This Guest paper is copyright to Dr. Paul D. Giammalvo.
Published here February 2021.

Introduction | Just the Facts, Ma'am
Asset Life Span Development | What Is an Asset and How Do We Manage Them?
Do Projects Generate Benefits or Do Assets? | Conclusion (Part 1) | PART 2

Conclusion (Part 1)

In this Part 1 of the paper, we advocate the use of "Accountability" as defined legally under "professional negligence" and "duty of care" laws as the basis for determining the degree to which a project was more or less "successful". This should be based on the requirements contained in the contractual documents (or the project charter, brief, or scope statement for internal projects). This is provided the project sponsor, project manager and project controllers had "reasonable ability to control" the outcomes, and the stated (express) authority to act, either under the contract or via the charter.

In Figure 2, we identified a fully-integrated Life Spans showing Asset, Portfolio, (of both assets and projects) and Programs (Operations). This was originally made public by either Esso or Diamond Shamrock Oil around 1955 and the fact that it remains in use after 65 years, attests to its value from an Owner's perspective, because it works. This raises the question that if there is a model that we know for a fact that works as a tested and proven model, then why haven't PMI, IPMA, APM/APMG et al adopted it? Why have they not joined AACE and the Guild of Project Controls in using this as the basis for their Body of Knowledge or "Best Tested and Proven" practices?

As shown in Figure 3 earlier, this fully integrated model is supported by the "strategic decision making" levels in most large organizations, both public and private sector, as well as governmental agencies, including the military. This concept dates back hundreds if not thousands of years. So again, given it is "tested and proven to work" why is this reality not the basis for the integration of all "asset, portfolio, program and project bodies of knowledge"? Why try to reinvent something that has withstood the test of time?

In Figure 4 we identified what an asset is using reputable and respect business dictionaries (Investopedia and the Online Business Dictionary). Using those definitions, we have shown that for an owner organization, all projects regardless of size or complexity are cost or investment centers. And further, that those projects produce "products" or "services" or other deliverables that fall into one or more of the five Asset Classification "buckets". We also know that the only organizations that can profit directly from a project is the contractor since that is their "raison d'etre" for becoming a contractor.

Finally, when we compare a typical "Benefits Realization Process Map" (Figure 6), as commonly seen in many "agile" or "Agile" publications, against a legitimate Business Case Analysis we can see how over-simplified the "Benefits Realization" model is.

For many years this author has long argued that the underlying "Project and Program Body of Knowledge" should be based on the principles outlined in any decent textbook on Engineering Economics. For those leaning towards "sustainability", then reference any of the Environmental Engineering Economics textbooks. Only AACE, the Guild of Project Controls and perhaps the Green or Sustainable Project Management organization have so far followed this advice.

Editor's comment

This concludes Part 1 of this paper. Next month in Part 2, Dr. Paul will continue with Exploring the Asset Delivery Options.

Do Projects Generate Benefits or Do Assets?  Do Projects Generate Benefits or Do Assets?

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