TEAMFLY Team-Fly ® STRATEGIC PLANNING FOR PROJECT MANAGEMENT USING A PROJECT MANAGEMENT MATURITY MODEL 9755.Frontmatter 10/31/00 9:40 AM Page i This Page Intentionally Left Blank STRATEGIC PLANNING FOR PROJECT MANAGEMENT USING A PROJECT MANAGEMENT MATURITY MODEL HAROLD KERZNER, PhD Senior Executive Director for Project Management International Institute for Learning New York, New York John Wiley & Sons, Inc. New York ● Chichester ● Weinheim ● Brisbane ● Singapore ● Toronto 9755.Frontmatter 12/5/00 12:28 PM Page iii This book is printed on acid-free paper. Copyright © 2001 by John Wiley & Sons. All rights reserved. Published simultaneously in Canada. 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If professional advice or other expert assistance is required, the services of a competent professional person should be sought. Library of Congress Cataloging-in-Publication Data Kerzner, Harold. Strategic planning for project management using a project management maturity model / Harold Kerzner. p. cm. Includes index. ISBN 0-471-40039-4 (alk. paper) 1. Industrial project management. 2. Strategic planning. I. Title. HD69.P75K494 2001 00-043814 658-4Ј 04—dc21 Printed in the United States of America. 10987654321 ∞ 9755.Frontmatter 10/31/00 9:40 AM Page iv Contents Foreword ix Preface xi Introduction xiii 1 The Need for Strategic Planning for Project Management 1 Introduction 1 Misconceptions 1 Wall Street Benefits 3 Stakeholders 4 Gap Analysis 5 Concluding Remarks 9 2 Impact of Economic Conditions of Project Management 11 Introduction 11 Historical Basis 11 3 Principles of Strategic Planning 15 General Strategic Planning 15 What Is Strategic Planning for Project Management? 16 Executive Involvement 25 The General Environment 26 Critical Success Factors for Strategic Planning 28 Qualitative Factors 29 Organizational Factors 30 Quantitative Factors 32 v 9755.Frontmatter 10/31/00 9:40 AM Page v Identifying Strategic Resources 34 Why Does Strategic Planning for Project Management Sometimes Fail? 38 4 An Introduction to the Project Management Maturity Model (PMMM) 41 Introduciton 41 The Foundation for Excellence 42 Overlap of Levels 43 Risks 45 5 Level 1: Common Language 47 Introduction 47 Roadblocks 48 Advancement Criteria 49 Risk 50 Assessment Instrument for Level 1 50 Questions 51 6 Level 2: Common Processes 67 Introduction 67 Life Cycles for Level 2 68 Roadblocks 71 Advancement Criteria 72 Risk 72 Overlapping Levels 73 Assessment Instrument for Level 2 73 Questions 74 7 Level 3: Singular Methodology 77 Introduction 77 Integrated Processes 78 Culture 81 Management Support 81 Informal Project Management 82 Training and Education 82 Behavioral Excellence 84 Roadblocks 85 Advancement Criteria 85 Risk 86 Overlapping Levels 87 Assessment Instrument for Level 3 87 Questions 87 vi CONTENTS 9755.Frontmatter 10/31/00 9:40 AM Page vi 8 Level 4: Benchmarking 97 Introduction 97 Characteristics 98 The Project Office/Center of Excellence 99 Benchmarking Opportunities 101 Roadblocks 103 Advancement Criteria 103 Assessment Instrument for Level 4 104 Questions 104 9 Level 5: Continuous Improvement 109 Characteristics 109 Continuous Improvement Areas 110 The Never-Ending Cycle 112 Examples of Continuous Improvement 113 Developing Effective Procedural Documentation 114 Project Management Methodologies 120 Continuous Improvement 120 Capacity Planning 122 Competency Models 123 Managing Multiple Projects 125 End-of-Phase Review Meetings 127 Strategic Selection of Projects 128 Portfolio Selection of Projects 131 Horizontal Accounting 134 Organizational Restructuring 136 Career Planning 138 Assessment Instrument for Level 5 138 Questions 139 10 Sustainable Competitive Advantage 143 Introduction 143 Strategic Thrusts 144 The Need for Continuous Improvement 147 Project Management Competitiveness 148 11 Special Problems with Strategic Planning for Project Management 151 Introduction 151 The Many Faces of Success 152 The Many Faces of Failure 153 Training and Education 157 Change Management 158 Partnerships 162 Contents vii 9755.Frontmatter 10/31/00 9:40 AM Page vii The Impact of Risk Controls Measures 163 Dependencies between Risks 165 Selecting the Appropriate Response Mechanism 168 Conclusions 170 11 Case Studies 171 Case 1: Packer Telecom 171 Case 2: Luxor Technologies 173 Case 3: Altex Corporation 177 Case 4: Acme Corporation 180 Case 5: Quantum Telecom 182 Case 6: Lakes Automotive 184 Case 7: Ferris HealthCare, Inc. 185 Case 8: Clark Faucet Company 187 Case 9: Hyten Corporation 190 Case 10: Como Tool and Die (A) 200 Case 11: Como Tool and Die (B) 204 Case 12: Macon Inc. 207 Case 13: The Trophy Project 209 Case 14: The Blue Spider Project 212 Case 15: Corwin Corporation 225 Case 16: MIS Project Management at First National Bank 235 Index 247 viii CONTENTS 9755.Frontmatter 10/31/00 9:40 AM Page viii [...]... efficiently toward fulfillment of its mission WHAT IS STRATEGIC PLANNING FOR PROJECT MANAGEMENT? Strategic planning for project management is the development of a standard methodology for project management, a methodology that can be used over and over again, and that will produce a high likelihood of achieving the project s objectives Although strategic planning for the methodology and execution of the methodology... or need for strategic planning for project management Others recognize its importance but simply lack expertise in how to do it In either event, strategic planning for project management is a necessity STAKEHOLDERS Given the fact that project management is no longer seen as just a quantitative tool for the employees, but is recognized as a source of benefits to the whole corporation, project management. .. International Institute for Learning 9755.Frontmatter 10/31/00 9:40 AM Page xv S T R AT E G I C PLANNING FOR PROJECT M A N AG E M E N T U S I N G A PROJECT M A N AG E M E N T M AT U R I T Y M O D E L 9755.ch01 10/31/00 9:42 AM Page 1 1 The Need for Strategic Planning for Project Management INTRODUCTION For more than 40 years, American companies have been using the principles of project management to get... Nortel Global Project Process Standards Team-Fly® 9755.Frontmatter 10/31/00 9:40 AM Page xi Preface Excellence in project management cannot occur, at least not within a reasonable time frame, without some form of strategic planning for project management Although the principles of strategic planning have been known for several decades, an understanding of their applicability to project management is... strategic planning and project management, as well as the relationship between them The relationship between project management and strategic planning can best be seen from Figure 2–1 Historically, a great deal of emphasis had been placed on strategic formulation with little emphasis on strategic implementation Now companies were recognizing that the principles of project management could be used for. .. the benefits that project management can provide to their “bottom line,” the need for strategic planning for project management has been identified as a high priority This book is broken down into two major parts The first part, Chapters 1 to 3, discusses the principles of strategic planning and how it relates to project management The second part, Chapters 4 to 10, details the project management maturity... required text for graduate courses on research methods in project management In addition, the book can be used as an introduction to research methods for project xi 9755.Frontmatter 10/31/00 9:40 AM Page xii xii PREFACE management benchmarking and continuous improvement, as well as providing a brief overview of how to design a project management methodology Seminars on strategic planning for project management. .. that the assessment instruments for each level of maturity can be customized for individual companies This customization opportunity makes Strategic Planning for Project Management Using a Project Management Maturity Model highly desirable as a required or reference text for college and university courses that require the students to perform an individual or group research project The book should also... that were project- driven, those that were non project- driven, and hybrids Knowledge concerning the benefits project management offered now permeated all levels of management Project management came to be recognized as a process that would increase shareholder value This new knowledge on the benefits of project management allowed us to 1 9755.ch01 10/31/00 9:42 AM Page 2 2 THE NEED FOR STRATEGIC PLANNING. .. looking at the project only Present view: Project management allows us to make better decisions for the best interest of the company End Result G Misconception: Project management delivers products to a customer G Present view: Project management delivers solutions to a customer Competitiveness G Misconception: The cost of project management may make us noncompetitive G Present view: Project management . PLANNING FOR PROJECT MANAGEMENT USING A PROJECT MANAGEMENT MATURITY MODEL 9755.Frontmatter 10/31/00 9:40 AM Page i This Page Intentionally Left Blank STRATEGIC PLANNING FOR PROJECT MANAGEMENT. Need for Strategic Planning for Project Management 1 INTRODUCTION For more than 40 years, American companies have been using the principles of project management to get work accomplished. Yet, for. 34 Why Does Strategic Planning for Project Management Sometimes Fail? 38 4 An Introduction to the Project Management Maturity Model (PMMM) 41 Introduciton 41 The Foundation for Excellence 42 Overlap