Project Management

1. Project Management • These slides are partially based on the following book: Frame, Davidson J.Managing projects in organizations: how to make the best use of time, techniques and people. San Francisco, Calif.: Jossey-Bass,C1995 or a newer edition. • It is important to acquire the book

2. 0 -WHAT IS A PROJECT?Use the PEAK-typology in your definition • A project is goal oriented (P) • Coordinates interrelated activities (E) • It is of finite duration: beginning and ends A) • It is, to a certain degree, unique (K) Let us look a bit closer at these PEAK-factors

3. How to make a projectgoal oriented? [P] • Use ”Management by objectives” (MbO) • Establishing clear objectives: goals or requirements or milestones • Making sure that they are achievable: Realistic, Objectively measurable, Limited in duration, Development oriented and Describing results. • Develop project goals jointly: no top-down imposition of will • ”Swim the pool as fast as possible” is less clearer than ”To be able to swim, by March 15, four laps of the twenty-five-meter pool, using the freestyle stroke, in sixty or fewer seconds” (p. 3-4)

4. How to coordinate interrelated activities? [E] • Use systems analysis so as to sync tasks with each other. • Coordinate dependent, parallel and independent tasks. [Peter Senge’s book The Fifth Discipline (1990) underlines the importance of the systems perspective.]

5. Has a project a limited duration: beginning and end? [A] • Projects have defined end dates, but project responsibilities extend beyond the handover of the deliverables. • On time and within budget does not necessarily mean deliverable. • A project manager should design and build deliverables that are operable and maintainable after they have been delivered.

6. In which way can a project be considered unique? [K] • Uniqueness may lie in: • The conditions and requirements of the project • Its usefulness or economics • The tasks implied in carrying it out • Its novelty or dependency on past experiences.

7. A systems theoretical picture:PEAK->Octograph->SETS • 1- organizational environment & projects • 2- project localization & identification • 3. organizational policy & projects • 4- project management • 5- project staff & teams • 6- empowerment & team identity • 7- cont. tasks & activites • 8- project evaluation • 9- termination & sustainability • 10-key lessons to learn

8. ENVIRONMENT?

9. 1- ORGANIZATIONAL ENVIRONMENT & PROJECTS • Environmental factors: • Political & legal [government regulations, contract provisions & law …]. • Economical [suppliers, external customers, subcontractors…]. • Physical & technological [Equipments…]. • Social & Cultural [Staff…] • External resources should furnish us with the best staff and the best equipments. • Expand using other PEAK-variables!

10. 2- PROJECT LOCALIZATION & IDENTIFICATION • Defining Needs: Internal & External Customer needs: • Making Certain the Project Is Based on a Clear Need (kap. 4) • Specifying What the Project Should Accomplish (kap. 5) • Specifying project Requirements: Problems & Guidelines

11. Defining Needs (pitfalls) • Dealing with Inherently Fuzzy Needs (Dynamic & gradually take a shape and substance). Specific sources of changing needs include: changing players, budgets, technology or business environment. • Misunderstood Needs: ”I’m not sure what I want, but I’ll know it when I see it” (case p. 120) • Customers often do not have a precise idea of what they want • Addressing the Needs of the Wrong Customers • Sorting Out the Needs of Multiple Customers (case, 122) • Multiple Customers, Multiple Needs (case) • Establishing Priorities: The Needs Hierarchy (Figure p. 127 & 128) • Distorting the Customer’ Needs: Gold-plating, filtering or father-knows-best-syndrome)

12. Making Certain the Project Is Based on a Clear Need (kapt.4) • Evolution of Needs (case, p.110) • The Needs/Requirements Life Cycle: • needs emergence phase (external/internal: business reengineering), • needs recognition phase (forecasting/scenario building), • needs articulation phase (direct identification, multidimensional view, research, precise formulation, revise formulation - p.115), • functional requirements (describe the characteristics of the deliverable), • technical requirements (written for the technical staff)

13. Specifying What the Project Should Accomplish (kap.5) • The Nature of Requirements (function/technical) • Problems with Requirements • Incorrect Requirements • Imprecise and Ambiguous Requirements: Language, Deliberate imprecision for flexibility, Conflict preventing consensus, Abstractions, Lack of Expertise, Oversights on the part of project planners • Shifting Requirements: • Cases: Buyer’s remote, insurmountable obstacles, Flights of Fancy, Seizing opportunities

14. Problemsin Specifying Requirements • Problems with Oversimplification of Requirements: • Insufficient information, Initiative discouraged, Requirements ignored, Costly rework efforts • Problems with Excessive Flexibility: • Patchwork deliverables, Chaotic project planning, Time and cost overruns

15. Guidelines for Specifying Project Requirements • Rule 1: State the requirement explicitly and have project staff and customers sign off on it • Rule 2: Be realistic; assume that if a requirement can be misinterpreted, it will be misinterpreted • Rule 3: Be realistic; recognize that there will be changes on your project and that things will not go precisely as anticipated • Rule 4: To as great an extent as possible, include pictures, graphs, physical models, and other nonverbal exhibits in the formulation of requirements

16. Guidelines for… • Rule 5: Establish a system to monitor carefully any changes made to the requirements: configuration management: • date of change, name of the person requesting change, description of change, statement of the change’s impact on the project, listing of tasks and staff affected by the change, estimate of the cost of the change, signature of the individual making the change request, indicating that this individual is aware of the cost and performance impacts of the requested change • Rule 6: Educate project staff and customers to the problem of specifying requirements • Application prototyping

17. 3. ORGANIZATIONAL POLICY & PROJECTS • The divorce of responsibility & authority • Operating within organizational reality • Politics is the art of influence. Six steps for good project politician (Block, 1983): 1. Assess the environment 2. Identify the goals of the principal actors 3. Assess your own capabilities (1-3 = realistic view) 4. Define the problem 5. Develop solutions 6. Test and refine the solutions

18. The Divorce of Responsibility and Authority • The divorce of responsibility and authority (Jerry’s first experiences): • projects are temporary, unique and are systems (borrowed Resources. Project manger is not the boss) • Nurturing Authority: • formal authority (backing from above and operational), purse-string (the carrot and the stick), • bureaucratic authority (rules, paperwork, procedures), • technical authority (technical competence) and • charismatic authority (leadership)

19. Operating within the Realities of Organizational Life (kap.1) • Projects must be designed and managed within their organizational context. • Case: The Education of Jerry: project manager for network LAN (page.28-31)

20. 4- PROJECT MANAGEMENT • Politics on Project Management • Project Actors & the job • ”To get the job done!….” • The Project Life Cycle: • Selection • Planning • Implementation • Control • Evaluation • Termination • The Project Manager

21. Politics of Project Management • Politics is the art of influence. Six steps for good project politician (Block, 1983): 1. Assess the environment 2. Identify the goals of the principal actors 3. Assess your own capabilities (1-3 = realistic view) 4. Define the problem 5. Develop solutions 6. Test and refine the solutions

22. Project Actors & the job • Figure 1.1., page 39 • Top Management: (high- vs low-visibility projects) • The boss: creating the daily working environment • Colleagues: information, operational help, competitors in flattened organizations. • Staff: often borrowed to matrix structure: to get the job done and done according to the triple constraint: on time, within budget, and according to specifications” • Scheduling tools: PERT/CPM Schedule Network: Program Evaluation and Review Technique (PERT). Critical Bath Method (CPM) etc. • Tools for managing human and material resources: resource loading charts, resource Gantt chartgs, linear responsibility charts • The most difficult to manage is SPECIFICATIONS

23. The Project Life Cycle - dynamics? • Where you are in the project life cycle determines what you should be doing and what options are open to you. • Six functions are addressed during the course of a project: [S-P-I-C-E-T] (Figure 1.2. Page 9) • Selection • Planning • Implementation • Control • Evaluation • Termination

24. Life Cycle: Project selection? • Why envisage project selection? • External and internal sources: • A project might come from the external environment as a request for proposal (RFP) or invitation for bid (TFB) • Or it might come internally from management or task force charged with reengineering corporate processes. • Project selection: • We select some projects and reject others because they involve OPPORTUNITY COSTS.

25. Life Cycle: What does planning tells us? • The plan is a roadmap, telling us how to get from one point to another. • Pre-plans: a rough idea of what the project would entail: • proposals, feasibility studies, business cases, competitive analysis etc. Pre-plans are important for project selection. • Detailed project plan -rarely static: • Gantt charts, network diagrams, resource-allocation charts, resource loading charts, responsibility charts, cumulative cost distributions etc.

26. Life Cycle: What is control useful for? • Determine variances: between the plan and what has been done to date, based on the level of variances determined at the outset of the project. • This is called Management by EXCEPTION in contrast to micromanagement. • The collection and examination of data on project’s progress lies at the centre of the control process.

27. The Project Manager • Project Manager Responsibilities • Developing Staff • Serving as Management/Staff Intermediary • Conveying Lessons Learned • Choosing a Management Style: Autocratic, Laissez-Faire & Democratic managers (Figure 2.2., p.76) • Exercise: case to be solved once normally and a second time by applying the six-step methodology mentioned earlier.

28. 5- PROJECT STAFF & TEAMS • General issues: (kap.2): getting the job done- on time, within budget, and according to specifications. What other responsibilities project managers have? What management styles do they practice, and under what circumstances? Who’s in Charge here? (case p.56-57 & Figure 2.1, p. 59) • The Perfect Project Staff Member: organizational commitment & psychological commitment • Working with people • The Mayers-Briggs type indicator • Using a Personal Touch • Team Efficiency & Cohesiveness • Structuring Teams

29. Working with people (kap.2) • Working Smart • Do Things Right the First Time (communication - reflection - undertakings) • Set Realistic Goals • Get Technically Competent People • Thomas-Kilman Conflict Mode Instrument, • FIRO-B Awareness Scale etc. [have some of them] • Psychological Types (Carl Jung 1923. The Mayers-Briggs Type Indicator)

30. The Mayers-Briggs Type Indicator • The Mayers-Briggs Type Indicator • The Extravert-Introvert Dimension • The Sensing-Intuition Dimension • The Thinking-Feeling Dimension • The Judging-Perceiving Dimension • Applying Psychological Type Theory to Projects • Selecting Staff. Diagnosing the Roots of Conflict. Improving Relations with Staff. Self-Knowledge

31. Using a Personal Touch • Be supportive • Be clear • Learn something about the team members • Celebrate special occasions • Be accessible

32. Team efficiency & Cohesiveness (kap. 3) • Team Efficiency: the fraction of potentially team performance that is actually achieved. • Matrix-Based Frictions (lack of direct control over project staff and material Resources) • Poor Communication (end rather than means). • Nr of communication channels n(n-1)/2 (p.87). • Information arteriosclerosis (difficult way, åreforkalkning). • Garbled Messages • Poor Integration

33. Structuring Teams • Isomorphic Team Structure: • with project manager as integrator (Figure p.92) • Specialty Team Structure: • a variance of Matrix. Figure 3.3., p.94 • Ego- less Team Structure: • high level of interaction. Western vs Japanese (Figure, p.95) • Surgical Team Structure: • The surgeon define effectiveness. System integration.Needs a Surgeon and may end up with three bosses. Figure p.99

34. 6- EMPOWERMENT & TEAM IDENTITY • Making the Team Tangible • Effective Use of Meetings: kick off meeting with a number of actions & status review • Collocation of Team Members • Creation of Team Name • Building a Reward system: • Letters of recommendation, public recognition for good work, job assignments, flexible work time, job-related perquisites, new equipments, recommendation for cash awards or bonuses. • Understanding Finance & Budgets

35. Understanding Finance & Budgets: • Components of the Budget • Direct labour costs: If we know the labour costs we can make good estimates of total project costs (parametric cost estimation, 185) • Overheads: relatively fixed in relation to direct costs • Fringe benefits: from social security to tuition fees • Auxiliary costs: travel expenses, consultant fees.. • Management Reserve • To cover unanticipated problems: 5 or 10% on projects with low level of certainty • Budget Control • Variance analysis can be used in controlling the budget (187) • Cumulative Cost Curve (189) • Staff & Economic Reasoning

36. 7. CONT. TASKS & ACTIVITIES:Planning, Implementation & control • Project Planning and Control (kap. 3) • How Much Planning and Control is Enough • Tools and Techniques for Keeping the Project on Course (kap. 6) • Planning and Control Tools: The Schedule • Managing Special Problems and Complex Projects (kap.7) • Planning & Control for Multiple Projects • Planning & Control for Contracted Projects • Planning & Control with Bureaucratic Milestones • Achieving Results Principles for Success as a project Manager (kap.8)

37. How Much Planning and Control is Enough • Project Costs = Production + Administrative Costs • Project complexity • Project Size • Level of Uncertainty • Organizational Requirements • User-Friendliness of the Planning and Control Tools

38. Tools and Techniques for Keeping the Project on Course (kap. 6) • Reactive or proactive management • The Project plan - three-dimensional: • Time, Money & Resources (human and material) • Good planning means phased planning or rolling wave approach to planning (phase 1-2..) • Planning and Uncertainty: terra incognita • Uncertainty is different from complexity (figure: high complexity, low uncertainty. Low complexity, High uncertainty - 166). • Project Controls • There will be variances between actual realisations and the plan. Are the variances (un)acceptable and according to which criteria? Management by exceptions. Management reserve.

39. Planning and Control Tools: The Schedule • Work-Breakdown Structure (WBS, 172) • Gantt Chart visualizes tasks taken from WBS • PERT/CPM Schedule Network: Program Evaluation and Review Technique (PERT). Critical Bath Method (CPM) • Building a PERT/CPM Network • The Critical Path: longest time to complete (178-181) • Non-critical Tasks and Slack Time • Earliest and Latest Start Time • Configuration of PERT/CPM: the more people, the more parallel activities • Usefulness of the PERT/CPM Network for planning & control

40. Planning and Control Tools: Human and Material Resources • Resource Matrix: primary & secondary responsibility (190) • Resource Gantt Chart (192) • Resource Spreadsheet (193) • Resource Loading Chart (194) • Resource Leveling • Graphical Control of Projects (198-199) • Project Management Software

41. Managing Special Problems and Complex Projects (kap. 7) • Planning and Control on Large Projects • The Need for formality in Planning and Controlling Large Projects • The Earned-Value Technique: does numerically what graphical approach does through charts. • Budgeting cost of work scheduled (BCWS) • Actual cost of work performed (ACWP) • Budgeted cost of work performed (BCWP) • Budget variance = BCWP minus ACWP • Schedule variance = BCWP minus BCWS • 50-50-rule, 10-90-rule or 0-100 rule (209)

42. Planning and Control for Multiple Projects • The Project Portfolio (Figure 211) • Special Considerations in Managing a Portfolio • Portfolios are administratively more complex than single projects • Optimisation of the portfolio’s performance will require sub-optimisation of individual projects • Portfolios run the risk of falling victim to the tyranny of large projects • Sequencing Projects in the Portfolio (214) • Gap Analysis (216)

43. Planning and Control for Contracted Projects • Private-sector firms prefer to call the contracting effort ”outsourcing” • Types of Contracts: • Firm fixed prince. Fixed prince, economic price adjustment • Fixed price, incentive. Fixed price, award • Fixed price, with provisions for re-determination • Firm fixed price, level of effort term. Cost reimbursable • Cost sharing. Cost plus incentive • Cost plus award fee. Cost plus fixed fee. Time and materials • Managing Changes to the Plan on Contracted Projects • Government vs Private-Sector Contractual Projects

44. Planning and control with Bureaucratic Milestones • Imposed milestone requirements: • submit budget requests, reports and test data submitted at bureaucratically crucial times. • (Figure 224)

45. Achieving Results (kap. 8) • Principles for Success as a Project Manager • Be conscious of what you are doing; don’t be an accidental manager • Invest heavily in the front-end spadework; get it right the first time • Anticipate the problems that will inevitable arise • Go beneath surface illusions; dig deeply to find the real situation • Be as flexible as possible; don’t get sucked into unnecessary rigidity and formality. • Areas of project Management • Scope management. Time management. Cost management. Human resource management. Risk management. Quality management. Contract management. Communication management (Guide to the Project Management Body of Knowledge, Upper Darby, Pennsylvania 19082)

46. 8- PROJECT EVALUATION • Variety of evaluations throughout the life of a project • Differences between Evaluation and Control: • Control continual project progress. Evaluation periodical to determine the status of project. vs goals • [Figure p.14 Mid-project Evaluation] • Control focuses on details. Evaluation the big picture • Control is the responsibility of project manager. Evaluation is carried out by individual or group NOT directly related to the project.

47. 9- TERMINATION & SUSTAINABILITY • When project end, the project manager’s responsibilities continue: • equipment, staff, deliverables, final reports etc. • Project maintenance: • is a separate and distinct undertaking from the initial project • The fastest growing area of project management lies in the information area

48. A systems theoretical picture revisited:PEAK->Octograph->SETS • 1- organizational environment & projects • 2- project localization & identification • 3. organizational policy & projects • 4- project management • 5- project staff & teams • 6- empowerment & team identity • 7- cont. tasks & activites • 8- project evaluation • 9- termination & sustainability • 10-key lessons to learn Let us see to how much degree these lessons are representative

49. 10- KEY LESSONS TO LEARN:Lesson 1 • Avoiding pitfalls. Recognize that problems will arise in spite of best efforts. • Three principal sources of project failure: • 1. Organizational factors: • arbitrary rules, micromanagement from the top, right people, haphazard budgeting: Coordinate & influence. Recognize limits & frustrations.Spend much time on what you can influence.

50. Lesson 2 • Inability to Identify Customer Needs and to Specify Requirements Adequately. • What is suggested, approved and ordered and what is actually required. Management’s view, designer’s opinion & ”expert” opinion. • Customer needs and project requirements are major sources of project failure