When we hear the term “Project Management,” we often think of large-scale industrial projects like solar farms, or airport infrastructure. This paper focuses on a practical application: the benefits of integrating project and business management. This perspective is a ‘critical value chain’ for businesses success in the twenty-first century. DPBA provides a broad perspective of project and business management, including three significant categories.

1. Physical (buildings and systems) infrastructure
2. Digital (information system) infrastructure
3. Research (statistical data) infrastructure

Regardless of the project’s size or category, the most significant component in any business undertaking is “data.” This essential commodity is at the foundation of everything we do at DPBA.

Dunn Pierre Barnett and Company Canada Ltd (DPBA) is a full-service Management, Consulting, and Technology firm specialising in Collecting, Disseminating, and analysing data on diverse populations globally, including Black, Indigenous, and People of Colour (BIPOC) in the diaspora and other racialized populations across Canada, the USA, the Caribbean, Latin America, and Africa.

In addition, the firm is one of the global leaders in conducting Labour Market Needs Assessment surveys, statistical analysis, and cutting-edge technological solutions. With a core focus on digital transformation and IT-managed services, DPBA bridges the gap between traditional business practices and innovative tech solutions. Our commitment to excellence and forward-thinking approaches has positioned us as leaders in the industry, serving both B2B and B2C clients worldwide.

DPBA is expanding its services to enhance the integration between project and business management. This initiative will support digital educational forums, provide innovative articles, and launch DPBA’s “Body of Knowledge.” This resource will cover end-to-end project and business management knowledge, from ideation to project closeout or business start-up.

WHAT IS A PROJECT?

According to the Project Management Institute (PMI)©,[1] a Project refers to any temporary endeavor with a definite beginning and end. In a more definitive sense, from a legal contract obligation, a project does come to a definitive end when 100% of the physical and non-physical contractual deliverables are accomplished, verified (audited), and turned over to the principal stakeholder(s).

The “big” question is whether a project ends or transitions into a physical business or a statistical digital data portal for governmental or private agencies. First and foremost, every company or functioning entity (however defined) begins as a project with a desired outcome(s). For instance, a project to build an airport may have a theoretical end, but the project transitions into a full-scale business operation.

However, besides the business aspect of managing an airport, primarily to meet specific business, legal, and financial regulatory obligations, the organization has multiple project management functions that are essential to its successful operations. Project management requires a clear understanding of the risks associated with project failure at the early stages, beginning with ideation, business planning (feasibility and viability studies and analysis), and crafting the business plan.

Common Causes of Project and Business Failure

Notwithstanding the type of project or business (industrial (physical), digital, or research infrastructure), the fundamental reasons for project and business failure are characteristically similar.

The significant consequences for owners and stakeholders and the risk of public liability demand great attention to these representative eleven well documented causes of project and business failure such as:

1. Weak feasibility/viability analysis
2. Unclear (vague) project/business definition
3. Unrealistic business planning
4. Inadequate communication planning
5. Impracticable target/milestone dates
6. Miss-alignment of expectations
7. Insufficient capital financing
8. Unqualified/Inadequate resources
9. Unrealistic business planning
10. Inadequate risk analysis
11. Lack of contingency planning

Today’s competitive business environment requires entrepreneurs, small businesspersons, and corporate executives to reassess the link between project and business management, whether construction, manufacturing, or information systems. Management Project underpins all businesses and industries, enabling their success based on five representative success strategies such as:

1. Business modeling—documentation, tools, processes and to accomplish the work.
2. Management approach—methodology and discipline to execute and control the work.
3. Competency development—essential skills required by those performing the work.
4. Output measurement—essential to determining the final quality an quantity of the work.
5. Delivery capacity—essential to deliver the business, systems, or product of the work.

PROJECT MANAGEMENT AND BUSINESS INTEGRATION

“Project Management” differs from “Managing Projects.” The former comprises composite knowledge, experience, policies, roles, responsibilities, accountabilities, guidelines and procedures, tools, techniques, processes, methodologies, enterprise resource planning (ERP), and enterprise reporting (ER). These are the principal aspects of the successful management of projects. The latter is often a function of “position of appointment” ─not essentially underpinned by the requisite proficiency in project management (PM) and best practices.

These core attributes of project management (delineated above) underpin the framework of PMIs ®Ten Knowledge Areas of Project Management (PMBOK), generally accepted standards for managing projects—worldwide.

TEN KNOWLEDGE AREAS OF PROJECT MANAGEMENT (PMBOK)[2]

1. Integration Management
2. Scope Management
3. Time Management
4. Cost Management
5. Quality Management
6. Resource Management
7. Communications Management [Enterprise Reporting (ER)]
8. Risk Management
9. Procurement Management
10. Stakeholder Management

More importantly, these ten knowledge areas constitute universally accepted standards for managing projects, supported by technology professionals and business administrators. Directors of Project Management and Project Managers need a supporting team of Project Management Professionals (PMPs) to help them understand and navigate the complex nature of integrated project management and define the “requisite expertise” to fulfill their projects. They often struggle to understand the inherent “financial value proposition” of project management. More importantly, to evaluate and quantify project management’s benefits as a “critical success enabler” for completing their projects within scope, time, and budget to specifications.

A CASE FOR IMPLEMENTING PROJECT MANAGEMENT

The 2018 Pulse of the Profession ®, a global survey conducted by Project Management Institute (PMI), reveals around $1 million is wasted every 20 seconds collectively by organizations ─worldwide due to the ineffective implementation of business strategy through poor project management practices, equivalent to roughly 2 trillion dollars wasted a year (https://www.pmi.org/about/press-media/press-releases/2018-pulse-of-the-profession-survey). 

PROJECT MANAGEMENT ─ THE BIG PICTURE

Project Management begins with understanding the three significant and highly integrated components, distinctly differentiated but equally weighted in value ─depicted in Figure 1.

Figure 1: Item 2 is the critical faculty of the three pillars that Project Managers and Business Managers should strive to integrate with aspects of business management, underpinning such parameters as ─scope, time, cost, resource, budget, priority, risk, qualitative and quantitative schedule analysis, and forecasting.

Business Managers can benefit from a high-level understanding of Project Management as the ultimate “force multiplier” for managing their businesses successfully. Moreover, to function effectively in today’s highly integrated multinational business environments ─further complicated by logistics supply chain integration of Tier 1, 2, and 3 manufacturers, suppliers, and assemblers, and the testing and commissioning of equipment and systems for approval and operation. 

BUSINESS MANAGEMENT AND INTEGRATION

“Business Management” differs from “Managing a Business.” The former comprises composite knowledge and experience in business administration, marketing, business analysis, accounting, Finance, and human resources management. The latter is often a function of ownership or “position of appointment” ─not essentially underpinned by the requisite proficiency in business management best practices.

The entry-level qualification to begin the journey of business management is the Bachelor of Business Administration (BBA), underpinned by a Business Accounting Assistant (BAA). These qualifications provide the critical foundation for entrepreneurs and small businesses starting and managing their businesses. More importantly, becoming part of a corporate business management team offers the opportunity to gain significant knowledge working with business managers, accountants, and controllers to achieve higher levels of expertise in the business management space and transition to being true entrepreneurs and business owners.

Community college certification, post-graduate degree-granting universities, and graduate business schools fuel the business management ecosystem. These entities provide significant opportunities to infuse the integration between the two disciplines, which is paramount. More importantly, the most critical “value added” integration interface is between Cost Management and Financial Management—a “force multiplier” for project and business management success.

The Role of GAAP in Business Management

Generally Accepted Accounting Principles (GAAP) guide Business Managers.[3] They providea broad set of accounting rules, guidelines, conventions, procedures, and practices to inform consistency across the business ecosystem. The practice of GAAP across businesses (inclusive) ensures uniformity, transparency, stability, and consistency as compliant organizations adhere to internal and external standards recognized across industries and report to regulatory agencies such as the Revenue Canada Agency (CRA) and the Internal Revenue Agency (IRA).

Project managers play a dual role in managing projects that should ensure a higher layer of successful financial management. For instance, they employ Cost Engineers and Cost Analysts as the first critical level of engagement in establishing the budget preparation in estimating the project expenses, undergirded by these ten representative elements:

1. Timelines (target/milestone dates)
2. Elapsed time versus real time
3. Task relationships (including float)
4. Priorities (scale 1 – 10)
5. Capital Financing (including contingency)
6. Resources (inclusive)
7. Constraints (inclusive)
8. Risks (internal and external)
9. Deliverables quality/quantity)
10. Storage (where applicable)

While these ten criteria may not be the common language in financial accounting, understanding and integrating critical aspects of project management into the business management space significantly increases the probability of business success. This knowledge empowers you to grasp how these elements impact cost and budget, making Cost Accounting Reporting more than just abstract numbers. It becomes a true representation of the business’s feasibility, viability, growth, stability, and sustainability.

Finally

The success of a project or business begins with feasibility and viability. Cost Engineers,[4] certified by the American Association of Cost Engineers (AACE) are the most indispensable resource for assisting Project and Business Managers in determining the actual cost of a project or business undertaking. A systematic approach that is key to managing cost throughout the life cycle of any enterprise, program, facility, project, product, or service. The highest’ value proposition’ (subject for a future article) is the application of principles of Review of Variance (ROV) across all aspects of projects and businesses. The benefits of ROV are critical to project and business cost management. It is the ‘force multiplier’ for successful cost and financial management.

CONTACT INFORMATION

Dunn, Pierre, Barnett & Company Canada Ltd
First Canadian Place
100 King Street West
Suite 5700, Toronto, ON
M5X 1C7, CANADA
Cell: 647-966-4783  Fax: 416.915.4260
Email: jpierre@dpbglobal.com
Email: cjustinepierre@gmail.com
Website: http://www.dpbglobal.com

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Footnotes:

[1] Project Management Institute (PMI)® [The Project Management Institute is an accredited based not-for-profit professional organization, for certifying individuals interested in a career in project management] (pmi.org). Project Management Professional (PMP)® Demonstrate your ability to lead projects in any industry with this globally recognized certification and open the door to a world of opportunities. The PMP acknowledges candidates who are skilled at managing the people, processes, and business priorities of professional projects (https://www.pmi.org/certifications/project-management-pmp).

[2] Project Management Institute (PMI)® Seventh Edition ─universally recognized as the benchmarks for results measurements and Key Performance Indicators (KPI) (https://www.kpi.org/) (https://www.projectmanager.com/blog/10-project-management-knowledge-areas).

[3] ACCOUNTING.COM:  Generally accepted accounting principles (GAAP) are a key standard used in the U.S. Build your knowledge of these crucial guidelines as you prepare to advance your career. Generally accepted accounting principles (GAAP) comprise a set of accounting rules and procedures used in standardized financial reporting practices. By following GAAP guidelines, compliant organizations ensure the accuracy, consistency, and transparency of their financial disclosures (https://www.accounting.com/resources/gaap/).

[4] AACE International was founded in 1956 by 59 cost estimators and cost engineers during the organizational meeting of the American Association of Cost Engineering (AACE)) at the University of New Hampshire in Durham, New Hampshire. AACE International Headquarters is located in Morgantown, West Virginia, USA. /web.aacei.org/).