Six key points to merge project marketing into project management

Transcription

1 International Journal of Project Management 23 (2005) INTERNATIONAL JOURNAL OF PROJECT MANAGEMENT Six key points to merge project marketing into project management Bernard Cova a, *, Robert Salle b,1 a ESCP-EAP, European School of Management & Euromed Marseilles, 79 Av. de la République, Paris, France b E.M. LYON, Lyon Graduate School of Business, 23 Av. Guy de Collongue, BP 174, Lyon Ecully Cedex, France Abstract From a conceptual point of view, project marketing and project management have existed for years as separate disciplines, each having developed independently from the other. In the nineties, evolutions in project management edged the project out of its strict time frame in order to re-position it within a strategic, long-term and customer-oriented approach. In doing so, such developments concur with progress made in project marketing over the last decade. This article proposes to bridge the gap between the two disciplines on six key points, thus structuring a conceptual time frame common to project marketing and project management. Ó 2005 Elsevier Ltd and IPMA. All rights reserved. Keywords: Project management; Project marketing; Customer-oriented approach 1. Introduction In the large amount of the literature on project management, the issue of marketing the project appears to be of marginal interest [1,2]. Two main reasons can be given. The first reason is that many projects are developed within firms, that is to say they do not or may not need to be marketed. The second reason is that projects are bound in time and the vast majority of project management methods are mobilised once the go-ahead has been given to the project team. A recent survey [3] confirms this marginal interest for marketing. Based on an analysis of the relative frequency of attention given to body of knowledge topics of project management (44 topics were selected), in papers published between 1990 and 1998 in the International Journal of Project Management (IJPM) and in the Project Management Journal (PMJ), this survey showed that very limited attention is dedicated to marketing and sales topics: respectively, 0% in IJPM and 2% in PMJ. * Corresponding author. Tel.: addresses: bcova@escp-eap.net (B. Cova), salle@em-lyon. com (R. Salle). 1 Tel.: Things have evolved and widened approaches to project management have appeared [4]. These approaches led to refocusing the goals of project management to make them customer- and stakeholder-based, whether or not these groups of actors happen to be internal or external to the company. However, these widened approaches to project management began to take shape [1] without any interaction or cross-referencing with the emerging trend of project marketing [5] in business-to-business marketing. The same applies to the latter: project marketing researchers never attempted to take into account project management concepts and methods [6]. The European Network for Project Marketing, also known as the International Network for Project Marketing (INPM), a research community loosely affiliated with the Industrial Marketing and Purchasing Group (IMP Group), has only recently taken steps to establish a dialogue with project management researchers. This dialogue is more of a monologue, however, as it entails a review of the INPMÕs possible contributions to project management [7]. This article proposes to bridge the gap between the two disciplines project marketing and project management using a meta-theoretical approach organised around six key points: the project, characteristics of /$30.00 Ó 2005 Elsevier Ltd and IPMA. All rights reserved. doi: /j.ijproman

2 B. Cova, R. Salle / International Journal of Project Management 23 (2005) projects, project cycle, focus of the approach, stakeholders, project origin. 2. What is a project? According to Turner and Müller [8], a project is a temporary organization to which resources are assigned to undertake a unique, novel and transient endeavour managing the inherent uncertainty and need for integration in order to deliver beneficial objectives of change. To be compared with Cova et al.õs project marketing approach [6], where project is defined as a complex transaction covering a package of products, services and work, specifically designed to create capital assets that produce benefits for a buyer over an extended period of time. Whereas the field of project management emphasises the temporary organization, project marketing emphasises the transaction. In fact, here we can point out the different viewpoints as exemplified in French by the couple projet/affaire; the customerõs project (projet) is perceived as a transaction for the supplier (affaire). Consequently, in project marketing there is only a project if the owner has decided to externalise an entire project or part of one. Taking this stance, some marketing approaches aim at driving the owner towards an outsourcing choice in order to create the transaction. Both are aimed at creating something unique or specific, but whereas project management focuses on the temporary endeavour that takes place after signing of the contract, project marketing focuses on the long-term consequences (an extended period of time) of the project for the buyer. This is where, recent work of a strategic nature in project management [9] bridges the gap in relation to the project marketingõs definition by taking into account the long-term effects of the project on the customerõs business. Thus, there is a tendency to reconsider the particular risks and rewards of each project within the wider context of the organization involved, in order to bear in mind the impact on the supplierõs competitiveness. 3. What are the characteristics of projects? From the vast amount of literature available on project management, it is possible to distinguish four common characteristics of a project: Finite budget and schedule constraints/complex and interrelated activities/clearly defined objectives/uniqueness. These characteristics have to be compared with the DUC model in project marketing [10], where the major characteristics of project transactions are defined as: Discontinuity/Uniqueness/Complexity. Complexity and Uniqueness are both presented as major features in the two bodies of literature. Whereas the customer-based project management approach emphasises the specific time frame and objectives of a given project, the project marketing approach emphasises the discontinuity between one project and another [11], which means that many buyer seller project-related resource and activity ties are terminated at the end of each individual project. One approach focuses on an existing project, the other focuses on project business. Even customer-based project management sees the world through the eye of a Project Manager (PM) who is in charge of a unique project which must be developed successfully in order to achieve the highest level of customer satisfaction. Project marketing sees the world through the eye of a marketer in charge of successfully managing a strategic business unit in order to achieve best performance. Actually, the whole development of project marketing over the last three decades [6] illustrates the move from focusing on a specific project through a competitive bidding strategy, to multi-project focusing with the same customer (follow-up projects). A similar evolution appeared recently in project management: from the management of single projects to project portfolio management [12]. Crucially, project management must be able to coordinate complex activities in a limited (often too short!) period of time, for a customer between the two boundaries of a project (beginning and end). What is critical for project marketing, however, is the unlimited period of time (often too long!) between the end of one project and the beginning of the next one for the same customer; a time frame that is known in project marketing approach as the independent of any project phase [6]. Limitation is central for project management; discontinuity is central for project marketing [11]. Herein lies the possible major discrepancy between these two visions of the world and thus between the two disciplines and their possible articulation. The International Network on Project Marketing (INPM) argument for studying project marketing rests on the assertion that it is not enough to regard a project delivered by one firm/a group of firms to another organization/group of organizations as a set of managerial actions taken by the supplier(s), i.e., mere project management... From an INPM perspective, project marketing is the broader term; it always implicitly includes project management but not (necessarily) vice versa [7]. Thus, project marketing reembeds the project in the wider context of project business. Some attempts at this kind of re-embedment can be found in the abundant literature dealing with projects in the construction industry [13]. 4. What is the project cycle? Project management in its modern form began to take root in the sixties with major military space

3 356 B. Cova, R. Salle / International Journal of Project Management 23 (2005) programmes and large-scale development work. The Project Management Institute (PMI) was the first to introduce an organizational model and standardised tools based on a model of reality as seen through the eyes of project managers and project teams. From this standpoint, the transaction which constitutes the invitation to bid is part of the overall process without being considered as a significant stage of the project life cycle (conceptualization/planning/execution/termination). From the supplierõs point of view, however, the invitation to tender has long acted as a trigger for action on a particular project. Once the contract has been won, the supplier takes over project management. It is the role of project marketing to probe beyond the invitation to bid in order to help the supplier foster competitive advantage. In doing so, by taking the supplierõs point of view, project marketing has broken away from the PMIÕs unique and encapsulating model. Initially, project marketing defined itself as a set of processes enabling suppliers selling projects-to-order to identify customer projects long before the invitation to tender, in order to better prepare for them. At the time, the project was conceived of as a specific type of offer, not falling under the umbrella of products and industrial services; this included, for instance, the sale of huge systems in such industries as Aerospace, Construction, Energy, Telecommunications, etc. The immediate consequence was to put the emphasis on everything occurring before and after the project, and modelling the project marketing cycle from there [14] into six phases: search/preparation/bidding/negotiation/implementation/transition. Although this approach broadens the time frame usually taken into account during project activities, it only considers the point of view of one of the projectõs players: the supplier. On the other hand, some studies influenced by the Interaction Model developed by the IMP Group [15] have sought to align the supplierõs project marketing cycle with the clientõs project buying cycle [5]. The theory of industrial networks [16], which views markets as networks, has enabled project marketing to go beyond the operational approach of achieving project sales based on identifying project opportunities (the search phase, [14]). Project marketing has thus been able to develop a strategic approach based on anticipating projects when there are not any projects on the horizon through relationships with key players, e.g., clients and stakeholders. This has allowed Cova et al. [6] to extend the project cycle upstream with development of the independent of any project or outside any project opportunity phases. They bear in mind three main phases: Independent of any project. The project does not yet exist for the supplier. Pre-tender. The supplier has identified a project and chooses whether or not to invest resources in the development of an offer and in contacts. Tender preparation. The project officially exists in the form of a market consultation by the customer (invitation to tender), calling for an offer by the supplier. Over the same period (80s and 90s), project management underwent huge expansion, prompting it to cover more and more diverse industries. In doing so, it consolidated its operational anchorage and time framework limited to carrying out a project (performance) within a given time with a given budget. Hence, project management only began to follow project marketingõs example and open up to the idea of broader time frames in the project life cycle in the late nineties. Artto [12] stated that the project concept must be redefined to include the activities from the very early pre-project phases to very late post-project phases. Such view suggests that the project must be managed already before the project is formally established, and then that the project must be managed after completing the execution and dissolving the formal project team. This approach to the extended project process widens the scope of project management outside the traditional planning/execution centered view. These broader time frames have diverse origins: the customer-based approach to project management [4]; supply chain management [17]; projects strategic orientation [9]. 5. What is the focus of the approach? Having a customer focus means shifting from a goal of maximizing our profits in one project by optimising the utilization of our resources to a goal of superior service to the customer to maximize the value of the customerõs project by meeting the jointly agreed project goals [4]. Here it would seem that customer-based project management approach is close to project marketing as regards its focus, e.g., building and maintaining longlasting relationships with key clients and stakeholders [6] and, in doing so, avoiding any form of short-term opportunism. Although the focus appears to be similar, the means are actually different. Whereas project marketing conceptual development aims to build and maintain relationships in-between two projects with key customers and stakeholders, customer-based project management development aims to enhance the relationship with the customer inside one project, between the sales phase and the delivery phase, through customer satisfaction. Infact, everything must be done to avoid uncertainty which could lead to adversarial relationships during the project life cycle. The major implication of discontinuity in project business is a potential lack of buyer seller bonding,

4 B. Cova, R. Salle / International Journal of Project Management 23 (2005) interdependence and mutual orientation beyond the single project, although there will be substantial buyer seller interaction during the delivery of an individual project [17]. Thus, project marketing approach supports the idea [6] that suppliers need to concentrate on three separate dimensions of relationships. The first dimension (buying network or temporary network) is managing networks and relationships relating to an individual project, from the call for tender to the end, as developed in the project management approach. The second (project network) is managing the network in and around the customer, from the identification of an emerging project (pre-tender phase) to the call for tender. The third is managing networks of players and relationships independent of any project; it encompasses the possibility (or lack) of relationships during a longer period of multiple project activity, including possible sleeping relationships [11], periods during which there are no projects. This latter network encapsulates all the business and non-business players that may play a role outside a given opportunity and is called a ÔmilieuÕ [6], Ôproject horizonõ [7] or Ôpermanent networkõ [17]. The project marketing approach brings a wider perspective to project management regarding the focus of developing and maintaining relationships. On the other hand, project management forces project marketing to remember that the project is more than a single episode in the relationship; it is in fact a long succession of different episodes with highs and lows that need to be carefully managed inside the project phase in order to avoid negative effects on the tone of the relationship. Once again, convergence of the two theories leads to construction of a more integrated time frame as far as relationship management is concerned: independent of any project/pre-tender/during tender preparation/during project completion. In conclusion, this means developing the relational dimension both in-between projects and during the project. 6. Who are the stakeholders? The management of internal and external project stakeholders represents a challenge that most project managers are only just beginning to acknowledge. According to Turner [2], it is only since the late 1960s, that investors in projects have begun to consider the stakeholders in a project, and it is not only over the last decade, since the 1980s, that truly adequate notice has been given to their requirements. In fact, little is known about the nature of the various project stakeholders: Who they are, what their drivers and separate agendas are, and how to understand the nature of project stakeholder trade-offs [4]. Thus, for project management, the main focus is on the players themselves without taking into account relationships between them. Indeed, project management considers stakeholders as a group of people who do not interact or form relationships. Conversely, project marketing [6] thinks of stakeholders from the standpoint of markets as networks, i.e., stressing the relationships between them rather than the players themselves. Project marketing describes the collective body of relevant players in a companyõs project marketing activities. It is termed the ÔmilieuÕ and is characterised by four elements: a territory; a network of heterogeneous players (e.g., business people, governmental bodies, civil society organizations, etc.), related to each other within this territory; a model constructed and shared by these groups; a set of rules and norms ( the law of the milieu ) regulating interaction between these groups. When choosing to enter a targeted segment (an activity on a geographical area), the supplier enters a ÔmilieuÕ which can be defined [6] as a socio-spatial entity that is geographically bound and in which, through the frequency of socio-economic exchanges, business and non-business players are intertwined. They share a common vision of business and a set of tacit rules the law of the milieu. This ÔmilieuÕ represents a kind of collective group that cannot be categorised or defined as with the segmentation approach. The relevant independent of any project entity becomes the ÔmilieuÕ. The marketing approach involves understanding this ÔmilieuÕ to develop a position for identifying client projects and securing relationship with stakeholders long before the appearance of a possible project. For project marketing, the milieu includes all players, rather than just customers and suppliers: Business actors: Consultants, financial backers, agents, engineering companies, sub-contractors, etc. Non-business actors: Governments, syndicates, lobbies, unions, pressure groups, activists, etc. In project marketing [6], there is a direct link between the three-phase model and the network of stakeholders to be considered: Independent of any project. There is a ÔmilieuÕ of stakeholders. In pre-tender. There is a Ôproject networkõ of stakeholders; During tender preparation. The Ôbuying networkõ of stakeholders is key. In this case, we can say that project management limits the network of stakeholders to the so-called Ôbuying networkõ, adding the Ôimplementation networkõ, but that

5 358 B. Cova, R. Salle / International Journal of Project Management 23 (2005) it fails to take the broader view of the ÔmilieuÕ into account. In doing so, it does not give the company the possibility of anticipating stakeholder interplay or capitalising on network knowledge gained on a specific project. However, in order to remain consistent with the relationship management time frame proposed earlier, we can integrate the following to the three networks previously described by project marketing: During project completion. The Ôimplementation networkõ is key. 7. The project: given or jointly constructed? Pinto and Rouhiainen [4], maintain that successful projects may require product and client modification... The process of developing greater acceptance of innovative projects involves a process mutual adaptation between the project itself and the customer. Significant prework is required from the project manager and team members as they scan the client and objectively assess attitudes and needs regarding a project. If the team determines that it is not feasible to introduce a project within the current organizational or environmental context, they need to begin formulating plans for how to create a more supportive environment. The notion of prework posited by Pinto and Rouhiainen [4] can be defined as cocreation or co-construction, as seen with project management in Knowledge Intensive Business-Services, KIBS [18], because service delivery activities among KIBS firms are complex, unstructured, and highly customized to meet a particular clientõs unique needs, clients must effectively perform a variety of roles as they serve as co-creators or co-producers of the knowledge-based solution. The project marketing approach is totally in tune with the possibility of modifying the project and proposes to go even further in creating the project by promoting a joint construction approach. In terms of demand and supply, the field of project marketing [6] may represent an extreme case of business-to-business marketing, radically opposed to the traditional model of business-to-consumer marketing. The customer buying the project is generally at the origin of the project: s/he has carried out a feasibility study, written specifications, defined a budget and launched a call for tender. S/he is a protagonist of her or his project. On the other hand, the project supplier, e.g., the bidder, is naturally placed in a submissive position, s/he is the stooge. However, the reality of project marketing is far more subtle. The usual strategy of such project suppliers is to try to influence the project before the call for tender is issued, so as to avoid the passive situation of a stooge. Interaction with the customer and the stakeholders in the ÔmilieuÕ takes place long before the call for tender and forms the basis of the marketing strategies of project suppliers attempting to anticipate and create projects. Current marketing strategies in project business mostly aim to construct or deconstruct demand with the customer, chiefly relying on the very long definition, implementation and completion process of the project (three years on average). Rather than preparing a proposal in response to a particular bid, it is creating demand for the project, i.e., the invitation to bid and its specifications, that comes across as central to project marketing tactics: Independent of any project. The aim is to create the demand. Pre-tender. The approach seeks to define the specifications in conjunction with the customer. During tender preparation. The aim is to deconstruct and recreate the project. Once again, in keeping with the relationship management time frame, it is useful to add the following: During project completion: Which involves drawing up creative value-added proposals regarding specific aspects of the project. 8. Conclusion During the last decade, achieving convergence between the two disciplines of project marketing and Table 1 A Comparison between project management and project marketing Disciplines Project management Project marketing Key Points The project Temporary organization Transaction Characteristics of projects Specific time frame and objectives Discontinuity between one project and another Project cycle Begins with request for proposal Begins outside any project opportunity Focus of the approach Resources are dedicated to enhance the relationship inside one project Resources are dedicated to maintain the relationship between two projects Stakeholders Internal and external actors that can have a positive or detrimental effect on the projectõs development Relationships between business and non-business actors in the milieu embedding the project Project origin Mostly given Given or jointly constructed

6 B. Cova, R. Salle / International Journal of Project Management 23 (2005) project management seemed rather difficult. Nevertheless, thanks to recent developments in the field of project management, the new century should pave the way for constructive dialogue. Table 1 summarizes the major points of convergence and divergence between the two disciplines and provides a basis for new and innovative avenue for research and managerial developments. References [1] Pinto JK, Covin JG. Project marketing: detailing the project managerõs hidden responsibility. Proj Manag J 1992;22(3): [2] Turner JR. The commercial project manager. London: McGraw Hill; [3] Themistocleous G, Wearne SH. Project management top coverage in journals. Int J Proj Manag 2000;18(1):7 11. [4] Pinto JK, Rouhiainen PK. Building customer-based project organizations. New York: John Wiley; [5] Cova B, Holstius K. How to create competitive advantage in project business. J Market Manag 1993;9(2): [6] Cova B, Ghauri PN, Salle R. Project marketing: beyond competitive bidding. Chichester: John Wiley; [7] Skaates MA, Tikkanen H. International project marketing: an introduction to the INPM approach. Int J Proj Manag 2003;21(7): [8] Turner JR, Müller R. On the nature of the project as a temporary organization. Int J Proj Manag 2003;21(1):1 8. [9] Shenhar AJ, Dvir D, Levy D, Maltz AC. Project success: a multidimensional strategic concept. Long Range Plann 2001;34(6): [10] Mandjak T, Veres Z. The D U C Model and the stages of the project marketing process. In: Halinen A, Nummela N, editors. Proceedings of the 14th IMP annual conference, Turku, Finland; p [11] Hadjikhani A. Project marketing and the management of discontinuity. Int Bus Rev 1996;5(3): [12] Artto K. Management of projects as portfolios. Proj Manag 2001;7(1):4 5. [13] Dubois A, Gadde LE. Supply strategy and network effects purchasing behaviour in the construction industry. Eur J Purchas Supp Chain Manag 2000;6(3-4): [14] Holstius K. Project Export. Research Report No. 1. Finland: Lappeenranta University of Technology; [15] Hakansson H. Industrial marketing and purchasing of industrial goods: an interaction approach. Chichester: John Wiley; [16] Mattsson LG. An application of network approach to marketing: defending and changing market position. In: Dholakia N, Arndt J, editors. Changing the course of marketing: alternative paradigms for widening marketing theory, Research in Marketing 2, Greenwich: JAI Press; p [17] Dubois A, Gadde LE. The construction industry as a loosely coupled system implications for productivity and innovativity. In: Hakansson H, editor. Proceedings of the 17th IMP conference, Oslo, Norway; [18] Bettencourt LA, Ostrom AL, Brown SW, Roundtree RI. Client co-production in knowledge-intensive business services. Calif Manag Rev 2002;44(4):