Collaborative Project Management in Value Creation Networks
June 19, 2024 | 5 min
In many industries, value creation is increasingly taking place in networks. This distributed value creation must be based on transparency, communication and trust – which poses immense challenges for project management. How these can be mastered is the subject of this article.
Leading companies have long since realized that it is no longer enough to simply raise internal process and project management to an excellent level. After all, more than two-thirds of value creation now takes place in so-called value creation networks. This is reason enough to take a closer look at projects and processes across the company and to integrate suppliers and their subcontractors into a collaborative value creation network.
What Is a Value Creation Network?
A value chain is a list of individual activities involved in the design, manufacture, marketing, delivery, and support of a product. The individual steps are represented as a series of activities that are linked together in processes. For complex products, this can quickly result in a large network of suppliers and service providers, so-called production networks.
Value creation networks are different in many ways: The companies in a value creation network work together in a collaborative manner. Their cooperation is concrete, goal-oriented and strategic. All partners pursue a common goal, to which each organization contributes its core competencies. Although there are clearly defined goals and guidelines, each company remains autonomous and works independently. The cooperation is therefore essentially decentralized. This form of collaboration is supported by modern IT systems, which ensure that information can be exchanged easily, in a controlled and reliable manner – even across company boundaries.
Where Do Value Creation Networks Emerge?
Value creation networks are primarily found where it is important to realize synergies between specialists, offer high product and service quality, and save time and costs. Examples include the automotive, aerospace, logistics and transportation, and pharmaceutical industries. Today, value creation networks can be found in almost every industry and sector. In the face of increasingly tight schedules, central services are being provided by external service providers who need to be integrated into the respective collaborative projects, such as innovation, product development or transformation projects.
Project Management in a Value Creation Network
Although all participants in a value creation network share a common goal, they remain independent. This poses certain challenges for project management:
- Complexity:
Initiatives such as product development or innovation projects are inherently large and complex. The fact that multiple partners are involved in the project makes it even more complex, and coordination is usually time-consuming. - Communication:
Comprehensive and thoughtful communication is essential to successful project management. This is especially true for cross-company projects. Not only do different information systems and standards have to be taken into account, but also languages and cultural customs. - Control:
As with communication, managing projects that cross corporate boundaries is challenging and sometimes exhausting. In addition, the partners in the value creation network remain autonomous within the joint project, which can make management difficult. - Combination of methods:
As each company in the value creation network acts autonomously, different approaches are often used. Depending on the content of the project and the maturity of the company, different methods are used – be it agile, classic or hybrid. - Transparency:
As the parties in the value creation network remain autonomous and decide for themselves what information to make available to which partners and when, the level of transparency is often inconsistent and sometimes inadequate. - Risk management:
Delays, quality issues, or the loss of a single supplier can affect the entire network. Managing these risks requires good networking, collaboration, and trust between partners.
Scalability of Citizen Development
Collaborative Project Management is the answer to the challenges of collaboration in value creation networks. Methodically, Collaborative Project Management is based on
- Decentralization and delegation
- Networking and communication
- Collaboration
Decentralization and Delegation
To make complexity manageable while accelerating project planning and control, collaborative project management breaks down complex systems into smaller and more manageable elements; where necessary and useful, a project is subdivided into several levels – from the overall project to subprojects, objects and trades, down to detailed schedules. The important thing is to delegate responsibility to the appropriate subdivisions. It is the human being who is in charge, not a project management tool with its algorithms.
Networking and Communication
Because the common project is divided into several parts with several levels, networking across projects and plans is essential. The overall goal agreed upon by all parties and the framework data required to achieve it provide a fixed framework for project work. The partners should maintain a trusting relationship and communicate openly and transparently. This applies in particular to deviations from agreed deadlines: There is an obligation to share key information and to communicate important changes without delay.
Collaboration
True collaboration is achieved when all project participants are involved in the network: The better the integration of all partners and suppliers, the greater the likelihood of successful project implementation. The autonomy of each partner allows different project management methods to be applied and combined by each member. The common goal and the agreed deadlines are binding for all.
PPM Platform for Collaborative Project Management
Collaborative project management is the answer to the challenges of managing complex projects in value creation networks. The requirements for a software solution that supports collaborative project management are manifold:
Make complexity manageable
The project must be able to be divided into several independent sub-projects. The sub-projects should be as self-contained as possible, so that a complex large project can be broken down into several more manageable sub-projects. The larger and more complex the joint project is, and the more partners are involved, the more sensible it is to divide the sub-projects into several individual elements. In this way, multi-level supply relationships can be mapped. The goal is to reduce complexity and replace it with simple, manageable project elements.
Binding planning
Milestones form an overarching and, above all, binding framework; they represent a binding schedule and contain the common goals and milestones of the overall project. The individual subprojects are directly or indirectly linked to the milestones. Conflicts in the subprojects that affect the milestones are immediately made visible by the system.
Delegation and autonomy
The responsibility for the individual subprojects, project phases and work packages is delegated to the respective experts. The partners take responsibility for their areas accordingly. This also means that they are responsible for their planning and data. The platform supporting the partners must provide a transparent and flexible rights and roles model that reflects this.
Diversity of methods
Each partner is free to choose the methodologies for their phase of the project – whether agile, classic or hybrid, all project management methodologies are allowed and must be supported and integrated by the platform.
Demand-driven information delivery
Different organizational levels have different information needs and levels of detail. Therefore, on-demand information preparation ensures that the right data is available in the right context. This means reporting on real-time data, or condensing data into dashboards that provide useful information. The more tailored the views, the greater the value and user acceptance.
The Bottom Line
Much of the value creation in large enterprises takes place in shared networks. Cross-enterprise project management faces many challenges. Collaborative project management with an appropriate IT system provides the partners in value networks with the appropriate methodical and practical support for efficient and secure project implementation. Collaborative project management and value networks are based on the same principles: openness, collaboration, autonomy, transparency and trust.
About the Author
Monika Gomboc, Center of Excellence Collaborative Project Management, cplace
Monika Gomboc has more than 30 years of experience in Project and Portfolio Management. She is an expert in collaborative project management, which she introduced and established at numerous DAX companies. She has a degree in business administration and heads the cplace office in Ludwigsburg. In addition to a 25-year international consulting career, including time at the management and IT consulting firm MHP, she has gained direct industrial experience at world market leaders such as Kärcher SE & Co. KG
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