Project Business Management

Oliver F. Lehmann, Ginger Levin, PMP, PgMP

• Publisher: Auerbach Publications
• Year: 2018
• Print ISBN: 9780367522070
• eBook ISBN: 9781351999175
• Topic: Business
• Subtopic: Management
• Index: Business

Roughly half of all project managers have to lead customer projects as profit centers on contractor side with two big objectives: making the customer happy and bringing money home. Customer projects are a high-risk business on both sides, customers and contractors, but the dynamics of this business have so far been mostly ignored in literature. The book is intended to fill this gap. The book helps project managers better understand the dynamics of customer projects under contract from business development through handover and find solutions for common problems. A central aspect is international contract laws, an often underestimated factor in projects.

Contents

Dedication

Contents

List of Illustrations

List of Tables

Foreword

Preface

Acknowledgments

About the Author

Chapter 1 Laying Out the Scenery: The Business Side of Project Management

1.1 The Importance of Project Business Management

1.2 Introductory Questions

1.3 The Story So Far

1.3.1 “Best Practices” or Uniqueness?

1.3.2 A Research Project

1.3.3 A Typology of Projects—Project Types

1.3.4 Mark 1 vs. Mark n Projects

1.3.5 Greenfield vs. Brownfield Projects

1.3.6 Siloed vs. Solid Projects

1.3.7 Blurred vs. Focused Projects

1.3.8 High-Impact vs. Low-Impact Projects

1.3.9 Customer Projects vs. Internal Projects

1.3.10 Standalone Projects vs. Satellite Projects

1.3.11 Predictable Projects vs. Exploratory Projects

1.3.12 Composed Projects vs. Decomposed Projects

1.4 Further Types of Projects

1.4.1 Engineers’ Projects and Gardeners’ Projects

1.4.2 Discretionary Projects and Mandatory Projects

1.4.3 Single-Handover Projects and Multiple-Handover Projects

1.4.4 No-Deadline Projects, Single-Deadline Projects, and Multiple-Deadline Projects

1.4.5 One-Shot Projects vs. Multi-Shot Projects

1.4.6 Open Typologies and Closed Typologies

1.5 An Introduction to Project Business Management

1.5.1 The Significance of Customer Projects

1.5.2 Procurement as Part of the Architecture of a Project

1.5.3 The Basic Nature of Customer Projects

1.6 Projects as Profit Centers

1.6.1 Small Consultancies and Development Offices

1.6.2 Large Consortia

1.6.3 Major Project Providers

1.6.4 Providers of Supportive Projects and Freebie Projects

1.6.5 Mixed Customer Projects

1.7 The Players in Project Supply Networks

1.7.1 The Buyer

1.7.2 Sellers #1: The Contractor

1.7.3 Sellers #2: The Prime Contractor

1.7.4 Sellers #3: Subcontractors over Various Tiers

1.7.5 Freelancers

1.7.6 Other Players

Chapter 2 The Difficult Way to the Contract

2.1 Bringing Order Into Chaos May Not Be Enough

2.2 Introductory Questions

2.3 The Lure of the Buy Option

2.3.1 The Dilemma of Management Attention

2.3.2 Agility and Speed of Change

2.3.3 Diversity of Skills

2.3.4 Unlocking Growth Potentials

2.3.5 Buying to Save Money or Time

2.3.6 Buying as a Political Decision

2.3.7 Tapping External Assets

2.4 Customer Project Management: Where Does the Market Stand?

2.4.1 The Rationale of the Research

2.4.2 The Design of the Research

2.4.3 The Survey Respondents

2.4.4 The Overall Result

2.4.5 The Influence of the Workload Assignment

2.4.6 The Influence of the Project Size

2.4.7 The Influence of the Project Location

2.4.8 Conclusions from the Research

2.5 Risks of the Buy Option

2.5.1 Time Losses

2.5.2 Unclear Scope

2.5.3 Fragmentation

2.5.4 Unattainable Cost Benefits

2.5.5 Narrowing Strategic Options

2.5.6 Remoteness of Error Fixing

2.5.7 Speed Blindness

2.5.8 Bringing Strange People into the Project

2.5.9 Opening the Project for Corruption

2.5.10 Coercing Behaviors by Contractors

2.5.11 Opening New Doors for Malware

2.5.12 The Reputation at Stake

2.5.13 The Contractor as a Data Leak

2.5.14 Other Risks

2.6 Finding and Approaching Sellers

2.6.1 Personal Recommendation

2.6.2 B2B Marketplaces

2.6.3 Public Tendering

2.6.4 Bidders’ Conferences

2.7 Requesting Seller Responses

2.7.1 Traps in Terminology

2.7.2 Statement of Work (SOW)

2.7.3 Thresholds for Procurement

2.8 The Offer/No-Offer Decision

2.8.1 Risks of an Offer Development Process Without Input from Project Managers

2.8.2 Templates

2.8.3 TRAC: Influencing Factors for the Bid/No-Bid Decision

2.8.4 A TRAC-Based Weighting System

2.8.5 A TRAC-Based Force-Field Analysis

2.9 Winning the Contract

2.9.1 AIDA—Singing for the Business

2.9.2 Hit Rates and Capture Ratio

2.9.3 Being an Incumbent

2.9.4 Conclusion

2.10 Offers: Bids, Proposals, Quotations, etc

2.10.1 Developing and Submitting the Offer

2.10.2 Types of Seller Responses

2.11 Binding and Non-Binding Offers

2.11.1 Binding Offers

2.11.2 The Invitation to Treat

2.11.3 Bid Bonds, Performance Bonds

2.11.4 Questions Forbidden

2.12 Submission Deadlines

2.13 Teaming Agreements

2.13.1 Informal Relationship

12.3.2 Prime/Subcontractor Relationship

2.13.3 The Consortium

2.13.4 Mixed and Expanded Teaming Agreements

2.14 Pricing

2.14.1 The “Perfect Price” in a Non-Competitive Setting

2.14.2 The “Perfect Price” in a Competitive Setting

2.14.3 When the Offer Is Too Low

2.14.4 The Customer Dictates the Price

2.14.5 The Absolutely Last Price

2.14.6 “Mission Success First” in Negotiations

2.15 Writing Complex Proposals

2.15.1 Where Do You Place the Most Important of the Complex Proposal?

2.15.2 Familiarity of the Audience

2.15.3 Behavioral Expectations by the Buyer

2.15.4 The Friendly Dog Effect

2.16 Non-Disclosure Agreements and Non-Compete Clauses

2.17 Submitting and Presenting the Offer

2.17.1 The Most Fundamental Consideration for the Presentation

2.17.2 Preparing the Offer Presentation

2.17.3 Preparing for Q&As

2.17.4 Some More Don’ts of Offer Development

2.18 The Contract

2.18.1 Binding and Nonbinding Agreements

2.18.2 Signing the Contract

2.18.3 Startup Meetings: On-Boarding and Kick-Off

Chapter 3 Contracting

3.1 Contracting as a Process

3.2 Introductory Questions

3.3 Good Faith and Mutual Obligations

3.3.1 The Doctrine of “Good Faith” in International Project Contracting

3.3.2 Good Faith in Common Law

3.3.3 Good Faith in Civil Law

3.3.4 Good Faith and Basic Trust

3.3.5 Concurrent Sourcing

3.4 International Contracts

3.5 Incomplete Contracts

3.6 Project-Related Contract Types

3.6.1 Contract Types in Civil Law Systems

3.6.2 Contract Types in Common Law Systems

3.6.3 Assigning Cost Risks to Contract Parties

3.6.4 Motivational Price Adjustments

3.6.5 The Capped Target Cost Contract

3.6.6 The Rolling Award Fee Contract

3.7 Protective and Relational Contracting

3.8 Refinements and Changes

Chapter 4 Managing Complex and Dynamic PSNs

4.1 Change Requests in Complex Project Supply Networks

4.2 Introductory Questions

4.3 Teaming Agreements

4.3.1 Direct Procurement

4.3.2 Indirect Procurement

4.3.3 Indirect Procurement over a Consortium

4.3.4 Mixed Structures

4.3.5 Customer’s Involvement in Subcontracting

4.4 Managing PSNs Is Managing Interfaces

4.4.1 The Sentiments of Industries

4.4.2 The Five Dysfunctions

4.4.3 How Competitiveness and Cooperation Interrelate

4.5 Interfaces Among Contractors

4.5.1 Customer Projects with One Customer

4.5.2 Customer Projects with Several Customers

4.6 Risks from Outsourcing Projects Under Contract

4.6.1 Risks from Differences in Software Tools Used

4.6.2 Risks from Interpersonal and Social Conflicts

4.7 Avoiding Crises in Project Business Management

4.8 Supportive Action, Provisions, and Enabling Services

4.8.1 Understanding “Mission Success First”

4.8.2 Objectives and Constraints

4.8.3 Enabling Services and Provisions

4.8.4 Institutionalized Conflict Resolution Mechanisms

4.8.5 Project Management Information Systems in PSNs

4.8.6 Specific Business Interests of In-Between Contractors

4.8.7 Work Flow Management Across a PSN

4.9 More Control on the Project Supply Network

4.9.1 Naming, Nominating, or Approving Subcontractors?

4.9.2 Coaching, Consulting, Mentoring

4.9.3 The Other Stakeholders on the Customer Side

4.9.4 Professional Integrity in the Project Supply Network

4.10 Chicken Races and How to Avoid Them

4.11 Closing Contracts and Projects

4.11.1 Handovers and Acceptances

4.11.2 Contract/Procurement Revisions in Project Supply Networks

4.12 Do We Need New Approaches to Contracting in Project Supply Networks?

Chapter 5 Project Business Management and Crisis Management

5.1 The Power of Documentation

5.2 Introductory Questions

5.3 The Dynamics of Success and Failure in Project Business Management

5.4 Causes for Conflicts in Project Supply Networks—A Survey

5.5 Benefit Engineering

...

Table of contents

• Cover
• Halftitle Page
• Title Page
• Copyright
• Dedication
• Table of Contents