MAN204 Summary Pinto Project management-Achieving competitive advantage PDF

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Summary Pinto, Project management -- Achieving competitive advantage

Chapter 1 – Introduction: Why Project Management Introduction Projects are one of the principals means by which we change our world. Project management has become a critical component of successful business operations in worldwide organizations.

1.1 What is a project. A process refers to ongoing, day-to-day activities in which an organization engages while producing goods or services. Processes use existing systems, properties, and capabilities in a continuous, repetitive manner. Projects, on the other hand, take place outside the normal, process-oriented world of the firm.

A project is a unique venture with a beginning and end, conducted by people to meet established goals within parameters of cost, schedule, and quality. Projects are goal-oriented, involve the coordinated undertaking of interrelated activities, are of finite duration, and are all, to a degree, unique. A project can be any series of activities and tasks that: Have a specific objective to be completed within certain specifications. Have defined start and end dates. Have funding limits (if applicable). Consume human and nonhuman resources (i.e., money, people, equipment). Are multifunctional (i.e., cut across several functional lines).

Organized work toward a predefined goal or objective that requires resources and effort, a unique (and therefore risky) venture having a budget and schedule. In the PMBoK guide, a project is defined as “a temporary endeavor undertaken to create a unique product or service.”

Projects are complex, one-time processes. Projects are limited by budget, schedule, and resources. Projects are developed to resolve a clear goal(deliverables) or set of goals. Projects are customer focused. Projects are characterized by the following properties: Projects are ad hoc endeavors with a clear life circle. Projects are building blocks in the design and execution of organizational

strategies. Projects are responsible for the newest and most improved products, services, and organizational processes. Projects provide a philosophy and strategy for the management of change. Project management entails crossing functional and organizational boundaries. The traditional management functions of planning, organizing, motivation, directing, and control apply to project management. The principal outcomes of a project are the satisfaction of customer requirements within the constraints of technical, cost, and schedule objectives. Projects are terminated upon successful completion of performance objectives.

Process orientation is the need to perform work as efficiently as possible in an ongoing manner. Projects, because they are discrete activities, violate the idea of repetition. They are temporary activities that operate outside formal channels. Note a recurring theme: projects operate in radical ways that consistently violate the standard, process-based view of organizations. Although project management is becoming popular, it is not easy to assimilate into the conventional processes of most firms.

1.2 Why are projects important?

David Cleland, a noted project management researcher, suggests that many of these reasons arise from the very pressures that organizations find themselves facing. -Shortened product life cycles. Narrow product launch windows. Increasingly complex and technical products. Emergence of global markets. An economic period marked by low inflation.

1.3 Project life cycles

A project life cycle refers to the stages in a project’s development. Life cycles are important because they demonstrate the logic that governs a project. A simplified model of the project life cycle divides it into four distinct phases: Conceptualization refers to the development of the initial goal and technical specifications for a project. Planning is the stage in which all detailed specifications, schematics, schedules, and other plans are developed. During execution, the actual “work” of the project is performed, the system developed, or the product created and fabricated. Termination occurs when the completed project is transferred to the customer, its resources are reassigned, and the project formally closed out.

These stages are the waypoints at which the project team can evaluate both its performance and the project’s overall status. Remember, however, that the life cycle is relevant only after the project has begun. The life cycle is signaled by the actual kickoff of project development, the development of plans and schedules, the performance of necessary work, and the completion of the project and reassignment of personnel. Thus, as we plan the project’s life cycle, we also acquire essential information regarding the resources that we will need. The life cycle model, then, serves the twofold function of project timing (schedule) and project requirements (resources), allowing team members to focus better on what and when resources are needed. The project life cycle is also a useful means of visualizing the activities required and challenges to be face during the life of a project. As you can see, five components of a project may change over the course of its life cycle: Client interest, Project stake, Resources, Creativity, and Uncertainty. Balancing the requirements of these elements across the project life cycle is just one of the many demands placed upon a project team.

1.4 Determinants of project success

Any definition of project success must take into consideration the elements that define the very nature of a project: that is, time (schedule adherence), budget, functionality/quality, and customer satisfaction. At one time, managers normally applied three criteria of project success: Time, Cost, and Performance. This so-called triple constraint was once the standard by which project performance was routinely assessed. Today, a fourth criterion has been added to these three: Client acceptance. The final arbiter of project success is not the firm’s accountants, but the marketplace. Four relevant dimensions of success: Project efficiency, Impact on the customer, Business success, and Future potential.

Chapter 2 – The Organizational Context

Introduction Within any organization, successful project management is contextual: the organization itself matters. The key challenge is discovering how project management may best be employed, regardless of the structure the company has adopted. 2.1 Projects and organizational strategy

Strategic management is the science of formulating, implementing, and evaluating crossfunctional decisions that enable an organization to achieve its objectives. Strategic management consists of the following elements: Developing vision statements and mission statements. Formulating, implementing, and evaluating. Making cross-functional decisions. Achieving objectives. Book of Proverbs: “Where there is no vision, the people perish” (Prov. 29:18). Project management work is a natural environment in which to operationalize strategic plans.

Projects have been called the “stepping-stones” of corporate strategy. This idea implies that an organization’s overall strategic vision is the driving force behind its project development. Projects are the building blocks of strategies; they put an action-oriented face on the strategic edifice. Projects are the “operational reality” behind strategic vision. Supporting the base of the pyramid are strategies, goals, and programs. Here the firm’s strategies are stated in terms of a three-phase approach: (1) concentrate on achieving objectives through existing markets and product lines, (2) focus on new market opportunities in foreign or restricted markets, and (3) pursue new products in existing markets. (Figure 2.2, page 56)

Even the most basic activities of the company are conducted in support of the firm’s strategic elements. To break this down, the Image Assessment Program (IAP) is made up of several supporting projects, including:

1.

Customer Survey Project

2.

Corporate Philanthropy Project

3.

Quality Assessment Project

4.

Employee Relations Project.

All these projects promote the Image Assessment Program, which in turn is just one supporting program in a series designed to achieve strategic goals. Projects, as the building blocks of strategy, are typically initiated through the corporation’s strategic purposes, deriving from a clear and logical sequencing of vision, objectives, strategies, and goals.

An organization’s strategic management is the first important contextual element in its project management approaches. 2.2 Stakeholder management

Stakeholder analysis is a useful tool for demonstrating some of the seemingly irresolvable conflicts that occur through the planned creation and introduction of any new project. Project Stakeholders are defined as all individuals or groups who have an active stake in the project and can potentially impact, either positively or negatively, its development. Project stakeholder analysis, then, consists of formulating strategies to identify and, if necessary, manage for positive results the impact of stakeholders on the project. In managing projects, we are challenged to find ways to balance a host of demands and still maintain supportive and constructive relationships with each important stakeholder group.

Intervenor groups are defined as groups external to the project but possessing the power to effectively intervene and disrupt the project’s development. Among the set of project stakeholders that project managers must consider are: Internal: Top management, Accountant, Other functional managers, and Project team members. External: Clients, Competitors, Suppliers, and Environmental, Political, Consumer, and other Intervenor groups.

The entire discipline of supply-chain management is predicated on the ability to streamline logistics processes by effectively managing the project’s supply chain. To be able to manage the project, to make the necessary decisions, and to communicate with the customer, the project manager must always stay on top of the cost of the project. An efficient cost control and reporting mechanism is vital. Project managers must understand that their projects’ success depends upon the commitment and productivity of each member of the project team.

Project managers and their companies need to recognize the importance of stakeholder groups and proactively manage with their concerns in mind. Block offers a useful framework of the political process that has fine application to stakeholder management. In his framework, Block suggests six steps: 1.

Assessing the environment.

2.

Identify the goals of the principal actors.

3.

Assess your own capabilities.

4.

Define the problem.

5.

Develop solutions.

6.

Test and refine the solutions.

Fisher and Ury have noted that the positions various parties adopt are invariably based on need. Project teams must look for hidden agendas in goal assessment. It is common for departments and stakeholder groups to exert a set of overt goals that are relevant, but often illusionary. In testing and refining solutions, the project manager and team should realize that solution implementation is an iterative process. An alternative, simplified stakeholder management process consists of planning, organizing, directing, motivating, and controlling the resources necessary to deal with the various internal and external stakeholder groups. Cleland (Figure 2.4, page 62) notes that the various stakeholder management functions are interlocked and repetitive; that is, this cycle is recurring.

2.3 Organizational structure

A span of control determines the number of subordinates directly reporting to each supervisor.

2.6 Organizational culture

One of the unique characteristics of organizations is the manner in which each develops its own outlook, operating policies and procedures, patterns of thinking, attitudes, and norms of behavior. Organizational culture is by one of the original writers defined as “the solution to external and internal problems that has worked consistently for a group and that is therefore taught to new members as the correct way to perceive, think about, and feel in relation to these problems.” In other settings, such as anthropology, a culture is seen as the collective or shared learning of a group, and it influences how that group is likely to respond in different situations. Elements of culture: Unwritten, Rules of behavior, held by some subset of the organization, and Taught to all new members. An organization may contain a number of different cultures, operating in different locations or at different levels.

Researchers have examined some of the powerful forces that can influence how a company’s culture emerges. Among the key factors that affect the development of a culture are; technology, environment, geographical location, reward systems, rules and procedures, key organizational members, and critical incidents. Critical incidents express culture because they demonstrate for all workers exactly what it takes to succeed in an organization. In other words, critical incidents are a public expression of what rules really operate, regardless of what the company formally espouses.

Culture can affect project management in at least four ways: Departmental interaction, Employee commitment to goals, Project planning, and Performance evaluation. Escalation of commitment occurs when, in spite of evidence identifying a project as failing, no longer necessary, or beset by huge technical or other difficulties, organizations continue to support it past the point an objective viewpoint would suggest that it should be terminated. Organizational culture must be managed, constantly assessed, and when necessary, changed in ways that promote project management rather than discouraging its efficient practice. The context within which we manage our projects is a key determinant in the likelihood of their success or failure. Three critical contextual factors are the organization’s strategy, structure, and culture.

Chapter 3 – Project Selection and Portfolio Management Introduction

A project portfolio is a set of projects that an organization is undertaking at any given time. When a firm is pursuing multiple projects, the challenges of strategic decision making, resource management, scheduling, and operational control are magnified.

3.1 Project selection

Priority systems are guidelines for balancing the opportunities and costs entailed by each alternative. Guidelines are selection models that permit them to save time and money while maximizing the likelihood of success. Souder identifies five critical issues that managers should consider when evaluating screening models: 1.

Realism

2.

Capability

3.

Flexibility

4.

Ease of use

5.

Cost

Project selection models come in two general classes: numeric and nonnumeric. Numeric models seek to use numbers as inputs for the decision process involved in selecting projects. The key is to remember that most selection processes for project screening involve a combination of subjective and objective data assessment and decision making. Nonnumeric models, on the other hand, do not employ numbers at decision inputs, relying instead on other data. The list of factors that can be considered when evaluating project alternatives is enormous. In general terms, we may look at risk and commercial factors, internal operating issues, and other factors. In fact, if we apply Pareto’s 80/20 principle, which states that a few issues (20%) are vital and many (80%) are trivial, it may be fairly argued that for many projects, less than 20% of all possible decision criteria account for over 80% of the decision of whether or not to pursue

the project. This being said, we should also reflect on two final points regarding the use of any decision-making approach to project selection. First, the most complete model in the world is still only a partial reflection of organizational reality. Second, embedded in every decision model are both objective and subjective factors. It is worthwhile acknowledging that there exists a place for both subjective and objective inputs and decisions in any useful screening model. 3.2 Approaches to project screening and selection

A project-screening model that generates useful information for project choices in a timely and useful fashion at an acceptable cost can serve as a valuable tool in helping an organization make optimal choices among numerous alternatives. 1. The simplest method of project screening and selection is developing a checklist, or a list of criteria that pertain to our choice of projects, and then applying them to different possible projects. In deciding among several new product development opportunities, a firm must weigh a variety of issues, including the following: Cost of development, Potential return on investment, Riskiness of the new venture, Stability of the development process, Governmental or stakeholder interference, and Product durability and future market potential. A checklist approach to the evaluation of project opportunities is a fairly simple device for recording opinions and encouraging discussion. Thus, checklists may best be used in a consensus-group setting, as a method for initiating conversation, stimulating discussion and the exchange of opinions, and highlighting the group’s priorities. Checklist screening models also fail to resolve trade-off issues.

2. In the simplified scoring model, each criterion is ranked according to its relative importance. Our choice of projects will thus reflect our desire to maximize the impact of certain criteria on our decision. Although adding a scoring component to our simple checklist complicates our decision, it also gives us a more precise screening model – one that more closely reflects our desire to emphasize certain criteria over others. The simple scoring model consists of the following steps: Assign importance weights to each criterion, Assign score values to each criterion in terms of its rating (High=3, Medium=2,Low=1), Multiply importance weights by scores to arrive at a weighted score for each criterion, and Add the weighted scores to arrive at an overall project score. The simple scoring model has some useful advantages as a project selection device. First, it is easy to use it to tie critical strategic goals for the company to various project alternatives. Second, the simple scoring model is easy to comprehend and use. With a checklist of key criteria, evaluation options, and attendant scores, top managers can quickly grasp how to employ this technique.

The simple scoring model illustrated here is an abbreviated and unsophisticated version of the weighted-scoring approach. In general, scoring models try to impose some structure on the decision-making process while, at the same time, combining multiple criteria. Most scoring models, however, share some important limitations. A scale from 1 to 3 may be intuitively appealing and easy to apply and understand, but it is not very accurate. Critics of scoring models argue that their ease of use may blind novice users to the sometimes-false assumptions that underlie them. From a managerial perspective, another drawback of scoring models is the fact that they depend on the relevance of the selected criteria and the accuracy of the weight given them. In other words, they do not ensure that there is a reasonable link between the selected and weighted criteria and the business objectives that prompted the project in the first place.

3. – 4. Profile models allow ...