CHAPTER 1

Introduction and Scope of this Book

Chapter 1 Introduction

This chapter reports on research undertaken for, and sponsored by, a Project Management Institute (PMI) globally competitive research grant. This chapter introduces the purpose of the research by initially stating the research problem to be addressed. This is followed by a brief explanation of our research approach, which is governed by our worldview that in turn helped us to identify both the research questions to be addressed and our research design. We follow with a brief outline of the sources of literature that are justified to be used in this study. This then leads to the introduction chapter conclusion.

The Purpose of the Research

We began this research project with a focus on collaborative project procurement arrangements, mainly in the construction and infrastructure industry sector. We originally envisaged these arrangements as a continuum with design and construct (D&C) at one end and project and program alliancing (P/PA) at the other. P/PAs are increasingly becoming a popular collaborative project arrangement form. These arrangements are often referred to as relationship-based procurement (RBP) within the Australasian and the U.K. context (Davis & Love, 2011; Mills & Harley, 2010; Wood & Duffield, 2009). There is also an increasingly emerging interest in P/PAs in other countries (see, for example, Howell, Windahl, & Seidel, 2010; Laan, Voordijk, & Dewulf, 2011; Manchester Business School, 2009c). However, the shape and form that RBP in general, and project alliancing in particular, takes around the world differs. Until recently, interpretation of European Union procurement regulations were thought to rule out P/PA choices by project owners; however, that mood is gradually changing and project alliances (PAs) in forms similar to those delivered in Australia are being undertaken (Laan et al., 2011). Moreover, in Europe, an interesting form of close integration between project owner and contractors during the project tendering procurement stage has emerged. It is called the competitive dialogue (CD) process (Hoezen, 2012). Another form collaboration between project owner (PO), designer, and delivery contractor called integrated project delivery (IPD) emerged in the U.S. during the early part of this century (Mathews & Howell, 2005). Lahdenperä (2012) maps these trends of flowing influence that have direct implications for the requirement of skills development for project owners (clients), project architects, and design teams as well as for project delivery contractors. It would be in the interests of project owners, PMI members, project management (PM) academics and practitioners to have a better understanding of this emerging trend.

PMI's A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (PMI, 2008) currently has gaps in its coverage of collaborative project procurement arrangements, even though we have known for several decades that they have been shown to be an effective way to deliver better value for money than do many more traditional project procurement approaches (Egan, 1998; Latham, 1994). We were successful in a research grant to undertake a global study of P/PA practices with a focus on alliances and similar forms of supply-chain integration that are being adopted and adapted globally.

We aim to help narrow the project procurement knowledge gap in the PMBOK® Guide for collaborative approaches to project procurement through publications flowing from our current work and the research work undertaken to write this book. This research outcome will improve our ability to compare and contrast RBP forms around the globe; more specifically, how P/PA compares with other identified RBP forms. The impact of this new form of RBP on the knowledge, skills, attributes, and experience (KSAE) profiles of successful project managers could then be identified. By contrasting these new KSAEs against current PM competencies, changes to country-specific and/or worldwide PM KSAEs could be recommended. This would then potentially influence any future development of the PM competency framework (PMI, 2007).

The Research Approach

The research problem as stated above is that the shape and form of RBP, and in particular project alliancing, around the world does differ, and this triggered us to contemplate developing a taxonomy of RBP approaches so that we can see P/PAs in a wider global context and be more confident that it possible to develop such a taxonomy.

Mingers (2003, p. 559) describes a paradigm as “particular combinations of assumptions” or more plainly, the assumed truth until proven otherwise. It is important for researchers to be clear about what they assume to be true. He further explains the term paradigm as “…a construct that specifies a general set of philosophical assumptions covering, for example, ontology (what is assumed to exist), epistemology (the nature of valid knowledge), ethics or axiology (what is valued or considered right), and methodology” (Mingers, 2003, p. 559).

We adhere to the paradigm of PM and forms of project procurement being a socially constructed concept. They did not exist before people started to do what we describe as project work. We believe that PM and project procurement exist in the sense that we find it convenient to interpret activity we can observe. People do PM work when they transform an idea of some kind of beneficial change (such as creating a software tool to perform a set of functions, or building a new transport facility for people and goods to be moved around a city, or transforming a business's administration system to comply with certain needed standards) into a project output. The process of obtaining the required resources to perform this transformation is what we perceive the major role of a project procurement process.

Our ontological position (our perspective of what we assumed to exist) drives us to believe that PM and a procurement choice for a project owner representative (POR) exists as a social construct. Therefore, we argue that attempting to conceptualize the phenomenon of a project procurement system must be based on trying to understand the descriptions and stories of project managers engaged in a project procurement process. If project procurement is a social construct then literature about it and normative guides to be found in, for example, the PMBOK® Guide are contestable. Further, as Koskinen (2012) argues, much of PM entails process thinking and he sees projects as learning episodes. Much of traditional PM thinking as presented in the PMBOK® Guide assumes a project as a product or product plus a service, even though it also describes PM as a set of processes. We view PM as a learning and transformational co-generated learning process.

We see a project-based organization in particular as a learning and not a learned organization. An organization that undertakes projects can continuously absorb knowledge and learn from experiences. This learning is also facilitated from the KSAE and social capital assets that other project team members bring to a project through the collaboration process. Project-oriented organizations undertake specific projects as a normal part of their operations, usually using internal PM resources supplemented with some external PM consultant resources (Gareis & Hueman, 2007; Turner, Huemann & Keegan, 2008); therefore, they also have the capacity to absorb knowledge through the collaboration process. This worldview naturally skews our perspective of what KSAE should be expected of proficient project managers.

Essentially, our epistemological stance (our perspective of the nature of valid knowledge) and our axiological position (the evidence that we most highly value) relies on analyzing the accounts of those engaged in those processes. The acceptability of evidence is, in our view, based on a rigorous account of their lived reality. Case studies provide a useful way to research phenomena from this epistemological perspective (Yin, 1994). While we have undertaken case studies as significant research in this area (Davis & Walker, 2008; Lloyd-Walker, Lingard, & Walker, 2008; Walker & Hampson, 2003b; Walker & Hampson, 2003c; Walker & Lloyd-Walker, 2011a; 2011b; 2011c; Walker & Rowlinson, 2008a), we also value the numerous case studies and research of a wide range of others.

Our principal axiological stance is that we value a pragmatic and transparently reflective practitioner-oriented research approach where case studies have been undertaken that reveal the untidy and messy real lived experience of those engaged in these projects. We value the insights that many published case studies reveal in the literature because these surface a rich context that underpins our understanding of this area.

As active researchers, we have experienced the frustrating process of writing and publishing research results. Often, much valuable material and research insights are excluded from a final published paper for many valid reasons. Word count may be a severe limitation, as may be the focus of a particular publisher. This led us to consider that rather than duplicate studies already documented, we could conduct a form of meta-study where we rely on a combination of published literature, our reflections on our own relevant case study research, and to extending our fieldwork research by inviting a number of the authors that have conducted important work in this field to share further insights on their work with us. We are fortunate in that we have a wide network of colleagues who have shared our interest in this area, and indeed from time to time we have collaborated with some of these on research projects and writing other papers. We, therefore, believe that we can undertake a peer review of the area as collegial facilitators.

Our research approach to work that we discuss in this chapter is to first review the literature, both from a more standard stance of scanning the environment to gain an appreciation of the state of the art but to also hone in on particular case study work that we consider could reveal additional insights. These opportunities may occur because an author was obliged to edit out important insights to focus his or her paper to a particular audience, or the case study authors may be able to reflect on their results as time has elapsed and current context has changed since the materials and evidence were published. We therefore propose to rely primarily on the published literature and our reflection on our research to identify a number of subject matter experts (SMEs) who we could interview. This extends the concept of a literature review in a valuable and insightful way. We also undertook several case studies in the application of RBP to bridge gaps in our knowledge.

We decided to collate evidence from published case study findings and other authoritative sources to establish a series of propositions about how an RBP approach might be categorized with associated KSAEs. This model could then be tested, consistent with our ontological and epistemological stance, by presenting findings to be revealed, questioned, and improved through several workshops with SMEs with both an academic and practitioner background. We chose academic experts because they have a potential skill to extract and synthesise tacit knowledge from experts through interviews and for their rigorous comparison with theory to synthesis and make sense of knowledge gained from practitioner SME stories and revelations. We chose to workshop findings with SMEs so that we could test our findings from sourced experts. This results in our findings being tested to be valid. Shalin (1992, p. 260) expresses pragmatic validation in terms of results being workable, understandable, and useful. We argue that rigor is maintained from a pragmatic perspective (Lovitt, 1997; Morgan, 2007; Shalin, 1992).

We also believe that to understand the process of project sponsors developing a way to convert the idea/concept to deliver a beneficial change into actual delivery of that beneficial change as a project procurement process. We need to differentiate between a purely transactional and the relational approach to this procurement process. Similarly, the procurement of a project is also a process of routines where known approaches and routines learned previously can be modified, adapted, and applied, such as was reported on the Heathrow Terminal 5 (T5) project (Davies, Gann, & Douglas, 2009).

A transactional approach implies that the project owner (PO) or their representative presents a substantially status quo position, a design that has been developed to a point of tender. In this more traditional approach, much criticized in, for example, U.K. government reports (Murray & Langford, 2003) for being inflexible and dismissing the early input of those that would actually deliver the project, the environment is established for a great deal of game playing and adversarial and opportunistic behavior (Masterman, 2002; Walker & Hampson, 2003c). This approach can be contrasted with an RBP approach where integration of the PO or most likely the POR, with those who advise the POR, and the entity that eventually is contracted to deliver the project. In RBP approaches, these entities collaborate to develop a coherent and pragmatic project delivery strategy. There are a number of forms of RBP and they are described in the literature in a dazzling array of terms and epithets.

Clients choosing a specific category of RBP would benefit from clearer definition of not only the characteristics of these forms of project procurement but also the knowledge, skills, attributes, and experience (KSAE) required of project managers delivering these projects.

Several research questions naturally flow from this research problem in the light of our stated research approach orientation as discussed above:

Q1 – What are the fundamental characteristics of emerging relationship-based forms of project procurement?

Q2 – Do these forms vary in different parts of the world and, if so, in what way?

Q3 – What specific KSAEs that are required to deliver such projects are currently underdeveloped or missing from traditional project managers’ knowledge and skills sets?

Q4 – How may any identified gaps be bridged?

We argue that our research approach can contribute new knowledge through the RBP taxonomy and associated KSAE capability maturity model (CMM). We acknowledge that this is a first step and we are confident that the taxonomy and KSAE CMM presented in this book will be improved upon over time as others extend the insights from case studies and as the whole approach evolves. We respectfully request those who develop these tools and concepts based on our work will cite this seminal work appropriately.

Fundamental Introductory Project Procurement Concepts

Projects vary considerably in their purpose and objectives. They all begin with an identified need and benefit that the project outcome is designed to provide (Bradley, 2010). The focus of this research is the point at which a project is procured, that is when an entity (internally or externally commissioned) commences the project delivery phase. The concept of project phases is fundamental to the PM worldview (PMI, 2008). In theory, a project arises out of a strategic need to do something or obtain something that defines a project goal and objectives (Artto, Kujala, Dietrich, & Martinsuo, 2008). Traditional PM theory holds that projects begin with an initial project concept and definitional phase, where benefit outputs from a proposed project are identified. This is followed by an intermediary phase in which the project is designed, a business case is presented to a high-level sanctioning entity (Klakegg, Williams, & Magnussen, 2009) that links the project brief and its outcome with the triggering strategy, and that this project concept is sanctioned if it is to proceed to the next phase (Bentley, 2010; Morris & Jamieson, 2004; Office of Government Commerce, 2007b). The next phase is a design development from the brief to a working solution; then resources are procured to deliver that project. Once the project is delivered, it is handed over to operational entities to deliver the outcomes facilitated by the project outputs (PMI, 2008).

More sophisticated approaches to the management of projects (and programs of projects) involve a stage gate system. This system provides for a series of checks and balances where the alignment of the project outputs and outcomes is tested against the strategic purpose of the project (Cooper, 2005; Cooper, Edgett, & Kleinschmidt, 1997; Klakegg, Williams, Walker, Andersen, & Magnussen, 2010; Office of Government Commerce, 2007c). In theory projects can be terminated if their raison d’être, their purpose, is not being fulfilled. For most projects, once they are sanctioned, they are very difficult to stop or substantially amend. This presents a serious limitation to PM and results in many project failures due to the weakness and vulnerability of sanctioning a project that cannot be stopped or substantially changed while being delivered (Klakegg, 2010). This insight lends weight to perceiving greater value in RBP approaches offering greater strategic flexibility over the delivery of projects and how scope, scale, and an ability to negotiate possible project termination if it becomes a strategic liability.

Morris and Geraldi (2011) describe three levels of PM. Level 1 relates to technical operational delivery-oriented and instrumental PM at an activity level. The strategic Level 2 perceives PM as being holistic within an organization and encompasses front-end development and moving from concerns over efficiency to effectiveness. Level 3 is about managing the institutional context and generating value to the broader enterprise by achieving a communities and institutions value proposition. This level considers the “parent” environment as well as the external environment. Many projects delivered for external project “clients” (rather than project oriented for internal organizational “clients”) need this kind of consideration. This is because the project teams that deliver a project are drawn from numerous independent organizations that come together to deliver that project but they have a separate “parent organization” agenda and needs—as do many of the communities and institutions that are affected by the projects delivery and existence.

This study naturally had to be constrained and limited in scope. Projects can be seen to comprise of many types with very different characteristics. We will discuss that later in this book.

Literature Supporting RBP Analysis

We will discuss a number of concepts from the literature with which we will use to either help us shape our understanding of the research problem stated earlier and to make sense of available literature, or to help us frame questions to ask selected literature authorities we interviewed and as a basis of supporting our SME workshops.

Project procurement choice may be influenced by a number of factors. Many of these need to be set in context. The literature that we chose to use to underpin our study is illustrated in Table 1 and explained in terms of rationale or purpose for its use. Three broad areas of literature were explored in this book.

First, we needed to place this firmly in a PM context because the study is about project and program procurement. We now need to explain project types and how they may affect a procurement choice as well as how the project life cycle defines our study focus. We will draw upon existing extensive project procurement literature to identify a taxonomy that can be used to more effectively categorize procurement choices that can be accepted globally.

Second, we need to place the study firmly in an organizational business context because PM is about delivering benefits to commercial, government, or not-for-profit organizations. We adopt the Artto and Wikström (2005) view of business, and project business in particular, as comprising a set of activities that seek to further the strategic direction of that organization and that both for-profit and not-for-profit organizations engage in project business. We explain that project work is outsourcing because our project procurement taxonomy is based on an organization-external delivery of projects after the project sanction phase of the project life cycle has been reached. Design of an appropriate procurement approach is linked to project governance, which relates to business governance, so we need to include discussion on that aspect. Much of the outsourcing undertaken today is influenced by global markets and complexity issues associated with turbulent and volatile economic conditions. Also, organizations these days are more aware of stakeholder engagement and this has triggered interest in triple bottom line (financial, environmental, social) issues.

Table 1.   Relevant literature

Third, projects are delivered by people. We, therefore, need to include discussion on human behavior (people) aspects of PM and project procurement and how their KSAE influence a project procurement choice decision. We focus on strategic human resource management (HRM) issues and KSAE issues in terms of capability maturity models (CMM), because these can provide a useful link to competence concepts, which in turn have an impact on project procurement approach choice.

Chapter 1 Summary

The purpose of this chapter was to introduce the study and its rationale. It was important for us to first explain the problem to be addressed. We also needed to clarify our position in terms of our worldview; what we perceive as being a valid ontological, epistemological, and axiological stance to take in researching this topic. We presented the research questions that logically flow from our worldview of the research problem, given our research perspective. Lastly, we indicated the literature that we felt was relevant to explore and to support conclusions made from this study.

This leads us to the three literature review chapters which explain the relevance of theory to the research questions and how they are useful in making sense of the findings.