PROJECT MANAGEMENT

"Project management is the methodology employed to accomplish a specified objective or task in a cost effective manner."

 We are interest in studying management from this perspective because:

1.     Technical people are likely to be hired to work on projects.

2.     Their management career is likely to commence at the project level starting as a project engineer/supervisor going either into functional or project management.

 What are the characteristics of a project?

          Unique on time activity

          Specific beginning and end

          It can be defined into required work

          Requires resources which usually come from within the organization

          Will have a budget

          Specifically organized to accomplish an objective and then disbanded.

Project     – Participants and Interested Parties

-          Customer/Funder

-          Management of Organization doing the work

-          Project Manager

-          Project Participants

-          Subcontractors

Each has a difficult perspective interest and priorities

How should you define authority and responsibilities to minimize conflicts, motivate cooperation and enhance communication between the various participants.

Project Management Goal 

Generally the specified objective is to complete projects that performs in accordance with specifications within budget costs and scheduled time.  The contract serves as a frame of reference.I like another specification of the objective which is to have a satisfied customer (i.e. Project conceivably could be over cost time, be less than anticipated, but customer is nevertheless satisfied with the result and visa versa).

Product vs. Capital Project Management

 Similarities

Applicable Software and Methodology

          Communication and Coordination problems

Management Structure

Risk Management

Systems Thinking

Top Management Support

 Differences 

          Project Life Cycle

          Staffing, Organizational Fit

          Location

          Implementation

          Experience Required

Modern Form of Project Management 

-          Fast Track

-          Concurrent Engineering

-          Simultaneous Engineering

Purpose – Speed

          Better Utilization of Resources

Features

-          Activities Done in Parallel instead of Sequentially

-          Require Close Coordination between the Participants

Negatives

a.      Scope Creep

b.     Costly Rework Possible

c.     Overlap Management Required

d.     Riskier

In reality, satisfying is practiced.  Specifically the administrative goal is to produce the project within 

          The time planned

        The cost budgeted

And of course meet performance expectations. 

Obviously the larger the project the more complex it will be, hence more project management effort required. 

Usually some thinking about how the project will be managed is initiated at bidding time since the contemplated. 

Project manager and key personnel have been already identified. 

By having the project manager involved early he/she will be familiar with the contract

Customer requirements

Key to the success is a good project manager.

Prime responsibilities of the project manager:

§        Produce the end item with the available resources and within the constraints of time, cost and performance/technology 

§        Meet contractual profit objectives 

§        Make all required decisions including those involving alternative choices or termination of activities 

§        Act as the customer (external) and upper-level management representative 

§        “Negotiate” with all functional disciplines for accomplishment of the necessary work packages, within time, cost and performance/technology Resolve conflicts that surface to best degree possible.

Project managers pay is quite good $250,000 + for $500 million projects.

How do you get to be one?

 Necessary Conditions for Employees to do Their Best………..

Must know what they are supposed to do, preferably in terms of an end product 

Must have a cleat understanding of what their authority is, and of its limits 

Must know what their relationship with other people is 

Should know what constitutes a job well done in terms of specific results 

Should know when and what they are doing exceptionally well 

Must be shown concrete evidence that there will be just rewards for work well done 

Should know where and when they are falling short 

Should be aware of what can and should be done to correct unsatisfactory results 

Must feel that their supervisor has an interest in him as an individual 

Likewise must feel that their supervisor believes in him and is anxious for him to succeed and progress.

Project Manager – Key Required Attributes

1.     Human relation skills 

2.     Political skills to sell ideas 

3.     Communication skills 

4.     Decision making ability 

5.     Technical competence 

6.     Detailed Knowledge of Project 

7.     Business skills 

Legal, financial, marketing, cash flow, cost estimating 

8.     Administrative know how 

a.     organized and disciplined 

b.    forceful – ability to say NO 

c.     react fast 

d.    balanced outlook 

9.     Initiative, flexibility and adaptiveness 

10. Leadership 

11. Systems Thinking 

12. Maintain Top Management Support

 Project Manager Background

Requirements Depends On 

-          Level of Technical Expertise Required

-          Available Expertise

-          Experience Required

-          Project Importance/Risks Involved

-          Human Relations/Political Skills Required

In a lot of cases the type of degree not important to be a successful project manager.

Difference between Project Manager and Project Engineer 

-          Technical  (PE)

-          Managerial (PM) 

Difference between Functional and Project Managers    

Functional – Has who, how, where, work responsibility 

Project – Has where, when, why  resources available and

              project business responsibility

 The overall objective is to minimize administrative (project management) cost – (since it is a none value added cost) 

As in all management – the project management process involves:  

planning

organizing

staffing

directing

controlling

1.      The problem is how to organize the project so as to fit into a formal existing organizational structure.

2.     How to get resources which often have to be taken those available in the organization. 

The extent of the organizational task depends on the size, duration, complexity of the job. 

Can range from Euro Tunnel

Two countries, languages, unknowns  railroads, construction, technical problems 

To simple modernization of a packaging line – where you have a project engineer who:

          Selects the machine

          Supervises installation 

Here the project is fit into an existing organization while with the Euro Tunnel.  One has to be set up from scratch. 

So lets see how projects are typically organized.

1.     Simple narrow based requiring one discipline –are set up in the context of the department having the expertise and assigned to a person or group of persons

i.e. Marketing study

     Productivity improvements

     Telecommunication expansion.

2.Quality improvement – new product development involves interdisciplinary effort – here people are lent to a group often described as a task force headed up by project task force leader. 

3. If required task takes time and requires substantial resources has to be managed separately.  The project is set up, headed up by an individual responsible for accomplishment

The Project Manager

Can have own staff and line or use company staff, i.e. payroll, personnel, miscellaneous.These project organizations methods are described in the literature in the following categories:

1.     Project done within a functional department.

Likely in the function with the technical expertise.  Allows flexibility in use and coverage of many.  If people leave, project continuity is not threatened.  Also technical people motivated since, they are directly tied into project success. 

Negative – likely emphasis more on technical than commercial aspects and/or achieving results.  Possible if project is small not of interest will be ignored (i.e. low motivation). 

2.   Task force-Interdisciplinary team set up to accomplish a specific purpose.  Does not involve setting up a separate project organization. 

3. Separate project organization

Since goal is achievement of project, most focused on that. Single minded responsibility and authority.  Communication less cumbersome than functional.  Decisions are likely to be made faster.  Easier to organize, reorganize as conditions change. 

Negative – Duplication of staff, may be hard to find competent people for non-permanent positions.  Moral concerns, procrastination if no assurance that the project member will reassigned to other projects.   Fosters specialization, which may make such reassignment difficult.

Matrix – Tries to combine the advantages of both these and avoid disadvantages. 

Here project is self-contained with defined accountability (project manager).  Has access to technical specialists.  Customer focus can be structured.  Avoids excessive duplication and theoretically is flexible.  Less anxiety about job security since part of functional unit

Major negative potential authority conflict, between functional and project manager, dual reporting also causes problems, competition between project managers for same pool of resources. 

Large firms are likely to have projects following all of these structures since many different types and sizes of projects are being done.

Deciding on the Appropriate

Organizational Structure 

New Product Development Project- (for example) 

Basically What is Involved 

1. Design the appropriate product. 

2. Pilot production and testing 

3. Production and support structure. 

4.Service system 

5. Marketing program development and implementation