projects and programs.ppt

Fiat Lux!Introduction to Project Management

Instructor:

Massimo T. Rossi

Module II Projects and Programs

Module II Projects and Programs

ContentsProjects and Programs

Attributes of a ProjectThe operational Context

Project Management’s OrganizationThe Actors of the process

Responsibility and Authority of the P.M.Characteristics of a P.M.

Projects and Programs


The Project Management Institute defines Project Management as:

The application of knowledge, abilities, tools and techniques to the activities of the Project to satisfy or exceed the needs and the expectations of the Stakeholders (persons or organizations involved or affected by the project).


Meeting or exceeding Stakeholders’ needs and expectations invariably involves balancing competing demands among:

Scope, time, cost and quality. Stakeholders with different needs and

expectations. Identifiable requirements (needs) and

unidentifiable requirements (expectations).

Projects and ProgramsThe terms Project and Program are generally used in an ambiguous way. The following definitions should be used in the business language:

Project – it is a complex effort that embraces different interconnected activities, executed by different organizations with objectives, planning and budget well defined.

Program – it is a long term initiative which may include various project.

Project Management techniques may be applied in both cases.

Attributesof a Project

Attributes of a Project A project is a process that

produces results previously determined. A project may be considered as a process required to produce a new product, a new plant or a new system to get other results.

Projects have got a start and an end and they are not repetitive.

The life of a project develops through well defined stages, which are not clearly separated one by the other, as shown in the following figure:

Fig. II.1Stages of a Project

Conception

Definition

O rganization

Construction

Com m issioning

Ind iv idua tingopportun ityo r necessityEva lua tingFeasib ility

Investm entA nalys isB udget

andF inanc ing

Eng ineeringD esign

Specifica tions M ate rilasP rocurem entC onstruction C om m ission ing

P ro ject D e live ry

STAR

T

END

OF P

ROJE

CT

Project Life

Fig. II.2Project Life

1st S

tage

2nd S

tage

3rd S

tage

4th S

tage

5th S

tage

Perc

enta

ge C

ompl

eted

Project Life

Construction

Attributes of a Project The risk of the project decreases with the

developing of the project. At the start of the project, the risk is maximum, because nobody can foresees what will happen during the execution of the works. As the works progress, the risk decreases up to its disappearance at the end of the project.

It is therefore clear that it is necessary to make a qualitative and quantitative analysis of the risk before stating the project in order to focus those critical areas which can affect cost and duration of the works.

The following graph shows the relation between project duration and risk.

Fig. II.3Risk of a project

-120

-100

-80

-60

-40

-20

0

20

40

60

80

1 2 3 4 5 6 7

Risk

-Pr

ojec

t Val

ue

Duration

Relation between Risk and Duration

Risk

Value

Attributes of a Project

A project is executed through a series of interconnected activities. In the next chapter we will detail this aspect.

A project uses different resources. A project has got an Owner. This means that the

Contractor is subject to comply with the Owner’s instructions, which are conveyed through drawings, specifications and contractual documents.

The decisions taken during the initial period of a project have got a greater influence over the decisions taken in the following stages. The concept of the “Level of Influence” clarifies this statement.

Fig. II.4

High Influence Low Influence Result

Low Cost High Cost

Project Duration

Design

Construction

Use

Decreasing Influence

Growing Costs

The operational context

of the Project

The operational context of the ProjectEach project must be conceived and managed in accordance with his particular operational context.

The success of a project does not depend only from the logic and the distribution of the roles, the responsibilities and the resources but also from to the adaptation of the different parties to:

The external elements (authorities, control agencies, suppliers of goods and services)

To the final users of the project And manly to the beneficiaries of

the project.

The operational context of the Project

It is very important to understand from the beginning which will be the context in which we will operate in order to establish the most appropriate connections.Not all the elements of the context are relevant. It is therefore essential to determine the critical elements.

The operational context of the Project

The first are individuals, groups and institutions which have the faculty to take actions which could have consequences on the project.

The second are entities without a direct intervention. Nevertheless, they can exercise an important influence on the project (laws, regulations, uses, customs, etc.)

The elements of the context may be divided in subjects and aspects.

Project Management

Elements of the context

Subjects Aspects

Project Organization

They must be involved in the organization of the project. We must

explain the project and try to understand the

reasons of the negative reaction.

We must be sure that the planning takes in

consideration the most relevant aspects.

Project Team Organization

We need to establish formal and informal relations with the principal subjects.

We must consider the subjects as members of

the Team.

We must take in account their influence in the organization of

the project. We must be sure that the Team is

aware of these aspects.

Fig. II.5a

Project Management


Subjects Aspects

Works Planning

They must be involved in the preparation of the plans as far as possible. They must participate in

the meetings.

We have to take in account the information

about the principal aspects in preparing the

Plan for the project.

Commencement of Activities

Control of the Works

The main subjects must be kept informed.

They must be kept under control in order to

avoid conflicts and problems.

Fig. II.5b

Project Management


Subjects Aspects

Progress Evaluation

Project Coordination

They must be involved in the evaluation of the

progress. We must inform them about the

most important changes.

Update periodically the data base of each

external aspect

Project Completion

They must be involved in the planning and

implementation of the activities required for the completion of the

project.

Consider the aspects in the planning of the completion of the

project.

Fig. II.5c

Organization for Project Management


For the Planning and the Execution of projects, we can make use of three types of organization: by Functions by Matrix by Projects


Each type of organization has got advantages and disadvantages, which can be more or less efficacious depending on the characteristics of the entity in which it is implemented and the projects executed by such an entity.

Companies have got the tendency to evolve in their organizational model, combining in various ways the three forms of organization above mentioned.

Usually, they start using the traditional hierarchical organization, organized by functions, with operational units (Line Units) like: engineering, production, etc. and support units (Staff Units) like: accounting, human resources, etc.

Organization for Project Management When the number of projects increase and they

become more complex and the need to comply with time and cost restrictions become a must, the companies leave behind this first form of organization and shift to the Organization by Matrix, structured by functions and by projects or to organization oriented to projects.

Nevertheless, it is very rare to create an organization completely dedicated to projects, due to the heavy load of resources required by this type of organization.In the majority of the cases, companies adopt some

form of Organization be Matrix.

Fig. II.6aOrganization by Functions

A

B

C

A A

B B

C C

FunctionalManager

FunctionalM anager

FunctionalManager

GeneralManager

ProjectCoordination

Fig. II.6bOrganization by Matrix

FunctionalManager

FunctionalManager

FunctionalManager

GeneralManager

ProjectCoordination

ProjectManager

Fig. II.6cOrganization by Projects

ProjectManager

ProjectManager

ProjectManager

GeneralManager

ProjectCoordination

Organization by Matrix

This type of organization tries to combine the advantages of the Organization by Functions with that oriented to the projects.

This type of organization aims to intersect the traditional hierarchical structure , vertically articulated by functions, with a second coordination structure, horizontally articulated by projects.

Organization by Matrix The most important advantages of this type of

organization is the balance among the objectives, the coordination of the functions and the evidence of the project objectives, due to the action of the Project Manager.

The disadvantage consists in the fact that in this type of organization, the participants to the projects report not to one boss, like in the case of the traditional organization, but to two: the Functional Manager and the Project Manager.

Many times, the Project Manager believes that he doesn’t have enough authority with the functional departments, while the Functional Managers resent of what they consider an undue interference by the Project Manager.

Organization by Matrix The problem can be solved defining clearly the

responsibility and the authority of each one of them.

In practice, the Project Manager establishes what must be done, while the Functional Managers have got the responsibility to decide how to do it.

In many cases, it is useful to unite physically the majority of the Project Team in one place (in a Construction project, this place is the Site).This form reminds the structure of an Organization by Projects, but in reality it is still a Matrix structure since each component is still depending from the functional department.

Organization by Matrix The three forms may be represented

graphically in a continuous medium in which an extreme is occupied by the Organization by Functions, the other extreme by the Organization by Projects and the central part is occupied by the Organization by Matrix.

The Organization by Matrix may have a large variety of solutions, from one similar to the Organization by Functions (Weak Matrix) to the one similar to the Organization by Projects (Strong Matrix).

The following figure illustrates this concept.

Fig. II.7

Coordinator

Separate Team

Full Time Project

Manager

Full TimePartialTimeNo

Coordinator

By ProjectsBy MatrixBy Functions

Personnel assigned to the Functional Units

Weak

Matrix

Strong

Matrix

Personnel assigned to he Project

Placement of the Project Manager

When we start a new project and we appoint a Project Manager, we have to decide at which level and in which part of the organization must be placed.

Usually the Project Manager should depend from the Line Manager who could solve the problems among the different projects of the company and in each one of them.

Sometimes, depending of the case, it could be opportune to place the Project Manager under the direction of a Department Manager, a Division Director or the General Manager in case of a big Project.

Placement of the Project Manager Usually, the Project Managers think that their

performance could be more efficacious if they would be placed under the direction of the Top Managers; nevertheless, experience teaches that this is not always true.

If the level is too high, conflicts can develop with the Line Managers and we can experience communication problems with the responsible heads of the units which contribute to the project.

Vice versa, if the level is too low, the Project Manager can have difficulties to get the cooperation of the other units.

Placement of the Project Manager

An organization which must managing a certain number of projects can chose between two alternatives:

A. To place the Project Managers under the Line Managers, individuating for each project the most appropriate unit.

A. To designate a manager responsible for all the projects and place all the Project Managers with the exception of the big projects.

Placement of the Project Manager In this last case, we can create a Project

Management Department, whose Director depends from the Top Management. This Director is in charge of the followings activities:

Directing the Project Managers and the specialists assigned to the Projects

Solving the conflicts of priority and allocation of resources

Selecting and training the Project Managers and the specialists

Informing the Top Management of the activities, performance and conflicts of the various projects.

The Actors of theProject Management

The Actors of the Project ManagementIn any organization there are different persons who have a direct responsibility for the integration of the various contributions to the project.

Top Management LevelThe General Manager

Project Management LevelThe Project Management Director

Project LevelThe Project Manager

Functional LevelThe Functional Project Leader

Te General ManagerThe general Manager has got the responsibility of integrating the processes of Project Management with other aspects of the organization.

He is responsible that: Projects are selected and organized

correctly. Projects may count with the

appropriate resources. Proper techniques of Project

Management are being implemented.

The progress of the works is carefully kept under control.

The Project Management Director

The role of the Project Management Director is very important in the organizations where a considerable part of the activities is executed by projects.

He is responsible for the Project Management Department from which depend the various projects.

The various responsibilities have been already listed.

The Project ManagerThe role of the Project Manager is an operational one. He is responsible for organizing and directing the project and for achieving the planned objectives in terms of time and cost.

The P. M. is responsible to integrate the contributions of all the individuals and all the units which participate to the project.

His primary duties are: Executing the project complying with the

technical specifications, the limits of cost and time, utilizing the available resources.

The Project Manager Integrating all the contributions of the

various participants to the project, acting as leader of the Project Team.

Informing the Management any time when it seems that the planned objectives are not achievable.

Taking decisions and convincing the others to take the right decision to achieve the project’s objectives.

Being the point of reference for the Client, the Top Management and the Functional Managers.

The Functional Project Leader

In each project there are various Functional Project Leaders in charge to integrate the contribution supplied by the functional department that they represent (Engineering, Finance, etc.).

The Functional Project Leader acts on behalf of the Functional Manager of the specific department.These contributions already integrated at function level will be integrated at the project level by the Project Manager.

Responsibility and Authority of the

Project Manager

Responsibility and Authority

The General Manager will delegate responsibilities to the Project Manager. The responsibilities will be proportionate to the magnitude of the project and to the functions of the position.

Generally the Project Manager has got the responsibility of the management and the coordination of the project in all its stages and consequently for achieving the prefixed objectives.

In practice, the P.M. is the General Manager of “his” project.

Responsibility and Authority The P.M. is responsible for the profit or loss of

the project and the completion of the works within the time prescribed by the contract.

His main activity is the integration of the contributions of all the participants to the project.

Differently from other management positions, the authority of the P.M. derives mainly from his personal capacity to gain said authority, more than by the authority conferred to him.

Responsibility and Authority With reference to authority, we can distinguish

between: Authority by right, which derives by:

Organization Chart, position in the company, work or position description, power of attorney, hierarchical flow, funds control, etc.

Personal or by merit authority, which derives by:Technical or management knowledge, experience, good personal relations, solid alliances, conflict solving, to be right.

Responsibility and Authority A P.M. who needs contributions by persons who

are not under his chain of command, must rely on interpersonal influences that overpass his formal authorities.

With relation to interpersonal influences, we can distinguish among:

A. The power to reward and to punish, which can be an apparent or conferred power. The real power to reward or to punish refers to what a P.M. can do directly or indirectly to hinder or facilitate the achievement of personal objectives for the people who work for him.It mainly derives from the authority conferred to him by his superiors.

Responsibility and Authority The attributed power to reward or to punish

refers to the power recognized to the P.M. by those who work for him.

It is what these persons think that the P.M. may do to hinder or facilitate their personal objectives when they do not comply with his requirements.

If the P.M. has got a direct relationship with the Top Management of the company, the members of the Project Team will think that the P.M. may have some influence on their careers.

The P.M.’s power to reward or to punish depends from what the others think he might have.

Responsibility and AuthorityB. The power due to his knowledge refers to the

capacity of the P.M. of convincing the others to do what he wants the others should do. This happens because other people attribute to him greater knowledge or they think that he is able to evaluate in better way the consequences of certain initiatives or to take decisions in the interest of the project.

B. The power due to be the point of reference refers to the degree of availability of the participants to the project, that for certain reasons are attracted by the P.M. appreciating his friendship or consideration.

Responsibility and Authority Therefore the General Manager should

choose a P.M. with knowledge and experience which will allow him the possibility to obtain the power of knowledge and attraction by the participants to the project.

Further, he should attribute enough authority by right to allow him to have the possibility to reward and to punish. After that, it will be up to the P.M. to gain additional authority.

Characteristics of aProject Manager

Characteristics of a Project Manager

The efficiency of a P.M. depends by his experience and his personal characteristicsThe capacity to work with other executives, to acquire authority, to integrate the contributions of other persons and to solve conflicts is essential for the success of the P.M.

A. Personal characteristics: Flexibility and adaptability Predisposition to initiative and leadership Confidence in his own capacities

Characteristics of a Project Manager Capacity to communicate and to coordinate Capacity of persuasion and speech Variety of personal interests Capacity to balance technical solutions with

time and cost considerations Abilities of “generalist” more than of

specialist Capacity and availability to dedicate himself to

planning and control activities. Capacity to individuate problems Readiness to take decisions

…and above all

a lot ofperseverance

Characteristics of a Project ManagerB. Competences

Competence in techniques and methods of Project Management. It refers to the techniques of planning, organizing, monitoring and controlling the project.

Competence in Team Work and in interpersonal relations. It refers to the techniques to guide, coordinate, motivate and train the Project Team

Technical competence. It refers to the academic education of the P.M.

Commercial and administrative experience. It refers to the organization of a company, the financial management, the contractual knowledge, etc.

projects and programs.ppt

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