Using the Project Management Maturity Model: Strategic Planning for Project Management / Edition 3

by Harold Kerzner

Overview

The industry validated Project Management Maturity Model developed by Dr. Harold Kerzner—updated and expanded

Using the Project Management Maturity Model offers assessment tools for organizations of all sizes to evaluate their progress in effectively integrating project management along the maturity curve. This Third Edition includes maturity metrics, examples of Project Management Maturity Model (PMMM) reports, a new chapter on the characteristics of effective PMMM, assessment questions that align with the PMBOK® Guide—Sixth Edition, all-new illustrations that define advanced levels of maturity, assessment tools for organizations using traditional PM methods, and detailed guidance for organizations using Agile and Scrum.

Using the Project Management Maturity Model: Strategic Planning for Project Management, Third Edition is broken down into three major parts. The first part discusses the principles of strategic planning and how it relates to project management, the definition of project management maturity, and the need for customization. The second part details the Project Management Maturity Model (PMMM), which provides organizations with general guidance on how to perform strategic planning for project management. The third part of the book looks at some relatively new concepts in project management such as how assessments can be made to measure the firm’s growth using PM 2.0 and PM 3.0. 

• Features customizable maturity model assessment tools for organizations of all sizes
• Includes assessment questions updated to line up with PMBOK® Guide—6th Edition
• Offers detailed guidance on applying the maturity model for Agile and Scrum
• Includes PowerPoint decks to aid in teaching the maturity model

Using the Project Management Maturity Model: Strategic Planning for Project Management, Third Edition is an ideal book for senior level and middle level corporate managers, project and team managers, engineers, project team members, and business consultants. It also benefits both business and engineering students in courses on advanced project management. 

Product Details

ISBN-13:	9781119530824
Publisher:	Wiley
Publication date:	03/19/2019
Edition description:	3rd ed.
Pages:	320
Product dimensions:	8.50(w) x 10.80(h) x 1.00(d)

About the Author

HAROLD KERZNER, PHD, is Senior Executive Director for Project Management at the International Institute for Learning, Inc. (IIL), a global learning solutions company offering professional training and consulting services worldwide. Dr. Kerzner's profound effect on the project management industry inspired IIL to establish, in coordination with PMI, the Kerzner International Project Manager of the Year Award, which is presented to a distinguished PMP^® credential holder or global equivalent each year.

Read an Excerpt

Using the Project Management Maturity Model

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By Harold Kerzner

John Wiley & Sons

ISBN: 0-471-69161-5

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Chapter One

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 work accomplished. Yet, for more than 30 of these years, very few attempts were made to recognize project management as a core competency for the company. There were three reasons for this resistance to project management. First, project management was viewed as simply a scheduling tool for the workers. Second, since this scheduling tool was thought to belong at the worker level, executives saw no reason to look more closely at project management, and thus failed to recognize the true benefits it could bring. Third, executives were fearful that project management, if viewed as a core competency, would require them to decentralize authority, to delegate decision-making to the project managers, and thus to diminish the executives' power and authority base.

MISCONCEPTIONS

As the 1990s approached, project management began to mature in virtually all types of organizations, including those firms 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 newknowledge on the benefits of project management allowed us to dispel the illusions and misconceptions that we had believed in for over 30 years. These misconceptions or past views are detailed below, together with current views.

Cost of Project Management

Misconception: Project management will require more people and increase our overhead costs.

Present view: Project management allows us to lower our cost of operations by accomplishing more work in less time and with fewer resources without any sacrifice in quality.

Profitability

Misconception: Profitability may decrease.

Present view: Profitability will increase.

Scope Changes

Misconception: Project management will increase the number of scope changes on projects, perhaps due to the project manager's desire for creativity.

Present view: Project management provides us with better control of scope changes. Good project managers try to avoid scope changes.

Organizational Performance

Misconception: Because of multiple-boss reporting, project management will create organizational instability and increase the potential for conflicts.

Present view: Project management makes the organization more efficient and effective through better organizational behavior principles.

Customer Contact

Misconception: Project management is really "eyewash" for the customer's benefit.

Present view: Project management allows us to develop a closer working relationship with our customers.

Problems

Misconception: Project management will end up creating more problems than usual.

Present view: Project management provides us with a structured process for effectively solving problems.

Applicability

Misconception: Project management is applicable only to large, long-term projects such as in aerospace, defense, and construction.

Present view: Virtually all projects in all industries can benefit from the principles of project management.

Quality

Misconception: Project management will increase the potential for quality problems.

Present view: Project management will increase the quality of our products and services.

Power/Authority

Misconception: Multiple-boss reporting will increase power and authority problems.

Present view: Project management will reduce the majority of the power/authority problems.

Focus

Misconception: Project management focuses on suboptimization by looking at the project only.

Present view: Project management allows us to make better decisions for the best interest of the company.

End Result

Misconception: Project management delivers products to a customer. Present view: Project management delivers solutions to a customer.

Competitiveness

Misconception: The cost of project management may make us noncompetitive. Present view: Project management will increase our business (and even enhance our reputation).

WALL STREET BENEFITS

The benefits recognized by the present views of project management are now seen to be strategic initiatives designed to enhance shareholder value. Perhaps one of the best examples showing this is the effect on stock price illustrated in Figure 1-1. An executive who wishes to remain anonymous believes that the difference between the target selling price of his company's stock and the actual selling price can be attributed to the quality of the company's project management system and management's ability to execute projects within time, cost, and quality constraints and to the customer's satisfaction. If the actual selling price was below the target selling price, it might indicate that the company, especially if it were project-driven, was having fundamental problems with project execution, which would affect competitiveness and profitability.

The concept behind Figure 1-1 may seem plausible from a theoretical point of view. In reality, other forces may exist that can have a significant impact on the stock price, such as recessions, lack of new products, competitor's activities, legal problems, and ratings by financial institutions.

It may take years for a company just beginning to adopt project management to reap the potential benefits shown in Figure 1-1. Some of the organizations that believe they are achieving the benefits of Figure 1-1 are in these fields:

Automotive subcontractors, some of whom are now treated as "partners" by their customers due to the quality of their project management systems.

Financial institutions, especially those that are aggressively acquiring and assimilating other organizations and rapidly integrating both cultures into one without any appreciable negative effect on earnings.

High technology companies who have beaten their competitors to the marketplace with new products.

Not all companies have the ability to reap the benefits of project management. Some do not yet recognize the benefits of 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 must satisfy the needs of its stakeholders. Stakeholders are individuals or groups that either directly or indirectly are affected by the performance of the organization. These individuals are not only affected by the organization's performance, but may even have a claim on its performance. As an example, unions can have a strong influence on how a project management methodology is executed. The general public and government agencies may be affected through health, safety, and ethical issues in the way projects are executed.

Although there are several ways to classify stakeholders, the most common method is as follows:

Financial Stakeholders

Stockholders

Financial institutions (suppliers of capital)

Creditors

The Product/Market Stakeholders

Primary customers

Primary suppliers

Competitors

Unions

Government agencies

Local government committees

Organizational Stakeholders

Executive officers

Board of Directors

Employees in general

Managers

Any strategic planning efforts must focus on the best interests of all of an organization's stakeholders, not merely a few.

GAP ANALYSIS

There are two primary reasons for wanting to perform strategic planning for project management. First and foremost is the desire to secure a competitive advantage. The second reason is to minimize the competition's competitive advantage or to strengthen your own competitive advantage.

The key to reducing any disadvantage that may exist between you and your competitors is the process known as gap analysis. Figure 1-2 illustrates the basic concept behind gap analysis. You can compare your firm either to the industry average or to another company. Both comparisons are shown in Figure 1-2.

Just for an example, using Figure 1-2, we can compare the gaps in total sales. According to Figure 1-2, the gap between your firm and your major competitor is significant and appears to be increasing. The gap between your organization and the industry average is also increasing, but not as greatly as the gap between you and your major competitor.

For a company aspiring to perform strategic planning for project management, there are three critical gaps to analyze:

Speed to market

Competitiveness on cost

Competitiveness on quality

Figure 1-3 shows the gap on speed to market or new product development times. If the gap is large between you and either the industry average or your major competitor, then to win the battle you must develop a project management methodology that allows for the overlapping of life cycle phases combined with appreciable risk-taking. The larger the gap, the greater the risks to be taken. If the gap cannot be closed, then your organization must decide if its future should rest on the shoulders of a "first-to-market" approach or if a less critical "me-too" product approach is best. Another unfavorable result would be the firm's inability to compete on full product lines. The latter could impact the firm's revenue stream.

Another critical aspect of the schedule gap analysis shown in Figure 1-3 is customer's future expectations. Consider, for example, the auto manufacturers and their tier one suppliers. Today, these organizations operate on a three-year life cycle from concept to first production run. If you were a tier one supplier, however, and you found out that your primary customers were experimenting with a 24-month car, then you would need to perform strategic planning, not only to be competitive but also to be able to react quickly should your customers mandate schedule compression.

A gap on cost is an even more serious situation. Figure 1-4 illustrates the cost or pricing gap. Strategic planning for project management can include for provisions in the methodology for better estimating techniques, the creation of lessons learned files on previous costing, and possibly the purchasing of historical databases for cost estimating.

Good project management methodologies allow work to be accomplished in less time, at lower cost, with fewer resources, and without any sacrifice in quality. But if a cost/pricing gap still persists despite good project management, then the organization may either have to be more selective about which projects it accepts or choose to compete on quality rather than on cost. The latter assumes that your customers would be willing to pay a higher price for added quality or added value features.

Gaps on time and cost may not necessarily limit the markets in which you compete. However, gaps on quality, as shown in Figure 1-5, can severely hinder your firm's ability to compete. The critical gap in Figure 1-5 is the difference between the customer's expectations of quality and what you can deliver. Good project management methodologies can include policies, procedures, and guidelines for improving quality. However, the gap on quality takes a lot longer to compress than the gaps on time and cost.

CONCLUDING REMARKS

Strategic planning for project management, combined with a good project management methodology, can compress the gaps on time, cost, and quality. However, there are still critical decisions that must be made. Marketing must decide what products to offer and which markets to serve. The information systems people must assist in the design, development, and/or selection of support systems. And senior management must provide sufficient and qualified resources.

Strategic planning for excellence in project management needs to consider all aspects of the company: from the working relationships among employees and managers and between staff and management, to the roles of the various players (especially the role of executive project sponsors), to the company's corporate structure and culture. Other aspects of project management must also be planned. Strategic planning is vital for every company's health. Effective strategic planning can mean the difference between long-term success and failure. Even career planning for individual project managers ultimately plays a part in a company's excellence, or its mediocrity, in project management. All of these subjects are discussed in the following chapters.

(Continues...)

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Table of Contents

Preface xi

Introduction xiii

Chapter 1 The Need for Strategic Planning for Project Management 1

Introduction 1

Misconceptions 1

Project Management Becomes a Strategic Competency 3

General Strategic Planning 4

Participation by the Project Manager in Strategic Planning 5

What Is Strategic Planning for Project Management? 7

Executive Involvement 13

Critical Success Factors for Strategic Planning 13

Identifying Strategic Resources 14

Why Does Strategic Planning for Project Management Sometimes Fail? 17

Concluding Remarks 19

Chapter 2 The Need to Plan for Project Management Maturity 21

Introduction 21

The Need for a PMMM 21

Other Purposes for the PMMM 23

Defining Project Management Maturity 24

Advantages of Using a PMMM 25

Disadvantages of Using a PMMM 26

Selecting a PMMM 27

Changing the Strategic Direction 27

Maturity and Core Competencies 28

Maturity and Assessment Timing 28

The Importance of Intangible Maturity Metrics 29

Chapter 3 Customizing the PMMM 31

The Need for PMMM Customization 31

Understanding Customization 31

Issues with Public-Sector Project Management Maturity 32

Olympic Games Project Management Maturity 35

Capturing Olympic Games Lessons Learned 36

Chapter 4 An Introduction to the Project Management Maturity Model (PMMM) 39

Introduction 39

The Foundation for Excellence 40

Overlap of Levels 41

Risks 43

Assessment Instruments 44

Chapter 5 Level 1: Common Language 45

Introduction 45

Roadblocks 46

Advancement Criteria 47

Risk 47

Assessment Instrument for Level 1 48

Questions 48

Answer Key 61

Explanation of Points for Level 1 63

Opportunities for Customizing Level 1 63

Chapter 6 Level 2: Common Processes 65

Introduction 65

Life Cycles for Level 2 66

Roadblocks 68

Advancement Criteria 69

Risk 69

Overlapping Levels 70

Assessment Instrument for Level 2 70

Questions 71

Explanation of Points for Level 2 74

Opportunities for Customizing Level 2 74

Chapter 7 Level 3: Singular Methodology 75

Introduction 75

Integrated Processes 76

Culture 78

Management Support 79

Informal Project Management 80

Training and Education 80

Behavioral Excellence 82

Roadblocks 83

Advancement Criteria 83

Risk 83

Overlapping Levels 84

Assessment Instrument for Level 3 84

Questions 84

Answer Key 92

Explanation of Points for Level 3 94

Opportunities for Customizing Level 3 95

Chapter 8 Level 4: Benchmarking 97

Introduction 97

Characteristics 98

The Project Office or Center of Excellence 99

Benchmarking Opportunities 100

Roadblocks 102

Advancement Criteria 103

Assessment Instrument for Level 4 103

Questions 103

Explanation of Points for Level 4 106

Opportunities for Customizing Level 4 107

Chapter 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 113

Project Management Methodologies 119

Continuous Improvement 120

Capacity Planning 121

Competency Models 122

Managing Multiple Projects 124

End-of-Phase Review Meetings 125

Strategic Selection of Projects 126

Portfolio Selection of Projects 129

Horizontal or Project Accounting 131

Organizational Restructuring 133

Career Planning 134

Assessment Instrument for Level 5 135

Questions 135

Explanation of Points for Level 5 137

Opportunities for Customizing Level 5 137

Chapter 10 Sustainable Competitive Advantage 139

Introduction 139

Strategic Thrusts 140

The Need for Continuous Improvement 143

Project Management Competitiveness 143

Products versus Solutions 144

Enterprise Project Management 145

Engagement Project Management 146

Chapter 11 Advanced Project Management Maturity Assessments 147

Introduction: Changing Times 147

Redefining Maturity from PM 1.0 to PM 2.0/3.0 147

Some Critical Issues with PM 1.0 149

The Need for PM 2.0 150

The Need for PM 3.0 153

Criticisms of PM 2.0 and PM 3.0 154

Implementing Continuous Improvement Changes 155

How to Update the Assessment Instruments 157

Changing Definitions for PM 2.0 and PM 3.0 158

Assessing Maturity for PM 2.0 and PM 3.0 159

Statements 159

Measuring Intangible Benefits and Value 164

Customizing PM 2.0 and PM 3.0 Assessments 165

PMMM and the Agile Environment 171

Chapter 12 How to Conduct a Project Management Maturity Assessment 173

Introduction 173

Find Ways to Bypass the Corporate Immune System 173

Explain Why You Are Doing This 174

Pick the Model that Is Best for Your Organization 175

Maturity Models: How Do They Compare? 176

Create the Right Fit 176

Choose an Appropriate Delivery Method 177

Establish Responsibility 180

Decide Who Should Participate 181

Turn the Results into an Action Plan 182

Develop a Remedial Training Curriculum 183

Keep Top Management Informed 183

Virtual Reporting 184

Benchmark Your Results to Others 184

Do It Again 185

Chapter 13 Using the PMMM to Extract Best Practices 187

Introduction 187

The Best Practices Process 188

Step 1: Definition of a Best Practice 189

Step 2: Seeking Out Best Practices 190

Step 3: Validating the Best Practice 191

Step 4: Levels of Best Practices 192

Step 5: Management of Best Practices 193

Step 6: Revalidating Best Practices 194

Step 7: What to Do with a Best Practice 194

Step 8: Communicating Best Practices Across the Company 195

Step 9: Ensuring Usage of the Best Practices 196

Common Beliefs 196

Best Practices Library 197

Best Practices and the PMMM 199

Chapter 14 Case Studies 201

Case 1: Simone Engineering Company 201

Case 2: NorthStar Software Company 202

Case 3: Colmar Automotive 203

Case 4: Ferris HealthCare, Inc. 204

Case 5: Clark Faucet Company 205

Case 6: Macon, Inc. 207

Case 7: The Blue Spider Project 209

Case 8: Corwin Corporation 221

Case 9: The Trophy Project 230

Appendix The Kerzner Project Management Maturity Model 235

XXXX KPMMM 235

Introduction 237

Respondents by Project Roles and Countries Represented 241

Executive Overview of the Assessment Results 242

Level 1: Common Language (Max 800) 244

Level 2: Common Processes (Max 60) 251

Level 3: Singular Methodology (Max 210) 256

Level 4: Benchmarking (Max 75) 260

Level 5: Continuous Improvement (Max 48) 262

A Study of Level 1 Performance 263

A Study of Level 2 Performance 267

A Study of Level 3 Performance 271

A Study of Level 4 Performance 275

A Study of Level 5 Performance 279

Suggested Actions 283

Index 285