3.1 Relation to business strategy
It emerges that Philips Research introduced PPM for a variety of reasons, reflecting diversity of motivation. This section outlines the main thinking behind these decisions.
Organisational complexity and growth of projects In Philips Research, PPM exists for quite a long time; it was introduced more than a decade ago. As a matter of fact, the company was dealing with multi-project management issues far before that time, but only later it adopted the name PPM. Research leadership felt a need to improve PPM processes and has been doing so over successive cycles since its introduction. In parallel, steps were taken to advance its supporting IT systems.
Doing projects right Strictly speaking, enhancement of project management practices per se is not the real aim of PPM.
Nevertheless, many organisations introducing PPM highlight the role of improved transparency and
better overview of all on-going projects. This intention to improve transparency calls for greater uniformity in the way projects are organised. Achieving greater uniformity is meant to improve the project management governance, i.e. ‘doing the projects right’. In Philips Research, processes have been defined for project management that allow for a large variety of research topics to be investigated.
Different levels of uncertainty can be handled, from “roadmap”-type of project with clear, relatively short-term deliverables up to more exploratory longer-term projects with less concrete deliverables.
Doing the right projects – Strategy alignment and commitment of senior executives
Philips Research closely aligns all its research projects with the business Sectors of its mother company. In other words, it is meant that results of research projects will be applied in products of the company’s main business lines. PPM is a well-established standard that all senior executives in the mother company are aware of. Senior executives responsible for the main business areas are intimately involved in PPM at Philips Research. The Board of Management funds projects aimed at exploration of new business opportunities or technological areas to secure long-term opportunity generation. These projects are often less directly derived from the existent business strategy.
Share of projects in all business operations Commitment and dedication of senior executives is often interrelated with the share of projects to the total business (in other words, the balance between projects and activities performed on a functional basis). We identify three distinctive models of interplay between PPM and all business areas.
Model 1: Partial Overlap. PPM covers business operations only partially. Most activities are done functionally; and specific tasks are executed as projects.
Model 2: Sectoral Overlap. PPM covers only a specific business sector/area (e.g. IT). All activities in this sector are done in projects. Activities in all other areas are performed on a functional basis: either they cannot be done in projects (e.g. sales), or they there is no political will to adopt project management for them.
Model 3: Complete Overlap. PPM fully covers all business operations; it can be described as
‘projectification of an organisation’. This is the case of Philips Research, where all research activities (i.e. the primary process) are done in projects; and functional work does not exist except in supporting