Project as an Investment

Project is one form of investment.

Investments may be:

1. Direct => Project
2. Indirect => Deposit
Shares
Portofolio
Equity
Etc.

Investment / Project Needs to Consider:

1. Economics => Economic Analysis.
2. Risk => Risk Analysis.

What is Investment for ?

 INVESTMENT => ECONOMIC GROWTH =>

EMPLOYMENT
 (Every 1 % of Economic Growth will produce
about 300.000 Employment)
 For company, Investment/Project will result in
Growth => Increase Profit

CONCEPT OF PROJECT MANAGEMENT HALAMAN 1 dari 27

 ENGINEERING &
CONSTRUCTION PROJECT PHASING

TIME

CONCEPTUAL PLANNING/ IMPLEMENTATION OPERATIONAL

DEFINITION
1. Idea Formulation 6. Firm Identification Of 12. Detailed 18. Start Up And
All Aspects (Scope, Engineering Performance Test
Cost And Schedule) Design
2. Term Of References (TOR) 7. Basic Design 13. Development Of 19. Demobilization
Engineering Specification And And Close-Out
Criteria Report
3. Feasibility Study 8. Making Master 14. Purchasing Of 20. Total Project
Schedule And Cost Equipment And Performance
Development Of Materials Evaluation
Implementation
4. Identify Project Scope 9. Strategy And 15. Fabrication And 21. Routine
Dimension Resources Utilization Construction Operation
Planning
5. Identify Cost And Schedule 10. Early Purchasing 16. Quality
INSPECTION
11. Preparation Of 17. Testing And
Facilities And Commissioning
Participant

Steps 1-9 = FEED (Front End Engineering Design)

CONCEPT OF PROJECT MANAGEMENT HALAMAN 2 dari 27

 WHAT IS A PROJECT

DEFINITION OF A PROJECT
A PROJECT IS ONE-TIME JOB THAT HAS DEFINITE STARTING AND
ENDING POINTS, CLEARLY DEFINED OBJECTIVES, SCOPE AND A
BUDGET.

PMBOK (Project Management Body Of Knowledge) DEFINITION

A PROJECT IS A TEMPORARY ENDEAVOR UNDERTAKEN TO
CREATE A UNIQUE PRODUCT OR SERVICE:
• TEMPORARY MEANS THAT EVERY PROJECT HAS A DEFINITE
BEGINNING AND A DEFINITE END.
• UNIQUE MEANS THAT THE PRODUCT OR SERVICE IS DIFFERENT
IN SOME DISTINGUISHING WAY FROM ALL SIMILAR PRODUCTS
OR SERVICES.

PROJECT CAN BE CONSIDERED TO BE ANY SERIES OF ACTIVITES

AND TASKS THAT:
• HAVE A SPECIFIC OBJECTIVE TO BE COMPLETED WITHIN
CERTAIN SPECIFICATIONS
• HAVE DEFINED START AND END DATES
• HAVE FUNDING LIMIT
• CONSUME RESOURCES

EXAMPLES OF A PROJECT

 DEVELOPING A NEW PRODUCT OR SERVICE

 EFFECTING A CHANGE IN STRUCTURE, STAFFING OR STYLE OF
ORGANIZATION
 DESIGNING A NEW TRANSPORTATION VEHICLE
 DEVELOPING A NEW OR MODIFIED INFORMATION SYSTEM
 CONSTRUCTING A BUILDING OR FACILITY
 RUNNING A CAMPAIGN FOR POLITICAL OFFICE
 IMPLEMENTING A NEW BUSINESS PROCEDURE OR PROCESS
 RUNNING A NEW EVENT

CONCEPT OF PROJECT MANAGEMENT HALAMAN 3 dari 27

 WHAT IS PROJECT MANAGEMENT

DEFINITION OF PROJECT MANAGEMENT

PROJECT MANAGEMENT IS THE PLANNING, ORGANIZING AND
CONTROLLING OF PROJECT ACTIVITIES TO ACHIEVE
PERFORMANCE/QUALITY, COST AND TIME OBJECTIVES FOR A
GIVEN SCOPE OF WORK, WHILE USING RESOURCES EFFICIENTLY
(DO RIGHT THINGS) AND EFFECTIVELY. (DO THINGS RIGHT)

PMBOK DEFINITION:
PROJECT MANAGEMENT IS THE APPLICATION OF KNOWLEDGE,
SKILLS, TOOLS AND TECHNIQUES TO PROJECT ACTIVITIES IN
ORDER TO MEET OR EXCEED STAKEHOLDER NEEDS AND
EXPECTATIONS FROM A PROJECT.

SUCCESSFUL PROJECT MANAGEMENT CAN THEN BE DEFINED

AS HAVING ACHIEVED THE PROJECT OBJECTIVES:
 WITHIN TIME / SCHEDULE
 WITHIN BUDGET COST
 AT THE DESIRED PERFORMANCE / QUALITY

PROJECT MANAGEMENT IS ESPECIALLY INVOLVED IN:

- PROJECT PLANNING
- PROJECT MONITORING AND CONTROLLING

PROJECT PLANNING:
- DEFINITION OF WORK SCOPE AND REQUIREMENT
- DEFINITION OF QUANTITY AND QUALITY OF WORKS
- DEFINITION OF RESOURCES NEEDED

PROJECT MONITORING AND CONTROLLING:

- TRACKING PROJECT PROGRESS
- COMPARING ACTUAL OUTCOME TO PLANNED OUTCOME
- ANALYSING THE IMPACT OF VARIANCES
- MAKING CORRECTIONS OR ADJUSTMENTS

5 M: MEN, MONEY, MACHINE, MATERIAL, METHOD

CONCEPT OF PROJECT MANAGEMENT HALAMAN 4 dari 27

PROJECT STAKEHOLDERS

PROJECT STAKEHOLDERS ARE INDIVIDUALS AND ORGANIZATIONS

WHO ARE ACTIVELY INVOLVED IN THE PROJECT, OR WHOSE
INTERESTS MAY BE POSITIVELY OR NEGATIVELY AFFECTED AS A
RESULT OF PROJECT EXECUTION OR SUCCESSFUL PROJECT
COMPLETION.

KEY STAKEHOLDERS ON EVERY PROJECT INCLUDE:

PROJECT MANAGER
CUSTOMERS
OWNER
SPONSOR - WHO PROVIDES FINANCIAL RESOURCES

THE BASIC FUNDAMENTALS

OF
PROJECT MANAGEMENT
TO PLAN THE WORK (PLANNING)

TO WORK THE PLAN (EXECUTING) OR ORGANISING

TO MONITOR AND CONTROL THE WORK (CONTROLLING)

PROJECT OBSTACLES

IN ACCOMPLISHING A PROJECT WE NEED TO OVERCOME

OBSTACLES, SUCH AS:
 PROJECT COMPLEXITY
 CHANGES IN TECHNOLOGY
 FORWARD PLANNING AND PRICING
 ORGANIZATIONAL RESTRUCTURING
 CUSTOMER'S SPECIAL REQUIREMENTS
 PROJECT RISKS
 ETC.
CONCEPT OF PROJECT MANAGEMENT HALAMAN 5 dari 27
  THE ABOVE FIGURE IS A PICTORIAL REPRESENTATION OF
PROJECT MANAGEMENT.

 THE OBJECTIVE OF THE FIGURE IS TO SHOW THAT PROJECT

MANAGEMENT IS DESIGNED TO MANAGE OR CONTROL
COMPANY RESOURCES ON A GIVEN PROJECT: WITHIN TIME,
WITHIN BUDGET/COST AND AT DESIRED QUALITY.

 TIME, COST AND QUALITY ARE THE CONSTRAINTS ON THE

PROJECT AND IS CALLED PROJECT TRIPLE CONSTRAINTS.

CONCEPT OF PROJECT MANAGEMENT HALAMAN 6 dari 27

 COMPARISON OF PROJECT ACTIVITIES
AND OPERATION ACTIVITIES
THERE ARE MANY DIFFERENCES BETWEEN PROJECT ACTIVITIES AND
OPERATION ACTIVITIES, BUT THE FUNDAMENTAL DIFFERENCE IS
THAT
THE OPERATION ACTIVITIES IS BASED ON THE CONCEPT OF UTILIZING
THE EXISTING FACILITIES SUCH AS PLANT, BUILDING, ETC.
CONTINUOUSLY AND REPEATEDLY, WHILST
PROJECT ACTIVITIES FOCUS ON BUILDING THE SYSTEM OR
FACILITIES WHICH DO NOT EXIST YET.

OPERATION : AS LONG AS
PROJECT : AS QUICK AS, AS CHEAP AS, AS GOOD AS

THE FOLLOWING TABLE SHOWS COMPARISON OF PROJECT ACTIVITIES AND

OPERATION ACTIVITIES:

PROJECT ACTIVITIES OPERATION ACTIVITIES

DYNAMIC & NON ROUTINE.
PROJECT CYCLE RELATIVELY SHORT
INTENSITY OF ACTIVITIES IS FLUCTUATED
ACTIVITIES MUST BE ACCOMPLISHED WITHIN BUDGET
AND SCHEDULE
CONSISTS OF VARIOUS ACTIVITIES WHICH NEED
MANY DISCIPLINES
QUANTITY & VARIATIONS OF RESOURCES NEEDED
ARE FLUCTUATED
REPEATEDLY& ROUTINE.
LONG TERM ACTIVITY
INTENSITY OF ACTIVITIES IS RELATIVELY FLAT
BUDGET & SCHEDULE LIMITS NOT TOO TIGHT
VARIATIONS OF ACTIVITIES NOT TOO MANY
THE REQUIRED RESOURCES ARE RELATIVELY
CONSTANT

PROJECT MANAGEMENT
CONCEPT OF PROJECT MANAGEMENT HALAMAN 7 dari 27
 Vs.
PRODUCTION -MANAGEMENT

PROJECT MANAGEMENT AND PRODUCTION MANAGEMENT ARE

SIMILAR, WITH ONE MAJOR EXCEPTION:

• THE PROJECT MANAGEMENT FOCUSES ON THE END DATE OF

HIS/HER PROJECT.

• WHEREAS THE PRODUCTION MANAGEMENT WANTS HIS/HER

PRODUCT LINE NEVER END TO BE AS LONG-LIVED AND
PROFITABLE, AS LONG AS POSSIBLE.

PROJECT ACTIVITIES BEHAVIOR AND

THE MANAGEMENT REQUIRED

PROJECT ACTIVITIES BEHAVIOR THE MANAGEMENT REQUIRED

DYNAMIC (INTENSITY & ACTIVITIES CHANGED  QUICK RESPONSE TO THE CHANGES.

PROMPTLY).

 NEEDS CLOSE MONITORING AND

CQNTROLLING

 INTEGRATED PLANNING AND

CONTROLLING

NON ROUTINE & TARGET AND TIMING HAVE BEEN  NEEDS HIGH DEDICATION OF TEAM.
DETERMINED.

MULTICOMPLEX WHICH INVOLVING VARIOUS  NEEDS COORDINATION WITH SINGLE

EXPERTISES FROM QUTSIDE AND INSIDE RESPONSIBILITY.
ORGANIZATION.

 SYSTEM APPROACH TO GET EFFICIENCY

OF RESOURCES.

 PRAGMATIC APPROACH AND USING

SYSTEM ANALYSIS IN PLANNING,

ONE TIME JOB AND USUALLY WITH HIGH RISK.  EMPHASIS ON HORIZONTAL
COMMUNICATION
.

RELATIONSHIP OF PROJECT MANAGEMENT

CONCEPT OF PROJECT MANAGEMENT HALAMAN 8 dari 27
 TO OTHER MANAGEMENT DISCIPLINES

 THIS FIGURE IS A CONCEPTUAL VIEW OF THESE RELATIONSHIP

 THE OVERLAPS SHOWN ARE NOT PROPORTIONAL

LIFE CYCLE PHASES

CONCEPT OF PROJECT MANAGEMENT HALAMAN 9 dari 27

EVERY COMPANY, PROJECT OR PRODUCT HAS CERTAIN PHASES OF
DEVELOPMENT.
A CLEAR UNDERSTANDING OF THESE PHASES PERMITS
EXECUTIVES TO BETTER CONTROL TOTAL CORPORATE
RESOURCES IN THE ACHIEVEMENT OF DESIRED GOALS.

THE PHASES OF DEVELOPMENT ARE KNOWN AS LIFE CYCLE PHASES.

HOWEVER, THE BREAKDOWN & TERMINOLOGY OF THESE PHASES
DIFFER, DEPENDING ON WHETHER WE ARE DISCUSSING, PRODUCT,
PROJECT OR COMPANY.

PRODUCT LIFE CYCLES

DURING THE PAST FEW YEARS, THERE HAS BEEN AT LEAST PARTIAL
AGREEMENT ABOUT THE LIFE CYCLE PHASES OF A PRODUCT:

THEY INCLUDE:

• RESEARCH AND DEVELOPMENT (R&D)

• MARKET INTRODUCTION

• GROWTH

• MATURITY

• DETERIORATION

• DEATH

CONCEPT OF PROJECT MANAGEMENT HALAMAN 10 dari 27

THE PROJECT LIFE CYCLE CONSISTS OF:
 CONCEPTUAL
 PLANNING/DEFINITION
 IMPLEMENTATION
 CONVERSION/OPERATIONAL

CONCEPT OF PROJECT MANAGEMENT HALAMAN 11 dari 27

 CONCEPTUAL DEVELOPMENT DEFINITION IMPLEMENTATION TERMINATION
& DESIGN (CONSTRUCTION) (CONVERSION)
Evaluates Organizational Product and Assign Work To Provide
potential Structure Process Design Participants Information
alternatives Cost, Schedule
Assessment of Communication, Specifications Monitoring Actual and Resources
costs Procedures & Progress utilization
Authorization Detail WBS Variance Analysis &
Corrective Actions
Financing options Budgets
Technological System and Scheduling & Reliable Progress
Aspects Performances Cost Information Follow - Up
Reporting
Potential Markets Contingency
& Competition Plans for High
Risk Activities
Selection of
Projects Based
On Profit-ability &
L
Risks

CONCEPT OF PROJECT MANAGEMENT HALAMAN 12 dari 27

 COMPANY LIFE CYCLES

THE LIFE CYCLE OF A COMPANY CONSISTS OF:

 GROWING STAGE
 COURTSHIP
 INFANT
 GO-GO
 ADDOLESCENCE
 PRIME
 STABLE

 AGING STAGE
 ARISTOCRACY
 EARLY BUREAUCRACY
 BUREAUCRACY
 DEATH

CONCEPT OF PROJECT MANAGEMENT HALAMAN 13 dari 27

 STRATEGIC & TACTICAL ISSUES OF PROJECT
THE LONG-RANGE (STRATEGIC) AND MEDIUM-RANGE (TACTICAL)
ISSUES THAT ARE RELEVANT TO MANY TYPES OF PROJECT ARE:

I. CONCEPTUAL PHASE
 INITIATES AND EVALUATES POTENTIAL PROJECT ALTERNATIVE
 THE SELECTION OF PROJECT IS A STRATEGIC DECISION BASED
ON GOALS, NEEDS AND LONG TERMS COMMITMENTS
 TO CONSIDER EXPECTED BENEFITS, ASSESMENT OF COSTS
AND RISKS, ESTIMATES OF REQUIRED RESOURCES
 TECHNOLOGICAL ASPECTS SUCH AS AVAILABILITY AND
MATURITY OF THE REQUIRED TECHNOLOGY, ITS PERFORMANCE
AND EXPECTED USAGE IN SUBSEQUENT PROJECTS
 ENVIRONMENTAL FACTORS RELATED TO GOVERNMENT
REGULATIONS, POTENTIAL MARKETS AND COMPETITION MUST
ALSO BE ANALYZED
 THE SELECTION OF PROJECT IS BASED ON GOALS AND
PERFORMANCE MEASURES, INCLUDING EXPECTED COST,
PROFITABILITY AND RISK

2. DEVELOPMENT PHASE:
 ORGANIZATIONAL STRUCTURE IS FORMED BY WEIGHING THE
TACTICAL ADVANTAGES AND DISADVANTAGES OF PROJECT
ORGANIZATION TYPES.
 ONCE A DECISION IS MADE, LINE OF COMMUNICATION AND
PROCEDURES FOR WORK AUTHORIZATION AND PERFORMANCE
REPORTING ARE ESTABLISHED.

3. DEFINITION & DESIGN ENGINEERING PHASE:

 PRODUCT AND PROCESS DESIGN
 FINAL PERFORMANCE REQUIREMENTS
 DETAILED WORK BREAKDOWN STRUCTURE (WBS)
 SCHEDULING AND COST INFORMATION
 DETAILED CONTINGENCY PLANS FOR HIGH RISK ACTIVITIES
 BUDGET
 EXPECTED CASH FLOWS

4. IMPLEMENTATION/CONSTRUCTION PHASE:
CONCEPT OF PROJECT MANAGEMENT HALAMAN 14 dari 27
 • THE CRITICAL STRATEGIC ISSUES HERE RELATES TO
MAINTAINING TOP MANAGEMENT SUPPORT
• THE CRITICAL TACTICAL ISSUES CENTER ON THE FLOW OF
COMMUNICATIONS WITHIN AND AMONG THE PROJECT
PARTICIPANTS
• THROUGHOUT THIS PHASE, MGNT’s TAKS IS TO ASSIGN WORKS
TO PROJECT PARTICIPANTS TO MONITOR ACTUAL PROGRESS
AND COMPARE IT TO THE BASELINE PLANS

5. TERMINATION PHASE :
 IN THIS PHASE, MGMT's GOALS IS TO CONSOLIDATE WHAT IT HAS
LEARNED AND TRANSLATE THIS KNOWLEDGE INTO ON GOING
IMPROVEMENTS IN THE PROCESS
 DATA BASES THAT STORE INFORMATION ON COST, SCHEDULE,
RESOURCES UTILIZATION, ETC. ARE ASSETS OF AN
ORGANIZATION
 READILY AVAILABLE, ACCURATE INFORMATION IS A KEY FACTOR
IN THE SUCCESS OF FUTURE PROJECTS

TYPICAL

CONCEPT OF PROJECT MANAGEMENT HALAMAN 15 dari 27

 TOTAL PROJECT LIFE CYCLE

TIME

PLAN ACCOMPLISH

PHASE I PHASE II PHASE III PHASE IV

CONCEPT DEVELOPMENT IMPLEMENTATION TERMINATION
CONCEIVE DEVELOP EXECUTE FINISH
GATHERED DATA APPOINT KEY TEAM SET UP: FINALIZED PRODUCT
MEMBER
IDENTIFIED NEED CONDUCT STUDIES - ORGANIZATION REVIEV AND ACCEPT
ESTABLISH: DEVELOP SCOPE - COMMUNICATION SETTLE FINAL ACTS
BASELINE:
 GOALS,  END PRODUCT MOTIVATE TEAM TRANSFER PRODUCT
OBJECTIVE RESPONSIBILITY
 BASIC ECONOMICS  QUALITY DETAIL TECHNICAL EVALUATE PROJECT
FEASIBILITY STANDARDS REQUIREMENT
 STAKE HOLDERS  RESOURCES ESTABLISH: DOCUMENT RESULT
 RISK LEVEL  ACTIVITIES - WORK PACKAGES RELEASE/REDIRECT
RESOURCES
 STRATEGY ESTABLISH: - DETAILED SCHEDULE REASSIGN PROJECT
TEAM
 POTENTIAL TEAM  MASTER PLAN - INFORMATION CONTROL
SYSTEM
GUEST/ESTIMATE  BUDGET, PROCURE GOODS & SERVICES
RESOURCES CASHFLOW
IDENTIFY  WBS EXECUTE WORK PACKAGES
ALTERNATIVES
PRESENT PROPOSAL  POLICIES & DIRECT/MONITOR/FORECAST/
PROCEDURES CONTROL:
OBTAIN APPROVAL ASSESS RISK - SCOPE
FOR NEXT PHASE
CONFIRM - QUALITY
JUSTIFICATION
PRESENT PROSPECT - TIME
BRIEF
OBTAIN APPROVAL - COST
TO PROCEED
RESOLVE PROBLEM

MATRIX OF PROJECT PHASES

CONCEPT OF PROJECT MANAGEMENT HALAMAN 16 dari 27
 PETROCHEMICAL PROJECT
PHASE I - PROJECT CRITERIA
GOAL: INDUSTRIAL PETROCHEMICAL PROJECT
- MARKETING ANALYSIS - COMMUNITY CONCERNS
- END PRODUCTS - ENVIRONMENTAL
- RAW MATERIAL CONCERNS
REQUIREMENTS - PROFITABILITY & RISKS
- FINANCING OPTIONS
- SAFETY ISSUES

PHASE II - CONCEPTUAL ENGINEERING

GOAL: TECHNOLOGY UTILIZED (MOST COST-EFFECTIVE)
PROCESS CONCEPT VALUE ENGINEERING
STANDARDS
• OPERATIONAL EASE - HIGH RELIABILITY
• LOW DOWNTIME - LOW OPERATIONS &
• COMPETITIVENESS MAINTENANCE
• LOW COST OF CONSUMPTION (O&M)COSTS
• ENVIRONMENTAL - OPTIMUM LIVE OF
COMPABILITY EQUIPMENT

PHASE III – BASIC ENGINEERING

GOAL: MAXIMUM OVERALL PERFORMANCE/COST RATIO
PROCESS CONFIGURATION MATERIAL & EQUIPMENT
DATABASE
• FLOW SHEETS (FINALIZED) - ACCURATE SPECIFICATION
• SUPPLIERS SELECTION FOR AND TYPES OF GENERIC
MAJOR PROCESS EUIPMENT COMPONENTS
• SITE AND PROCESS AREA
LAYOUT
• PROCESS CONTROL SYSTEM

PHASE IV - DETAIL ENGINEERING

GOAL: THE FUNCTIONAL PROCESS AND
COST-EFFECTIVE CONSTRUCTION
CONCEPT OF PROJECT MANAGEMENT HALAMAN 17 dari 27
 • DESIGN CONSTRUCTIBILITY
• PROPER CONSTRUCTION AND DOCUMENTATION
• ECONOMICAL PROCUREMENT OF MATERIAL
• WORK PACKAGE REQUISITIONS FOR ON-TIME CONSTRUCTION

PHASE V - CONSTRUCTION
GOAL: HIGH QUALITY WORK, ON TIME, WITHIN BUDGET
• SAFETY PROCEDURES FOLLOWED
• PRECISE PLANNING
• FUNCTIONAL CONTRACT FORMS
• RELIABLE PROGRESS FOLLOW-UP

PHASE VI – COMMISSIONING AND START-UP

GOAL: SMOOTH HAND OVER FROM CONSTRUCTION TO PRODUCTION
• EFFECTIVE TEST LOOP - PARTICIPATION OF
PROGRAM OPERATION PERSONNEL
• EXACT SCHEDULING EARLY IN THE PROJECT
• WELL DEFINED AND - RESPONSIBILITES OF ALL
DOCUMENTED OPERATING PARTICIPANTS WELL
INSTRUCTION DEFINED

THE ROLE OF PROJECT MANAGER

THE PROJECT MANAGEMENT SUBSYSTEMS

The project management system consists of 7 subsystems

1. Human
2. Methods
3. Culture
4. Organization
5. Planning
6. Information
7. Control

CONCEPT OF PROJECT MANAGEMENT HALAMAN 18 dari 27

THE ROLE OF PROJECT MANAGER

THE PROJECT MANAGER (PM) IS RESPONSIBLE, FOR COORDINATING

AND INTEGRATING ACTIVITIES ACROSS MULTIPLE FUNCTION LINES.
IN ORDER TO DO THIS, PM NEEDS STRONG COMMUNICATIVE AND
INTERPERSONAL SKILLS,

A PM MUST NOT ONLY BE ABLE TO MANAGE THE ENGINEERING,

PROCUREMENT AND CONSTRUCTION ASPECTS OF A PROJECT, HE
OR SHE MUST ALSO BE ABLE TO MANAGE ASPECTS RELATING TO
FINANCE, COST ENGINEERING, INFLATION AND COST ESCALATION,
PUBLIC AND CLIENT RELATIONS AND RISKS ANALYSIS.

CONCEPT OF PROJECT MANAGEMENT HALAMAN 19 dari 27

THE ROLE OF PM CAN BE DESCRIBED AS:
 MANAGING HUMAN INTERRELATIONSHIP IN THE PROJECT
ORGANIZATION
 MAINTAINING THE BALANCE BETWEEN TECHNICAL AND
MANAGERIAL PROJECT FUNCTIONS
 COPING WITH RISK ASSOCIATED WITH PROJECT MANAGEMENT
 SURVIVING ORGANIZATIONAL RESTRAINTS

o Scheduling and time management skills

o Budgeting and cost skills
o Marketing, contracting, customer relationship skills
o Negotiating skills
o Technical skills (scope of projects)
o Leadership skills (goal, performance measures)
o Resource Management, human relationship skills
o Communication skills

CONCEPT OF PROJECT MANAGEMENT HALAMAN 20 dari 27

 PROJECT ORGANIZATION
 Organization can be defined as groups of people who must coordinate
their activities in order to meet organizational objectives
 In general, organizing is to arrange the corporate resources (5 m's =
men, materials, machines, money and management, methods) in a
synchronous action to achieve corporate objectives effectively and
efficiently.
 The coordination function requires strong communications and a clear
understanding of the relationships and interdependencies among
people, so that authority, responsibility and accountability of each
member can be described clearly.
 Authority is the power granted to individuals so that they can take
decisions for others to follow.
 Responsibility is the obligation incurred by individuals in their roles in the
organization in order to effectively perform assignments.
 Accountability is the state of being totally answerable for the satisfactory
completion of a specific job
Accountability = Authority + Responsibility

THERE ARE MANY TYPES OF PROJECT ORGANIZATION, BUT ONLY 3

PROJECT ORGANIZATIONS TO BE DISCUSSED

• CONVENTIONAL/FUNCTIONAL. PROJECT ORGANIZATION

• PURE PROJECT ORGANIZATION
• MATRIX PROJECT ORGANIZATION

THE BASIC FACTORS THAT INFLUENCE THE SELECTION OF

PROJECT ORGANIZATION STRUCTURE:

• PROJECT SIZE
• PROJECT LENGTH
• PHILOSOPHY & VISIBILITY OF TOP MANAGEMENT
• PROJECT LOCATION
• AVAILABLE RESOURCES
• UNIQUE ASPECTS OF THE PROJECT

CONCEPT OF PROJECT MANAGEMENT HALAMAN 21 dari 27

CONCEPT OF PROJECT MANAGEMENT HALAMAN 22 dari 27
 PROJECT ORGANIZATION
Comparison of Pure Project Organization
And Matrix Project Organization
For Various Phenomena
PHENOMENA PURE PROJECT MATRIX PROJECT
ORGANIZATION ORGANIZATION
 Effectiveness to achieve V
quality and schedule
 Efficiency In utilizing V
resources
 Big project V
 Improvement of human V
resources
 Ability to manage multi V
project
 Career development V
 Personal commitment to V
meet target
 Conflicts (internal and V
external)

Organizational Structure Influences on Projects

Organization Type
Project Functional Matrix Pure Project
Characteristics
Project Manager’s Little or None Limited Low to Moderate Moderate to High High to almost
Authority Total
Percent of Virtually None 0-25 % 15-60 % 50-95 % 85-100 %
performing
Organization’s
Personnel
Assigned Full-
time to Project
Work
Project Manager’s Part-time Part-time Full-time Full-time Full-time
Role
Common Titles Project Project Project Manager / Project Manager / Project Manager /
for Project Coordinator / Coordinator / Project Officer Program Manager Program Manager
Manager’s Role Project Leader Project Leader
Project Part-time Part-time Part-time Full-time Full-time
Management
Administrative
Staff

PROJECT MANAGERS VERSUS PROJECT CHAMPIONS

Project Managers
 Prefer to work in groups
 Committed to their managerial and technical responsibilities
 Committed to the corporation
CONCEPT OF PROJECT MANAGEMENT HALAMAN 23 dari 27
  Seek to achieve the objective
 Are willing to take risks
 Seek what is possible
 Think in terms of short time spans
 Manage people
 Are committed to and pursue material Values

Project Champions

 Prefer working individually

 Committed to technology
 Committed to the profession
 Seek to exceed the objective
 Are unwilling to take risks; try to test everything
 Seek perfection
 Think in terms of long time spans
 Manage things
 Are committed to and pursue intellectual values

Transition from Engineer to Manager

TABLE 1A.-2 ENGINEERING VERSUS MANAGEMENT
What engineers do What managers do
Minimize risks, emphasize accuracy and Take calculated risks, rely heavily on
mathematical precision intuition, take educated guesses, and try
to be "about right"
Exercise care in applying sound Exercise leadership in making decisions
scientific methods, on the basis of under widely varying conditions, based
reproducible data on sketchy information
Solve technical problems based on their Solve techno-people problems based on
own individual skills skills in integrating the talents and
behaviors of others
Work largely through their own abilities Work through others to get things done
to get things done

MANAGEMENT LEADERSHIP
Compliance Commitment
Doing Things Right Doing The Right Things
Administration Innovation
Maintenance Development
CONCEPT OF PROJECT MANAGEMENT HALAMAN 24 dari 27
 System /Structure People/Trust
Short Range Long Range
I-low Why
Control Empowerment
Accept status quo Challenge Status Quo

PROJECT UNCERTAINTY
IN PROJECT MANAGEMENT IT IS COMMON TO REFER TO VERY HIGH
LEVELS OF UNCERTAINTY AS SOURCE OF RISK

PRINCIPAL SOURCES OF UNCERTAINTY ARE:

1. UNCERTAINTY IN SCHEDULING
 CHANGES IN THE ENVIRONMENT THAT ARE IMPOSSIBLE TO
FORECAST ACCURATELY AT OUT SET OF A PROJECT, WILL HAVE
A CRITICAL IMPACT ON THE PROJECT SCHEDULE
 METHODS ARE NEEDED TO DEAL WITH PROBLEMATIC TIME
ESTIMATES
 PROBABILITY THEORY AND SIMULATION HAVE BEEN USED
SUCCESFULLY FOR THIS PURPOSE

2. UNCERTAINTY IN COST
 LIMITED INFORMATION ON THE DURATION OF PROJECT
ACTIVITIES MAKES IT DIFFICULT TO PREDICT THE AMOUNT OF
RESOURCES NEEDED TO COMPLETE THEM ON SCHEDULE
 ALSO, THE EXPECTED HOURLY RATE OF RESOURCES AND THE
COST OF MATERIALS USED TO CARRY OUT PROJECT WILL
POSSESS A HIGH DEGREE OF UNCERTAINTY

CONCEPT OF PROJECT MANAGEMENT HALAMAN 25 dari 27

3. TECHNOLOGICAL UNCERTAINTY
 THIS FORM OF UNCERTAINTY IS USUALLY PRESENT IN
PROJECTS WHERE NEW TECHNOLOGIES ARE DEVELOPED
AND/OR EMPLOYED
 TECHNOLOGICAL UNCERTAINTY MAY AFFECT THE SCHEDULE,
THE COST AND THE ULTIMATE SUCCESS OF THE PROJECT

THERE ARE OTHER SOURCE OF UNCERTAINTY INCLUDING THOSE OF

AN ORGANIZATIONAL AND POLITICAL NATURE, SUCH AS:
• NEW REGULATIONS MIGHT AFFECT THE MARKET FOR PRODUCTS
OF A PROJECT
• THE TURNOVER OF PERSONNEL AND CHANGES IN THE POLICIES
OF THE PARTICIPATING ORGANIZATIONS MAY DISRUPT THE FLOW
OF WORK

LAW OF PROJECT MANAGEMENT

1. NO MAJOR PROJECT IS EVER INSTALLED ON TIME, WITHIN BUDGET,
OR WITH THE SAME STAFF THAT STARTED IT. YOURS WILL NOT BE
THE FIRST.

2. PROJECTS PROGRESS QUICKLY UNTIL THEY BECOME 90%

COMPLETE, THEN THEY REMAIN AT 90% COMPLETE FOREVER

3. ONE ADVANTAGE OF FUZZY PROJECT OBJECTIVES IS THAT THEY

LET YOU AVOID THE EMBARRASMENT OF ESTIMATING THE
CORRESPONDING COSTS

4. IF PROJCECT CONTENT IS ALLOWED TO CHANGE FREELY, THE

RATE OF CHANGE WILL EXCEED THE RATE OF PROGRESS.

5. A CARELESS PLANNED PROJECT WILL TAKE THREE TIMES LONGER

TO COMPLETE THAN EXPECTED; A CAREFULLY PLANNED PROJECT
WILL TAKE ONLY TWICE AS LONG

6. PROJECT TEAMS DETEST PROGRESS REPORTING BECAUSE IT

VIVIDLY MANIFEST THEIR LACK OF PROGRESS

CONCEPT OF PROJECT MANAGEMENT HALAMAN 26 dari 27

CONCEPT OF PROJECT MANAGEMENT HALAMAN 27 dari 27