Project Management

By the 1990s, companies had begun to realize that implementing project management was a necessity, not a choice. The question was not how to implement project management, but how fast could it be done?

Table 2-1 shows the typical life-cycle phases that an organization goes through to implement project management. In the first phase, the Embryonic Phase, the organization recognizes the apparent need for project management.

TABLE 2-1. LIFE-CYCLE PHASES FOR PROJECT MANAGEMENT MATURITY

Embryonic Stage

• Recognize need support

■ Recognize benefits

Executive Management Acceptance Stage

• Visible executive support

• Executive understanding of project management

■ Recognize applications • Project sponsorship

Line Management Acceptance Stage

• Line management support

• Line management commitment

• Line management education

Growth Stage

• Use of life-cycle phases

• Development of a project management methodology

• Commitment to planning

• Recognize what must be • Willingness to change way of • Willingness to release done doing business employees for project management training

• Minimization of "creeping scope"

• Selection of a project tracking system

This recognition normally takes place at the lower and middle levels of management where the projec take place. The executives are then informed of the need and assess the situation. It is the exception, r for the need for project management to be first identified at the executive levels of management.

There are six driving forces that lead executives to the recognition of the need for project managemen

• Capital projects

• Customer expectations

• Competitiveness

• Executive understanding

• New project development

• Efficiency and effectiveness

Manufacturing companies are driven to project management either because of large capital projects o multitude of simultaneous projects. Executives soon realize the impact on cash flow and that slippage end up idling workers.

Companies that sell products or services to their clients and that also wish to be responsible for install have good project management practices. These companies are usually non-project-driven but functi< project-driven. These companies now sell solutions to their customers rather than products. It is almo complete solutions to cus tomers without having superior project management practices because what you are actually selling is your project management expertise.

There are two situations where competitiveness becomes the driving force: internal projects and external (outside customer) projects. Internally, companies get into trouble when the organization realizes that much of the work can be outsourced for less than it would cost to perform the work themselves. Externally, companies get into trouble when they are no longer competitive on price or quality, or simply cannot increase their market share.

Executive understanding is the driving force in those organizations that have a rigid traditional structure that performs routine, repetitive activities. These organizations are quite resistant to change unless driven by the executives. This driving force can exist in conjunction with any of the other driving forces.

New product development is the driving force for those organizations that are heavily invested in R&D activities. Given the fact that only a small percentage of R&D projects ever make it into commercialization where the R&D costs can be recovered, project management becomes a necessity. Project management can also be used as an early warning system that a project should be cancelled.

Efficiency and effectiveness, as a driving force, can exist in conjunction with any other driving forces. Efficiency and effectiveness take on paramount importance for small companies that are enduring growing pains. Project management can be used to help such companies remain competitive during periods of growth and to assist in determining capacity constraints.

Because of the interrelatedness of these driving forces, some people contend that the only true driving force is survival. This is illustrated in Figure 2-4. When the company recognizes that survival of the firm is at stake, the implementation of project management becomes easier.

The speed by which companies reach some degree of maturity in project management is most often based upon how important they perceive the driving

Figure 2-4. The components of survival. Source: Reprinted from H. Kerzner, /n Search of Excellence in Project Management. New York: Wiley, 199S, p. 51.
Figure 2-5. The speed of maturity.

forces to be. This is illustrated generically in Figure 2-5. Non-project-driven and hybrid organizations move quickly to maturity if increased internal efficiencies and effectiveness are needed. Competitiveness is the slowest path because these types of organizations do not recognize project management as affecting their competitive position directly. For project-driven organizations, the path is reversed. Competitiveness is the name of the game and the vehicle used is project management.

Once the organization perceives the need for project management, the organization enters the second life-cycle phase of Table 2-1, Executive Support. Project management cannot be implemented rapidly in the near term without executive support. Furthermore, the support must be visible to all.

The third life-cycle phase is Line Management Support. It is highly unlikely that any line manager would actively support the implementation of project management without first recognizing the same support coming from above. Even minimal line management support will still cause project management to struggle.

The fourth life-cycle phase is the Growth Phase where the organization becomes committed to the development of the corporate tools for project management. This includes the project management methodology for planning, scheduling, and controlling, as well as selection of the appropriate supporting software. Portions of this phase can begin during earlier phases.

The fifth life-cycle phase is Maturity. In this phase, the organization begins using the tools developed in the previous phase. Here, the organization must be totally dedicated to project management. The organization must develop a reasonable project management curriculum to provide the appropriate training and education in support of the tools, as well as the expected organizational behavior.

By the 1990s, companies finally began to recognize the benefits of project management, and the fact that these benefits could be realized. Table 2-2 shows

TABLE 2-2. BENEFITS OF PROJECT MANAGEMENT

Past View

• Project management will require more people and add to the overhead costs.

• Profitability may decrease.

• Project management will increase the amount of scope changes.

• Project management creates organizational instability and increases conflicts.

• Project management is really ''eye wash" for the customer's benefit.

• Project management will create problems.

• Only large projects need project management.

• Project management will increase quality problems.

• Project management will create power and authority problems.

• Project management focuses on suboptimization by looking at only the project.

• Project management delivers products to a customer.

• The cost of project management may make us noncompetitive.

Present View

• Project management allows us to accomplish more work in less time and with less people.

• Profitability will increase.

• Project management will provide better control of scope changes.

• Project management makes the organization more efficient and effective through better organizational behavior principles.

• Project management will allow us to work more closely with our customers.

• Project management provides a means for solving problems.

• All projects will benefit from project management.

• Project management increases quality.

• Project management will reduce power struggles.

• Project management allows people to make good company decisions.

• Project management delivers solutions.

• Project management will increase our business.

the benefits of project management. Also shown in Table 2-2 is a comparison of how our past view of project management has changed.

Recognizing that the organization can benefit from the implementation of project is just the starting point. The question now becomes, "How long will it take us to achieve these benefits?" This question can be partially answered from Figure 2-6. In the beginning of the implementation process, there will be added

Ciul rvf Project

Additional Profits ffoJM

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Figure 2-6. Project management costs versus benefits.

expenses to develop the project management methodology and establish the support systems for planning, scheduling, and control. Eventually, the cost will level off and become pegged. The question mark in Figure 2-6 is the point at which the benefits equal the cost of implementation. This point can be pushed to the left through training and education.

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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