The Three Types of Projects
By William R. Duncan
There are three major types of projects:
- New product development projects
The justification for these projects is to develop something that will be sold: they are undertaken to solve someone else’s problem. The product of the project is the thing that will be sold. The product might be software, an airplane engine, the airplane itself, a camera, a training program, whatever. From a financial perspective, the profit to be generated from the product is a key decision in project selection decisions.
There is no direct justification for these projects: they are undertaken to provide support to someone else’s project. The product of the project is the work of the project. Most consulting (including construction) projects fall into this category as do non-profit fund-raisers. From a financial perspective, the profitability of the project itself is a key decision in project selection decisions.
The justification for these projects is to fix a problem that prevents the organization from doing something as well as it could (this includes creating the capacity to do something it can’t). The product of the project is infrastructure: the ability to do something. Most internal projects fall into this category: IT, organizational development, strategic planning, etc. From a financial perspective, it is often hard to justify these projects since they deliver no direct benefits.
Originally published at pmtip.wordpress.com
William R. Duncan is the principal of Project Management Partners of Lexington, MA USA. He currently chairs the Board of PMCert, the certification body of the American Society for Advancement of Project Management (asapm). He was the primary author of the original (1996) version of A Guide to the Project Management Body of Knowledge and was one of the founding members of the Global Alliance for Project Performance Standards (GAPPS) which has recently published a framework for performance-based competency standards for project managers.
© 2009 William R. Duncan – http://www.pmpartners.com/