Part 4: Governance of project-based

management • PART 4: Governance

• Chapter 16: Project oversight
Project management: the managerial process

• Chapter 12: Outsourcing: managing

interorganizational relations
Project Management: The managerial process

• Chapter 15: International projects

Project management: The managerial process

Project Management
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Where we are now

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 Project oversight

• Project Oversight – done/lead by PO and with “helicopter

perspective”
• A set of principles and processes to guide and improve the
management of projects.
• Oversight’s Purposes:
• To ensure projects meet the organizational needs for
standards, procedures, accountability, efficient allocation of
resources, and continuous improvement in the management
of projects
• To support the project manager

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 Oversight activities
• Atthe Organization Level
•Project selection.
•Portfolio management.
•Improving how all projects are
managed over time.
• Assessing and elevating the
maturity
level of the organization’s project
management system.
• Using balanced scorecard approach
to review progress on strategic
priorities.
• At the Project Level
• Review projects’ objectives.
• Decide on issues raised by the
project manager.
• Track and assist the project to
resolve bottlenecks.
• Review status reports from the
project manager.
• Audit and review lessons learned.
• Authorize major deviations from
the original scope.
• Cancel the project.
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 Importance of Oversight
to the Project Manager

• Oversight Functions:
• Providing support and help to the project manager
where needed.
• Determining the environment in which the project manager
will implement his or her project.
• Influence the performance measures used to hold the project
manager responsible and accountable.
• Providing the oversight group to which the project manager
will be reporting at predetermined phases in the project.

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 Current and Future Trends
in Project Management

• Forces for Change

• Global competition, knowledge explosion, innovation,
time to market, and shortened product life cycles

• Two Major Outcomes for the 21st Century:

• An increase in the scope of project management and
system integration.
• The focus of projects has shifted from tactical to
strategic.
• An increasing discipline in the way projects are
managed.

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Increasing Scope of Project Management
and System Integration

• Portfolio Project Management

• The centralized management of projects to ensure that
the allocation of resources to projects is directed
toward projects that contribute the greatest value to
organization goals.
• Project Office (PO)
• The unit responsible for continued support of consistent
application of selection criteria, standards, and
processes; training of and general assistance to project
managers; and continued improvement and use of best
practices.

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 Phase Gate Methodology

• Phase Gate Review Process (= in-depth review of individual

projects in specific phases by so-called gatekeepers)
• A structured process to review, evaluate, and document
outcomes in each project phase and to provide
management with information to guide resource
deployment toward strategic goals.
• Decision Gate Components
1. Required deliverables
2. Gate criteria and specific outputs
3. A clear yes/no decision on whether to go ahead.
 Organization Project Management
in the Long Run

• Capability Maturity Model (CMM)

• Focuses on guiding and assessing organizations in
implementing concrete best practices of managing software
development projects. (outcome of study in late 80s)

Later in 2004: Project Management Institute:

• Organizational Project Maturity Model (now OPM3)
• Is divided into a continuum of growth levels: initial,
repeatable, defined, managed, and optimized (5 steps in
maturity in PM).
 The BSCM

• Balanced Scorecard Model

• Assumes that people will take the necessary actions to
improve the performance of the organization on the given
measures and goals.
• Reviews projects over a longer horizon—5 to 10 years after
the project is implemented than other models.
• Has a more “macro” perspective than project selection
models: answers the questions
• did we select the right projects?
• did these contribute to the long term strategic direction of
the firm?
• Measures performance results for four major areas of
activities (so is limited to)—customer, internal process,
innovation and learning, and financial.
 Key terms

Balance scorecard
Oversight
Phase gating
Portfolio management
Project management maturity
Project office (PO)
Part 4: Governance of project-based
management • PART 4: Governance
• Chapter 16: Project oversight
Project management: the managerial process

• Chapter 12: Outsourcing: managing

interorganizational relations
Project Management: The managerial process

• Chapter 15: International projects

Project management: The managerial process

Project Management
03-12-19 | 12
Where we are now

Project Management
03-12-19 | 13
 Introduction to project partnering

• Partnering
• A process of transforming contractual arrangements into a cohesive, collaborative
team that deals with issues and problems encountered to meet a customer’s
needs.
• Assumes that the traditional adversarial (opposition) relationship between the owner
and contractor is ineffective and self-defeating.
• Assumes that both parties share common goals and mutually benefit from the
successful completion of projects.
• Factors favoring partnering:
• Existence of common goals
• High costs of the adversarial approach
• Shared benefits of the collaborative approach
Outsourcing project work

• Advantages • Disadvantages
• Cost reduction • Coordination
breakdowns
• Faster project
completion • Loss of control
• High level of expertise • Interpersonal conflict
• Flexibility • Security issues

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Strategies for Communicating
with Outsourcers

STRATEGY 1: Recognize cultural differences

STRATEGY 2: Choose the right words

STRATEGY 3: Confirm your requirements

STRATEGY 4: Set deadlines

 Pre-project Activities—Setting the Stage
for Successful Partnering

• Selecting a Partner(s)
• Voluntary, experienced, willing,
with committed top management.
• Team Building: The Project Managers
• Build a collaborative relationship among
the project managers.
• Team Building: The Stakeholders
• Expand the partnership commitment to include other
key managers and specialists.
 Project Implementation—Sustaining
Collaborative Relationships

• Establish a “we” as opposed to “us and them” attitude

toward the project.
• Co-location: employees from different organizations
work together at the same location.
• Establish mechanisms that will ensure the relationship
withstands problems and setbacks.
• Problem resolution
• Continuous improvement
• Joint evaluation
• Persistent leadership
 Project Completion—Celebrating Success

• Conduct a joint review of accomplishments

and disappointments.
• Hold a celebration for all project participants.
• Recognize special contributions.
 Why project partnering fails

• Causes of Partnering Failures

• Senior management fails to address problems or does not
empower team members to solve problems.
• Cultural differences are not adequately dealt with
such that a common team culture develops.
• No formal evaluation process is in place to identify problems
and opportunities at the operating level or to assess the
current state of the partnering relationship.
• A lack of incentive for continuous improvement by contractors
participating in the partnering relationship.
 Advantages of long-term partnerships

• Reduced administrative costs

• More efficient utilization of resources
• Improved communication
• Improved innovation
• Improved performance
The art of negotiating

• Project management is NOT a contest.

• Everyone is on the same side—OURS.
• Everyone is bound by the success of the
project.
• Everyone has to continue to work together.
• Principled Negotiations
• Separate the people from the problem
• Focus on interests, not positions
• Invent options for mutual gain
• When possible, use objective criteria
 The art of negotiating (part two)

• Dealing with Unreasonable People

• If pushed, don’t push back.
• Ask questions instead of making statements.
• Use silence as a response to unreasonable demands.
• Ask for advice and encourage others to criticize your ideas
and positions.
• Use Fisher and Ury’s best alternative to a negotiated
agreement (BATNA) concept to work toward a win/win
scenario.
 Managing Customer Relations

• Customer Satisfaction
• The negative effect of dissatisfied customers on a firm’s
reputation is far greater than the positive effect of satisfied
customers.
• Every customer has a unique set of performance expectations
and met-performance perceptions.
• Satisfaction is a perceptual relationship:
Perceived performance
Expected performance
• Project managers must be skilled at managing both customer
expectations and perceptions.
 Managing Customer Relations (cont’d)

• Managing Customer Expectations

• Don’t oversell the project; better to undersell.
• Develop a well-defined project scope statement.
• Share significant problems and risks.
• Keep everyone informed about the project’s progress.
• Involve customers early in decisions about project
development changes.
• Handle customer relationships and problems in an
expeditious, competent, and professional manner.
• Speak with one voice.
• Speak the language of the customer.
 Key Terms

• Best alternative to a negotiated agreement (BATNA)

• Co-location
• Escalation
• Met-expectations model
• Outsourcing
• Partnering charter
• Principled negotiation
Part 4: Governance of project-based
management • PART 4: Governance
• Chapter 16: Project oversight
Project management: the managerial process

• Chapter 12: Outsourcing: managing

interorganizational relations
Project Management: The managerial process

• Chapter 15: International projects

Project management: The managerial process

Project Management
03-12-19 | 27
Where we are now

Project Management
03-12-19 | 28
 International Projects

• Types of Projects
• Domestic
• Overseas
• Foreign
• Global
• Issues in Managing International Projects
• Environmental factors affecting projects
• Global expansion considerations
• Challenges of working in foreign cultures
• Selection and training of overseas managers
 International Assignments
• Positives
• Increased income
• Increased responsibilities
• Career opportunities
• Foreign travel
• New lifetime friends
• Negatives
• Absence from home and friends,
and family
• Personal security risks
• Missed career opportunities
• Difficulties with foreign language,
culture, and laws
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 Environmental Factors

• Legal/Political
• Political stability
• National and local laws and regulations
• Government, state and local bureaucracies
• Government interference or support
• Government corruption
• Security
• International terrorism
• National and local security
• Local crime and kidnapping
• Risk management
 Environmental Factors (cont’d)

• Geography
• Climate and seasonal differences
• Natural obstacles
• Economic
• Gross domestic product (GDP)
• Protectionist strategies and policies
• Balance of payments
• Currency convertibility and exchange rates
• Inflation rates
• Local labor force: supply, educational and skill levels
 Environmental Factors (cont’d)

• Infrastructure
• Telecommunication networks
• Transportation systems
• Power distribution grids
• Unique local technologies
• Educational systems
• Culture
• Customs and social standards
• Values and philosophies
• Language
• Multicultural environments
 Cross-Cultural Considerations:
A Closer Look

• Culture
• A system of shared norms, beliefs, values, and customs that bind people together,
creating shared meaning and a unique identity.
• Cultural Differences:
• Geographic regions
• Ethnic or religious groups
• Language
• Economic
 Cross-Cultural Considerations… (cont’d)

• Ethnocentric Perspective
• The tendency to believe that one’s cultural values and ways of doing things are
superior to all others
• Wanting to conduct business only on your terms and stereotyping other countries.
• Ignoring the “people factor” in other cultures by putting work ahead of building
relationships.
• Adjustments Required:
• Relativity of time and punctuality
• Culture-related ethical differences
• Personal and professional relationships
• Attitudes toward work and life
 Cross-Cultural Orientations

• Relation to Nature
• How people relate to the natural world around them
and to the supernatural.
• Time Orientation
• The culture focus on the past, present, or future.
• Activity Orientation
• How to live: “being” or living in the moment, doing, or
controlling.
• Basic Nature of People
• Whether people viewed as good, evil, or some mix of
these two.
• Relationships Among People
• The degree of responsibility one has for others.
 Working in Different Cultures

• Relying on Local Intermediaries

• Translators
• Social connections
• Expeditors
• Cultural advisors and guides
• Culture Shock
• The natural psychological disorientation that people suffer when they move into a
different culture.
• A breakdown in a person’s selective perception and effective interpretation system
induced by foreign stimuli and the inability to function effectively in a strange land.
 Working in Different Cultures (cont’d)

• Coping with Culture Shock

• Create “stability zones” that closely create home
• Modify expectations and behavior
• Redefine priorities and develop realistic expectations
• Focus on most important tasks and relish small accomplishments
• Use project work as a bridge until adjusted
to the new environment
• Engage in regular physical exercise programs, practice meditation and relaxation
exercises,
and keep a journal
 Selection and Training for
International Projects

• Selection Factors
• Work experience with cultures other than one’s own
• Previous overseas travel
• Good physical and emotional health
• Knowledge of a host nation’s language
• Recent immigration background or heritage
• Ability to adapt and function in the new culture
Selection and Training for
International Projects (cont’d)

• Areas for Training to Increase Understanding of

a Foreign Culture:
• Religion
• Dress codes
• Education system
• Holidays—national and religious
• Daily eating patterns
• Family life
• Business protocols
• Social etiquette
• Equal opportunity
 Key Terms

Cross-cultural orientations
Culture
Culture shock
Infrastructure