module 1 - 7 point form 106

7/26/2019 Module 1 - 7 Point Form 106

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Project Management Module 1

1.0 Introduction ......................................................................................................... 1

1.1.2 Projects and other production systems .......................................................... 1

1.1.3 Characteristics of a project ........................................................................... 1

1.2. What is Project Management? ............................................................................ 2

1.2.3 Basic Project Management Structures........................................................... 2

1.2.3.1 Internal Project Management ................................................................. 2

1.3.2 External Project Management .......................................................................... 3

1.3 Characteristics of Project Management ............................................................... 3

1.3.2 Multiple Objectives ....................................................................................... 3

1.3.3 International Co-Operation and Standards ................................................... 3

1.3.4 Multi Industry ............................................................................................... 3

1.3.5 Generic Benchmarks ..................................................................................... 3

1.3.6 Specific Provisions ........................................................................................ 41.3.7 Project Life Cycle ......................................................................................... 4

1.4 Potential Benefits and Challenges of Project Management .................................. 4

1.4.2 Potential Benefits .......................................................................................... 4

1.4.3 Potential Challenges ..................................................................................... 4

1.0 Introduction

1.1.2 Projects and other production systems Production systems can be classified into three broad categories

o Mass production e.g. cars

o Batch production e.g. chemicals

o Project (non-repetitive) production e.g. IT

Mass production is capitally intensive, highly mechanistic & little

management intervention once system running satisfactorily

Batch production unlikely to be continual high demand, typically organised

around functional groupings

Project one off change e.g. improving batch or mass production efficiency

Programme may contain many projects e.g. customer service improvement

programme

1.1.3 Characteristics of a project

Single, definable purpose, product or result

Usually has defined constraints or targets

Uses skills & talents from multiple professions and organisations

It is unique, unfamiliar and temporary

It is part of a process to achieve a goal


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It is part of an interlinked process

It is generally of secondary importance to the company, exceptions are pure

R&D

It is relatively complex

Skills required include:

o

Financial awarenesso Marketing appreciation

o Technical knowledge

o Planning skills

o Strategic Awareness

o Quality Management

1.2. What is Project Management? It is about achieving time, cost and quality targets, within the general

context of overall strategic and tactical client requirements, by using

project resources Cost vs. Time vs. Quality, pick two

Industrial Projects have become more complex and hence so has project

management

1.2.3 Basic Project Management Structures

1.2.3.1 Internal Project Management

Most common form, project team operates within the firm

Most companies are organised around functional groupso Advantages specialisation

o Disadvantages compartmentalised and rigid

Project teams can operate across these functional groups

Project team members then have project and functional responsibilities

Characteristics

o Single designated person (PM) acts independently and outside formal

functional authority structure

o PM has equal authority to functional managers over shared resources

o PM acts as single leader

o Projects normally require several functional specialists to work

together

o

PM has to negotiate with functional heads for resourceso People can originate from any level with the organisation

o Project structures generally require the assistance of standard support

functions such as HR and IT


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1.3.2 External Project Management

External PM is appointed on a consultancy basis and acts as external agent on

behalf of client, has external resources for project group

Characteristics

o External system is more flexible than the internal system

o Communication has to be across organisational boundary, this may be

a problem

o Team allegiance is lower

o PM has direct authority of his team, functional structure of firm does

not matter

o Greater requirement for risk transfer and contractual control

o No built in knowledge of firm

1.3 Characteristics of Project Management

1.3.2 Multiple Objectives Typically these objectives fall into the categories of cost, quality and time

Cost Quality curve shows how quality improves as cost improves (usually).

Where you want to be on a curve can depend on factors like:

o Market price of goods

o Guaranties and warranties in place

o Cost of replacement

o True cost of defective workmanship

Project Management is concerned with ensuring the project success criteria aremet within the changing constraints of the time,cost,quality continuum

1.3.3 International Co-Operation and Standards

PMs code of practice and body of knowledge are based on international rather

than national practice, i.e. a project manager in one country should be able to

practice his art in another

The international body is the International Project Management Association(IPMA)

1.3.4 Multi Industry

PM not specific to one industry

1.3.5 Generic Benchmarks

There are standards that are not industry specific

o British BS6079

o International ISO10006

and standards that are:

o Prince2: controlled environment industries & government


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1.3.6 Specific Provisions

Traditionally PMs were selected from functional specialists within anorganisation

Modern concept of project management includes the professional project

manager

1.3.7 Project Life Cycle

Traditionally consultants have only advised on 1 or 2 sections of an overall

project this leads to problems of lack of co-ordination

Project managers now give advice to clients on all stages of the project

Life cycles include:o Inception the basic proposal for work

o Feasibility establish the validity of the proposal from all persepctives

o Prototype

o

Full Design Development once protoype has been adjustedo Tendering and contractual arrangements can be a mixture of in house

and external

o Manufacturing

o Commisionning all aspects of switching the system on

o Operation actively used for the purpose for which it was designed

o Decommisionning process by which it is switched off

o Removal & Recycling

1.4 Potential Benefits and Challenges of Project

Management

1.4.2 Potential Benefits

Increased concentration on a specific objective

More efficient use of resources

Accountability

Healthy competition between functional and project units

Reduced disruption of functional operations

Enhanced visibility of strategy implementation

Improved team spirit and innovation

Improved management skills

1.4.3 Potential Challenges

Key staff taken away from functional units

Competition for resources

Conflicting orders

Powerful functional manager can deprive project of resources


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Project sponsor is necessary go between for project manager and functionalmanager

Staff need to be flexible

Project staff may find it difficult to re-adjust to functional units


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Module 2 Individual and Team issues

2.2 The Project Manager ........................................................................................... 7

2.2.2 Selecting the Project Manager ...................................................................... 7

2.2.2.2 The concept of the PM ............................................................................ 7

2.2.2.3 Central Position of the PM ..................................................................... 7

2.2.2.4 Role of the PM ....................................................................................... 82.2.2.5 Selecting the Project Manager ............................................................... 9

2.2.3 Some Essential PM requirements .................................................................. 9

2.2.3.1 Introduction ........................................................................................... 9

2.2.3.2 Planning ................................................................................................ 9

2.2.3.3 Authorising .......................................................................................... 10

2.2.3.4. Team organising ................................................................................. 10

2.2.3.5 Controlling .......................................................................................... 11

2.2.3.6 Directing .............................................................................................. 11

2.2.3.7 Team Building ...................................................................................... 12

2.2.3.8 Leadership ........................................................................................... 12

2.2.3.9 Lifecycle Leadership ............................................................................ 13

2.3 Project Team ..................................................................................................... 13

2.3.2 Project teams within functional organisations ......................................... 13

2.3.3 Team multi-disciplinary and heterogeneity Issues ....................................... 14

2.3.4. Group and team processes ......................................................................... 14

2.3.5 Project team performance ........................................................................... 14

2.4 Project Team Staffing Profile and Operation ..................................................... 15

2.4.2 Project Team Staffing ................................................................................. 15

2.4.3 Project Team Profile ................................................................................... 15

2.4.3.1 Project Team Mix ................................................................................. 15

2.4.3.2 Uniqueness of project team .................................................................. 15

2.4.4 Project Team Operation .............................................................................. 16

2.5 Project Team Evaluation ................................................................................... 16

2.5.2 Project Life Cycles ...................................................................................... 16

2.5.3 Project Change control and management ................................................... 16

2.5.4 Project Team evaluation ............................................................................. 16

2.5.5. Groupthink ................................................................................................ 17

2.6 Project team motivation ..................................................................................... 17

2.6.2 McGregor and Maslow ............................................................................... 17

2.6.3 Equity Theory and Expectancy Theory ........................................................ 17

2.6.3.1 Equity Theory ....................................................................................... 172.6.3.2 Expectancy Theory ............................................................................... 18

2.7 Project Team Communications .......................................................................... 18

2.7.2 Project Communication .............................................................................. 18

2.7.3 Formal and Informal communications ........................................................ 18

2.7.4 Internal and External communications ......... .......... ......... .......... .......... ........ 18

2.8 Project Team Stress ........................................................................................... 19


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2.8.2 Origins and Symptoms of Team Member stress ........................................... 19

2.8.3 Stress Management ..................................................................................... 19

2.8.3.1 Individual Stress Management ............................................................. 19

2.8.3.2 Project Team Stress ............................................................................. 19

2.9 Conflict Identification and Resolution ................................................................ 20

2.9.2 Sources of conflict ....................................................................................... 202.9.3 Conflict Characteristics .............................................................................. 20

2.9.4 Approaches to Conflict ............................................................................... 20

2.9.5 Conflict management .................................................................................. 20

2.2 The Project Manager

2.2.2 Selecting the Project Manager

2.2.2.2 The concept of the PM

PMs are sometime permanent specialists or external consultants

The role is similar to CEO or General Manager

PM usually responsible to Project Sponsor

Different kind of projects call for different types of PM

Projects tend to be run outside the traditional top down hierarchy of thecompany

His role is temporary and without the power of functional managers

They have the authority to make project decisions but dont have authority to

order people to carry out the work which results from these decisions The PM must depend on other forms of influence to persuade functional

managers to agree with them

o Competency

o Professionalism

o Reputation

o Skill

o Inter personal skills

o Alliances

If these dont work, go to the Project Sponsor, so the PS needs to be senior

2.2.2.3 Central Position of the PM Key ability is to be able to focus on issues in detail while not losing sight of

the project as a whole

PM occupies a central position relating to communications between the

various people and organizations involved

Needs both the intellect to devise the project strategy and the diligence toensure that the actions are taken, both to the required standards and on time


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2.2.2.4 Role of the PM

Primary requirements of the role are:

o Planning project activities, schedules and budget

o Organising and selecting project team

o Interfacing with client, the organisation and all interested parties

o Negotiating with suppliers and clients

o

Managing the project resourceso Monitoring and controlling the project status

o Identifying issues and problems

o Finding solutions

o Resolving conflicts

These requirements have to be carried out within the overall success criteria of

the project, including:

o Within agreed time limits

o Within agreed cost limit

o To at least minimum specified quality level

o To the satisfaction of the client

o

In compliance with the strategic plano

Within agreed scope

Scope is what is and is not part of project

Project scope creep is a killer, need to manager it using interface management

managing the organisational interfaces

Personal, Managerial and Leadership skills

In terms of personal skills, the PM should:o Be flexible and adaptable

o Be able to concentrate on more than one thing at a time

o Demonstrate initiative

o Be persuasive

o

Good communicatoro Balance multiple objectives

o Be prepared to generalize rather than always specialise

o Good planner and implementer

o Good time manager

o Good negotiator and influencer

o Be diplomatic

Technical and Business Skills

Technical skills help a PM understand the detailed components of a project

Harder characteristics include

o Understanding how to setup a team and run it

o

The ability to develop complex time and cost plans and achieve them

o Understanding of contracts, procurement and purchasing

o Active interest in training and development

o Understanding of the technology that is central to project success

o Ability to translate business strategy into project objectives


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2.2.2.5 Selecting the Project Manager

Best person is a functional manager with project management skills

knowledge of industry & organisation

Problem is losing a good functional manager, should not do both PM and fnc

management at same time

Could use an external consultant, but they have learning curve

Specialist project managers are best main issue is technical competence

2.2.3 Some Essential PM requirements

2.2.3.1 Introduction

Primary functions

o Project planning

o Authorising

o Team organising

o

Controllingo Directing

o Team building

o Leadership

o Life cycle leadership

2.2.3.2 Planning

Most critical phase of project as mistakes made here are most expensive to

rectify if they are not discovered until later phases

Organisational and resourcing issues planning covers activities and their

sequence Technical planning required for

o Time planning & control

o Cost planning & control

o Quality management

Also need to plan and establish individual/team authority and communication

relationships

Use Task Responsibility Matrix (TRM) to define authority linkages. TRMshows

o Key milestones

o Individual important activities

o General responsibilities

o

Specific responsibilitieso Dates

Responsibilities include:

o Approval

o Preparation

o Checking

o Making and input

o Authorising


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Typical TRM

Person A Person B Person C

Inception Report O,I C A

Feasibility Report O,I I A

Outline Proposals O,I I A

Scheme Designreport

I O,I O,C,A

I = Input

C= Checking report

A = authorising contents before submission to client

O = Organising reports

2.2.3.3 Authorising

Interested in authority from two perspectives:o Sufficient authority to get job done

o How much authority to delegate

Authority is not the same as power

Authority is the type of ability to control and direct that is delegated from

higher levels

Power is given to an individual by subordinates at lower levels

For example, PM and functional manager have the same authority, but

functional leader has more power, given to him by subordinates

PM has to enter authority negotiations with functional manager

2.2.3.4. Team organizing PM responsible for organising how work is to be executed

To create organisational structures, PM must understand politics of the

organisation & the stakeholders

Organisational structures fall into the following categories

o Classic Theory: people involved are components of a production

process, producing the goals of the org. Often used in large scale

manufacturing

o Empirical Theory: basic similarities between the systems and processes

adopted by organisations. If enough observations and sample data are

taken, the process can be identified & indeed predicted. E.g. train

operating organisations tend towards the same systems and procedureso Behavioural Theory: two main schools

Human relations school: suggests there are intrinsic links

between the behaviour of individuals and the behaviour of the

organisation, need to match the two e.g. total quality

management

Social system school: as social characteristics of the

organisation change, so to must those of individuals. Changes


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may go beyond attitudes and objectives they may involve

working practices e.g. smoking ban in workplace

o Decision theory: organisations can be observed and modelled and

models can be used to predict organisational efficiency in other

organisations

o System management theory: break up an organisation into a series of

linked systems, each with inputs, some form of processing and outputs Managers that subscribe to any of the above theories will be resistant to the

imposition of any systems derived from any other theory e.g. using classical

theory in an ad agency

PMs tend to favor more analytical - decision and system theories

PM needs to review available resources and pick appropriate org structure

At the first meeting, the following are agreed:

o Individual responsibilities

o Project organisational breakdown structure (OBS)

o Project Task responsibility matrix (TRM)

o Communication links

o Authority links

o

Information configuration management system

o Project programme

2.2.3.5 Controlling

PM responsible for

o Establishing desired targets for performance

o Measuring actual performance against targets

o Initiating corrective action where the actual performance deviates too

far from that desired

Controlling is a four stage process:

o

Targeting targets can be set for individuals or the group and shouldbe in line with overall success and failure criteria for project

o Measuring can be formal (earned value analysis) or informal

(appreciation or evaluation)

o Evaluating identifying where progress is not being made in

accordance with the overall project plan & consideration of corrective

action. Variance analysis looks at difference between planned and

actual events i.e. its retrospective. Should also use a forecasting

system, telling the PM where planned actions are likely to result in

poor performance

o Correcting Evaluation identifies where problems are occurring,

correcting phase identifies why problems are occurring, how to correct

them and monitors if they are being corrected (second level varianceanalysis)

2.2.3.6 Directing

1 This is the process involved in converting organizational goals into reality

using organizational and project resources

2 Activities include:


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o Setting up the project team

o Team training and development

o Supervision

o Individual and team motivation

o Co-ordination

2.2.3.7 Team Building

1 Process of taking a series of individuals from different functional groups andwelding them into a unified project team

2 This is an ongoing thing, not just at start, although the start is most critical

3 Ten sections to any good team building process:

o Individual and team commitment: sharing aims and objectives of

project. This is easier when its an internal rather than external team.

Use reward system or external factors

o Developing team spirit: this is a measure of motivation

o Obtaining project resources: often a problem when the success of a

team means it grows. Mix of skills also criticalo Establishment of clear goalsand successes and failure criteria: stops

people moving the goalposts, strategic changes must be relayed to

team and project objectives re-established. Criteria must be

quantifiable

o Formalisation of visible senior management support

o Demonstration of effective program leadership

o Development of open formal and informal communications. Good

communications is a motivator. People take ownership

o Application of reward and retribution systems: good performers are

recognised and rewarded

o Identification and management of conflict: not just between people

but between incompatible design and cost information. Some conflict

is necessary

o Development of heterogeneity control and cohesiveness

2.2.3.8 Leadership

Traits include:

1 Decision making capability

2 Problem solving

3 Ability to integrate new team members

4 Inter personal skills

5

Ability to identify and manage conflict6 Communications skills

7 Interface management skills: with upper management, functional heads and

project team

8 Factor balancing skill: constant tradeoffs


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2.2.3.9 Lifecycle Leadership

Project leadership is unique because requirements vary over time

1 Project teams last only until project is completed and hence there is little time

to gain knowledge of the project and team

2 Project manager concerned with complete lifecycle rather than just the

individual stage. So he must apply different leadership skills and styles

depending on the stage3 Lifecycle leadership is only relevant when one person leads team(s) through

entire lifecycle

4 Task oriented leadership relates to tasks themselves and the mechanics of the

process

5 People oriented leadership relates to leadership of individuals and how they

work as a team

Phase Characteristic Task People Effect

1 Inception Hi Lo Telling2 Development Hi Hi Persuading

3 Stablisation Lo Hi Participating

4 Maturity Lo Lo Delegating

1

Phase 1: similar to new employees joining a company, they want to be told

what to do as there is much confusion

2

Phase 2: system not yet evolved, so high task leadership. Growing trust

and so growing people leadership

3

Phase 3: Stabilised team and output secure. Manager moves to higher level

motivational factors (e.g. Maslows hierarchy)

4

Phase 4: team can be left alone to do project

2.3 Project Team

2.3.2 Project teams within functional organisations

1 Most projects are carried out within traditional organisations designed along

functional lines e.g. repackaging product is a marketing project

2 Some projects are run across functional areas e.g. installing a new finance

system

3 Some pure project organizations may be setup external to a parent company

4 Advantage of running projects with operating project teams within functional

organizations:o Structure provides flexibility

o Employees given new skills and experiences

o Team and cross functional attitude is improved

o Experts can share expertise across organisation

o Experts working together produce new synergies

o Employees in project can still follow primary career path

o New career paths open


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o Less costly than using external consultants

5 Disadvantages

o Function has to continue to operate as normal despite resource

depletion

o Functional managers sometimes put weak people on projects

o May be difficult to adapt

o Project manager has difficulty making his project the priority

o Communications problems between projects and functional

organizations

o Motivation may be a problem

2.3.3 Team multi-disciplinary and heterogeneity Issues

1 The Project manager must blend functional specialists together

2 Sentience is the tendency for individuals to identify with their own

professional background3 Interdependency is when teams depend on inputs from more than one person

4 Specilaism adds to sentience which can lead to a communications problem

5 Integration is the process of defining responsibilities and control

6 The greater the range of team members characteristics and background, the

less the chance of overall bias or sentience, but higher conflict

7 Homogenous = one type

8 Heterogeneous = many types

2.3.4. Group and team processes1 Groups are collection of individuals who work together in pursuance of a

common objective

2

Teams are a collection of individuals who work under direction of a team

leader in pursuance of a common objective

3

Team = subset of Group

4 An organisation has many groups, formal and informal

5

Informal groups meet because of social reasons

6 Project Managers must be aware of all types of groups in an organisation

7

Groups are better than individuals at problem solving because

o they brainstorm more effectively

o consider a wide range of factors

o develop an enhanced logic flow

o generate more original ideaso consider a wider range of consequences

o solve problems quicker and more accurately

2.3.5 Project team performance

8 Factors which effect team performance the most are:

o Heterogeneity - the more, the better problem sovling but the more


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conflict

o Cohesiveness - how much team members want to be members and how

well personal goals are aligned to team goals

2.4 Project Team Staffing Profile and Operation

2.4.2 Project Team Staffing

A balance of skills and experience is sought

Normally project manager will assemble a schedule of resources requiredand submit to senior management

Factors taken into account include

o Availability of resources - short and long term, internal vs.

external

o Ability

o Continuity requirements

o team working skills

o

special skills Successfully staffing means:

o Staffing is voluntary

o Staffing is in relation to value of project

o Less formal than functional teams

o PMs lead by example

o Teams are flexible and responsive

o Teams interface across all boundaries

o Teams innovate and evolve

o Functional managers receive recognition

o Conflict can be good during staffing

2.4.3 Project Team Profile

2.4.3.1 Project Team Mix

Think about team in the widest terms, including clients, subcontractors,stakeholders

The Project Office provides a focus

2.4.3.2 Uniqueness of project team

No set skills profile for an effective project team There are three project management positions that need to be filled: Project

Manager (acts as MD), Project Planner (acts as Operations Manager) and

Project Controller (CFO)


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2.4.4 Project Team OperationKey areas are:

Establish measurable objectives: identify which stakeholders will decide ifproject is a success and work with them to define success

Stakeholder management: perception by them is critical, develop mentors and

get quality resources

Establish & plan for SMART targets at different levels with different people,

plan for risk and use milestones

Plan and establish processes: the environment and relationships should be

planned for (morale). Clear but flexible rules applied

Leadership: constant improving of team & rewards

Membership and identity: credibility, active membership

Communication systems: meetings are important, formal and informal,

actionable

Team separation: rely on the ability of other member to keep in regular contact

Teams in general: regular face to face meetings, performance measures,

completion criteria, commitments and responsibility

2.5 Project Team Evaluation

2.5.2 Project Life Cycles

Inception

Feasibility

Preliminary R&D

Manufacture of prototype

Development and testing of prototype

Second stage R&D Final trials

Production

Commissioning

Use

Decommissioning

Recycling

2.5.3 Project Change control and management

Very important

2.5.4 Project Team evaluation

Forming: team meets, objectives set, rules established, everyone knows their

responsibilities and objectives

Storming: establish cohesiveness, maybe conflict at this stage

Norming: establishing team standards

Performing


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2.5.5. Groupthink

Happens when group of individuals become highly motivated towards a set ofbeliefs

Inconsistencies can cause problems

Groups emerging beliefs and aims replace their own

Symptoms include

o Absolute commitment to project

o Lack of respect for competitors

o Intolerance of dissenters

o Fear that something is wrong but censor themselves

o Self delusion, positive filter

o Selective reporting

2.6 Project team motivation

2.6.2 McGregor and Maslow

McGregor:

Theory X: operatives are lazy and need to be led

Theory Y: operatives want to work and find work stimulating

Most operational systems fall between the two

Functional managers are more X, Project managers are more Y

Maslow hierarchy of needs

Self actualisation (freedom to make the best of one's talents)

Esteem

Belongingness Safety

Physiology (Food/Water)

Hierarchy should be considered from the following perspectives:

Relative importance of needs, varies from project to project

Time based requirements, higher the level, the more time it takes to achieve it

Unsatisfied needs can cause resentment

Complex needs: higher level are more subjective and so more complex

Anticipation: fulfilled needs are no longer a motivation

2.6.3 Equity Theory and Expectancy Theory

2.6.3.1 Equity Theory

Based on the perceptions of individuals in relation to what they do and who

they are

Employees compare these and the level of effort to achieve them and that

defines level of motivation

If you perceive inequality you can:


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o seek promotion

o seek increased reward level

o make a lesser contribution

o increase other inputs (shift work to colleagues)

2.6.3.2 Expectancy Theory People are motivated to achieve goals they believe will give them the rewards

they desire

People can be motivated provided the successful completion of the project can

be linked to their own personal goals

2.7 Project Team Communications

2.7.2 Project Communication

Process by which the Project Manager sends out information, directives and

objectives and monitors actual performance Depends partly on quantity and quality of face to face meetings

2.7.3 Formal and Informal communications

Organisations naturally develop barriers to communication

Various section of the organisation that are defined by functional and power

boundaries are called operation boundaries

Formal lines of communication are setup so project stakeholders get whatever

information they need and vice versa

A good communications system monitors and records the flow of information

Danger that formal communications become choked with volumes ofrelatively low value information, problem made worse by email and MS

Project

Formal communications include

o frequently distributed reports to predefined list

o regular project meetings

o project memos

o project noticeboard, newsletter and project away days

Informal communications revolve around the grapevine: hard to control but

can be influenced by

o lunch and dinner appointments

o telephone conversations

o

coffee breakso evening in bar

o social events

2.7.4 Internal and External communications

Project communication is either internal to project members or external to allother people


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Good internal communication relies on people's willingness to communicateand disseminate openly

Good external communications is the opposite: requires absolute control overdissemination of information

One person should be responsible for all external communication

2.8 Project Team Stress

2.8.2 Origins and Symptoms of Team Member stressTypical reasons for stress

o Conflict between project and functional duties

o Working to strict time, cost and quality limits

o Team's short life span

o Projects tend to be relatively complex

o Operating within a changing environment

Stress leads to a loss in productivity and efficiency Stress types

o personal - from within the team member

o work - from work environment, usually linked to workload

o environmental stress - originates from outside both individual and

workplace e.g. fear of unemployment

Symptoms

Physiological - blood pressure

Phychological - sleep problems

Behavioural - loss of energy

2.8.3 Stress Management

2.8.3.1 Individual Stress Management

Poor diet

Lack of exercise

Physiological awareness and control

communication

Holidays

2.8.3.2 Project Team Stress Deregulation e.g. flexi time

Reasonableness

Fairness - balancing the workload

Open mindedness

Flexibility

Approachableness


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2.9 Conflict Identification and Resolution

2.9.2 Sources of conflict

Onerous resource constraints

Pressure to increase speed / reduce costs

pressure to meet deadlines

personality clashes

functional vs project

misunderstanding requirements

incorrect or late communications

perception of inequalities

underlying resentment

2.9.3 Conflict Characteristics

more multi disciplined the team, the more the conflict

positive conflict is good

the lower the project managers power and authority, the higher the conflict

the lower the degree of specified and quantifiable objectives, the greater the

conflict

lower communications and accountability means more conflict

more change means more conflict

lower prestige of project means more conflict

2.9.4 Approaches to Conflict

must monitor and manage divergences of opinion

conflict highest during active phases of project, reduces at the beginning andend

Questions to ask

o why is conflict occurring

o what is the source of conflict e.g. are objective inconsistent?

o what is the potential impact to project

o can conflict be reduced or eliminated

o could conflict be foreseen and can we avoid it in future

2.9.5 Conflict management conflict avoidance: used if matter is not important enough or there is no

acceptable solution

conflict absorption: accept it and try to minimize

conflict resolution imposition: where there is no alternative, no consultation or

negotiation e.g. unemployment

negotiated conflict resolution


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Module 3 - Risk

3.2 Background to risk .................................................................................................. 23

3.2.2 Concept of Risk ................................................................................................. 23

3.2.3 The Human Cognitive Process .......................................................................... 24

3.2.3.1 Pattern Recognition and Attention.............................................................. 243.2.3.2 Bounded Rationality ................................................................................... 24

3.2.3.4 Intuition and bias ....................................................................................... 24

3.2.3.5 The Decision Model ................................................................................... 24

3.3 Risk Handling .......................................................................................................... 25

3.3.2 Approaches to risk handling ............................................................................. 25

3.3.3 Risk Assessment and Control ............................................................................ 25

3.3.3.1 Elements of Risk assessment ....................................................................... 25

3.3.3.2 Elements of Risk Control ............................................................................ 25

3.3.3.3 Risk Identification ...................................................................................... 26

3.3.4 Project and Strategic Risks ............................................................................... 26

3.4 Types of Risk ........................................................................................................... 26

3.4.1 Generic Risk Headings ..................................................................................... 26

3.4.2 Market and Static Risk ...................................................................................... 26

3.4.3 External and Internal Risk ................................................................................ 26

3.4.3.1 External Risk (cannot be controlled) .......................................................... 26

3.4.3.2 Internal Risk (can be controlled) ................................................................ 27

3.4.4 Predictable and Unpredictable risks ................................................................. 27

3.5. Risk conditions and decision making....................................................................... 27

3.5.1 Conditions of Certainty ..................................................................................... 27

3.5.2 Decisions made under conditions of risk ........................................................... 27

3.5.3 Decision made under conditions of uncertainty ................................................. 27

3.5.3.1 Hurwicz Criteria ........................................................................................ 28

3.2.3.2 Wald Criterion ........................................................................................... 28

3.5.3.3 Savage Criterion ........................................................................................ 28

3.5.4.3.4 Laplace Criterion .................................................................................... 28

3.5.4 Rules for risk taking based on certainty risk and uncertainty ........... ........... ....... 29

3.5.5 Need for risk management strategy ................................................................... 29

3.6 The concept of Risk Management ............................................................................. 29

3.6.2 Risk Identification ............................................................................................. 30

3.6.2.1 Brainstorming ............................................................................................ 30

3.6.3 Risk Classification ............................................................................................ 303.6.4. Risk Analysis .................................................................................................... 30

3.6.4.1 Risk Analysis table ..................................................................................... 31

3.6.4.3 Risk Drivers Map ....................................................................................... 31

3.6.4.4 Risk Map .................................................................................................... 31

3.6.4.5 Risk grid .................................................................................................... 31

3.6.5 Risk Attitude ..................................................................................................... 31

3.6.6 Risk Response ................................................................................................... 32

3.6.6.1 Response Considerations ........................................................................... 32


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3.6.6.2 Response Options ....................................................................................... 32

3.6.7 Risk control, policy and reporting ..................................................................... 33

3.7 Risk, Contracts and Procurement ............................................................................ 33

3.7.2 Basic Contract theory ....................................................................................... 33

3.7.3 Procurement ..................................................................................................... 34

3.7.4 Characteristics of Contracts ............................................................................. 343.7.4.1 Controllable and uncontrollable costs ........................................................ 34

3.7.4.2 Express and implied terms.......................................................................... 34

3.7.5 Transfer of risk in contracts .............................................................................. 35

3.7.6 Variation orders and change notices ................................................................. 35

3.7.7. Claims risk ....................................................................................................... 35

3.2 Background to risk

3.2.2 Concept of Risk1 Risk management evolved in the 50s with the design of nuclear reactors2 Risk is a measurement of the probability and consequence of not achieving a

specific project goal

3 First level equation for risk:

o Risk = function (event, uncertainty, consequences)

4 Two different events may carry the same risk, depending upon theiruncertainty and consequences

5 Second level equation is used when uncertainty is difficult to measure

o Risk = function (event, hazard, safeguard)

6 Something or lack of something = event. An event causes a risky situation7 Hazard = source of danger8 Safeguard = mitigation or defence against hazard9 Risk acts as a barrier to the development of an effective strategy10Risk management means that risk can be controlled and a certain strategy can

be pursued

11Exposure is a measure of the vulnerability of parts of the organisation to riskimpacts

12An organisations sensitivity to risk is a function ofo Significance (severity) of enterprises exposure

o Likelihood of different events occurring

o

Firms ability to manage implications13 Sensitivity = function(significance, likelihood, manageability)14Effective Risk Exploitation (EFE) is when an organisation makes use of assets

not normally measured on its P&L e.g. IP

15 Positive or negative changes in key variables are a source of risk16 General facts about risks

o World is uncertain

o Sometimes risks can be eliminated

o Risk is a function of opportunity


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o Risk is an ally, if seized can lead to competitive advantage

o Risk management providers a range of analytical tools

17Risk management operates at all levels within an organisation18 Companies have to take risks19No risk management system is infallible

3.2.3 The Human Cognitive Process

3.2.3.1 Pattern Recognition and Attention

1 The decision making process is largely dependant on perceived risks andrewards

2 The human cognitive process involveso Pattern recognition: have I seen this before?

o Attention: this filters out unwanted information so only info relevant to

the decision remains

o Memory: short term memory stores the basic pattern recognition

information. Once filtered, its stored in long term memory to be usedagain

3.2.3.2 Bounded Rationality

1) A person will generally opt for rational behaviour within constraints2) Risk forecasting is

o Built on experience

o As much subjective as objective

o Possible to model it in complex maths

o Best evaluated using a combination of modelling and subject

approaches

o Extrapolate from past data to predict future events

3) Important to accurate forecasting:

o Accurate data

o Time limit, longer the time the more inaccurate

o Cost

o Vision, trying to envisage what the future will look like

3.2.3.4 Intuition and bias

1 Intuition is a combination of experience and extrapolations forward2 Bias is the tendency to misinterpret data because of a person's aims or

outcome preferences

3.2.3.5 The Decision Model

The analysis and synthesis of a problem from a four stage process:

Framing: avoid working on the wrong problem, the various

components of the problem are evaluated

Formulation: provides the formal model based on the problem


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o alternatives available

o relationship between possible decisions and outcome

o preferences of decision maker

Evaluation: establish a ranking order of options

Appraisal: sensitivity of decision and effects on risk

3.3 Risk Handling

3.3.2 Approaches to risk handling

Bunker approach : try to be ready for anything.

o very expensive initial estimate

o only applicable to high tech, high significance work

Ostrich approach: opposite to bunker

Gut reaction: should be last resort

Aggressive

3.3.3 Risk Assessment and Control

Risk Assessment is part of risk analysis

Risk Analysis = determining the probability of risky events occurring and

their potential consequences and a monitoring and control process

Risk handling = how we deal with the risks

Risk control = risk analysis + risk handling + feedback to future strategies

Risk Management = Risk Assessment + Risk control

3.3.3.1 Elements of Risk assessment Risk assessment = Identify, analyse, classify and prioritise risk

process is iterative

steps are

o Identify risk

o Analyse risk

o Classify risk

o Prioritise risk

Likelihood of occurrence: Rabbits Lions

Mice Shark

Potential of occurring->

3.3.3.2 Elements of Risk Control

Risk control is a process by which actual and planned risk are measured andvariances between them acts as a basis for corrective action

must consider project constraints

activities on critical path are especially scrutinised


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3.3.3.3 Risk Identification

Risk will have a source and an effect

Control requirements will vary according to the relative importance of an

activity

'Project could overrun' is not a risk

'Task A is underestimated' is a risk

3.3.4 Project and Strategic Risks

Project Risks are limited to Project

Strategic risks are more difficult to manage because they're more long term

and more complex & difficult to model

Most strategies allow for a variance envelope, up to which no action is taken.

Margin must diminish as project nears completion

3.4 Types of Risk

3.4.1 Generic Risk Headings

Strategic risk e.g. market, economic environment

Operational risk : the process, people in project teams

Financial risk : market, credit and capital structure

Knowledge risk: IT and KM issues

Catastrophic risk: cannot be predicted

All of the above are linked

3.4.2 Market and Static Risk

Some risks can have positive or negative outcomes and are dynamic e.g.

shares

Others are only negative e.g. insurance

Market risk is dynamic and concerned with potential losses and gains to the

organisation.

Market Business Risk (MBR) is when the company trades with its assets:

spreads risks throughout all of the company

Market Financial Risks arise from gearing ration and effects equity holders

only

Static Risk e.g. insurance, can be controlled or reduced whereas market risks

are always there

3.4.3 External and Internal Risk

3.4.3.1 External Risk (cannot be controlled)

Competition Risk

Market demand

Innovation


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Exposure e.g. gearing

Shareholder risk eg. if shareholder confidence declines, may be difficult to

raise capital

Political risk

Statute risk

Impact - some companies can handle big hits

3.4.3.2 Internal Risk (can be controlled)

Operational

Financial

Management e.g. outsourcing

IT

3.4.4 Predictable and Unpredictable risks

Predictable are 'known unknown'

Unpredictable are 'unknown unknown'

change in project priority is an example of a dynamic internal unpredictable

risk

3.5. Risk conditions and decision making Risk assessment and control are tools for decision making

Three main conditions under which decisions can be made

o conditions of certainty

o conditions of risk: reasonable probability of a event occurring &

assessment can be made (predictable risk)

o

condition of uncertainty (unpredictable risk)

3.5.1 Conditions of Certainty

you know exactly what the outcome is for a range of strategies under a range

of different conditions

3.5.2 Decisions made under conditions of risk

In general, higher profits mean high risk

in the absence of a dominant strategy a probability is assigned to each state of

nature

3.5.3 Decision made under conditions of uncertainty

essential in this case to identify sources of uncertainty that relate to each of

the firms exposures (risk assessment)

source of uncertainty

o external


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o internal

o decision drive (information) e.g. new market analysis

Its not possible to predict what will happen i.e. what state of nature will apply

3.5.3.1 Hurwicz Criteria

Also known as the Maximax criterion: decision maker seeks to maximizeprofits

N1 (probability= 25%) N2 (prob=25%) N3(prob=50%)

S1 100M 80M 60M

S2 150M 100M 80M

S3 200M 160M -100M

S= Strategies, N = events

Decision maker here would go for strategy S3 becuase it gives the maximum

profit (200)

He would ignore the fact that S3 is risky : max loss -100M

3.2.3.2 Wald Criterion

Also known as Maximin

Only considers minimum profits (not losses)

He would go for S2, as its worst case still yields 80M

3.5.3.3 Savage Criterion

Also known as Minimax

Minimise maximum regret for each strategy

For N1:

S1 regret = 200 -100 = 100

S2 regret = 200 -150 = 50

S3 regret = 200 -200 = 0

Regret table

N1 (probability= 25%) N2 (prob=25%) N3(prob=50%)

TOTAL

S1 100M 80M 20M 200

S2 50M 20M 0M 110

S3 0M 0M 180M 180

S2 has least regret and hence S2 is chosen

3.5.4.3.4 Laplace Criterion

Tries to convert uncertainty decision making to risk decision making using

subjective possibilities

objective possibilities are based on long term frequencies of occurrence

subject possibilities are based on degree of belief of decision maker


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usually you compare the uncertain risk to a hypothetical risk and compare up

with an approximate possibilities

in the example, he just averages the payoffs for each strategy

3.5.4 Rules for risk taking based on certainty risk and

uncertainty Uncertainty

o how much money can we afford to lose

o what level of risk are we willing to take

o what level of risk outcome can we absorb

General

o analyse risks carefully

o plan as much as possible

o always have a plan B

o Dont accept risks for spurious reasons

o never risk more than you can afford to lose

o

allow for bias and groupthink Hazard and safeguard

o take risks in non critical areas

o reduce risk profile where possible

o dont confuse risk taking with boldness

Philosophical

o cannot avoid risk so accept

o risk = opportunity

o use risk to make money

3.5.5 Need for risk management strategy

Every area for outsourcing and risk transfer has been explored

Risk management should be seen as a collective corporate strategy

Total Strategic Risk Management (TRSM) is better suited to strategic planning

rather than tactical response

3.6 The concept of Risk Management Most risk management systems consist of 5 distinct areas

o risk identification

o risk classification

o risk analysis

o

risk attitude

o risk response

A Risk Management system should be

o practical

o realistic

o compliant

o cost effective


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3.6.2 Risk Identification

This is about finding out all risks likely to impact on a given project and

exploring linkages between them, risks like:

Project risk: time & cost limits

Technical risk: R&D risk

Production risk: downtime Engineering risk: maintenance

Classifications of risk

Internal: these can be identified by breaking the project down into separate

work packages using Work Breakdown Structure (WBS)

External

Project: overlap internal and external, they are a feature of this specific

project e.g. the specific project team

It is important that identification process is concerned with risk source rather

than effect

Objective risk = based on experience Subjective risk = based on current knowledge e.g. Pert analysis

3.6.2.1 Brainstorming

Primary method for risk identification

Two phases: creative & evaluation

3.6.3 Risk Classification

Portfolio theory considers risk classification from a financial point of view

Three level classificationo risk type: static (insurable) or market (business)

o risk extent: environment, sector, company, project

o risk impact: hi, lo or medium

3.6.4. Risk Analysis

Identification of all feasible options and data relating to various risks and

analysis of outcomes of any decision

Step 1: evaluate all options: look deeper into identified risks

Step 2: consider the risk attitude of decision maker

Step 3: consider the characteristics of the risks eg. controllable?outcomes?

Step 4: establish measurement system e.g. qualitative or quantitative

Step 5: interpret results of measurement system

Step 6: make decision as to which risks to retain, which to transfer to

other parties and what risk profile is acceptable


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3.6.4.1 Risk Analysis table

A risk analysis should comprise of a simple numerical analysis

Soil Type Probability Cost Probable Cost Time Probable

Time

Dry 0.2 1 0.20 2 0.4

Average 0.3 3 0.90 10 3Wet 0.5 5 2.50 20 10

TOTALS 3.60 13.4

3.6.4.2 Risk Factor Checklists

1=High, 5 = Low

Risk Description Probability Impact

---------------- ----------- --------

Design Problems 3 5Project Team gets VD 2 2

3.6.4.3 Risk Drivers Map

Usually derived from the SWOT analysis

3.6.4.4 Risk Map

Put isolated risks on an axis of impact vs. probability of occurrence

Risks can move within the risk map over time

you can have an 'actual' and a 'target' risk map

may be zones rather points that mark a risk where either impact and/or

probability is not exactly known

3.6.4.5 Risk grid

Alternative to risk map

Severity

Probability LO Medium High

Lo Retain Retain Insure

Medium Retain Insure Insure

High Insure Cease Cease

3.6.5 Risk Attitude

Risk evaluation is subjective and hence perceived level of risk depends upon

attitude of risk taker

Depends on company and personality of risk taker

Professions can be plotted


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Plot of jobs on graph of Creativity vs. Risk

FACT: Teams take riskier decisions the longer they are together

3.6.6 Risk Response

3.6.6.1 Response Considerations Response depends upon

o nature of risk

o detail of the risk analysis

o attitude of risk taker

Risk response centres on risk distribution

The contract is the tool by which risk is allocated and distributed

The distribution of risk depends on

o is the outcome of project worth the risk?

o who has greatest risk control? e.g. suppliers controls delivery risk

o who has the greatest risk liability? Usually in legal systems the onus is

on the party who would be least effected by it occurring e.g. employerliable for employee

o what incentive does each party have? Usually both parties share at

least some risk

3.6.6.2 Response Options

Risk retention eg. not insuring household contents and hoping nothing goes

wrong. Perhaps you can retain some risk and transfer other e.g. 5% defect

rate on widgets

Risk reduction by:

o education/training

o

physical protection to reduce likelihood of loss [design to be robust]o systems for contingency

o physical protection to people and property

Risk reduction matrix:

Risk How to reduce probability How to reduce impact

-------------- --------------------------- --------------------------

......

Risk Transfer

o insurance is an option

o contractual clauses

Factors when considering insuranceo insurability of risk (eg. is data available)

o cost of premium

o maximum probable loss

o likely cost of loss (including replacement)

o likely cost of paying for loss if uninsured

Risks can be transferred through damage clauses within contracts

Non insurable risks can be transferred to contractors

Risk avoidance = refusal to take risks


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Further information can be gathered

3.6.7 Risk control, policy and reporting

Risk Control = using information learnt now on a project at a later stage of

project

Risk impact + probabilities change over time and so need to be monitored

A risk handbook documents risk experiences

Risk reports could include

o risk maps with variances

o listing of risk drivers

o risks and KPIs

o progress reports

A risk policy doc contains

o risk holders and risk strategies for high probability and high impact

risks

o overall aims and objectives of risk management strategy

o

accountability e.g. task responsibility matrix (TRM)o formalised reporting channels

o risk tolerances

o authorisation

3.7 Risk, Contracts and Procurement Contract defines rights, dues, obligations and liabilities of each party

3.7.2 Basic Contract theory Companies compete for work using bids or tenders

These bids and tenders depend upon wording of the contract

Contract normally include

o signature block and project title

o definition of contract terms and scope

o information and facilities provided by client

o project approvals e.g. milestones

o payment systems e.g. when and how much

o specification of product/service being provided

o general conditions

o specific conditions

o

provision for changeso form of tender

o dispute resolution e.g. bad contract, insolvency

o bonds and warranties

For a contract to exist there must be

o offer and acceptance

o consideration i.e. exchange of something, usually money

o Capacity ie. ability to perform obligations


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o legal relations - contract must be legal

o communication - offeror must be aware

Alternatives to successfully performing the contract are

o breach

o frustration - contract cannot be performed even though both parties

want to

o

recission - error or misunderstanding in original contracto rectification - badly worded contract

o void e.g. legal goods

o termination

o determination - one party seeks reimbursement from the other

3.7.3 Procurement

process by which goods and services are acquired

good procurement -> good suppliers -> good performance

procurement can be strategic or project procurement can have lifecycle phases:

o objective: establishing objectives of procurement process and contract

terms

o exposure: sourcing vendors

o alternatives: comparing vendors

o documentation: preparation of contracts and definition

o tendering : vendors invited to bid

o award: bids scrutinised

o contract administration: monitor T&C's to ensure they are satisfied

3.7.4 Characteristics of Contracts

3.7.4.1 Controllable and uncontrollable costs

these effect overall level of risk in contract

fundamental contract risks are

o adequacy of design: latent (hidden) and patent (obvious) defects

o project eventual cost: cost overrun risk could be born by client and/or

contractor

o safety and indemnification for accidents

o third party insurance

o fire/flood etc.

o completion deadlines

3.7.4.2 Express and implied terms

Fundamental risks are expressed by express terms

Liabilities (eg. reasonable duty of care) are generally covered by implied

terms

There are contractual situations (e.g. professional services) where you cannot

cover everything in express terms


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most consultants/professional have professional indemnity insurance

3.7.5 Transfer of risk in contracts

The greater transfer of risk, the greater the cost of the contract

Indemnity clauses transfer specific risk for specific events onto a named party

3.7.6 Variation orders and change notices

There allow for changes in a contract without invalidating it

Must be fair to both parties

3.7.7. Claims risk

If a delay or change occurs a party might seek reimbursement from the party

that caused it

Contracts will often list items that are classified as client risk e.g. feature

creep

Contractor could claim direct loss and expense and/or more time

client usually liable for fire/flood/acts of God

contractor usually liable for his employees/harmful chemicals etc.


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Module 4: Project Management

Organisation Structures and Standards

4.1 Introduction ............................................................................................................. 364.2. Organisation Theory and structures ....................................................................... 37

4.2.2 The Project within an existing organisation ...................................................... 37

4.2.2.1 Introduction ............................................................................................... 37

4.2.2.2 Functional structure ................................................................................... 37

4.2.2.3 Pure Project Structure ............................................................................... 37

4.2.2.4 Matrix Structure ......................................................................................... 38

4.2.2.5 Mixed or hybrid structure ........................................................................... 39

4.2.3 The Project external to the existing organisation .............................................. 39

4.2.3.1 Introduction ............................................................................................... 39

4.2.3.2 External (executive) project management structure .................................... 39

4.2.4 Criterion for selecting organisation structure ................................................... 41

4.2.4.1 Broad Considerations ................................................................................ 414.2.4.2 Project Objectives and choice of organisational structure .......................... 41

4.3 Examples of Organisation Structure ........................................................................ 41

4.3.2 Example of an internal project management structure ...................................... 42

4.4 Project Management Standards ............................................................................... 42

4.4.2 The APM and the APM body of knowledge ....................................................... 42

4.4.2.1 Aims ........................................................................................................... 42

4.4.2.2 The APM body of knowledge profile ........................................................... 42

4.4.3 BS6079 ............................................................................................................. 43

4.4.4. Prince 2 ........................................................................................................... 43

4.4.4.1 Introduction ................................................................................................... 43

4.4.4.2 PRINCE2 Methodology .................................................................................. 43

4.1 Introduction The org structure defines the arrangement of resources within the

organisation

An org breakdown structure (OBS) is a map showing main components or

organisation and how they relate to each other

A project managers task is to look at existing org structures, look at the

required project structure and modifying both to produce the optimal project

structure

Project teams can beo wholly internal to organisation

o wholly external to organisation

o partly internal but with external specialist support

Organisation structures can be

functional based

pure project based e.g. R&D


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matrix structure - functional group exist but project teams are formed

across functional boundaries

internal project teams eg. local govt

external project teams e.g. ad agencies

4.2. Organisation Theory and structures

4.2.2 The Project within an existing organisation


The decision of internal vs. external depends on

size of project relative to organisation

relative status and importance of project

resources available

strategic fit with strategic objectives of company

4.2.2.2 Functional structure

In larger organisations self contained non matrixed projects can exist within

a particular functional group

These are usually incremental improvement projects

Advantages

clear reporting

clear authority

simpler

uses specialist knowledge

Disadvantages

inflexible

projects within functional group tend to be viewed as of secondary

importance

cross functional activities are discouraged

career is tied to functional rather than project

projects become islands in group

only OK for continuous programs of work

greater degree of central support required

main problem is operational islands = semi independent sub groups

project and matrix structures remove these islands by forming horizontal and

vertical lines of authority and communication

4.2.2.3 Pure Project Structure

Could be a self contained project within a group

used when project are difficult to plan and resources required are uncertain

at its simplest, project manager picks from a pool of specialist resources that

get returned to the pool when project is complete (e.g. consultancy company)

pure project structure differs from functional organisation projects in that the

latter are internal for benefit of organisation itself whereas former are more

visible e.g. new drug development


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pure project structures may be completely separate from parent company e.g.

joint venture

Advantages

flexibility

encourages innovation

operational: can be dynamically adjusted

project manager has total control of project, not sharing resource withthe functional manager

clear reporting

communications lines shorter

authority contained within project

team members have no functional loyalties

support requirements are smaller

easier to use external consultants in this structure

can have a series of projects forming a program-> more efficiencies

Disadvantages

several projects at same time => duplication of work

initial operating costs can be high

central authority required

may be a padding of resources

unhealthy competition e.g. cutting corners

lack of long term commitment

difficult to compare project performance due to different nature

prolonged absence from their functional group may blunt a team

members specialist knowledge

4.2.2.4 Matrix Structure

pure functional and pure project structures represent different ends of the

spectrum matrix is a compromise, also known as internal or non-executive project

management structure

usually technical decisions on the project are responsibility of functional

group

Resourcing, scheduling and cost decisions made by project manager

matrix structures can be strong e.g. long-term projects that veer more

towards pure project structures

Internal project management systems have the following key characteristics:

functional boundaries - vertical

organisationl islands - same horizontal level but different functions and

so dont communicate

project sponsor - conflict resolving and monitors project

Project management chair: PS


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Time recording and cost centre charging

Good points of matrix project management system

self contained unit

access to functional units

flexible and adaptable

links with functional groups means project remains in sync with corporate

and functonal objectivesgood innovation

Weaknesses

difficulties balancing project vs functional

confused reporting to two bosses

project management job is more complex

project sponsor requirements adds complexity

4.2.2.5 Mixed or hybrid structure

combination of functional and project structures e.g. new product project

based in marketing but requires R&D input

4.2.3 The Project external to the existing organisation


Surrogacy is the extent to which clients want to delegate control/authority to

running a project

Risk transfer is also an important issue in external project management

4.2.3.2 External (executive) project management structure

'Executive' because project management has total control, no negotiation

with functional managers

Suits smaller organisations

Formal interface body acts as gateway between organisation and external

organisation project manager

A legal contract might be drawn up and monitored

Characteristics

o multidisplinarian/shared loyalty group characteristics -> sentience

and differentiation

o fee structure - consultants bid to be part of an external project team.

The timing could be at

completion of pre contract work (e.g. analysis) completion of post contract work (e.g. implementation)

completion of final account (e.g. completion)

o fees could be per hour or % of work to be done

External contractual linkages

o risk increases with more external dependency

o contract take these forms

completion contract - one off payments on completion

term contracts : long term


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service level agreements

o contracts are priced by

completion contracts

negotiated contracts

o contracts can be

fixed price

cost or cost plus: profit fixedreimbursement: expenses plus fees

target price: target + fee+ incentive

o contract types:

standard: reasonable risk allocation, recourse cover all eventualities

professional services contract: mostly implied terms, fees and dates

covered, related to professional standards

supply contract: specify goods and delivery dates

pro forma contracts: monopoly situation, onus on the client e.g. ESB

Contractual links include

o Client to PM and other team members

o Client to main contractor

o Client to service authorities i.e. supply agreements

o Client to nominated sub contractors and suppliers: sub contractor

nominated to main contractor

o Client to local authority e.g. safety & regulatory issues

External non contractual linkages

o Authority links: client = head of authority

o Communication links: change control procedures

o Having client bypass project manger and communicate directly with team

is a bad idea: scope creep

Advantages of external project management

o Flexibleo Dynamic

o External specialist bring in new ideas

o If there is no internal knowledge you can use external

o Quick to setup

o Quick to disband

o Internal risks avoided e.g. having key people missing

Disadavantages:

o Expensive

o No loyalty

o Recourse can be difficult

o New control structures necessaryo Rigid and controlled communications required

o Legal people get involved

o Risk profile changes

o Complex project management


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4.2.4 Criterion for selecting organisation structure

4.2.4.1 Broad Considerations

o Authority

o Communication

o

Knowledge transfer

o Loyalty

o Technology e.g. matrix use IT to innovate

o Cost: functional is high cost and inflexible

o Co-ordination: functional has a low degree of co-ordination required

o Support functions: functional require lots of support

4.2.4.2 Project Objectives and choice of organisational structure

A Functional organisation structure is suitable when

o Workload is constant and doesnt vary mucho Projects are required infrequently

o Well developed support structure exist

o Informal communications not required

o Where functional objectives are the main concern

A Matrix structure is suitable when

o Dynamic workload

o Project frequently required

o R&D frequently required

o Centralised support present or outsourced

o Split authority ok

o Informal communications oko Projects are of secondary importance but still significant

o Projects are small to medium sized

o Fast response not required

Pure project structure is suitable when

o Workload varies a lot

o Projects are frequent

o Lots of R&D

o Little centralised support

o Authority can be devolved to project managers

o Projects are primary concern

o Projects are largeo Fast response time required

4.3 Examples of Organisation Structure


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4.3.2 Example of an internal project management structureSetting up a new engineering project management course

Step 1: Appoint a project manager and team. The choice depends on

o Priority of new course

o General availability and workload

o Existing commitments

o University policy

Step 2: structure: maybe matrix across engineering, management and science?

Step 3: external consultants? Yes, if its a highly specialised subject area. It may

involve the setting up an interface via the Legal Services group within the

university

Step 4: setup formal and informal links within the internal project team, university

admin, external consultant and project sponsor

4.3.3 Example of an external project management structureManaging external training courses

Step 1 : the clients legal services setup contracts with external service providersStep 2: Draw up pro-forma professional services agreements describing syllabus

and details, fees and expenses

4.4 Project Management StandardsAPM is the Association for Project Management: body of knowledge

BS 6079: standards for practice based on APM approaches

Prince 2: stand alone methodology (Project management ina Controlled

Envrionment), its an alternative to BS 6079

Numerous industry specific adaptations of these generic standards

4.4.2 The APM and the APM body of knowledge

4.4.2.1 Aims

o Act as the first point of contact

o Lead the development of professionalism

o Champion interest representation: lobby govts etc.

o Establish standards of qualifications

o Establish national branches

o Establish practices and procedures for training

4.4.2.2 The APM body of knowledge profile

Lists five areas project managers must have academic qualifications and

experience in:

o Project management e.,g. project lifecycle and environment

o Organisation and people e.g. leadership and communications

o Techniques and procedures e.g. scheduling and estimating

o General management e.g. finance and law


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o Value management i.e. aims and objectives of client

Project manager should be concerned about the long term use of the system

being built

4.4.3 BS6079 British guide to Project management

Strategic Project Plan (SPP) is the most important part of BS6079

Establishes a generic project plan that is applied to all projects

Main sections of SPP defined in BS 6079 include:

o Preliminaries: title page, description of project, contents list, defines who

has access to what

o Project aims and objectives: objectives relate to time, cost, quality and a

range of other objectives. may also be sub objectives e.g. health and

safety, environment

o Subject specific sections: information presented in standard format.

scheduling and cost control, project history Contributors to the SPP include:

o design engineers

o cost consultants

o legal consultants

o client (aims and objectives)

o project manager (communication and co-ordination systems)

o external statutory bodies

4.4.4. Prince 2


Its an alternative to BS 6079

Originally used for government IT projects

4.4.4.2 PRINCE2 Methodology

Based on the process model of a project - breaking project down into

component processes

Each process is then defined in terms of its key inputs and outputs and in

terms of the aims and objectives of each process

Prince 2 is driven by the project business case Main advantages

o offers a standardized project structure with a clear start, middle and

end

o allows regular and detailed reviews of actual vs. planned progress

o allows regular and detailed reviews of actual vs. business case

o identifies and makes use of flexible decision points


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o identifies and allows automatic control of any deviations from project

plan

o ensures timing and involvement of all stakeholders and management is

optimized

o encourages good communication channels


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Module 5 : Project Time Planning and Control

5.1 The Concept of Project Time Planning and Control ................................................................. 46

5.1.1 Introduction ...................................................................................................................... 46

5.1.2 Aim and Objectives of the planning process ...................................................................... 46

5.1.3 Project Time Planning and control and the Generic Project Plan ..................................... 47

5.1.4 Project Time Planning and the Project Life Cycle ............................................................. 47

5.2 The Process of Project Time Planning ..................................................................................... 48

5.2.1 Factors Affecting the Time Planning Process .................................................................... 48

5.2.1.2 Sources of Time Planning Data .................................................................................. 48

5.2.1.3 Project Uniqueness .................................................................................................... 48

5.2.1.4 People Issues ............................................................................................................. 48

5.2.1.5 Complexity ................................................................................................................. 48

5.2.1.6 Uncerta

module 1 - 7 point form 106

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