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Lessons Learned for Project Managers - Part XIII
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Lessons Learned for Project Managers - Part XII
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Quality Control in Project Management
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Categorization of Risks in Project Risk Management
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Project Portfolio Management - Role Play part 4 (The Customer)
March 2, 2008 | Author: admin | Filed under: Project Stakeholder Mgmt, Project Portfolio Management
Project Portfolio Management - Role Play part 4 (The Customer) (#4 in the series Project Portfolio Management - Role Play)
By Demian Entrekin
In the continuing discussion of the roles relevant to PPM, I’d like to spend some time on the PPM Customer. The customer of the PPM solution can take many forms, but perhaps the simplest way to describe the PPM customer is to say that these people are the recipients of the combined project outputs. These customers can be typecast is several ways, but there are perhaps four that are the most prevalent:
- Product consumer external to the organization
- External to the department but inside the organization
- Internal to the department
- Service consumer external the organization
Just to complicate matters a bit, the customer may be a combination of two or all three of these types. Here are a few examples:
Product consumer external to the organization: In this case, the project deliverables are either new products or product enhancements. But it is the product that the consumer wants, not the project. These customers could care less about the project or the process. All they care about is the product and the price/performance of that product. It could be an iPod, a new drug, a new car, a new plane, an enhancement to an existing software application. Either way, the product is the key and the time-to-market and the product quality for the price are the major drivers.
External to the department inside the organization: these customers receive a service from another department in the form of a project. A typical example of this would be the IT department implements a new CRM application for the sales, marketing and support departments. These are considered cost-center projects and cost containment is often a huge priority in the minds of the customer and the CFO, to whom they all report. Since these projects don’t directly generate revenue, they are often thought of as a tax on the business.
Internal to the department: In this case, the customer is also the producer. It might be a project to improve how the department executes projects. It might be an infrastructure upgrade that saves time or money or meets a compliance requirement. In these cases, the producer may have to scrape and claw to come up with the budget since there is no external source of revenue or payment, so it might have to be done “on the cheap.” Plus, since there is less accountability for success or failure, these projects can tend to wander in circles, never start, and never end.
Service consumer external to the organization: the classic example here is a customer in the truest sense of the word: these folks are directly paying for the project. They are buying your services and the project is the means for delivering the service, or at least it is the budget control for the deliverables which are the purpose of the project. The project has a revenue budget and a cost budget, the supplier bills the customer for the execution of the project. The customer gets the deliverables that result from the project. In this case, the customer typically cares most about the deliverables, and the projects themselves are simply a means to that end. In many cases, the customer doesn’t realize the value of explicit project management. And they are even less likely to appreciate the value of PPM, even though it may make a huge difference in the performance of the service organization.
This is just a preliminary outline of the PPM Customer. There is much more to be said on this matter. Perhaps the most important point is that many organizations need to support the needs of all four of these customer types, and that all these conflicting priorities are tough to sort out. That is the nature of the Portfolio part of PPM.
Demian is the CTO of Innotas. As founder and CEO, Entrekin oversaw marketing, product development, sales and services for the company. Today, he focuses on strategic product direction. Prior to Innotas, Entrekin co-founded Convoy Corporation and was Chief Architect of its initial products. In that role, Entrekin helped the company lead the middleware market with an annual growth rate of 670 percent and played an instrumental role in Convoy’s subsequent acquisition by New Era Networks in 1999. A recognized thought leader in Project Portfolio Management, Entrekin has published numerous papers on PPM and his blog (PPM Today) explores current issues related to successful PPM implementation. During his 18 year career, Demian has assumed leadership roles as a consultant and as an entrepreneur, delivering commercial and corporate database applications. Demian holds a B.A. in English from UCLA and an M.A. in English from San Francisco State University.
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- Successfully Interviewing Your Project Customer and Gathering Project Requirements - Part V - Requirements Interview Process
- Successfully Interviewing Your Project Customer and Gathering Project Requirements - Part IV - Customer Interview Funnel
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