Different Types of Project
Oliver F. Lehmann: Bill, one problem we have in project management is a lack of valid and agreed upon typology for projects. This leads to discussions where contributors presume that the kind of project they know well is just the only kind of project in existence. It probably isn't,
Here are three classifications that I believe help clarify the matter:
- Internal projects vs. Customer projects.
- Simple differentiation: Internal projects are cost centers; customer projects are profit centers.
- Most internal projects are run in weak matrices. Most customer projects are run in strong matrices, at least on contractor side.
- The business value for a customer project is in most cases (not all!) easy to describe: "This is the way we earn money".
- Internal projects are more complicated.
- My (nonscientific) observation is that Internal: Customer projects are distributed by about 50% : 50% for IT and OD projects.
- Your statement is true for the majority of Internal projects.
- Mandatory projects vs. Discretionary projects
- Remember Sarbanes-Oxley Act of 2002 projects in USA? Know something about SEPA projects, currently run in all European companies and agencies and many abroad that make business with Europe?
- These projects are not just justified by business, they are legally mandated. They are not run to avoid penalties; they are run to be in accordance with law.
- Your statement is true for the majority of Discretionary projects. Both types occur in IT and OD projects.
- Business-case driven projects vs. Pet projects
- Some Pet projects are true BS, of course. But among the greatest projects of mankind are many Pet projects.
- Without Pet projects, we would still believe that Earth is the center of a small Universe and no men would have walked on the moon, we would not have Google search and no Facebook. I believe, LinkedIn was business-case driven from the start, but Google and Facebook found out after inception what an enormous business value their inventions had.
- All truly scientific projects are "Pet" projects, and are run for the sake of being run, l'art pour l'art. The same is true for Art projects, think of Christo and Jeanne-Claude's wrapping projects.
- The PMI Munich Chapter that I have the honor to preside is running many projects without a business case. They bring joy to our volunteers and allow them to do things that they are not allowed to do at work. They do wonderful projects by the way, giving evidence of their professionalism.
- My observation is IT and OD projects are mostly business-case driven, but not always.
My disagreement relates to the word "every" (even capitalized). You would have my agreement if you would limit your statement to the kind of projects that you are dealing with. Another little agreement: Most changes in IT also change the social contracts inside the organizations involved. And vice versa. Therefore, IT and OD (Organizational development) commonly come together.
Bill Monroe: Hi Oliver, Thank you for your detailed analysis and response. Here's my two cents:
- Internal projects vs. Customer projects. "... The business value for a customer project is in most cases (not all!) easy to describe: "This is the way we earn money ..."
I would add that the business value for an internal project could be described as: "This is the way we cut costs, thereby increasing net profits."
- Mandatory projects vs. Discretionary projects. "... These [Sarbanes-Oxley, SEPA] projects are not just justified by business, they are legally mandated. They are not run to avoid penalties, they are run to be in accordance with law."
These projects are absolutely justified by Business, because being in accordance with the law is a very powerful Business objective. Companies abide by laws because the penalties for not doing so outweigh the benefits. A company might decide to intentionally ignore the law because it's cheaper to pay the fines if they get caught. It may not be ethical but it's a strategic decision. Doesn't this, in part, explain the China economy, and the current state of their ecosystems?
- Business-case driven projects vs. Pet projects. "... All truly scientific projects are Pet projects, are run for the sake of being run ..."
I would site any number of research related projects that refute this assertion. Research projects are conducted with resources that are designated as expendable with the intent that benefits and value will be realized through the effort.
- "... The PMI Munich Chapter that I have the honor to preside is running many projects without a business case. They bring joy to our volunteers and allow them to do things that they are not allowed to do at work."
Wouldn't you say that the joy and experience gained by your membership is the business case that justifies these projects? If there were no value and benefits returned to your members through the offering of these opportunities you probably wouldn't continue to offer them.
The business value isn't always about money.