My Project Nature Matrix

Project managers deal with many different types of projects. In my experiences as a project manager, I've seen simple strategy projects, mission critical system implementation projects and everything in between.

In some projects, you might be delivering a Microsoft Word document or a Powerpoint presentation containing the business strategy of an organization over the next five years. In other projects, you may be trying to launch a space shuttle!

Given the extreme diversity of projects out there, I've come up with a little “Project Nature Matrix” of my own which helps to put projects into context.

With this, I hope to help you understand what types of projects there are and how you can best handle them if you're placed as the project manager.

The Project Nature Matrix

My Project Nature matrix is shown in the diagram below, with two axes - Project Return on Investment (ROI) and Project Effort.

my project nature matrix My Project Nature Matrix

I define Project ROI as the amount of business benefit derived from delivering the project (usually measured in Net Present Value terms). Project Effort is the amount of work your resource(s) need to do in order to get the job done.

With these definitions, I propose that we have four categories of projects out there:

  • Time Wasters (low Project Effort, low Project ROI)

  • Quick Wins (low Project Effort, high Project ROI)

  • Commodity (high Project Effort, low Project ROI)

  • Mission Critical (high Project Effort, high Project ROI)

Let's take a look at each of these project categories in turn.

1. Quick Wins

Quick Wins” are good projects to do. They require low effort but have high ROI. Examples of this kind of project? Well, let's take an example.

Suppose you are the COO of a bank. You find that there are scores of operations staff reconciling trades on a daily basis. You want to automate this to some extent to free up time for your operations folks.

So you talk to the CIO and he says a programmer can write a simple script in Excel to automate reconciliations. It shouldn't take him more than three days to do it.

THAT is an example of a quick win. For a mere three days of effort, you are going to save so much time for your operations staff.

Case Study: Reconciliations are one of the most time consuming and tedious processes in a bank. A trader enters an order, e.g. buy 20 units of IBM stock at a price of $80.15 into the trading system and also records those order details into an Excel spreadsheet (usually called a “trade blotter”).

At the end of the trading day, the operations guy in the back room needs to “match” that order in the spreadsheet against the corresponding trade in the trading system. That is called “reconciliation”.

Imagine hundreds of trades being done each day and you can imagine how much tedium the operations guy has to go through.

Quick wins are the first things that should be done if you have a large list of projects to deliver. Keep delivering quick wins and the ROI will add up.

2. Commodity Work

"Commodity Work" refers to projects which are high effort, but give low ROI. These are projects you SHOULD NOT do.

I'll give you an example.

One of the things we do as a vendor is to deliver “test scripts”. These are step-by-step instructions (usually documented in Excel) to tell users how to test a particular functionality in a system.

So you'll have a test script like:

  • 1. Key your user name and password into the system.
  • 2. Click the OK button.
  • 3. If the user name and password are correct, system displays a “Login successful” message.
  • 4. If the user name and password are incorrect, system displays a “Login error” message.

This is a simple example, but in system implementation projects there can be literally thousands of such test scripts. And they are usually written by human beings in Excel.

I classify human writing of test scripts as “Commodity Work”. You have to expend many hours doing up test scripts but the returns are probably low. This is especially true if you're writing test scripts for standard functionalities like “log into the system”.

Contrast this, however with automation of such standard test scripts (i.e. you can write programs to automatically run the login test script above with no human intervention). THAT would be a "Quick Win" project because you invest in the automation one time, and you can use it again and again.

3. Mission Critical

"Mission Critical" projects are high effort and high ROI. I classify big ticket projects like core banking, core insurance or CRM implementations as Mission Critical.

Launching a space shuttle, constructing a hundred storey office building, constructing the stadium or the Olympic Games - these are all Mission Critical projects.

Mission Critical projects require huge amounts of resources and you will want a very experienced project manager at the helm, possibly with several junior project managers underneath him or her.

These projects are also very risky. And they can be “career killers”. Usually, if the sponsor of a Mission Critical project fails to deliver, he or she can be fired - because of the huge amounts of time, money and resources spent on the project.

Case Study: I was once a Business Analyst on a large core banking project for a German bank. The project was about EUR 100 million and needless to say, it involved scores of resource spread over many countries. The project manager was a very senior bank personnel and he promised to deliver the system within one and a half years.

Due to scope creep and unrealistic user expectations, the project never got delivered after that one and a half years.

Two years went by. Then three years. Parts of the system rolled out but the key functionalities were mired in problems after the launch.

What happened to this project manager? He was quickly deployed to another department in the bank and stripped of all his project management duties.

He was one of the lucky ones. In other companies, I've seen project managers get terminated, even if they had years of service in the company.

The takeaway is this - Mission Critical projects are huge in scope and impact.

If you get them right, you will earn the stars and stripes and your resume will really shine.

Get them wrong and you could be on your way out the door.

4. Time Wasters

I categorize Time Wasters as projects which are low effort and low ROI. They're not as bad as “Commodity Work” projects - they have low ROI but at least they only require low effort to implement.

Examples? Well, projects which involve fussing over small, minute details which don't matter to anyone fall in this category. If you're spending hours and hours cleaning up the contents of a shared folder in your company which no one uses - then you're guilty of a “Time Waster” project.

My take is this - alone, a Time Waster project may not take up much time or effort. But do too many of them - and you'll start seeing your valuable time seep away. Which distracts you from the projects that DO matter. So avoid Time Wasters like the plague.

Wrapping Up ...

I hope this little “Project Nature Matrix” of mine helps you understand what kinds of projects are out there. It provides you with a small lens through which you can do “Project Portfolio Management” (i.e. selection of which projects to do to achieve the best ROI in your company).

Project portfolio management is an art and science all by itself and will be a topic for another time and place. For now, I hope you've gained some insight into project natures and how you can apply this matrix to your future projects. Until next time, have a good time managing those projects!

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