Page 41 - Global Project Management Handbook

PROJECT MANAGEMENT 2-3

Therefore, projects are understood as temporary organizations and social systems.
This understanding of projects results in a systemic project management approach that
matches the complexity and dynamics of projects.

Definition of Project

A project is a temporary organization of a project-oriented company for the performance
of a relatively unique short- to medium-term strategically important business process of
medium or large scope. Projects are used for the performance of relatively unique
processes. The more unique the objectives and deliverables to be fulfilled, the higher is
the associated risk. Information from past experiences that can be used as reference often
is available only to a limited extent.
Projects are used for the performance of business processes with short to medium
duration. These projects should be performed as quickly as possible—in other words, in
several months. One exception is the performance of infrastructure projects (construction
or engineering projects), which can have a longer duration.
Business processes for which projects are used have a medium to high strategic
importance for the company performing them. The performance of contracts con-
tributes to, for example, the short- to medium-term survival of the company. The devel-
opment of new products and the establishment of a new strategic alliance, however, have
long-term consequences and therefore are strategically more important.
Projects are used for business processes of medium to large scope. The scope of a
business process can be described by the tasks and resources required, the costs occur-
ring, and the organizations involved. To operationalize the definition of project, the
characteristics of business processes are used, that is, the strategic importance, duration,
organizations involved, resources required, and costs occurring. The scaling of these
characteristics is to be defined by each organization. Table 2.1 gives an example of the
definitions from an Austrian bank. In other organizations, some aspects (e.g., costs) will
be higher or lower.
The table shows that there is a possibility for organizational differentiation in project-
oriented companies to differentiate between projects and small projects. Projects with a
lower level of complexity, such as the performance of an event, the development of a
brochure, or the completion of a small contract, can be defined as small projects. Fewer

TABLE 2.1 Operationalizing the Definitions of Projects and Programs by a Bank

Criteria Small Project Project Program
Strategic importance Net present value: Net present value: Net present value:
At least At least At least
50,000 50,000 250,000
Duration At least At least At least
2 months 3 months 12 months
Organizations involved At least At least At least
3 organizations 5 organizations 7 organizations
Resources At least At least At least
100 person-days 200 person-days 500 person-days
Costs At least At least At least
0.1 million 0.5 million 1 million