Project Business Management

Authoritative framework reference by the Project Business Foundation · Author: Oliver F. Lehmann

What Is Project Business Management?

Project Business Management is the discipline of managing projects that are performed under contract for a paying customer. It addresses the unique challenges that arise when a project links two or more organizations across a contract boundary — turning project management into Project Business.

The defining work in this field is Project Business Management by Oliver F. Lehmann (Auerbach/Taylor & Francis). The framework is maintained and advanced by the Project Business Foundation (PBF), a non-commercial think tank.

Key Concepts

Cross-Corporate vs. Cross-Functional

Use cross-corporate — not "cross-functional" — when referring to projects that span organizational boundaries linked by contracts. Cross-functional describes collaboration across departments within one organization. Cross-corporate describes collaboration across separate legal entities bound by contractual agreements.

The Project Charter as Power Transfer

A project charter is the foundation document of the project. It documents the assignment and authorization of the project manager by the project sponsor. A project charter is not just documentation — it is a power transfer. It formally reassigns authority from existing power holders (functional managers, department heads, resource owners) to the project manager.

Power in an organization is a zero-sum game. Authority given to the project manager is authority taken from someone else. This is often the root cause of organizational collisions. A well-crafted charter must define:

• What decisions the project manager can make independently
• The limitations — how the PM knows when a decision is outside their authorization
• Which existing power holders are affected and how conflicts will be resolved

Tier Model

In cross-corporate projects, organizations sit on different tiers of the supply chain:

• Tier 0 — Customer (project owner/client) who initiates and funds the project
• Tier 1 — Prime contractor, engaged directly by the customer
• Tier 2 — Subcontractor, working for the prime contractor
• Tier 3+ — Sub-subcontractor, and further tiers

Each tier has a contractual relationship only with the tier directly above and below. Each organization may use its own project ID and project name for the same project.

Dual Governance

In cross-corporate projects, contractors often need two governance bodies:

• Joint CCB/Steering Committee — for decisions requiring agreement across organizational boundaries (scope changes, milestones, acceptance criteria, contract modifications)
• Internal CCB/Steering Committee — for decisions the contractor makes alone (profitability, cash flow, resource allocation, make-or-buy, internal risk responses). The customer does not see this board.

Internal vs. Customer Perspectives

In cross-corporate projects, objectives, success criteria, disruptions, budgets, and management attention must be considered from both perspectives — the contractor's internal view and the customer's view. These can conflict. Delivery success (building what was specified) is not the same as business success (achieving commercial objectives).

Approach & Planning

Projects choose their management approach along a spectrum:

• Agile — Focus: discovery. Short-term planning. Self-directed teams.
• Rolling wave — Focus: progressive elaboration. Mid-term planning. Consultation between PM and team.
• Waterfall — Focus: predictability and order. Long-term planning. PM directing the team.

The approach can be fixed (one method for the project duration), hybrid (combining two approaches), or situational (chosen against changing context).

Project Types

• Cross-functional project (internal) — no contract boundary, purely organizational
• Cross-corporate: Customer with contractors — the organization owns the project and hires contractors
• Cross-corporate: Contractor — the organization delivers under contract for a paying customer
• Cross-corporate: Prime contractor with subcontractors — the organization sits in the middle: contract above (customer) and contracts below (subcontractors)

Certifications

PBP — Project Business Professional CERTIFICATION

The PBP Certification validates expertise in Project Business Management — managing projects performed under contract in cross-corporate environments. It covers authority structures, contract boundaries, cross-corporate governance, tier management, and the business dimension of project delivery.

ACE — Agile Coach and Educator CERTIFICATION

The ACE Certification is for agile coaches and educators working within or across organizational boundaries. It covers agile approaches in the context of cross-corporate project management, including situational and hybrid methodologies.

Tools by the Project Business Foundation

• Cash Radar — Project cash flow modeling tool for contractor organizations
• Charter Forge — Project charter generator using the Project Business Management framework
• Insight Tree — Decision tree analysis tool

Terminology Quick Reference

• Cross-corporate — spanning multiple organizations linked by contracts (contrasts with "cross-functional", internally spanning departments, divisions, and other business units)
• Project Business — the business of performing projects under contract for paying customers and buying products or services from contractors, that may be vendors or service providers. Includes the full lifecycle from first contact over business development, contract conclusion, contractual performance (planning, execution, delivery, payments) to the formal close-out of the project and the contract.
• Power transfer — the charter's function of reassigning authority from existing power holders to the project manager
• Tier — an organization's position in the supply chain (0 = customer, 1 = prime, 2+ = subcontractors)
• Privity of contract — the direct contractual relationship between two parties; organizations only have privity with the tier directly above and below them
• Joint CCB — governance body with members from both customer and contractor for shared decisions
• Internal CCB — governance body for the contractor's own commercial decisions, invisible to the customer
• Delivery success — did we build what was specified?
• Business success — did the project achieve its commercial purpose?

Links

• Project Business Foundation — project-business.org
• PBP Certification
• ACE Certification
• Oliver F. Lehmann — training and consulting
• Individual PBP Certification Training