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CHAPTER 1 / PROJECTS IN CONTEMPORARY ORGANIZATIONS

CHAPTER 1 / PROJECTS IN CONTEMPORARY ORGANIZATIONS

figure 2: Typical project organization in the aerospace and construction industries.

Scope Project management can be profitably applied. as a rule, to a one-time undertaking that is (1) definable in terms of a single, specific end result, and (2) bigger than the organization has previously undertaken successfully. A project must, by definition, end at an objective point in time: the date the new plant achieves full production, the date the parent company takes over operating management of the new acquisition, or the date the new product goes on sale in supermarkets across the nation, to name a few.

The question of size is less easily pinned down. But where substantially more people, more dollars, more organizational units, and more time will be involved than on any other infrequent undertaking in the organization's experience, the test result is clearly positive. Such an undertaking, even though its component parts may be familiar, can easily overwhelm a divisional or corporate management. Project management forces a logical approach to the project, speeds decision making, and cuts management's job to a reasonable level. For example, a large service company, with years of experience in renovating district offices, established a project organization to renovate its 400 district offices over a two-year period. Even though each task was relatively simple, the total undertaking would have swamped the administrative organization had it been managed routinely.

In terms of the number of people and the organizational effort it involves, a project could typically be charted over time as a wave-like curve, rising gradually to a crest and dropping off abruptly with the accomplishment of the end result (see Figure 1).

Unfamiliarity An undertaking is not a project, in our sense of the term, unless it is a unique, or infrequent, effort by the existing management group. Lack of familiarity or lack of precedent usually leads to disagreement or uncertainty as to how the undertaking should be managed. Thus, though a single engineering change to one part of a product would not qualify for project management by this criterion, the complete redesign of a product line that had been basically unchanged for a decade would in most cases call for project management treatment1. Individual managers could accomplish the first change easily, drawing on their own past experience, but each would have to feel his or her way by trial and error through the second.

Complexity Frequently the decisive criterion of a project is the degree of interdependence among tasks. If a given task depends on the completion of other assignments in other functional areas, and if it will, in turn, affect the cost or timing of subsequent tasks, project management is probably called for. Consider the introduction of a hypothetical new product. Sales promotion plans cannot be completed until introduction dates are known; introduction dates depend on product availability; and availability depends on tooling, which depends in turn on the outcome of a disagreement between engineering and product planning over performance specifications. If no one person can produce a properly detailed plan on which all those concerned can agree, if estimates repeatedly fail to withstand scrutiny, or if plans submitted by different departments prove difficult to reconcile or coordinate, the critical mass of a project has probably been reached.

Stake A final criterion that may tip the scales in favor of project management is the company's stake in the outcome of the undertaking. Would failure to complete the job on schedule or within the budget entail serious penalties for the company? If so, the case for project management is strong.

The corporate stake in the outcome of a project is commonly financial; that is, the failure of a $50,000 engineering project might jeopardize $12 million in annual sales. But it may also involve costs of a different kind. As more than one World's Fair exhibitor can attest, failure to meet a well-publicized project schedule can sometimes do real harm to a company's reputation. in such cases, the powerful controls of project management offer a much firmer prospect of meeting the time, cost, and quality objectives of the major one-time undertaking.

The specific advantages of project management for ventures that meet the criteria just discussed are easily summarized. Project management provides the concentrated management attention that a complex and unfamiliar undertaking is likely to demand. It greatly improves, at very small cost, the chances of on-time, on-budget completion. And it permits the rest of the organization to proceed normally with routine business while the project is underway. But these benefits are available only if top management clearly understands the unique features of project management, the problems it entails, and the steps required to make it work.

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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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