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Project Management in Today’s World of Business

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Project Management in Today’s World of Business

The project manager has never had a tougher job. Companies are always in transition now, remodeling and reorganizing to meet the latest global challenges. Competition is keen and only the flexible will survive. These business conditions translate directly to the greater demands for efficient, effective management of an entire spectrum of projects.

For example, a rise in use of distributed systems technology (e.g., client/server, Intranet, and Internet computing) and telecommuting has accelerated the disappearance of organizational boundaries and hierarchical management levels. Along with this blurring of organizational levels has come employee empowerment. Many companies now grant employees greater responsibilities and decision-making authority (e.g., self-directed work teams).

And the changes just don’t stop. Many companies view projects as investments, integral parts of their strategic plans. This means the project managers must continually demonstrate their contribution to the bottom line. With this alliance between strategic plan and project management comes an increasingly close but often tense relationship between project and process management. Contrary to popular belief, project management and process management are compatible; projects become integral players in using and implementing processes. But failure to effectively manage a key project could cause a malfunction in the core process! This relationship between process and project management also manifests itself in a need to integrate multiple projects when they involve common core processes, thus requiring even greater integration to ensure such processes are not adversely affected.

The nature of today’s workforce has changed in many companies. Employees are no longer offered or seek long-term employment—many people and companies want flexibility or mobility. Such changes add a new dimension to the work being done on a project—a dimension that directly affects relationships and ways of doing business. And many projects now involve people from different occupations and backgrounds. The globalization of the nation’s business, for instance, requires that a project manager’s skills go beyond being able to put together a flowchart.

As the economy continues to expand, key resources will become limited and project managers will need alternative ways to obtain expertise, such as by using consultants and outsourcing. Certainly, project managers in the past have faced similar problems of providing alternative sources of expertise—but never on as great a scale as they do today.

Market pressures complicate the management of projects, too. Customers not only want a quality product but also want it sooner. Time-to-market pressures force project managers to be efficient and effective to an unprecedented degree. The complexity involved in managing projects has never been greater and will likely only grow in the future. So, too, will the risks for failure. It is more critical than ever that the pieces of the project be in place to ensure delivery of the final service on time and within budget and to guarantee that it be of the highest quality.

Tom Peters, the great management consultant, was correct when he said that project management is the skill of the 1990s. But it is the skill of the future as well. The need for managing projects efficiently and effectively has never been greater and so are the rewards for its success. But having good project management practices in place will no longer suffice; what is required now is excellence in project management if project success is to be the norm.

Project Management Defined

Despite a changing project environment, the fundamental tools of project management remain the same regardless of project or industry. For example, managing a marketing project requires the same skills as managing a software engineering project.

But what is a project? What is project management? A project is a discrete set of activities performed in a logical sequence to attain a specific result. Each activity, and the entire project, has a start and stop date. Project management is the tools, techniques, and processes for defining, planning, organizing, controlling, and leading a project as it completes its tasks and delivers the results. But let’s take a closer look at the functions of project management just mentioned.

Lead To inspire the participants to accomplish the goals and objectives at a level that meets or exceeds expectations. It is the only function of project management that occurs simultaneously with the other functions. Whether defining, planning, organizing, or controling, the project manager uses leadership to execute the project efficiently and effectively.

Introducing Project Management

The top management in some companies does not understand that project management is what is needed. How do you convince people that project management will help them?

Introducing project management is a change management issue, even a paradigm shift. That’s because project management disciplines will affect many policies, procedures, and processes. They will also affect technical, operational, economic, and human resources issues. Such changes can be dramatic, and many people—as in many change efforts—will resist or embrace change, depending on how it is perceived.

Here are some steps for introducing project management within an organization.

1. Build an awareness of project management. You can distribute articles and books on the subject and attend meetings sponsored by the Project Management Institute and the American Management Association.

2. Establish a need for project management. Identify opportunities for applying project management, particularly as a way to solve problems. Collect data on previous project performance and show statistically and anecdotally how project management would have improved results.

3. Benchmark. You can compare your organization’s experience with projects to that of companies that have used project management.

4. Find a sponsor. No matter what case you can make for project management, you still need someone with enough clout to support its introduction.

5. Select a good pilot. Avoid taking on too much when introducing the idea of project management. Select a project that’s not too visible but also one that people care about. The project serves as a proving ground for your new ideas.

6. Communicate the results. As the project progresses, let management know about its successes and failures. Profile the project as a “lessons learned” experience.

7. Provide consultation on other projects. With the expertise acquired on your pilot project, apply your knowledge to other projects. Your advice will enable others to see the value of project management.

Define To determine the overall vision, goals, objectives, scope, responsibilities, and deliverables of a project. A common way to capture this information is with a statement of work. This is a document that delineates the above information and is signed by all interested parties.

Plan To determine the steps needed to execute a project, assign who will perform them, and identify their start and completion dates. Planning entails activities such as constructing a work breakdown structure and a schedule for start and completion of the project.

Organize To orchestrate the resources cost-effectively so as to execute the plan. Organizing involves activities such as forming a team, allocating resources, calculating costs, assessing risk, preparing project documentation, and ensuring good communications.

Control To assess how well a project meets its goals and objectives. Controlling involves collecting and assessing status reports, managing changes to baselines, and responding to circumstances that can negatively impact the project participants.

Close To conclude a project efficiently and effectively. Closing a project involves comClassical vs. Behavioral Approaches to Managing Projects

The field of project management is currently in transition. What worked in the past may not necessarily work in the future, precisely because the world of business has changed. In the past, managing a project meant focusing on three key elements of a project: cost, schedule, and quality. Each element had a direct relationship with the other two. Do something to one and the other two would be affected, positively or negatively. This viewpoint is considered the classical approach for managing projects. The classical approach emphasized the formal, structural aspects. Managing projects meant building neat organizational charts and highly logical schedules, as well as using formal decision-making disciplines.

Recently, however, project management has taken a more behavioral approach. The emphasis is shifting toward viewing a project as a total system, or subsystem operating within a system. This system perspective emphasizes the human aspects of a project as much as the structural ones. This does not mean that the formal tools, techniques, and principles are less important; it is just that they share the stage with behavioral techniques. The three elements—cost, schedule, and quality—gain an added dimension: people. Cost, schedule, quality, and people all play integral roles in the success or failure of a project.

Indeed, it is quite evident that the behavioral aspects of a project can have an impact on final results. Individual and team motivations, informal power structures, and interpersonal communications can have as much an effect as a poorly defined schedule or an ill-defined goal. In many cases, the impact of behavioral problems can be even more dramatic.

The Project Cycle and Tts Phases

In the classical approach, project management was conceived in a linear way, or was at least formally portrayed that way. Project managers were to define, plan, organize, control, and close—in that order. While it made sense, the reality was usually something else.

Today, we view the project manager’s role differently; although project managers perform the same functions, we perceive their performance not in a linear context but in a cyclical one, as shown in Exhibit 1-1. Each time the cycle completes (reaches closure), it begins again, requiring the reinstitution or refinement of the functions that were used in a previous cycle.


Exhibit 1-1. Functions of project management.

Notice the word lead in the middle of the cycle. As noted earlier, this function occurs throughout the project life cycle and plays a prominent role in each iteration of the cycle. It is the center—focus—to ensure that each function occurs efficiently and effectively.

The typical project cycle consists of phases that result in output. During the concept phase, the idea of a project arises and preliminary cost and schedule estimates are developed at a high level to determine if the project not only is technically feasible but also will have a payback. In the formulation phase, the complete project plans are developed. These plans often include a statement of work, a work breakdown structure, and schedules.



The implementation phase is when the plan is executed. Energy is expended to achieve the goals and objectives of the project in the manner prescribed during the formulation phase. Then, in the installation phase, the final product is delivered to the customer. At this point, considerable training and administrative support are provided to “please the customer.”

The sustaining phase covers the time the product, such as a computing system or a building, is under the customer’s control and an infrastructure exists to maintain and enhance the product. Sometimes these phases occur linearly; other times, they overlap. Still other times they occur in a spiral, as shown in Exhibit 1-2.

In today’s fast-paced environment, partly owing to time-to-market pressures and partly to a rapidly changing business environment, there’s pressure to accelerate the project cycle without sacrificing quality. Many projects are on the fast track, meaning they proceed quickly. To accommodate that acceleration, companies adopt simplistic, modular approaches


Exhibit 1-2. Phases of project management.

to building a new product or delivering a new service. Component-based manufacturing, reuse, and just-in-time delivery, as well as more sophisticated tools (e.g., in-systems development) for building products, enable such fast-tracking to become possible and prevalent.

Project Success or Failure

Projects, of course, are not operated in a vacuum. They are parts, or subsystems, of much bigger systems called businesses. Each project has or uses elements such as processes, participants, policies, procedures, and requirements, some of which are dependent upon and interact with related elements in the larger business system. A conflict between project and system can result in disequilibrium. But by taking a systems perspective, the project manager can see how all the elements interact, and assess the impact on the individual project. For example, it becomes easier to understand the impact of a 10 percent budget cut on each element of a project. More important, it is easier to identify potential project failure by recognizing the disequilibrium. If left unmanaged, disequilibrium can result in project failure.

So what types of disequilibrium make a project a success or failure? In the past, the view was that failure resulted from not adequately defining, planning, organizing, or controlling the project in a step-by-step manner. In many cases, a project’s failure was attributed to not having an adequate statement of work, a work breakdown structure, or a schedule. But, as mentioned earlier, failure of a project is increasingly seen as a result of bad behavioral circumstances—for example, poor customer commitment, lack of vision, low morale, no buymin from people doing the work, or unrealistic expectations. Such behavioral factors are frequently recognized as having as much importance for project success, for example, as a well-defined work breakdown structure. Exhibit 1-3 shows some common reasons for project success or failure.

piling statistics, releasing people, and preparing the lessons learned document.

The key, of course, is being able to recognize if and when projects start to fail. To do that requires maintaining a feedback loop throughout the project cycle. And the effectiveness of the feedback loop depends on a constant flow of quality information among the project manager, team members, the customer, and senior management; see Exhibit 1-4. We’ll discuss this in greater depth in Chapters 13, 14, and 19.

Based on the case study presented in the next chapter, you will learn how to apply the basic functions of project management throughout the cycle of a typical project. Chapters 4 through 17 will walk you through the process, showing the major assessments and decisions to be made. At the end of each chapter is a set of questions you can answer on your own to help you apply the principles and techniques that you have learned. So begin now, by meeting the CEO of Great Weddings, Inc., and the project the company is about to launch.

Exhibit 1-3. Reasons for project failures and successes.

Reasons for Project Failures


Classical Behavioral


Ill-defined work breakdown structure Inappropriate leadership style


High-level schedule No common vision


No reporting infrastructure Unrealistic expectations


Too pessimistic or optimistic estimates Poor informal communications and interpersonal relationships


No change management discipline No 'buy-in' or commitment from customer or people doing work


Inadequate formal communications Low morale


Inefficient allocation of resources Lack of training


No accountability and responsibility for results Poor teaming


Poor role definition Culture not conducive to project management


Inadequacy of tools Lack of trust among participants


Ill-defined scope False or unrealistic expectations


Unclear requirements No or weak executive sponsorship


Too high, too long, or too short time frame Mediocre knowledge transfer

Reasons for Project Successes


Classical Behavioral


Well-defined goals and objectives Agreement over goals and objectives


Detailed work breakdown structure Commitment to achieving goals and objectives


Clear reporting relationships High morale


Formal change management disciplines in place Good teaming


Channels of communication exist Cooperation among all participants


Adherence to scope Receptivity to positive and negative feedback


Reliable estimating Receptive culture to project management


Reliable monitoring and tracking techniques Realistic expectations


Clear requirements Good conflict resolution


Reasonable time frame Executive sponsorship


Broad distribution of work Good customer-supplier relationship


Exhibit 1-4. Feedback loop.

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