How PMI defines business value?

A Guide to The Project Management Body of Knowledge (PMBOK Guide) – Fifth Edition () states "through the effective use of portfolio, program, and project management, organizations will possess the ability to employ reliable, established processes to meet strategic objectives and obtain greater business value from their project investments." In other words, the whole purpose for project management (as well as portfolio and program management) is to execute work which provides increased "value" to the business or customer. If an organization does not realize increased business value as a result of sponsoring and executing a project, then the project will not (or should not) be embarked.Thus, the most important aspect of project management is "delivering business value to the customer.”As a means to realize this aspect, a project manager must foster a project environment which focuses on delivering the identified 

business value.

Author : Mark A Phillipy, PMP Sensible Project Manager

PMI defines business value as the "entire value of the business; the total sum of all tangible and intangible elements".  Therefore, successful business value realization is a combination of strategic planning and effective management. Bridging the gap between organizational strategy and successful business value realization requires the use of portfolio, program, and project management techniques:  

• Portfolio management aligns projects programs and/or operations to the organizational strategy 

• Program management aligns multiple project for optimize and/or integrated cost, schedule, effort, and benefits 

• Project management enables the organization to apply knowledge, processes, skills, and tools to enhance the likelihood of success over a wide range of projects. Projects are means of achieving organizational strategy and objectives   

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Defining the business value of a project during the planning process can give project leaders information they need to make smart decisions throughout execution

Looking for a way to stay ahead of the pack in today’s competitive and chaotic global economy, companies are turning to project management to consistently deliver business results. Disciplined project management starts at the portfolio level, where the strategic vision drives initial investments and where value measures are established. A fully aligned project, program and portfolio management strategy encompasses the entire organization, dictating project execution at every level and aiming to deliver value at each step along the way. Project management is, in fact, shorthand for project, program and portfolio management. And more companies are clearly seeing the payoff from investing time, money and resources to build organizational project management expertise: lower costs, greater efficiencies, improved customer and stakeholder satisfaction, and greater compe

• nitiating
• Planning
• Executing
• Monitoring and Controlling
• Closing

…based on the relationship between satisfying needs and expectations and the resources required to achieve them

More specifically, what is a project? It's a temporary endeavor undertaken to create a unique product, service or result.

A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources.

And a project is unique in that it is not a routine operation, but a specific set of operations designed to accomplish a singular goal. So a project team often includes people who don’t usually work together – sometimes from different organizations and across multiple geographies.

The development of software for an improved business process, the construction of a building or bridge, the relief effort after a natural disaster, the expansion of sales into a new geographic market — all are projects.

And all must be expertly managed to deliver the on-time, on-budget results, learning and integration that organizations need.

Project management, then, is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.

It has always been practiced informally, but began to emerge as a distinct profession in the mid-20th century. PMI’s A Guide to the Project Management Body of Knowledge (PMBOK® Guide) identifies its recurring elements:

Project management processes fall into five groups:

• Initiating
• Planning
• Executing
• Monitoring and Controlling
• Closing

Project management knowledge draws on ten areas:

All management is concerned with these, of course. But project management brings a unique focus shaped by the goals, resources and schedule of each project. The value of that focus is proved by the rapid, worldwide growth of project management:

• as a recognized and strategic organizational competence 
• as a subject for training and education 
• as a career path

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agreed with Mr. Farooq