Supplier perspective


This section Supplier perspective further investigates the customer perspective on project objectives and based on analysis develops the opposite supplier perspective on project objectives within projects a the supplier of a project. This perspective is a key element and basis of the method, supplier project objectives management, that will be introduced in the next and final section Method.

The Conventional Definition of

Project Objectives [1]

The conventional definition of a project objective - as introduced in section Now - introduced several relevant terms and their relationships, such as business benefit, project objective, project result, change, and goal. For the method, the typical definition of project objectives is now transformed into a more generic and suitable form by substituting the following terms.

  • business becomes organisational;
  • injecting becomes implementing;
  • product becomes project result (being project product(s), service(s), other result(s), or a combination).

These substitutions result in the following new key definition.

In project management, project objectives are organisational benefits an organisation expects to achieve as a result of implementing the projectresult—product(s), service(s), other result(s), or a combination—within itself or its environment.

The term organisational benefits refers not only to strictly monetary gains, but to all kinds of changes in parameters describing the workings of any organisation that bring it closer to its goal. 

Let's focus first on the second part of this definition, regarding "all kinds of changes in parameters describing the workings of any organisation that brings it closer to its goal."

Goldratt introduces in his book The Goal that "productivity is bringing a company closer to its goal. Every action that brings a company closer to its goal is productive. Every action that does not bring the company closer to its goal is not productive." [2] 

This definition of productivity, actions, and the goal are redefined in the project context to the following.

Any project action that moves the organisation closer toward its goal is productive. Any project action that moves the organisation away from its goal is not productive.

Therefore, organisational benefits are any productive changes within an organisation that take it closer to its goal. A change is a process caused by an action; with as input the situation before the change and as output the situation after the change. Project objectives (project changes) are a selection of organisational benefits achieved because of project implementation (project actions) as part of the total group of any productive changes within the organisation (organisational changes) caused by any actions. (Figure 1)

Figure 1 Project objectives (changes) versus any changes within the organisation

The project objective is an organisational benefit achieved as a direct result of implementing the project result—product(s), service(s), other result(s), or a combination—into itself or its environment, referred to as project implementation in the broad sense. Therefore, the word implementing is embedded within project actions to emphasise that actions cause changes. The project's resulting organisational benefit is the change that takes the organisation closer to its goal.

This leads to the following redefinition of a project objective.

In project management, project objectives are organisational benefits an organisation expects to achieve as a result of project actions, which implement the project result—product(s), service(s), other result(s), or a combination—within itself or its environment. Organisational benefits are changes within an organisation that take it closer to its goal.

Figure 2 Customer perspective on project objective

It is clear from the definition and important to highlight that a project has no goal of its own. A project has project objectives, which are organisational benefits that take the organisation, not the project, closer to its goal. Therefore, there is no project goal, however only an organisational goal. 

Note however that this definition is still conventional, defined from the customer perspective, to provide the most possible benefit to the customer's organisation. 

The customer versus supplier perspective [1]

The customer and supplier perspectives on project objectives are defined relative to the concerned project. Relative to different projects, an organisation can be both supplier to another customer, and customer to another supplier. However, in case of a delivering department to a user department within an organisation, the roles of customer and supplier are fixed; for example an IT department (supplier) that executes the project and delivers the project result (new software feature) to the user (financial department), which implements the new feature within its existing software and process. 

The main questions representing the supplier perspective are (Figure 3):

  • What are project actions for a supplier?
  • How do they achieve project objectives?
  • What changes are there, and how do these turn into organisational benefits?
  • How do these changes take the project supplier closer to its goal?
  • What is the most effective goal of a project supplier?

Figure 3 Main questions representing the supplier perspective on project objectives

The following four deductions answers these questions and thereby lead to the customer and supplier perspectives via their differences, correlations, and relationships between the elements of their respective perspectives, are further explained below.

  • deviating project actions;
  • product versus process focus;
  • deviating relationships between project objectives and organizational benefits;
  • customer and supplier goals.

Deviating project actions 

The link between the customer (perspective) and the supplier (perspective) consists of the link between the implementation of the project product(s) within the customer's organisation (project result implementation) as a result of the product delivery by the supplier.

The clear distinction with the customer is that the supplier—the developing organisation—both delivers the project result to the customer and (also) executes the project to accomplish this, together defined as project execution, as opposed to project implementation by the customer.

These are the deviating project actions (project execution) of the supplier, consisting of executing the project and delivering the project result, vs. the project action (project implementation) of the customer, implementing the project result. (Figure 4)

Figure 4 The supplier's project action (project execution) - executing the project and delivering the project result - versus the customer's project action (project implementation)

The organisational benefits for the customer are project objectives achieved directly from using the implemented project result. The organisational benefits for the supplier are not equal because the supplier delivers the project result to the customer and does not receive or use the result itself. There are exceptions, such as a software supplier that develops modules on a project that can be reused in new products and projects. Therefore, because the supplier is not using the project result, its project objectives can only be achieved by this project execution, the combination of executing the project and delivering the project result to the customer. However, although some execution and delivery actions might directly achieve project objectives, there is no guarantee that project objectives are achieved just by execution and delivery. No, to successfully achieve project objectives that lead to organisational benefits for the supplier, it is necessary to actively execute specific and different actions directed at the project objectives and the internal organisation. These specific objective actions are the method's foundation and are defined as supplier project objective actions. Such objective actions are executed through the project actions of executing the project and delivering the project result. This difference and relationship between the various actions is represented in Figure 5.

Figure 5 Supplier project objective actions through project execution

Note that the supplier project actions that execute the project and deliver the project result (external focus) act as a catalyst for these supplier project objective actions (internal focus) that achieve the supplier project objectives within the supplier's organisation. (Figure 6)

Figure 6 Project objective actions through project actions

A key principle within the method is to elevate the passive results of project actions by the active results of project objective actions. The passive result of supplier project actions, executing and delivering the project result, is enhanced by actively managed execution of supplier project objective actions to achieve specific supplier project objectives.

Product versus process focus

F.J. Heemstra found two approaches to project success within an organization: the process approach (where success relates to on time, within budget, and conform specifications) and the product approach (where success relates to added value for the organization). [3] From this definition, you would identify the supplier perspective as the product approach, focusing on the added value for the organization from project execution. However, when separating the customer from the supplier perspective, we have two different organisations or departments (user and supplier) within an organisation instead of the product/process approach within the same organization. In this case, the customer focus is on the project result, and the product focus and the supplier focus should be on the added value for the organisation of the project execution (executing the project and delivering the project result delivery) within its organisation. Therefore, within the customer and supplier perspectives, the supplier perspective is indicated as the process focus, and the customer perspective is the product focus. (Figure 7)

Figure 7 Product focus on customer versus process focus on supplier

Deviating relationships between project objective and organisational benefit

Another difference between the customer and supplier perspective is the link between the project objective and the organisational benefit. For the customer, the project objectives are instant organisational benefits directly resulting from the implemented project result. However, for the supplier, in general, there is no guaranteed or instant benefit of project objectives achieved by project execution and result delivery; although exceptions exist, such as immediate earned income and a satisfied customer. The achieved project objectives might still be only of benefit within the project, and still be only potential organisational benefits at best within the organisation, that only turn into actual realized organisational benefits when they are actively embedded within the supplier's organisation. These differences are represented in Figure 8, with distinct single vs. double-sided and horizontal vs. vertical-oriented arrows within the customer and the supplier perspectives.

Figure 8 Deviating links between objectives and organisational benefits 

In other words, direct organisational benefits to the customer and indirect organisational benefits to the supplier. Note that all supplier project objectives are potential organizational benefits for the supplier. However, not all organisational benefits for the supplier result from projects; various other sources exist for internal organisational benefits, not resulting from their main project business. Examples are internal organisational improvements, innovations not through an external project, or a charity initiative creating positive publicity. 

Furthermore, although project objectives and organisational benefits are both types of changes—the organizational benefit being an achieved project objective—a subtle difference is made, specifically for the supplier. Project objectives are defined as actions and organisational benefits as their results. For example, a project objective is to make a profit on the project, the resulting potential organisational benefit, once the project objective is achieved, is the anticipated profit (more revenue than cost), and the actual realized benefit for the organisation, when embedded by the organization through fulfilling the payment conditions, submitting the formal invoice, and receiving the actual payment, actual cash received.

Customer and supplier goals

The goal of the customer and supplier might be equal, for instance, when they are both suppliers and customers in the project chain of sub-supplier to supplier to customer to end-customer. Or the goals might deviate in case of a fixed relationship of supplier and user within a single organization. The goal of for-profit companies (supplier and customer) might be equal, for example, making money. The main question is: What is the goal of the customer or supplier, both project-based organizations, profit or non-profit, with internal or external project deliveries, operating in a multi-project environment?

In section Future, the unique goal and most effective goal within the customer and supplier perspective and the method of both project customers and suppliers was redefined to the generic definition for both for-profit and non-profit organisations to: 

  • secure the future of the organisation. 

For some non-profit organisations, such as a human aid organisation, the goal to provide human aid might be their highest goal. However, for this organisation to be able to provide such aid on a long term basis, now and in the future, it should still ensure that its future is secured in the long term. Providing human aid without sufficient focus on securing its future might actually risk its continued existence, thereby not being able to provide that human aid in the future.

The customer versus supplier perspectives diagram

The preceding deductions are depicted in the customer and supplier perspectives diagram (Figure 9), structuring the differences, correlations, and relationships between their various elements.

Figure 9 Customer versus supplier perspectives diagram (CSP Diagram) © 

It is important again to highlight the link—a partnership—between the supplier and the customer established through part of the supplier project actions, namely through the project result delivery part of the project execution, linked with the customer's project actions of implementing the project result. PMI [4] defines the project charter as a document formally authorising a project or a phase and documenting initial requirements that satisfy the stakeholders' needs and expectations. It establishes this partnership between the performing organisation and the requesting organisation (or customer, in the case of external projects). The project charter documents the business needs, current understanding of the customer's needs, and the new product, service, or result intended to satisfy, such as measurable project objectives and related success criteria.

The supplier perspective on project objectives [1]

The preceding deviations between the customer and supplier perspectives result in the following distinct definition of a project objective from the supplier perspective, as opposed to the customer perspective (Figure 10):

In project objectives management at a project supplier, supplier project objectives are potential supplier organisational benefits, achieved by actively fulfilling supplier project objective actions, along with and through supplier project actions (which execute the project and deliver the project result – product(s), service(s), other result(s) or a combination – to the customer).

These potential supplier organisational benefits turn into productive changes; however, only when embedded by the organisation as actual realised supplier organisational benefits within itself, which take the project supplier closer to its goal to secure its own future.

Figure 10 Supplier perspective on project objectives

This perspective on project objectives for the project supplier, the supplier perspective, forms the core philosophy of the method; it provides the means to close the gap between project and organizational success for the project supplier. Although also valid from the customer perspective, it is highlighted that supplier project objective actions act on the project level, project objectives act on both the project and organization levels, and organisational benefits and the goal act on the organisation level. Furthermore, it is of primary importance within the supplier perspective of the method to realize and accept the following:

  • the project has no primary goal of its own;
  • there is only one goal: the organization's goal.

Therefore, the project (team) should subordinate to the organisation and, ultimately, the organisation's goal by implementing supplier project objective actions.

Active subordination (alignment) of the project (team) to its organisation and its organisation's goal is a governing principle and part of the core philosophy, and an essential requisite for success for the supplier that distinguishes the supplier from the customer perspective on project objectives. The project subordinates to its organisation's goal and not its own goal. A project's goal does not exist within the method to emphasize the importance of this principle. It is important for the project objectives and their definitions to highlight the link between the project and the organisation and its subordination to the organisation.

There must be a clear link between the outputs created by the projects and the requirements of the organisation's business strategy for an organisation to create optimal value from its investment in projects. This means organisations need a structure to align the project deliverables with organisational goals.

Although apparent for the customer, where projects directly achieve organisational benefits that take the customer closer to its goal, such alignment or subordination is less apparent for the supplier, where projects themselves usually have the highest priority, at least for the project team, for example, incentives to keep good resources on their project without sharing with other projects.

Supplier project actions are possible without supplier project objective actions; however, contrary, supplier project objective actions are not possible without supplier project actions. Supplier project actions still provide the highest possible benefit to the customer, along with which supplier project objective actions aim to provide the most benefit to the supplier. Furthermore, note that supplier project objective actions act on the project level, project objectives on both organisational and project levels, and organisational benefits and goals on the organisational level.

Conclusions

This section Supplier perspective further investigated the customer perspective on project objectives and based on analysis develops the opposite supplier perspective on project objectives within projects a the supplier of a project. This perspective is a key element and basis of the method, supplier project objectives management, that will be introduced in the next and final section Method. 

The next section Generic objectives introduces the ten generic project objectives within the dedicated method. Combined with the supplier perspective these generic project objectives form the basis of the dedicated method for project suppliers to manage project objectives effectively within their organisation. 

Generic objectives

Footnotes (see section References)

[1] van der Wekken, 2024.  

[2] Goldratt and Cox, 1984. 

[3] Heemstra, 2011.

[4] PMI, 2021.