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Evaluation vs.

Management
Dr. Syed Amir Iqbal
Resource Person

Dr. Syed Amir Iqbal

Project Management

Project Managing Vs. Evaluation


Project Management:
Once the Project has been selected, we start
managing it
Management is accomplished in 5 process:
Initiating, Planning, Executing, Monitoring &
Control and Closing
As the lifecycle of the project starts we start
managing it
A number of Org. define its body of knowledge

Project Evaluation:
Help in making decision about which project
to do & why.
Dr. Syed Amir Iqbal
Project Management
Accomplished before the project
can be

Project or Capital Expenditure


Involves a current outlay of funds in the
expectation of a stream of benefits extending far
into the future.
In accounting perspective, Capital Exp. is an exp.
that is shown as an Asset on the balance sheet.
The field of Project Evaluation and Feasibility
Analysis has the following fundamental issues:

Capital Investment Importance and difficulties


Types of Capital Investments
Phases of Capital Budgeting
Levels of Decision Making
Facets of Project Analysis
Feasibility Study

Dr. Syed Amir Iqbal

Project Management

Capital Budgeting
Capital budgeting is a complex process
Planning
that may be divided
into six broad phases.

Phases:
Analysis

Selection

Financing
Implement
ation

Dr. Syed Amir Iqbal

Review

Project Management

Project Analysis
The important facets of project analysis
are:

Dr. Syed Amir Iqbal

Project Management

Project
Screening Models

Dr. Syed Amir Iqbal

Project Management

Project Selection
Screening models help managers pick
winners from a pool of projects. Screening
models are numeric or nonnumeric and
should have:

Realism
Capability
Flexibility
Ease of use
Cost effectiveness
Comparability
Dr. Syed Amir Iqbal

Project Management

Screening & Selection Issues


Risk unpredictability to the firm
Commercial market potential
Internal operating changes in firm
ops
Additional image, patent, fit, etc.
All models only partially reflect reality
and have both objective and subjective
factors imbedded
Dr. Syed Amir Iqbal

Project Management

Project Screening Approaches


o Checklist
o Simple scoring models
o Analytic hierarchy process
o Profile models
o Financial models

Dr. Syed Amir Iqbal

Project Management

Project
Management Growth
Dr. Syed Amir Iqbal
Resource Person

Dr. Syed Amir Iqbal

Project Management

Project Management
General systems theory implies the creation of a
management technique that is able to cut across
many organizational disciplines;

finance,

manufacturing,

engineering,

marketing,

and so onwhile still carrying out the functions of


management. This technique has come to be
called
systems
management,
project
management, or matrix management.
Dr. Syed Amir Iqbal

Project Management

11

Project
Management
1940-85

Dr. Syed Amir Iqbal

Project Management

Project Management Evolution

During 1940s, several line


responsible for the projects.

Failure was blamed to the line managers in action.

Customers were not have single point of contact.

Filtering of information wasted


customer and contractors.

During cold war, the defense arms development


were performed under the umbrella of project
managers (solely responsible and accountable for
success or failure of a project.

B52 Bomber, Intercontinental Ballistic Missile, and


the Polaris Submarine, even jet fighters and tanks
developed under the project management teams.

Dr. Syed Amir Iqbal

managers

time

for

Project Management

were

both

13

Project Management Evolution

By 1970 and early 1980s,


more companies departed
from
informal
project
management
and
restructured to formalize
the
projectfivemanagement
Following
questions help determine whether
process.
formal project management is necessary:
Are the jobs complex
Are there dynamic environmental
considerations?
Are the constraints tight?
Are there several activities to be
integrated?

there
Dr. SyedAre
Amir Iqbal

several functional boundaries


toManagement
Project
be crossed?

If any of
the
question
answered
yes, 14

Major Problem in Project Management

Project priorities and competition for talent may


interrupt the stability by upsetting the normal
business of the functional organization.

Long-range planning may suffer as more focus


on fulfilling the requirements of temporary
projects.

Shifting people from the project to project may


hinder employees growth and development
within their fields of specialization.

Delegation of authority to middle management


cause them to occupy the power positions.

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Project Management

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John Kenneths Imperatives of Technology

Other than limitation, there are driving forces behind


PM;
1. The time span between project initiation and
completion appears to be increasing.
2. The capital committed to the project prior to the
use of the end item appears to be increasing.
3. As technology increases, the commitment of time
and money appears to become inflexible.
4. Technology requires more and more specialized
manpower.
5. The inevitable counterpart of specialization in
organization.
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Failure to Project Management

There was no need for project management.

Employees werent informed about how PM


works.

Executives selected inappropriate projects or


project managers for the first few projects.

No attempt to explain the effect of the PM


organizational structure on the wage and salary
administration.

Employees were not convinced that executives


were in total support of the change (to PM).

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Project
Management
1985-2010

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Project Management

Driving Forces of Project Management

There are six driving forces that lead executives to


recognize the need for project management:
1
.

Capital
projects

Large capital projects or a multitude of


simultaneous projects.

2
.

Customer
expectations

Some organizations sell solutions (PM


expertise) to the customers rather than
products

3
.

Competitiven Internal : To do project internally.


External : Do project with competitive price,
ess
quality.

4
.

Organizations are quite resistant to change


Executive
understandin unless driven by the executives
g

5
.

New product
development

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Efficiency

Organizations that are heavily invested in R&D


activities. Small project recover cost of overall
R&D.
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small companies experiencing growing pains

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Ultimate Driving Force to PM

Efficiency and
Effectiveness

New Product
Development

Executive
Understanding

Dr. Syed Amir Iqbal

Capital
Projects

SURVIVAL

Customer
Expectations

Competitiveness

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Speed of Maturity
Internal
Efficiencies &
Effectiveness

Non-Project-Driven
and Hybrid
Organizations

Project-Driven
Organizations

Competitiveness
Fast

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Speed of Maturity
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Slow

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Benefits of Project Management

Past View
Project management will
require more people and
add to the overhead costs.
Profitability may decrease.
Project management will
increase the amount of
scope changes.
Project management
creates organizational
instability and increases
conflicts.
Dr. Syed Amir Iqbal

Present View

Project management allows


us to accomplish more work
in less time and with less
people.

Profitability will increase.

Project management will


provide better control of
scope changes.

Project management makes


the organization more
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efficient
and effective.

Benefits of Project Management

Past View
Project management is
really eye wash for
the customers benefit.
Project management will
create problems.
Only large projects need
project management.
Project management will
increase quality
problems.
Dr. Syed Amir Iqbal

Present View

Project management will


allow us to work closer
with our customers.

Project management
provides a means for
problem solving.

All projects will benefit


from project management.

Project management
increases quality.
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Benefits of Project Management

Past View
Project management
will create power and
authority problems.
Project management
focuses on suboptimization by looking
at only the project.
Project management
delivers products to a
customer.
The cost of project
management may make
us noncompetitive.
Dr. Syed Amir Iqbal

Present View

Project management will


reduce the majority of
the power struggles.

Project management
allows people to make
good company
decisions.

Project management
delivers solutions to a
customer.

Project management will


increase our business.
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Cost Vs. Benefits


How long itll take to achieve the benefits of PM?
This point can be pushed to the left by training and
education
Additional
Profits from
Better Project
Management

Cost of Project
Management

Pegged

?
Dr. Syed Amir Iqbal

Tim
e

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Resistance to Change

Dr. Syed Amir Iqbal

Project Management

Industry Classification

In
Project-driven
companies,
project
managers were given the responsibility for profit
and loss.
In the nonproject-driven sectors of the
marketplace, corporate survival was based upon
products and services.
Profitability was identified through marketing and
sales.
Hybrid organizations are typically nonprojectdriven firms with one or two divisions that are
project-driven.
Organizations can most effectively run on a
by project basis,
and
thereby
Dr. Syedmanagement
Amir Iqbal
Project
Management

27

Industry Classification

Project
Driven
PM has P&L
responsibility
PM is a
recognized
profession

Hybrid
Production
driven but with
many projects
Emphasis on
new product
Present develop.

Multiple
career paths

Short product
life cycles

Income comes
from projects

Marketingorient.

Project
Management
Dr. Syed Amir Iqbal

NonProject-Driven
Very few
projects

Past

Profitability
from
production
Large brick
walls
Long life cycle
products

Need for rapid


develop.
Program
process
Management

Product
Management

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New processes supporting project management

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Informal Project Management

Informal PM is based upon guidelines


rather than the policies and procedures that
are the basis for formal PM.
Effective communications, cooperation,
teamwork and trust are absolutely
essential for informal PM.
As companies become mature in PM,
emphasis is on guidelines and checklists
(informal PM)
Customers have a strong voice in whether
formal or informal PM will be used.
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Project Managements
Maturity & Excellence

Dr. Syed Amir Iqbal

Project Management

Project Management Maturity

Maturity in project management is the


implementation of a standard
methodology and accompanying
processes such that there exists a high
likelihood of repeated successes.

Maturity implies that the proper


foundation of tools, techniques,
processes, and even culture, exists.
At the closure of project debriefing, senior
management looks at key performance
indicators, it allows the organization to
maximize what it does right and to correct
Dr. Syed Amir Iqbal
Project Management
what it did wrong.

32

Project Management Maturity

Defense and Construction Industries are


much more advanced in how they
manage projects.
Maturity models provide the necessary
framework to:
Analyze and critically evaluate current
practices
Compare those against chief competitors
or general industry standard
Define a systematic route for
improvement

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Life Cycle Phases


for Project Management Maturity

Exec. Mgmt.
Line Mgmt.
Growth
Maturity
Embryoni
Executive
Acceptance
Acceptance

Development
of a Development of a
Recognize
cmethodology
Managemen
Visible executive
Embryonic
Line management
management cost/
support Need Use of lifesupport
cycle tschedule control
Executive
Line management
system
Benefitsphases Acceptance

understanding
commitment
Commitment
to Integrating cost
Applications
Line management
planning of PM and schedule
Project
education
Minimization
of control
Line
What must
Willingness to
Developing an
creeping sponsorship
scope
Managemen
be done Growth
Maturity
of
Willingness
to
release employees
educational
Selection
a
t
of to
for PM training
program
project change way
Acceptance tracking system
doing business
enhance PM skills

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Life Cycle Phases


for Project Management Maturity

Embryonic

Line
Managemen
t
Acceptance

Dr. Syed Amir Iqbal

Executive
Managemen
t
Acceptance

Growth

Maturity

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Life Cycle Phases


for Project Management Maturity

Embryoni
Recognize
c
Executive
need

Recognize
benefits

Managem
ent
Acceptanc
e

Recognize
Line
applications
Managem
Growt
Recognize h
ent
what must be
Acceptanc
edone

Dr. Syed Amir Iqbal

Maturi
ty
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36

Life Cycle Phases


for Project Management Maturity

Executive

Manageme
Executive
nt
Embryoni
Managem
Visible
executive
support
Acceptance
c

Line
Managem
ent
Acceptanc
e

Dr. Syed Amir Iqbal

ent
Acceptanc
e

Executive understanding of
project management
Project sponsorship

Willingness to change way of


doing business

Growt
h

Maturi
ty

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Life Cycle Phases


for Project Management Maturity

Line
Management
Executive
Acceptance
Line
management

Embryoni Managem
support
c
ent
Line management
Acceptanc
commitment
e
Line management
education
Maturi
Growt
Willingness to release
ty
h
employees for project
management training
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Life Cycle Phases


for Project Management Maturity

Growt
Development of a
hExecutive
methodology
Embryoni Managem
Use of life cycle phases

ent
Commitment to
Acceptanc
planning
e

Line Minimization of
scope
Managemcreeping
Maturi
Growt
ent Selection of
ty
h a project
Acceptanctracking system
e

Dr. Syed Amir Iqbal

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39

Life Cycle Phases


for Project Management Maturity

Maturity

Embryoni
c
Line
Managem
ent
Acceptanc
e

Dr. Syed Amir Iqbal

Development of a
Executive
management cost/
Managem
schedule control
ent
system

Acceptanc
Integrating cost and
e
schedule
control

Developing
an
Maturi
Growt
educational program
ty
h
to enhance project
management skills
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Phases for Project Management Maturity


For each of the following items provide a recommendation
for addressing and resolving the issue that will allow an
organization
to
progress
toward
achieving
Project
Management
Maturity.
Phase
Issue
Recommendation
a) Embryonic

Recognizing the need

b) Executive
Management
Acceptance

Executive understanding of
PM

c) Line Management
Acceptance

Line Management Support

d) Growth

Development of a PM
methodology

e) Maturity Phase

Developing an educational
program to enhance PM
skills

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Phase
a)
Embryoni
c

Issue
Recognizing
the need

Recommendation
Explain the benefits of repeatable processes,
identify areas for improvement in schedule, cost
and requirements management

b) Executive Executive
Provide supporting information about project
Management understanding successes and the use of best practices
Acceptance
of PM
c) Line
Line
Management Management
Acceptance
Support

Obtain and communicate management support


to functional managers, explain the benefits of
PM, acknowledge the needs of the functional
managers

d) Growth

Development
of a PM
methodology

Establish a PMO, standardize methods, establish


enterprise-wide processes, provide PM training

e) Maturity
Phase

Developing an
educational
program to
enhance PM
skills

Establish PM as a career path, continuous


improvement through reviews and feedback,
provide training to all levels of employees,
maintain management support and visibility,
document lessons learned

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Developing Project Management Maturity

Project management maturity models:


Center for business practices
Kerzners project management maturity
model
ESI Internationals project framework
SEIs capability maturity model integration
PMIs OPM3: Organizational Project
Management Maturity Model
Key Feature of these Maturity Models is the
important recognition that:
Change does
not occur Abruptly
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OPM3 Model

The purpose of this


standard is to provide;
understanding
about
organizational
project
management and to
measure their
maturity against PM
Best Practices.
Based on Knowledge,
Improvement and
Dr. Syed Amir Iqbal
Assessment.

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OPM3 Model
Knowledge : Familiarity with
the contents of the Standard is
essential.
Assessment : the
organization uses an
assessment tool to determine
areas of strength and
weakness in relation to the
body of Best Practices.
Improvement : Provides list of
incapability in the organization.
OPM3 provides guidance in
placing these in order of
importance, and this sequence
Dr. Syed
Amir Iqbal
forms
the basis for any

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OPM3 Model Maturity Assessment

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OPM3 Model Maturity Assessment


The results also generate
four charts/graphs showing,
based on their responses:
1) the organizations overall
position on a continuum of
organizational project
management maturity,
2) the organizations
maturity in terms of each
domain,
3) the organizations
maturity in terms of each
process improvement
stage, and
4)
a composite view of
Dr. Syed Amir Iqbal
graphs 2 and 3.

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PM Maturity Generic Model

High
Maturity
Institutionalized,
seeks continuous
improvement

Moderate Maturity
Defined practices, training programs,
organizational support
Low Maturity
Ad hoc process, no common language, little
support
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Project Management Excellence

Organizations excellent in project


management are those that create the
environment in which there exists a
continuous stream of successfully
managed projects and where success is
measured by what is in the best
interest of both the company and the
Excellence goes project.
well beyond maturity.
Project must have maturity to achieve
excellence.
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Project Management Excellence

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Project Management Failure


Executives who always make the right
decision are not making enough decisions.
Likewise, organizations in which all projects are
completed successfully are not taking enough
risks and are not working on enough projects.

It is unrealistic to believe that all projects


will be completed successfully.
Some people contend that the only true
project failures are the ones from which
nothing is learned.
Failure can be viewed as success if the
failure is identified early enough so that
the resources can be reassigned
to other
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Project Management Failure


Executives who always make the right
decision are not making enough decisions.
Likewise, organizations in which all projects are
completed successfully are not taking enough
risks and are not working on enough projects.

It is unrealistic to believe that all projects


will be completed successfully.
Some people contend that the only true
project failures are the ones from which
nothing is learned.
Failure can be viewed as success if the
failure is identified early enough so that
the resources can be reassigned
to other
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Project Life Cycle

Dr. Syed Amir Iqbal

Project Management

Product Life Cycle

A project life cycle is the series of phases that a project


passes through from its initiation to its closure.

The phases can be broken down by functional or partial


objectives, intermediate results or deliverables,
specific milestones within the overall scope of work, or
financial availability.

Phases are generally time bounded, with a start and


ending or control point.

Every project has a definite start and a definite end,


the specific deliverables and activities that take place
in between will vary widely with the project.

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Generic Life Cycle


All projects can be mapped to the following
generic life cycle structure

Starting the project,

Organizing and preparing,

Carrying out the project work, and

Closing the project.

The project life cycle is independent from the


life cycle of the product produced by or
modified by the project.
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Generic Life Cycle

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Generic Life Cycle

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Project Phases
A project phase is a collection of logically
related project activities that culminates in the
completion of one or more deliverables.
Project phases are used when the nature of
the work to be performed is unique to a
portion of the project, and are typically linked
to the development of a specific major
deliverable.
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Characteristics of Phases

The work has a distinct focus that differs from any


other phase.

Achieving the primary deliverable or objective of the


phase requires controls or processes unique to the
phase or its activities.

The closure of a phase ends with some form of transfer


or hand-off of the work product produced as the phase
deliverable.

This phase end represents a natural point to reassess


the activities underway and to change or terminate the

Dr. Syed Amir Iqbal

project if necessary.

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Phase to Phase Relationship


Sequential relationship. In a sequential
relationship, a phase starts only when the previous
phase is complete.
The step-by-step nature of this approach reduces
uncertainty, but may eliminate options for reducing
the overall schedule.

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Phase to Phase Relationship


Overlapping relationship. In an overlapping
relationship, a phase starts prior to completion of the
previous one.
May require additional resources to allow work to be
done in parallel,
May increase risk, and can result in rework if a
subsequent phase progresses before accurate
information is available from the previous phase.

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1-Predictive Life-cycle

Also known as fully plan-driven, are ones in which the


project scope, and the time and cost required to
deliver that scope, are determined as early in
the project life cycle as practically possible.

These projects proceed through a series of sequential


or overlapping phases, with each phase generally
focusing on a subset of project activities and project
management processes.

Predictive life cycles are generally preferred when the


product to be delivered is well understood, there
is a substantial base of industry practice, or
where a product is required to be delivered in
full to have value to stakeholder groups.

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1-Predictive Life-cycle

For example,

Construction of building

Software development

Power plant installation

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2-Iterative and Incremental Life Cycles

Iterations develop the product through a series of


repeated cycles, while increments successively add
to the functionality of the product.

During an iteration, activities from all Project


Management Process Groups will be performed.

At the end of each iteration, a deliverable or set of


deliverables will be completed. Future iterations may
enhance those deliverables or create new ones.

Each iteration incrementally builds the deliverables until


the

exit criteria for the phase are met, allowing the project
team to incorporate feedback.

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2-Iterative and Incremental Life Cycles


Iterative and incremental life cycles are generally preferred;

When an organization needs to manage changing


objectives and scope,

To reduce the complexity of a project, or

When the partial delivery of a product is beneficial


and provides value for one or more stakeholder
groups without impact to the final deliverable or set of
deliverables.

Large and complex projects are frequently executed in an


iterative fashion to reduce risk.

For example
Implementation of new standards in an organization
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Amir Iqbal
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3-Adaptive Life Cycles


Adaptive life cycles (also known as change-driven or agile
methods) are intended to respond to high levels of change
and ongoing stakeholder involvement.
Adaptive methods are also iterative and incremental, but
differ in that iterations are very rapid (usually with a
duration of 2 to 4 weeks) and are fixed in time and cost.
The overall scope of the project will be decomposed into a
set of requirements and work to be performed, sometimes
referred to as a product backlog.

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3-Adaptive Life Cycles


Adaptive methods are generally preferred;
When dealing with a rapidly changing environment,
when requirements and scope are difficult to define in
advance, and
when it is possible to define small incremental
improvements that will deliver value to stakeholders.
For example,
Implementation of advanced electronic products,
Design of new passenger and jet planes.
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Product Life Cycle

General phases of Product Life-Cycle


Research and development
Market introduction
Growth
Maturity
Deterioration
Death

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Project Life Cycle


Today, there is no agreement among industries,
or even companies within same industry, about
life-cycle phases of a project. This is
understandable because of the complexity and
diversity of projects.
The life-cycle phases of a project include:
Conceptual
Planning
Testing
Implementation
Closure

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Project Life Cycle

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Project Life Cycle


1. Conceptual Phase

Preliminary evaluation of an idea.

Analysis of risk and the resulting impact on company


resources.

The conceptual phase also includes a first cut at


the feasibility of the effort.

2. Planning Phase
Identification of the resources required.
Establishment of realistic time, cost, and performance
parameters.
Initial preparation of documentation.
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Bidding decision and development of the total bid

73

Project Life Cycle


3. Testing Phase

Is predominantly a testing and final standardization


effort.

Almost all documentation must be completed in this


phase.

4. Implementation Phase
Integrates the projects product or services into the
existing organization.
For product development project, product life-cycle
phases of market introduction, growth, maturity, and
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74
a portion of deterioration.

Project Life Cycle


5. Closure Phase

The reallocation of resources.

The closure phase evaluates the efforts of the total


system and serves as input to the conceptual phases
for new projects and systems.

This final phase also has an impact on other ongoing


projects with regard to identifying priorities.

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Project Life Cycle


5. Closure Phase

The reallocation of resources.

The closure phase evaluates the efforts of the total


system and serves as input to the conceptual phases
for new projects and systems.

This final phase also has an impact on other ongoing


projects with regard to identifying priorities.

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Project Life Cycle

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Project Life Cycle Phase Definition of


Different Industries

Different organizations have, different life cycle


phase, even they are in the same industry. It is due
to the complexity and diversity of projects.

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Project Life Cycle of Computer Programming


PLANNING
PHASE

DEFINITION AND
DESIGN PHASE

RESOURCES/EFFORT

CONCEPTUAL
PHASE

IMPLEMENTATION
PHASE

CONVERSION
OR TERMINATION
PHASE

Resources
Utilized

TIME
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Project Life Cycle of Construction

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Effects of Project Life Cycles


Client
Interest

Project
Stake

Resources
Creativity

Conceptualizatio
n
Dr. Syed Amir Iqbal

Planning

Execution

Uncertaint
y
Termination
Project Management

81

Resistance to Project Management


Business
Unit/Entity

Reasons for resistance

a) Sales

Potential loss of power & position with the customer.


Credit given to the PM

b) Marketing

Potential for the PM to become associated with the


marketing function. Customer has more contact with
the project manager. Fear of loss of credit for sales.

c) Finance and
Accounting

Development of independent accounting systems,


loss of control.

d) Procurement

Bypassing of the established processes

e) Human
Resources

Potential additional workload, new job description,


more training requirements

f) Manufacturing

Potential loss of experienced resources to the project

g) Engineering

May not agree with the methodology, may not


support the planning process, may perceive project
mgt. as overhead

Dr. Syed Amir Iqbal

Project Management

Responses or
actions that
will minimize
resistance

82