article - global project management

8 ■ Contract Management / April 2004

This article is an extract fromManaging Complex OutsourceProjects by Gregory A. Garrett, published by CCH Inc., Chicago 2004.

As more and more companies andorganizations conduct work on a multi-national or global basis, the need todefine project management (PM) “bestpractices” and leverage project man-agement expertise globally becomesgreater. What organizations want is to develop PM methodologies, basedupon proven processes to ensurerepeatable and measurable results,which meet or exceed their customersdemanding expectations.

Many companies or organizationshave developed internal PM expertise,typically within their professional services department or supply chainmanagement organizations. Likewise,many companies have taken the timeto develop PM best practices databasesto facilitate knowledge transfer withintheir organizations. Most companieshope to repeat project best practices,if they were proven successful some-where else in the organization.

According to the Center for BusinessPractices (CBP), the research arm ofPM Solutions and a U.S.-based projectmanagement firm, consistency andresource problems top the list of con-cerns facing project managers. Theseresults come from CBP’s 2003 surveyof 1,000 project professionals andsenior-level executives from suchindustries as manufacturing, healthcare, and information technology. CBP’ssurvey found the largest project man-agement challenge was developing aconsistent approach to managing pro-jects (23.9 percent of the respondents).Following close behind was the concernover resource allocation (19.7 percent)and managing too many projects orthe wrong projects (16.9 percent).

GREGORY A. GARRETT, CPCM, PMP,is vice president and general manager,

U.S. federal government programs for

Lucent Technologies in Herndon, Virginia.

He is a member of NCMA’s Washington,

D.C., Chapter and received the Project

Management Excellence Award from

the Project Management Institute.

Send comments on this article to

[email protected].

A b o u t t h e A u t h o r

As projects are becoming increasingly complex,professional project management is vital toachieving successful results in both the public and private business sectors.

BY GREGORY A. GARRETT

Global ProjectManagement:Best Practices

Global ProjectManagement:Best Practices

April 2004 / Contract Management ■ 9

The CBP survey also found thatcompanies implementing PM improve-ments spent an average of $712,000 onthem annually, with most commonlyimplemented improvements including:

■ Software tools (77.9 percent),

■ Methodology development (69.1 percent), and

■ Staff training (69.1 percent).

The survey also included otherinsights in the area of project types,project activities, and other areas,such as

■ Project complexity—51.7 percent of the projects surveyed were con-sidered complex or highly complex.

■ Project management office (PMO)—44.6 percent of the companies surveyed had established a PMO or PM Center of Excellence.

■ Project portfolio management(PPM)—Most companies surveyedstill had a low level of project portfolio management maturity.

■ Project performance measurements—The metrics most commonly used bythe companies surveyed to assess valueare measured by improvements indelivery dates (78.9 percent), bottom-line economics (65.8 percent), andproduct or service quality (57.9 percent).1

PM Methodology and StructureThe following best practices have all been proven effective by numerousorganizations involved in managingprojects on a multi-national and/orglobal business scale.

MethodologyMany large multi-national organizationsand companies have created a networkof project managers geographicallydistributed in numerous countriesworldwide. The goal of most largemulti-national organizations and companies is to meet or exceed theircustomer’s business needs through

successful project results. Many com-panies, including ABB, AT&T, Bechtel,EDS, Hewlett-Packard, IBM, LucentTechnologies, NCR, Sun Microsystems,USAA, and others; have developed or have had outside consultants helpthem create a high-level project management methodology. Such PMmethodologies are usually composedof standardized project managementprocesses, based upon industry bestpractices and specific and tailoredprocesses proven successful for therespective company.

A global project managementmethodology should be a dynamic setof processes that evolve as the industryand company change to meet or exceedits customers’ needs. Unfortunately,some companies develop or purchasea global PM methodology, but do nottake the time and effort to keep it current and accurate. As a result,some companies invest a lot of moneyin the one-time development of suchmethodologies, but do not truly reapthe long-term benefits. It is importantto remember that project managementmethodologies, processes, best prac-tices, and numerous tools andtechniques exist only as a means to an end—meeting or exceeding a customer’s needs, while achievingdesired company or organization performance targets.

For a global project managementmethodology to be truly successful it must be (1) widely distributedthroughout the organization,

typically through multi-media (Web-based, CD-ROM, and paper copies,etc.), (2) widely acknowledged at alllevels of the organization, and (3)routinely practiced by the projectmanagement community within the respective organization. TheInternational Standards Organization(ISO) Standards for ProjectManagement 10006 provides a goodstandardized outline of what process-es and practices should be includedwithin global PM methodology.

Support StructureIn order to truly make project man-agement globally successful within an organization, there must be anappropriate support structure. Clearly,the level of support varies, based uponnumerous factors including the levelof PM maturity, project complexity,degree of outsourcing, geographic distribution, and project importance,etc. The following items are usuallyvital to ensure an appropriate projectmanagement support structure existsto successfully manage complex outsourced projects worldwide.

■ Executive sponsorship—A knowl-edgeable, experienced, certifiedproject management executive, who serves as a champion of theproject management disciplinewithin the company and externally.

■ Global project management office(GPMO)—A small but effectiveteam of highly experienced, trained,and certified project managementprofessionals, who ensure the pro-ject managers in the field have allthe resources, tools, training, andsupport they need to get the jobdone, including a global projectmanagement methodology.

■ Regional and/or local country project management office (PMO)—In addition, to the GPMO, thereshould be a small but highly respon-sive regional and/or local countryPMO to help support the local pro-ject managers with more local- andcountry-specific project needs, locallaws and regulations, customs, andteam mobilization support.

■ Web-based PM best practices(knowledge management)—Asmuch as possible, the best practicesfrom projects worldwide should bedocumented and made easily avail-able and key-word searchable to all organization project managers.

■ Project management networking—Every available means should beused to facilitate the networking of project managers to share expertise, including teleconferences,video conferences, net-meetings,shared electronic databases, Webportals, and appropriate face-to-face meetings.


G L O B A L P R O J E C T M A N A G E M E N T : B E S T P R A C T I C E S

ProjectName

Project 1

Project 2

Project 3

ProjectManager

Status(Green,Yellow, Red)

Project NetPresentValue(Revenue)

ProjectMargin

CustomerName

ProjectResource(Hdct)

CustomerStrategicObjective

Comments/Key Notes

Key Projects Portfolio

Table 1.

■ Accurate and real-time project-leveldata—The organization should offeran enterprisewide, globally accessi-ble (24/7/365) information system,which provides real-time status onthe placement of orders, for pur-chasing products and services, andthe status of engineering, construc-tion, manufacturing, shippinginstallation, and testing.

Case Study #1With more than 35,000 employees in 100 countries, Sun Microsystems(Sun) is performing project manage-ment on a truly global scale. WithinSun’s Services organization, SunProfessional Services has the responsi-bility for developing internal projectmanagement expertise. SunProfessional Services has a network of about 500 project management professionals. Project managementexpertise with Sun ProfessionalServices is organized around its primary competencies—the ProjectManagement Performance Model, project quality activities, CustomerLoyalty Index (CLI), and the QualityFeedback Loop. All of Sun’s specificproject management methodologies,processes, and tools are driven bythree principles: (1) customer busi-ness case, (2) quality, and (3) riskmanagement.2

Global Project PortfolioManagement In today’s business environment, most companies manage numerousprojects. When multiple projects arerelated to one another by customers,technology, products, services, and/orlocation, they are usually referred toas programs. While all programs andtheir related projects are important,to some extent, some are clearly moreimportant than others. Thus, it isincumbent upon each organization tounderstand which of their numerousprograms and related projects are ofthe highest priority, to ensure the toptalent of the organization and the nec-essary support is provided to thosekey projects.

Unfortunately, many organizationsdo not do a very good job of effective-ly managing their respective projectportfolio. Common project portfoliomanagement problems may include:

■ Allowing lower priority projects to acquire vital materials, products,or services needed by the higherpriority projects;

■ Allowing the internal “who-you-know”network approach to circumvent apriority resource allocation program;

■ Not placing the best talent on thehighest priority projects, typicallyjust getting the available talent;

■ Failing to rack and stack your organization’s projects to determinewhich are the most important projects by country, region, or global basis;

■ Not properly or frequently obtaining status on the organiza-tion’s key projects;

■ Failing to use appropriate perfor-mance metrics to evaluate costcontrol, profitability, on-time deliv-ery, product and service quality, and customer satisfaction on thekey projects; and

■ Not terminating failing projects.

Table 1 (on page 10) provides asimple means of helping organizationsprioritize their projects and summa-rize the key aspects of their portfolioof projects.

Multi-cultural Awareness TrainingAs project managers are increasinglyasked by their employers to relocateto other countries or remotely supportcustomer’s projects globally, the needfor multi-cultural awareness traininghas grown. Likewise, as more organi-zations outsource supplies on amulti-national or global basis, theneed for multi-cultural awarenesstraining continues to grow. Clearly,both buyers or customers and sellers



Individual Global Business Competencies

Table 2.

Vision

Global Attitude

• A global mindset

• Ability to work with a highly diverse team

• A long-term orienta-tion

Strategy

Leadership

• Motivates employeesto excellence

• Facilitates organiza-tional change

• Sets high expectations

• Leads by example

Competencies required to make it work!

Demonstrated abilities/actions

Structure

Discipline

• Focuses on processimprovement

• Serves as a team or force multiplier

• Holds employeesaccountable

Implementation

Execution

• Leverages supply-chainpartners

• Skillfully executes the deployment cycle

• Plans and tracks performance withappropriate metrics

i Adapted from The Global Challenge, by Moran & Riesenberger, New York, McGraw-Hill, 1994.

or suppliers of products and servicesprojects are expanding the need forpersonnel to receive multi-culturalawareness training, especially toreflect the diversity of the businesspartners engaged in the outsourcingmanagement environment.

Increasingly companies and othermulti-national organizations are estab-lishing local country offices staffed withlocal country nationals. Yet, manyorganizations still require a few keyforeign country nationals to supporttheir projects. As a result, the foreigncountry nationals often require trainingin a variety of aspects in order to beable to successfully conduct business.Training in often needed in the areas of

■ Language development,

■ Local culture and customs,

■ Support of local country advisors tounderstand local business processesand/or practices,

■ Support of interpreters, and

■ Document transcription.

Individual Global BusinessCompetenciesSome people believe that conductingbusiness on a global basis is an attitude,not knowledge or information. StephenRhinesmith, author and internationalbusiness expert, has stated that a glob-al mindset is a requirement of a globalbusiness manager who will guide institutions and organizations into thefuture. He defines a mindset as

A predisposition to see the world in a particular way that sets boundaries and

provides explanations for why things arethey way they are, while at the same timeestablishing guidance for ways in whichwe should behave. In other words, a mind-set is a filter through which we look at the world.

Rhinesmith explains that people withglobal mindsets approach the world in a number of specifics ways. Theseindividuals

(1) Look for the big picture and multiple possibilities;

(2) Understand the world is very com-plex and business is interdependent;

(3) Are process-oriented, understand-ing that all business follows aprocess of inputs, tools and tech-niques, and outputs;



Organizational Global Business Competencies

Table 3.

Core Competencies

1. Global Vision—Where the corporation intends to go, emphasis is on acceptance

2. Strategic Focus—Competitive advantages of the organization

3. Control—Flow of strategic direction from headquarters

4. Local Autonomy—Degree of freedom allocated to the subsidiary to change/modify products or services

5. Coordination—Degree of teamwork between subsidiary, headquarters and third parties

6. Domestic/Subsidiary Relationship—Flow of information-sharing

7. Corporate Culture—Characteristics that unite people in an organization

8. Management Selection—Strong leadership trait, team-builder, and results-oriented

9. Employee Selection—Combine country of origin and corporate management staff

10. Decision Processes—Control and flow of decision-making

11. Information Processes—Control and flow of information and knowledge

12. Performance-Oriented—Results focused management and employees

Worldwide Organizational Solutions

Unified, understood, and accepted by all employees

Growth through coordinated centralization and local adaptability

High

High

High

High, shared, and interdependent

Central and unified

Flexibility, best candidate available from any country

Best available candidate

Shared and complex emphasis on the customer and empoweringemployees

Shared and complex, real-time data, and accurate information

Shared and understood performance goals and metrics, with paytied to performance

i Adapted from The Global Challenge, by Moran and Riesenberger, New York, McGraw-Hill, 1994

(4) Consider diversity in people as a real asset and valued resource,know how to work effectively in multicultural teams;

(5) Are comfortable with change and ambiguity; and

(6) Are open to new experiences, and enjoy a challenge.

While a global mindset or attitude is vital to successfully manage out-sourced projects worldwide, there areseveral additional factors or compe-tencies that are essential for success.Table 2 (on page 12) illustrates theglobal business essentials and individ-ual key competencies of a successfulglobal business manager/executive.

Organizational Global Business Competencies In addition to the individual compe-tencies required for successful globalbusiness, there are numerous coreorganizational competencies requiredfor a company to successfully managecomplex outsourced projects world-wide. Table 3 (on page 13) lists thecore organizational competencies necessary for global business success.

Benchmarking ProjectManagement Maturity The challenge facing today’s project-performing organizations is that eachof the ingredients it takes to deliverprojects successfully requires a sub-stantial commitment of time andresources. Given the many initiativesrequired to achieve consistent project

success, which initiatives should anorganization undertake first? Projectmanagement maturity models aredesigned to provide the frameworkthat an organization needs to purpose-fully and progressively develop itscapabilities to consistently deliversuccessful projects. Numerous projectmanagement maturity models haveemerged since the mid ‘90s. A recentestimate suggests there are more than30 models currently serving the mar-ket. Most of the models are based onthe Capability Maturity Model devel-oped by the Software EngineeringInstitute at Carnegie Mellon.

In a study first reported in 1998,William C. Ibbs and Young-HoonKwak, from the University ofCalifornia, developed a benchmark forproject management maturity, as partof a broader study to determine thefinancial and organizational impactsof project management. This studyemployed the Berkeley PM ProcessMaturity Model. The sample included38 companies representing four targeted industries: engineering andconstruction, telecommunications,information systems, and hi-techmanufacturing. Each of the participat-ing companies completed a surveyassessment tool. The researchersdetermined that the overall projectmanagement maturity of the 38 com-panies studied was 3.26 on a 5-pointscale. Ibbs and Kwak also comparedmaturity among industries. Using theaverage maturity level of all compa-nies in each of the four industries, theresearchers reported that engineeringand construction (3.36), hi-tech

manufacturing (3.34) and telecommu-nications (3.30) demonstratedrelatively high project managementmaturity compared to informationsystems (3.06).

The PM Solution’s ProjectManagement Maturity ModelThe PM Solutions’ ProjectManagement Maturity Model, devel-oped by its CEO, Kent Crawford, is an excellent benchmarking tool. Thismodel is based on a two-dimensionalframework. The first dimensionreflects the level of maturity. It isbased on the structure of the SoftwareEngineering Institute’s (SEI)Capability Maturity Model (CMM).The SEI-CMM has received wide-spread acceptance as a standard forprocess modeling and assessment of organizational maturity in severalprocess areas. The second dimensiondepicts the key areas of project man-agement addressed. This dimensionadopts the structure of the ProjectManagement Institute’s nine knowl-edge areas. All of the nine knowledgeareas are further decomposed yieldinga total of 42 key components thatenable a more rigorous and specificdetermination of project managementmaturity. The structure of this two-dimensional framework is presentedin Figure 1 (on page 16).

Benchmarking Study ResultsUsing the Project ManagementMaturity Model as a tool, JamesPennypacker (director of Center for Business Practices) and Dr. KevinGrant (assistant professor, Universityof Texas San Antonio) conducted a survey of 123 firms. The surveyresults determined that nearly 67 percent of the organizations, compa-nies with revenues ranging frombelow $100 million to more than $3 billion, were currently operating at an overall project maturity level of 2 (out of 5) or below. Further, theresearch conducted concludes thelevel of project management maturityis statistically consistent among industries and companies of varying size.3



Project Management Organization Benchmarking Study

Table 4.

Revenue to Hdct. $M (U.S.)

$10M

$15M

$16M

$18M

$20+M

Expense/Revenue %

1.5%

1.0%

0.93%

0.83%

0.75%

Industry Assessment

Below average

Average

Above average

Best-in-class

World-class


PM Expense-to-RevenueBenchmarking StudyThe Center for Project Studies (CPS), a part of Garrett ConsultingServices—a Virginia-based interna-tional business consulting practice,conducted a survey of more than 75companies during 2002. Each compa-ny surveyed had more than $5 billionin annual revenue during 2001, managing numerous large complexoutsourced projects. Based upon aresponse rate of more than 32 per-cent, the following information wasgathered from multi-national compa-nies in the following industries:aerospace, defense, engineering, information technology, construction,and telecommunications.

Given: A company of more than $5 billion in annual revenue with outsourced projects greater than $50million. Given: A project managementorganization performs the followingfunctions on large complex out-sourced projects:

(1) project management

■ project leadership,

■ project planning,

■ project scheduling,

■ project status,

■ project control, and

■ project correcting;

(2) Product/service demand planning;

(3) Order management;

(4) Material management;

(5) Supply chain interface; and

(6) Contract administration.

Given: An average employee total(wrap-rate) expense equals $150,000USD per year. Table 4 (on page 14)provides a roughly-right guideline forstaffing large complex outsourced pro-ject within large companies worldwide.

RecommendationsBased upon research, experience, and recent discussion with several ofthe leading project management con-sultants who have helped numerousorganizations worldwide improve pro-ject performance, the following majoractions are suggested.

(1) Ensure top PM talent—Obtainhighly skilled, experienced,trained, and certified project management professionals at all levels of the organization.

(2) Improve information systems—Provide accurate, real-time,order-level data by customerincluding: plans vs. actual perfor-mance for cost and schedule/delivery.

(3) Streamline staff—Reduce supportstaffs at all levels by automatingreports, standardizing processes,driving down decision-makingauthority, and outsourcing support functions.


Figure 1.

Level 1 Initial Process

Level 2 Structured Processand Standards

Level 3 OrganizationalStandards andInstitutionalizedProcess

Level 4 Managed Process

Level 5 Optimizing Process

SEI Maturity Levels

PMI Knowledge Areas

Each knowledge area is broken down into specific components. Specific components are usedto measure maturity and develop action plans. The number of components associated witheach knowledge area is presented parenthetically following the title of each model.

PM SolutionsProject ManagementMaturity Model

Project IntegrationManagement (5)

Scope Management (6)

Time Management (5)

Cost Management (5)

Quality Management (4)

Project Human ResourceManagement (4)

CommunicationsManagement (4)

Risk Management (5)

ProcurementManagement (4)


(4) Build high-performance teams—Motivate leaders to create highperformance teams using the PMdiscipline to consistently achievecustomer needs and goals.

(5) Recognize and reward outstandingperformance—Ensure businessleaders actively recognize andreward project teams when theyachieve excellent results for theircustomers and their organization.

(6) Develop project leadership succession plans—Take the timeto develop project leaders at everylevel of the organization. Prepareappropriate professional developplans for all top rated project managers.

SummaryIn today’s world of increased outsourcing and customers’ highexpections, there is a great need todevelop global project managementbest practices. This article provides abrief summary of many of the proveneffective tools, techniques, and prac-tices to help projects meet or exceedboth the customers’ and suppliers’requirements. As projects are becomingincreasingly complex, with the inte-gration of multiple-parties involvinghardware, software, and professionalservices all linked together—profes-sional project management is vital toachieving successful results in boththe public and private business sectors. CM ■ CMBOK 1.4.6

Endnotes

1. James S. Pennypacker, Center forBusiness Practices Survey Results, PMNetwork Magazine, (Project ManagementInstitute, May 2003), 6–7.

2. Marissa Peterson, “Sun Microsystems—Best Practices,” PM Network Magazine,(Project Management Institute, January2003), 24.

3. James S. Pennypacker and Kevin P.Grant, “Project Management Maturity:An Industry Benchmark,” ProjectManagement Journal (ProjectManagement Institute, March 2003),4–11.


It is often said “experience is the best teacher,” and that people learn

more from their mistakes than their successes. This checklist should

help you avoid some of the most common problems that often result

in the failure of complex outsourced projects.

❑ Who needs roles and responsibilities?

❑ Begin work without a contract.

❑ Forget about project progress reports.

❑ Who needs acceptance criteria?

❑ Change team members frequently.

❑ Keep changing requirements.

❑ Don’t document anything.

❑ Hire the cheapest subcontractors.

❑ Select project team leader from whoever is available.

❑ Who needs a project plan—Just do it!

❑ Who needs executive support?

❑ Who cares about a supplier’s past performance?

❑ Who needs a business case?

❑ Promise the customer whatever he or she wants.

❑ Agree to whatever delivery schedule the customer wants.

❑ Forget about a project kick-off meeting.

❑ Agree to unlimited liquidated damages.

❑ Who needs performance-based requirements?

❑ Forget about earned value.

❑ Play the lie-and-blame game.

What Not to Do

article - global project management

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