PM STANDARDS AND INVESTMENT ANALYSIS

Global recognized project management standards offered by international project management as­sociations have a big influence on the practices of the project management community (Hodgson/ Muzio 2011).

Standards are the basis for the certification of project and program manager and thus these stan­dards reflect a common understanding of project initiation and project management. Furthermore these standards offer a generic project manage­ment approach.

We analyzed globally recognized project and program management standards if and how they

Table 1. The consideration of sustainability principles in investment methods

consider SD principles in the investment analy­sis.

We structure the analysis as following. First, we analyzed which investment analysis methods are considered in the standards. Then we analyzed how stakeholders are considered in the performance of the investment analysis as well as in the decision process. Furthermore, we analyzed which values are the basis for using the analysis method. Table 3 provides a summary about the analysis results. The results are discussed briefly.

Investment Analysis Method: All standards consider a business case as central method for analysis of the investment, while the focus mainly lays on economic aspects. The PMBOK® Guide as well as the Standard for Programme Manage­ment describes in addition to the monetary and economical results of the cost benefit analysis, other principles like customer requests, techno­logical advances, legal requirements, as well as environmental impacts and social needs.

In addition to the business case the PMBOK® Guide, the Standardfor Programme Management, PRINCE 2 as well as MSP describes a cost benefit analysis. In the PMBOK® Guide the cost benefit

Table 2. Overview analyzed documents

co

Table 3.

Project Initiation

analysis is not described in detail, the assumption taken is that a traditional cost benefit analysis taken. In contrast to that the Standardfor Program Management the described cost benefit analysis includes, in addition to the traditional financial cost and benefits, also the description of non-financial benefits such as increased market share. Thus a qualitative benefit description is possible.

PRINCE2 as well as MSP provide no detailed description of the cost and benefit analysis but indicate that the benefit of an investment can also be described in non-monetary facts. Thus the benefits of an investment are described in a qualitative way and the consideration of intangible costs and benefits is possible.

In addition to the business case the ICB describes an environmental impact plan. In the environmental impact plan ecologic principles are analyzed and considered.

Involvement of Stakeholder: All standards recommend an involvement of stakeholders during the development of the business case. Stakeholder interests are not considered in the investment analysis and therefore are not considered in the investment decision. Furthermore, stakeholders are not involved in the investment decision process. Stakeholder participation is mentioned as relevant in the MoV but not integrated in PRINCE2 or MSP.

Consideration of Values: Behavior and deci­sions are driven by values. Thus the investment decision is driven by values of organizations or communities as well as personal values of indi­viduals taking the investment decision. Values are often only implicitly traceable in standards. Nevertheless, some values are explicitly defined in standards e.g. ethics in the ICB. Other values are not integrated in the standards itself but explicitly mentioned in additional documents, e.g. the code of ethics of PMI. These additional documents are guiding documents for the standards and need to be considered in every decision. One limitation of these documents is the focus on the project manager as the investment decision is made e.g. by the project portfolio group and not by the project manager itself. Thus these documents are very limited considered when analyzing the investment. OGC developed the MoV as a guiding framework for benefit management in project and programs. It focuses on values like stakeholder participation and mentions that the economic, ecologic as well as social orientation is relevant. This document should be used as guiding framework for all deci­sion and lays the basis for PRINCE2 and MSP.

Summarizing our findings, all standards de­scribe a business case to evaluate an investment. In some standards further investment analysis methods are recommended e.g. the environmental impact plan. Further developments of traditional investment analysis methods such as the social cost benefits analysis are not recommended. SD principles are implicitly considered but there is no explicit consideration in the investment decision.