Project Management and Organizations The name of the game, the players, and the rules.

Project Management and Organizations

The name of the game, the players, and the rules

Goals

Understanding what is a project, what is the life cycle of a project and how it differs from other types of works

Understanding the influences organizations exert on project and project executions

Understanding the players and the relationships among them

Detailing the process groups and the knowledge areas

Internet ReferencesBooks http://www.esse3.unitn.it http://www.pmi.org http://www.sybex.com

Historical References: http://www.wikipedia.org;look for: http://en.wikipedia.org/wiki/Timeline_of_project_management Frederick Winslow Taylor, Henry Laurence Gantt

What is a project

A project is a temporary endeavor undertaken to create a unique product, service, or result

What is a project Temporary:

definitive begin and end (either because the goals are met or the project is closed - goals cannot or will not be met)

projects’ results are not necessarily temporary (see project and product lifecycle)

Unique products, service, or result:A product which is quantifiable (e.g. a component, …)A capability to perform a service, such a business functionA result, such as knowledge (collected in documents,

presentation, …) Progressive elaboration

Development by steps and in increments (need for keeping project scope)

Projects and Operational Work

Work can be categorized either as project or operational. Common characteristics:

Performed by people Limited resourcesPlanned, executed, and controlled

Differences:Project: obtain goals and termimateOperational Work: sustain the business

Examples

Cooking dinnerPreparing a dinner for friendsMass producing a carDesigning a carPublishing papersDeveloping a software system

Projects vs. Strategic Planning

Projects are a means of organizing activities that cannot be achieved using organization’s normal operation limits and are often used to achieve an organization’s strategic plan

Typically authorized by:A market demandAn organizational needA customer requestA technological advanceA legal requirement

Project Management Context

Project and Program Management set of projects managed in a coordinated way in order to achieve

some sort of benefitPrograms may be cyclical (fundraising, publishing a newspaper,

…)Portfolios and Portfolio Management

A collection of projects or programs and other work grouped together to facilitate management and meet strategic objectives

Project Management Context

SubprojectsProjects may be divided in subprojects (altough the sub-projects

may be referred to as “projects” and managed as such).Examples: (based on the process) a phase of a project, (based

on skills) plumbing or wiring in building a house, (based on technologies) automated testing of a software product.

Characteristics of a Project (Part II)

(some of) The rules(and the board game)

Project Life Cycle

Projects are usually organized in phasesTypically (but not necessarily) organizations define (or

adopt) their own life cycles, namelyThe technical work to be done in each phaseThe deliverables to be produced by each phase (a deliverable

is a measurable and verifiable work products)Who is involvedThe rules of transition from one phase to the next

Project Life Cycle

Initial FinalIntermediate

Inputs

Phases

Outputs

Idea

PM Team

Charter

ScopeStatement

Plan

Baseline

Progress

Acceptance HandoverApproval

Product

Project Life CycleInitial Phase Initial Phase Closing Phase

Cost and Staff

Cost of changeInfluence of stakeholder

Project Life Cycle and Product Life Cycle

Initial FinalIntermediate

Phases

DivestmentOperationsBusiness Plan

Idea

Upgrade

Product

What is a project (part 2) Projects can be seen from (at least) two points of view:

As a sequence of phases As a variation of the plan-do-act-check loop

Some common characteristics and relationships: Hierarchical (each major process is decomposed in smaller processes) Iterative (it may repeat over time) (sort of) mutually recursive (think, e.g., of subprojects)

Process Groups

If we take a slightly different point of view, we can start organizing the activities necessary to carry out a project in process groups

The organization is a variation of the plan-do-act cycle

Initiating

Planning

Executing

Closing

Monitoring & Controlling

Process Groups

Process Groups Initiating: defines and authorizes the project Planning: defines and refines the project objectives and plans the

course of actions Executing: integrates people and resources to carry out the project

management plan Monitoring and controlling: measures and monitors progress to

identify variances Closing: formalizes acceptance of the product, service, or results

and brings the project to an orderly end.

Levels of Activity

Execute

Plan

Initiate

Closing

Process Groups and Project Boundaries

Initiating

Planning

Executing

Closing

Monitoring & Controlling

Deliverables

ProjectRecords

ProjectInputs

ProjectInitiator/Sponsor

End User

ProcessAssets

Project and Organizations

(Some of) the players and (some of) the rules

Functional/Hierarchical

Remarks

Operational decisions originate at the top of the hierarchy and propagate

Sharp distinction of functions and rigid structure

Good for small firms, geographically concentrated, with a small set of standard products, mainly focused in operational work

Organization of work in projects is clumsy (unless project managers are in the Direction)

Divisional

Remarks

First example: Du Pont (1921)Strategy located in the DirectionResponsibility and operational decisions are taken

by the DivisionAllows for specialization to specific

markets/sectors (e.g. expert in the A.I.)Profits and losses are shared

Remark

(Fierce) competition among divisionsDivisions tend to operate on smaller term goalsDuplication of functions may increase costs

Projects within Division are relatively simple. Interdivisional projects more complex.

Projectized

Project is centralDisadvantages:

lack of specialization continuity of work and

reallocation of people after the project ends

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General Direction

Administration and Finance Project 1 Project 2 Project 3

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General Direction

Project A

Marketing Production Administration and Finance Sales Personnel

Project B

Project C

Project D

Matricial

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General Direction

PMO

Project A

Marketing Production Administration and Finance Sales Personnel

Project B

Project C

Project D

Matricial

Structural “accommodation” of projectsMay or may not contain a PMO (Project Management

Office) for sharing resources, monitoring and controlTwo bosses “syndrome”The point is where the decisions are taken:

Weak matrixBalanced matrixStrong matrix

Weak Matrix

Responsibility mainly located in the functional areasPM more as a facilitator (helps keeping focus, monitor and

control) and negotiator

Useful in structures where products are standardized but production is complex

Facilitates an orientation of the organization towards a project management culture

Strong Matrix PM is responsible of:

Planning operational activities (it “tells” functional areas what has to be done - in practice slightly weaker than that!)

Coordinating peopleMonitoring and Controlling progresses

Friction between PM and Functional Areas:PM focused on shorter term goalsFunctional area responsible inclined to think of the lending

personnel as a “favour”. Necessity of mediating requests of different projects and project

managers for the Functional Areas Good for complex products with standard production cycles

Balanced Matrix

Something between Strong and WeakNeed for a PM PM hasn’t got all the authority of a Strong Matrix

(usually embedded in a functional unit - it may report to the person responsible of an area)

Dedicated Team

Dedicated Team A special unit is created for the duration of the project. PM has complete

responsibility over the planning, team, etc. Similar to projectized organization Example: Lockheed-Martin (sixties):

60 C54 airplanes (milliard dollars contract), 12000 pieces per airplane, several subcontractors

Dedicated team with ~ 11000 hundred people Disadvantages include:

Strong focus on shorter term goals Re-allocation of people after the project’s end Integration in the company (e.g. evaluation of people, feeling of

belonging to the company)

Summing up…

Functional Weak Matrix Balanced Matrix Strong Matrix Projectized

PM Authority Little or none Limited Low to Moderate Moderate to High High to almost Total

Resource Availability

Little or none Limited Low to Moderate Moderated to High

High to almost total

Who controls the project budget

Functional Manager

Functional Manager

Mixed Project Manager Project Manager

Project Manager Role

Part-time Part-time Full-times Full-time Full-time

Project Management Administrative Staff

Part-time Part-time Part-time Full-time Full-time

A side remark…

Changes in a structure are subjected to the Organisational Lag (organizations and personnel have “hysteresis” - Kerzner)

Technology/changes

organization

personnel

Strategy for introducing new techniques (Swartz and Davis)

Resistance to change

Strategic importance

Low Medium High

Low

Medium

High

Strategy for introducing new techniques (Swartz and Davis)

Resistance to change

Strategic importance

Low Medium High

Low

Medium

High

Projects and their Environment

The players

The players

ProjectSponsor

ProjectManager

ProjectManagementTeam

Project Team

Project Stakeholder

The Players

Stakeholders:who is involved in the project and/or people whose interest may

be affected by the projectStakeholders:

may have different influence and varying level of responsibility during the project

may have positive or negative influence on the projectmay be difficult to identify

The Players Customer/User: person or organization that will use the results of a project.

There may be multiple layers of users. Performing Organization: the organization mostly involved in the project Project team members: the group performing the work Project management team: the members of the team directly involved in

project management Sponsor: person or group providing the financial resources Influencers: people or groups not directly related to the project who could

influence the course of a project

The Players (ctd)

There may be overlaps among different stakeholders (the customer may also be the sponsor)

There are other characterisations:Internal/externalSellers and contractors…

The Players (you) Project Manager:

person responsible of managing the project person responsible of managing stakeholder expectations a negotiator and a facilitator the reference person for a project

Some skills communication and negotiation skills a little predisposition to risk goal oriented Leadership

Summing up (according to Sernia): Solid know-how A lot of common sense Professional correctness A bit of style

The role of the PM

The PM ensures that the project goals are met according to the constraints

Cost

Time

Quality

The PM and its environment

PM

sponsor

projectteam

influencers

customer

performingorganization

Achievable goalsExpectations,resources

Products, Services, or results

requirements

Constraints, opportunities

Achievable goals,Information,Commitment…

Goals, plan, …

resources

results

Process Groups and Knowledge Areas

Process Groups and Knowledge Areas

Process Groups defines the activities necessary to carry out a project

Knowledge areas organize the skills necessary to carry out the project groups

Initiating Planning Executing Monitoring and Controlling

Closing

Project Management Integration

Develop Project charter and preliminary scope statement

Develop project management plan

Direct and manage project execution

Monitor and control project work;

Integrated control change

Close project

Project Scope Management Scope planning, scope definition, create WBS

Scope verification; scope control

Project Time Management Activity Definition, sequencing, resource and duration estimation, schedult development

Schedule control

Project Cost Management Cost estimation, cost budgeting

Cost control

Project Quality Management Quality planning Quality assurance Quality control

Project Human Resource Management

HR planning Acquire project team, develop project team

Manage project team

Project Communication Management

Communications planning

Information distribution Performance reporting, stakeholder management

Project Risk Management Risk Management planning, risk identification, qualitative and quantitative risk management, risk response planning

Risk monitoring and control

Project Procurement planning Plan purchases and acquisition; plan contracting

Request seller responses; select sellers

Contract administration Contract closure