The free market

Figure 4.7 illustrates a free market. Having been given authority to deliver a successful outcome, the project management teams attempt to secure the resources they need from a variety of sources, both internal and external. External sources such as third-party resource suppliers may require a bigger investment, but the project management team has authority to deliver a commercially viable outcome. As long as the project's benefits outweigh its costs, they can argue in favour of employing external resources.

A free market

A free market

Resource supply (resource pools) Resource demand (projects)

Internal suppliers such as those in Department 1 and Department 2 can work in much the same way as an external provider, with one significant exception. Although they are resource pools, many of these internal departments must also carry out business as usual successfully, so most department managers are charged with managing the supply of resources to projects and business as usual.

Things become more complicated when a project makes a demand on the resource pools that other projects are also making demands upon. It is better for the organisation if such competition can be regulated.

The regulated market

This structure differs in two important ways from the free market model (see Figure 4.8):

e The supply and demand relationships between project and resource pool managers have been replaced with a single resource management function.

e The resolution of problems arising from shortages or oversupply of resources no longer rests with the resource pool managers but with the resource management function.

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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