Freie wissenschaftliche Arbeit zur Erlangung
des Grades eines Diplom-Ingenieurs
am
Institut für Technologie und Management
TIM – Lehrstuhl für Innovations - und Technologiemanagement
Fakultät VIII (Wirtschaft und Management)
TU Berlin

Benefits of recent Project Management Methods and Tools

eingereicht von

Jan-Martin Lurse

Berlin, den 22.09.2004

Abstract
A wide range of tools to support various aspects of project management are available and are being constantly improved. This research examines recently introduced methods and tools which are applied to Single and Multi-Project Management and reviews the benefits they can bring to project success and on-time performance.

The work goes on to analyse whether these methods are supported by or potentially implantable into IT tools and what further benefits can be gained from software support. A survey of international industrial companies was designed and carried out to determine the requirements, benefits and criticisms of IT-based project planning as reported by people in positio ns ranging from project engineers to top managers. The data collected were evaluated qualitatively and quantitatively to determine the benefits arising from the application of IT tools and the limitations of the currently available software. Finally, proposals are made for the future development of these tools.

Index

ABSTRACT ... I

INDEX ... II
ABBREVIATIONS AND DEFINITIONS: ... IV
TABLE OF FIGURES ... VII

1 INTRODUCTION ... 1
1.1 THE SITUATION ... 1
1.2 SCOPE ... 2
1.3 PROCEDURE OF THIS WORK ... 2

2 RELEVANT ISSUES IN PROJECT MANAGEMENT ... 3
2.1 ORGANIZATION OF PROJECTS ... 8
2.1.1 Organization Structure and Size ... 8
2.1.2 Informal factors of an Organization and team building ... 8
2.1.3 Frustration ... 9
2.1.4 Optimal team size and communication ... 10
2.2 PROJECT PLANNING: METHODS OF SCHEDULING PROJECTS AND RESOURCES ... 12
2.2.1 Types of Project Planning ... 12
2.2.2 Project structure and schedule planning methods ... 14
2.2.3 Resource allocation methods ... 15
2.3 PROJECT EXECUTION / STEERING METHODS AND TOOLS ... 18
2.3.1 Problem solving procedure / Customer Change Request Procedure ... 18
2.3.2 Project Team Coordination / Groupware tools ... 19
2.4 METHODS OF PROJECT CONTROLLING ... 20
2.4.1 Evaluating Project Progress (deadlines, costs and subject progress) ... 20
2.4.2 Project Risk Assessment (risk) ... 25
2.4.3 Productivity Measurement (time) ... 27
2.4.4 Performance Measurement (quality) ... 30

3 IMPLEMENTATION OF PLANNING PROCESSES INTO IT TOOLS ... 33

4 PREVIOUS EMPIRICAL RESEARCH ON THE BENEFITS OF METHODS AND TOOLS ... 38
4.1 PROJECT PORTFOLIO MANAGEMENT ... 38
4.1.1 Findings of Cooper, R.G.; Edgett, S.J.;Kleinschmidt, E.J. (2001) ... 38
4.1.2 Findings of Cooke-Davies, Terry (2002) ... 40
4.2 BEST PRACTICES FOR PROJECT MANAGEMENT ... 41
4.2.1 Findings of Elonen, Suvi; Artto, Karlos, A. (2003) ... 41
4.2.2 Findings of an analysis in Balderstone, S. J.; Mabin, V. J. (1998) ... 41
4.2.3 Findings of Diallo, Amadou; Thuillier, Denis (2004) ... 42
4.2.4 Findings of Matheson, D.; Matheson, J. (1998) ... 43
4.2.6 Findings of Shenhar et al. (2002) ... 48
4.2.7 Findings of Ojanen, Ville (2003) ... 48
4.3 PROJECT MANAGEMENT IT TOOLS ... 49
4.3.1 Findings of Kalthoff, C.; Kunz, S. (2004) ... 49
4.3.2 Findings of Projektron Ltd ... 50
4.3.3 Findings of Ahlborn, Jan (2003) ... 51

5 A STUDY ON DESIRED FUNCTIONALITY IN PROJ ECT MANAGEMENT IT TOOLS ... 52
5.1 GOAL AND PROCEDURE OF THE SURVEY ... 52
5.1.1 Goal of the Survey ... 52
5.1.2 Design of the survey ... 54
5.1.3 Searching for and selecting suitable participants ... 69
5.2 SURVEY RESEARCH IMPLICATIONS ... 71
5.2.1 Qualitative Analysis ... 71
5.2.2 Quantitative Analysis ... 78

6 SUMMARY AND CONCLUSIONS ... 85

REFERENCES ... 86

APPENDIX A: MANAGEMENT FEEDBACK SURVEY ... 94
APPENDIX B: COVER LETTERS OF THE SURVEY ... 97
APPENDIX C: SURVEY DATA BASE STATISTICS ... 99
APPENDIX D: SURVEY RESPONSE STATISTICS ... 100

RESPONSE STATISTICS GENERAL ITEMS ... 102
RESPONSE STATISTICS IT TOOLS IMPORTANCE / REALIZATION ITEMS (EXCL. OUTLIERS) ... 103
BEST PRACTICES OF IT TOOL BASED PROJECT MANAGEMENT ... 104
CORRELATIONS AND FACTOR ANALYSIS OF REASONS FOR PROJECT ’S FAILURE: ... 105
INDEPENDENT SAMPLE T-TEST ON PERCEIVED IMPORTANCE OF IT TOOLS BY RESPONDENTS GROUPED BY AGGREGATED PROJECT SUCCESS OF PROJECTS ... 106
INDEPENDENT SAMPLE T-TEST ON REALIZATION OF IT TOOLS BY RESPONDENTS GROUPED BY AGGREGATED PROJECT SUCCESS ... 107
DATA REDUCTION OF REALIZATION PERCEPTION OF DIFFERENT IT TOOL FEATURES: ... 108
APPENDIX E: CRITICIS MS OF AND HINTS FOR IT TOOLS STATED BY PARTICIPANTS ... 109
APPENDIX F: ZUSAMMENFASSUNG IN DEUTSCHER SPRACHE ... 112

Benefits of Project Planning Methods and Tools
1 Introduction
1.1 The Situation
All branches are facing rougher economic environments with increasing competition, increasing market concentration and fragility which is shortening product lifecycles while putting strong requirements to costs and quality. Coincidently less customer and supplier loyalty were forcing industry and science to increase productivity in all branches and business units ¹. In order to increase productivity, theories were heading production costs; trying to optimize production flow, lower throughput time and product buffers.

Pressure to perform came also up for project management and the costs coming up from failing projects and lack of efficiency were embattled (every year 75 Billion US Dollar have been spent on failing projects only in the IT-Sector²). New methods and tools were necessary to face inefficiency in projects caused by little pressure to perform, bad planning and unpredicted upcoming resource bottlenecks. As in production, these theories applied critical path, buffer and throughput time planning which guaranteed project schedule optimization.

Furthermore, in the early nineties ³, new, department overlapping project organization structures were introduced and Project Managers were increasingly managing multiple projects at a time. This made project schedule planning very complex and prediction of resource bottlenecks without aids nearly impossible.

Therefore some scientists suggested application of IT tool supported detailed project planning and controlling, while others, managers in industry were still widely thinking like Dwight Eisenhower once said: "Plans are nothing, planning is everything”⁴.

1.2 Scope
This thesis summarizes and analyses, which principal methods and tools for Single and Multi-Project Management are applicable in IT tools for Project Management and which benefits can arise through application of those.
By performing an industry wide empirical survey on Project Managers, importance and actual realization of functionality in IT tools that can influence success factors of project management will be revealed; and the actual benefits of detailed, IT based project planning regarding industry′s needs will be found. Finally, it will be tested whether the degree of application of IT tools has a positive influence on the given project success rate underneath the respondents of the survey.

1.3 Procedure of this Work
This work is basically divided into four parts:
In the first part (Chapter 2) key strategies, methods and tools of project management will be summarized and checked upon their potential use in IT tools.
In the second part (Chapter 3), the author will check how professional Planning Tool Provider implemented the Project Management methods into their systems, and what items still have to be improved.
In the third part (Chapter 4), relevant studies on key issues in project management will be summarized and their findings prepared for survey creation.
The final fourth part (Chapter 5) is related to the creation and execution of a primary empirical study that verifies project manager′s tacit knowledge of project management and their perception of IT tool importance and realization. The survey’s outcome will be interpreted qualitatively and quantitatively.

2 Relevant Issues in Project Management
In order to be able to understand and to judge whether methods and tools are important for project management, it is important to define the principal terms and to know the levels and the structure of project management.

[...]

1 Clark, Kim B.; Fujimoto Takahiro (1991), pp. 12-18

2 Microsoft Corp. (2003), p. 6

3 Nobeoka, Kentaro (1995), p. 3

4 Lechler, Thomas (2002), p. 1