Project Management
Chapter Two
Project Management Growth: Concepts and Definitions
When to Use Project Management
- Are the jobs complex?
- Are there dynamic environmental considerations?
- Are the constraints tight?
- Are there several activities to be integrated?
- Are there several functional boundaries to be crossed?
The Need For Restructuring
- Accomplish tasks that could not be effectively handled by the traditional structure
- Accomplish onetime activities with minimum disruption to routine business
Restructuring Problems
- Project priorities and competition for talent may interrupt the stability of the organization and interfere with its long-range interests by upsetting the normal business of the functional organization.
- Long-range planning may suffer as the company gets more involved in meeting schedules and fulfilling the requirements of temporary projects.
Restructuring Problems
(Continued)
- Shifting people from the project to project may disrupt the training of new employees and specialists. This may hinder their growth and development within their fields of specialization.
Imperatives
- The time span between project initiation and completion appears to be increasing.
- The capital committed to the project prior to the use of the end item appears to be increasing.
- As technology increases, the commitment of time and money appears to become inflexible.
Imperatives (Continued)
- Technology requires more and more specialized manpower.
- The inevitable counterpart of specialization is organization.
- The above five “imperatives” identify the necessity for more effective planning, scheduling, and control.
Obstacles
- Unstable economy
- Shortages
- Soaring costs
- Increased complexity
- Heightened competition
- Technological changes
- Societal Concerns
Obstacles (Continued)
- Consumerism
- Ecology
- Quality of work
Results of NOT Controlling Obstacles
- Decreased Profits
- Increased manpower needs
- Cost overruns, schedule delays, and penalty occurring earlier and earlier
- An inability to cope with new technology
- R&D results too late to benefit existing product lines
- Temptation to make hasty decisions that prove to be costly
Results of NOT Controlling Obstacles (Continued)
- Management insisting on earlier and greater return on investment
- Greater difficulty in establishing on-target objectives in real time
- Problems in relating cost to technical performance and scheduling during the execution of the project
Project Management Growth
- Technology increasing at an astounding rate
- More money invested in R&D
- More information available
- Shortening of project life cycles
Early Reasons For Failure
- There was no need for project management.
- Employees were not informed about how project management should work.
- Executives did not select the appropriate projects or project managers for the first few projects.
Early Reasons for Failure
(Continued)
- There was no attempt to explain the effect of the project management organizational structure on the wage and salary administration program.
- Employees were not convinced that executives were in total support of the change (to project management).
Integrative Responsibility
- Total accountability assumed by a single person
- Project rather than functional dedication
- A requirement for coordination across functional interfaces
- Proper utilization of integral planning and control
Advantages
- Easy adaptation to an ever-changing environment
- Ability to handle a multidisciplinary activity within a specified period of time
- Horizontal as well as vertical work flow
- Better orientation toward customer problems
- Easier identification of activity responsibilities
- A multidisciplinary decision-making process
- Innovation in organizational design
Project Management Evolution
- Biblical Project Management
- Military Project Management
- Space Exploration
- Heavy Construction
- Other
Life Cycle Phases for Project Management Maturity
Line
Management
Acceptance
Growth
Maturity
Embryonic
Executive
Management
Acceptance
Executive
Management
Acceptance
Line
Management
Acceptance
Growth
Maturity
Life Cycle Phases for Level 2
Project Management Maturity
Embryonic
- Recognize need
- Recognize benefits
- Recognize applications
- Recognize what must be done
Embryonic
Executive
Management
Acceptance
Line
Management
Acceptance
Growth
Maturity
Life Cycle Phases for Level 2
Project Management Maturity
Executive
- Visible executive support
- Executive understanding of project management
- Project sponsorship
- Willingness to change way of doing business
Management Acceptance
Embryonic
Executive
Management
Acceptance
Growth
Maturity
Life Cycle Phases for Level 2
Project Management Maturity
Line Management
Acceptance
- Line management support
- Line management
commitment - Line management education
- Willingness to release employees for project management training
Embryonic
Executive
Management
Acceptance
Line
Management
Acceptance
Growth
Maturity
Life Cycle Phases for Level 2
Project Management Maturity
Growth
- Development of a methodology
- Use of life cycle phases
- Commitment to planning
- Minimization of “creeping scope”
- Selection of a project tracking system
Embryonic
Executive
Management
Acceptance
Line
Management
Acceptance
Growth
Maturity
Life Cycle Phases for Level 2
Project Management Maturity
Maturity
- Development of a management cost/ schedule control system
- Integrating cost and schedule control
- Developing an educational program to enhance project management skills
Driving Forces for Maturity
- Capital projects
- Customer expectations
- Competitiveness
- Executive understanding
- New product development
- Efficiency and effectiveness
The Components of Survival
Efficiency and
Effectiveness
New Product
Development
Executive
Understanding
Capital
Projects
Customer
Expectations
Competitiveness
SURVIVAL
Internal
Efficiencies &
Effectiveness
Fast
Slow
Speed of Maturity
The Speed of Maturity
Customer
Expectations
Competitiveness
Project-Driven
Organizations
Non-Project-Driven
and Hybrid
Organizations
Benefits Of Project Mgt.
- Project management will require more people and add to the overhead costs.
- Profitability may decrease.
- Project management allows us to accomplish more work in less time and with less people.
- Profitability will increase.
Present View
Past View
Benefits Of Project Mgt.
- Project management will increase the amount of scope changes.
- Project management creates organizational instability and increases conflicts.
- Project management will provide better control of scope changes.
- Project management makes the organization more efficient and effective.
Present View
Past View
Benefits Of Project Mgt.
- Project management is really “eye wash” for the customer’s benefit.
- Project management will create problems.
- Project management will allow us to work closer with our customers.
- Project management provides a means for problem solving.
Present View
Past View
Benefits Of Project Mgt.
- Only large projects need project management.
- Project management will increase quality problems.
- All projects will benefit from project management.
- Project management increases quality.
Present View
Past View
Benefits Of Project Mgt.
- Project management will create power and authority problems.
- Project management focuses on suboptimization by looking at only the project.
- Project management will reduce the majority of the power struggles.
- Project management allows people to make good company decisions.
Present View
Past View
Benefits Of Project Mgt.
- Project management delivers products to a customer.
- The cost of project management may make us noncompetitive.
- Project management delivers solutions to a customer.
- Project management will increase our business.
Present View
Past View
$
?
Time
Project Management Costs Versus Benefits
Additional
Profits from
Better Project
Management
Pegged
Cost of Project Management
Project -Driven
Industry Classification
(By Project Management Utilization)
- PM has P&L responsibility
- PM is a recognized profession
- Multiple career paths
- Income comes from projects
Hybrid
- Production driven but with many projects
- Emphasis on new product develop.
- Short product life cycles
- Marketing-orient.
- Need for rapid develop. process
Program Management
- Very few projects
- Profitability from production
- Large brick walls
- Long life cycle products
Product Management
Present
Past
Project
Management
Non-
Project-Driven
From Hybrid to Project-Driven
- Entrance via project-driven divisions such as MIS and R&D
- Entrance via marketing, sales, engineering and R&D
Traditional Project
Management
Modern Project
Management
1960 -1990 Hybrid
1990 -Present Hybrid
Recessionary Effects
Recession
Layoffs
R&D
Training
Solutions
Sought
Results of the
Recessions
1979-1983
Blue
Collar
Eliminated
Eliminated
Short-
Term
- Return to status quo
- No project management support
- No allies for
project management
- Change way of doing
business - Risk management
- Examine lessons
learned
1989-1993
White
Collar
Focused
Focused
Long-
Term
Characteristics
New Processes Supporting Project Management
1960-
1985
1985
1990
1991-
1992
1993
1994
No
Allies
Total
Quality
Manage-
ment
Concurrent
Engineer-
ing
Empower-
ment and
Self-
Directed
Teams
Re-
Engineering
Life
Cycle
Costing
Increasing Support
New Processes Supporting Project Management (Continued)
1995
1996
1997-
1998
1999
2000
Scope
Change
Control
Risk
Management
Project
Offices
And
COEs
Co-
Located
Teams
Multi-
National
Teams
Increasing Support
New Processes Supporting Project Management (Continued)
2001
2002
2003
2004
2005
Maturity
Models
Strategic
Planning
For
Project
Management
Intranet
Status
Reports
Capacity
Planning
Models
Six Sigma Project Mgt
Increasing Support
New Processes Supporting Project Management (Continued)
2006
2007
2008
2009
Virtual Project Teams
Lean
Project Teams
Best
Practice
Libraries
Capacity
Planning
Models
Increasing Support
Definitions: Systems
- Air Force
A composite of equipment, skills, and techniques capable of performing and/or supporting an operational role. A complete system includes related facilities, equipment, material services, and personnel required for its operation to the degree that it can be considered as a self- sufficient unit in its intended operational and/or support environment.
Definitions: Systems (continued)
- NASA
One of the principal functioning entities comprising the project hardware within a project or program. The meaning may vary to suit a particular project or program area. Ordinarily, a “system” is the first major subdivision of project work (spacecraft systems, launch vehicle systems).
Definitions: Programs
- Air Force
The integrated, time-phased tasks necessary to accomplish a particular purpose.
- NASA
A relative series of undertakings that continue over a period of time (normally years) and that are designed to accomplish a broad, scientific or technological goal in the NASA long-range plan (lunar and planetary exploration, manned spacecraft systems).
Definitions: Projects
- NASA/Air Force
A project is within a program as an undertaking with a scheduled beginning and end, and which normally involves some primary purpose.
KINDS OF PROJECTS
Once a group of tasks is selected and considered to be a project the next step is to define the kinds of projects encountered. There are four categories of projects:
INDIVIDUAL PROJECTS
Short-duration projects normally assigned to a single individual who may be acting as a project manager and/or a functional manager.
STAFF PROJECTS
These projects that can be accomplished by one organizational unit, say a department. Staff (or a task force) is developed from each section involved. This works best when one functional unit is involved.
SPECIAL PROJECTS
Very often special projects occur which require that certain primary functions and/or authority be assigned temporarily to other individuals or unit. These works best for short-duration projects. Long-term projects can lead to severe conflicts.
MATRIX OR AGGREGATE PROJECTS
These projects require specific (or specialized) input from a large number of functional (or business) units and usually control vast resources.
Failures
Projects
Time
Successes
MATURITY
EXCELLENCE
2 YEARS
5 YEARS
Successes Vs. Failures
Evolution of Policies,
Procedures and Guidelines
1970s
Early 1980s
Mid 1980s
Late 1980s
1990s
Project
Management
with Concurrent
Engineering
CONVENTIONAL PROJECT MANAGEMENT
Life
Cycle
Phases
Policy and
Procedure
Manuals
Guidelines
per
Life Cycle
Phase
General
Project
Guidelines
Checklists
with
Periodic
Review
Points
Magnitude of Documentation
LEGEND
DEFINITION OF A PROJECT LIFE CYCLE
Resources
Utilized
RESOURCES
TIME
CONCEPTUAL
PHASE
DETAILED
PLANNING PHASE
FEASIBILITY AND
PRELIMINARY
PLANNING PHASE
IMPLEMENTATION
PHASE
CONVERSION
OR TERMINATION
PHASE
PMO
PMO *
Success: Point Or Cube?
Cost
Time
Quality
(or scope)
The Definition Of Success
Success
- Definition of Success
Primary Factors
Within Time
Within Cost
Within Quality
Accepted by The Customer
Success
Secondary Factors:
Customer Reference
Follow-on Work
Financial Success
Technical Superiority
Strategic Alignment
Regulatory Agency Relations
Health and Safety
Environmental Protection
Corporate Reputation
Employee Alignment
Ethical conduct
Success
- Critical Success Factors (CSFs) [Focuses on the Deliverables]
- Key Performance Indicators (KPIs) [Focuses on the Execution Metrics of the Process]
Key Performance Indicators
These are shared learning topics which allow us to maximize what we do right and correct what we do wrong.
None
Components of Failure
A
Perceived
Failure
Actual
Planned
Perfection
Achievable
B
C
D
Actual Failure
Planning
Failure
E
Accomplishment
None
Components of Failure
A
Perceived Failure
Actual
Planned
Perfection
Achievable
B
C
D
Actual
Failure
Planning
Failure
Accomplishment
Poor Risk Management
Risk Planning
Technical
Inability
Customer Expectations
Actual Performance
Performance
Time
Mitigation Strategies Available
Opportunities for Tradeoffs
Resulting from Risk Analyses
Numerous
Limited
Project
Objectives
Project
Planning
Schedule Risk
Assessment
Financial Risk
Assessment
Technical Risk
Assessment
and Forecasting
Market Risk
Assessment
and Forecasting
Project
Execution
Technical
Strategy
Product/Market
Strategy
The starting point in the development of any project management methodology is the implementation of a stage-gate process.
Stages
- Groups of series or parallel activities (based upon the risks of the project)
- Managed by cross-functional teams
- To reach a predetermined deliverable established by management
Gates
- Structured decision points at the end of each stage
- Number of gates must be limited
Gatekeepers
- Individuals (i.e. sponsors) or groups of individuals assigned by senior management
- Empowered to enforce the structured process (including change management)
- Authorized to evaluate performance and make decisions
- And willing to provide the team necessary technical and business information
Gatekeeper’s decisions
- Proceed to next gate with the original objectives
- Proceed to the next gate with revised objectives
- Delay making a gate decision until further information is obtained
- Terminate the project
Stage-Gate Failures
- Assigning gatekeepers and not empowering them to make decisions
- Assigning gatekeepers who are afraid to terminate a project
- Failure to provide the team with information critical to gate reviews
- Allowing the team to focus more on the gates than on the stages
Methodology Inputs
Project
Management
Methodology
Organization
Work
(Tasks)
Tools
People
Low
Neutral
High
Resistance to Change
Finance
H.R.
Eng.
I.T.
Sales
Marketing
Procurement
Manu.
R&D
Change Process
Support for Change
Time
Denial
Resistance
Exploration
Resistance
Support
Types of Cultures
- Cooperative
- Non-cooperative
- Isolated (large companies)
- Fragmented (multinational)
Integrated Processes for
The 21st Century
Project Management
Concurrent
Engineering
Total Quality
Management
Risk
Management
Change
Management
Yrs: 1990-2000
Integrated Processes
(Past, Present, and Future)
- Project management
- Total quality management
- Concurrent engineering
- Scope change management
- Risk management
Yrs: 2000-2010
- Supply chain management
- Business processes
- Feasibility studies
- Cost-benefit analyses (ROI)
- Capital budgeting
Current
Integrated
Processes
Integrated
Processes
Integrated
Processes
Multi-project Management
- Are the project objectives the same?
For the good of the project?
For the good of the company?
- Is there a distinction between large and small projects?
- How do we handle conflicting priorities?
Critical versus critical projects
Critical versus non-critical projects
Non-critical versus non-critical projects