The Lazy Project Manager's Blog

The following article is the first of four in a series on ‘Project Business’ and is authored by Daniel Bévort

I have long commented on, and grumbled about if I am honest, that most project conversations talk about internal projects and not external, client facing, business oriented projects – both of which are important but with the latter representing most of my personal career experience.

As such I am delighted to share these articles with you.

How would you categorize construction, architecture and engineering companies? If you think about it, the construction, architecture and engineering part of it is just about the type of projects they do. Essentially, these companies are Project Businesses, companies that provide products or services for their customers through projects.

Project Business is an industry just like Retail and Manufacturing because projects are their primary business function. For example, if we think of a Retail Business, it’s about reselling goods to consumers. It doesn’t matter what goods you sell. Whatever it is, if you sell it to consumers, you are a Retail Business. The same goes for a Manufacturing Business. It doesn’t matter what products you make, if you manufacture it, you are a Manufacturing Business.

Project Business is the same. Whatever the product or service is, if you are running and delivering projects to your customers, you are a Project Business.

Project Management as a Central Component of a Project Business

Oftentimes, people think managing a project and managing a project business are interchangeable. They’re not. Project Management is something that a business does, regardless of the type of business it is. Project Management applies knowledge, skills, tools and techniques to complete projects and is a central component of a Project Business. Since projects are temporary, managing a project is also temporary. On the other hand, Project Business is enduring and as such, managing a Project Business is an enduring activity.

Characteristics of Project Businesses

Although we can compare Project Business to traditional industries like Retail, Distribution or Manufacturing, there are several major characteristics unique to Project Business. Unlike traditional industries:

·       Projects are Temporary and Unique to Each Customer

Retail, Distribution and Manufacturing companies produce or sell the same goods repeatedly. This allows these companies to take advantage of standardized processes and KPIs, automation, and economies of scale more easily than Project Businesses. As a result, these traditional businesses are more predictable and can replicate procedures and processes easier than Project Businesses.

·       Project Business Processes Can Differ Depending on Who Is Doing Them

In traditional industries, processes and data are standardized no matter who is doing the work. In a Project Business, it all depends on who is executing the task. With the amount of detail included in a specific project plan, processes can differ between different project managers who have different preferences. Even the data that is considered important and used to make critical business decisions can be different across the company. This makes Project Business more complex than traditional businesses. Since project business processes aren’t uniform, it’s difficult to manage the business functions and establish standard metrics to measure performance.

With all that in mind, it’s no surprise we’ve seen productivity in traditional sectors continue to grow while it has remained stagnant in Project Businesses. This increase in productivity has largely been attributed to technology. It’s a lot easier to apply technology to standardized processes and data in order to automate and increase production. However, it’s not so easy with Project Businesses that have unique products and non-standard business practices.

Identifying as a Project Business is Key to Growth & Success

In order to improve productivity and optimize your business for success, it’s important to first identify as a Project Business. Once you do that, it’s easier to see how you can improve, structure your project business processes, and identify what systems and solutions are possible.

Project Businesses need to govern their business activities in the same way traditional industries have. More specifically, they need to be able to control their business processes to optimize business performance. Let’s look at the core activities for a project business.

Project Businesses engage in the following activities:

·       Project Management & Operations– Scheduling, resource management, change control, risk & issue management, time and expense

·       Project Financials & Accounting– Costing & estimating, budgeting, cost control, EAC/BAC, cash flow management

·       Project Analytics– Earned value analysis & management, forecasting, KPIs, profitability

·       General– Project-owner collaboration, portfolio/program management, HR management, sales, customer service, business intelligence and financials

When your business depends on the successful delivery of projects to your customers, it’s critical to be on point. Recognizing your company as a Project Business is the first step to setting the foundation for expansion, growth and profitability. Failing to identify as a Project Business will lead to challenges in business productivity and performance. The next blog in our four-part Project Business series will take a deep dive into why productivity is failing Project Businesses and what is the solution.

Peter: This is also something my friend Oliver F. Lehmann would acknowledge and support through his Project Business Foundation https://www.linkedin.com/company/project-business-foundation/

Daniel Bévort: Founder & CEO

Prior to founding ADEACA, Daniel was a principal architect of Axapta at Damgaard Data, which was acquired by Microsoft in 2002 for $1.6B and became Microsoft’s ERP offering, now called Dynamics 365 Finance & Operations. Daniel recognized that every traditional industry has systems to integrate and control all their business processes, but that is not the case for project-based industries. ADEACA was founded to accomplish that same vision for these neglected industries and find a way to run project business with real-time information and much better control.

Tags: adeaca

This entry was posted on February 18, 2020 at 9:43 am and is filed under project management, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.