes, and support services. This functional group is - Integrates the application of portfolio, program,
staffed with experts skilled in providing those services, and project management business practices with
and: the operational business practices throughout the
enterprise, through coaching, mentoring, and
training.
Exhibit 6: Enterprise-level Project Business Management Organization Model – Typical Organizational Functions and Management
Capabilities for OPB
For an Enterprise-level PBMO, a chief project officer, Project Business Management Organizations are now
who reports directly to a chief executive officer or a effectively and successfully addressing a wide range of
chief operating officer, needs to lead the PBMO and be business and organizational challenges associated with
responsible for implementing and managing Project implementing and operating Organizational Project
Business Management on an enterprise-wide basis. Business Management, which include:
PMI SG Live – Seite 21# 9-2018
- Managing the associated organizational changes company-standardized project management
inherent in implementing OPBM; practices at any level where they are used.
- Improving communications and collaborative However, the actual effective application and
cooperation among business units: enforcement of those practices and process
requires a PBMO at the enterprise, division, or
- Dealing with complexity;
major business unit level;
- Managing changes in projects, project-programs
- PBMOs employed on a major/critical project are
and project-portfolios;
effective, but have little long-term influence on
- Establishing project management as a core an enterprise-wide basis; and
competency;
- PBMOs located at the Business Unit level are
- Enhancing project management competency and effective within the business unit. However, they
maturity; lack the strategic and tactical aspects needed to
- Managing and balancing project related risk; have an influence on the enterprise outside of
- Applying Agile project management practices; the Business Unit.
- Supporting executive management in maintaining
In summary, the PBMOs that can have an influence
market competitiveness; and
enterprise-wide are those established at the
- Maintaining the sustainability of OPBM. enterprise-level or division-level (see Exhibit 3 on
Page 5). Only these two PBMOs have led to
The establishment of the Enterprise-level PBMO, as
enterprise-wide quantifiable improvements in the
well as the Division-level and Business-Unit PBMOs,
Organizational Project Business Management of an
based upon our PBM Framework and PBMO models,
enterprise's projects, project-programs, and/or
has been shown to provide a solid foundation to
project- portfolios. Of the two, the Enterprise PBMO
proactively address impediments and organizational
is more likely to be successful and beneficial to the
challenges to implementing OPBM—and to establish
overall enterprise than the Division PBMO.
and uniformly apply Project Business Management
governance, leadership, standards, and
Organizational Project Business Management
methodologies (processes, procedures, and
(OPBM): Business Function and Role
techniques) in the application of OPBM {Hubbard &
Bolles 2012, 2014, & 2016}. Projects, project-programs, and project-portfolios are
an enterprise's strategic business investments. From a
To be a PBMO, that organization must be a unique
competitive financial perspective, enterprises can no
business function within its enterprise, and not be an
longer afford to authorize, or fund, or execute any
add-on to an existing function or department. Of our
project without that project supporting a clear and
seven identified types of PMO models only four meet
controlling strategy. Projects and programs, and any
the full definition of a PBMO. Moreover, only two of
related portfolios as strategic business investments,
those are effective on an enterprise-wide and
must be properly managed. However, many businesses
enterprise-level basis in implementing Organizational
are not necessarily managing them that way, because
Project Business Management. This means:
those enterprises are using a traditional management
- PBMOs located below the enterprise or division approach for projects, programs, and portfolios that
level have little influence on an enterprise-wide primarily relies on a basic project-centric execution-
basis; orientated methodology. This limited approach is not
only inefficient and ineffective from a business
- Project Support Organizations as well as Project management perspective, but also puts the business
Management Centers of Excellence do not benefits and values, that enterprise requires, at risk.
manage projects and consequently they are not
actually a PBMO; Most business executives realize that effective
- Project Management Centers of Excellence are management of their projects has a measurable impact
of value for developing and disseminating OPBM on their enterprise's bottom line. Those executives
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