1.1 Formation of a Project Management Model

Fig. 1 represents the author’s analysis of the factors and their interaction to form a specific project management model.


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Step 1: The basic project management model (1) is the classical project management model with triple constraints of quality, viz., technical performance, time and costs.
Step 2: Socio-economic drivers demand modifications to the basic model (2); while a modified project management model (3a) is being prototyped through the publication of adapted formats by practitioners and academia, specific requirements from application areas are presented, and if of value, incorporated into the model (3b).
Step 3: Then, a new PM model with a specific structure and methods is formed (4), which, in turn, creates new or adapted techniques and tools (5) that support the model.
Step 4: The new project management model supported by practical techniques and tools is popularized into the application area which has originally proposed specific requirements for the modification as well as new areas of application (6) which consider the model fit.
Step 5: Further development of models proceeds based on the new model, or the basic model, with new inputs (7a and 7b) and in like manner.

1.2 A Historical View of Project Management Models

Fig. 2 depicts the author’s historical view of project management models over the four generations. A three-generation approach to project management was made by Prof. Shigenobu Ohara in “A Guidebook of Project & Program Management for Enterprise Innovation – P2M” (2Project Management Professionals Certification Center) and many comparative discussions of the traditional project management versus modern project management models were made. This analysis expands such discussions with the author’s own analysis.


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From the original “Classical” model, put as Model A, project management has developed into the “Modern” model (Model B), which is subdivided into Models B-1, B-2 and B-3 bearing characteristics particular to relevant application areas as well as the “Neo-Classical” model (Model A’) which is a global operation adaptation of Model A, and then into the “Strategic” model (Model C) expected as an innovative project management model in this century.

A hypothesis is that the “Versatile” model (Model D) is forthcoming in the future in which traditional general management will have been replaced by or merged into project management.

Detailed analysis of the respective models are given in the paragraphs to follow. It should be noted that incoming new models have not replaced the existing models but are rather coexisting with them as project management models offer relative value to practitioners (refer to the arrows in the figure).

In trying to identify project management models, one should be aware that the evolution of project management models does not necessarily represent the incremental sophistication of project management methods; in a way, it is the process of liberating project management from its original rigid form to such variations that are more accessible by many practitioners in many fields owing to less complicated yet more balanced processes.

The original project management model, in the modern context, was born at NASA in the 1950’s and since has been developed in the space, defense, engineering/construction and general construction industry.

The features, drivers that pushed for this model, typical techniques, application areas and popularization mechanism are described in the following table.


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2.2 Model B: Modern Project Management Model

While the classical model was gradually applied to expanded areas with patch type modifications, the industry met the following situation in the latter half of the 1980’s:

The industry started moving at an accelerated pace.
The global economy was growing.
Deregulation became a major force, calling for free market competition.
The market driven economy was shaping itself; how to meet market needs (marketin) rather than how to sell products based on core technology (product-out) became the question.
Too many failed projects were seen in the IT services industry.
The market began to address value reframing (deconstruction/reconstruction).

All in all, the FBC or faster- better - cheaper doctrine started manifesting itself.

To meet these challenges, more flexible project management models were sought after by an increasing number of industry branches and pubic services; and dialogues were held between traditional project management users and entrant users or users-to-be with project management associations serving as catalysts. As a result, the modern project management model was created largely by way of “A Guide to the Project Management Body of Knowledge” or generally known as the PMBOKGuide (1996 Edition) issued by the Project Management Institute (PMI) based in the United States of America (Project Management Institute) or the APM Project Management Body of Knowledge (2nd Edition), or APM PM BoK, published by the Association for Project Management based in the United Kingdom (Association for Project Management).

Salient features(特征) of this model are balanced project management processes integrating both “hard” PM processes such as those of quality, resources/costs, time, procurement and “soft” PM processes, including, those of scope, risk, communications, people/human resources, organization and integration; project management processes in project management bodies of knowledge (PM BoKs) distinctly separated from product processes; and wide applicability due to its soft structure and easy project management process description. This model is described further in Fig. 4.

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Model B is divided into three sub-models in the sense that the basic features of the model remain but the model varies in the ways it is deployed reflecting application area specific requirements. These sub-models are described in the following paragraphs.

Model B-1

This sub-model is utilized mainly by manufacturing companies and serves as a planning and management framework for strategic new product development. Fig.5 describes this sub-model.

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The pioneering users of this model are pharmaceutical(制药的) companies in the U.S.A. in the middle of the 1980’s that formed the Pharmaceutical SIG(Special Interest Group, 有共同特殊观点或要求的群体) of PMI about the same time. The aircraft industry and car manufacturing industry followed them.

Case: Boeing Commercial Airplanes (5James J. Morris)

Operating in the defense industry, Boeing Corporation is the time-honored user of project management. After application of Model A, Classical, Boeing’s Commercial Airplane division shifted to Model B-1, Modern-Manufacturing, in 1999 in the face of stiff competition from Airbus Industry in Europe. The Boeing commercial airplane operations transitioned into six major airplane programs of 717, 737, 747,757, 767 and 777. Boeing’s new program management model gave birth to unique PM techniques such as front-end loading with “customers-in”, target costing, the design-build (DB) team and closed loop issue management on top of traditional, common PM methods.

Model B-2

Model B-2 is characterized by the author as the common business language for fast moving global business operations as in the information services and management industry, telecommunication or information movement industry and the financial industry.

The major drivers seeking the modern project management model in these branches of industry are as follows:

Information Services and Management
Worldwide competition; both in hardware products and software development
Business focus on services in addition to devices (services business nearing or surpassing devices business)
Resource pressures creating opportunities for managing and conducting outsourced services
Rapid technology shift: network, client/server, Web, ERP packages
Customer segmentation
Too many failed projects in software development and systems integration (The “CHAOS Reports” of the Standish Group)
Internal need to provide standard projectized business languages across national boundaries to match “glocal” (global and local) operations

Telecommunications
Deregulation(反常): from monopoly(垄断) business to free market competition
Expedited(快速，加速) shift to business operations “across the walls” from “above the walls”
Internal need to provide standard projectized business languages across national boundaries to match “glocal” operations

Financial Services
Continuing development of financial products
Requirement for flexible organizational operations forced by frequent M&A and changes in business domain or business portfolio
Increasing ratio of project financing (in addition to corporate financing)
Risk management on financing provided, from PM perspectives
Expedited shift to business operations across the walls from above the walls
Internal need to provide standard projectized business languages across national boundaries to match “glocal” operations

Without constraints imposed by legacy project management practices and forming an emerging, absolute majority of the project management population in the world, the mentioned branches of industry are instrumental in popularizing the Modern Project Management model which takes balanced PM processes integrating both the hard and soft elements of project management as main features. Their contribution in having made project management accessible to such business persons having limited relevant experience is noteworthy.

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Typical utilization cases of this model are introduced.

Case: IBM Corporation (Carol Wright)

IBM Corporation was struck with a serious performance setback in 1991 to 1993, that triggered the import of the new CEO, Louis V. Gerstner, Jr., who after a round of business process re-engineering (BPR) in the corporation realized that to more effectively reap the benefit of its BPR, IBM would need another wheel of the vehicle to revive the corporation and declared on November 19, 1996 that IBM become a project based business and project management be raised to a core competence. One foremost policy to realize this charter is the corporation wide project management renaissance with the IBM Center of Excellence of Project Management championing the campaign. IBM’s major project management objectives consist of the deployment of PM center of excellence with selected experts serving global business units, one consistent approach with PM, qualified project managers on significant projects, project performance measurements, defined accountability of project managers and project executives and the IBM PM community. These objectives have been translated into key transformational projects on methods and tools, management systems and professional developments. The PMBOKÒ Guide based project management framework has been adapted to IBM’s tradition of practice.

Case: NCR Corporation (William Gendron)

NCR Corporation is the pioneer of a global project management framework center to which is its “GlobalPM-NCR Global Project Management Methodology”, which also formed AT&T’ project management framework as it belonged to AT&T in the first half of the 1990’s. One of the world’s most time-honored global corporations with its original name being National Cash Register, NCR maintains globally scattered operations and hence offer both a globally consistent core project management framework and country-specific adaptations. The NCR GlobalPM, its global intranet extension, global program management office and regional or national project management offices all serving global NCR project professionals are typical best practices embodying the modern project management. NCR’s approach to improve project management maturity, illustrated in Fig. 7 below, is also notable.

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Case: Lloyds TSB Bank (Nick Warrillow)

At Llods TSB Bank, one of the leading banks in Europe, the need to maximize shareholder value over a long term, an expanding portfolio of financial products and continuing M&A have required the bank to address competition, new finance technology and customer mobility. This environment has urged the bank to institutionalize project management. Lloyds TSB embarked on PM by employing a reputable PM consultant and benchmarking companies successfully practicing project management. The bank structures its PM practice based on products of PMI and APM, stresses project portfolio management (PPM) and an in-house PM community. Project management training is provided for employees who are encouraged to be certified to APM’s four-level project management qualifications. Lloyds TBS continues to challenge higher organizational project management maturity.

Model B-3

This model is project management as change agent for agencies, corporations and other organizations. This model serves project management’s original mission to plan and manage an implementation framework for changes in order to lead an organization to specific set of transition strategy.

This model is used for BPR or more positively corporate transformation projects as well as new services introduction projects. The background that government agencies are turning to project management can be summarized as follows (adapted from the PMI 2002 paper by Lisa S. Pyne and Beth Rigby):

Decreases in government and public services staff strength call for higher efficiency that could be attained by way of project management.
Increasing outsourcing at government agencies has turned officials into contract managers, fulfilling which position requires project thinking and project management expertise.
Demonstrating high performance and earning taxpayer satisfaction are required for organizational security; being an accountable organization is essential.
The faster-better-cheaper (FBC) principle, a doctrine in business, now governs government budget races. Hence, government agencies should be objectives driven to which project management is an effective guide.
Fast growing e-Government services demand articulated services on the part of government agencies; timeline management and communications management skills are vital.

Fig. 8 depicts Model B-3.

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The following are recent cases of model deployment.

Case: Australian Securities & Investments Commission (D. Charters-Wood)

The Australian Securities and Investments Commission (ASIC), a multi-faceted federal regulatory authority responsible for enforcing and regulating company and financial services laws to protect consumers, investors and creditor in Australia, recognized that the comprehensive changes it was required to implement on a number of fronts demanded a major shift in management approach. Without this, the delivery of its business strategies and achievement of strategic goals were at risk. Following extensive research, the organization adopted the use of a standard comprehensive and sound methodology, PRINCE2. A Project Support Office has also been established to provide a center of competence for enabling organizational success in project management. The Project Support Office has since tailored the methodology, now called APM, to suit the needs of the organization. After one year of successful pilot project management program implementation, ASIC has started organizational deployment of APM and at the same time is carrying on popularization of its project management program to other Australian federal government agencies.

Case: CIA, USA (O’Brochta)

The Central Intelligence Agency of the USA (CIA) has embarked on the agency-wide Project Management Training and Certification Program (PMTCP). The CIA has a long, rich history involving thousand of projects over decades. The spies and the intelligence analysts have long relied on technology to support their accomplishment and the method of choice has been to manage the work as projects. For the last fifteen years a standard project management life cycle process known as the Agency Project Cycle (APC) has been taught and widely adopted. The CIA has now adopted the PMTCP incorporating PMBOK Guide and tied to the PMP certification system. Issues typical of agencies of this fame such as grandfather affairs, testing resistance, recertification, and transitioning from the legacy curriculum to the new curriculum are being dealt with.

Case: Tasmania Government, Australia (Tasmania Government)

Project management needs are equally strong at state governments. The Tasmania Government operates a comprehensive project management website for state project managers and outside parties liaising with state agencies on government projects. The PM Website consists of Guidelines, Templates, Knowledge Base, Roles and Resources, Publications/Tools and Links, which all provide pull-down menu containing totally 200 pages of resources and information.

Model A, Classical, is still used in the field of defense and social infrastructure projects. In the meanwhile, another large user of this model, the oil & gas and chemicals industry is now turning to the Neo-classical model, put as Model A’, which is the adaptation of the original Classical model to global collaboration for optimum capital and resources deployment while adopting some features of Model B.

Model A’ is outlined in Fig. 9 below.

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This model has given birth to the following project management methods that shape project operations of the global era(时代):
Strategic alliances:
Owners (clients) and one or several prime contractors, or prime contractors and vendors, form alliance for specific projects to reap(获得) the combined strengths of all the best among the alliance partners and share gain and loss on an equal partner basis; this scheme is unique in turning around the conventional client-contractor relationship, often adversarial.
Owner/contractor integration (one team concept):
This includes the strategic alliance mentioned above, partnering (mid-term owner/contractor arrangements for exclusively handling specific types of contracts) and owner/contractor amalgamated project teams.
Joint venture/consortium prime contractors:
Sizes of projects and associated large risk, need to couple financing packages required to be brought in by prime contractors, pursuit of combined strengths enhancing chances to win and client preferences encourage the formation of joint ventures (sharing gain and loss form a single consolidated account) or consortia (internal split of work while jointly and severally responsible for project execution and deliverables toward owners) of prime contractors from different countries.
Structured financing/finance engineering:
In the era of uneven distribution of funds, structured financing based on expert finance engineering techniques is required. The project financing technique has opened new opportunities for project materialization where traditional financing such as corporate financing, export credit agency (ECA) loans, bank loans for projects are hard to be procured.
Front-end loading (FEL):
Project industry experience shows that consolidated and intensive cross-functional planning during the upfront phase of a project greatly enhances opportunities to optimize project plans in terms of technical performance, cycle time and investment costs. This experience has led to the concept of front-end loading (FEL) exercise.
Enhanced work break-down structure (WBS):
WBSs used by global engineering and construction companies are structured for global collaboration of parties involved in a project that facilitates communications among parties and allow quality definition of projects and clearer split of work.
Multi-pillar operations management method:
Global engineering and construction companies have developed methods to manage operations of project offices, called operations centers, on specific projects distributed throughout the world. The methods, among others, clarify the function of a project directorate charged with overall project management and delegation of management to participating project operations centers.
Global resources procurement management system:
Large engineering and construction projects source services, equipment and materials from the worldwide open market: for this they have global resources database, resources tracking system, and recently e-market places.
Global project IT and communications systems:
The above-mentioned global spreading of project work has necessitated the development and extensive use of IT and communication (ITC) systems supporting global operations; global ITC systems connect multi-pillar operations centers on a real time basis on high speed leased lines.

Case: JGC Corporation Joint Venture & Consortium Project Experience (Akiyama/Tanaka)

JGC Corporation, Japan’s leading global engineering and construction company, has in-depth experience in completing international oil & gas and petrochemical projects in a joint venture or consortium contractual format with Western counterparts or host country contractors on projects in excess of 200 million US dollars as depicted in Fig.10. On 65% of projects shown, JGC served as the project leader. This typically illustrates that joint venture or consortium project execution is a common practice in the global engineering and construction industry.

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Case: ECI Strategic Alliance Model

The operating mode and advantage of strategic alliance as summarized from the paper presentations during the 8th Annual Conference of the European Construction Institute (ECI), an institute for project operations research by process industry operating companies and contractors, in Berlin, Germany in April 1997 are as follows:

Operating Mode

The owner and the contractor(s) align project objectives to realizing maximum practicable value of the project by forming an integrated project team.
The owner and the contractor(s) share gain/pain out of the project.
To enable this, the owner and the nominated contractor jointly establish and agree on a project budget through open book cost estimates.
The contractor is reimbursed costs on formats similar to the reimbursable cost format.
The CRINE (Cost Reduction Initiative for the New Era) principles, born in the UK, are applied to the Project to save capital expenditure (CAPEX) costs and create the “gain”.

Advantage

Increased trust, teamwork, openness, communication, real dialogue
Changed attitude and culture - move away from adversarial relationship
Ownership of deliverables
Fully understanding the project objectives
Empowered to manage the project - start to finish
Objectives to achieve lower CAPEX, shorter schedule, safety targets, ease of plant start-up, plant reliability/performance, lower operating expenditure (OPEX) costs and improved life-cycle costs
Reward alliance through performance, funded from CAPEX savings
Fair balance between risk and reward

Over the decades, it has generally been held that strategic business management and project management are two separate business disciplines. In this thinking, project management is focused on the most efficient and effective delivery of a project conceived by strategic business management in the upstream of the project life cycle. However in the face of increasing global competition of business causing faster obsolescence of products and services; a large part of the old economy is losing competitiveness due to decreased demand itself, competition from destructive technology or due to internal lack of coherence between organizational strategy and methods to implement it; the new economy is increasingly taking on actual value to consumers; and there emerge needs to address complex social, economic and business issues as organic programs, strategic project management models have been proposed in this century. The Strategic Project Management model stresses the integration of project management with business (or organizational) elements and offers an all-in-one package of strategic project business management and project management.

The Strategic Project Management model addresses pursuit of innovation and added value out of projects; linking organizational strategy with projects through project portfolio management (PPP), program management and project management; structuring of project portfolio management and program management; value feedback and continuing utilization of program and project products; and organizational project management maturity model, among others. Fig. 11 outlines the strategic project management model.

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Strategic elements of project management are one of the most popular topics presented at international project management conferences over the past two years. The following key words have been collected at PMI Annual Seminars and Symposium 2002, PMI Global Congress – North America 2003, 17th IPMA World Congress Moscow 2003, AIPM Conference 2003 and JPMF Project Management Symposium Japan 2003 and support the emerging need for strategic project management:

PMO (Project Management Office)
PMO (Project Managed Organization)
PPM (Project Portfolio Management)
EPM (Enterprise Project Management)
PMM (Project Management Maturity)
CCM (Critical Chain Management)
BSC (Balanced Score Card) in PM
P2M (The Guide of Project and Program Management for Enterprise Innovation)
OPM3 (Organizational Project Management Maturity Model)
Cross-functional Team
Six Sigma Project Management
SMBP (Strategic Management by Projects)
Social PM
Experience Projects
Transformation Projects
The Composite Project Manager

Case: APM PM BoK 4th Edition (Association for Project Management)

The Association for Project Management (APM)’s APM PM BoK 4th Edition, published in 2000, addresses strategic aspects of project management in its Section 2,” Strategic”, Section 5, “Commercial” and Section 5, “Organisational,” for the first time in the project management standards in the world, thus opened the era of strategic project management. Yet, elaboration of strategic elements had to be awaited until later publication of other project management standards.

P2M (Tanaka)

The Engineering Advancement Association of Japan (ENAA) published “A Guidebook of Project & Program Management for Enterprise Innovation – P2M” in November, 2001 under the strategic purview of Prof. S. Ohara, the lead writer and editor (Projec Management Professionals Certification Center). The P2M, now administered by NPO Project Management Professionals Certification Center (PMCC), was developed on the belief that reflecting the ongoing highly challenging Japanese economic situation, the nation needs a zero-based Program and Project Management (P2M) paradigm to give a second thought to mere dependence on the delivery-focused traditional project management models and to develop a guide to allow the integration of project business strategy elements and utilization of valuable knowledge created through projects and programs and subsequent projectized management of operation and maintenance of projects into the traditional project management dimensions. The P2M has been designed to serve as a gyrocompass for such break-through activities in the competitive business and public services environment and to supplement each other with the existing international project management bodies of knowledge and project management competency standards.

The P2M is a 420-page guide document in the Japanese language, of which tentative summary English translation is available, and consists of the following four parts:
Part 1, Project Management Entry
Part 2, Project Management
Part 3, Program Management
Part 4, Project Segment Management, consisting of: Project Strategy Management, Project Finance Management, Project Systems Management, Project Organization Management, Project Objectives Management, Project Resources Management, Project Risk Management, Project Information Technology Management, Project Relationships Management, Project Value Management and Project Communications Management.

The P2M’s features include, among others:
Orientation for innovation and value creation
Linking the chain from enterprise strategy to delivery of projects producing results
Three standard models of project management and modular project approach
Structuring of program management
Systems approach to programs and projects.
Platform, community and context of P&PM

OPM3 (Fahrenkrog)

PMI’s OPM3, or the Organizational Project Management Maturity Model, was released in December 2003. The development of the OPM3 required five years since 1998 and dedication of 800 volunteers from 35 countries and 30,000 on-spot contributors who worked under the coordination of the relevant PMI Standards project team. OPM3 deals with “ the organizational project management” which is defined (by PMI) as “the application of knowledge, skills, tools, and techniques to organizational and project activities to achieve the aims of an organization through projects”.

This model is hypothetical and envisions versatile, user-friendly management methods for all organizations, either business, public, non-profit, or societal, and ordinary individuals. The author labels the society where this model is eminent as the “PM ubiquitous society”.

The expected attributes of Model D are given in the following table.

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Opportunities:

(1) Tooling the Strategic Project Management Model

The strategic project management model pioneered by P2M of Japan and OPM3 released by PMI should be supported by techniques and tools ready for use by organizations and validated by successful application cases that will have delivered innovation and other strategic value to organizations.

(2) Verification of Value Delivered by Project Management

Lately, value proposition realized by or associated with project management is voiced. Related to (1) above, it should be clarified what would be the scope of project management, including program management, in relation to existing strategic business management and how value, if delivered, is attributable to project management and not projects. A questions is posed if the management of project operations as practiced by the traditional project industry such as the global engineering and construction industry and the project management are two separate disciplines or if the emerging strategic project management model is more or less equivalent to the former.

(3) Global Project Management

This does not mean the globalization of the project management profession or discipline but the refinement of Model A’, “Neo-Classical”, that supports single projects encompassing the globe. Many branches of the industry are tackling global project management on a trial and error basis while the global engineering and construction industry that has dealt with global project management since the 1970’ has considerable hand-in experience. The project management associations’ grip on the engineering and construction industry has become weak due to their shift of membership focus; however, there is no reason that such valuable experience should not be shared by the rest of the global project management community.

(4) Project Management in Public Sectors

Project management if practiced by nations’ governments would greatly enhance credibility of project management as well as realize cost effective public services for taxpayers. As mentioned in Section 2.2, Model B-3 of this paper, there are already prominent cases of project management application in this application area, and further promotion by all the project management associations toward government and other public agencies is expected.

(5) Social Project Management

One of the most prospective application area of project management is societal management and activities. Research on and practice of social project management has been conducted by Dr. Roland Gareis (21Gareis) and other project management leaders. Besides, grassroots project management teaching is reported at PMI chapters (Edithe Drewery-Brown) that provides PM learning opportunities for young students. With the good progress of the social project management, the “ubiquitous project management society” mentioned by the author in Section 2.5 of this paper is coming near at hand.

Challenges

(6) Establishment of Project Management as a Firm, Testable Academic and Professional Discipline

The question as to whether the project management is:
- an academic discipline, and
- an independent professional discipline,
has not been answered yet. Referring to the first part of the question, answers should be positive and negative depending on the countries or more specifically educational institutions that teach project management at higher education institutes. The author being not an academic, no discussion is offered here.

Referring to the second part of the question, again answers vary largely depending on whether answers are from within the practicing circle or from outside. The project management profession should candidly examine if the profession meets the generally accepted criteria of a profession requiring:
- Recognized and scientifically proven body of knowledge,
- Generally accepted standards for professional competency,
- Professional community or communities that share a single set of most significant objectives,
- Generally agreed code of ethics for practitioners, and
- Regulations that mandate those certified or licensed to practice the profession to
maintain demonstrated professional competency over time.

(7) Harmonization of Project Management Bodies of Knowledge, Competency Standards and Certifications Systems

Currently, project management bodies of knowledge, competency standards and certification systems are owned and administered by discrete project management associations or associated accreditation bodies, which cause certain confusion in the industrial society and dilutes the maturity of the relatively young profession. The project management community as a whole should struggle in enhancing project management to a testable academic or at least truly professional discipline that guarantee a high probability of project success by pursuing a single set of project management body of knowledge (practice language), competency standards (cure anywhere) and ethical rules.

(8)Corporate Support

Corporate support of the project management profession has become less evident compared with the latter half of the 1990’s when project management began to flourish in many branches of industry. The value of organizational mastery of project management can only be delivered after years of consistent professional development and practice. Organizations are required to support their employees to actively participate in activities provided by professional project management associations for cross-fertilization with peers and to tap diversified resources available from such associations. Individual professionals’ contribution alone cannot sustain professional project management associations; corporations and agencies that benefit from project management are required to invest in their infrastructure, which is not free of charge.