Project firms

Hongkong and Shanghai Banking Corporation (HSBC) is a major bank based in Hong Kong. In the late 1970s the new chief executive and chairman decided that in order to signal its aspiration to be a global, and not a regional, financial institution. To help achieve that he believed it needed a new and prestigious headquarters building.  Clearly this was a project it could not carry out itself.  It needed to engage the services of a number of project firms – architects, builders, engineers – to design and construct the new Hongkong and Shanghai Banking Corporation headquarters.  Establishing and conducting the project raised enormous challenges but eventually produced one of the great buildings of the late twentieth century.

Project firms specialise in doing projects

Although most projects are done by the organisations that need them, many projects are just too large or complex for them to be done in-house.  Project firms are organisations (overwhelmingly companies and partnerships) that carry out projects for clients.  They include everything from small architectural practices right the way up to huge international IT services firms and construction companies.  Activities include management consulting, technical advice, IT system development, organisational change and many other things.  Project firms may work with others in joint ventures to complete very large and complex projects.  They may also act as customers and suppliers of each other.  They are commonly referred to as contractors, because they work under a contract with their customers.

Project firms get business by actively marketing their services in different ways, sometimes even proposing ideas for projects.  A potential client may issue a request for proposals to a number of project firms, and evaluate tenders from them before picking the winner.  Even traditional manufacturing businesses are transforming themselves into project firms, some offering to create the project output and then support it throughout its operational life under a whole life contract.

Should the project be done in-house or not?

When contemplating a project, an organisation will have to weigh up whether they can do it all themselves, contract with a project firm for the entire job, or engage professional help for parts of the project where it lacks expertise (see below). A core consideration is risk – who is best placed to deal with the risks which the project presents? Project firms make a lot of their money from being able to manage risks better than their clients could if they did projects themselves.

If the decision is taken to have an external supplier do all or most of the project, that does not mean that the customer organisation simply sits back and watches the work being done. In order to make things run smoothly, the customer needs to have a project running in parallel with that of the supplier, with specific roles to facilitate progress.

Main source

Foster and Partners (2005). Catalogue. Munich: Prestel.  Herzner, H. (2009). Project management case studies. 3 ed. Hoboken, NJ: John Wiley.