Project Management

Lecture April 7, 2011

Overview
Project planning III
Repetition Project Organization
Summary

Model of Project Control Project control Project planning content / deliveries start and end date team members budget
adaptation
discrepancies Real values Real values

Target values

Monitoring

Control
Activities

Project execution
disturbance

scope change capacity problems inter personal problems

From the Structure to Scheduling of a Project Work breakdown structure

Work package

Schedule (e.g. network)

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B Create list of requirements D Conduct Feasibility study A Project organization C Project schedule

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E Phase plan Projektmmgt creation F Project report study

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G Design system concept

H Determine functions

I Phase plan concept

J Determine development process

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Project report Concept

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Work Flow
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Example: Gantt-Chart

Determine Critical Path 1. step: forward calculation

earliest starting date estimated duration earliest finishing date

Activity 1 2 2 3

Activity 3
3 2 5

Activity 5
5 0 9

Project start

project end

0
0 5 5 5 1 6 6 2 8

Activity 2
0 0 5

Activity 4
6 1 7

Activity 6
7 1 9

latest start

Total float

latest finishing date

2. step: backward calculation

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Principles of Cost Estimation in Projects

Top-down (global) estimation methods
For a fast and easy, approximate estimation of projects cost. Uses parameters, key data (e.g. per volume)

Bottom-up (analytical, AP-based) estimation methods

Basis for detailed project cost planning Basis for cost based project controlling Type of cost

Allocation

Work package costs

Project costs (PC)

PC over time

Work packages

Project Organization

Project Organization: Introduction

Classical (permanent) organization structure of a company
Determines leadership structure and organizational rules to manage the task Set up for recurring, well-known transaction Mostly skill-orientated structure

But projects require:

Intensive interdisciplinary cooperation Specific tasks and workflows Specific leadership and motivation of employees Particular leadership tasks and structure

=> Project organization

Definition: Project Organization

The term project organization refers to the organization, which is assigned with a project and its integration in the existing organization of the company.
(Kummer: Projektmanagement. 1986. S. 41)

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Organizational Structure of a Project

Organization

Structure

Process

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Tasks of the Structural Organization

Result- and fact oriented arrangement of the functional structure of the project

Clear allocation of task, responsibilities and competencies

Effective collaboration and cooperation of all parties concerned in the project

Fast alignment of the project organization to changes in the objectives and boundary conditions
Source: Litke, H.-D.: Projektmanagement. Hanser 1995

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People in Projects Expert committee Steering committee

Project leader
Special functions

Project team

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People in Projects Expert committee Steering committee

Project leader
Special functions

Project team

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Steering Committee
Temporary, project accompanying committee Superior authority to project leader and project team (to be reported to) Gives a summary of decision-makers and responsible persons for the project (e.g. later user, system responsibility, commercial responsibility) Take essential decisions for project together Task ends after project is finished

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Main Tasks of a Steering Committee

Principals representative of the interests, the participating divisions in the project or outsider Definition of project objectives and project tasks (together with project manager) Agreement and assignment of members to the consulting team Controlling and approval of the project plan Setting priorities Verification and approval of the elaborated phase results Support and advice of all major occurring problems Make decisions, which exceed competency of the project manager Resource allocation Mediation if conflicts occur Enforcement of outside related topics of the project

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Steering Committee
Composition
1 representative of each relevant hierarchy level/line Representatives of each essential involved parties Project manager Experts Possibly representatives of external groups (political representatives)

Criteria to choose members

Position, which enhance the implementation of the project Expertise Position as an information carrier Involvement

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People in Projects

Expert committee Fachausschuss

Lenkungsausschuss Steering committee

Project leader Projektleitung Spezielle Special functions Funktionen

Project team Projektteam

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Expert Committee
Should inform, support and advice the project team

Placement of expertise in terms of effects, risks, accompaniment

To carry out results of the project team into special fields

Committee with supporting and advising function, but without decision-making authority

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People in Projects Expert committee Fachausschuss Lenkungsausschuss Steering committee

Project leader Projektleitung Spezielle Special functions Funktionen

Project team Projektteam

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Project Management
Is in charge of the attainment of the project goal, as regards content as well as competence Has the duty to assure the best possible success of the project, technical as well as economical Prerequisites to carry out this duty:
Clear project brief Objectives which are agreed on, realizable and measurable Well-defined area of responsibility Sufficient resources Duty of the Congruent tasks and authorities

project management to intervene or to refuse if those terms are not fulfilled!

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Tasks of the Project Management

To plan the project

To align tasks, competencies, responsibilities, resources

To set priorities To assure and control system and project tasks To push the project, evolve initiative To take action to realize the project within the given specification (activity, costs, deadlines) To clear up conflicts

To prepare and procure decisions

To initiate contacts

To assure communication
To lead and motivate the project team
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People in Projects Expert committee Steering committee

Project leader
Special functions

Project team

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People in Projects Expert committee Fachausschuss Lenkungsausschuss Steering committee

Project leader Projektleitung Spezielle Special functions Funktionen

Project team Projektteam

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Special Functions
Consulting in methodology Documentation management Liaison people (to the concerned parties)

Power promoter Technical promoter

Social promoter

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Overview of the Project and Organization Structures

Pure project organization

Influence project organization Matrix project organization

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Pure Project Organization (1)

Board of Management

Department A

Department B

Department C

Projekt A
PM A

Projekt B
PM B

Source: Litke, H.-D.: Projektmanagement. Hanser 1995

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Pure Project Organization (2)

Virtually separate organization for a project Managed in full responsibility by the project leader

Project team members are displaced, delegated for the duration of the project
Project team members get only briefed by the project manager

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Pros and Cons of a Pure Project Organization

+ Full concentration of all involved members to the project goals + High identification with the project + Full line authority of the project manager + Clear managerial authority + Taut leadership of the project

+ Fast reaction to changes/ disturbances

+ Fast coping with difficulties - Allocation of requisite dedicated resources - Little exchange of specialists with divisions

- Problematic capacity utilization of specialists

- Critical reintegration of the team members at the end of the project
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When is a Pure Project Organization Appropriate?

Extraordinary intention
With major size With strategic character
With relatively little connection to conventional projects

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Influence Project Organization (1)

Board of Management

PM

Staff

Department A

Department B

Department C

Source: Litke, H.-D.: Projektmanagement. Hanser 1995

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Influence Project Organization(2)

Minimum configuration of a project organization Functional organization/ hierarchy remains unchanged Organization is extended by a project leader in a executive management team function (on a sufficient high level) Project leader on management team function level
Has only information and advising rights towards the departments Has no decision and directive authority Tracks project regarding content, deadlines and costs Proposes measures to line managers Motivates employees within the departments to actively participate in the project towards the fulfilling of the project objectives

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Pros and Cons of the Influence Project Organization

+ Flexibility regarding work force usage (involvement in several projects possible) + Improved learning curve (experience from several projects) + No change of company organization necessary + Continued relation to department - Limited identification and responsibilities - Limited need to solve problems across departments - Response and decision time low (involvement of line organization!)

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Suitability of the Influence Project Organization

Small projects
Projects, which allow the team members to fulfill their main line tasks and responsibilities

Key factor: Departments and department manager accept the project leader

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Matrix Project Organization (1)

Executive board
Department A Department B Department C

Project 1

Project related directives

Project 2

Function related directives

Source: Litke, H.-D.: Projektmanagement. Hanser 1995

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Matrix Project Organization (2)

Main principle: Combination of a vertical (functional) and a horizontal (project oriented) organization Project executed by the departments as a service provider for the project (focus on execution) Project leader coordinates and is responsible for the project as a whole (focus on project targets, planning and controlling)

More than one project leader may use same resources

Project members are assigned to department manager + project leader

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Competencies in a Matrix Project Organization

Project manager
What When Instruction instruction

Department manager
Codetermination Codetermination

Who how Where

Arrangement
Codetermination

Arrangement Instruction

Arrangement Source: Litke, H.-D.: Projektmanagement. Hanser 1995 Arrangement

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Pros and Cons of the Matrix Project Organization

+ balanced consideration of project dimension and professional dimension + Goal oriented coordination of different interests

+ High identification of all employees with the project

+ Simultaneous technical source for project team members - Potential to conflict since different interest of line and project - Cut of the authority of the line => danger of arguments concerning competencies and passive resistance - Enormous coordination effort between line and project management

- Difficult situation for employees (servant of two masters)

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Advantages of a Functional Home Base

A flexible deployment of staff is possible Continuity of further training in expertise is rather assured

Special knowledge and specific experience can be transferred from one project to the next
Those employees, which are not completely moved out of their original organization feel more comfortable and more secure.
Source: Litke, H.-D.: Projektmanagement. Hanser 1995

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Matrix Project Organization

Matrix project organization requires a highly developed understanding of organization and leadership a project leader, who is accepted in the lines a politic clever acting project leader Highly qualified employees and high requirements on the willingness to communicate and to move on information

Despite all those objections is the matrix project organization in many cases the most effective, most profitable one and in consideration of the scarce resources, the only enforceable solution.
(Litke 1995, S.81)

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Choice of the Adequate Organizational Structure

Project organization and project management can only be successful, if the existing management system and the project organization match up.

The choice of the project organization depends on:

structure of the existing organization size and duration of the project its importance for business policy reasons necessity of the interdisciplinary cooperation of different areas project risk availability of resources experience in project organizations number/ frequency of projects in one area

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Project Size

Number employees

Man-year < 0,4 0,4-50

Mio. DM < 0,1

0,1-10

Small project
Medium sized project Major project

<6
6-50

> 50

> 50

> 10

Source: Litke, H.-D.: Projektmanagement. Hanser 1995

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Reasons for a Change in Project Organization During a Project

Different emphases and people in different phases Changes of objectives and contents as the project runs

Exchange of important staff members

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Example for a Change in Project Organization

Phase
Definition

Profile of project organization

Influenceproject organization

Reasoning
Creativity and brainstorming come to the fore. Performance of the project uncertain. High interdisciplinary cooperation needed. Project has high importance for business policy reasons. Conceptual design largely finished, no need anymore for cooperation with other departments.

Draft

Matrixproject organization pure project organization

Realization

Trial

Line organization

Source: Litke, H.-D.: Projektmanagement. Hanser 1995

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Summary and Preparation for the Next Session

Pure project organization (p.o.): independent, PL in the fore Influence p.o.: existing organization is completed to a minimum Matrix p.o.: overlay of the vertical (functional) organization with a horizontal (project orientated) organization

Preparation
Post processing of today's lecture

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