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Commercial Project Management

Expands the body of knowledge into an essential domain

SERIES ARTICLE

Advances in Project Management Series

By Robin Hornby

Calgary, Alberta, Canada

 



Introduction

Most of my career in IT and software development has been spent with vendors – migrating from an emphasis on hardware, to software, then to services as the decades passed. Services were really always a part of it, usually bundled, but the reality of managing a delivery team where real dollars are being consumed against a fixed project budget only struck home when I joined a dedicated contracting outfit in the early ’80s. There I started to experience the unique problems faced by both vendor project managers (PMs), and increasingly by PMs operating under commercial terms or constraints, as encountered in larger corporations operating an internal economy.

These problems fall into two general and related categories. The first is the lack of standards and the need that arises for an extension to the body of knowledge, not supplied by current offerings, such as PMBOK®, or PRINCE2®. The second category arises from the multiple views of project management (client, prime, and subcontractors) that inevitably exist in this environment. This demands flexibility from the vendor, who must adapt to the client (more often than vice-versa) and who is also faced with the need for internal (vendor) management discipline.

This has spawned a number of potential failure causes uniquely observed in the commercial project environment – poor integration as exhibited by project ‘silos’, poor recognition of the business role of PMs, poor connection between sales commitments and delivery capability, futile generation of multiple SOWs when really only one project is operating, poor project management communication, plummeting client satisfaction, and narrow or disappearing vendor margins.

  1. Overview of the Situation

The introduction of a business relationship between a services firm, their project manager, and a sponsor who is now a customer has a salutary effect on the traditional project management role. Project managers with little experience in these situations manage less effectively, jeopardizing customer satisfaction and project profitability. At the same time, executives or owners of the firm are often unfamiliar with the disciplines of project management, especially at an early stage of their firm’s evolution, so their support for a struggling project manager is lacking and the firm may never gain the foundation for healthy growth or even survival.

My generalized observations are:

  • PMs lack experience and knowledge of business essentials, fail to run their projects as profit centers, and have difficulty understanding that their sponsor is also their customer; and
  • Business owners are unaware of the potential for project management disciplines to enhance their business operations and are missing opportunities to gain much-needed business control.

Firms who have primed their PMs with business acumen and balanced an enthusiastic and skillful sales team with delivery management disciplines are rewarded with both successful projects and repeat business, which is the secret of a firm’s profitability and longevity.

This, of course, is easier said than done. The essence of the problem is the inevitable encroachment of business management demands into the exclusive realm of project management. The PM requires training, proper exposure to legitimate vendor interests (and sometimes an attitude adjustment) to be successful.

The intersection between business and vendor project management can be expressed in three simple terms:

  1. Customer satisfaction and repeat business;
  2. Employee skill, growth and retention; and,
  3. Profit

Contemplate the advice I received from a boss at my old consulting company who had a unique way of emphasizing these three priorities of the professional services firm:

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Editor’s note: The Advances in Project Management series includes articles by authors of program and project management books previously published by Gower in UK and now by Routledge worldwide. Information about Routledge project management books can be found here.

 



About the Author


Robin Hornby

Alberta, Canada

 


After graduating from Queens University Belfast with a degree in aeronautical engineering and a Masters in applied science, Robin’s career began with IBM United Kingdom as systems engineer. Moving to Canada in 1977, he worked in the telecommunications sector as systems planner before embarking on his project management career with DMR Consulting. When DMR expanded overseas, Robin accepted a six-month assignment in Melbourne, Australia, where he assembled a team of DMR consultants to successfully implement a time-critical on-line health insurance system. Returning to Edmonton, he managed multiple government contracts and assumed responsibilities as office development manager.

In 1987 Robin returned to Australia to help establish the Canberra and Perth offices and provide training as part of the acquisition of about 100 consultant staff into DMR. Back in Canada in 1990, he joined the Calgary office of DMR as a member of the management team for DMR Western Region, with responsibility for systems delivery and project profitability. In 1995 he was offered the role of National Delivery Manager for Intergraph Canada, and in a few years returned the services business to profitability. This role continued following the establishment of Tempest Management Inc. (TMI) in 1997 which allowed the pursuit of wider interests including a ten-year affiliation with Mount Royal University to teach the PMBOKÒ curriculum and collaborate in the development and delivery of custom courses for corporate clients.

Robin is the author of three books, most recently Commercial Project Management – a Guide for Selling and Delivering Professional Services. Recent consulting assignments have included project risk reviews, contract reviews, PM coaching, and delivery and project office management roles. His current focus is on writing and conducting seminars on the aspects of project management he believes are neglected – commercial practice, methodology for collaborative procurement of services, and PM leadership to achieve project quality.