i

PROJECT MANAGEMENT




PRESENTED BY




PHIDELIS M. K. EBLEDZI

(CILT ACCREDITED LECTURER)







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TABLE OF CONTENTS
Contents Page
QUESTION 1a: DESCRIBE THE PROCESS AND THE IMPORTANCE OF DEVELOPING A
WBS FOR A PROJECT ................................................................................................................. 1
1.1.0 Introduction ............................................................................................................................ 1
1.1 The process of developing a WBS for a project .................................................................. 1
1.1.2 The importance of developing a WBS for a project ............................................................. 4
QUESTION 1b: AS A GLOBAL PROJECT MANAGER, DISCUSS HOW YOU WOULD
DEAL WITH CULTURAL ISSUES IN YOUR PROJECT TEAM. ............................................. 6
QUESTION 2a: THE ROLE THAT PROJECTS PLAY IN THE STRATEGIC
MANAGEMENT PROCESS WHY SHOULD EVERY PROJECT MANAGER
UNDERSTAND THEIR ORGANIZATIONS VISION, MISSION AND STRATEGY. .......... 10
2.0 Introduction ............................................................................................................................. 10
2.1.1 The role that projects play in the strategic management process ......................................... 10
2.1.2 Why should every project manager understand their organizations vision, mission and
strategy. ......................................................................................................................................... 11
2.1.3 Conclusion ........................................................................................................................... 13
QUESTION 2b: The myriad of challenges that confronts a global project manager ................... 13
QUESTION 3: THE BENEFIT OF CONTROLLING PROJECT PROCESSES AND PROJECT
RESOURCES THROUGH A CENTRALIZED PROJECT MANAGEMENT OFFICE (PMO).
....................................................................................................................................................... 17
Bibliography ................................................................................................................................. 23

1

QUESTION 1a:
DESCRIBE THE PROCESS AND THE IMPORTANCE OF DEVELOPING A WBS FOR
A PROJECT

1.1.0 Introduction

According to Halli (1993) the success of a project can be attributed to the use of a work
breakdown structure (WBS). A WBS is has been defined by PMBOK Guide (2008) as
deliverable-oriented hierarchical decomposition of the work to be executed by the project team,
to accomplish the project objectives and create the required deliverables. It is instructive to note
that each descending level of the WBS represent an increasingly detailed definition of the project
work. It is also the document that breaks all the work required for the project into discrete tasks,
and groups those tasks into a logical hierarchy. Furthermore, the work package is the lowest
level of decomposition. Work package is the lowest level WBS component and it is considered
to be a manageable component of work, which can be scheduled, cost estimated, monitored and
controlled. Generally, the WBS does not show the time or order of execution. Most of the work
included in the child element should equal the complete work to be completed for the parent
element.
1.1 The process of developing a WBS for a project

The process of developing a WBS is the subdividing of project deliverables and project work
into smaller, more manageable components. It is often shown in two different forms: tabular
form and chart form. The WBS is associated with an important policy called the 100% rule.
The rule requires the WBS to contain all the deliverables required by the scope of the project.
These include internal, external, and interim deliverables. It also includes the project
management components like change orders and schedules. The sum of the work at any level
must represent all the requirements, and no more, for the next higher level.

However, the following processes are followed in order to develop a successfully WBS. This
involves a project team which normally sit in a half-day to multi-day workshop to decompose all
the work necessary to complete the work.
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i. Structure and organize the WBS
A WBS workshop is often organized at a minimum to include all the key members of the
project team. The focus of the project team is to consider all the work required to deliver
the final product or service. The project sponsor and all other key members who are
actually going to do the work should be there and be actively involved. Also, the project
team should review WBSs of similar projects, review corporate guidelines for creating
WBS and focus on determining all of the deliverables required for the project.

ii. Decompose the work
Decomposition is the subdivision of project deliverables into more manageable
components until the work and deliverables are defined to the work package level. The
work package level is the lowest level in the WBS, and is the point at which the cost and
schedule for the work can be reliably estimated. Thus, it is significant to decompose each
WBS component into lower level components by identifying all the deliverables and
activities necessary to complete the WBS component. The process of decomposing
project work into WBS includes:
Identifying the project deliverables;
Identifying work related to project deliverables;
Building a high-level WBS based on the information above;
Decomposing the high level WBS into work packages.

Subsequently, a WBS can take different forms like using major project deliverables and/or sub-
projects as the first level of the WBS; using the phases of project life cycle as the first cycle as
the first level of the WBS with the project deliverables inserted as the second level; and using a
combination of phases and project deliverables within each branch of the WBS.

iii. Complete a WBS Dictionary Card for each WBS component
The WBS Dictionary is a document that contains a detailed explanation of the
component, level of effort and other information that could help during project schedule
development. This activity entails assigning unique WBS identification numbers to each
WBS component which is critical to keep the WBS Cards organized. Also included in the
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dictionary are performance measurement criteria, statement of work paragraph number,
contract line item, start and end dates, resource requirements, cost estimates, quality
requirements, technical content contact information, and revision history among others.

iv. Verify that the level of decomposition is sufficient at the work package level to
ensure that the work is not too large or small, but manageable.
Ideally, the project manager has to work with the sponsor and the steering committee to
develop a process for verifying successful completion of project deliverables. Generally,
the project sponsor is the one responsible for verifying the completion of major
deliverables. Additionally, the contract administrator is also involved in verifying
successful completion of deliverables received from outside sources. More importantly,
contracts will include clauses for describing the scope verification process.

v. Managing requests for changes to project scope
Basically, all requests that will result in change to project scope that may possibly have
significant effects on meeting project requirements must follow the formal change-
control procedures. Thus, a change request form has to be completed and reviewed by the
appropriate group. It si crucial to follow these procedures to prevent scope creep.

Below is a typical WBS in a chart and tabular form:

Figure 1.0: WBS in chart form, adapted from PMI Global standard, 2006.
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Figure 2.0: WBS in tabular form, adapted from PMI Global standard, 2006.

Finally, the process of developing a WBS is primarily concerned with the actions necessary to
define, organize, and subdivide work required to meet project goals to a work package level. The
content of the WBS will vary depending upon the complexity of the project. Conclusively, the
size of and time invested to develop a WBS should be balanced with the size and complexity of
the project. For instance, large, more complex projects justify a significant effort in developing a
comprehensive WBS.

1.1.2 The importance of developing a WBS for a project
It is undeniable fact that the more clearly the scope of the project is formulated before the actual
work begins, the more likely the success of the project the intelligent structure of work
breakdowns is a precursor to effective project management (Homer and Gunn,1995, p. 84).
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The creating of WBS is of great significance because it serves as a foundational building block to
initiating, planning, executing, and monitoring and controlling processes used to manage projects.
Also, the developing of a WBS reduces or eliminates adverse project outcomes including
ongoing, repeated project re-plans and extensions, unclear work assignments, scope creep or
unmanageable, frequently changing scope, budget overrun, missed deadlines and unusable new
products or delivered features. Furthermore, the developing of a WBS is one of the prerequisite
of a successful projects because it compelled the project team to painstakingly consider all the
pieces work necessary to complete the project. Similarly, the developing of a WBS makes it
possible for the project team to do due diligence in identifying all the work that has to be done.
Again, the WBS exercise also helps with time estimation and sequencing of activities since all
the people involved in performing the work are collocated for a period of time with the one
purpose of identifying all the work and providing estimates and dependencies on the work.
1.1.3 Conclusion
the developing of a WBS set the tone for scope management and is integral to other Project
Management Institute (PMI) processes. Consequently, the standards that define these processes
explicitly or implicitly rely on the WBS. More importantly, standards that take advantage of the
WBS either use the WBS as an input, for instance, PMIs Practice Standard for Earned Value
Management (EVM) and the Practice Standard for Scheduling) or incorporate the WBS as the
preferred tool to develop the scope definition
(PMBOK GuideThird Edition, Chapter 5, Section 5.3).









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QUESTION 1b
AS A GLOBAL PROJECT MANAGER, DISCUSS HOW YOU WOULD DEAL WITH
CULTURAL ISSUES IN YOUR PROJECT TEAM.

Culture according to The World Book (1997) refers to the entire way of life for a group of
people. It entails every aspect of living and has four elements that are common to all cultures:
technology, institutions, language, and arts. The increased complexity of projects today have
called for a culturally and functionally diverse mix of individuals who has to be integrated into
an effective unit, thus a project team. Therefore, effective teamwork is crucial to the success of
project during all phases of the project life cycle. Even though tough global competition has
created a significant need for faster, more flexible, and highly competitive operations; they can
however be met only by developing high-performing teams. Consequently, it behoves the project
manager to use effective team building to respond to these needs (Knutson, Joan, 2001). Project
teams require an increased interaction between people of different background and sometimes
countries, hence there is an increase need for the project manager to deal with cultural
differences. Besides the organisational culture which is unique, differences in national culture
has a great influence not only on the surface behaviour but also essential conditions for
understanding the values adopted by business people. For instance, each person comes to the
negotiation table with skills and habits that are often not aware and that there are only
subconsciously.
However, the global project manager can resort to the use of originality to move away from
general norms and obtain competitive advantage, improving the possibility of project success.
The global project manager in dealing with cultural issues can adopt crossvergence concept, thus
fusing together management practices of two or more cultures, so that a practice relevant to a
heterogeneous culture can be assembled. Moreover, global teams can also provide all elements
for an effective fusion of different project management practices: people from various country
and company cultures, enriched by different experiences and management theories. implemented
by a team in different countries, with a wealthy mix of skills and beliefs (Binder, Jean Carlo,
2007, p. 40-42).

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Another way that the global project manager can deal with cultural issues in project teams is
though the use of hybridization concept. The concept relates to multicultural management, that
is the use of a common body of knowledge, enhanced with selective parts of successful practices
from the countries where the project is being implemented, or from the team members original
culture. Even people from the same country exhibit different behaviors when working with a
team of people because their values and norms from the cultural dimensions are not only
dependent on the nationality of team members. When global project manager is dealing with
cultural issues regarding new project team members who have a cultural origin that the project
manager never experienced before; the cultural dimensions become the first source of reference
for the global project manager to understand the general mindset, and the cultural patterns likely
to be found in the project teams culture. Additionally, the global project manager can read
different sources of information on the country, not only to show the team members that you care
for their culture, but to really understand how they live, think, and what the main sources of
cultural and economic richness are. More importantly, the global project manager has to pay
attention to the behaviour of the team members in order to understand their values during
informal conversations and to show respect for these values, while letting them know his/her
own opinion, the project communication standards and the important norms that must be
followed for them to be accepted by the other team members.

Furthermore, the global project manager can also adopt soft-skills training sessions as well as
request coaching from more experienced global managers in similar capacity. Fisher and Fisher
suggest that a good training plan will incorporate language lessons (for people in frequent
contact with a foreign language), technical training (when there are different levels of
understanding on technical disciplines that can create conflicts or risks to the collaboration) and
cross-cultural training (when team members and key stakeholders come from different cultural
backgrounds and there are many differences in the cultural dimensions).
To a large extent, the steps below will serve as a guideline to the global project manager to
effectively deal with cultural issues in project teams:
Learn the definition and different types of culture the cultural differences exist across
countries but are also influenced by a diversity of age, gender, regions, religions and
many other types of social groups.
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Understanding the cultural differences using the cultural dimensions to know what
differences to expect between people from different cultures. Employ a team building
exercise to identify how his/her team and colleagues view these differences.
Respect the cultural differences keep the differences in mind when confronted with
opposite views of the world. The global project manager must accept them and show
respect for the different standpoints.
Enjoy the richness of a multi-cultural team. It is necessary for the global project manager
to build on the differences to identify and mitigate risks, to find alternative approaches
and achieve the project objectives in better ways, and to increase the level of innovation
and quality of your project deliverables.
Principally, the global project manager can effectively deal with cultural issues by establishing
the ground rules in clear expectations regarding acceptable behaviour by project team members.
In other words, early commitment to clear guidelines decreases misunderstandings and increases
productivity. Also, discussing ground rules allows team members to discover values that are
important to one another. All project team members share responsibility for enforcing the rules
once they are established.

Last but not the least, global project manager can deal with cultural issues through team
development process, thus recognizing and rewarding desirable behaviour in the project team.
The global project manager can develop the original plans regarding ways in which to reward
people during the Develop Human Resource Plan process. It is instructive to note that a
particular reward given to any individual will only be effective if it satisfies a need which is
valued by that individual. For this reason, award decisions should be made formally or
informally, during the process of managing the project team through project performance
appraisals. Cultural differences should be considered when determining recognition and rewards.
For instance, developing the right team rewards in a culture that encourages individualism can be
difficult. Moreover, only desirable behaviour should be rewarded. For example, the willingness
to work overtime to meet an aggressive schedule objective should be rewarded or acknowledged;
needing to work overtime as the result of poor planning by the team member should not be
rewarded. However, the team members should not be punished for poor planning and
consistently unrealistic expectations imposed by senior management. Win-lose (zero sum)
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rewards that only a limited number of project team members can achieve, such as team member
of the month, can hurt team cohesiveness. Rewarding behaviour that everyone can achieve, such
as turning in progress reports on time, tends to increase support among team members.
Finally, the culture framework guides the global project manger to fully understand culturally
diverse project stakeholders better. Cultural gap tool can raise awareness of the global project
manager concerning the manifestation of cultural differences in his or her project teams. It also
can be used by the project management team and project members to help them in identifying
differences and dealing with them. The gap analysis will offer the global project manager with
valuable input for the stakeholder management process. Moreover, it highlights any areas of
potential issues between
participating stakeholders, based on the assumption that big differences or large cultural
distance, which if not managed well, will lead to misunderstandings, conflict, and ultimately to
project failure.

Conclusively, globalization comes with an increased interaction between people of different
cultural background and an increase in the need to deal with cultural differences. A global
project manager needs to understand his or her own culture and the cultures of the project
stakeholders. For this reason, the key to success in international business is the sincere desire to
integrate into a new and different culture. Being part of a multicultural team has a lot of
advantages like accumulating a lot of skills, beliefs and experiences that help make us unique.
The culture gap tool highlights the biggest cultural differences between major stakeholders such
as the global project manager, the customer and the project team.









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QUESTION 2a
THE ROLE THAT PROJECTS PLAY IN THE STRATEGIC MANAGEMENT
PROCESS WHY SHOULD EVERY PROJECT MANAGER UNDERSTAND THEIR
ORGANIZATIONS VISION, MISSION AND STRATEGY.
2.0 Introduction
Most modern organisation (public or private) that wants to perform well needs some kind of
management and a long-term plan. Strategic management is a tool designed to upgrade or
maintain the organisations performance.According to David (2011) the strategic management
process is an attempt both to duplicate what goes on in the mind of a brilliant, intuitive person
who knows the business and to couple it with analysis. The strategic-management process
consists of three stages: strategy formulation, strategy implementation, and strategy evaluation.
However, strategy formulation includes developing a vision and mission, identifying an
organizations external opportunities and threats, determining internal strengths and weaknesses,
establishing long-term objectives, generating alternative strategies, and choosing particular
strategies to pursue. Therefore, strategies determine long-term competitive advantages. For
better or worse, strategic decisions have major multifunctional consequences and enduring
effects on an organization.
2.1.1 The role that projects play in the strategic management process

Generally, projects are limited in scope and has short execution time. For this reason, project
managers have to use them to analyze operational issues, solve problems and explore new
possibilities without unsettling tactical operations. Therefore, strategic management operates on
long-term plans and applies information gained from projects to set the organization's future
priorities. As part of the strategic management process, projects may focus on both the external
customer environment and internal activities required to maintain better alignment of operations
and strategic objectives. Moreover, the use of project in strategic management process offers the
project manager and stakeholders the opportunity to determine, clarify, revise and implement
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their fundamental mission in the society (Brown, undated). Projects aim at producing products or
service as such its role in the strategic management process cannot be glossed over.


2.1.2 Why should every project manager understand their organizations vision, mission
and strategy.

The important role of using mission, vision and strategy has been recognized in most
organizations today. Vision is the ideal state of the organization in the future. Mission is the
reason why the organization exists. Strategy defines the way of how to get towards the ideal state
introduced in the vision. These tools are considered to be very useful in guiding the whole
organization into the same direction. Different ways of producing vision mission and strategy
have been developed. In projects, using these tools are still quite rare even though it is
acknowledged that projects in an organization should sustain the overall strategy of the
organization. Consequently, the project manager should have a clear direction where to go and
this direction should be made known to every stakeholder of the project. It is therefore necessary
for the project manager to understand their organisations vision, mission and strategy to enable
them evaluate the organisations position and take the necessary steps to fulfil its vision and
mission more satisfactorily or, if necessary, engaging in reorientation.

Mission is primarily a strategic tool, an intellectual discipline which defines the organisations
commercial rationale and target market. As a result, it is regarded as the first step in strategic
management. Generally, mission exists to answer two fundamental questions: what is our
business, and what business should it be? (Yeung, 1991). However, some organisations view
mission as the cultural glue which enables them to function as collective unity. This cultural
glue consists of strong norms and values that heavily influence the way in which people behave,
how they work together and how they pursue the goals of the organisation.

Simply put, mission is about culture and about strategy. In reality, a mission exists when strategy
and culture are mutually supportive. In other words, an organisation has a mission when its
culture fits with its strategy. Therefore, mission is an organisations character, identity and
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reason for existence. Mission can therefore be divided into four inter-relaing parts: purpose,
strategy, behaviour, standards and values.The purpose addresses why an organisation is in being;
for whose benefit is all this effort beingput in? Strategy considers the nature of the business, the
desired positioning versus other companies and the source of competitive advantage. Similarly,
the behaviour standards are the norms and rules of the way things are done while values are the
beliefs and moral principles that lie behind the behaviour standards, beliefs that have normally
been formulated within the organisation by a founding dynasty or dominant management team. It
is against this background that the project manager has to understand the mission of the
organisation so that he or she can link behaviour standards with the purpose in nk two ways: the
strategy link explains that certain behaviours will help make the organisation stressful; the values
link explains that certain behaviour is morally upright, the right way to behave.

The project managers understanding of the vision will enable him or her to choose a direction
and also develop a mental image of a possible and desirable future state of the organisation.
According to Warren and Burt (1985) the critical point is that a vision articulate future for the
organisation, a condition that is better in some important ways than what now exists. The latter
elaborated that a vision refers to a future state, a condition that is betterthan what now exists.
The understanding of the vision of the organisation will help the project manger to formulate
appropriate strategies that will fit the organisation. Mission can sometimes be treated same way
as strategy. Without understanding of the organisations vision, the project manager will be
exposed to short-term opportunities that he or she may feel endlessly compelled to seize. More
importantly, understanding the vision of the organisation will help the project manager and the
project team to in general to focus their attention on what is important whilst the organisation
eliminate a myriad of unproductive activities. Also, a shared vision providea context for decision
making. Additiionally, when the project manager understands and effectively communicate the
vision of the organisation, the members of the project team will see significantly higher level of
job satisfaction, commitment, loyalty, esprit de corps, and clarity about the organisations values,
pride, productivity, and encouragement. Mission entails mission,strategy and culture of the
organisation. In a nutshell, vision of an organisation communicates three messages: the mission
or purpose, the strategy for achieving the mission, the strategy for achieving the mission, and
elements of the culture that seem necessary to achieve the mission and support the strategy.
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Strategy on the other hand is used to achieve the mission. In view of this, the project manager
has to understand it in order to give the best in providing a particular service. Furthermore, it is
essentially for the project manager to understand the strategy of the organisation because it
defines the business in which a company competes and the distinctive competence or
competitive advantage that it has or plans to develop.
2.1.3 Conclusion

To a large extent, the project manager will be at a better position to use formal communication
methodology to ensure that mission, vision and strategy is communicated to all project
stakeholders in order to maintain mission, vision and strategy focus, thus answer those why
questions. Similarly, the project managers understanding of the mission, vision and strategy of
organisation keep the mission, vision and strategy fresh and alive with the project
stakeholders. A dedicated project manager supports the importance of the mission, vision and
strategy of the organisation. In simple terms, the mission, vision and strategy becomes
visible. Last but not the least, associating all work to the mission, vision and strategy ensures
that everyone in the project team understands why they are working so hard, what the end goal is
and helps the stakeholders embrace and believe in it. A mission, vision and strategy will keep the
project team focused on where they are, where they are headed, and why they are doing what
they do. It creates an atmosphere of teamwork, focus and collective enthusiasm ensuring project
success.

QUESTION 2b
The Myriad of Challenges that Confronts a Global Project Manager

There are many challenges that confronts global project manager especially when using
components to effectively communicate with project stakeholders, for instance, in a highly
technical, multinational project team. Generally, it is not easy for a global project manager to
effectively communicate a technical concept to another team member in a different country
because it involves encoding the message in the appropriate language, sending the message using
a variety of technologies, and having the receiver decode the message and reply or provide
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feedback. As a matter of fact, the world of business has become smaller as a result of
globalization. Consequently, it is now very normal to be working with overseas partners on
projects. This could either be attributed to an outsourcing arrangement, or through the offshoring
model, which is very popular in organizations that require follow the sun financial transaction
processing or telephone support. Of course, your company may have divisions scattered around
the world as well; international projects dont always involve third parties.
For a global project manager whose company may have divisions across the globe, will have to
deal with different types of stakeholders involved in projects and this has its own implications.
Therefore, managing international projects can sometimesbe interesting and rewarding but they
are also a challenge. Among the challenges faced by the global project officer include:.
i. Language
Obviously, working across borders comes with a language problem since it is impossible for the
project team to speak same language. This manifests itself especially when there is something
that need to be explained. For instance, a global project manager from an English speaking
country working with project team from China. The problem of a common language is far
greater if the global project manager is working with colleagues who do not routinely work in his
or her language. It is imperative for the global project manager to indicate at the beginning of a
project the main working language that will be used throughout the entire project. The global
project manager can overcome this challenge by using enterprise project management tool which
may have interfaces in several languages. The team abroad can enter their timesheet data and
interact with menus in their own language while keeping the official language of project
documents as English. However, the global project manager ought to be considerate to members
of the team who are not working in their native language. Similarly, the global project manager
should minimize the use of jargon and make his or her spoken and written language clear.

ii. Time
It is undisputable fact that different cultures have different interpretations of time and for some,
milestones are just a guide. Even though the global project manager may value punctuality other
team members may not have the same view when a meeting is supposed to start. The global
project manager has to manage this by having frank conversations with everyone involved,
indicating to them what the potential challenges might be and asking for collaborative solutions
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to to solvethem. It is better to have these conversations early than spend a lot of time hanging
around on conference calls waiting for the others to turn up.

iii. Roles and Responsibilities
Sometimes the role of the global project manager might be very well respected in his or
her own country but that same role might not be understood elsewhere. Project teams in
countries where companies have very hierarchical structures may not take direction from
the global project manager because they may not recognize his or her role as being
relevant. Furthermore, project teams may not have received much guidance about how
their project responsibilities fit with their day job. The global project manager is likely to
uncover this challenge once he or she has started working on the project. The most
important thing for the global project manager is to to deal with this challenge as and
when it arises.. Another way the global project manager can deal with this challenge is to
talk with his or her own manager and colleagues who have experience in working with the
overseas team.

iv. Tools
The global project manager may sometimes have a challenge with the software that is
made available to him or her. While some tools may have instant messaging capabilities,
others may not. This challenge can be overcome by using universal applications like
skype software if it is applicable to the companys software and that of other
stakeholders.This type of technology can be easily connected to the team members even if
the global project manager is not working in the same room with other team members of
the project. However, this software work best when the time difference is not more much.
In addition, tools like blogs and wikis that enable synchronise working are valuable in
these situations. The global project manager can also record presentations or conference
calls and make these available to other members of the project team later.

v. Virtual Teams
This is a major challenge facing global project managers. It is not easy to manage virtual
teams because it needs a lot of commitment from everyone involved. Besides, the global
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project manager has to be better at documentation, knowledge sharing and team building
than other members of the project team. Being alert to the challenges of virtual teams is
the first step to identifying methods to help keep your team on track.

To conclude, the global project manager can learn a lot from other cultures and working with
international teams is regarded as one of the most rewarding parts of project management.
Finally, when considerthe benefits of working on international projects with these challenges,
one can conclude that they are all part of the rich experience that results from a shrinking work
environment.





















17

QUESTION 3
THE BENEFIT OF CONTROLLING PROJECT PROCESSES AND PROJECT
RESOURCES THROUGH A CENTRALIZED PROJECT MANAGEMENT OFFICE
(PMO)

The increasing role of projects in todays organizations and the move toward management by
projects, has arisen for an organizational entity to help manage these fast multiplying forms of
getting work done. This is the role of the Project Management Offi ce (PMO) (Meredith and
Mantel, 2009). A project management office (PMO) according to PMBOK Guide is an
organizational body or entity assigned various responsibilities related to the centralized and
coordinated management of those projects under its domain. The responsibilities of a PMO can
range from providing project management support functions to actually being responsible for the
direct management of a project. Furthermore, the projects administered by the PMO may not be
related, other than by being managed together. The specific form, function, and structure of a
PMO is depend upon the needs of the organization that it supports.

Additionally, a PMO may delegate authority to act as an integral stakeholder and a key decision
maker during the beginning of each project, to make recommendations, or to terminate projects
or take other actions as required to keep business objectives consistent. A major contribution of
PMOs is to set up project administration procedures for selecting, initializing and planning,
budgeting, and scheduling projects as well as to serve as a repository for reports on the
performance of the planning, budgeting, scheduling, and resource allocation processes.
Furthermore, PMOs can offer a variety of services. Block et al. (2001) indicated that their PMO
established and maintained standard project processes (practices and procedures).

Even though specific goals may be expressed for the PMO, the main purpose is often inbuilt in
the process itself and is unstated, for instance, ensuring that the firms portfolio of projects
supports the organisations general goals and strategy. In view of this, the PMO is a vital tie
between strategic management and the project managers. Another principal purpose is the
gradual incorporation of good project management practice into the entire organization, moving
it from a functionally organized to a project based form, not only in structure but in culture as
well. It is important to note that the above role of the PMO is that of an enabler/facilitator of
projects, not the doer of projects. Even top management cannot allow the PMO to usurp the
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technical aspects - scheduling, and budgeting the of running the project. Those are the project
managers responsibility. Although the PMO may, on occasion, become involved in some
project management tasks, it should be for the purpose of facilitating liaison with top
management, not to do the work of the project team.

A primary function of a PMO is to support project managers in a variety of ways which may
include, but are not limited to:
Managing shared resources across all projects administered by the PMO;
Identifying and developing project management methodology, best practices, and
standards;
Coaching, mentoring, training, and oversight;
Monitoring compliance with project management standards, policies, procedures, and
templates via project audits;
Developing and managing project policies, procedures, templates, and other shared
documentation (organizational process assets); and
Coordinating communication across projects
(PMBOK).
It is important to note that not all of these goals can be achieved at once. In the short term, or the
first few months, the PMO will only be able to assess the organisations current project
management practices and perhaps evaluate the progress of each of the organizations many
projects. In the mid-term, the PMO can start standardizing project management processes and
procedures, begin helping individual projects with, for example, risk analysis and administrative
details, and perhaps initiate a strategic portfolio analysis of the current projects. In the long term,
or after about a year, the more comprehensive tasks may be undertaken, such as assembling a
resource database, training project managers, conducting project audits, and consulting on
individual projects. The PMO evaluates all proposed initiatives against the companys goals,
estimates costs, and proves the businesss proposed return on investment (ROI) if the initiative is
funded.

Similar, to the time phasing of PMO responsibilities, there are different forms of PMOs that have
similar responsibilities. Thus, some organizations may only want a limited PMO that represents
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an information center, reporting on project progress and assessing the organizations project
maturity. At the next level, the PMO may establish project management procedures and practices,
promulgate lessons learned from prior projects, create a database for risk analysis, help project
managers with administrative and managerial matters, and possibly even offer basic training in
project management. At the upper level, the PMO may establish a resource database and monitor
interproject dependencies, manage the project portfolio to ensure attainment of the organizations
goals, audit and prioritize individual projects, and generally establish an enterprise project
management system.

Another way of organizing the PMO has to do with the reporting level of the offi ce. If top
management wants to test the efficacy of a PMO at a lower level before approving it for the
organization as a whole, they may place it in a functional department such as Information
Technology or Engineering. In this role, the main responsibility of the PMO will be to help the
departments project managers with their individual projects. If the PMO is established at the
business level, it may take on more responsibility for good project management practices and
possibly offer basic training. At higher organizational levels, the PMOs responsibilities will
broaden and become less tactical and more strategic. If the eventual goal is to improve the
organizations ability to execute projects, this is a risky way to implement a PMO. Simply
because a PMO is not able to rescue a failing engineering project, for example, does not mean
that it could not be extremely valuable to the organization by performing the many preceding
tasks.


It is significant to note that the best way to implement a PMO is to treat it as a project and apply
good project management procedures. In addition, given the role of this special type of project, it
is also suggested that the effort not be initiated until it has the full commitment of the top
managers of the organization. It should also have a senior management sponsor/champion who is
determined to see this project through to success. One way to initiate the project is through a
pilot program in one of the areas that falls under the responsibility of the PMO project champion.
Following its completion, the pilot project can be assessed, any mistakes corrected, and the
benefi ts publicized to the rest of the organization. As the PMO expands and interacts with more
and more projects, its benefi ts to the organization will increase progressively with its reach. Liu
20

et al. (2007) have shown that PMOs have a signifi cantly positive impact on projects operating
with high task uncertainty. The positive impact of PMOs decreases as task uncertainty
diminishes.
However, not all PMOs are successful. According to Tennant (2001), one of the primary
problems of PMOs is that the executives who establish PMOs often do not understand project
management practices themselves. Thus, they have unrealistic expectations of the PMO, such as
providing temporary help for a project in trouble or to obtain cost reductions from on-going
projects. The PMO is not a quick fix for saving projects that are failing; its primary objective is
to improve project management processes over the long run.

PMOs cannot be expected to correct upper management failures such as inappropriate project
goals, insuffi cient project support, and inadequate resource availability. Interestingly, a recent
trend in project organizations is the outsourcing of the PMO functions themselves. One has to
wonder if this is a sign of impending trouble or a wise recognition of the limitations of upper
management knowledge.

Many organisations across the globe are spending much sums of money on executing projects
and programmes. Managing change successfully has become a significant factor in
organisational success, and investment in projects and programmes is integral to that success.
However, many organisations still struggle to achieve success with the majority of their projects
and programmes. Some believe that the effort and money spent in implementing PMOs has made
a big difference in the level of success achieved in executing projects and programmes.









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QUESTION 3b
Top-down (macro) estimates are made by top management and bottom-up (micro)
estimates are made by those responsible for completing the work packages Discuss the
benefits of each approach and give an example of where one method might be preferable to
use over the other.
Project cost management includes the processes required to ensure that a project team completes
a project within an approved budget. Therefore, the main planning tasks are cost estimating and
cost budgeting. The main documents produced include a cost estimate and a cost baseline.
Estimate Costs is the process of developing an approximation of the monetary of resources
needed to complete project activities. It includes the identification and consideration of cost
alternatives to initiate and complete the project. Project teams normally prepare cost estimates at
various stages of a project, and these estimates should be fine-tuned as time progresses. Cost
trade offs and risk must be considered, such as make verse buy, buy verse lease, and the sharing
of resources in order to achieve optimal costs for the project. Cost estimates are generally
expressed in units of currency (for example, Naira, Ghana cedi, dollars, euro, yen among others),
although in some instances other units of measure, such as staff hours or days, are used to
facilitate comparisons both within and across projects. Like error budgets, cost estimates can be
classified as top-down or bottom-up.

Top-down methods start with the complete project and break the total cost into a relatively small
number of parts. The top-down method is also known as the analogous method. Costs are
estimated by analogy or by statistical methods. In other words, the method uses the actual
durations, effort or costs from previous projects as a basis for estimating the effort or costs for
the current project. For example, estimators often look at the fractional breakdown of costs for
historical projects into different categories such as site development, optics, enclosure and draw
conclusions about the cost distribution of future projects. Top-down methods are best applied in
the early phases of the project, when little detailed information is available. The following
procedures are followed when using the top-down methods:
1. Identify a previous project or section of a previous project that is similar to the current
project.
22

2. Assess the extent to which the current project is similar to the previous project the
comparison factor (For example, 1.5 if the current project is estimated to be 50% larger).
3. Compute the estimate for the current project based on the actual durations, effort or costs
from the previous project and the comparison factor.

Bottom-up estimating on the other hand assigns costs to individual work packages or activities.
The smaller the level of activity, the more accurate the estimate. This is the preferred method for
cost estimating. Bottom-up methods start with estimates for each task or piece part, and build up
the complete price as the summation of the individual parts. Bottom-up methods require much
more detail about the system design and operational modes, and so are best suited to the detail
design and construction phases of the project. The bottom-up method is considered to be the
most accurate method for generating project estimates.

It is used to determine budget or definitive estimates during the planning phase and at the start of
each project stage. The method uses the Work Breakdown Structure (WBS) developed during the
planning stage of the project. Estimates are created for all tasks at the lowest level of the WBS
and then these are accumulated to determine the estimates for the whole project. The consensus
technique is usually used to obtain task estimates for the low level tasks on the WBS, because as
well as producing reliable estimates it also builds active involvement, cooperation and
commitment. Experts with the skills required to perform the work should be included in the
estimating process.
One disadvantage of the bottom-up method is that it is much more time-consuming than other
methods.










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