project management

www.izmirekonomi.edu.trAsst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics

SpringSpring, 2007, 2007

Project Management

www.izmirekonomi.edu.tr

Asst. Asst. Prof. Dr. Prof. Dr. Mahmut Ali Mahmut Ali GÖKÇE, Izmir University of EconomicsGÖKÇE, Izmir University of Economics


Outline

What is a “project”? Project management drivers Project objectives and project life cycle Organizational aspects Planning tools

Critical Path Method (CPM) Program Evaluation and Review Technique (PERT)




What Is A Project?

Temporary Unique product or service

Unique, one-time operation designed to accomplish a specific set of objectives in a limited time frame.




Examples of Projects

Construction projects. Dams, freeways, houses, etc.

New product development. Marketing campaigns (service). Mergers, acquisitions (service). Software development. Use of a manufacturing line to produce

standard products.




History

Large and complex R&D projects by US military (1930-).

Manhattan project, Polaris missile program, Apollo space program, etc.

Automotive companies, airline industry.

Since then, non-military public sector, private and volunteer organizations use project management to achieve their goals, and to increase their effectiveness.




Project Management Drivers

Expansion of knowledge. Different disciplines contribute to the solution of

development, production and distribution of goods and services.

Demand for complex, customized products. Product design needs to be integrated with the

production and distribution systems. Worldwide markets for production and

consumption of goods and services. Competition forced by the economic system.

Decreasing time-to-market. Expanding size of projects.




Project Management Drivers

These forces increase the complexity of operations and the knowledge necessary to answer the questions of what, where, when to produce and how to distribute cannot be provided by individuals any more.

Teams are used for decision making and action, and this calls for a high level of interaction and coordination.




Three Project Objectives

Performance (conformance to specifications)

Cost Time

Project management is about managing the trade-offs between these three objectives.




Project Manager

The project manager is responsible that proper knowledge and resources are available where and when needed, and that the project is completed on-time and within budget.

The rapid growth of project-oriented organizations leads to a “project manager” career path.




Project Manager

Project Management Institute established in 1969, had 7,500 members until 1990, 17,000 by 1995 and 86,000 by the end of 2001. Exponential growth due to a major increase in

project-oriented organizations and number of projects.

Software industry and IT projects. Istanbul Proje Yönetim Derneği has

currently 415 members.




Project Life Cycle(% Completion) Vs. (Time)

Slow start (initial resources assigned, PM selected, program organized).

Quick momentum. Slow finish (many parts

must come together at the end).




Project Life CycleTime Distribution of Project Effort

The slow-finish effect is also a result of changing the levels of resources dedicated to the project during successive phases of the life cycle.




Project Life CycleTime Distribution of Project Effort

Conception Selection Planning, scheduling,

monitoring, control Evolution and

termination




Project Life CycleReducing Uncertainty in Estimates

At the beginning of the project.

Toward the end.




Project Attributes

Purpose One time activity with a well-defined set of desired end

results. The project is divided into tasks that are complex on

their own. The tasks need to be coordinated in terms of timing,

precedence, cost and performance. Life cycle

Slow beginning, buildup, peak, decline and termination. Projects are sometimes terminated by being phased

into normal ongoing operations.




Project Attributes

Interdependencies Projects interact with

Other projects being carried out in the organization Ongoing routine operations

Uniqueness No two construction or R&D projects are the same. By the presence of risk (for instance financial volatility,

long project durations), projects cannot be regarded as routine.




Project Attributes

Conflict for resources. Competition with the regular functional

departments. Project-to-project competition. Competition among team members.




Strategic and Organizational Issues

Key decisions for the organization Deciding which projects to implement Selecting a project manager Selecting a project team Planning and designing the project Managing and controlling project resources Deciding if and when a project should be

terminated




Project Selection

Project selection is the process of evaluating individual projects or groups of projects and then choosing to implement some subset of them so that the objectives of the organization will be achieved.

Many projects fall outside the organization’s stated mission or are unrelated to the organization’s strategy or goals.

Excessive costs relative to benefits.




Project Selection Problem

Multi-objective nature Financial, organizational, etc. objectives.

Types of project selection models Simple weighted scoring models Financial models (payback period, net present value,

internal rate of return, etc.) Goal programming, data envelopment analysis

Risk analysis and management is essential Simulation models




The Project Manager

Takes responsibility for starting, planning, implementing and completing the project.

Typically, the PM is chosen as soon as the project is selected for funding.




Functional and Project Manager Compared

Functional Manager:

Project Manager:




PM’s Project Responsibilities

Responsibility to the parent organization The senior management must be fully informed

about status, cost and timing at all times. Risks need to be communicated properly.

Responsibility to the client Performance and time.

Responsibility to the project team




Acquiring Personnel

PM chooses FM’s best workers for project Project more glamorous than steady

functional duties

Concerns by Functional Manager:

Concerns by Acquired Team Member: FM controls evaluation, salary &

promotion




Characteristics of Effective Team Members

High-quality technical skills Political sensitivity Strong problem orientation Strong goal orientation High self-esteem




Interfacing a Project

How to tie the project to the parent organization? How to organize the project itself? How to organize activities related to other

projects? Here, we focus on the interface of the project

with the parent organization. This interface is usually determined by senior

management, but affects the work of the PM significantly.




Functional Organization

Organization chart for a university




Functional Organization

A particular functional department is given the duty of project management. Typically, the one with the closest interest in the

outcome of the project. New product

Either engineering or marketing Personnel database development

Either IT or human resources.




Advantages/Disadvantages of Functional Organization Advantages

Highly flexible staff use. Ease of switching experts among projects in same functional division.

Technological continuity Quicker career advancement of specialists

Disadvantages Project not client focused. Slow response to client needs Different goals between functional parent division and

project PM competes with FM for role of central project

responsibility Weaker project team motivation than in pure project

organization




Pure Project Organization




Advantages/Disadvantages of Pure Project Organization

Advantages PM with full project authority. Unity of command. Shorter communication lines than in functional organization.

Faster decision making. Higher project commitment of team Organization is structurally simple and flexible

Disadvantages Duplication of staff among projects Experts develop too much depth --- not enough breadth Inconsistency in carrying out policies and procedures Excessive attachment of team to project Team worries of “life after the project ends”




The Matrix Organization




Advantages/Disadvantages of Matrix Organization

This structure is a mix between functional and pure project organizations.

So, it balances advantages and disadvantages of these two types.

project management

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