Rethinking Project Management Goals and Methods to Suit Service Systems

Abstract

Industrial economies of the past are now moving towards becoming service-intensive, creative and knowledge-based economies that incorporate human creativity and social capital as the basis of value creation and productivity improvements. Moreover, they are radically transforming the manner in which they design, deliver and operate, thereby creating new services and market opportunities. Further, the fact that services are varied, have unique attributes — such as intangibility, heterogeneity, perishability, and inseparability (simultaneous consumption and delivery) — with the customer as a provider of input, make them complex in nature and difficult to understand and analyse. This has inspired a flurry of activity in government, industry and universities. There is now a growing recognition of the need for transdisciplinary research and new business models to propel innovation in services, commonly referred to as Services Science — an interdisciplinary cross-functional stream that brings together engineering, social sciences and management. In addition, business success is becoming less associated with tangible outcomes, embedded value and physical transactions, but more reliant on intangible resources, relationships, networks and co-creation of value. In the unfolding global economy, supply chains and value networks play a crucial role, and service organisations have to find innovative ways for attaining sustainable competitive advantage. Beyond this direct economic contribution, service industries have an ongoing role to deliver considerable indirect embodied value to goods production.

Transformations in organisational structures and relations can imply changes in some or all of the mechanisms used to govern projects. Moreover, there is a growing consensus that project managers have to be more strategically instrumental than before in transforming organisational practices and processes when accomplishing project objectives. Underpinned by changing dynamics, project management objectives are becoming difficult to understand. The old norms of the triple constraint of time-cost-quality in managing competing project requirements in order to deliver products, services or infrastructure are not sufficient. Projects are becoming increasingly subject to unparalleled risks, uncertainty and complexity, thus making it difficult for project managers to govern projects in line with changing strategic objectives and imperatives.

Recent trends in project management research and practice is driving organisations and their project managers to take a holistic approach to managing projects. The development of program and portfolio management standards by professional project management associations such as the Project Management Institute (PMI) and the Association for Project Managers (APM) has pushed project management beyond the sphere of just implementing what was authorised by the organisation. There is also increased emphasis on project governance and organisations are setting up Project Management Offices (PMO) and steering committees to ensure that projects deliver the intended benefits to the organisations and stakeholders. Project managers of megaprojects are now being trained to deal with complexity in such projects. Recently, the International Council on Systems Engineering(INCOSE), the PMI and the International Society for the Systems Sciences (ISSS) have agreed to work together to develop competencies required by project and program managers to deal with complex projects.

While project managers are being taught to look at projects holistically through systems approaches such as systems dynamics, soft systems thinking and viable systems in postgraduate programs (such as the one taught at the University of Technology Sydney), they are not being taught about the emerging science of service systems. It is for this reason that in this paper we conceptualise the service science ecosystem as seen through a project manager’s lens.

Additionally, there is a push to compete through new services and service innovation, creation of knowledge, products and services enabled through technological advancements, online communities of companies and consumers, and adoption of distributed co-creation; all of which are still in their infancy — and so is their project management. Thus, a major challenge faced by contemporary project managers is to develop knowledge and understanding of complex service ecosystems and their functions. In other words, why are the new breed of project managers disconcerted about service science ecosystems, and what do they need to know and why? This paper enables us to disburden project management from its longstanding theoretical heritage, discusses recent research challenges in this field and proposes a new framework for project management.