Table of Contents

Title Page




International Institute for Learning, Inc. (IIL)

Chapter 1: How Project Management Has Changed

Why Traditional Project Management May Not Work

Today's View of Project Management

Changing Views of Project Management

Recognizing the Need for Change

Chapter 2: Changing Our Definition of Project Success

Changing Times

Not Meeting the Triple Constraint

Defining Project and Program Success

Redefining the Triple Constraint Success Criteria

Definition of Success

Chapter 3: The Importance of Value


Types of Value

Return on Investment (ROI)

Types of Business Values

Changing Values

Chapter 4: The Stakeholders’ View of Value

Stakeholder Perception

Classification of Stakeholders

The Sydney, Australia, Opera House

Apple's Lisa Computer

Denver International Airport

Balancing Stakeholders’ Needs

Traditional Conflicts Over Values

Project Management Value Conflicts

Value Perceptions within a Project

Chapter 5: The Components of Success

Four Cornerstones of Success

Categories of Success

Categories of Values

Deciding on the Quadrant

Internal Values

Financial Values

Future Values

Customer-Related Values

Reasons for Internal Value Failure

Reasons for Financial Value Failure

Reasons for Future Value Failure

Reasons for Customer-Related Value Failure

Antares Solutions

General Electric (Plastics Group)

Asea Brown Boveri (ABB)

Westfield Group

Computer Associates Technology Services

Convergent Computing


Automotive Suppliers Sector

Banking Sector

Commodity Products (Manufacturing) Sector

Large Companies

Small Companies

Chapter 6: Success and Best Practices

From Values to Best Practices

Two Components of Success

Redefining Value Metrics (CSFs and KPIs)

The Need for Changing Metrics

Project Management Office Involvement

Discovery of Best Practices

The Debriefing Pyramid

Disclosure of Best Practices

Levels of Success in Obtaining Values

Project Management Knowledge

Project Management Benchmarking

Sharing Values during Benchmarking

Intellectual Property Cost versus Value

Implementation Failures

Chapter 7: The Value Continuum

The Timing of Values

The Value Continuum

Barriers Along The Continuum

Activities to Speed Up the Value Continuum

The Value Continuum and the Project Management Maturity Model

Value Management Life-Cycle Phases

Value Identification Phase: Business Case

Business Drivers Phase: Business Drivers

Measurement Phase: Key Performance Indicators

Value Realization Phase: Value (Benefits)

Customer Satisfaction Management Phase: Continuous Improvement

Chapter 8: Assigning Value Through Objectives

Types of Performance Reports

Benefits and Value at Completion

Determining Benefits (Value) at Completion

Establishing the Business Objectives

Estimating Approaches

Project Plans

Business Plans

Canceling Projects

Marrying Project and Program Management

Chapter 9: Value Leadership and Senior Management

The Evolution of Leadership

Measurements and Triggers

What Executives Want to Hear

Critical Issues for the Selling Process

Threats that Executives Face

Project Management Success versus Maturity




For more than 40 years, the traditional view of project management was based on a belief that if you completed the project by adhering to the well-known triple constraint of time, cost, and performance, the project was considered to be successful. Perhaps in the eyes of the project manager and possibly the sponsor, the project appeared to be a success. But in the eyes of the customer or even the parent or sponsoring company's senior management, the project might be regarded as a failure.

The changing economic climate and the increasingly competitive global environment are driving project managers to become more business oriented. Projects are now being viewed from a strategic perspective and as part of a business or enterprise for the purpose of providing value to both the ultimate customer and the parent corporation. Project managers are expected to understand business operations much more so today than in the past. Some companies have begun developing and delivering internal training programs for their project managers specifically focused on business processes. As project managers become more business oriented, the definition of project success now includes a business component. The business component is directly related to value.

Projects must provide some appreciable degree of value when completed in addition to meeting the objectives associated with the triple constraint. Perhaps many project managers believe that achieving the parameters of the triple constraint means providing value, but that's not always the case. Why should a company select and assign resources to work on projects that provide no measurable and documentable near-term or long-term value? Too many companies are either working on the wrong projects or simply have an inadequate project selection process. Project portfolios are filled with projects that do not provide real value at completion even though the triple constraints have been managed carefully and met.

Assigning valuable resources to projects that provide no appreciable value internally to the organization or externally to a client is an example of truly inept management and poor decision making. Yet selecting projects that will guarantee value or an acceptable return on investment (ROI) is very challenging because some of today's projects do not provide the targeted value until perhaps years into the future. This is particularly true for research and development (R&D) and new product development, where as many as 50 or more ideas must be explored to generate one commercially successful product. In the pharmaceutical industry, the cost of developing a new drug could run about $850 million, take 3,000 days to go from exploration to commercialization, and provide no meaningful return on investment. In the pharmaceutical industry, less than 3 percent of the R&D projects are ever viewed as a commercial success and generate more that $400 million per year in revenue.

There are, of course, multiple views of the definition of value. For the most part, value is viewed very similarly to how we view beauty—it is in the eyes of the beholder. In other words, value may be viewed as a perception at project selection and initiation based on data available at the time. But at project completion, the actual value becomes a reality that may not meet the expectations that had initially been perceived.

Another problem is that the achieved value of a project may not satisfy all of the key stakeholders since each stakeholder may have a different perception of value as it relates to their particular business function. The definition of value can be industry specific, company specific, or even dependent on the size, nature, culture, and business base of the firm. Some stakeholders may view value as job security or profitability. Others might view value as image, brand recognition, reputation, or the creation of intellectual property. Satisfying all stakeholders is a formidable task that is often difficult to achieve and, in some cases, may simply be impossible.

When the true value of a project is obtained, the company must decide how to capitalize on what has been gained. The projects and associated procedures that resulted in the value can either lead to or become examples of best practices that are formally documented and advertised in organizational literature. Other forms of value may be seen as company proprietary information and intellectual property that differentiates the company from competitors, the details of which are not released publicly. In any event, the ultimate goal is to define and achieve value.

Harold Kerzner, Ph.D.

Frank P. Saladis, PMP

International Institute for Learning, Inc., 2009


Some of the material in this book has been either extracted or adapted from Harold Kerzner's Project Management: A Systems Approach to Planning, Scheduling, and Controlling, 10th edition; Advanced Project Management: Best Practices on Implementation, 2nd edition; Strategic Planning for Project Management Using a Project Management Maturity Model; Project Management Best Practices: Achieving Global Excellence, 1st edition (all published by John Wiley & Sons, Inc.).

Reproduced by permission of Harold Kerzner and John Wiley & Sons, Inc.

We would like to sincerely thank the dedicated people assigned to this project, especially the International Institute for Learning, Inc. (IIL) staff and John Wiley & Sons, Inc. staff for their patience, professionalism, and guidance during the development of this book.

We would also like to thank E. LaVerne Johnson, Founder, President & CEO, IIL, for her vision and continued support of the project management profession, Judith W. Umlas, Senior Vice President, Learning Innovations, IIL, and John Kenneth White, MA, PMP, Senior Consultant, IIL for their diligence and valuable insight.

In addition, we would like to acknowledge the many project managers whose ideas, thoughts, and observations inspired us to initiate this project.

—Harold Kerzner, Ph.D., and Frank Saladis, PMP

International Institute for Learning, Inc. (IIL)

International Institute for Learning, Inc. (IIL) specializes in professional training and comprehensive consulting services that improve the effectiveness and productivity of individuals and organizations.

As a recognized global leader, IIL offers comprehensive learning solutions in hard and soft skills for individuals, as well as training in enterprise-wide Project, Program, and Portfolio Management; PRINCE2®1; Lean Six Sigma; Microsoft® Office Project and Project Server2, and Business Analysis.

After you have completed Value-Driven Project Management, IIL invites you to explore our supplementary course offerings. Through an interactive, instructor-led environment, these virtual courses will provide you with even more tools and skills for delivering the value that your customers and stakeholders have come to expect.

For more information, visit or call 1-212-758-0177.



1 PRINCE2® is a registered trademark of the Office of Government Commerce in the United Kingdom and other countries.

2 Microsoft Office Project and Microsoft Office Project Server are registered trademarks of the Microsoft Corporation.