Download - Sangram Pandit - PM1 Term Paper
THE BARTLETT
Faculty of the Built Environment
PM1 : PROJECT MANAGEMENT
TERM PAPER
SANGRAM PANDIT
STUDENT NO: 1049073
MSc. Project and Enterprise Management Full Time
Term Paper Brief:
November 2010
Many project management text books focus upon the tools and techniques of project management
(e.g. Levy, 2000 cited in Walker, 2007). Others would argue that these tools and techniques have
insufficient focus upon the needs of the client and stakeholders and that our inherently complex
construction and engineering projects need to operate as open systems in order to provide
innovation and “customer delight”.
Objective:
To read and assimilate material from books, journals and other sources. To present a literature
review with references.
Word Count:
Approximately 3150 words excluding Diagrams, Figures, Abstract and Table of contents.
Tags:
Open Systems ; Customer Delight ; Closed System ; Project Organisation.
TABLE OF CONTENTS
Page No.
1. Introduction 01
2. Closed Systems – Traditional Approach: Brief Overview 02
2.1 Nature of Project success 03
2.2 Why the need to look beyond traditional closed system? 04
3. Open Systems: Brief Overview 05
4. Analysis of the Dichotomy 06
4.1 Project Objective 06
4.2 Project : Organisation and Environment 06
5. Conclusions and Recommendations 10
ABSTRACT
Construction is one of the oldest professions in the history of mankind, so it is without
doubt that one presumes that project management has its roots in the construction
industry.
Project Management as a professional discipline came into existence due to the rapid
development of Defence and Aerospace projects in the 1950’s and 1960’s.
The systems theory developed by Von Bertalanffy in late 1960’s brought about the
evolution of the management process. The management science took a leap of its own.
The seedling which started as controlling and planning procedures for project
management took shape of a whole new discipline within the systems theory, generally
known as the Hard Systems or the Closed Systems. Contemporary thinkers of the time
contributed to management science, the Soft systems approach also known as the Open
Systems Theory which challenged the whole Construction management process. The
debate which started in the 1960’s has taken a stronghold in the wake of current spate of
project failures during the past decade. The Egan Report to the Prime Minister of UK in
1998 ‘Rethinking Construction’ entails the need for the traditional approach to be
changed or to have a progressive evolution in the Project Management Discipline. This
paper traces the Open systems theory and its focus on Innovation in the Construction
Project Management to achieve Customer Delight. It dissects the dichotomy it shares with
the Traditional tools and techniques of Project Management while forming a Open
thought process and approach towards Value added project success and Customer Delight
instead of just Profitability.
S. S. Pandit – PM1 Term Paper 1
1. Introduction: Project Management
Project management as a concept took root in the early nineteenth century. It was initially
adopted by the US aircraft industry, and it gained maturity as a discipline during the US defence
and aerospace projects of the 1950’s and 1960’s. This time period saw the emergence of the
modern day project management philosophy, and distinctive management tools and techniques.
Modern Project Management has its roots embedded in operation research and systems approach
to management (Walker 2007)
Tools and techniques like Program evaluation and review technique (PERT), Critical Path Method
(CPM), earned value, value engineering, work breakdown structure were developed by the
defence and aerospace industry namely DOD and NASA (Rory Burke, 2000).
Project management has evolved as a business process, which is put to practice among enterprise
project management system. After the recession of 1989-1993, implementing Project
Management became a necessity for the emerging companies (Kerzner, 2009).
Kerzner (2009) and Rory Burke (2000) point out that in today competitive markets, changing
technologies, fierce business environments, adoption of project management would offer a real
solution. The PIPC Global Project Management survey of 2005 reiterates the same fact with a
resounding 95% of the Companies stating that adopting and integrating project management is
vital for their success.
Modern day projects have grown in size and complexity. The current avatar of project
management offers a systematic structured approach to managing projects. Rory Burke (2000)
commonly refers it as Management-by-projects. Morris and Pinto (2004) make obvious references
to the same concept and refer to it as “Management of Project”. This encompasses the total
process of from initiation to delivering a project and not just the planning and control techniques.
Walker (2007) elaborates the definition of construction project management as
‘ The planning and coordination and control of a project from conception to completion (including
commissioning) on behalf of a client requiring the identification of the client’s objectives in terms
of utility , function , quality , time and cost, and the establishment of relationships between
resources , integrating , monitoring and controlling the contributors to the project and their output,
and evaluating and selecting alternatives in pursuit of the client’s satisfaction with the project
outcome.’
Experts in the field generally classify this systematic approach into two categories: Closed
Systems and Open Systems. It is fatuous to proceed with the dissection of their dichotomy before
understanding their individual perspectives.
S. S. Pandit – PM1 Term Paper 2
2. Closed Systems – Traditional Approach: Brief Overview
The traditional approach according to PMBOK (2004) also known as the classical management is
considered to cater to 5 functions:
Project Initiation
Project Planning
Project Execution
Project Monitoring and Control
Project Closure
The sum of all these functions is regarded as the Project Life-Cycle.
Traditional project management uses a typical set of techniques and procedures intended to define
and direct the work. It uses a sequential procedural planning with time, cost and resources as its
central functions.
Fig 1: Overview of the traditional Project Management (Kerzner 2009)
Henry Gantt’s Development of bar chart in early 1900’s and the techniques developed during the
aerospace and defence projects of the 1950’s laid the foundations for the plethora of Project
management tools and software’s (Burke 2000).
All of them rely on the sequencing of activities within affordable time durations and resources and
cost budgets.
The Foremost software’s which implement most of these procedures and techniques are:
MSP : Microsoft Project
Primavera Project Planning
Primavera Enterprise Solutions
Many of the time taking calculations are becoming easier using these tools. With time these tools
and techniques have become more flexible in their usage and also provides a efficient solution for
S. S. Pandit – PM1 Term Paper 3
multitude of quantitative tasks or purposes. The following table is a compilation of popular tools
and techniques and their purposes.
Techniques / Tools Purpose
WBS – Work Breakdown Structure Basic definition of the project work.
Precedes the project schedule and cost
estimations
Bar charts or Gantt Charts Simple representation of the project schedule.
Does not show the precedence relationships
among activities
Project Network techniques: PERT , CPM ,
PDM , GERT and other
Net work techniques for work scheduling.
Provide the analysis of the scheduling impacts
the activities have on each other and the
determination of critical activities and float
times. Base of cost estimation,
Resource allocation and management, and risk
analysis
Cost schedules Identification of the capital requirements for
resources. Estimation of realistic budgets that
provide standards against which project
performance is measured.
Project Control: PERT , Variance Analysis ,
Earned Value and others
Assessment of project performance with the
generation of performance indicators. Provide
for the detention of project overruns and the
need of corrective actions. The WBS , GANTT
Charts and other scheduling techniques are
usually incorporated in the project control
process.
Table 1: Overview of traditional Project Management Tools and Techniques (Rodrigues 1994)
2.1 Nature of Project Success
The ultimate aim of any project manager is to achieve project success.
PMBOK (2004) and Walker (2007) define success when project is
1) Within Time
2) Within Cost or Budget
3) At the desired performance /technology level – functional satisfaction
S. S. Pandit – PM1 Term Paper 4
4) While utilizing the assigned resources effectively and efficiently
5) Accepted by the customer or Value for money
Project success parameters are derived from the intellectual perspective of project management
essentially as an execution discipline: of delivering a project “on time, in budget , to scope’
(Morris, 2003).
2.2 Why the need to look beyond traditional Closed systems?
The basic reason is due to inability to achieve project success in the current modern era.
The PIPC Global Project Management survey indicates that 58% of projects fail to deliver its true
business value. Most of the project managers and experts consider the traditional approach to be
immature.
Organisations are exposed to increasing rate of changes, along with the growing complexity of
projects and of the environment (Rodriguez 1994). The traditional approach is not conceived
keeping such complex environment in mind. The analysis given by closed systems is centered on
logic of the project work Structure (Rodriguez 1994).
Closed systems contains nothing detailed on project strategy , nothing on project definition , little
on value management , nothing on technology management and little on the linkage with
programs and portfolios. It concentrates only on implementation stage; there is no value addition
during front-end and initial stages of the project life-cycle (Burke 2000).
It fails to consider the broader aspect of project objectives (Morris 2003; Walker 2007; Kerzner
2009).
The industry was in a state of inertia to adapt a new approach to overcome all the shortcomings
till the Egan Report 1998 to the Prime Minister for Rethinking Construction, which stressed on 4
key areas namely Client engagement, Integrating teams and supply chain, People issues and
Enhancing the value of the product (Walker, 2007).
Experts and researchers use the word ‘Hard Systems’ with the same reference to Closed Systems.
The analysis of the dichotomy between Open and Closed systems will further throw light on the
same.
S. S. Pandit – PM1 Term Paper 5
3. Open system: Brief overview
Systems theory took root in General Systems Theory (GST) by Ludwig Von Bertalanffy in 1968.
The open systems approach is based on Soft system methodology (SSM). Checkland (1981)
advocates the soft system methodology as a general problem solving approach but not a method,
while he denotes hard systems approach to problem solving as a method. Checkland (1981) uses
the terms ‘Systems Engineering’ and ‘Systems Analysis’ to describe these hard systems. The soft
systems approach to problem focuses on systems taken as a whole and not on their component
parts taken separately (Checkland, 1981; Ackoff, 1971). Checkland (1981) considers soft systems
as human activity systems and holds them on a higher level than just physical operations of a
system. Such an approach is concerned with the total system performance (Ackoff, 1971).
According to Ackoff (1971), the Open systems concept did not gain momentum despite of its
importance because there was no unified or integrated set of such concept and the literature was
widely dispersed.
Walker (2007) believes that open system approach to project management as a holistic view of the
project management process. This approach has a revolutionary impact on one’s thinking about
the relationship between performance and project objectives as it is more closely aligned with the
stake holders, project sponsors or client’s perspective (Morris, 2004). The project management
process is taken in a wider context including all soft factors, internal and external to the project.
Open systems focuses on the idea of customer delight and delivering value and in depth
understanding of their needs. It compliments the whole concept of business strategy and value
added project performance while adding value to its customers, known as ‘Value driven business’
(Blockey and Godfrey, 2000). The open system approach stresses the contribution of the
interrelationships of the parts or components of the systems and the systems adaption to its
environment in achieving its objectives. Walker (2007) explains the benefit of open systems to
construction project management is the structuring of organisation in a way as to achieve client’s
objectives. Understanding such reciprocal interdependencies requires more effort and systematic
approach rather than just linking or plan sequential activities which are interdependent. The
awareness of this aspect has encouraged more authors and experts to focus on the management
needs of Projects (Walker, 2007).
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4. Analysis of the Dichotomy
The proliferation of personal computers & an explosion of software’s related to project
management during the 1990’s made the use of traditional tools and techniques a norm (Burke
2000). These tools and techniques are just monitoring devices that declare the position too late
after the event to take corrective action (Walker 2007). The defence and aerospace projects had
considerably stable conditions and almost no constraints on resources and budget when these tools
and techniques were developed. The current conditions faced by the construction industry and its
clients are very complex and face numerous uncertainties and are affected by numerous external
factors. Walker (2007) explains that projects are becoming increasingly complex, not necessarily
technologically but in terms of specifying objectives and hence organisationally. But the
engineering background of many in construction has instilled the closed system ethos (walker,
2007).
The changing need have dictated a new open outlook towards Project Management. The further
analysis is pertaining to the original argument of customer delight.
4.1 Project Objective
The clients brief is traditionally regarded as the objective of the project. But this brief is generally
unsatisfactory or unclear about time and cost or is deficient to the real needs of the customer. The
interest of stakeholders or beneficiaries also has to be taken into account. Working towards a
unified goal complicates the concept of establishing the project objective (Walker 2007). The
most important aim is to develop an objective at the front-end.
The closed system works with the assumption that the goals are clearly defined and need no
further development. They address the task of most efficiently reaching the defined goal
(Crawford & Pollack, 2004). Hall (1962) states that such a closed system is basically an
engineering one about how to meet a defined need (cf. Morris, 2004).
The current construction project involves numerous independent firms and professions. The
arising conflicting objective due to the same, increase the degree of uncertainty inherent in the
objective. Walker (2007) believes that open system approach helps all the contributors to be
aware of the uncertainties and respond accordingly, either to adopt the best approach towards the
unified objective or by contributing to identifying and rectifying deficiencies towards an objective
to achieve customer delight.
4.2 Project: Organisation & Environment
The traditional approach abides by the classical hierarchy in ordering and controlling
organisation. Walker (2007) points out that the general reaction to this hierarchy is negative and it
S. S. Pandit – PM1 Term Paper 7
is out of date and inefficient. The construction projects under closed systems are still viewed as
method and process oriented. It neglects the organizational structures and business value of the
product (Kerzner 2000). A construction project organisation should therefore be designed to adapt
and reflect to its environment. Open system adapts to events and occurrences outside the system
also regarded as the System Environment (Walker 2007). Checkland (1981) explains the project
and its entire system including system environment as intelligible systems. He denotes all
complex modern projects as intelligible systems.
Closed systems tend to be non-participative. The open systems imbibes a participative,
collaborative and facilitative approach which promotes crossing professional boundaries to
express views while addressing and issues and problems (Crawford and Pollack, 2004)
Pryke and Smith (2008) explain the concept from a relationship point of view. The relationship
approach to project management aims to improve the performance on project delivery by adding
value and satisfying client’s needs by socially managing relationships between people, people and
firms and between firms. This is highly relevant to the current construction project scenario
involving coalitions, partnering and numerous professional disciplines (Pryke and Smith 2008).
Scott (1992) refers to original rational models of organisation like Taylor, Fayol, Webber and
natural models like Bernanrd , Mayo as closed system views as they did not formally incorporate
interaction with the environment within their system (cf. Walker 2007).
Kerzner (2000) disintegrates the interaction between organisation (project system) and its
environments into two broad categories namely: Macro-Environment and Micro-Environment.
The following figure aptly explains the systems and its environment and their factors.
Fig 2: Inferred from Kerzner 2000.
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Walker (2007) states that there is no quantitative method to properly measure the impact of
environmental forces on construction projects , but stresses that just the recognition and
understanding of their effect on projects permits them to anticipate , adapt and respond to any
changes in the environment. Open systems is dynamic and adapts to its environment by changing
its structure and process. Business organisation are analysed as a function of open systems.
Micro-Environment
Internal Factors
Macro-Environment
External Factors
Customer Political
Stakeholders Economic
Beneficiaries Socio-cultural
Suppliers Technological
Competitors Environmental
Employers Legal
(Table 2: Data inferred from Kerzner, 2000; Walker, 2007; Winch 2010).
Assessing these factors from the table, Walker (2007) believes that the traditional organisational
structures does not possess the ability to adopt the changes in the system environment due to the
authoritarian reporting structures or lack of open relationship by all the contributors. The open
systems approach enables to establish relationships during design or organisation which in turn
allows a properly designed control function with appropriate feedback mechanisms to overcome
the deficiency and operate effectively. Walker (2007) further points out that this approach to
construction project management in structuring organisations effectively contributes to clearly
define the objective.
So the process of construction is now a subsystem of the clients system which needs to be
integrated at the established boundary. The objective of this integrative device is to recognise and
take action on changes in the client or construction process environment in terms of maximising
the benefit to the client (Walker, 2007).
Establishing and defining objectives at the front-end and managing evolutions of project to
achieve business success, brings the whole project organisation into a more sophisticated view in
terms of accomplishing project success. The new maturity models of project management reflect
this theory of improving overall performance and achieving customer delight than just achieving
initial baseline targets (Morris, 2004).
S. S. Pandit – PM1 Term Paper 9
Objectives of Project Management in construction industry as defined by Walker (2007) are:
1) Identifying goals, communicating and adapting the systems objectives.
2) To ensure that subsystems of the system are working efficiently and towards a unified
goal.
3) To ensure that proper connections and relationships are established between the
subsystems.
4) To relate the whole systems to its environment and adapting the system as required in
response to changes in its environment.
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5. Conclusion and Recommendations
Peter Morris (2004) points out that the execution view of Project Management is increasingly
being recognised as having shortcomings and not always the appropriate view of the discipline.
But the importance of the tools and techniques cannot be negated as well. Crawford and Pollack
(2004) state while qualitative data of open system approach provide rich indepth understanding of
the situation, the quantitative tools and techniques can be used to translate subjective judgements
into precise metrics. Companies still prefer quantitative techniques for performance measurement
as they are easy to record and analyze. Walker (2007) and Kerzner (2000) reiterate the use of
GANTT Charts, PERT, Cost Analysis and Earned Value Analysis as integral parts of the Project
management discipline.
Improved project management methodology can be achieved by exploring the potential synergy
of combining closed systems, traditional tools and techniques and open systems.
Each system is part of a larger system and also comprises of other systems. This ideology is apt to
be inculcated into the Project management evolution. Blockey and Godfrey (2000) elaborate on
the same by stating that all closed systems are understood and managed through open systems. in
fact it is better to interpret closed systems as being embedded in Open systems (cf. Walker 2007).
Project management which has its roots in management is not a proper science by definitions. It is
concepts and approaches towards the process of talking any issue. So one’s approach will depend
upon the extent of knowledge and personal experience.
The latest PRINCE 2 Methodology recognises the concept of customer delight as it stresses that
the ‘user’ should be involved in all stages of development and that the project should be managed
under the direction of all parties involved (Neal, 1995).
It took almost 40 yrs for the construction industry since the Phillip’s report of 1950 to Emmerson
report of 1962 to the Latham report of 1994 to realize the importance of Project Management and
establishing it as a professional discipline. The inertial within the building industry and
professions which stifled innovation (Marian Bowley 1966 cited in Walker 2007) has diminished.
The increased awareness has seen a spurt in growth of Project management certifications and
societies like PMI, APM, AIPM, IPMA, PRINCE 2, ProgM. Given the pace of change in the
construction industry, Project management as a discipline will surely evolve with the
amalgamation of traditional tools and techniques and Open system Approach. The current
recession might even act as a catalyst and bring about a fast change in the discipline and move the
focus from only ‘achieving profits’ to achieving ‘Value added business success’, ‘innovation’ and
‘Customer Delight’.
S. S. Pandit – PM1 Term Paper 11
REFERENCES
1) Checkland, P (1981), Systems Thinking, Systems Practice, Chichester: John Wiley & Sons
2) PIPC Global Project Management Survey 2005
[Http://www.pmportal.co.uk/uploads/documents/PIPCsurvey.pdf], 2005.
3) Winch, G (2010), Managing Construction Projects: An information processing approach,
2nd ed., West Sussex: Wiley-Blackwell.
4) Walker, A (2007), Project Management in Construction, 5th ed., London: Blackwell
5) Pryke, S and Smyth, H (2008), Management of Complex Projects: A relationship
approach, (ed), Oxford: Blackwell.
6) Burke, R (2000), Project Management: Planning and control techniques, 3rd ed.,
Chichester: John Wiley & Sons.
7) Kerzner, H (2009), Project Management: A systems approach to planning, scheduling
and controlling, 10th ed., New York: John Wiley & Sons.
8) PMBOK Guide (2004), A Guide to Project Management Book of Knowledge, 3rd ed,
Project management Institute Inc.
9) Kerzner, H (2000), Applied Project Management: Best practices on implementation, New
York; Chichester: John Wiley & Sons.
10) Blockey, D & Godfrey, P (2000), Doing it differently: Systems thinking for rethinking
construction, London,: Thomas Telford publishing.
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[Http://www.bartlett.ucl.ac.uk/research/management/moscow2003.pdf], 2003
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