Project Management

I. Table of Contents

1. How should projects be managed?
1.1. Introduction
1.2. What is a project?
1.3. Project Objectives
1.4. Project Organization
1.5. The Project Life Cycle
1.5.1. Project Selection
1.5.2. Planning
1.5.3. Build up
1.5.4. Implementation
1.5.5. Phase out

2. Why do projects fail? Analyse strengths + weaknesses of project work
2.1. Weaknesses of project management
2.2. Strengths of Project Management

3. The nature of project organisation, a "battle field" or a new possibility for learning?

II. Sources

1. How should projects be managed?

1.1. Introduction

"A project is a problem scheduled to be solved" (Dr. J. M. Juran). This citation briefly describes the highly demanding and complex task of project management. A more technical definition understands the nature of project management as "the entirety of managerial functions, managerial organisation, and managerial techniques and means for the carrying out of a project" (DIN 69 901)^[1]. Project Management requires organizational skills, the foresight to anticipate the unexpected, and the ability to monitor progress and change course as needed. The use of project management continues to grow in our society and its organizations. Companies nowadays are growing more rapidly but their conservative organisational structure, which is based on functional specialisation, is not able to deal with increasing complex tasks, thus many goals could not be achieved in traditional ways but with project management. This has lead to the fact that businesses are more and more focussing on a more project - oriented approach. Businesses take advantage of project management when unique outcomes have to be accomplished and resources and time are limited. Projects are even more familiar in the service sector, where mostly campaigns, seminars, etc. are structured as projects. Since the massive growth in this field has made project management so popular, many companies nowadays also use it for restructuring. Generally, projects tend to be established for special tasks, e.g. extraordinary order sizes that have to be processed within a sharp time frame. It is also very common to carry out research and development of new products as projects. Of course, almost anything can be organized as a project, no matter how large the scope or money involved is.

As long as the effort taken to achieve the determined goal is unique and does not reoccur in the same matter, it can be called a project.^[2]
To find out, how projects should be managed, we first of all need to define, what a project is.

1.2. What is a project?

A project is a plan that is mainly identified through the singleness of the conditions under which it is implemented. It is thus a nonrecurring event that differs from daily business routine. It is furthermore temporary due to its exactly fixed start and ending. For every project, detailed targets must be defined, and provided with different criteria. This has to be done in order to enable clear benchmarking after the project has been finished, to tell whether it was a success or failure. A project is also determined by its complexity. Therefore different means and techniques have to be used in order to achieve its goal. Specialists have to be deployed and their diverse knowledge has to be coordinated, taking into account their different ways of thinking and communicating. Since projects are connected with investments that can influence the economic outcome of a company, senior management must not forget to evaluate risks that are connected with the project. Therefore risk management is often very closely connected to project management. Projects are further identified through interdependencies, since they often interact with other projects or with ongoing operations, e.g. involving certain departments at certain project stages. Conflict also belongs to the nature of projects. That is because projects tend to compete with functional departments for resources and staff. Conflicts might also occur among the parties - of - interest, e.g. the client wants changes, which would reduce the profitability of the project if made. Last, projects can also be identified by their budget. Since they do not belong to daily work routine, they have their own budget.^[3]

1.3. Project Objectives

During the project's duration, three main objectives can be found that are have to be watched very carefully: Quality (or performance), cost and time. These three objectives are also called the magic triangle of project management. That is because once the project is complete, its success or failure is measured through these three variables. When looking at them from a logical point of view, it can be concluded that they actually interrelate each other. Changing one factor automatically leads to the alteration of another factor. If, for example the time frame of a project shall be reduced, this can be only achieved through reducing quality of outcome or by locating additional funds for the project. Thus it is hardly possible to alter just one factor leaving the others constant. The primary task of the project manager is to manage these trade-offs. The figure below shows the three project targets.

illustration not visible in this excerpt

Figure 1: Performance, cost, time project targets^[4]

Since a majority of projects are focussed to a certain client, Meredith and Mantel consider the expectations of the client almost as a fourth dimension or objective since his influence on the project is huge and failure is programmed if he is not satisfied with the desired outcome. To avoid conflicts during the project's progress, the expectations of the client and project team should be integrated throughout the entire project. This is not always easy although all stakeholders are interested in the project's success. Nevertheless senior management might have a different idea of what constitutes success than the project manager, his team, or the client might think of.^[5]

1.4. Project Organization

In order to determine the organizational background of how projects should be managed, the following shows three different forms of how projects can be organized. The first one integrates the project to the functional organization. This is done by making it part of one of the functional divisions of the firm. Functionally organized projects are always assigned under the functional unit that has most interest in ensuring its success or can be most helpful in implementing it. Advantages of this form of organisation are maximum staff flexibility, since the project manager does not have to gain skilled people together anymore, experts are available for many projects since they are not excluded and assigned to one single project, functional specialists can be grouped to increase problem solving efficiency, etc. Of course this form also has its disadvantages. The most important to mention are that the client is not the focus and coordination might lack efficiency due to indirect responsibilities, but also less motivation might be found since the project is done besides daily work in the functional department.^[6]

Pure project organization is the second form of how projects can be integrated into the organisation of a business. Here the project is separated from the rest of the system. It becomes a self-standing unit with own staff that has to provide progress reports and results to the parent firm. The prescribed level of freedom depends upon the parent organisation's policy. Positive aspects of this organisation form are the project manager's full line work force that is separated from daily activities and therefore can work on a more effective and motivational level. Effectiveness is further reached through shorter lines of communication and centralised authority. To mention just some of the disadvantages, duplication of effort can be reached easily when every project is fully staffed and can lead to staff shortage or additional costs for extra hired personnel. The insularity of the team members that are drawn off their regular units can lead to problems of re - integration once the project has ended.^[7]

The final option of organisational form is the matrix organisation. This form was developed to combine some of the advantages of both forms mentioned above as well as to eliminate some of the disadvantages, which they occupy. It can be defined as "a pure project organisation overlaid on the functional divisions of the parent firm." (Meredith and Mantel, p.147)

Matrix organisations can be either weak or strong, depending on the level of the two extremes (functional or pure project) it most resembles. Generally speaking, there can be an infinite variety between the two extreme forms. Advantages and disadvantages depend should not be mentioned in detail since it would go too far here.^[8]

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^[1] DIN = German Industry Norm

^[2] Cp. Meredith Mantel, 2000, p. vii, Heimerer, 2002, p.1, Duffy, 2002, p.1 ff., www.steuerlex.de

^[3] Cp. EnBW Servicegesellschaft, 2001, p.3 ff., Heimerer, 2002, p.1, Meredith and Mantel, 2000, p. 8-11

^[4] Source: Meredith and Mantel, 2000, p.4

^[5] Cp. Meredith and Mantel, 2000, p. 3 ff., Heimerer, 2002, p.2, EnBW Servicegesellschaft, 2001, p.6

^[6] Cp. Meredith and Mantel, 2000, p. 139-145, EnBW Servicegesellschaft, 2001, p.10

^[7] Cp. Meredith and Mantel, 2000, p. 145-147, EnBW Servicegesellschaft, 2001, p.11

^[8] Cp. Meredith and Mantel, 2000, p. 147-152, EnBW Servicegesellschaft, 2001, p.12 ff.