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Project Management

Project Life Cycle, Organization Structure and Culture

Introduction
Once the management approves the project then the question becomes how will the project be implemented? What will be the project life cycle? How will the project be organized? What will be the effects of organization culture?

Introduction
Projects and project management are carried out in an environment broader than the project itself. The project management team must understand this broader context so that it can select the life cycle, tools and techniques and processes that appropriately fit the project. Project management structure and culture of the organization constitute major elements of the environment in which projects are implemented. It is important for project managers and participants to know the lay of the land so that they can avoid obstacles and take advantage of pathways to complete their projects.

Introduction
Project management system provides a framework for launching and implementing project activities within a parent organization. A good system appropriately balances the needs of both the parent organization and the project by defining the interface between the project and parent organization in terms of authority, allocation of resources and eventual integration of project outcomes into mainstream operations.

Project Life Cycle


Project life cycle is collectively all the phases of the project. It represents a relationship between project management and project delivery. Project Delivery detailed tasks that our team is going to undertake to deliver project results

Project managers or the organization can divide projects into phases to provide better management control with appropriate links to ongoing operations of the performing organization.
Example: software development project may have five phases: definition, design, code, integration test, maintenance.

Project Life Cycle


There are a number of different life-cycle models. Many are unique to specific industry or type of project. Project life cycle typically passes sequentially through different stages. The starting point being the moment the project is given go ahead. Project efforts start slowly, builds to a peak, and then declines to delivery of the project to customer.

Initiating - Goals - Specifications - Tasks - Responsibilities

Planning - Schedules - Budgets - Resources - Risks - Staffing

Executing - Status Reports - Changes - Quality - Forecasts

Monitoring and Control - Scope - Schedule / Cost - Quality - Performance - Risk

Closing - Project - Contract Closure

Project Life Cycle An Example

AcceleratedSAP (ASAP) is a comprehensive method for accelerating SAP R/3 implementation projects. The combination of the set of ASAP components ensure quick and efficient implementation of the SAP R/3 System. The ASAP Roadmap, a process-oriented, comprehensible, compressed project plan, leads the implementation process step by step. ASAP describes how to implement an SAP product / solution.

Project Life Cycle An Example

At the highest level the ASAP Roadmap comprises five phases: 1. Project Preparation - Inclusion of all relevant decision-makers for the SAP R/3 implementation and selection of the internal and external members of the project team. Business Blueprint - Determine the business requirements of the implementing company. The Business Blueprint is a visual representation of the status of the company which is to be realized in the SAP R/3 implementation. Implementation - Configuration and fine-tuning of the SAP R/3 System. Final Preparation - Test all interfaces, train users, migrate business data into the SAP R/3 System. Go Live & Support - Start SAP R/3 production operation, specify procedures and benchmarks to permanently monitor the gains of the investment in SAP R/3.

2.

3. 4. 5.

Project Life Cycle An Example

Project Life Cycle An Example

Project Life Cycle


Project life cycle is a corner stone of project management. Projects have a limited life span and there are predictable changes in level of effort and focus over the life of the project.

A Generic Project Life Cycle

Project Life Cycle


There are three elements that you should compare over the life of the project. These are: Ability to influence the outcome of the project Cost and staffing levels Level of uncertainty

Cost and Staffing Level Across the Project Life Cycle

Cost and Staffing Levels to the project starts low and rises as the project progresses, finally drops rapidly as the project draws to conclusion.

Stakeholders Influence Across the Project Life Cycle

Ability to influence the outcome of the project is high in the beginning and becomes more difficult (and expensive) as time passes.

Uncertainty (Risk) Across the Project Life Cycle

Level of Uncertainty is highest and hence risk of failing to achieve the objectives is greatest at the start of the project and drops off as time progresses and the opportunity for problems lessens.

Project Life Cycle and Product Life Cycle Relationship

Phases of a Project All projects can be thought of as a series of phases that have a defined beginnings and defined end points. These phases may overlap. Phases usually have an endpoint that results in some sort of deliverable. A deliverable is a measurable, verifiable work product such as a specification, feasibility study report, detailed design document, or working prototype.

Deliverable from one phase are usually reviewed for completeness and accuracy and approved before work starts at the next phase.
Phases are not the same as project management process groups.

Phases of a Project The purpose of the phased approach is to allow management to decide whether to proceed with a project without having to commit large amount of resources.

Characteristics of Project Phases


Completion and approval of one or more deliverables characterizes a project phase. Some deliverables can correspond to the project management process, whereas other are the end product or components of the end products for which the project was conceived. The deliverables and hence the phases are part of a generally sequential process designed to ensure proper control of the project and to attain the desired product or service, which is the objective of the project.

Characteristics of Project Phases


In any specific project, for reasons of size, complexity, level of risk and cash flow constraints, phases can be further subdivided into sub-phases.

Each sub-phase is aligned with one or more specific deliverables for monitoring and control.
Majority of these sub-phase deliverables are related to the primary phase deliverable, and the phases typically take their names from these phase deliverables: requirements, design, build, test, startup, turnover, and others, as appropriate.

Characteristics of Project Phases


A project phase is generally concluded with a review of the work accomplished and the deliverables to determine acceptance, whether extra work is still required, or whether the phase should be considered closed. A management review is often held to reach a decision to start the activities of the next phase without closing the current phase.

Characteristics of Project Phases


A phase can be closed without the decision to initiate any other phases. For example, the project is completed or risk is deemed too great for the project to be allowed to continue.

Characteristics of Project Phases


Formal phase completion does not include authorizing the subsequent phase. For effective control, each phase is formally initiated to produce a phase-dependent out of the Initiating process group, specifying what is allowed and expected for the phase. A phase-end review can be held with the explicit goals of obtaining authorization to close the current phase and to initiate the subsequent one. Sometimes both authorizations can be gained at one review. Phase reviews are also called phase exits, phase gates, or kill points.

Characteristics of Project Phases

Relationship between PM Processes and Project Processes


Project Processes such as analysis, design, development, implementation, etc. Project Management Processes enveloping processes (initiating, planning, executing, monitoring and control, closing) to ensure project processes are executed. They are carried out once per project or per phase of the project

Phase 1
Initiating Planning Executing Monitoring & Control Closing

Phase 2
Initiating Planning Executing Monitoring & Control Closing

Phase 3
Initiating Planning Executing Monitoring & Control Closing

Phase 4
Initiating Planning Executing Monitoring & Control Closing

Separate process groups for each phase of the project

Project Management Structures Four types: Functional Organization Dedicated Project Teams Matrix (Weak, Balanced and Strong) Organization Network Organization

Working in Matrix system in one organization is different from working in matrix in another organization. Researches attribute this to the organizational culture in the two organizations. Organizational culture reflects the personality of the organization.

Functional Organization

Chief Executive

Human Resources

Finance

Marketing

Engineering

Manufacturing

Procurement

Customer Services
Domestic Sales International Sales

Electronics Engineering
Software Engineering Mechanical Engineering Design

Fabrication

Purchasing

Assembly

Receiving & Inspection

Testing

Production Scheduling

Functional Organization

Delta Manufacturing, Inc. CEO

Project Coordination
Functional Manager Functional Manager Functional Manager Functional Manager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Golden boxes represent staff engaged in project activities

Functional Structure

Advantages
No change in organizational structure Flexibility In-depth expertise Easy post-project transition Easier management of professionals Team members only report to one supervisor Similar resources are centralized, the company is grouped by specialists Clearly defined career paths in areas of work specialization

Functional Structure

Disadvantages
Lack of focus Poor integration Slow Lack of ownership People place more emphasis on their functional specialty to the determent of the project No career path in project management Project manager has little or no authority
These disadvantages are more pronounced when the scope of the project is broader and one functional department does not take the dominant technological and managerial lead on the project.

Dedicated Project Team

Delta Manufacturing, Inc. CEO Human Resources Finance

Marketing

Engineering

Manufacturing

Procurement

Project Manager

Customer Services
Domestic Sales International Sales

Electronics Engineering
Software Engineering Mechanical Engineering Design

Fabrication

Purchasing

Assembly

Receiving & Inspection

Testing

Production Scheduling

Individuals from inside and outside the organization

Projectized Organization Structure


Delta Manufacturing, Inc. CEO Human Resources Finance

Marketing

Legal

Other projects
Project 1 PM Project 2 PM

Other projects

Engineering

Engineering

Electrical Mechanical Software


Manufacturing

System Hardware Software


Subcontractor

Fabrication Assembly Testing


Procurement

Subcontractor 1 Subcontractor 2
Procurement

Project Coordination Golden boxes represent staff engaged in project activities

Project Coordination

Projectized Organization Structure

Advantages Simple, fast and efficient project organization Cohesive Cross functional integration Loyalty to the project More effective organization than functional

Projectized Organization Structure

Disadvantages Expensive Internal strife Limited technology expertise Difficult post-project transition No home when project is complete Lack of professionalism in disciplines Duplication of facilities and job functions Less efficient use of resources

Matrix Organization Structure


Delta Manufacturing, Inc. CEO Human Resources Finance

Director of Projects

Marketing

Engineering

Customer Services

Domestic Sales

International Sales

Electronics Engineering

Software Engineering

Mechanical Engineering

Project Manager 1

Project Manager 2
Project Manager 3

Different Matrix Forms In practice there are really different kind of matrix systems, depending on relative authority of the project and functional managers. Functional, lightweight or weak matrix balance of authority strongly favors the functional managers. Balanced or middleweight matrix traditional matrix arrangement. Project, heavyweight or strong matrix balance of authority is strongly on the side of project manager.

Weak Matrix Form

Delta Manufacturing, Inc. CEO

Functional Manager

Functional Manager

Functional Manager

Functional Manager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project Coordination

Golden boxes represent staff engaged in project activities Project Managers role is more of that of a coordinator / expeditor rather than a true project manager.

Balanced Matrix Form

Delta Manufacturing, Inc. CEO

Functional Manager

Functional Manager

Functional Manager

Functional Manager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project Manager

Staff

Staff

Staff

Project Coordination

Golden boxes represent staff engaged in project activities. The need for a project manager is recognized but project manager does not have full authority over the project and project funding.

Strong Matrix Form

Delta Manufacturing, Inc. CEO

Functional Manager

Functional Manager

Functional Manager

Manager of Project Managers

Staff

Staff

Staff

Project Manager Project Manager Project Manager

Staff

Staff

Staff

Staff

Staff

Staff

Project Coordination

Golden boxes represent staff engaged in project activities. Project Manager is a dedicated / specialized project manager.

Matrix Organization Structure Advantages Efficient Strong Project Focus Easier Post-Project Transition Flexible Highly visible project objectives Improved project manager control over resources More support from functional organization Maximum utilization of resources Better coordination Better horizontal / vertical dissemination of information compared to functional Team membership maintain a home

Matrix Organization Structure

Disadvantages Dysfunctional conflict Infighting Stressful Slow Extra administration required More than one boss for project team More complex to monitor / control Tougher problems with resource allocation Need extensive policies and procedures Functional managers may have different priorities than project manager Higher potential for conflict

Matrix Organization Structure

According to experts, it takes 3 to 5 years for a matrix system to fully mature.

Network / Composite Organization


Corporate downsizing and cost control have combined to produce network organizations. In theory, network organization is an alliance of several organizational structures for the purpose of creating products and services for the customers.
Delta Manufacturing, Inc. CEO

Functional Manager

Functional Manager

Functional Manager

Manager of Project Managers

Staff

Staff

Staff

Project Manager Project Manager Project Manager

Staff

Staff

Staff

Staff

Staff

Staff

Project B Coordination

Project A Coordination

Golden boxes represent staff engaged in project activities

Network Organization Advantages Cost Reduction High level of expertise Flexible Disadvantages Coordination breakthrough Loss of control Conflict

Tight Matrix It has nothing to do with matrix organization Refers to locating the project team offices in the same room

Organizational Structure Influences on Projects


Functional Organization Project Managers Authority Resource Availability Budget Ownership Project Managers Role Project Mgt. Admin. Staff Project Managers Accountability Project Managers Skills Staff Skills Little or None Little or None Functional Manager Part Time Part Time Part Time Limited Wide range of skills Matrix Organization Weak Unlimited Balanced Low to Moderate Low to Moderate Mixed Full Time Part Time Full Time Mixed Wide range of skills Strong Moderate to High Moderate to High Project Manager Full Time Full Time Full Time High Wide range of skills Projectized Organization High to Almost Total High to Almost Total Project Manager Full Time Full Time Full Time High High

Unlimited Functional Manager Part Time Part Time Part Time Limited Wide range of skills

Relative Effectiveness of Organization Structures


Larson and Gobeli studied the relative efficacy of different project management structures. Their work is based on a sample of more than 1600 project professionals and managers actively involved in project management within their organization. Among the findings they report are the rated effectiveness of different structures for product development and construction projects. The results indicate a strong preference for either the project team or strong matrix. Very Effective Construction Projects Effective New Products Projects Ineffective

Very Ineffective

Functional Organization

Weak Matrix

Balanced Matrix

Strong Matrix

Projectized Organization

Choosing Appropriate Project Management Structure Project success is directly linked to the amount of autonomy and authority project managers have over their projects. Best system balances the needs of the project with those of the parent organization. What project structure should an organization use? This is a complicated question with no precise answer. A number of issues need to be considered at both the organization and project level.

Organization Considerations How important is project management to the success of the firm? What percentage of core work involves projects?
75% of work involves projects fully projectized organization. Both standard products and projects matrix organization. Few projects functional organization. Temporary task forces could be created on an as-needed basis and the organization could outsource project work.

Resource availability.
Matrix share resources across multiple projects and functional domains while at the same time creating legitimate project leadership. For organization, that cannot afford to tie up critical personnel on individual projects, a matrix system would appear to be appropriate. An alternative would be to create a dedicated team but outsource project work when resources are not available internally.

Project Considerations How much autonomy the project needs in order to be successfully completed. Hobbs and Menard identify seven factors that should influence the choice of project management structure:
Size of project Strategic importance Novelty and need for innovation Need for integration (number of departments involved) Environmental complexity (number of external interfaces) Budget and time constraints Stability of resources requirements

The higher the levels of these seven factors, the more autonomy and authority the project manager and project team need to be successful. This translates into using either a dedicated project team or project matrix.

Example: Chaparral Steel

Example: Chaparral Steel


A mini steel mill that produces steel bars and beans from scrap metal. Classifies projects into three categories: Advanced development projects High risk endeavors involving creation of breakthrough product or process. One or two advanced projects at one point in time. Dedicated project teams are used. Platform projects Medium risk projects involving system upgrades that yield new products and processes. Three to five platform projects at one point in time. Strong matrix is used. Incremental projects low risk short term projects that involve minor adjustments in existing products and processes. Thirty five to forty five incremental projects at one point in time. Weak matrix is used.

Organizational Culture
Strong connection between project management structure, organization culture and project success. Organization culture refers to a system of shared norms, beliefs, values and assumptions which binds people together, thereby creating shared meanings. Reflects the personality of the organization and can enable us to predict attitudes and behaviors of organizational members. Culture is also one of the defining aspects of an organization that sets it apart from other organizations even in the same industry.

Organizational Culture

It is important for project managers to be culture sensitive so that they can develop strategies and responses that are likely to be understood and accepted as well as avoid violating key norms that would jeopardize their effectiveness within the organization.

Organizational Culture

Organizational culture often has a direct influence on project: A team proposing an unusual or high-risk approach is more likely to secure approval in an aggressive or entrepreneurial organization.

A project manager with participative style will have problems in hierarchical / bureaucratic organization.

Organizational Culture Ten primary characteristics which in aggregate, capture the essence of an organizations culture. These characteristics exists on a continuum.
Job Individual Task Independent Loose Low Performance Member Identity Team Emphasis Management Focus Unit Integration Control Risk Tolerance Reward Criteria Organization Group People Interdependent Tight High Other

Low
Means Internal

Conflict Tolerance
Means-ends Orientation

High
Ends External

Open System Focus

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Organizational Culture

Culture performs several important functions in an organization Provides a sense of identity Helps legitimize the management system Clarifies and reinforces standards of behavior Helps create social order

Organizational Culture

Subculture Often aligned within


specific departments or specialty areas. It is not uncommon for norms, values and customs to develop within a specific field or profession such as marketing, finance, operations, I.T.

Countercultures Reflect different


set of values beliefs and customs often in direct contradiction with the culture espoused by top management.

Project Organizational Structure


Framework Structural framework Companys organization chart Who reports to whom? Structure Functional organization Projectized organization Matrix organization

Human Resource Scope How an employee is treated? Work ethics Corporate identity Overtime expected? How does the organization sees itself Training emphasis (leader, follower, environment friendly, etc.) Corporate vs. individual emphasis Internal and External politics Who has the power? How Business Units integrate? Where leadership lies? (share or compete for organization resources) Symbolic Style of management Dress code Formal vs. informal

Risk tolerance (risk taker, risk averter, etc.)


Organizational focus (long-term vs. short-term) Project / product / company maturity