Attributes of

Project-Friendly
Enterprises

Attributes of
Project-Friendly
Enterprises
Vittal S. Anantatmula and Parviz F. Rad

Attributes of Project-Friendly Enterprises

Copyright Business Expert Press, LLC, 2016.
All rights reserved. No part of this publication may be reproduced,
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First published in 2016 by
Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com
ISBN-13: 978-1-63157-214-2 (paperback)
ISBN-13: 978-1-63157-215-9 (e-book)
Business Expert Press Portfolio and Project Management Collection
Collection ISSN: 2156-8189 (print)
Collection ISSN: 2156-8200 (electronic)
Cover and interior design by Exeter Premedia Services Private Ltd.,
Chennai, India
First edition: 2016
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America.

I Dedicate This Book

To all my teachers, mentors, family, friends, and
students: I continue to learn from all of them
Vittal S. Anantatmula

I Dedicate This Book

To My Delightful Grandchildren
Parviz F. Rad

Abstract
The objective of any organization is to create value for its stockholders.
Given that sophistication in project management will lead to efficiency in
operations, which in turn leads to better profits, enlightened enterprises
are sensitive to project management sophistication and the definitive way
of measuring it and improving it. Although in many organizations, projects are initiated in isolation of each other, and based on ad hoc urgencies,
sophisticated enterprises have a formalized, logical, and consistent, structure for organizing, and managing, their projects.
Project management sophistication is the state of enterprise practices in which success of projects is predictable and that the definitive
measure of project management success continually improves with time.
Conducting a full assessment of the organizational project management
sophistication is relatively time consuming and costly. Thus, many organizations have a need and desire for instruments that would provide a
rough estimate of the project management maturity of the organization
without a major expenditure of funds. This book includes instruments
that should help in that regard.
Attributes of Project-Friendly Enterprises book creates a structured
approach and presents attributes of a healthy project environment that
include key indicators of success for projects, proposals, portfolios, project teams, project management office, and the enterprise.
This book is written for project management professionals, project
managers, and senior executives of any organization. This book serves as
a guide to make these evaluations. Further, graduate students in business
schools may use this as a reference book to understand influencing factors
in assessing project and project management performance.

Keywords
attributes, portfolios, projects, project management, project management
maturity, project management sophistication, project teams, project-
friendly organizations and enterprises, proposals, sophistication, vital
signs

Contents
Prefacexi
Acknowledgmentsxiii
Chapter 1 Introduction......................................................................1
Chapter 2 Project Attributes.............................................................27
Chapter 3 Proposal Attributes..........................................................49
Chapter 4 Portfolio Attributes..........................................................69
Chapter 5 Team Attributes...............................................................93
Chapter 6 Enterprise Attributes......................................................113
Appendix149
Bibliography183
Index187

Preface
Projects are at the core of all project management activities because they
directly will contribute to the operational and financial success of the
organization. Proposals are usually preludes to externally funded projects, and portfolios are collections of projects or proposals. Occasionally,
proposals are required for internal projects in large organizations with
multiple divisions and locations.
Given that sophistication in project management will positively
impact the operational profit margin, the desire for sophistication and
the motivation for excellence in project management are almost universal.
Independent of the source of this underlying noble motivation, the pace
at which an organization achieves that desired sophistication will directly
depend on how much time, effort, and support, is dedicated to the
enhancement of project management processes, procedures, and tools. A
high level of project management sophistication can be an exceptionally
advantageous credential for the enterprise because this credential can be
used as a competitive edge for advancing one contractor among the other
members of the bidder pool. If an organization has reached a high level
of project management maturity, the organization should regard that as
a reason for extreme pride among competitors. This book describes the
methods of recognizing or measuring attributes of organizations, and
determining the extent of sophistication of those attributes.
As a part of this book, an assessment instrument is created that consists sections representing attributes of projects, proposals, portfolios,
teams, and enterprises with a purpose to demonstrate the usefulness of
the instrument and assess project management sophistication in organizations. A few organizations that are known to managing projects well were
approached to participate in this study. Of these, three companies participated in project management sophistication assessment survey. These
results are presented in each chapter. Accordingly, each chapter in this
book is compiled in three parts.

xii Preface

Part one of the chapter describes the components and

attributes of project management activities of the enterprise,
namely projects, proposals, portfolios, and the methods and
processes of formalizing its plans and operations. Partone
also describes the attributes of teams, and the enterprise,
highlighting the premise that competent teams and a
project-friendly enterprise are essential for the success of
projects, and ultimately for the success of the enterprise.
Part two of the chapter contains the results of using some of
these instruments in a few selected successful enterprises, one
each from the United States, Japan, and India.
Part three of the chapter lists a part of the instrument that
can be used to address part one of the chapter and to determine the level of sophistication in those attributes.
At the end of the book, the complete instrument that covers all of the
overall project management activities is provided as appendix for enterprises to assess project management sophistication and identify strengths,
weaknesses, and gaps.
Vittal S. Anantatmula
Parviz F. Rad

Acknowledgments
Part one and part two of this book are adapted from a paper, by the authors
which was published in the proceedings of the 2014 annual meeting of the
Association for Advancement of Cost Engineering (AACE) International.
The authors would like to acknowledge AACE Internationals gracious
permission for the adaptation of the paper. The authors would also like
to acknowledge major corporations from the United States, India, and
Japan who participated and presented information for studying their
project management practices and sophistication. Specifically, authors are
grateful to Jim Grubbs and Takeomi Imani for their support in obtaining
information for the book.

CHAPTER 1

Introduction
In practical terms, the primary objective of an organization is to create
value for its stockholders. The interests of the stockholders will be served
when the organization creates a healthy profit through the achievement
of its strategic objectives. And projects are the instruments by which an
enterprise accomplishes its strategic objectives.
Organizations, due to the nature of their business, design and execute
projects that can be classified as internally and externally funded projects. In organizations that conduct externally funded projects for a fee (of
sorts) on behalf of external clients, efficiency in the conduct of projects is
the means by which the amount of real profit is enhanced. If the primary
line of business of the organization is service, manufacturing, or research;
the projects in the organization are probably internally funded, and the
missions of project teams are to create increased operational efficiency,
new products, or new markets.
McKinsey found that nearly 60 percent of senior executives felt that building a strong project management discipline is a top-three priority for their
companies as they look to the future.
PMI, in its report of Value of Project Management opined that
implementation of project management helps create a strategic value chain
that gives companies competitive advantage, specifically in high-risk sectors and markets. Ability to deliver projects on time and within budget
often determines whether a company will get the next job or whether its
new product hits the market.
The Economist Intelligence Unit survey reported that 90 percent of
global senior executives ranked project management methods as either critical or somewhat important to their ability to deliver successful projects
and remain competitive.
Source: PMI (2010).

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

Even internally funded projects still play an important role in the

profit margin, albeit indirectly. In the case of a nonprofit organization,
the projects are executed either internally or externally and are conceived
to serve its main purpose, which is a social cause and not profit. However,
the underlying project management principles of effective and efficient
use of resources are still valid and important to expand their services for
social cause without increase in their resources.
Sophistication in managing projects in and of itself should, and does,
appeal to enterprises because it provides a point of pride among peers.
However, project management sophistication has an enormous amount
of operational practicality for creating improved organizational capabilities. In turn, operational efficiency has the practical advantage of providing the foundation of profitability, competitive edge, and first in class
position (Figure 1.1).
Project management sophistication refers to the state of enterprise
practices in which success of projects is predictable, and in which the specific measures of both the project management success and project success
continually improve with time. However, it must be noted that organizational processes are considered mediating variables for project success.
In other words, there is no direct correlation between project management processes and project success, which is influenced by people-related
factors and team effectiveness in managing task-related project factors
such as cost, scope, and schedule. Organizational processes are different

More accurate bids

Better proposals
More accurate estimates

Better cash flow

Higher capabilities

Better profits

Higher operational efficiency

Figure 1.1 Benefits of project sophistication: Internally and

externally funded

 Introduction 3

from project management methods and properly designed project management methods are proven to reduce risks, cut costs, and save time,
thereby impacting the project success.

Sophistication of Project Management

Enlightened enterprises are sensitive to project management sophistication, the specific way of measuring it, and the methodical manner of
improving it. In some contracting environments, efficiency in managing
the projects is a prerequisite for being selected as the performing organization for an externally funded project.
It is a pragmatic and healthy policy to subscribe to a continuous
improvement plan that is guided by regular formal assessment of the
manner by which the organizational projects contribute to organizational
success and growth. Continuous monitoring of the vital statistics of the
project management activities is significantly valuable (directly or indirectly) in providing a tool for overall enhancement of all aspects of the
operations of the enterprise. As project management encompasses project
proposals projects, programs, and portfolios, a sophisticated enterprise
collects performance data not only on projects, but also on proposals and
portfolios. Performance data of projects, proposals, and portfolios include
various important aspects such as effectiveness of project management
processes, tools, implementation, performance, and end results. In turn,
with data on the status of all ongoing project management initiatives in
hand, a sophisticated enterprise can put measures in place in order to continually improve all of the project implementation processes (Figure 1.2).
Enterprise-specific historical data are paramount in planning proposals, projects, programs, and portfolios. There might be organizations for
which there is no meaningful historical data for quantifying each of the
four major project management functions, that is, project management,
proposal management, project portfolio management, and proposal portfolio management. In these cases, one would have to presume that the
enterprise is highly unsophisticated; and by extension one would have to
presume that the formalized system for managing those features of the
enterprise might have just been initiated. Naturally, the proposal portfolio management will not be among the organizational functions if the

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

Set industry standards

Pride among competitors

Show higher corporate profits
Select and continue projects that
support enterprise strategy

Improve overall project management

performance

Be more aware of performance of

projects, proposals, and portfolios
Finish selected projects on targ

et

Figure 1.2 Stages of project management sophistication

organization does not engage in formal proposals for externally funded

projects.
In an enterprise that is not highly sophisticated, projects are initiated
in isolation of one another, and are based on ad hoc urgencies. Since the
projects are initialed in isolation of one another, there usually is not a centralized listing of all projects and there is always a very good chance that
some of the projects duplicate one another, partially or totally. By contrast, a sophisticated enterprise has a formalized, logical, and consistent
structure for initiating, and for organizing its projects. With a collective
view of the current and proposed projects, a sophisticated enterprise will
be able to authorize new projects with consistency, with efficiency and
effectiveness, and without duplication of projects.
In an organization that is sophisticated in project management, there
are four different project management teams, all of which contribute to
the overall project management mission of the enterprise. These teams
deal with execution of projects (internally funded or externally funded),
proposals for externally funded projects, portfolios of proposals, and

 Introduction 5
 Project team
 Responsible for implementing the projects deliverable in line with its
specifications for scope, cost, and duration
 Project portfolio team
 Responsible for having the most relevant suite of projects in the project
pipeline
 Proposal team
 Responsible for drafting a compelling proposal for a forthcoming externallyfunded project
Proposal
portfolio team

 Responsible for having the most relevant suite of proposals in the proposal
pipeline

Figure 1.3 Organizational project management teams

portfolios of internally funded projects. Although the missions of these

teams are distinctly different, there might be some overlap in the personnel who serve on these teams.
In sophisticated organizations, one would be able to identify the
teams that are charged with handling different project management missions. Specifically, one would be able to find teams that manage individual
projects, teams that manage portfolios of internally funded projects, and
teams that manage proposals for externally funded projects (Figure 1.3).
By comparison, in unsophisticated organizations, the distinctly different project functions have not been formalized, nor have they been clearly
identified. Therefore, the missions of the teams become highly diffused,
and usually the senior management tends to be part of all of these teams.
The participation of senior management is usually characterized as review,
approval, or governance. There is a debate as to whether the senior management, of unsophisticated organizations, is obligated to attend these
meetings because the objectives are vague, or that the presence of senior
management in these teams is the source of the vagueness in objectives in
the first place.

Programs, Projects, and Portfolios

There is an overlap between the definitions, components, and domains, of
portfolios, projects, and programs. Projects and programs have an overlap
in the execution phase; in that, a program can often be considered to be
a very large project that is composed of many related small projects and
it has long duration. Often a program is perceived as more permanent.

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

Another overlap between projects and programs is that considerations for

the management of knowledge areas are roughly the same for projects and
programs. Portfolios and programs have overlaps in the prioritization for
authorization of the projects within them, and in prioritization of those
projects for execution. Prioritization for authorization is normally conducted in the light of limited funds, whereas prioritization during execution is normally conducted in the light of limited resources. In this book,
although programs are not explicitly covered, their execution features are
addressed through projects, and their prioritization features are addressed
through portfolios.

Enterprise Project Management

Project proposals constitute the detailed and formal means for the initiation process for externally funded projects. A far less formalized proposal will be necessary for initiating internally funded projects, primarily
because the performing organization and funding organization are one
and the same in this case. Detailed proposals are somewhat uncommon for internally funded projects although, if present, they suggest
sophisticated and unbiased approach to approving internal projects for
implementation.
Projects are at the core of the project management activities. An
informed view of a project will include detailed data on attributes such
as cost, schedule, and quality across many phases (initiation, planning,
monitoring, etc.). Additionally, the informed view will provide data for
characterizing the predictions for project completion. It also provides
documented and definitive indicators for the progress toward those completion predictions. On the other hand, an informed view of a proposal
will include details of proposal cost, the value of the resulting project,
expected profit, and so on.
A portfolio is a collection of projects or proposals that are connected
to each other through a single source of limited funds but not necessarily
share the same strategic objective. An informed view of a portfolio will
include details of project scores, or proposal scores, within the portfolio. These scores are derived from strategic alignment, total cost, possible profit, and operational efficiencies, of the contents of the portfolio.

 Introduction 7

Naturally, these scores will be refreshed and reset at each round of portfolio optimization.
Looking at the efforts involved in managing an individual project, the
project personnel must be prepared to manage the following attributes of
the project: the enterprise objectives that created that specific project, the
people attributes of the team charged with the implementation of that
project, and task attributes of the deliverable, such as cost, schedule, and
risk. Likewise, managing proposals and portfolios can be characterized as
managing the three different sets of issues of task, people, and enterprise;
although these categories address slightly different issue when one views
projects, proposals, or portfolios (Figures 1.4 to 1.6).
In a shorthand notation, enterprise objectives can be referred to as the
why of the project management activities. Task indices can be referred
to those that describe the what of the project management activities.
However, the task indices indirectly relate to the strategic and financial
mandates of the enterprise (why), because the strategic objectives demand
the existence of the deliverable within the boundaries of the financial

Project

Task
attributes

People
attributes

Enterprise
attributes

Scope

Technical
competence

Strategic goals

Cost

Human
interactions

Financial objectives

How

Why

Duration
What

Figure 1.4 Managing project

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

Proposal

Task
attributes

People
attributes

Enterprise
attributes

Proposal
documents

Technical
competence

Strategic
goals

Proposal
cost, duration

Human
interactions

Financial
objectives

How

Why

Project
cost, duration
What

Figure 1.5 Managing proposal

Portfolio

Task
attributes

People
attributes

Enterprise
attributes

Pipeline
cost

Technical
competence

Strategic
goals

Pipeline
strategic goals

Human
interactions

Financial
objectives

How

Why

Pipeline
financial objectives
What

Figure 1.6 Managing portfolio

 Introduction 9

constraints, of course. The shorthand for the operational issues of the

project is the question how because they describe, primarily, not only
the personnel, but also the tools and materials, needed to create the deliverable. In other words, why of the project focuses on project selection,
what on project plan and development with a focus on delivery of project goals within constraints, and how focuses on efficient and effective
project execution.
The project deliverable will hopefully be crafted in such a way that the
enterprise objectives would be met by the use of the project deliverable.
Therefore, it is a generally accepted practice to equate project management competency with the skills in managing task-attributes of the project, such as managing cost, duration, scope, and quality. However, for
optimized success of the project management initiatives, the team members should also have tools and skills for working together in a harmonious fashion during the process of discharging their duties, in addition to
project management processes and practices. Equally important, the team
members should have the knowledge and skills to deal with enterprise
strategic objectives, enterprise financial constraints, and time constraints
of the deliverable.
Projects are conducted in order to satisfy distinct and specific enterprise objectives. The projects are intended to meet certain specific strategic objectives, while being mindful of the financial constraints of the
enterprise. Put another way, enterprise objectives shape the size and scope
of the deliverable, and influence the priority that will be attached to the
project during the project prioritization of the portfolio management
process. Additionally, occasional changes in these enterprise objectives
will impact the task facets of the project, and ultimately the success of the
project. On rare occasions, drastic changes in enterprise objectives might
even cause the midstream termination of the project.
To a great extent, the people management of the projects, proposals,
and portfolios will address very similar issue; primarily because the team
interaction norms are usually a reflection of the organizational culture,
and tempered by the personalities of the people within that specific team.
Ideally, the team attributes of the work of project, proposal, or portfolio
are facilitated by the project management office (PMO) through providing a friendly culture, and through procedures and guidelines for the

10

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

teams day-to-day operations, particularly as they relate to interpersonal

dynamics and team development norms.
By examining Figures 1.4 to 1.6, it is obvious that the enterprise attributes are roughly the same for all three missions (projects, proposals, and
portfolios) because they describe the strategic and financial objectives of
the enterprise. These objectives will be translated slightly differently for
each of these three missions of project, proposal, and portfolio. However,
the task attributes of projects, proposals, and portfolios are distinctly different from each other. The deliverable for a project might be either a
product or a service. The deliverable for a proposal team is a document
that will hopefully convince the external client to fund the subject project
within the performing organization. By comparison, the deliverable of
portfolio is a suite of projects, or proposals, that are carefully aligned with
the current strategic objectives of the enterprise.
Most of the task attributes of the project (cost, duration, scope, risks,
etc.) can be described in quantitative terms, and are somewhat definitive.
The financial objectives of the enterprise (profit margin, payback period,
etc.) are also somewhat specific and quantitative. Although it is desirable that people attributes and enterprise strategic attributes be described
in a quantitative fashion, some attributes can be described only verbally
and qualitatively. Nonetheless, the qualitative description can become the
basis for scoring that particular attribute, using the narrative scales of the
model. It is an important point that a narrative scale describes various
plateaus, and that the scale is not necessarily linear.

Project Management Success

A quick, direct, and slightly oversimplified measure of the enterprise
sophistication in managing a project can be obtained through the sophistication (efficiency and effectiveness) by which the task attributes of the
deliverable have been achieved routinely. The task components of the project management processes would address details of planning and managing
the project deliverables cost, duration, and risks in addition to completing
the project deliverable in line with its own specifications and scope.
It is important to note that the success of the project is defined by how
efficiently the project team has crafted the deliverable. On the other hand,

 Introduction 11

the client who paid for the project might or might not be successful in
achieving value or profit while using the deliverable. So, the measure of
project success is the amount by which the deliverable is in line with its
own specifications. From the clients perspective (be it internal or external), the measure of success in using the deliverable is the amount by
which the strategic objective that created the need for the deliverable is
logical, rational, and with enough forethought.
The success of an individual project is observed through measuring
the performance in achieving the desired values for the task facets of the
project. Task facets of the project include scope, cost, and duration, and
quality is integral to scope specifications. Likewise, the success of a proposal is observed through winning the contract, and through earning a
high level of profit during the execution of that externally funded project.
Lastly, the success of a portfolio (of projects or of proposals) is observed
through achieving a balanced portfolio, through meeting most of the strategic objectives, and through meeting most of the financial mandates.
This practice seems to be the norm, partly because the task attributes
reflect the outward results of the project, partly because the elements of
task attributes are easier to measure and calculate, and partly because task
attributes are often the primary concern of the (internal or external) clients of the project. That is not to say that people issues and enterprise
issues are not important. Rather, the latter two facets provide the foundation for the success of the mission. Therefore, sophisticated enterprises are
keenly aware of the fact that the foundation for successful deliverables, in
all project management initiatives, is provided by harmonious teams, and
by a supporting infrastructure and organization culture.
Most indicators of project success tend to measure the task aspects
of the project such as cost, duration, and deliverable quality. However,
sophisticated organizations acknowledge that; in addition to attending
to the task aspects of the project, the foundation for this success was provided by attending to the people issues of the project, and to the enterprise
issues of the project. In other words, the successful project results were the
manifestation of productive behavior by the projects personnel, supporting functions, and the organizational processes during the conduct of the
project. An appropriate metaphor would be that of ice; in that, for every
mass of ice that protrudes from water, there is a mass of much larger size

12

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

that is under water, that is, supporting the visible ice. Another metaphor
would be that of the vital signs of a human body, which are blood pressure
and cholesterol levels. Although these attributes are measured during an
examination, and even though they can be treated directly, the most effective way to improve these values would be to lay emphasis on improving
the food and exercise habits of that person (Figure 1.7).
A thorough assessment exercise should examine the success of projects not only as measured by task indices, but also examine the more
systemic means of that success, namely attending to people issues and
enterprise issues. Usually the task attributes are the only attributes that
are measured as part of survey instruments and the reason for this is
that task attributes are much easier to describe and quantify with survey
instruments, and questions for testing these skills are widely available
within the professional literature. Measuring people and organizational
attributes would require more effort and more elaborate forms and survey instruments.
Lastly, the measure of success and sophistication of the enterprise in
managing projects is the track-record of improving the accuracy of estimates from project to project, and from year to year, and repeated success
in completing projects as planned. Similarly, proposal success is characterized by having successful and continuously more profitable proposals.
Portfolio success is characterized by having a large number of fully relevant proposals and projects in the pipeline, with a continuously increasing level of alignment between the portfolio contents and the enterprise
objectives.

Task
issues
Provides foundation for
smooth operations and
for ultimate success

Enterprise
issues

People
issues

Figure 1.7 Project issue spectrum

Outward measure of
progress and success

 Introduction 13

If the project is being conducted for the benefit of another organization, and it is funded by that external organization, the project is considered to be externally funded. From a broad perspective, there are two
organizations that have interests in an externally funded project. One is
the client organization, which funds the project and ultimately benefits
from using the deliverable. The other one is the performing organization
that will essentially collect a fee for lending some of its people and equipment to the external client for the purposes of that project. In essence, the
funding organization provides the funds, strategic objectives, and sometimes the deliverable specifications. In turn, the performing organization
will provide the personnel, tools, and materials for creating the deliverable
(Figure 1.8).
It is an important point that the funding organization and the performing organization do not always share the same vantage point on elements
of the success of the project. The project client (the funding organization)
is primarily interested in the final values of cost, duration, and scope. On
the other hand, the implementation team (the performing organization)
measures its own success through determining how well it managed all
aspects of the project such as cost, schedule, risk, scope changes, people
issues, and the profit. To some extent, this disparity exists for internally
funded projects, although not as pronounced, and not as significant.

Client focus

 Values of
 Cost
 Duration
 Quality
 Scope
 Strategic goals
 Financial objectives
 Management of
 Cost
 Duration
 Quality
 Scope
 Risk
 Reports
 Contracts
 Relationships

Figure 1.8 Client and team focus

Project team focus

14

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

Enterprise Support
The span of activities for planning and implementation of projects
encompass the management of the task attributes, people attributes, and
enterprise attributes. The project management professionals should be
skillful in, and fully equipped for:

Developing the project plans;

Conducting midstream plan enhancement;
Executing the project plans;
Managing change;
Reporting the progress; and
Collecting significant project information and historical data.

During the implementation period, details of project plan must be

repeatedly revisited, fine-tuned, and modified in the light of the reaction
of the project team to the changing environmental circumstances.
In a typical unsophisticated enterprise, a team of qualified and competent project management professionals will be only marginally successful in its duties and responsibilities. The reason for the shortfall is partly
because the team will have to invent, and modify, all the processes and
models that are necessary for the proper conduct of the project, and partly
because the enterprise culture might not truly be supportive of the project
teams work. The enterprise support, or lack thereof, will be manifested in
the speed and comprehensiveness of the assistance that the team receives
from enterprise infrastructure support divisions, notably in the areas of
human resources, finance, and accounting.
In a sophisticated enterprise, and the one that is friendly and supportive to projects, the vast majority of the project teams time and effort
is spent on managing the task aspects of projects due to the presence
of enabling culture and proven processes, and the efforts of the team to
produce remarkable results. At the other end of the spectrum, in grossly
unsophisticated organizations, the project teams do not pay attention to
the team and enterprise issues; no one does. Therefore, the teams efforts
are almost always inefficient and ineffective, as evidenced by the cost overruns, and duration over-runs, of the projects. Reinventing the wheel is a

 Introduction 15

norm and not an exception in these organizations. Additionally, the activities are often reactive and based only on emerging issues. The interesting
dichotomy is that, in both circumstances, the team focuses primarily on
task issues of the project, with major success in a sophisticated organization, and with utter failure in an unsophisticated organization.
PMI conducted a survey of 1189 project management practitioners and
interviewed senior executives, Project Management Office (PMO) directors, and Directors of project management in 2016. The survey results
show that prior identification of benefits of projects, programs, or programs
result in 74 percent of projects meeting their goals and business intent as
compared to 48 percent in organizations that do not. When formal project
management is used for identifying benefits, these numbers improve to 80
and 54 percent respectively.
In another PMI 2015 survey (of 2428 project management practitioners, 192 senior executives, and 282 PMO directors), having proven
project, program, and portfolio management practices in place helped
organizations to meet original goals and business intent in 89 percent of
the projects.
Source: PMI (2016).

Often, a distinct organizational entity is necessary to guide the

organizational efforts toward project management sophistication. The
most common title that is given to this entity is PMO. In broad terms,
the functions of the PMO can be divided into two distinctly different
categories: team-focused and enterprise-oriented. Team focused f unctions
tend to be reactionary and are often aimed for short-term results. They are
intended to provide assistance to the segments of the organization that have
not attained full sophistication. Hopefully, the intensity and frequency
of these functions will diminish as the organization progresses toward
project management sophistication. By comparison, e nterprise-oriented
functions are proactive and they are intended to achieve long-term organizational results. The intensity, and institutional coverage, of these
functions will expand as higher levels of project management sophistication are achieved (Figure 1.9).

16

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

Clearinghouse

Enterprise-oriented
functions

Promote

Practice

Train
Tutor

Team-focused
functions
Augment

Consult

Figure 1.9 PMO functions

The team-focused category of the PMO functions includes augmenting the project staff, tutoring and mentoring the project staff, and providing consultation to the project staff. The enterprise-oriented category
of the PMO functions includes maintaining clearing house for the operational performance data, providing best practices and tools to the project
management professionals, offering project management training to the
staff, and providing visibility and career stability for the project management professionals.
It is important to note that, although managing individual projects
is at the core of the project management activities, and although the vast
majority of the project management effort is concentrated on managing
individual projects, sophisticated organizations will have separate teams

 Introduction 17
Decrease
diminish
Team-focused
assistance

Increase
expand
Enterprise-oriented
facilitation

Proposals

Projects
Portfolios

Figure 1.10 PMO function transition

whose missions are managing proposals, managing portfolios of projects,

and managing portfolios of proposals, respectively. The short-term and
long-term functions of PMO will apply to all of these different teams.
Efforts should be made to rely solely on the long-term functions of the
PMO, by virtue of minimizing the incidences that will require short-term
assistance functions of the PMO (Figure 1.10).
Sophistication of project management activities of the enterprise
will require competency of the professionals involved, friendliness of the
enterprise toward supporting project management activities, and cohesiveness of the teams that are charged with discharging the various project
management duties. Ideally, the project management professionals will
be fluent in project management knowledge areas, the technical specialty
areas, and the organizational-specific processes. The friendliness of the
enterprise toward project will be manifested by the availability of the
processes and tools that are necessary for a sophisticated implementation, and by the availability of a facilitative and responsive infrastructure. To some extent, project friendliness is an enterprise culture issue,
and not just an issue of providing task-facilitation. Lastly, team success is
highly dependent on team harmony, conflict management, and a healthy
amount of communication. Cohesive teams enjoy a high level of collaboration, teamwork, and trust, primarily because these teams nurture that
elusive attribute known as team harmony (Figures 1.11 and 1.12).
The planning and execution phases of any project management activity must include details of task, enterprise, and people facets, of that

18

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

Competent
professionals

Manage
task issues

Harmonious
teams

Manage
people
issues

Project-friendly
organization
.
Manage
enterprise
issues

Project
management
success

Figure 1.11 Elements of organizational project management

sophistication

Compliance
with
process

Existence
of
process
Success
using process

Figure 1.12 Enterprise processes

particular mission. Naturally, the guidelines and tools that are provided
by the PMO will streamline preparation of these plans substantially.
Asophisticated organization is one that, not only has best-practices for
all of the facets of the missions, but also one that encourages the project management professionals to follow those plans during the execution
phase. Ultimately, the measure of the appropriateness and sophistication
of a set of guidelines is the level of success that is achieved using that
guideline. Monitoring the compliance with the process, measuring the
success of the process, and observing the enhanced success of the process
are the trademarks of a sophisticated enterprise.

Assessment of Project Management Sophistication

It is imperative that the enterprise has a detailed, objective, and formalized, picture of the state of its overall organizational project management

 Introduction 19

competency. The project management maturity assessment would provide a methodical and deliberate mechanism for checking the competency status of all of the organizations constituent components, and the
organization as a whole. The measurable, outward, and obvious signs
of project management sophistication are the measurable indices of the
performance of portfolios of projects and proposals of the enterprise.
Most of these indices are relatively straightforward to determine if there
is an enterprise-desire to collect accurate and regular data regarding its
performance.
Conceptually, the logical measures of progress in a major organizational project management capability improvement effort are the
collective and summarized values of all elements in the suite of quantitative indices that are available for characterizing the performance of
all of the projects within the organization; such as earned value, cost
over- or under-run, duration over- or under-run, and so on. On the
basis of the collected data and the resulting prediction of future performance, the enterprise could develop a continuous improvement plan. If
the enterprise has a clear picture of the recently measured and current
level of capabilities, the indicators of the current sophistication level
can be used as a prelude to developing a baseline for predicting future
performance.
An assessment exercise will provide data that will identify organizational strengths and weaknesses in project management, as the preliminary
step toward mapping a path and toward higher levels of sophistication. A
clear view of the current health of the enterprise will ultimately provide
the incentive, for developing an expanded library of best practices. These
best practices will assist with establishing a formalized enterprise-wide
project management process, and with developing a pool of more competent, and more qualified personnel, who can successfully assume the role
of more productive project team members.
An enterprise might choose to conduct the assessment of its project
management sophistication by using one of the well-known maturity models. Alternately, the enterprise might choose to conduct such
assessment in a less formal fashion, albeit just as objective, through
using enterprise-specific instruments. This book is directed toward the
latter case.

20

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

Summary
Project management sophistication is desirable to an enlightened enterprise because it is the basis for pride among peers, and equally important
it is the foundation of enhanced operations and good profits. Project
management sophistication can be detected, or measured, for projects,
proposals and portfolios. Although such sophistication is usually measured in terms of success in task attributes, the underpinning for such
success is provided through harmonious teams and a project-friendly
environment. Typically the organizational unit that is responsible for
facilitating a project-friendly environment is the enterprise-wide PMO.

Case Studies
As discussed earlier in the Preface of the book, three companies agreed
to participate in our study of project management sophistication. They
represent three different countries, namely the United States, Japan,
and India. In terms of GDP, these three countries figure in the worlds
top five economies, thereby representing a significant part of the global
economy.
Company Geographical

Services

Employees Annual revenue

India
multinational

Technology
services

>10,000

>$10 billion

Japan
multinational

IT Consulting >10,000

>$500M<1 billion

U.S.
multinational

Transportation >2500
10,000

>$500M<1 billion

All the three companies who participated in the study are for-profit
organizations in private sector and are considered to be among the
leaders in their respective countries and specific industrial sectors they
cater their services to.
Company A provides IT services, consulting, and business
solutions worldwide in 46 countries. It offers services in
many industries including health care, finance, banking,
insurance, energy and oil sector, life sciences, manufacturing,

 Introduction 21

media and information services, and consumer products. Its

services include business process, consulting, digital enterprise, engineering and Industrial Services, enterprise security
and risk management, enterprise solutions, and IT Services.
The company aspires to manager major programs effectively.
The companys pursuit of excellence in project management
includes flawless and zero defect delivery with high quality
within budget, adherence to duration, motivated workforce,
delighted customers, and repeated business.
Company B offers services to fulfill the needs of customers
in the areas of information processing systems, software,
communications systems, and solutions consisting of other
products and services. It has a comprehensive project management training process in place for all employees and processes
are well defined. It is known to deliver high-quality services
to customers around the globe. The company aspires to train
young project managers and deal with complex problems
and projects. The companys pursuit of perfection in project
management includes meeting strategic and financial objectives, social grace, and minimizing consequences of nonconformance, and quality.
Company C develops electrical and electronic components
for automotive, airspace, commercial vehicles, and marine
markets. It often deals with projects of significant complexity
including global team members working virtually. Each project
team deals with a portfolio of multiple projects simultaneously.
The company aspires to excel at risk management, project
planning, and budget performance. The companys pursuit
of perfection in project management includes a detailed
and accurate assessment of risks and risk management, lean
principles, and an excellent project plan development and
management.
The preceding information provided for each company provides
context for the analysis of these companies in each and every subsequent chapter in this book. Therefore, the company profile may require

22

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

to be referred again and again when reviewing the assessment results

of these companies in terms of where they stand and how well they
perform or manage the attributes of projects, proposals, p
ortfolios,
project teams, and enterprises.
Overall, these companies, to a large extent, have good project
management practices although maturity levels vary in individual
management attributes of projects, proposals, portfolios, teams, and
enterprise. The details and analysis of the results are provided at the
end of each chapter followed by the relevant section of the assessment
survey.

Analysis of the Results

1. Extent to which each company has achieved success or improvements in operational efficiency
 Company A provides a variety of business, consulting, and IT
services in different industrial sectors in many countries. As their
revenue suggests, the company has been doing very well from a
project management perspective.
 Company B is a very reputed international organization providing business, consulting, and technology services worldwide in
many industrial sectors successfully for a very long time. It is known
for an established and matured project management systems and
training programs.
 Company C is an established manufacturer of electrical and
electronic components for automotive, aerospace, and marine
industries and its projects are executed in a highly competitive and
challenging market environment. It has been managing projects
well to stay competitive and cost effective.
2. Areas for their next focus for improvements
 Company A would like to extend its competitiveness and success to managing programs and introduce full service concept to
bring rigor in governance of large program that span multiple
business and service units. Providing flawless delivery of projects
within budget and duration much to the delight of customers and

 Introduction 23

developing teams of highly motivated individuals are considered

recipe to perfect project management.
 Company B aims to manage complex programs and projects
effectively with repeated success. Perfect project management,
from its perspective, is the one that has rigorous checklist system
to ensure proper planning and implementation, considers strategic
and financial objectives, defines consequences for nonconformance
and social grace.
 Company C aspires to manage projects of significant complexity that are managed using global virtual teams by exceling in the
areas of planning, risk management, and budget performance. In
its opinion, perfect project management begins with definition of
complete requirements and performance metrics; it also includes
excellent risk management system and lean approach.

Assessment Instrument
Your Organization Profile
1. Type of organization
Federal State Private (profit) Nonprofit

2. Type of industry
Financial services

Entertainment

Business management

Medical

Marketing

Utilities

Engineering

Communication

Transportation

Real estate

Mining

Construction

Technology

Others, please specify

3. Number of full-time employees in your organization

1100

>1,0002,500

>100500

>2,50010,000

>5001,000

More than 10,000

24

ATTRIBUTES OF PROJECT-FRIENDLY ENTERPRISES

4. Annual revenue of the organization

Not applicable

Nonprofit organization without revenue

Up to and equal to $100,000 >$100500 million

>$100,000500,000

>$500 million<1 billion

>$500,000$1 million

$1 billion or more

>$1 million100 million

5. Geographical characteristic of the organization

Single location Several locations nationwide Multinational

6. Brief description of products and services of your current

organization

Assessment Overview
What are the aspirations for the project management sophistication of
your organization?

 Introduction 25

What project management enhancement would you like to see implemented next?

In your view, what are the attributes of perfection in project management?

Index
analytical hierarchy process (AHP),
7779
assessment
enterprise attributes, 137147,
171182
informal, 133
portfolio team, 8591, 162168
project management team,
132133, 169171
project team, 4047, 151158
proposal team, 6368, 158162
attributes
enterprise, 113147
portfolio, 6993
project, 2747
proposal, 4968
team, 93111
certified cost professional (CCP), 102
client organizations, 122
communication and reporting, 9899
conflict management, 99101
cost, defined, 32
enterprise attributes, 610
assessments, 137147, 171182
measuring project management
sophistication, 114125
project management maturity
models, 125131
enterprise
processes, 18
project management, 610
strategic and financial objectives of,
10, 32
externally funded projects, 13, 4950
funding organization, 13, 122
implementation team, 13
individual project, success of, 11
internally funded projects, 2

maturity models, 125131

components of, 146147
configurations, 128131
organizational project management,
125131
organizational entity. See PMO
organizational processes, 23
organizational project management
teams, 5
portfolio. See also portfolio team
managing, 8
projects, and programs, 56
success of, 11
portfolio team
assessment, 8591, 162168
case studies, 8185
management characterization,
7071
prioritization, 71
prioritization models
of externally funded projects,
75, 77
of internally funded projects, 73
other approaches, 7781
prioritization process
of externally funded projects,
7475
of internally funded projects,
7174
task aspects of, 74
types of, 70
prioritization for authorization, 6
project. See also project team
assessment, 4047, 151158
attributes, 2728
control phases and, 51
enterprise attributes of, 3132
externally funded, 13
issue spectrum, 12
managing, 7

188 Index

planning and implementation of,

1418, 2829, 3234
size and nature of, 49
success, 2930
task attributes of, 10, 32
task issues, 34
project client. See funding
organization
project management
defined, 27
maturity models of, 125131
success, 1013
task force of, 49
project management maturity models,
125131
apex of, 113
case studies, 134136
efforts of, 113
elements of, 123125, 147
project management office (PMO), 9
defined, 118119
founding and effective functioning
of, 27
functions of, 1517
mission of, 27
project portfolio prioritization
models, 120
project portfolio selection, 119
project management sophistication,
35
achievement of, 132133
assessment of, 1819
benefits of, 2
case studies, 2023
defined, 2
elements of, 18
ingredients of, 145146
managing project issues, 117
managing project phases, 116
managing project portfolios, 118
maturity assessment, 114
measuring, 114125
stages of, 4
project management team
assessment, 109111, 169171
behavior, 101102
case studies, 106110
communication and reporting,
9899

conflict management, 99101

importance of, 9396
knowledge areas of, 115
maturity levels of, 105
roles and responsibilities, 9496
span of activities for, 14
sustaining performance of, 103106
team charter, 9698
team member profile, 103
team models, 102103
project team
case studies, 3440
efforts, 14
span of activities for, 14
proposal. See also proposal team
assessment, 6368, 158162
attributes, 54
case studies, 5963
development steps, 5153
disparity of objectives, 55
externally funded project phases,
5657
management, 49, 5758
managing development, 122
prioritizing, 5356, 7677
selecting technical areas, 121
selection and management, 120
proposal team
deliverable for, 10
managing, 8
success of, 12
radial mapping, 7981
request for proposal (RFP), 50
risk, defined, 32
schedule, defined, 32
scope, defined, 32, 33
team charter
elements, 97
project management team, 9698
team dysfunction symptoms,
110111
team interaction indicators, 110
team member profile, 103
work breakdown structure (WBS), 33