CHAPTER 1

Project Management as a Business Function

If you're like most people, you probably have at least some of your money tiedup in financial investments. Companies are not really all that different fromyou in this regard. Why? Because all companies have money tied up in projects.The reality is this: The projects that companies pursue are really just anothertype of financial investment.

So, who manages your personal investments? An engineer? A scientist ortechnician?

Or someone with a title that sounds something like "financial planner" or"investment analyst"?

Well, here's some interesting food for thought: In most companies, projectmanagement has long been viewed as a technical function. Accordingly, the roleof project manager has traditionally been filled by technical specialists. Inmany companies today, this continues to be so.

But wait a minute ... didn't we just say projects are financial investments?

A FEW REVELATIONS AS WE BEGIN ...

If you are someone who is steeped in the traditional rules and regulations thatsurround the discipline of project management, prepare to be surprised. Some ofthe thoughts and principles that I am about to present may strike you as beingoutrageous.

For example, few would argue the long-standing contention that finishing aproject on time and on budget are crucial project objectives. And I certainlywouldn't debate their importance. But let's take another look at this from abusiness standpoint and ask some tough, objective questions.

First, in the grand scheme of things, exactly how important are the objectivesof completing a project on the originally specified day at the originallyspecified cost?

Second, isn't there actually a "larger picture" that we should focus on? Don'tmore important objectives exist?

The answer to the last two questions is a resounding "Yes," and simply reflectsthe notion that projects are an integral element of a very largeframework—the framework of business. And so, for just about any companytoday, projects are (or should be) recognized as key agents in the pursuit ofbusiness excellence.

If we begin adjusting our perspective to accept the principle that projectmanagement is primarily a business function, it follows that we may have toconsider adjusting our entire perspective regarding the things that representthe most important project objectives. Confused? Perhaps some of the followingrevelations will help clarify this point and put you in the appropriate frame ofmind for reading the remainder of the book.

Revelation #1: It really doesn't matter how well you execute a project, ifyou're working on the wrong project!

A recurring theme throughout this book will be the notion that one of the mostbasic objectives of any project is to make or save money. Generating positivecash flows is a key element of nearly every business operation. On the surface,projects are pursued for a wide variety of objectives, including increasingcustomer satisfaction, expanding presence in a particular segment of a market,or enabling higher efficiency in day-to-day operations. But the true impetus fordoing any of these things can be traced back to the same objective: to make orsave money.

This certainly seems obvious, doesn't it? Not necessarily. Consider for a momenta project that is executed flawlessly, yet ends up costing more money than itsaves. It almost seems silly to ask whether that project should be considered asuccess. And yet, day after day, week after week, countless projects like thisare pursued by companies. Why? Well, for many possible reasons. What I havefound, though, is a fairly consistent pattern of insufficient, flawed, or biasedupfront work. And, as we will discover a bit later in the book, the upfront workis focused on ensuring that companies have identified and selected the bestpossible project opportunities. Only after this has been done should companiesshift their attention to issues such as the pursuit of cost and scheduleexcellence. Sadly, this sequence is not always followed.

Let's examine how this phenomenon plays out at the personal level. Before mostpeople enter into any kind of personal financial investment, they often spend aconsiderable amount of time carefully researching that investment. I'm not surethe same can be said for all companies that enter into the pursuit of newprojects. The reality is that an alarming number of projects get launchedwithout a rigorous analysis of whether they represent a sound businessinvestment. Many are launched with virtually no analysis whatsoever. And, in analarming number of cases, projects are launched on little more than the notionthat they "seem like a very good idea."

A famous adage in the world of project management says doing the right projectand doing the project right are two different factors, both of which must begiven serious consideration. This is quite true. However, the question "Are wedoing the right project?" often is underplayed or largely bypassed, while thequestion "Are we doing the project right?" often is examined in excruciatingdetail.

To illustrate, I can tell you that I frequently receive telephone calls and e-mails from potential clients requesting services such as delivering a trainingcourse on how to use project scheduling software, assisting them in setting upand administering an earned value measurement process, or facilitating a sessionon how to construct a work breakdown schedule....