Business / Implementing A Project Management System

Implementing A Project Management System

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Autor:  anton  18 January 2011
Tags:  Implementing,  Project,  Management,  System
Words: 2516   |   Pages: 11
Views: 582

INTRODUCTION

“A project is a complex non routine, one-time effort limited by time, budget, resources, and performance specifications designed to meet customer needs” (Gray/Larson Project Management)

Project Management (pm) is an evolving science. It is a flexible, efficient, innovative, and accountable way to get things done in today’s fast paced consumerist society. Pm is ideally suited to the business environment where product lead times are constantly being trimmed down, due to the rapid increase in global competition.

In the recent past, the general consensus in business was that strategic business and project management were two different disciplines. Strategy deals with the how’s of a business, how will it make profit? How will it grow? How will it attract new customers? By its nature PM is results orientated, it is how the strategy objectives are achieved. Today a new discipline is being employed, Strategic Project Management.

The first step in implementing a pm system is to align this style of management with the companies overall business strategy. Following this the firm must decide on the correct structure to use. Next, managers must create a culture within the firm where all employees share the company’s vision and accept this style of governance. The final two steps are implementing and evaluating the new system.

Over the following pages this report will examine, Strategy, Structure, Culture, and implementation & Evaluation individually. As this report deals with implementation of a project management system, the emphasis of the report is placed on the first three topics. The final section of this report examines a project management case study on Boeing, and the design of the new 777 aircraft. This case study gives working examples of good approaches, which are highlight in the report, to project management.

STRATEGY

“A managerial commitment to pursue a particular course of action”

(Thompson, Strickland, Gamble, Crafting & Executing strategy)

Today Strategic Project Management is emerging as the new business management science. Management as a science has been in existence since Frederick Taylor et al. created the classical business school, based on the following principles;

пѓј division of labour

пѓј division of functional processes

пѓј division of structure

пѓј division of control

The rationale of this thinking was to find the “single best way” of getting things done mainly through operational activities. Today most companies are proficient at reducing costs and achieving maximum efficiency. Therefore competitive advantage comes “from organisational agility which we define as the ability to quickly change and reconfigure your business in response to changes in your environment.” (Pat Millar, climbing the project management maturity ladder, lecture notes)

To address those needs modern day business principles have adapted to;

пѓј Strategy

пѓј Structure

пѓј Processes

пѓј Projects

The above principles are inter-linked, the aim is to create cross-border co-operation between all departments and to create the link between customers, company strategy making, and operational activities.

To successfully implement a project management system, it is imperative the firm takes an integrative approach. Forming a strategy to follow, “determines the core competencies of a business, and develops a strategic vision of the organisations direction while instilling the organisation with a sense of purpose, long-term direction and a clear mission” (PMWorld Today, 2006 vol. iv, issue 1)

It is essential project managers are brought in at the planning stage of top-level strategy decision making process. Project managers and project team members need to know the purpose of a particular project and understand how it compliments the companies overall strategy. This will enable the project manager to make correct, quick decisions which complement the company’s overall strategy. Knowledge of strategy and company goals will also give the manager the potential to motivate and inspire workers to commit to, and provide the necessary resources to successfully complete the project.

STRUCTURE

“The sum total of the ways in which an organisation can divide its labour into distinct tasks and then achieve co-ordination amongst them” (Mintzberg in PMWorld Today, 2006 vol. iv, issue 1)

The successful completion of a project is in itself not enough to call the project a success. Success depends on the integration of the outcome of that project into the operational functions of the business. A project is a unique one-time effort, by their nature they do not fit well with the daily repetitive tasks of operational management. A structure must be in place which balances the requirements of the project, with those of the organisation. There are three recognised structures to achieve this, which are project management; within functional operations, organised as dedicated teams, and matrix system.

Project management within functional operations

This is simplest and quickest type of pm system to introduce. The project is operated as an additional function within the existing departments. The accounting department is responsible for finance, sales dept deal with sales, etc… the overall management remains within the existing hierarchal system. In addition to being quick and easy to implement it also has the advantage of having natural expertise in that each department already have the necessary skills and knowledge to carry out the work involved.

Organising projects as dedicated teams

This system extends the hierarchical structure of the organisation. A project manager is appointed at the same level as upper/top management. It is this manager’s responsibility to recruit a core group of specialists form within and outside the organisation. As well as many of the advantages similar to the above approach it also counteracts many of the disadvantages. Having a dedicated cross-functional group gives the project focus, and ownership. This results in better and more efficient project results.

Matrix system

This is a relatively new system which complements Strategic Project Management. It is a type of hybrid organisational form, with the pm structure being overlaid onto the normal hierarchy, taking on different forms, weak, balanced, and strong. There are usually two chains of command with employees reporting along their usual functional lines in addition to reporting to the project manager

This structure is aimed at optimally utilising the resources of a firm by integrating project work into the functional departments. Employees have dual roles and can be assigned to work part-time on projects, spending the reminder of their working time in their original functional/operational role.

CULTURE

“We are what we repeatedly do; excellence then is not an act, but a habit.” (Aristotle)

Culture within a firm can be described as corporate behaviour. “A corporate culture reflects the goals, beliefs, and aspirations of senior management” (Kerzner, Advanced Project Management). Therefore culture is top-level manager’s responsibility; they must lead from the top to inspire a supportive culture within the organisation.

Culture is abstract; it can not be measured or copied. What works in one firm may not work in another. Recently distinct cultures have gained media attention. Companies like Google and 3M who promote innovation and employee intrapreneurship have radically different cultures to most businesses. Google have a no uniforms policy, staff can lounge around in bean bags and enjoy the use of a hot tub during working hours.

A successful culture will always be one which promotes leadership, encourages shared resources, and fosters good working relationships with team members who share a common goal. The first two topics of this report go some way to achieving these objectives. If employees and project managers feel they are included in strategy/decision making process they are more likely to sense ownership of the project and be dedicated to completing it successfully. A workable structure gives workers the support they need to achieve results.

Employee support and cooperation is vital as project management sometimes fails due to self-fulfilling prophecy. A team member thinks it is going to fail, so he constantly berates the actions of the project manager to others, this causes other team-members to lose faith, hence the project collapses. Not because of poor management but because of “one rotten apple” within the team.

Picking the right people for the right job is also important, people with a strong tendency to work on their own or people who do not like working to deadlines are unsuitable to organisations that have a project management system. Once the right people are selected they should be told what their role is, and what is expected of them in that role.

IMPLEMENTATION & EVALUATION

“Fail to prepare, prepare to fail”

This is the most time-consuming, exhaustive and usually the most expensive process. To adapt a project management system a project program must be put in place with each individual project making up the program. To manage this, a portfolio management system needs to be put in place with complementary computer packages.

This system is responsible for classifying, sourcing, evaluating, costing, planning and managing the range of projects. Included in this should be scoring, ranking, and prioritising model. As each project is selected they should be tested as to their suitability to overall strategy, their business/financial risk and rewards, and the resources requirement of the project. This will provide a sound basis of reasoning in the project selection process.

Scarce resources within organisations include funds, people, management talents, technological skills, equipment and most importantly time. Each project has to be chosen so it complements the organisation and does not pull resources from other areas.

Project risks should be determined and contingency plans put in place. Risk should be classified as avoidable, manageable, cost etc…. procedures should be put in place to mitigate or avoid the risk altogether.

As the project progresses, controls must be put in place so that the processes are being followed correctly. Performance should be measured and performance evaluated, the results should then be compared against the plan. Corrective action should be taken if actual performance has deviated significantly from the plan.

Finally when the project has finished a project audit should be carried out. No project is a complete failure if the company learns from the mistakes. A project audit examines the good and bad points of the project procedure. Obviously the goal is to build on the good points and eradicate the bad.

BOEING CASE STUDY

The most successful aerospace company has become famous for its family of 7 series aircraft, the 777 model has been the company’s most successful venture. First conceived in 1989, this new project would cost $6.5 billion; have a lead time of five years with negative cash flows for the duration of this time. If the project failed it could have forced this successful company into bankruptcy.

STRATEGY

The strategy decision to build the new airliner was “to create an airplane that was preferred by the airlines at a price that was truly competitive” (Philip Condit project manager Boeing 777, in Kerzner Advanced Project Management) to achieve this Condit realised he would have to cut production costs by introducing several innovations in aircraft design, manufacturing and assembly. To help him achieve this he enlisted the help of Boeings biggest customers, United Airlines, British Airways, and Qantas. This was Philip Condit, acting as project manager, been involved in, and designing the strategy for this particular project and the Boeing company.

STRUCTURE

Condit’s strategy influenced the project as it progressed. He used a matrix organisational structure, bringing manufacturing, tooling, planning, engineering, finance, and materials all together in small “build-design” teams. These teams enjoyed a high degree of autonomy from management; members designed their own tools, developed their own manufacturing plans, and wrote their own contracts with program management, specifying deliverables, resources, and schedules.

CULTURE

Top-level management strived to create a good culture within the firm. Factory workers were encouraged to speak up, offer suggestions, and participate in decision making. Managers paid particular attention to “human relations” problems like parking, childcare, and health & safety issues, faced by employees. If staff had a problem with a process or piece of equipment, managers would quickly examine the problem and solve it.

IMPLEMENTATION & EVALUATION

Progress was evaluated and monitored, a chart was clearly visible indicating whether workers were hitting their targets or not. Once jobs were complete the completed part had to be “sold” to an inspector, no part was completed until “bought” by an inspector.

Workers were happy with their work practices as evidenced by a 14 year veteran mechanic “I even like going to work. It’s bubbly. It’s clean. Everyone has confidence……..new factory Workers are treated better and encouraged to offer ideas.” Condit believed that the new system of open management was indispensable for improving morale and raising productivity.

SECTION ENDS

The above case study is a summary of “Philip Condit and the Boeing 777: from design and development to production and sales.” (kerzner in Advanced Project Management)

CONCLUSION

Today, no matter what sector you look at, organisations are constantly faced with the challenges of a fiercely competitive and changing environment. Project management is seen as the strategic tool to respond effectively to this shifting environment.

To successfully implement a project management system, a firm must lead from the top-down. Consensus must be reached by all employees as to the need for a new system. According to PricewaterhouseCoopers report, putting the correct strategy, structure, culture, and implementation & evaluation processes in place is not enough to guarantee success. This leading financial services firm carried out a survey in 2004 and found maturity level, “the consistency with which an organisation runs it business in a given manner,” had a massive impact on the success ratio of projects. Companies within the survey who had a higher maturity level invariably delivered projects consistently better than others (i.e. on time, within budget, to scope, and delivering business benefits)

This report has identified the very first steps to take to achieve this success. Strategy is the very first phase any company should consider, regardless of what management system or style they wish to implement. A project management system must compliment that strategy. The next steps identified above all need to be in place before an organisation can hope to complete projects successfully every time.

Project Management or Strategic Project Management is a fascinating subject. It is the new science of business. The original classical school took over one hundred years to evolve, and achieve its original objective, maximum organisational efficiency.

There is no certain way to successfully implement a project management system; the blueprint has not yet been written. However by adopting the approaches included in this report the chances of success will grow.

BIBLIOGRAPHY

TEXT BOOKS

• Gray Larson (2007) Project Management, the managerial process, 4th ed. McGraw Hill

• Kernzer Advanced Project Management

• Morley, Moore, Heraty, Linehan, MacCurtain, (2004) Principles of Organisational Behaviour 2nd ed. Gill & McMillan

• Tiernan, Morley, Foley, (2001) Modern Management 2nd ed. Gill & McMillan

• Thompson, Strickland, Gamble (2007) Crafting & Executing Strategy 15th ed. McGraw Hill

JOURNAL ARTICLES

Johnson, (2006) Project management and business processes a look at strategy, structure processes, and projects. (Electronic Version) PMWorld Today Jan. 2007 vol iv, issue 1

Milliar (2006) Climbing the project management maturity ladder. Knowledge Ireland. (Lecture handout)

Websites

www.ontv.com

www.onzdnet.com

www.pmi.com



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