From the course: Project Management Foundations

Create organizational value through a value delivery system

From the course: Project Management Foundations

Create organizational value through a value delivery system

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- [Instructor] Organizations don't perform projects for the fun of it. They undertake projects to receive value of some kind. The standard for project management associated with the seventh edition of the "Project Management Body of Knowledge" includes a section on a value delivery system to highlight this desire for value and a high-level mechanism for achieving it. Value can take many forms. For example, Bryceland Hospital management wants to improve operations to reduce cost and improve healthcare. That's what the example project in this course was all about. The project will deliver value through implementing a new scheduling system and undertaking process improvement work to achieve those goals. Suppose the hospital's CEO also wants to increase the hospital's patient ratings. Ultimately, to increase market share. The hospital might consider a portfolio of patient-oriented projects to improve customer satisfaction. Now, let's look at the value delivery system from the PMI's standard for project management. Keep in mind, junior project managers might not be involved in building a value delivery system, but it's helpful to understand how project-related efforts deliver value to organizations. The value delivery system starts with the senior leadership of an organization. Leaders have a vision for the organization and develop a strategy and plan to make that vision a reality. In the Bryceland Hospital example, the COO's vision is to improve operations to reduce cost and improve healthcare. The CEO has a vision for Bryceland to be the hospital of choice in the area. One strategy is to use technology and process improvement to improve operations. A second strategy is to implement website and app-based services to improve patient satisfaction. Leadership identifies the outcomes they want to achieve based on their strategies. Outcomes can be tangible, like new products or services hospital patients can use. Other outcomes could deliver value indirectly, such as customer satisfaction through process improvement. Strategies drive the portfolios that the organization initiates. Within a portfolio, you may have individual projects as well as programs comprising several projects. For example, Bryceland Hospital might have one portfolio for efforts related to improving operations and another portfolio for the website and app services. The improve operations portfolio would include the scheduling project from this course and might have additional projects focused on other operational areas like billing. The value delivery system isn't complete without a way to make sure that value is actually delivered. When projects are complete and the outcomes delivered, leadership can analyze the outcomes, benefits and value that were achieved and compare that to what they wanted. Based on the value realized, they might adjust their strategies. That, in turn, could lead to adjustments or additions to portfolios, programs and projects. There's more feedback in this system. Operations can provide feedback to the program and project teams about fixes and other changes that would provide more value. Program and project teams report performance and progress information up to the portfolio level, and the portfolio managers report overall portfolio performance to the leadership team. That's one example of how a value delivery system can help an organization earn value from project-related efforts.

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