02-project And Organization

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

Goals ⑤ Understanding what is a project, what is the life cycle of a project and how it differs from other types of works ⑤ Understanding the influences organizations exert on project and project executions ⑤ Understanding the players and the relationships among them ⑤ Detailing the process groups and the knowledge areas

Internet References Books ⑤ http://www.esse3.unitn.it ⑤ http://www.pmi.org ⑤ http://www.sybex.com

Historical References: http://www.wikipedia.org; look for: ⑤ http://en.wikipedia.org/wiki/Timeline_of_project_manageme ⑤ Frederick Winslow Taylor, ⑤ Henry Laurence Gantt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 ⑤ 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) ⑤ Unique products, service, or result:  A product which is quantifiable (e.g. a component, …)  A capability to perform a service, such a business function  A result, such as knowledge (collected in documents, presentation, …) ⑤ Progressive elaboration  Development by steps and in increments

Projects and Operational Work Work can be categorized either as project or operational. ⑤ Common characteristics:  Performed by people  Limited resources  Planned, executed, and controlled

⑤ Differences:  Project: obtain goals and termimate  Operational Work: sustain the business

Examples ⑤ Cooking dinner ⑤ Preparing a dinner for friends ⑤ Mass producing a car ⑤ Designing a car ⑤ Publishing papers ⑤ Developing 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: ⑤ A market demand ⑤ An organizational need ⑤ A customer request ⑤ A technological advance ⑤ A legal requirement

Project Management Context ⑤ Project and Program Management  set of projects managed in a coordinated way in order to achieve some sort of benefit  Programs may be cyclical (fundraising, publishing a newspaper, …)

⑤ 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 ⑤ Subprojects  Projects 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 ⑤ Projects are usually organized in phases ⑤ Typically (but not necessarily) organizations define (or adopt) their own life cycles, namely  The technical work to be done in each phase  The deliverables to be produced by each phase (a deliverable is a measurable and verifiable work products)  Who is involved  The rules of transition from one phase to the next

Project Life Cycle Inputs Phases

Idea PM Team

Initial Charter

Outputs

Intermediate Plan

Scope Statement

Final

Progress Baseline

Acceptance

Approval

Handover

Product

Project Life Cycle Initial Phase

Initial Phase

Closing Phase

Cost and Staff

Influence of stakeholder

Cost of change

Project Life Cycle and Product Life Cycle Upgrade

Business Plan

Operations

Idea Product

Phases Initial

Intermedi ate

Final

Divestment

What is a project (part 2) ⑤ 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

⑤ 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 ⑤ If we take a slightly different point of view, we can start organizing the activities necessary to carry out a project in process groups ⑤ The organization is a variation of the plan-do-act cycle

Process Groups Monitoring & Controlling

Planning

Closing

Initiating

Executing

Process Groups ⑤ Initiating: defines and authorizes the project ⑤ Planning: defines and refines the project objectives and plans the course of actions ⑤ Executing: integrates people and resources to carry out the project management plan ⑤ Monitoring and controlling: measures and monitors progress to identify variances ⑤ Closing: formalizes acceptance of the product, service, or results and brings the project to an orderly end.

Levels of Activity Execute

Plan

Closing Initiate

Process Groups and Project Boundaries Monitoring & Controlling

Deliverables

End User

Planning

Project Project Initiator/Sponsor Inputs

Closing

Initiating

Executing

Project Records

Process Assets

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

Functional/Hierarchical

Remarks ⑤ Operational decisions originate at the top of the hierarchy and propagate ⑤ Sharp distinction of functions and rigid structure ⑤ Good for small firms, geographically concentrated, with a small set of standard products, mainly focused in operational work ⑤ Organization of work in projects is clumsy (unless project managers are in the Direction)

Divisional

Remarks ⑤ First example: Du Pont (1921) ⑤ Strategy located in the Direction ⑤ Responsibility and operational decisions are taken by the Division ⑤ Allows for specialization to specific markets/sectors (e.g. expert in the A.I.) ⑤ Profits and losses are shared

Remark ⑤ (Fierce) competition among divisions ⑤ Divisions tend to operate on smaller term goals ⑤ Duplication of functions may increase costs ⑤ Projects within Division are relatively simple. Interdivisional projects more complex.

Projectized ⑤ Project is central ⑤ Disadvantages:

General Direction

Administration and Finance

Project 1

Project 2

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Project 3

 lack of specialization  continuity of work and reallocation of people after the project ends

Matricial QuickTime™ and a None decompressor are needed to see this picture. General Direction

Marketing

Project A

Project B

Project C

Project D

Production

Administration and Finance

Sales

Personnel

Matricial General Direction

PMO

Marketing

Production

Administration and Finance

Project A

Project B

Project C

Project D

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Sales

Personnel

Matricial ⑤ Structural “accommodation” of projects ⑤ May or may not contain a PMO (Project Management Office) for sharing resources, monitoring and control ⑤ Two bosses “syndrome” ⑤ The point is where the decisions are taken:  Weak matrix  Balanced matrix  Strong matrix

Weak Matrix ⑤ Responsibility mainly located in the functional areas ⑤ PM more as a facilitator (helps keeping focus, monitor and control) and negotiator ⑤ Useful in structures where products are standardized but production is complex ⑤ Facilitates an orientation of the organization towards a project management culture

Strong Matrix ⑤ PM is responsible of:  Planning operational activities (it “tells” functional areas what has to be done - in practice slightly weaker than that!)  Coordinating people  Monitoring and Controlling progresses ⑤ Friction between PM and Functional Areas:  PM focused on shorter term goals  Functional 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 ⑤ Good for complex products with standard

Balanced Matrix ⑤ Something between Strong and Weak ⑤ Need for a PM ⑤ 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 ⑤ A special unit is created for the duration of the project. PM has complete responsibility over the planning, team, etc. ⑤ Similar to projectized organization ⑤ Example: Lockheed-Martin (sixties):  60 C54 airplanes (milliard dollars contract), 12000 pieces per airplane, several subcontractors  Dedicated team with ~ 11000 hundred people ⑤ 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 Project Manager Role Project Managemen t Administrati ve Staff

Functional Manager

Functional Manager

Mixed

Project Manager

Project Manager

Part-time

Part-time

Full-times

Full-time

Full-time

Part-time

Part-time

Part-time

Full-time

Full-time

A side remark… ⑤ 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)

Strategic importance

High

Medium

Low Resistance to change Low

Medium

High

Strategy for introducing new techniques (Swartz and Davis)

Strategic importance

High

Medium

Low Resistance to change Low

Medium

High

Projects and their Environment The players

The players Project Sponsor

Project Manager

Project Management Team Project Team Project Stakeholder

The Players ⑤ Stakeholders:  who is involved in the project and/or people whose interest may be affected by the project

⑤ Stakeholders:  may have different influence and varying level of responsibility during the project  may have positive or negative influence on the project  may be difficult to identify

The Players ⑤ Customer/User: person or organization that will use the results of a project. There may be multiple layers of users. ⑤ Performing Organization: the organization mostly involved in the project ⑤ Project team members: the group performing the work ⑤ Project management team: the members of the team directly involved in project management ⑤ Sponsor: person or group providing the financial resources ⑤ Influencers: people or groups not directly related to the project who could influence the course of a project

The Players (ctd) ⑤ There may be overlaps among different stakeholders (the customer may also be the sponsor) ⑤ There are other characterisations: Internal/external Sellers and contractors …

The Players (you) ⑤ 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 ⑤ Some skills  communication and negotiation skills  a little predisposition to risk  goal oriented  Leadership ⑤ Summing up (according to Sernia):  Solid know-how  A lot of common sense  Professional correctness  A bit of style

The role of the PM ⑤ The PM ensures that the project goals are met according to the constraints

Cost

Time Quality

The PM and its environment sponsor Expectations, resources

performing organization

Achievable goals Constraints, opportunities

resources results

influencers

PM Goals, plan, …

Products, Services, or results requirements

customer

Achievable goals, Information, Commitment …

project team

Process Groups and Knowledge Areas

Process Groups and Knowledge Areas ⑤ Process Groups defines the activities necessary to carry out a project ⑤ Knowledge areas organize the skills necessary to carry out the project groups

Project Management Integration

Initiating

Planning

Executing

Monitoring and Controlling

Closing

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 Plan purchases and acquisition; plan contracting

Project Procurement planning

Risk monitoring and control

Request seller responses; select sellers

Contract administration

Contract closure