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PMI Research Conference, Warsaw, Poland

7/21/2008

RESEARCHING THE VALUE OF PROJECT MANAGEMENT


Janice L. Thomas, Ph.D.
Athabasca University

Mark E. Mullaly, PMP


Interthink Consulting Incorporated

2008/07/14

PMI Research Conference, Warsaw, Poland

A Conceptual Research Model


PM Constructs PM Implementation

Business Orientation

Organizational Context Fit Value of Project Management Organizational Value

Environment

Process Criteria

Outcome Criteria

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Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

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And A Great Deal Of Data


Project Suppliers Project Customers Project E l Employees Project Managers
Project Subcontractors

Unit Of Analysis
Project History

Surveys

Organization
Project Managers PM Management Project Managers Project Sponsors Senior Management

Interviews

Organization Data Collection Researcher Observations

Case Reports

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PMI Research Conference, Warsaw, Poland

And A Great Deal Of Data


43 65
Project Suppliers

66

148

Project Customers

Project Subcontractors

418 Projects Summaries

344Employees E l
Project Managers

Project

Surveys

65 Organizations
Project History

447 Interviews
Project Managers PM Management Project Managers Project Sponsors Senior Management

Organization

54 Quantitative 447 Interviews Datasets

Interviews

60 Case Reports

Organization Data Collection Researcher Observations

Case Reports

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PMI Research Conference, Warsaw, Poland

7/21/2008

Adopting A Multi-Method Approach


Qualitative Methods
Between- and within-case analysis Manual coding and interpretation Content analysis

Quantitative Methods
Principal Components Analysis Regression analysis Cluster analysis

Integration Of Analysis Approaches


Q Qualitative li i analysis l i h has h helped l df frame quantitative i i exploration l i Quantitative analysis has both framed and reinforced qualitative results

Theory Generation
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To Answer A Comprehensive Question


What Is The Value Project Management Delivers To Organizations?
Organizational Context
How do organizations differ? What differences matter to PM implementations?

PM Implementation
What do organizations do or put in place and call PM?

Organizational Value
What is valuable to organizations and how is it measured?
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Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

PMI Research Conference, Warsaw, Poland

7/21/2008

How do organizations differ? What differences matter to PM implementations?

ORGANIZATIONAL CONTEXT

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Descriptive Statistics By Region


China 22% Australia 6% North America 22% South America 8% Russia 8% Europe 29% Middle East 5%

N=65
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PMI Research Conference, Warsaw, Poland

7/21/2008

Descriptive Statistics By Industry


Government 16% Consulting 11% Research 13% Services 12% Industry 14% Construction 20%

High Technology 14%

N=65
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Descriptive Statistics By Project Type


Other, 8 R&D, 22 Internal, 31 Engineering, 31 Software, 31 Product Devlopment, 23 New Product Dev, 23 Organizational Change, 20 Other, 11 Process Development, 24

Customer, 32

N=48 15 companies indicated 100% involvement in 1 type of projects


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Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

PMI Research Conference, Warsaw, Poland

7/21/2008

Descriptive Statistics By Organization


Limited Partnership 10% Joint J i t Venture V t 4%
Sole Proprietorship 6%

Government Department/Agency 23% Crown Corporation 12% Corporation, Privately Held 29%

Project Driven 31%

Operational 35%

Corporation, Publicly Traded 16%

Strong Matrix 12%

Weak Matrix 22%

N=52
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Principal Components - Context


Economic 70% People 60% Principal Components Analysis Context Culture 69% Projects 48% Organizational Attributes 59% Strategic 56%
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Economic Prospects

GDP Growth Rate GDP per Capita Inflation Rate Current Acct Bal

0.962 0.899 0.669 0.792

Seniority PM Experience Positive PM Attitude Innovators Conflict Avoiders Not Customer Focussed Construction Product Development Organizational Change Strategic Construction Government Publicly Held Public Partnerships Privately Held Sole Proprietorships Strategic Innovators Operational Efficiency Customer Intimacy
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PMI Research Conference, Warsaw, Poland

7/21/2008

What do organizations implement that they call project management?

PM IMPLEMENTATION

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Principal Components Implementation


Training - Topics 39% Training Delivery 53% Training Duration Principal Components Analysis Implementation Tools 54% People p 55% Motivators 46% Organization
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Full PM Training Lunch & Learn Distance Degree & Diploma Tailored Internal Informal Off-the-Shelf Customized External

Long-Term Training Short-Term Training

67%

Full Toolsets Resource Management Cost Management Clear Roles & Training Trained Experts Traditional Drivers Cultural Drivers Cultural NOT Traditional

PMI Research Conference, Warsaw, Poland

36%

PM Authority PMO Influence PMO Size


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PMI Research Conference, Warsaw, Poland

7/21/2008

Project Management Maturity


25

24

20

17

15

10
10

6
5

2 0
0 Level1 1.5 Level2 2.5 Level3 3.5 Level4 4.5 Level5

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N=59

15

Project Management Maturity


25

24

20

17

15

10

"The PM process has become normal and ordinal, which reduced individual heroism in 10 PM." Project Manager, 23
6

2 0
0 Level1 1.5 Level2 2.5 Level3 3.5 Level4 4.5 Level5

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PMI Research Conference, Warsaw, Poland

N=59

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Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

PMI Research Conference, Warsaw, Poland

7/21/2008

What is valuable to organizations and how is it measured?

ORGANIZATIONAL VALUE

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Components Of Measuring Value


Initial Constructs Of Value
Level Level v Level Level Level 1 2 3 4 5 Satisfaction Aligned g Use of Practices Process Improvements Outcome Improvements Return On Investment (ROI)

Source: Phillips, 1998 2008/07/14 PMI Research Conference, Warsaw, Poland 18

Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

PMI Research Conference, Warsaw, Poland

7/21/2008

Components Of Measuring Value


Initial Constructs Of Value
Satisfaction Aligned Use of Practices P Process I Improvements t Outcome Improvements

Derived Constructs Of Value


Return On Investment
What quantifiable benefits can be derived from the implementation? How do these compare to the costs of the implementation?

Fit
What implementations and context are associated with what value?
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Principal Components - Value


Satisfaction 38% Alignment 64% Principal Components Analysis Value Consistent Practices
Good Practices Good PM No Practices Desire For Change PM Satisfaction Customer Satisfaction Aligned Organization Aligned Project Management

62%
Better Process Results Better Project Results

Process Outcomes 70% Business Outcomes

Better Organization Results

53%

Benefits Realized 58%


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Positive Value Tangible & Intangible Intangible Value Improved HR/Quality of Life Strategic Alignment & Staff Retention Positive Value, New Services, Retention
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What contexts create what value? What implementations create what value?

DRIVERS OF VALUE

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Principal Components Integrated View


Economic Training Topics Satisfaction Training Duration Tools

De etermines s

In nfluences

People

Imp plementatio on

Training Delivery

Alignment Consistent Practices Process Outcomes Business Outcomes Benefits Realized


22

Context

Culture

Projects

People p Motivators

Organizational Attributes

Strategic
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Organization
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Value

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Maturity vs. Value - Tangible


0 1 Level 3 2.5
21 44 45 48 55 90 36 87

2
71

3
35

72

73

Level 2
17 18 51 20 53 30 65 39 43 57 81 22 23 24 25 74 75 76

15 1.5

19 52

28 54 64

29 56 82

32 59 84

34 62 86

42 63 26 27 49 51 83 33 89 47

Level 1
88 31 60 70 67 69

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Maturity vs. Value - Tangible


0 1 Level 3 "We now bill an additional 20% for project management on all our projects." Senior Manager, 76
21 44 45 48 55 90 36 87

2
71

3
35

2.5
72 73

Level 2
17 18 51 20 53 30 65 39 43

"Project managers have become good at selling additional services." 57 81 22 23 24 25 74 75 76 Senior Manager, 76

1.5 15

19 52

28 54

29 56

32 59

34 62

42 63 26 27 49 51 83 33 89 47

Level 1

"Improved project management should help 64 82 84 86 with share prices because it will increase confidence in the market as we deliver on projects." 88 31 60 70 67 PM Management, 75
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Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

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7/21/2008

Maturity vs. Value - Intangible


0 1 Level 3 2.5
90 21

2
71

3
35

36

48

87

44

45

55

72

73

Level 2
30 51 53 57 65

17 39

22 75

23 76

24 81

25

18

20

43

74

15 1.5
34 59 47 62 49 64 51 82 54 84 56 86 19 33 26 42 27 52 28 83 29 89 32 63

Level 1
31 88 61 70 67 69

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Maturity vs. Value - Intangible


0 1 Level 3"Project management has a positive influence on creative thinking and enhances the organization's innovation capacity." S Sponsor, 24 2.5
90 21

2
71

3
35

36

48

87

44

45

55

72

73

Level 2
30 51

"Collaboration within and between teams has improved; silos within the organization have diminished. 17 22 23 24 25 53 57 65 Senior Manager, 76 18 20 43 74
39 75 76 81

"It It gives them a sense of accomplishment accomplishment, it 1.5 1 5 34 47connected 49 51 54 56 19 26 give them a sense of being to the 59 an 62 opportunity 64 82 84 86 enterprise, it gives them to33 42 contribute and understand how [their work] relates to the larger operation and to the Level 1 success 31 88 of the organization." 61 70 Senior Manager, 20
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27 52

28 83

29 89

32

63

67

69

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Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

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7/21/2008

Maturity vs. Value - Integrated


0 1 Level 3 2.5
21 44 45 48 55 90 36

2
71 71

3
35 35

90 87

21

36 72

48 73

87

44

45

55

72

73

Level 2
17 18 51 20

30 30 53 29 56 82 32 59 84 65 34 62 86 42 63 34 59 26 39 43

51

53 57

57 81

65 22 54 84 56 86 83 19 33

17 39 23 26 42

22 75 24 27 52 33

23 76 25 28 83 89

24 81 75 29 89

25

18 74 32

20 76

43

74

15 1.5

19 52

28 54 64

47 62 27

49 64 49

51 82 51

63 47

Level 1

31 88

88 31

61 61

70 70

67 67

69 69

Intangible Tangible
27

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PMI Research Conference, Warsaw, Poland

Maturity vs. Value Direction All Cases


-2 -1 0 1
71

2
35

Level 3 2.5

45

48

Level 2 1.5 15

75

36 55 73 87 90in "Without projects we21would not be72moving any direction, so this work is absolutely critical for this organization. Project Manager, 1917 18 20 22 23 24 30 43 57 39 53 65 74 81

44

25

76

26 47 52 83

28 56 84

32 59 86

34 64

49 82

19 51

27 52

29 62

33 63

42

89

Level 1
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88

31

70

61

67

69

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Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

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Maturity vs. Value Direction High Value


-2 -1 0 1 Level 3 2.5
United States

2
China

71

35

China

China

Australia

72

73

44

Level 2 15 1.5

Canada

China

China

China

Canada Denmark

75
United Kingdom

24

74

22
China Serbia

23

76

25

Russia

47

33

89

Level 1
2008/07/14 PMI Research Conference, Warsaw, Poland

UAE UAE

67

69
29

Maturity vs. Value Direction High Value


-2 -1 0 1 Level 3 2.5
United States

2
China

71

35

China

China

Australia

72

73

44

Level 2 15 1.5

Canada

China

China

China

Canada Denmark

75
United Kingdom

24

74

22
China Serbia

23

76

25

Russia

47

33

89

Level 1
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UAE UAE

67

69
30

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Maturity vs. Value Direction High Value


We've not only followed the government regulations, but we've been continuously establishing and innovating our own -2 -1 0 1 management system according to the United States Level company's development and the industry's 3 situation." 71 Industry: Construction Project Manager, 35 2.5
China Initial Implementation China (<1993): PM processes imposed funding 72 by73 agencies Canada

2
China

35

Australia

44

Level 2 1.5 15

75
United Kingdom

Most recent (2007): Review of strategic 24 74 22 23 projects and introduction of lessons China learned
Serbia

China

China

China

Canada Denmark

76

25

Russia

47

Level 1
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"It was only since the 33 adoption of project 89 management methods that the company started to really reform its system and establish new management UAE UAE procedures and processes and to run as an economic 67 69 enterprise. Senior Manager, 35

31

Maturity vs. Value Direction High Value


-2 -1 0 1 Level 3 2.5
United States

2
China

Industry: High-Tech Engineering Initial Implementation (<1988): Basic project management practices
Canada China

71

35

China

Australia

72

73

44

Level 2 15 1.5

75

Most recent (2006): Review ofChina practices derive best practices and 24 consolidate/simplify
United Kingdom

China

China

Canada Denmark

74

22
China Serbia

23

76

25

Russia

47

33

89

Level 1
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UAE UAE

67

69
32

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Maturity vs. Value Direction High Value


-2 -1 0 Level 3 2.5
United States China China

1 Industry: Telecommuications

2
China

71 Initial Implementation (2002): Basic project management processes

35

Most recent (2006): Integration of 44 72 73 practices with new parent organization


Canada China China China

Australia

Level 2 1.5 15

Canada Denmark

75
United Kingdom

24

74

22
China Serbia

23

76

25

Level 1
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"All divisions must work like a team to respond 47 to customer needs. Project 33 management 89 contributes to team building and coordination. It greatly improved work efficiency UAE UAE and customer satisfaction. 67 24 69 Project Manager,

Russia

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Industry: Utilities Maturity vs. Value Direction High Value


-2 Level 3 2.5

Initial Implementation (2000): -1 0 Award-winning Centre of Excellence by 2005 Most recent (2006): ( ) Control-focussed PMO and centralized Program Managers

2
China

United States

71

35

China

China

Australia

72

73

44

Level 2 1.5 15

Canada

75

"The value of project management is tangible. China China Denmark China Canada It's the structure behind the projects. We do 24 74 22 23 76 25 better than industry benchmarks." China Project Manager, 75
United Kingdom Serbia Russia

47 hard value: "Project management provides saving wasted dollars and effort and mitigating the risk of wasting dollars. Level Senior Manager, 75 1

33

89

UAE UAE

67

69

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"The value of project management is control. Project PMI Research Conference, Warsaw, Poland Manager, 75 34

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Value Drivers

Creation Of Value
Collective perception of Fit Continuous investment, focus and commitment Perceiving value in project management

Destruction Of Value
Changes in personnel responsible for driving/leading implementation Lack of attention, focus, maintenance, will Over-implementation or over-bureaucratization Inconsistent alignment of needs
Particularly between management and project managers

Uncertainty Of f Value
Political changes and conflicts Control issues/imposition of control frameworks Project management implementation as a fad PM as something that people have to do
PMI Research Conference, Warsaw, Poland 35

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CONCLUSIONS

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For This Project To Be Successful

Our Proposal Asserted That We Needed To Demonstrate:


Unequivocal and compelling evidence of the value of project management

To Do This, We Identified The Following Requirements:


A strong, international, multi-disciplinary team An approach that addresses the problems of earlier studies A cohesive and integrated research strategy that explores the overall phenomenon of project management An integrated, multi-method design that develops common, credible and defensible measures of tangible and intangible value Leveraging PMIs investment through matching funds and donations-in-kind from other institutions and organizations
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Conclusions

Project Management Delivers Value Why y are a e we so su sure? e? W


Large international team effort Sound multi-method, multi-paradigm approach Cohesive and integrated research strategy Strong reliability and validity within and across paradigms 1.2 M USD from PMI leveraged by additional funds (380,000) and donations-in-kind (~1.2M USD)
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Conclusions

Half Our Case Study Organizations Demonstrate Tangible Value Organizations That Could Calculate ROI
Should have data Are those that deliver projects for customers

However, Even Where ROI Could Be Calculated


It isnt The data isnt being collected The answer isnt considered meaningful

Resistance To Calculating ROI Appears To Stem From:


Lack of interest in the answer Fear of accountability Perceived complexity of the measurement
2008/07/14 PMI Research Conference, Warsaw, Poland 39

Conclusions

Most Organizations Demonstrate Intangible Value Value Tends To Be Around


D i i making Decision ki Communication Effective work culture Alignment of approach, terminology and values Effectiveness of the organization

Realization Of Intangible Value Is Correlated With The M Maturity i Of O Organizational i i lI Implementation l i This Reinforces The Lack Of Interest Of Many Organizations In Direct Measures Of ROI
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Conclusions
Increased Maturity Delivers Greater Value Intangible Value Appears To Increase In Proportion To Maturity
Greater levels of intangible value are reported in organizations with higher level of maturity

However, Tangible Value Is Seen At All Levels Of Maturity


Even organizations with cynical motives for implementation are able to attain tangible value
2008/07/14 PMI Research Conference, Warsaw, Poland 41

Conclusions

Implementation AND Value Are Largely Influenced By Culture These Include Differences In:
National culture
Illustrated by different approaches to this study

Organizational culture
Process vs. results driven cultures

Project management culture


PM as control and policing vs. PM as leadership and coaching
2008/07/14 PMI Research Conference, Warsaw, Poland 42

Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

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Conclusions
Even Organizations That Demonstrate Significant Value Today Are Not Assured Of Continued Value Moving g Forward Many Organizations Appear To Be At An Inflection Point
Continued delivery of value is open to question

Some Organizations Demonstrating Significant Value And Actively Investing In Their PM Implementation Are In Fact Destroying Value
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Conclusions
Where Value Is Being Sustained And Continuing To Grow, There Is On-going Focus And Improvement Underway Organizations That Stop Focussing On Value, Or Believe That They Are Done:
Stop demonstrating value The act of not enhancing value appears to destroy value

This Raises A Question On The Nature Of The Decline:


Are organizations actually losing value? Are organizations perceiving a loss of value?
2008/07/14 PMI Research Conference, Warsaw, Poland 44

Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

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Conclusions
The Value Of Project Management Implementations Are Fundamentally Determined By Fit:
How well what is implemented p meets the needs of the organization

Fit Can Be Inferred By Satisfaction


This is at best a proxy measure

Measurement Of Fit Requires Determining What Contexts And Implementations Deliver What Value
This is what this study has delivered
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Future Research Directions

Testing Of Exploratory Theories


Expansion of data collection beyond 65 organizations Large-scale, online, focussed data collection

Additional Analysis On Existing Dataset


Cultural Impacts Professionalization Industries Organizational change and PM

Exploration E l ti Of Additional Additi l Topics T i


What makes PM sustainable? What drives destruction of value? How can we better align management and project manager expectations?
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Copyright 2008 Janice Thomas, Mark Mullaly. All Rights Reserved.

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CREDITS & THANKS THE RESEARCH TEAM

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Proposal Team
Dr. Frank Anbari Dr. Ben Arbaugh Dr. Tim Brady Dr. Walid Belassi Dr. Christophe Bredillet Dr. Peter Checkland Dr Svetlana Cicmil Dr. Terry Cooke-Davies Dr. Lynn y Crawford Dr. Fathi Elloumi Dr. Young Hoon Kwak Dr. Harvey Maylor Dr. Thomas Mengel Mr. Mark Mullaly Dr. Janice Thomas Dr. Terry Williams Dr. Mark Winter

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Workshop 1 Broadway, UK
Dr. Frank Anbari Dr. Erling Andersen Dr. Walid Belassi Dr Tim Brady Dr. Dr. Christopher Bredillet Dr. Peter Checkland Dr. Svetlana Cicmil Dr. Lynn Crawford Dr. Terry Cooke-Davies Dr. Fathi Elloumi Dr. Patrick Fong Dr. Zhai Li Dr. Harvey Maylor Dr. Thomas Mengel Mr. Mark Mullaly Dr. Shi Qian Dr. Maria Romanova Dr. Jonas Soderlund Dr. Janice Thomas Dr. Rodney Turner Dr. Terry Williams Dr. Mark Winter Dr. Zhai Li Dr. Khim Teck Yeo Dr. Harry Stefanou Dr. Edwin Andrews Ms. Janice Janzen
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Workshop 2 - Montreal, Canada


Dr. Frank Anbari Dr. Erling Andersen Dr. Tim Brady p Bredillet Dr. Christopher Dr. Peter Checkland Dr. Ping Chen Dr. Svetlana Cicmil Dr. Lynn Crawford Dr. Terry Cooke-Davies Dr. Fathi Elloumi Dr Pernille Eskerod Dr. Dr. Patrick Fong Dr. Merlyn Foo Dr. Stella George Dr. Zhai Li Dr. Harvey Maylor Dr. Thomas Mengel Dr. Qiang Maoshan Mr. Mark Mullaly Dr. Shi Qian Dr. Maria Romanova Dr. Jonas Soderlund Dr. Janice Thomas Dr. Rodney Turner Dr. Vaidotas Viliunas Dr. Terry Williams Dr Mark Winter Dr. Dr. Xue Yan Dr. Khim Teck Yeo Dr. Harry Stefanou Dr. Edwin Andrews Ms. Marguerite LeBlanc
50

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Workshop 3 Esbjerg, Denmark


Dr. Frank Anbari Dr. Walid Belassi Dr. Christophe Bredillet Dr Ping Chen Dr. Dr. Svetlana Cicmil Dr. Terry Cooke-Davies Dr. Lynn Crawford Dr. Zoran Djordjevic Dr. Pernille Eskerod Dr. Stella George Mr. Nils Gerdes Dr. Thomas Lechler Dr. Zhai Li Dr. Thomas Mengel

Mr. Mark Mullaly Dr. Shi Qian Ms. Eva Riis Dr Maria Romanova Dr. Dr. Jonas Soderlund Dr. Janice Thomas Ms. Anne Live Vaagaasar Dr. Vaidotas Viliunas Ms. Jia Ning Wang Dr. Terry Williams Dr. Khim Teck Yeo Dr. Sasa Zivanovic Dr. Edwin Andrews Ms. Marguerite LeBlanc
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Workshop 4 Lake Louise, Canada


Mr. Marcos Santos Abreu Dr. Walid Belassi Dr. Ping Chen Dr. Svetlana Cicmil Mr. Martin Cohen Dr. Terry Cooke-Davies Ms. Lisa Danquah Dr. Zoran Djordjevic Dr. Pernille Eskerod Dr. Merlyn Foo Dr. Stella George Ms. Jane Helm Dr. Mimi Hurt Dr. Zhai Li Dr. Thomas Mengel Mr. Mark Mullaly Dr. Shi Qian Ms. Eva Riis Ms. Kathy Sahadath Dr. Janice Thomas Dr. Rodney Turner Ms. Anne Live Vaagaasar g Dr. Terry Williams Dr. Sasa Zivanovic Dr. Edwin Andrews Ms. Dianne Ingram
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Case Study Team Leads


Canada

Denmark
Pernille Eskerod

Mimi Hurt Thomas Mengel Mark Mullaly Janice Thomas

Norway
Erling Andersen

United States
Thomas Lechler

Lithuania
Vaidotas Viliunas

Brazil
Marcos Santos Abreu

Sweden
Jonas Soderlund

United Kingdom
Tim Brady Svetlana Cicmil Terry Cooke-Davies H Harvey M l Maylor Janice Thomas

Russia
Maria Romanova

United Arab Emirates


Walid Belassi

China
Ping Chen Shi Qian Xue Yan Zhai Li

Germany
Thomas Mengel

Serbia
Svetlana Cicmil

Australia
Lynn Crawford

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Analysis Team
Qualitative Team Dr. Svetlana Cicmil D Pi Dr. Ping Ch Chen Dr. Pernille Eskerod Dr. Zhai Li Dr. Thomas Mengel Mr. Mark Mullaly Dr. Janice Thomas Quantitative Team Dr. Terry Williams M Lisa Ms. Li Danquah D h Dr. Merlyn Foo Dr. Thomas Lechler Dr. J.W. (Mac) McDonald Mr. Mark Mullaly Dr. Janice Thomas

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And particular thanks to.

PMI AND THE CASE STUDY ORGANIZATIONS THAT MADE THIS RESEARCH POSSIBLE
2008/07/14 PMI Research Conference, Warsaw, Poland 55

RESEARCHING THE VALUE OF PROJECT MANAGEMENT


Janice L. Thomas, Ph.D.
Athabasca University

Mark E. Mullaly, PMP


Interthink Consulting Incorporated

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