Friday, December 30, 2011
Harvard Business School - Blogs and Working Papers on Management
Five resolutions for aspiring leaders
December 2011
Bill George - Professor of Management Practice at HBS
Harvard Business School Working Knowledge - The Landing Page
http://hbswk.hbs.edu/topics/
Accounting - Harvard Business School Working Papers and Summaries
Index - Accounting - Harvard Business School Working Papers and Summaries
Financial Accounting - Cost Accounting - Management Accounting and Control
http://hbswk.hbs.edu/topics/accountingandcontrol.html
63 articles on 31.12.2011
Business History - Harvard Business School Working Papers and Summaries
Index - Business History - Harvard Business School Working Papers and Summaries
http://hbswk.hbs.edu/topics/businesshistory.html
104 articles on 31.12.2011
Entrepreneurship - Harvard Business School Working Papers and Summaries
Index - Entrepreneurship - Harvard Business School Working Papers and Summaries
http://hbswk.hbs.edu/topics/entrepreneurship.html
140 articles on 31.12.2011
Business and Management Thinkers - Brief Biographies and Their Publications
_______________
Thinkers 50 of 2011
http://www.thinkers50.com/
Clayton Christensen
http://www.claytonchristensen.com/
Daniel Goleman
http://danielgoleman.info/
http://www.thinkers50.com/
Clayton Christensen
http://www.claytonchristensen.com/
Daniel Goleman
http://danielgoleman.info/
Jim Collins
Marshall Goldsmith
http://www.marshallgoldsmithlibrary.com/
Vijay Govind Rajan
http://www.vijaygovindarajan.com/
http://business.in.com/article/the-thinkers-50/the-top-50-business-thinkers-of-the-world/30442/0
____________
Vijay Govind Rajan
http://www.vijaygovindarajan.com/
http://business.in.com/article/the-thinkers-50/the-top-50-business-thinkers-of-the-world/30442/0
____________
David Kolb
Kurt Lewin
Index to thinkers series of articles on Infed
Originally posted at
http://knol.google.com/k/narayana-rao/business-and-management-thinkers-brief/2utb2lsm2k7a/5963#
Thursday, December 29, 2011
Saturday, December 24, 2011
Google Website for Digital Advertising
Have you visited http://services.google.com/advertisers/us/
It provides you
Insights for Online Advertising
http://services.google.com/advertisers/us/insightsSupport for Creative Advertisements
http://services.google.com/advertisers/us/creativeOnline Media Information and Media Planning Tools
http://services.google.com/advertisers/us/mediaOnline Advertising Optimization Tools
http://services.google.com/advertisers/us/optimizationStaying up-to-date on Online Advertising
http://services.google.com/advertisers/us/stayuptodateEducation and Training on Digital Advertising
Certification Programs for Digital Advertising Companies and Individuals
http://www.google.com/intl/en/adwords/professionals/Adwords Certification Program Learning Materials
http://adwords.google.com/support/aw/bin/static.py?hl=en&page=examstudy.cs&ctx=goInnovations in Digital Advertising
http://www.google.com/ads/innovations/Originally posted in
http://knol.google.com/k/narayana-rao/online-advertising-google-media-and/2utb2lsm2k7a/5438#
Value Based Pricing and Revenue Sharing Pricing for Website Design
Source Knol
How to Price Your Web Design Work
Accessed on 10.9.2011
Revenue Sharing
Instead of value based pricing, a web designer can offer revenue sharing based on expected sales of the website and become a partner in the e-commerce venture. The small business persons will be more willing to take up website based commerce if revenue sharing based web design services are offered to them.
Originally posted at
http://knol.google.com/k/narayana-rao/value-based-pricing-and-revenue-sharing/2utb2lsm2k7a/5644#
How to Price Your Web Design Work
Accessed on 10.9.2011
Value-based Pricing
Value-based pricing takes a different approach because the final price is rests not on you, but on your client. Instead of extracting the price you will tell your client from your salary, your hourly rate, or your desired profit and return, you will take a cue from how much value your client puts on the benefits of the website you will be building. Yeah, it's a bit less proactive than the previous two methods, but it has the biggest potential.
Let's imagine that your client is book publisher and they want a website to sell their latest release, a sequel to a successful teen romantic novel about vampires and werewolves (What cool novel doesn't have vampires and werewolves these days?). The book costs $15 and they're expecting a boost in sales because of the movie version of the first novel is coming soon. You estimate that the new website that you will design will get a monthly traffic of 1,000 visitors per month for the first year, with a conversion rate of 1%, or 1% of people who visit the site will buy the new book:
Let's calculate the estimated amount of sales the new website will generate for your client:
1,000 visitors/month X 1% = 10 visitors buying the book per month
10 visitors X $15 per book = $150 book sales per month
$150 / month X 12 months = $1,800 book sales for 1 year
As you can see, you estimate that the website could generate $1,800 for your client, yet you only need $420 to break even. With knowledge of the benefit your client will get from the website, are you going to bill your client a price in the vicinity of $420? Of course not, except maybe when you have a handshake deal after four shots of tequila .
You can bill your client $900, and present that they'll be getting a 100% return in one year. You go home happy with a deal in hand, then that's the time you go on drinking your four shots of tequila in celebration.
The challenge with Value-based pricing is that most of the time, you have little or know information about the benefits your client is getting for the website or service you will be providing them. So this entails a lot of research and business intelligence on your part to find that valuation.
Revenue Sharing
Instead of value based pricing, a web designer can offer revenue sharing based on expected sales of the website and become a partner in the e-commerce venture. The small business persons will be more willing to take up website based commerce if revenue sharing based web design services are offered to them.
Originally posted at
http://knol.google.com/k/narayana-rao/value-based-pricing-and-revenue-sharing/2utb2lsm2k7a/5644#
Accountability - What is meant by making people accountable?
I hear many times people saying there is no accountability in the organization. What is the meaning of the term? What is a good meaning of the term.
I liked the explanation in the blog post :
http://www.leadershipnow.com/leadingblog/2011/09/the_3_core_elements_of_delegat.html
Accountability is the moral compulsion felt by a team member to meet the objectives and goals of an assigned task.
The team leader must be able to choose people and assign tasks that each member of the team is committed morally to achieve the goal. What is moral commitment? Moral commitments create a guilt feeling the in the person when he could not achieve the desired result or show appropriate behavior in the effort.
Originally posted at
http://knol.google.com/k/narayana-rao/accountability-what-is-meant-by-making/2utb2lsm2k7a/5806#
I liked the explanation in the blog post :
http://www.leadershipnow.com/leadingblog/2011/09/the_3_core_elements_of_delegat.html
Accountability is the moral compulsion felt by a team member to meet the objectives and goals of an assigned task.
The team leader must be able to choose people and assign tasks that each member of the team is committed morally to achieve the goal. What is moral commitment? Moral commitments create a guilt feeling the in the person when he could not achieve the desired result or show appropriate behavior in the effort.
Originally posted at
http://knol.google.com/k/narayana-rao/accountability-what-is-meant-by-making/2utb2lsm2k7a/5806#
CEOS and Successful Entrepreneurs Have to Coach Aspiring Entrepreneurs
Many steps of enterprise starting can be taught through formal courses. But success as an entrepreneur depends on a fairly unusual combination of personality traits and innovative skills, most of which can be honed on the job only (Richard Bronson). Hence most novice entrepreneurs need the kind of guidance that the successful CEOs and entrepreneurs provide in the role of mentors. There can be even knowledge, traits and skills particularly relevant to the current environment and these can be articulated better by the currently successful businessmen and the persons willing to start new ventures can benefit by being aware of them. Then only they can start attempts to know more about them and use available learning opportunities. Even persons who are in the business of coaching new entrepreneurs may come to know about new knowledge, traits and skills through the conversations with the successful business people.
Richard Bronson is right in stating that where existing successful business persons are willing to share their thoughts regarding successful business with the rest of the community especially with the segments most relevant, community success will be more prominent.
The thought by Richard Bronson
http://www.businessday.co.za/Articles/Content.aspx?id=154353
Originally posted at
http://knol.google.com/k/narayana-rao/ceos-and-successful-entrepreneurs-have/2utb2lsm2k7a/5838#
Richard Bronson is right in stating that where existing successful business persons are willing to share their thoughts regarding successful business with the rest of the community especially with the segments most relevant, community success will be more prominent.
The thought by Richard Bronson
http://www.businessday.co.za/Articles/Content.aspx?id=154353
Originally posted at
http://knol.google.com/k/narayana-rao/ceos-and-successful-entrepreneurs-have/2utb2lsm2k7a/5838#
Tradeoffs and Targeting in Operations Strategy - Revision Notes
Revision notes for Chapter 3 of Nigel Slack and Michael Lewis
Operations strategy takes place in a dynamic environment. As markets change, the type of things operations is called upon to do will also change. The operations strategy has to change. At any point in this dynamic development of operations strategy, the resources of operations are all interrelated and any change will have different effects on them. In the short term, the resources of an organization cannot be exceptionally good at everything the market requires and may have to optimize its output and performance measures by accepting lower performance in one area for excellence in another. This idea of sacrificing one thing for great performance in another area can be taken to its logical conclusion by focusing or targeting operations on a very narrow set of tasks and objectives from the available opportunities that the market provides.
Operations strategy changes over time
• The chapter utilized the example of Volkswagen Motor Company it show how the balance between operations resources and market requirements has changed over time. One of the illustration in the VW story is the announcement of 11 joint production systems among all modes from four platform systems at the time in use
• The importance of attention to operations strategy changes over time. Three areas are seen by some authorities see as the major pillars for the foundation of competition.
• The product or service specification (product strategy).
• The way the company markets its products and services (marketing strategy).
• The way in which it manages its operations which create products and services (operations strategy).
• The way the company markets its products and services (marketing strategy).
• The way in which it manages its operations which create products and services (operations strategy).
• The idea is illustrated in the change in importance given to product/service strategy, marketing strategy and operations strategy in the pharmaceutical industry over a period.
• Initially large pharmaceutical companies devoted their attention to almost exclusively to applied research and development and saw themselves as companies whose future depended on the development of new drugs. Huge amounts were invested in developing the drugs. But as some new drugs were discovered, marketing the products became important, and in the 1970s and 1980s, the amount of money that pharmaceutical companies spent on marketing their products started to equal and then exceed their expenditure on developing new drugs. In subsequent periods, competition becomes fiercer and generic drug manufacturers with lower prices appeared, the large pharmaceutical companies have turned their attention to increasing the efficiency of their operations strategy, most especially their supply chain strategies. Interestingly, it is pointed out that many people in the industry now believe that opportunity of exploring the human genome may result in a swing back to an increased emphasis on new product (that is drug) development as the basis for competitive advantage in the future periods to come.
• The chapter also points out that the idea of the “emergent strategy” is important when considering the dynamics of operations strategy. This point is important in operations strategy theory. Emergent strategies emerge from the organization resources, and large amount of resources of an organization are employed in operations function.
Trade-offs
• The issue of trade-offs has been positioned as a closely fought debate in operations strategy.
• In its history of development, three schools can be identified in the thought regarding trade-offs. The original school of thought was started by Wickham Skinner who first pointed out that trade-offs were an important issue in operations strategy. He emphasized the point that trade-offs should be determined to reflect the company’s overall strategy or alignment with the overall strategy. Achieving the right balance or positioning between various performance objectives in alignment with the overall strategy is fundamental in developing operations strategy. The second school of thought of improvement in performance capabilities over time was positioned as an criticism of this idea. It emerged in the early 1980s in movement of understanding the Japanese manufacturing principles and the concept of continuous improvement. Put simply, it claimed that trade-offs were largely imagined and unnecessarily highlightd. It advocated that the main objective of operations management was to be good at everything. Merely accepting that one aspect of performance must be designed at lower level or forced to deteriorate if another is to be improved was, they claimed, at best unimaginative and at worst irresponsible. The third (and now largely accepted) school of thought is that yes, trade-offs do exist in the short term, but over time they can be overcome and operations strategy needs to include programs to improve performance capabilities. The chapter promotes the third school.
Targeting and operations focus
• The idea of targeting operations or parts of operations on a relatively narrow set of tasks or markets is not a new one. It was first written about in the 1960s and 70s but was in practice must before. It is one of the most important “solutions” to managing the complexity present in most operations.
• Put simply, focused operations facilities are given a narrow set of objectives, technologies, products or services, markets, or activities on which to concentrate.
• There are a number of advantages to focusing operations.
• The overall managerial targets for operations management can be made more focused and clear. For example keeping costs to a minimum on a small set of standard products is one target statement while provide customization service to the customer and the customers will pay on cost basis is another target statement.
• Resources appropriate for those narrower set of objectives can be allocated to this focused operation. For example, if cost is the main objective then high volume, low variable cost technology could be used. If customization is particularly important then more flexible technology could be used.
• Focused operations can take a more appropriate improvement trajectory. For example the operations that concentrate on cost can become particularly experienced in shaving every cent off operations costs and employ people well trained in smaller set of skills, whereas those specializing in customization can develop skills of understanding and interpreting customers’ needs and employ people with multi-skilling into the delivered service.
• Focused operations can take a more appropriate improvement trajectory. For example the operations that concentrate on cost can become particularly experienced in shaving every cent off operations costs and employ people well trained in smaller set of skills, whereas those specializing in customization can develop skills of understanding and interpreting customers’ needs and employ people with multi-skilling into the delivered service.
• When operations are set up as independent units with particular focus, each facility with a high degree of focus has to make a success of its business or fold. There is no option to continue with the strategic decision if it is not contributing to profits.
CHAPTER 3. TIME, TRADE-OFFS, AND TARGETING
Nigel Slack and Michael Lewis, Operations Strategy
2nd Ed. 2009
Pearson Prentice Hall
Textbook and Student Guide
Powerpoint slides of the chapter from the first edition
http://www2.gsu.edu/~mgtwlw/operationstrategy/chap03.pptOriginally posted at
http://knol.google.com/k/narayana-rao/tradeoffs-and-targeting-in-operations/2utb2lsm2k7a/5903
Friday, December 23, 2011
Leadership - Cases and Readings
Co-Leadership: A Manifesto to enhance leadership effectiveness and longevity
by Stephen Remedios - Freelance Coach & Executive Trainer at The Stephen Remedios Company
Dec 2011
Know "Thyself" in Leadership
by Shane Newman - Business Owner at NH Packing
Dec 2011
Level 1 Leadership Communication – Becoming the Leader You Want/Need to Be
by Skip Weisman - Leadership & Workplace Communication Expert at Weisman Success Resources, Inc.
Stone Soup Global Leadership - a new model of collaborative leadership to address today’s global challenges
by Deb Kemper - Executive Director - Stone Soup Global Leadership Initiative at JUCCCE
Dec 2011
The TELUS Leadership Philosophy: a collaborative, engaging and open leadership framework for 35,000+ team members
by Dan Pontefract - Senior Director, Head of Learning & Collaboration at TELUS
by Stephen Remedios - Freelance Coach & Executive Trainer at The Stephen Remedios Company
Dec 2011
Know "Thyself" in Leadership
by Shane Newman - Business Owner at NH Packing
Dec 2011
Level 1 Leadership Communication – Becoming the Leader You Want/Need to Be
by Skip Weisman - Leadership & Workplace Communication Expert at Weisman Success Resources, Inc.
Stone Soup Global Leadership - a new model of collaborative leadership to address today’s global challenges
by Deb Kemper - Executive Director - Stone Soup Global Leadership Initiative at JUCCCE
Dec 2011
The TELUS Leadership Philosophy: a collaborative, engaging and open leadership framework for 35,000+ team members
by Dan Pontefract - Senior Director, Head of Learning & Collaboration at TELUS
Operations Management - Cases and Readings
Vodafone UK's revolutionary approach to mobility, flexibility & productivity
by Richard Wray - Head of External Communications at Vodafone UK
December 2011
by Richard Wray - Head of External Communications at Vodafone UK
December 2011
Marketing Management - Cases and Readings
A Partnership Marketing Manifesto
by Andrew Armour - Founder, Managing Director, Principal Consultant at Benchstone
Marketing Challenges of Many2Many Communications
by Ashish Jajoo - Director Strategic Engagements & Digital Marketing at CIBER Inc.
July 2011
by Andrew Armour - Founder, Managing Director, Principal Consultant at Benchstone
Marketing Challenges of Many2Many Communications
by Ashish Jajoo - Director Strategic Engagements & Digital Marketing at CIBER Inc.
July 2011
Strategic Management - Cases and Readings
Are the Principles of War applicable to corporate management?
by Salvatore Moccia - Professor of Strategic Management at Universidad CEU Cardenal Herrera
August 2010
Democratizing the Strategic Management Process at Red Hat.
By Jackie Yeaney - Executive Vice President, Strategy and Corporate Marketing at Red Hat, November 2011
From Total Quality Management to Total Innovation Management
by Willy A. Sussland - Sussland & Associates consults with senior mangement on strategic and organizational effectiveness.
How Red Hat found its mission—the open source way
By Jim Whitehurst
August 2011
Strategic Planning, the Purpose Driven Way: Using Nature’s Seedal Chain Principle
by Charles Prabakar - Executive Global Partner/Managing Director at ABS/Willis Consulting LLC
June 2011
by Salvatore Moccia - Professor of Strategic Management at Universidad CEU Cardenal Herrera
August 2010
Democratizing the Strategic Management Process at Red Hat.
By Jackie Yeaney - Executive Vice President, Strategy and Corporate Marketing at Red Hat, November 2011
From Total Quality Management to Total Innovation Management
by Willy A. Sussland - Sussland & Associates consults with senior mangement on strategic and organizational effectiveness.
How Red Hat found its mission—the open source way
By Jim Whitehurst
August 2011
Strategic Planning, the Purpose Driven Way: Using Nature’s Seedal Chain Principle
by Charles Prabakar - Executive Global Partner/Managing Director at ABS/Willis Consulting LLC
June 2011
Wednesday, December 21, 2011
Behavioral Approach to Strategic Management - Research Papers
Strategic Management Journal,
December 2011,Volume 32, Issue 13,Pages 1369–1523
is a special issue on behavioral issues of strategic management and all articles are free to access.
http://onlinelibrary.wiley.com/doi/10.1002/smj.v32.13/issuetoc
- Behavioral strategy (pages 1369–1386)
Thomas C. Powell, Dan Lovallo and Craig R. Fox
Article first published online: 27 OCT 2011 | DOI: 10.1002/smj.968
- How middle managers' group-focus emotions and social identities influence strategy implementation (pages 1387–1410)
Quy Nguyen Huy
Article first published online: 27 OCT 2011 | DOI: 10.1002/smj.961
- Dysfunctional learning in decision processes: the case of employee reciprocity (pages 1411–1425)
Alex B. Markle
Article first published online: 27 OCT 2011 |
- You have free access to this contentAdaptive aspirations: performance consequences of risk preferences at extremes and alternative reference groups (pages 1426–1436)
Songcui Hu, Daniela Blettner and Richard A. Bettis
Article first published online: 27 OCT 2011 |
- Rational heuristics: the ‘simple rules’ that strategists learn from process experience (pages 1437–1464)
Christopher B. Bingham and Kathleen M. Eisenhardt
Article first published online: 27 OCT 2011 |
- Corporate capital allocation: a behavioral perspective (pages 1465–1483)
David Bardolet, Craig R. Fox and Dan Lovallo
Article first published online: 27 OCT 2011 | DOI: 10.1002/smj.966
- You have free access to this contentNeurostrategy (pages 1484–1499)
Thomas C. Powell
Article first published online: 27 OCT 2011 |Abstract
- Psychological foundations of dynamic capabilities: reflexion and reflection in strategic management (pages 1500–1516)
Gerard P. Hodgkinson and Mark P. Healey
Article first published online: 27 OCT 2011 | DOI: 10.1002/smj.964
- A behavioral approach to strategy—what's the alternative? (pages 1517–1523)
Daniel A. Levinthal
Article first published online: 27 OCT 2011 | DOI: 10.1002/smj.963
Tuesday, December 20, 2011
Leader's Ambition - Organization Mission
The best executives have as their ambition contribution to the mission of the organization.
"If your leadership flows first and foremost from inner character and integrity of ambition, then you can justly ask people to lend themselves to your organization and its mission." (Jim Collins)
Organization members don't work to fulfil the self centric ambitions of a leader. They work the mission of the organization.
"In a world where the very best people are ultimately volunteers, why on earth should they give over their creative energies to advance the greater glory of a leader whose ambition is first and foremost self-centric? They shouldn't, and they don't." (Jim Collins)
Jim Collins in foreword to the book, Hesselbein on Leadership
http://www.jimcollins.com/article_topics/articles/hesselbein.html
Originally posted in
http://knol.google.com/k/narayana-rao/leader-s-ambition-organization-mission/2utb2lsm2k7a/6014#
"If your leadership flows first and foremost from inner character and integrity of ambition, then you can justly ask people to lend themselves to your organization and its mission." (Jim Collins)
Organization members don't work to fulfil the self centric ambitions of a leader. They work the mission of the organization.
"In a world where the very best people are ultimately volunteers, why on earth should they give over their creative energies to advance the greater glory of a leader whose ambition is first and foremost self-centric? They shouldn't, and they don't." (Jim Collins)
Jim Collins in foreword to the book, Hesselbein on Leadership
http://www.jimcollins.com/article_topics/articles/hesselbein.html
Originally posted in
http://knol.google.com/k/narayana-rao/leader-s-ambition-organization-mission/2utb2lsm2k7a/6014#
Sunday, December 18, 2011
Friday, December 16, 2011
Minimum Wage Regulation in USA
USA has minimum wage regulation
The federal minimum wage for covered nonexempt employees is $7.25 per hour effective July 24, 2009.
The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). Many states also have minimum wage laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.
The Department of Labor’s Wage and Hour Division administers and enforces the federal minimum wage law.
http://www.dol.gov/dol/topic/wages/minimumwage.htm
The federal minimum wage for covered nonexempt employees is $7.25 per hour effective July 24, 2009.
The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). Many states also have minimum wage laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.
The Department of Labor’s Wage and Hour Division administers and enforces the federal minimum wage law.
http://www.dol.gov/dol/topic/wages/minimumwage.htm
Wednesday, December 14, 2011
Behavioral Economics and Finance - Bibliography - Articles, Books, Blogs and Sites
Behavioral finance deals with irrationality that creeps into economic and financial decision making.
Simon Gervais
Behavioral Finance: Capital Budgeting and other Investment Decision
Book chapter
http://faculty.fuqua.duke.edu/~sgervais/Research/Papers/BookChapter.OvCapitalBudgeting.pdf
Simon Gervais
Behavioral Finance: Capital Budgeting and other Investment Decision
Book chapter
http://faculty.fuqua.duke.edu/~sgervais/Research/Papers/BookChapter.OvCapitalBudgeting.pdf
Human Resource Management - Bibliography - Articles, Blogs, Books, Presentations
Articles
Using HRM to compete in 21st century
http://findarticles.com/p/articles/mi_hb3266/is_n4_v38/ai_n28703302/
Blogs & Web Pages on HRM
Web page with many links to presentations on HRM
http://www.andrews.edu/~schwab/bs670.html
Books on HRM
Interesting book on HRM for line managers by University of California, San Francisco, Addresses to the line manager as you and gives instructions.
http://ucsfhr.ucsf.edu/index.php/pubs/HRGuide/
Presentation on HR
http://www.csupomona.edu/~wcweber/301/301slide/ch10301/tsld001.htm
Using HRM to compete in 21st century
http://findarticles.com/p/articles/mi_hb3266/is_n4_v38/ai_n28703302/
Blogs & Web Pages on HRM
Web page with many links to presentations on HRM
http://www.andrews.edu/~schwab/bs670.html
Books on HRM
Interesting book on HRM for line managers by University of California, San Francisco, Addresses to the line manager as you and gives instructions.
http://ucsfhr.ucsf.edu/index.php/pubs/HRGuide/
Presentation on HR
http://www.csupomona.edu/~wcweber/301/301slide/ch10301/tsld001.htm
Tuesday, December 13, 2011
Budget, Budgeting and Budgetary Control
Management Accounting- Control-Decision Making Articles Series
A budget is a formal quantitative expression of management plans.
Budgets can be made by managers at any level including a single person managing a machine or operating a machine. In the context of business, budget may have revunue, expenses and profits, all in a single statement. But one can think of a budget for revenues alone, budget for expenses alone.
_______________________________________________________________
A budget is a formal quantitative expression of management plans.
Budgets can be made by managers at any level including a single person managing a machine or operating a machine. In the context of business, budget may have revunue, expenses and profits, all in a single statement. But one can think of a budget for revenues alone, budget for expenses alone.
Master budget for a big organization summarizes the goals of all subunits of an organization - either business divisions if the company is organized along divisional lines or managerial functions if the company is organized along functional lines.
The master budget consists of expected or projected income statement, balance sheet, and a cash flow statement, along with supporting schedules.
The advocates of budgeting state that the process of preparing budget forces executives to become better managers. Budgeting schedule of a company puts planning where it belongs - in the forefront of every manager's mind. It also forces him to review his performance in the last period and identify good practices that enhanced performance and issues that contributed negatively to performance.
The formal budgeting system has the following major benefits.
1. Budgeting due to its formal time table or schedule compels managers to think ahead apart from taking care of their current activities.
2. Budgeting, due to its approval and authorization by the superiors, provides definite expectations that are the best framework for judging subsequent performance.
3. Budgeting helps in coordinating the various departements of the organization. The budget harmonizes the goals (objectives) of the individual departments into the organization wide goals (objectives).
Budgetary control at department level is encouraging department level personnel to plan their operations for the forth coming period. Both outputs and inputs are to be planned. If possible outputs and inputs are converted into revenues and costs.
The accounting system of the company will prepare the actual revenues and costs generated at the end of the period as well as during the period. The department managers have to responsibility to carry out the day to day activities to achieve the best possible results with their plan/budget as the guiding document.
Budgets can be made flexible so that cost estimates are in relation to the output produced.
Variance analysis can be done to pin point the variables that changed during the period and their effect on actual results.
Budgetary control system facilitates participation of department managers as well as senior level managers in explicitly planning for the future. The plan can be optimized with various optimization techniques.
These techniques include linear programming (for product mix problems), transportation (for planning transport of finished goods) and assignment (assigning machines for jobs or operators for jobs) and other operations research techniques. A formal budgeting system can question the department managers on whether they have applied the optimization techniques or not and where necessary advise them to use those techniques and provide specialist support in cases where necessary.
Horngren, Charles, T., Gary L. Sundem, and William O. Stratton, Introduction to Management Accounting, 13th Ed., Prentice Hall, 1999.
Originally posted in
http://knol.google.com/k/budget-budgeting-and-budgetary-control
A budget is a formal quantitative expression of management plans.
Budgets can be made by managers at any level including a single person managing a machine or operating a machine. In the context of business, budget may have revunue, expenses and profits, all in a single statement. But one can think of a budget for revenues alone, budget for expenses alone.
_______________________________________________________________
Budget
A budget is a formal quantitative expression of management plans.
Budgets can be made by managers at any level including a single person managing a machine or operating a machine. In the context of business, budget may have revunue, expenses and profits, all in a single statement. But one can think of a budget for revenues alone, budget for expenses alone.
Master Budget
Master budget for a big organization summarizes the goals of all subunits of an organization - either business divisions if the company is organized along divisional lines or managerial functions if the company is organized along functional lines.
The master budget consists of expected or projected income statement, balance sheet, and a cash flow statement, along with supporting schedules.
Benefits of Budgeting or Imperative for Budgeting
The advocates of budgeting state that the process of preparing budget forces executives to become better managers. Budgeting schedule of a company puts planning where it belongs - in the forefront of every manager's mind. It also forces him to review his performance in the last period and identify good practices that enhanced performance and issues that contributed negatively to performance.
The formal budgeting system has the following major benefits.
1. Budgeting due to its formal time table or schedule compels managers to think ahead apart from taking care of their current activities.
2. Budgeting, due to its approval and authorization by the superiors, provides definite expectations that are the best framework for judging subsequent performance.
3. Budgeting helps in coordinating the various departements of the organization. The budget harmonizes the goals (objectives) of the individual departments into the organization wide goals (objectives).
Budgetary control at department level is encouraging department level personnel to plan their operations for the forth coming period. Both outputs and inputs are to be planned. If possible outputs and inputs are converted into revenues and costs.
The accounting system of the company will prepare the actual revenues and costs generated at the end of the period as well as during the period. The department managers have to responsibility to carry out the day to day activities to achieve the best possible results with their plan/budget as the guiding document.
Budgets can be made flexible so that cost estimates are in relation to the output produced.
Variance analysis can be done to pin point the variables that changed during the period and their effect on actual results.
Budgetary control system facilitates participation of department managers as well as senior level managers in explicitly planning for the future. The plan can be optimized with various optimization techniques.
These techniques include linear programming (for product mix problems), transportation (for planning transport of finished goods) and assignment (assigning machines for jobs or operators for jobs) and other operations research techniques. A formal budgeting system can question the department managers on whether they have applied the optimization techniques or not and where necessary advise them to use those techniques and provide specialist support in cases where necessary.
References
Horngren, Charles, T., Gary L. Sundem, and William O. Stratton, Introduction to Management Accounting, 13th Ed., Prentice Hall, 1999.
Originally posted in
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Project Management
1 What is a Project?
Generally projects are made up of:
· a defined beginning,
· multiple activities which are performed to a plan,
· a defined end.
Two essential features are present in every project no matter how simple or complicated they are. In the first place, all projects must be planned out in advance if they are to be successfully executed. Secondly, the execution of the project must be controlled to ensure that the desired results are achieved.
Regardless of the nature or size of your project a successful outcome can only be achieved by using sound project management techniques. It is also important to remember that projects are carried out by people, and the human aspects of project management are critical for the project success.
1.1 Terminology and Definitions
A project is an interrelated set of activities that has a definite starting and ending point and results in the accomplishment of a unique, often major outcome. "Project management" is, therefore, the planning and control of events that, together, comprise the project. Project management aims to ensure the effective use of resources and delivery of the project objectives on time and within cost constraints.
An activity or task is the smallest unit of work effort within the project and consumes both time and resources which are under the control of the project manager. A project is a sequence of activities that has a definite start and finish, an identifiable goal and an integrated system of complex but interdependent relationships.
A schedule allocates resources to accomplish the activities within a timeframe. The schedule sets priorities, start times and finish times.
Project management is:
the adept use of techniques and skills (hard and soft) in planning and controlling tasks and resources needed for the project, from both inside and outside of organisation, to achieve results.
The purpose of project management is to achieve successful project completion with the resources available. A successful project is one which:
· has been finished on time
· is within its cost budget
· performs to a technical/performance standard which satisfies the end user.
1.2 The Attributes of Successful Project Management in an Organization
The effectiveness of project management is critical in assuring the success of any substantial undertaking. Areas of responsibility for the project manager include planning, control and implementation. A project should be initiated with a feasibility study, where a clear definition of the goals and ultimate benefits need to be established.
Knowledge, skills, goals and personalities are all factors that need to be considered within project management. The project manager and his/her team should collectively possess the necessary and requisite interpersonal and technical skills to facilitate control over the various activities within the project.
The stages of implementation must be articulated at the project planning phase. Disaggregating the stages at its early point assists in the successful development of the project by providing a number of milestones that need to be accomplished for completion. In addition to planning, the control of the evolving project is also prerequisite to success. Control requires adequate monitoring and feedback mechanisms by which senior and project managers can compare progress against initial projections at each stage of the project. Monitoring and feedback also enables the project manager to anticipate problems (e.g.: the knock-on effects of late start or finish times) and therefore take pre-emptive corrective measures for the benefit of the project overall.
Projects normally involve the introduction of a new system of some kind and, in almost all cases, new methods and ways of doing things. This impacts upon the work of others: the "users (customer)". User (customer) consultation is an important factor in the success of projects
Projects normally involve the introduction of a new system of some kind and, in almost all cases, new methods and ways of doing things. This impacts upon the work of others: the "users (customer)". User (customer) consultation is an important factor in the success of projects
1.2.1 Features of projects
· Projects are often carried out by a team of people who have been assembled for that specific purpose. The activities of this team may be co-ordinated by a project manager.
· Project teams may consist of people from different backgrounds and different parts of the organisation. In some cases project teams may consist of people from different organisations.
· Project teams may be inter-disciplinary groups and are likely to lie outside the normal organisation hierarchies.
· The project team will be responsible for delivery of the project end product to some sponsor within or outside the organisation. The full benefit of any project will not become available until the project as been completed.
In recent years more and more activities have been tackled on a project basis. Project teams and a project management approach have become common in most organisations. The basic approaches to project management remain the same regardless of the type of project being considered. You may find it useful to consider projects in relation to a number of major classifications:
a) Engineering and construction
The projects are concerned with producing a clear physical output, such as roads, bridges or buildings. The requirements of a project team are well defined in terms of skills and background, as are the main procedures that have to be undergone. Most of the problems which may confront the project team are likely to have occurred before and therefore their solution may be based upon past experiences.
b) Introduction of new systems
These projects would include computerisation projects and the introduction of new systems and procedures including financial systems. The nature and constitution of a project team may vary with the subject of the project, as different skills may be required and different end-users may be involved. Major projects involving a systems analysis approach may incorporate clearly defined procedures within an organisation.
c) Annual Projects
An example is the preparation of an annual report by a specified date. Another example is the annual budget preparation.
Activity
Consider this last category. Can you think of any examples where your organisation needs to respond to change and a project management approach may be valid?
1.3 Responsibilities of the Project Manager
1. To plan thoroughly all aspects of the project, soliciting the active involvement of all functional areas involved, in order to obtain and maintain a realistic plan that satisfies their commitment for performance.
2. To set up the organization needed to implement the project.
3. To control the basic technical definition of the project, ensuring that "technical" versus "cost" trade-offs determine the specific areas where optimisation is necessary.
4. To lead the people and organizations assigned to the project at any given point in time. Strong positive leadership must be exercised in order to keep the many disparate elements moving in the same direction in a co-operative.
5. To monitor performance, costs and efficiency of all elements of the project and the project as a whole, exercising judgement and leadership in determining the causes of problems and facilitating solutions.
6. To complete the project on schedule and within costs, these being the overall standard by which performance of the project manager is evaluated.
1.3.1 Why do projects go wrong?
There can be many reasons why projects go wrong. The most common reasons are as follows:
a) Project goals are not clearly defined
b) The constraints on the completion of projects are not understood properly.
Ø Short time scale
Ø Resource availability
Ø Quality factors
Ø Human factors
c) Adequate resources were not planned for.
d) Project plan was not managed properly. Project manager has to replan on a continuous basis as certain activities or delayed. All activities are subject to variable times of completion. Project manager has to reschedule resources on continuous basis to optimize costs.
e) Customers or project sponsors were not given appropriate feedback.
1.1.1 Problems with Project Goals
· The project sponsor or client has an inadequate idea of what the project is about at the start.
· There may be a failure of communication between the client and the project manager. The may be due to a lack of technical knowledge on the part of the client or an overuse of jargon by the project manager.
· Specifications may be subject to constant change. This may be due to problems with individual clients, decision making processes at the client end, or environmental changes. For example the government may change the basic "rules of the game" before the completion of the project.
· The project goals may be unrealistic and unachievable, and it may be that this is only realised once the project is under way.
· The client may become carried away with the idea of the project and may be unable to see clearly what can be achieved.
· Projects may be highly complex and may have a number of objectives that actually contradict each other.
There are perhaps two stages which can help in ensuring that goals are properly defined and achievable:
a) Ensuring that the client specification is clear and understandable. To do this you must first of all establish the objectives of the project. It would help to ask the following questions:
· What is it that the organisation is setting out to achieve or is being asked to achieve?
· Will the suggested project fulfil these objectives?
· Have all the alternatives been considered and is the chosen option the best one available?
· Have the full effects of the project, both inside and outside the organisation, been considered?
b) Preparation of a Project overview (Project brief). The brief should take the objectives set out in the previous exercise and translate them into targets and goals. Any key constraints should also be identified and stated at this stage. This brief should be agreed by the sponsor/client and communicated to the project manager. Any ambiguities or queries should be sorted out as soon as possible.
A good way forward would be through the establishment of success criteria for the project. If you want the project to succeed , then you have to know when you have succeeded.
Success criteria can be described as being hard or soft:
a) Hard criteria
· Performance specifications: these may be set out in terms of the ability to deal with certain demands. For example, this could be throughput of traffic, number of patients, volume of transactions processed or the number of enquiries dealt with.
· Specific quality standards: this could relate to technical standards and tolerance, or may be the achievement of a favourable report from an outside inspection agency.
· Meeting deadlines: this is probably the most obvious one of them all where projects need to be completed within a given time scale. For example, a new system may need to be implemented ready for the start of the financial year, or a new development may have to meet time requirements as laid down in contract specifications.
· Cost of budget constraints: an important criterion may be to complete the project within a cost limit or budget which has been determined. Additionally there may be requirements in terms of the ongoing cost of the completed project. For example, a new system may be required to make savings for the organisation on a continuing basis.
As you can see, the above criteria are relatively easy to establish and should also be quite easy to specify in a project brief.
b) Soft criteria
· Demonstrative co-operation: The project team was managed in such a way that it could work together effectively and without a degree of conflict in future also. It could be an important consideration to develop and implement solutions for the organisation which have a wide element of consensus and stem from a co-operative attitude.
· Developing and maintaining a positive image:
· Development of total quality approach in project management.
· Gaining commitment: this is again about how the project is managed and the attitude of the project team to it.
· Ensuring that ethical standards are maintained: it can be very important to ensure that no corners have been cut that should not have been and that professional standards of ethics have not been breached.
· Showing an appreciation of risk: this would ensure that no unacceptable risks were taken in the pursuit of other project objectives. This aspect has to be in the project plan as well as subsequent decisions.
1.1.2 Constraints on the completion of projects
a) Time
The definition of a project stated that it was an activity which had a defined beginning and ending point. Most projects will be close-ended in terms of there being a requirement for completion by a certain point in time. There is likely to be some relationship between the time taken for a project and its cost. A trade-off between the two constraining factors may then be necessary.
b) Resource Availability
There is likely to be a budget for the project and this will clearly be a major constraint. Cost constraints may be set in a number of ways, for example as an overall cash limit or as a detailed budget broken down over a number of expenditure headings. Labour resources in particular may be a limiting factor on the completion of the project. In the short run it is likely that labour will be fixed in supply. Whilst the overall resource available may in theory be sufficient to complete the project, there may be difficulties arising out of the way in which the project has been scheduled. That is, there may be a number of activities scheduled to take place at the same time and this may not be possible given the amount of resources available.
2 THE PROCESS OF PROJECT MANAGEMENT
2.1 Project Planning
A major decision at the outset of any project is to decide upon the organization and composition of the project planning team. In so doing, it is worth remembering that many members will have dual responsibilities of involvement in the project in addition to a commitment to other projects or management of a functional area on a day-to-day basis. It is at this stage that a project manager should be appointed and responsibilities made explicit for all members of the team.
The project planning team will, therefore, begin its task in advance of project proper so that a plan can be developed. An important first step is to set the objectives and then define the project, breaking it down into a set of activities and related costs. It is probably too early to determine exact resource implications at this stage, but expected requirements for people, supplies and equipment should at least be estimated during the planning stage.
2.2 Project Scheduling
This phase is primarily concerned with attaching a timescale and sequence to the activities to be conducted within the project. Materials and people needed at each stage of the project are determined and the time each is to take will be set.
A popular and easy to use technique for scheduling is the use of Gantt charts.
2.2.1 Gantt Charts
A Gantt Chart is a simple technique that can be used to attach a time scale and sequence to a project.
A Gantt Chart is a form of horizontal bar chart and horizontal bars are drawn against a time scale for each project activity, the length of which represents the time taken to complete. To construct a Gantt Chart the following steps are necessary:
1) Use the horizontal axis to represent time
2) Use the vertical axis to represent activities
3) Represent each activity by a horizontal bar of appropriate length
4) Take activity procedures into account by starting each activity bar to an appropriate point along the time axis after its preceding activities. Normally the start point for an activity is the earliest time that it could start after its preceding activities had finished.
It is possible to enhance the Gantt Chart in several ways. For instance the number of staff required to do a task can be entered into the bar on the diagram.
Gantt charts, also commonly known as milestone plans, are a low cost means of assisting the project manager at the initial stages of scheduling. They ensure that:
1. all activities are planned for,
2. the sequence of activities is accounted for,
3. the activity time estimates are recorded; and
4. the overall project time is recorded.
They are therefore a simple, rough and ready means of planning a project and assessing progress and are sufficient for most simple projects.
Gantt charts also provide a summary of the project as a whole and can be used as a rough and ready means of assessing progress at the project control phase. At any date, the project manager can draw a dateline through the Gantt chart and see which activities are on-time, which are behind schedule and generally record project status against plan.
Gantt charts, named after Henry L. Gantt, one of the pioneers of scientific management, are a useful means of representing a schedule of activities comprising a project and enable the operations manager to know exactly what activities should be performed at a given time and, more importantly, to monitor daily progress of a project so that corrective action may be taken when necessary.
To construct a Gantt chart, the various activities are listed on a vertical axis and the horizontal axis is used to represent time. Activity precedencies are taken into account by starting a horizontal bar to represent the next activity at an appropriate point after its preceding activities, i.e. those activities which must take place before the next activity can start, have taken place. Normally this would be at the earliest time that it could start after its preceding activities had finished.
Those activities forming the critical path can be highlighted on the Gantt chart to help the operations manager to give priority to them if lack of resources mean that such decisions have to be made.
However, where projects become complex, it becomes difficult to see relationships between activities by using a Gantt Chart. For more complex projects Network Analysis techniques are used.
3 Network Analysis
3.1 Introduction to PERT and CPM
The two most common and widely used project management techniques that can be classified under the title of Network Analysis are Programme Evaluation and review Technique (PERT) and Critical Path Method (CPM). Both were developed in the 1950's to help managers schedule, monitor and control large and complex projects. CPM was first used in 1957 to assist in the development and building of chemical plants within the DuPont corporation. Independently developed, PERT was introduced in 1958 following research within the Special Projects Office of the US Navy. It was initially used to plan and control the Polaris missile programme which involved the coordination of thousands of contractors.
The use of PERT helps in visualsing the range of project completion dates and announcing more realistic project completion time target.
3.2 The PERT/CPM Procedure
There are six stages common to both PERT and CPM:
1. Define the project and specify all activities or tasks.
2. Develop the relationships amongst activities. Decide upon precedences.
3. Draw network to connect all activities.
4. Assign time and/or costs to each activity.
5. Calculate the longest time path through the network: this is the "critical path".
6. Use network to plan, monitor and control the project.
Finding the critical path (step 5) is a major in controlling a project. Activities on the critical path represent tasks which, if performed behind schedule, will delay the whole project. Managers can derive flexibility by identifying the non-critical activities and replanning, rescheduling and reallocating resources such as manpower and finances within identified boundaries.
PERT employs three time estimates for each activity. Probabilities are attached to each of these times which, in turn, is used for computing expected values and potential variations for activity times.
CPM is a technique used to plan a project to with a set target completion time. Various activity times are also given target completion times or deates. Hence actitity times are fixed and known to the network developer.
PERT and CPM can help to answer the following questions for projects with thousands of activities and events, both at the beginning of the project and once it is underway:
· When will the project be completed?
· What are the critical activities (i.e.: the tasks which, if delayed, will effect time for overall completion)?
· Which activities are non-critical and can run late without delaying project completion time?
· What is the probability of the project being completed by a specific date?
· At any particular time, is the project on schedule?
· At any particular time, is the money spent equal to, less than or greater than the budgeted amount?
· Are there enough resources left to complete the project on time?
· If the project is to be completed in a shorter time, what is the least cost means to accomplish this and what are the cost consequences?
3.3 Critical Path Analysis
The objective of critical path analysis is to determine times for the following:
· ES = Earliest Start Time. This is the earliest time an activity can be started, allowing for the fact that all preceding activities have been completed.
· LS = Latest Start Time. This is the latest time an activity can be started without delaying the start of following activities which would put the entire project behind schedule.
· EF = Earliest Finish Time. The earliest time an activity can be finished.
· LF = Latest Finish Time. The latest time that an activity can finish for the project to remain on schedule.
· S = Activity Slack Time. The amount of slippage in activity start or duration time which can be tolerated without delaying the project as a whole.
If ES and LS for any activity is known, then one can calculate values for the other three times as follows:
EF = ES + t
LF = LS + t
S = LS - ES or S = LF - EF
Analysis of the project normally involves:
1. Determining the Critical Path. The critical path is the group of activities in the project that have a slack time of zero. This path of activities is critical because a delay in any activity along it would delay the project as a whole.
2. Calculating the total project completion time, T. This is done by adding the activity times of those activities on the critical path.
The steps in critical path analysis are as follows:
a) Determine ES and EF values for all activities in the project: the Forward Pass through the network.
b) Calculate LS and LF values for all activities by conducting a Backward Pass through the network.
c) Identify the critical path which will be those activities with zero slack (i.e.: ES=LS and EF=LF).
d) Calculate total project completion time.
3.4 PERT and Activity Time Estimation
The three time estimates specified for each activity in PERT are:
i) the optimistic time;
ii) the most probable time; and
iii) the pessimistic time.
These times can be determined from past data where available for each activity. The potential contractors are asked to provide these estimates based on various similar jobs that they did in the past.
The optimistic, most likely and pessimistic time estimates are used to calculate an expected activity completion time which, because of the skewed nature of the beta distribution, is marginally grater than the most likely time estimate. In addition, the three time estimates can be used to calculate the variance for each activity. The formulae used are as follows:
Where:
o, m, p - optimistic, most likely, and pessimistic times
t - expected completion time for task
v - variance of task completion time
Knowing the details of a project, its network and values for its activity times (t) and their variances (v) a complete PERT analysis can be carried out. This includes the determination of the ES, EF, LS, LF and S for each activity as well as identifying the critical path, the project completion time (T) and the variance (V) for the entire project.
Normally when using PERT, the expected times (t) are calculated first from the three values of activity time estimates. The variance values are calculated for the various activity times and the variance of the total project completion time (i.e. the sum of the activity expected times of those activities on the critical path) is the sum of the variances of the activities lying on that critical path.
3.5 Probability Analysis
Once the expected completion time and variance (T and V) have been determined, the probability that a project will be completed by a specific date can be assessed. The assumption is usually made that the distribution of completion dates follows that of a normal distribution curve.
4 Management of Projects
Good management practices, clear responsibilities for tasks, and accurate and timely reporting systems are the most essential qualities for successful project completions.
4.1 The Process of Project Management
a) Clarifying the nature of the project
b) Defining goals and objectives
c) Feasibility studies
d) Detailed organisation of the project:
· Project definition
· Planning and scheduling
e) Project implementation and control
4.1.1 Clarifying the nature of the project
The following need to be established at the planning stage of the project:
· Objectives and goals.
· Resources,
· Management support,
· Project team: with appropriate balance between creativite planning and implementation skills,
4.1.2 Defining goals and objectives
The success criteria for the project need to be defined ( hard or soft).
4.1.3 Feasibility Studies
The basic questions to be asked are:
· Is the project feasible?
· How feasible are the alternatives under consideration?
The aim of the study would be to carry out a preliminary investigation which should help to determine whether the project should proceed further and how it should proceed.
The relevance of this approach will vary with the nature of the project itself. The more concrete the project is, the more likely that there will be established procedures in relation to feasibility. At the other end of the scale there will be less need for a feasibility study for an open project.
The project manager responsible for conducting the feasibility study would normally consider:
a) Cost: is this within the budget set by the organisation or within the capabilities of the organisation to finance it? How do the alternatives compare?
b) Timing: are there specific constraints on timing and is it possible to complete the project within these constraints?
c) Performance: will the project satisfy performance criteria which have been determined? Basically this means will it do the job it is designed to do?
d) Effect on the organisation: is it feasible in the context of the organisation and the effect which it will have upon it?
More detail factors that determine feasibility.
a) Cost factors will be looked at through a financial appraisal. This should be related to financial criteria which have been determined. You need to consider whether the following criteria are relevant.
i) Capital expenditure implications:
· What are the costs of the project?
· If there are alternatives, what are the relative figures?
· What effect will this have upon the organisation's finances particularly the capital budget?
· How will it fit with controls imposed upon the organisation by central government.
· How will the expenditure be financed? What are the alternatives?
ii) Revenue implications:
· How much will this cost both in the current year and in subsequent years?
· What are the likely gains in terms of income?
· What effect will this have upon the revenue budget?
The answers to these questions will determine the financial criteria upon which the feasibility will be judged.
b) Timing: the project schedule may need to comply with specific criteria which have been laid down. Timing can be important:
· to comply with legal or governmental requirements. For example, new legislation or new requirements may need to be implemented by a certain date;
· for operational reasons. A new system may be required as a matter of organisational policy or to fit in with existing procedures and deadlines;
· to assist with financing arrangements. Grants or borrowing approvals may need to be spent within a specific period;
· to give the organisation an edge over its competitors.
c) Performance specifications: these may be:
· technical
· service based
· resulting from external regulations
· required by clients and customers
d) Organisational context:
· What is the policy of the organisation?
· Organisational culture; does the project fit in with the general values and beliefs of the organisation?
· How will it affect resourcing? (Are the skills, technology and physical space available?)
· How will the project fit in with existing procedures? What effect will it have upon systems?
The actual questions asked and the shape of the study and the consequent report will depend upon the type of project being investigated.
4.1.1.1 Feasibility Report
The project manager will be responsible for reporting on feasibility to the sponsoring decision makers or stakeholders.
This may be done in a variety of ways and with different degrees of formality. Typical contents would include:
· project definition covering goals and objectives
· general background and introduction with an outline description of the options
· a clear definition of success criteria or feasibility criteria
· findings of the feasibility study
· financial appraisal
· preliminary compliance
· organisational suitability
· the plan for the management of the project including implementation
4.1.2 Detailed Organisation of the Project
4.1.2.1 Project Definition
This begins once the project has received formal approval to proceed. Its purpose is to formally document the objectives of the project and decide how the work will be undertaken. The Project Manager will carry out this work, in consultation with the Project Sponsor or the client
Large projects may be divided into sub-projects, with each sub-project requiring its own sub-project definition.
1. Ensure that Prerequisites are in place. Before definition can begin you should have:
Ø a Project Brief signed off by all parties involved in the project
Ø authority to proceed
Ø a Project Sponsor
Ø a Project Manager
1. Clarify Objectives.
Objectives must be achievable by the project alone, and must be measurable.
2. Determine Project Scope.
Determining the scope of the project helps to clarify objectives and set the boundaries of the project. It is often useful to state limitations i.e. what the project will not cover.
3. Determine Work Structure.
Large projects can be better controlled, and are therefore more likely to be successful, if they can be divided into smaller units of work (sub-projects).
Identify tasks which can be arranged into logical groups to form sub-projects. Grouping could be on the basis of (for example):
· tasks relating to one functional area,
· tasks to be performed by staff in one geographic location,
· tasks relating to a particular deliverable,
· tasks to be performed by team members belonging to the same Division or Department.
5. Identify the Major Project Milestones
Milestones are significant events in the life of the project, such as installation of hardware or completion of training. They are used in tracking project progress.
Dates will be added to these during Planning.
6. Ensure Project Structure and Responsibilities are Established
Assign Sub-project Managers where appropriate. Clarify composition and responsibilities of Project Steering Group, and responsibilities of Project Sponsor and Project Manager.
Produce a project organisation structure to show reporting lines.
7. Determine Management Systems
These will vary according to the size and nature of the project but should always include:
· a progress control system for recording planned and actual times. This could be an automated system or a manual one,
· acceptance procedures for formal review and agreement of each project deliverable
· scheduled management checkpoints
If the project is divided into sub-projects it is important that consistent management systems are used across them all.
8. Document the Project Definition
The results of Project Definition must be documented and distributed for agreement to:
· Project Sponsor
· Steering Group members (if applicable)
· Sub-project managers
· Line managers who are contributing significant resource to the project
The precise format of the document is left to the discretion of the Project Manager. However the following topics should be covered:
· Goals and Objectives
State the business goals and the project objectives.
· Work Structure and Scope
A high level description of the work to be performed including:
Ø a brief statement of the current business situation and the changes which the project is intended to bring about
Ø a list and brief description of each sub-project
Ø key events in the project i.e. the Major Milestones
· Organisation and Responsibilities
Include an organisation chart, names and responsibilities.
Highlight any functions or responsibilities peculiar to this project.
· Risks and Assumptions
List and briefly describe each identified risk. Give an indication of its severity i.e. the probability of its occurrence and the impact on the project if it does occur.
· Management Systems
Outline the systems to be used for tracking and control of the work.
· Potential Problems
List any other outstanding issues which might affect the project, and any actions being taken to resolve them. Include details of who is responsible for the action and the completion date.
· Appendices
The Project Definition document will first be issued as a draft. Once the Sub-Project Managers have completed Sub-project Definition their reports can be added as appendices. The Sub-project Definition should include Objectives, Work Structure and Scope and Organisation.
The whole document will normally be only a few pages. For very large projects, where the document exceeds about a dozen pages, it may be helpful to include a Management Summary as the first section.
4.1.2.2 Project Planning and Scheduling
Project Planning begins as soon as Definition allows. The process involves planning sub-projects first and hence Definition must at least have identified the sub-projects and the major tasks involved in them.
From this point, Planning and Definition tend to continue in parallel as a series of iterations, gradually refining and hardening both Definition and Plans.
The purpose of the Project Plan at this stage, is to provide detailed realistic estimates of time, duration, resource and cost, and planning should be carried out only in sufficient detail to allow this to be achieved. Detailed planning for allocation of tasks to individuals is carried out progressively as the work proceeds.
Where there are sub-projects these should be planned first and then combined to produce the overall project plan. Produce a plan for each sub-project, or for the total project if there are no sub-projects as follows:
1. Identify Major Activities
Break the work down into activities of the order of 20-50 days of effort, ensuring that milestones correspond to completion of one or more of these. In practice the achievement of a milestone is usually a good basis for identifying an activity e.g. 'prepare and perform user training'.
2. Identify and Chart Dependencies
Produce a network chart for the sub-project showing dependencies between the major activities and dependencies on other sub-projects or external events.
3. Estimate Effort and Duration
Estimate effort and duration of each major activity.
4. Provide Contingency
At this stage estimates are likely to be 'soft' and probably expressed in ranges, because precise details of the work are not settled. Contingency needs to be allowed both on the estimated effort and elapsed time because of:
· the likelihood of unforeseen work arising,
· the likelihood that tasks will take longer than expected,
· the likelihood of changes to requirements or plans before publication. (Subsequent changes should be processed through Change Control).
Contingency provision should remain evident in plans (probably as one or more contingency 'tasks'). This provision should then progressively be removed from plans during Tracking and Control as a result of either:
· being used up by e.g. tasks taking longer than planned,
· or reaching a point where uncertainty is reduced such that a part of contingency provision can safely be deleted. This usually means the deletion of contingency allowed, but not used, on tasks now completed.
5. Schedule Major Activities
Determine start and end dates for each major activity and produce a bar chart or other diagram, showing relationships between activities.
6. Calculate Resource Requirements
Calculate requirements for each time period. Identify needs for each resource type (e.g. systems analyst, user staff) and identify needs for special skills or scarce resources.
7. Calculate Costs
Calculate costs for the sub-project. This should include 'hardening up' items such as cabling, training etc., for which an order of costs had been produced previously.
8. Determine Overall Costs and Benefits of the Project
The cost/benefit justification should have already been stated in the feasibility study. This stage provides the opportunity to review the case in the light of more detailed information.
9. Document the Project Plan
Once a viable plan has emerged (i.e. conflicts have been resolved, resource availability has been confirmed etc.) the Project Manager should produce the Project Plan covering:
· Project Schedule. This should show major activities by sub-project on a bar chart or other diagram. The chart should also show project milestones and target dates. Show contingency as a single provision at the end. Include an overall project network showing the critical path. Narrative explanation may be included for clarification.
· Major Checkpoints and Reviews. List the dates of Checkpoint Reports, Checkpoint Meetings, Steering Group Meeting and the Post-Implementation Review.
· Deliverables. List the major products of the project with delivery dates and acceptance procedures.
· Resources. Summarise the resource needs from the sub-project plans.
· Costs and Benefits figures. Revise and refine as a result of completion of Definition and Planning.
· Potential Problems. List any risks, problems or assumptions which may jeopardise the Plan, together with actions needed to correct the situation.
· Appendices. Any useful supporting information including Sub-project Plans may be included.
10. Ensure Management Systems are in place.
4.1.1 Project Implementation and Control
The role of the project manager falls into three areas:
i) Management of stakeholders
ii) Management of the project and its completion.
iii) Management of project team performance
An approach needs to be developed for each of these. Control and monitoring procedures need to be put in place and appropriate information systems developed.
The procedures which are put into place can only be successful if:
· there is satisfactory information to enable the team to manage the project effectively;
· they are simple and easy to operate and understand;
· they have the full support of the project team.
How should this relate to the three categories referred to above?
i) Management of stakeholders:
Stakeholders' interest must be monitored to ensure that:
· their interest and support is maintained;
· their views and ideas are being adequately reflected in the project development;
· their personal success criteria are being pursued and achieved;
· environmental change is fully taken into account.
ii) Management of the project and its completion.
This is probably the most conventional view of project control. Feedback systems need to be set up to monitor key areas.
Activity
For a project that is already underway in your organisation, identify the key areas requiring monitoring and suggest the kind of information and procedures that would be involved.
The key areas would be as follows:
· The project timetable, with particular reference to critical event times and potential bottlenecks. There should be feedback on activity times achieved and their effect on the whole project. If network analysis is used, then it is vital that the network is reworked and updated to take into account the actual performance achieved.
· The project budget; budgetary control procedures can be used as in respect of any other form of budget.
· Quality and performance standards; these need to be monitored against the original project specification subject to changes agreed with stakeholders in the course of project development.
Where possible this should all be done through positive reporting which will required action to be taken.
iii) Management of project team performance:
This is the least tangible but possibly the most important of the three categories. How it is tackled will depend upon what kind of project is being carried out.
It is unlikely that the project team will spend all of their working time together in close proximity and under the direct supervision of the project manager. It is much more likely that they will work apart most of the time, only meeting up occasionally and only meeting with the project manager from time to time. Control issues that need to be considered therefore would be:
· How to get the best out of the team when they are together. If you are holding meetings then they should be purposeful and effective. They should not simply be part of the routine. Having said that, they may be an important element in binding the team together and in developing a team approach to planning and monitoring of performance.
· Ensuring people work when the team is apart. You need to set people realistic deadlines and ensure that they see the importance of their contribution and that their contribution is fully valued.
· Communications are important in terms of disseminating information and keeping everyone informed. There are views that team members should be given information on a need to know basis but this approach can cause problems.
· Ensuring continuing commitment by the team and adherence to the values and beliefs being pursued by the team.
· Change, in particular, needs to be communicated to team members quickly and effectively.
It is to stress that apart from looking after the team performance, the project leader has to look inwards at his or her own performance and manage his own performance.
1.2 Funding the Project
This will be determined by:
a) The nature of the project
b) The nature of the organisation
1.2.1 The nature of the Project
A major capital scheme will call for a large injection of new finance into the organisation. A management project can often be managed by using existing staffing resources. However it should not be forgotten that there is an opportunity cost to this.
1.2.2 The nature of the organisation
Companies can use a variety of resources for capital projects.
· Share issues
· Long term loans
· Leasing
The ability of companies to raise finance will depend upon the perceptions of lenders of money. Public Sector organisations are often restricted in their sources of finance by government regulations.
5 Human Factors
5.1 Human Factors in Project Management
Project management involves managing people also
5.2 Motivation
Human motivation is a complex issue and a great deal of research has been done on how best to motivate employees of an organisation to achieve good performance.
Motivation is the creation of a keen enthusiasm or desire in a person for the achievement of a particular objective or set of objectives. Because human beings have free-will and have a great many other influences acting upon them, it is not surprising that motivation is a complex issue.
One very important quality needed by a project manager is the ability to motivate the project team. Different people respond to various techniques of persuasion in sometimes very different ways, and it is necessary to know how to approach a particular individual, or group of individuals, in order to optimise your likelihood of success in motivating them into appropriate action.
5.3 Project teams
The management of a project includes the creation and management of a team of people who are given the task of handling the project from its inception to successful completion.
The benefits of effective teamwork are clear to those who have experienced the synergy created by a team who work together well, who cooperate with each other, and who are all committed to the project.
Synergy is the state in which the team 'takes off', working together as a whole to achieve far more than the individuals, working separately, could have done.
The opposite of such a synergistic grouping is sometimes called dysfunctional conflict - the unpleasant state when everyone seems to be wilfully at cross purposes with everyone else, and the group achieves much less than the individuals working separately, could have done.
An effective team is more dependent upon the chemistry between the members of the group than a strict matching of the various roles suggested by Belbin et al. to the attributes of those group members. Mutual trust is an effective lubricant to the effectiveness of team work.
Teamwork depends upon being able to persuade people to work together, to cooperate, and to be committed to the project. By their very nature, projects are usually one-off situations and the project team will usually be an ad-hoc matrix of individuals chosen for their specialist skills and who may not be used to working together. The role of the project manager is particularly challenging under these conditions.
6 The Project Manager
The prime objectives of project management are performance, cost and time [Meredith, 2003]. Clearly there is a relationship between these three objectives, and there may be trade-offs between them to be managed by the PM.
The project manager is expected to integrate all aspects of the project, to ensure that the proper knowledge and resources are available when and where needed, and above all to ensure that the expected results are produced in a timely , cost-effective manner.
Meredith and Mantel (2003) discuss differences between a functional manager and a project manager. A functional manager being defined as a person in charge of a functional department such as marketing, engineering, finance etc., within an organization.
They argue that the functional manager is likely to be a specialist in the area being managed, and as such they are analytically oriented, so that when a technically difficult task is encountered they know how to analyse and tackle it.
By contrast, the PM is more likely to be a generalist, or non-specialist, with a wide background of both experience and knowledge, and who is required to manage a number of diverse functional areas, each comprising a group of specialists in their own fields. The PM's task then is to bring together all the bits of the project together to form a coherent whole - i.e. the PM must be more skilled in synthesis, whereas the functional manager must be more skilled in analysis. The authors argue that the functional manager uses an analytical approach whereas the PM uses a systems approach.
The analytical approach would break a system down into smaller and smaller parts, but the systems approach is one which attempts to understand the links between the components, as well as the components themselves, on the basis that the links between components are as important in determining the systems performance as the components themselves. In order understand the system better, it is necessary to understand the environment (or larger system) of which it is a part.
The authors maintain that the adoption of the systems approach is crucial for project management, with an understanding of the organisational programme of which the project is a part, and the organization in which the programme exists, as well as the environment within which the organization operates.
Another difference between the functional and project manager is that the functional manager is a direct, technical supervisor, whereas the PM is a facilitator. The facilitation of co-operation between those who have various kinds of specialised knowledge and those who need it.
Three questions face the PM at the outset of a project:
· What needs to be done?
· When must it be done?
· How are the resources needed by the project to be obtained?
The PM will often be reliant upon functional managers for answers to these questions, and for other specialist inputs and it is often the case that the functional managers will make some of the fundamental and critical project decisions. For example they may select the people who will be responsible for carrying out the project, and may develop the technological plan detailing how to accomplish the project's goals, as well as frequently influencing the precise deployment of the projects resources. It is this separation of powers between functional and project management that on the one hand makes for a successful outcome to the project, but on the other is a source of discomfort for both.
Clearly a good project manager will attempt to influence by negotiation or other means the choice of specific individuals making up the project team, and the PM cannot allow the functional manager to usurp control of the project, since if this happens the project is likely to become secondary to the work of that functional group and consequently the project is likely to suffer. Equally the functional manager cannot allow the PM to usurp his/her authority when it comes to making technical decisions in the functional area, or indeed to the assignment of duties to personnel within that functional department or section.
Guidelines for Managing Projects
· Set a clear Goal
· Determine the Objectives
· Establish Checkpoints, Activities, Relationships, and Time estimates
· Create a Schedule
· Develop people individually and as a team
· Reinforce the commitment and excitement of people
· Inform everyone connected with the project
· Vitalise people by building agreements
· Empower yourself and others
· Risk approaching problems creatively
Source: Randolph and Posner, Getting the Job Done! Managing Project Teams and Task Forces for Success, Prentice-Hall, 1992
6.1 The Attributes of Successful Project Management in an Organization
The effectiveness of project management is critical in assuring the success of any substantial undertaking. Areas of responsibility for the project manager include planning, control and implementation. A project should be initiated with a feasibility study, where a clear definition of the goals and ultimate benefits need to be established. Senior managers' support for projects is important so as to ensure authority and direction throughout the project's progress and, also to ensure that the goals of the organization are effectively achieved within this process. The particular form of support given can influence the degree of resistance the project encounters.
Projects normally involve the introduction of a new system of some kind and, in almost all cases, new methods and ways of doing things. This impacts upon the work of others: the "users". User consultation is an important factor in the success of projects and, indeed, the degree of user involvement can influence the extent of support for the project or its implementation plan. A essential quality of the project manager is that of being a good communicator, not just within the project team itself, but with the rest of the organization and outside bodies as well (the users may be internal or external).
Referenences
Meredith, Jack and Samuel Mantel, Project Management - A Managerial Approach, Wiley, 2003.
Tomas Sabol, Project Management Notes, available at (accessed on 27.11. 2008) http://acru.tuke.sk/doc/PM_Text/PM_Text.doc
(The notes was the base document for this article. The notes was modified to bring in and highlight certain points ignored in project management texts)
Originally posted in
http://knol.google.com/k/narayana-rao/project-management/2utb2lsm2k7a/536
Generally projects are made up of:
· a defined beginning,
· multiple activities which are performed to a plan,
· a defined end.
Two essential features are present in every project no matter how simple or complicated they are. In the first place, all projects must be planned out in advance if they are to be successfully executed. Secondly, the execution of the project must be controlled to ensure that the desired results are achieved.
Regardless of the nature or size of your project a successful outcome can only be achieved by using sound project management techniques. It is also important to remember that projects are carried out by people, and the human aspects of project management are critical for the project success.
1.1 Terminology and Definitions
A project is an interrelated set of activities that has a definite starting and ending point and results in the accomplishment of a unique, often major outcome. "Project management" is, therefore, the planning and control of events that, together, comprise the project. Project management aims to ensure the effective use of resources and delivery of the project objectives on time and within cost constraints.
An activity or task is the smallest unit of work effort within the project and consumes both time and resources which are under the control of the project manager. A project is a sequence of activities that has a definite start and finish, an identifiable goal and an integrated system of complex but interdependent relationships.
A schedule allocates resources to accomplish the activities within a timeframe. The schedule sets priorities, start times and finish times.
Project management is:
the adept use of techniques and skills (hard and soft) in planning and controlling tasks and resources needed for the project, from both inside and outside of organisation, to achieve results.
The purpose of project management is to achieve successful project completion with the resources available. A successful project is one which:
· has been finished on time
· is within its cost budget
· performs to a technical/performance standard which satisfies the end user.
1.2 The Attributes of Successful Project Management in an Organization
The effectiveness of project management is critical in assuring the success of any substantial undertaking. Areas of responsibility for the project manager include planning, control and implementation. A project should be initiated with a feasibility study, where a clear definition of the goals and ultimate benefits need to be established.
Knowledge, skills, goals and personalities are all factors that need to be considered within project management. The project manager and his/her team should collectively possess the necessary and requisite interpersonal and technical skills to facilitate control over the various activities within the project.
The stages of implementation must be articulated at the project planning phase. Disaggregating the stages at its early point assists in the successful development of the project by providing a number of milestones that need to be accomplished for completion. In addition to planning, the control of the evolving project is also prerequisite to success. Control requires adequate monitoring and feedback mechanisms by which senior and project managers can compare progress against initial projections at each stage of the project. Monitoring and feedback also enables the project manager to anticipate problems (e.g.: the knock-on effects of late start or finish times) and therefore take pre-emptive corrective measures for the benefit of the project overall.
Projects normally involve the introduction of a new system of some kind and, in almost all cases, new methods and ways of doing things. This impacts upon the work of others: the "users (customer)". User (customer) consultation is an important factor in the success of projects
Projects normally involve the introduction of a new system of some kind and, in almost all cases, new methods and ways of doing things. This impacts upon the work of others: the "users (customer)". User (customer) consultation is an important factor in the success of projects
1.2.1 Features of projects
· Projects are often carried out by a team of people who have been assembled for that specific purpose. The activities of this team may be co-ordinated by a project manager.
· Project teams may consist of people from different backgrounds and different parts of the organisation. In some cases project teams may consist of people from different organisations.
· Project teams may be inter-disciplinary groups and are likely to lie outside the normal organisation hierarchies.
· The project team will be responsible for delivery of the project end product to some sponsor within or outside the organisation. The full benefit of any project will not become available until the project as been completed.
In recent years more and more activities have been tackled on a project basis. Project teams and a project management approach have become common in most organisations. The basic approaches to project management remain the same regardless of the type of project being considered. You may find it useful to consider projects in relation to a number of major classifications:
a) Engineering and construction
The projects are concerned with producing a clear physical output, such as roads, bridges or buildings. The requirements of a project team are well defined in terms of skills and background, as are the main procedures that have to be undergone. Most of the problems which may confront the project team are likely to have occurred before and therefore their solution may be based upon past experiences.
b) Introduction of new systems
These projects would include computerisation projects and the introduction of new systems and procedures including financial systems. The nature and constitution of a project team may vary with the subject of the project, as different skills may be required and different end-users may be involved. Major projects involving a systems analysis approach may incorporate clearly defined procedures within an organisation.
c) Annual Projects
An example is the preparation of an annual report by a specified date. Another example is the annual budget preparation.
Activity
Consider this last category. Can you think of any examples where your organisation needs to respond to change and a project management approach may be valid?
1.3 Responsibilities of the Project Manager
1. To plan thoroughly all aspects of the project, soliciting the active involvement of all functional areas involved, in order to obtain and maintain a realistic plan that satisfies their commitment for performance.
2. To set up the organization needed to implement the project.
3. To control the basic technical definition of the project, ensuring that "technical" versus "cost" trade-offs determine the specific areas where optimisation is necessary.
4. To lead the people and organizations assigned to the project at any given point in time. Strong positive leadership must be exercised in order to keep the many disparate elements moving in the same direction in a co-operative.
5. To monitor performance, costs and efficiency of all elements of the project and the project as a whole, exercising judgement and leadership in determining the causes of problems and facilitating solutions.
6. To complete the project on schedule and within costs, these being the overall standard by which performance of the project manager is evaluated.
1.3.1 Why do projects go wrong?
There can be many reasons why projects go wrong. The most common reasons are as follows:
a) Project goals are not clearly defined
b) The constraints on the completion of projects are not understood properly.
Ø Short time scale
Ø Resource availability
Ø Quality factors
Ø Human factors
c) Adequate resources were not planned for.
d) Project plan was not managed properly. Project manager has to replan on a continuous basis as certain activities or delayed. All activities are subject to variable times of completion. Project manager has to reschedule resources on continuous basis to optimize costs.
e) Customers or project sponsors were not given appropriate feedback.
1.1.1 Problems with Project Goals
· The project sponsor or client has an inadequate idea of what the project is about at the start.
· There may be a failure of communication between the client and the project manager. The may be due to a lack of technical knowledge on the part of the client or an overuse of jargon by the project manager.
· Specifications may be subject to constant change. This may be due to problems with individual clients, decision making processes at the client end, or environmental changes. For example the government may change the basic "rules of the game" before the completion of the project.
· The project goals may be unrealistic and unachievable, and it may be that this is only realised once the project is under way.
· The client may become carried away with the idea of the project and may be unable to see clearly what can be achieved.
· Projects may be highly complex and may have a number of objectives that actually contradict each other.
There are perhaps two stages which can help in ensuring that goals are properly defined and achievable:
a) Ensuring that the client specification is clear and understandable. To do this you must first of all establish the objectives of the project. It would help to ask the following questions:
· What is it that the organisation is setting out to achieve or is being asked to achieve?
· Will the suggested project fulfil these objectives?
· Have all the alternatives been considered and is the chosen option the best one available?
· Have the full effects of the project, both inside and outside the organisation, been considered?
b) Preparation of a Project overview (Project brief). The brief should take the objectives set out in the previous exercise and translate them into targets and goals. Any key constraints should also be identified and stated at this stage. This brief should be agreed by the sponsor/client and communicated to the project manager. Any ambiguities or queries should be sorted out as soon as possible.
A good way forward would be through the establishment of success criteria for the project. If you want the project to succeed , then you have to know when you have succeeded.
Success criteria can be described as being hard or soft:
a) Hard criteria
· Performance specifications: these may be set out in terms of the ability to deal with certain demands. For example, this could be throughput of traffic, number of patients, volume of transactions processed or the number of enquiries dealt with.
· Specific quality standards: this could relate to technical standards and tolerance, or may be the achievement of a favourable report from an outside inspection agency.
· Meeting deadlines: this is probably the most obvious one of them all where projects need to be completed within a given time scale. For example, a new system may need to be implemented ready for the start of the financial year, or a new development may have to meet time requirements as laid down in contract specifications.
· Cost of budget constraints: an important criterion may be to complete the project within a cost limit or budget which has been determined. Additionally there may be requirements in terms of the ongoing cost of the completed project. For example, a new system may be required to make savings for the organisation on a continuing basis.
As you can see, the above criteria are relatively easy to establish and should also be quite easy to specify in a project brief.
b) Soft criteria
· Demonstrative co-operation: The project team was managed in such a way that it could work together effectively and without a degree of conflict in future also. It could be an important consideration to develop and implement solutions for the organisation which have a wide element of consensus and stem from a co-operative attitude.
· Developing and maintaining a positive image:
· Development of total quality approach in project management.
· Gaining commitment: this is again about how the project is managed and the attitude of the project team to it.
· Ensuring that ethical standards are maintained: it can be very important to ensure that no corners have been cut that should not have been and that professional standards of ethics have not been breached.
· Showing an appreciation of risk: this would ensure that no unacceptable risks were taken in the pursuit of other project objectives. This aspect has to be in the project plan as well as subsequent decisions.
1.1.2 Constraints on the completion of projects
a) Time
The definition of a project stated that it was an activity which had a defined beginning and ending point. Most projects will be close-ended in terms of there being a requirement for completion by a certain point in time. There is likely to be some relationship between the time taken for a project and its cost. A trade-off between the two constraining factors may then be necessary.
b) Resource Availability
There is likely to be a budget for the project and this will clearly be a major constraint. Cost constraints may be set in a number of ways, for example as an overall cash limit or as a detailed budget broken down over a number of expenditure headings. Labour resources in particular may be a limiting factor on the completion of the project. In the short run it is likely that labour will be fixed in supply. Whilst the overall resource available may in theory be sufficient to complete the project, there may be difficulties arising out of the way in which the project has been scheduled. That is, there may be a number of activities scheduled to take place at the same time and this may not be possible given the amount of resources available.
2 THE PROCESS OF PROJECT MANAGEMENT
2.1 Project Planning
A major decision at the outset of any project is to decide upon the organization and composition of the project planning team. In so doing, it is worth remembering that many members will have dual responsibilities of involvement in the project in addition to a commitment to other projects or management of a functional area on a day-to-day basis. It is at this stage that a project manager should be appointed and responsibilities made explicit for all members of the team.
The project planning team will, therefore, begin its task in advance of project proper so that a plan can be developed. An important first step is to set the objectives and then define the project, breaking it down into a set of activities and related costs. It is probably too early to determine exact resource implications at this stage, but expected requirements for people, supplies and equipment should at least be estimated during the planning stage.
2.2 Project Scheduling
This phase is primarily concerned with attaching a timescale and sequence to the activities to be conducted within the project. Materials and people needed at each stage of the project are determined and the time each is to take will be set.
A popular and easy to use technique for scheduling is the use of Gantt charts.
2.2.1 Gantt Charts
A Gantt Chart is a simple technique that can be used to attach a time scale and sequence to a project.
A Gantt Chart is a form of horizontal bar chart and horizontal bars are drawn against a time scale for each project activity, the length of which represents the time taken to complete. To construct a Gantt Chart the following steps are necessary:
1) Use the horizontal axis to represent time
2) Use the vertical axis to represent activities
3) Represent each activity by a horizontal bar of appropriate length
4) Take activity procedures into account by starting each activity bar to an appropriate point along the time axis after its preceding activities. Normally the start point for an activity is the earliest time that it could start after its preceding activities had finished.
It is possible to enhance the Gantt Chart in several ways. For instance the number of staff required to do a task can be entered into the bar on the diagram.
Gantt charts, also commonly known as milestone plans, are a low cost means of assisting the project manager at the initial stages of scheduling. They ensure that:
1. all activities are planned for,
2. the sequence of activities is accounted for,
3. the activity time estimates are recorded; and
4. the overall project time is recorded.
They are therefore a simple, rough and ready means of planning a project and assessing progress and are sufficient for most simple projects.
Gantt charts also provide a summary of the project as a whole and can be used as a rough and ready means of assessing progress at the project control phase. At any date, the project manager can draw a dateline through the Gantt chart and see which activities are on-time, which are behind schedule and generally record project status against plan.
Gantt charts, named after Henry L. Gantt, one of the pioneers of scientific management, are a useful means of representing a schedule of activities comprising a project and enable the operations manager to know exactly what activities should be performed at a given time and, more importantly, to monitor daily progress of a project so that corrective action may be taken when necessary.
To construct a Gantt chart, the various activities are listed on a vertical axis and the horizontal axis is used to represent time. Activity precedencies are taken into account by starting a horizontal bar to represent the next activity at an appropriate point after its preceding activities, i.e. those activities which must take place before the next activity can start, have taken place. Normally this would be at the earliest time that it could start after its preceding activities had finished.
Those activities forming the critical path can be highlighted on the Gantt chart to help the operations manager to give priority to them if lack of resources mean that such decisions have to be made.
However, where projects become complex, it becomes difficult to see relationships between activities by using a Gantt Chart. For more complex projects Network Analysis techniques are used.
3 Network Analysis
3.1 Introduction to PERT and CPM
The two most common and widely used project management techniques that can be classified under the title of Network Analysis are Programme Evaluation and review Technique (PERT) and Critical Path Method (CPM). Both were developed in the 1950's to help managers schedule, monitor and control large and complex projects. CPM was first used in 1957 to assist in the development and building of chemical plants within the DuPont corporation. Independently developed, PERT was introduced in 1958 following research within the Special Projects Office of the US Navy. It was initially used to plan and control the Polaris missile programme which involved the coordination of thousands of contractors.
The use of PERT helps in visualsing the range of project completion dates and announcing more realistic project completion time target.
3.2 The PERT/CPM Procedure
There are six stages common to both PERT and CPM:
1. Define the project and specify all activities or tasks.
2. Develop the relationships amongst activities. Decide upon precedences.
3. Draw network to connect all activities.
4. Assign time and/or costs to each activity.
5. Calculate the longest time path through the network: this is the "critical path".
6. Use network to plan, monitor and control the project.
Finding the critical path (step 5) is a major in controlling a project. Activities on the critical path represent tasks which, if performed behind schedule, will delay the whole project. Managers can derive flexibility by identifying the non-critical activities and replanning, rescheduling and reallocating resources such as manpower and finances within identified boundaries.
PERT employs three time estimates for each activity. Probabilities are attached to each of these times which, in turn, is used for computing expected values and potential variations for activity times.
CPM is a technique used to plan a project to with a set target completion time. Various activity times are also given target completion times or deates. Hence actitity times are fixed and known to the network developer.
PERT and CPM can help to answer the following questions for projects with thousands of activities and events, both at the beginning of the project and once it is underway:
· When will the project be completed?
· What are the critical activities (i.e.: the tasks which, if delayed, will effect time for overall completion)?
· Which activities are non-critical and can run late without delaying project completion time?
· What is the probability of the project being completed by a specific date?
· At any particular time, is the project on schedule?
· At any particular time, is the money spent equal to, less than or greater than the budgeted amount?
· Are there enough resources left to complete the project on time?
· If the project is to be completed in a shorter time, what is the least cost means to accomplish this and what are the cost consequences?
3.3 Critical Path Analysis
The objective of critical path analysis is to determine times for the following:
· ES = Earliest Start Time. This is the earliest time an activity can be started, allowing for the fact that all preceding activities have been completed.
· LS = Latest Start Time. This is the latest time an activity can be started without delaying the start of following activities which would put the entire project behind schedule.
· EF = Earliest Finish Time. The earliest time an activity can be finished.
· LF = Latest Finish Time. The latest time that an activity can finish for the project to remain on schedule.
· S = Activity Slack Time. The amount of slippage in activity start or duration time which can be tolerated without delaying the project as a whole.
If ES and LS for any activity is known, then one can calculate values for the other three times as follows:
EF = ES + t
LF = LS + t
S = LS - ES or S = LF - EF
Analysis of the project normally involves:
1. Determining the Critical Path. The critical path is the group of activities in the project that have a slack time of zero. This path of activities is critical because a delay in any activity along it would delay the project as a whole.
2. Calculating the total project completion time, T. This is done by adding the activity times of those activities on the critical path.
The steps in critical path analysis are as follows:
a) Determine ES and EF values for all activities in the project: the Forward Pass through the network.
b) Calculate LS and LF values for all activities by conducting a Backward Pass through the network.
c) Identify the critical path which will be those activities with zero slack (i.e.: ES=LS and EF=LF).
d) Calculate total project completion time.
3.4 PERT and Activity Time Estimation
The three time estimates specified for each activity in PERT are:
i) the optimistic time;
ii) the most probable time; and
iii) the pessimistic time.
These times can be determined from past data where available for each activity. The potential contractors are asked to provide these estimates based on various similar jobs that they did in the past.
The optimistic, most likely and pessimistic time estimates are used to calculate an expected activity completion time which, because of the skewed nature of the beta distribution, is marginally grater than the most likely time estimate. In addition, the three time estimates can be used to calculate the variance for each activity. The formulae used are as follows:
Where:
o, m, p - optimistic, most likely, and pessimistic times
t - expected completion time for task
v - variance of task completion time
Knowing the details of a project, its network and values for its activity times (t) and their variances (v) a complete PERT analysis can be carried out. This includes the determination of the ES, EF, LS, LF and S for each activity as well as identifying the critical path, the project completion time (T) and the variance (V) for the entire project.
Normally when using PERT, the expected times (t) are calculated first from the three values of activity time estimates. The variance values are calculated for the various activity times and the variance of the total project completion time (i.e. the sum of the activity expected times of those activities on the critical path) is the sum of the variances of the activities lying on that critical path.
3.5 Probability Analysis
Once the expected completion time and variance (T and V) have been determined, the probability that a project will be completed by a specific date can be assessed. The assumption is usually made that the distribution of completion dates follows that of a normal distribution curve.
4 Management of Projects
Good management practices, clear responsibilities for tasks, and accurate and timely reporting systems are the most essential qualities for successful project completions.
4.1 The Process of Project Management
a) Clarifying the nature of the project
b) Defining goals and objectives
c) Feasibility studies
d) Detailed organisation of the project:
· Project definition
· Planning and scheduling
e) Project implementation and control
4.1.1 Clarifying the nature of the project
The following need to be established at the planning stage of the project:
· Objectives and goals.
· Resources,
· Management support,
· Project team: with appropriate balance between creativite planning and implementation skills,
4.1.2 Defining goals and objectives
The success criteria for the project need to be defined ( hard or soft).
4.1.3 Feasibility Studies
The basic questions to be asked are:
· Is the project feasible?
· How feasible are the alternatives under consideration?
The aim of the study would be to carry out a preliminary investigation which should help to determine whether the project should proceed further and how it should proceed.
The relevance of this approach will vary with the nature of the project itself. The more concrete the project is, the more likely that there will be established procedures in relation to feasibility. At the other end of the scale there will be less need for a feasibility study for an open project.
The project manager responsible for conducting the feasibility study would normally consider:
a) Cost: is this within the budget set by the organisation or within the capabilities of the organisation to finance it? How do the alternatives compare?
b) Timing: are there specific constraints on timing and is it possible to complete the project within these constraints?
c) Performance: will the project satisfy performance criteria which have been determined? Basically this means will it do the job it is designed to do?
d) Effect on the organisation: is it feasible in the context of the organisation and the effect which it will have upon it?
More detail factors that determine feasibility.
a) Cost factors will be looked at through a financial appraisal. This should be related to financial criteria which have been determined. You need to consider whether the following criteria are relevant.
i) Capital expenditure implications:
· What are the costs of the project?
· If there are alternatives, what are the relative figures?
· What effect will this have upon the organisation's finances particularly the capital budget?
· How will it fit with controls imposed upon the organisation by central government.
· How will the expenditure be financed? What are the alternatives?
ii) Revenue implications:
· How much will this cost both in the current year and in subsequent years?
· What are the likely gains in terms of income?
· What effect will this have upon the revenue budget?
The answers to these questions will determine the financial criteria upon which the feasibility will be judged.
b) Timing: the project schedule may need to comply with specific criteria which have been laid down. Timing can be important:
· to comply with legal or governmental requirements. For example, new legislation or new requirements may need to be implemented by a certain date;
· for operational reasons. A new system may be required as a matter of organisational policy or to fit in with existing procedures and deadlines;
· to assist with financing arrangements. Grants or borrowing approvals may need to be spent within a specific period;
· to give the organisation an edge over its competitors.
c) Performance specifications: these may be:
· technical
· service based
· resulting from external regulations
· required by clients and customers
d) Organisational context:
· What is the policy of the organisation?
· Organisational culture; does the project fit in with the general values and beliefs of the organisation?
· How will it affect resourcing? (Are the skills, technology and physical space available?)
· How will the project fit in with existing procedures? What effect will it have upon systems?
The actual questions asked and the shape of the study and the consequent report will depend upon the type of project being investigated.
4.1.1.1 Feasibility Report
The project manager will be responsible for reporting on feasibility to the sponsoring decision makers or stakeholders.
This may be done in a variety of ways and with different degrees of formality. Typical contents would include:
· project definition covering goals and objectives
· general background and introduction with an outline description of the options
· a clear definition of success criteria or feasibility criteria
· findings of the feasibility study
· financial appraisal
· preliminary compliance
· organisational suitability
· the plan for the management of the project including implementation
4.1.2 Detailed Organisation of the Project
4.1.2.1 Project Definition
This begins once the project has received formal approval to proceed. Its purpose is to formally document the objectives of the project and decide how the work will be undertaken. The Project Manager will carry out this work, in consultation with the Project Sponsor or the client
Large projects may be divided into sub-projects, with each sub-project requiring its own sub-project definition.
1. Ensure that Prerequisites are in place. Before definition can begin you should have:
Ø a Project Brief signed off by all parties involved in the project
Ø authority to proceed
Ø a Project Sponsor
Ø a Project Manager
1. Clarify Objectives.
Objectives must be achievable by the project alone, and must be measurable.
2. Determine Project Scope.
Determining the scope of the project helps to clarify objectives and set the boundaries of the project. It is often useful to state limitations i.e. what the project will not cover.
3. Determine Work Structure.
Large projects can be better controlled, and are therefore more likely to be successful, if they can be divided into smaller units of work (sub-projects).
Identify tasks which can be arranged into logical groups to form sub-projects. Grouping could be on the basis of (for example):
· tasks relating to one functional area,
· tasks to be performed by staff in one geographic location,
· tasks relating to a particular deliverable,
· tasks to be performed by team members belonging to the same Division or Department.
5. Identify the Major Project Milestones
Milestones are significant events in the life of the project, such as installation of hardware or completion of training. They are used in tracking project progress.
Dates will be added to these during Planning.
6. Ensure Project Structure and Responsibilities are Established
Assign Sub-project Managers where appropriate. Clarify composition and responsibilities of Project Steering Group, and responsibilities of Project Sponsor and Project Manager.
Produce a project organisation structure to show reporting lines.
7. Determine Management Systems
These will vary according to the size and nature of the project but should always include:
· a progress control system for recording planned and actual times. This could be an automated system or a manual one,
· acceptance procedures for formal review and agreement of each project deliverable
· scheduled management checkpoints
If the project is divided into sub-projects it is important that consistent management systems are used across them all.
8. Document the Project Definition
The results of Project Definition must be documented and distributed for agreement to:
· Project Sponsor
· Steering Group members (if applicable)
· Sub-project managers
· Line managers who are contributing significant resource to the project
The precise format of the document is left to the discretion of the Project Manager. However the following topics should be covered:
· Goals and Objectives
State the business goals and the project objectives.
· Work Structure and Scope
A high level description of the work to be performed including:
Ø a brief statement of the current business situation and the changes which the project is intended to bring about
Ø a list and brief description of each sub-project
Ø key events in the project i.e. the Major Milestones
· Organisation and Responsibilities
Include an organisation chart, names and responsibilities.
Highlight any functions or responsibilities peculiar to this project.
· Risks and Assumptions
List and briefly describe each identified risk. Give an indication of its severity i.e. the probability of its occurrence and the impact on the project if it does occur.
· Management Systems
Outline the systems to be used for tracking and control of the work.
· Potential Problems
List any other outstanding issues which might affect the project, and any actions being taken to resolve them. Include details of who is responsible for the action and the completion date.
· Appendices
The Project Definition document will first be issued as a draft. Once the Sub-Project Managers have completed Sub-project Definition their reports can be added as appendices. The Sub-project Definition should include Objectives, Work Structure and Scope and Organisation.
The whole document will normally be only a few pages. For very large projects, where the document exceeds about a dozen pages, it may be helpful to include a Management Summary as the first section.
4.1.2.2 Project Planning and Scheduling
Project Planning begins as soon as Definition allows. The process involves planning sub-projects first and hence Definition must at least have identified the sub-projects and the major tasks involved in them.
From this point, Planning and Definition tend to continue in parallel as a series of iterations, gradually refining and hardening both Definition and Plans.
The purpose of the Project Plan at this stage, is to provide detailed realistic estimates of time, duration, resource and cost, and planning should be carried out only in sufficient detail to allow this to be achieved. Detailed planning for allocation of tasks to individuals is carried out progressively as the work proceeds.
Where there are sub-projects these should be planned first and then combined to produce the overall project plan. Produce a plan for each sub-project, or for the total project if there are no sub-projects as follows:
1. Identify Major Activities
Break the work down into activities of the order of 20-50 days of effort, ensuring that milestones correspond to completion of one or more of these. In practice the achievement of a milestone is usually a good basis for identifying an activity e.g. 'prepare and perform user training'.
2. Identify and Chart Dependencies
Produce a network chart for the sub-project showing dependencies between the major activities and dependencies on other sub-projects or external events.
3. Estimate Effort and Duration
Estimate effort and duration of each major activity.
4. Provide Contingency
At this stage estimates are likely to be 'soft' and probably expressed in ranges, because precise details of the work are not settled. Contingency needs to be allowed both on the estimated effort and elapsed time because of:
· the likelihood of unforeseen work arising,
· the likelihood that tasks will take longer than expected,
· the likelihood of changes to requirements or plans before publication. (Subsequent changes should be processed through Change Control).
Contingency provision should remain evident in plans (probably as one or more contingency 'tasks'). This provision should then progressively be removed from plans during Tracking and Control as a result of either:
· being used up by e.g. tasks taking longer than planned,
· or reaching a point where uncertainty is reduced such that a part of contingency provision can safely be deleted. This usually means the deletion of contingency allowed, but not used, on tasks now completed.
5. Schedule Major Activities
Determine start and end dates for each major activity and produce a bar chart or other diagram, showing relationships between activities.
6. Calculate Resource Requirements
Calculate requirements for each time period. Identify needs for each resource type (e.g. systems analyst, user staff) and identify needs for special skills or scarce resources.
7. Calculate Costs
Calculate costs for the sub-project. This should include 'hardening up' items such as cabling, training etc., for which an order of costs had been produced previously.
8. Determine Overall Costs and Benefits of the Project
The cost/benefit justification should have already been stated in the feasibility study. This stage provides the opportunity to review the case in the light of more detailed information.
9. Document the Project Plan
Once a viable plan has emerged (i.e. conflicts have been resolved, resource availability has been confirmed etc.) the Project Manager should produce the Project Plan covering:
· Project Schedule. This should show major activities by sub-project on a bar chart or other diagram. The chart should also show project milestones and target dates. Show contingency as a single provision at the end. Include an overall project network showing the critical path. Narrative explanation may be included for clarification.
· Major Checkpoints and Reviews. List the dates of Checkpoint Reports, Checkpoint Meetings, Steering Group Meeting and the Post-Implementation Review.
· Deliverables. List the major products of the project with delivery dates and acceptance procedures.
· Resources. Summarise the resource needs from the sub-project plans.
· Costs and Benefits figures. Revise and refine as a result of completion of Definition and Planning.
· Potential Problems. List any risks, problems or assumptions which may jeopardise the Plan, together with actions needed to correct the situation.
· Appendices. Any useful supporting information including Sub-project Plans may be included.
10. Ensure Management Systems are in place.
4.1.1 Project Implementation and Control
The role of the project manager falls into three areas:
i) Management of stakeholders
ii) Management of the project and its completion.
iii) Management of project team performance
An approach needs to be developed for each of these. Control and monitoring procedures need to be put in place and appropriate information systems developed.
The procedures which are put into place can only be successful if:
· there is satisfactory information to enable the team to manage the project effectively;
· they are simple and easy to operate and understand;
· they have the full support of the project team.
How should this relate to the three categories referred to above?
i) Management of stakeholders:
Stakeholders' interest must be monitored to ensure that:
· their interest and support is maintained;
· their views and ideas are being adequately reflected in the project development;
· their personal success criteria are being pursued and achieved;
· environmental change is fully taken into account.
ii) Management of the project and its completion.
This is probably the most conventional view of project control. Feedback systems need to be set up to monitor key areas.
Activity
For a project that is already underway in your organisation, identify the key areas requiring monitoring and suggest the kind of information and procedures that would be involved.
The key areas would be as follows:
· The project timetable, with particular reference to critical event times and potential bottlenecks. There should be feedback on activity times achieved and their effect on the whole project. If network analysis is used, then it is vital that the network is reworked and updated to take into account the actual performance achieved.
· The project budget; budgetary control procedures can be used as in respect of any other form of budget.
· Quality and performance standards; these need to be monitored against the original project specification subject to changes agreed with stakeholders in the course of project development.
Where possible this should all be done through positive reporting which will required action to be taken.
iii) Management of project team performance:
This is the least tangible but possibly the most important of the three categories. How it is tackled will depend upon what kind of project is being carried out.
It is unlikely that the project team will spend all of their working time together in close proximity and under the direct supervision of the project manager. It is much more likely that they will work apart most of the time, only meeting up occasionally and only meeting with the project manager from time to time. Control issues that need to be considered therefore would be:
· How to get the best out of the team when they are together. If you are holding meetings then they should be purposeful and effective. They should not simply be part of the routine. Having said that, they may be an important element in binding the team together and in developing a team approach to planning and monitoring of performance.
· Ensuring people work when the team is apart. You need to set people realistic deadlines and ensure that they see the importance of their contribution and that their contribution is fully valued.
· Communications are important in terms of disseminating information and keeping everyone informed. There are views that team members should be given information on a need to know basis but this approach can cause problems.
· Ensuring continuing commitment by the team and adherence to the values and beliefs being pursued by the team.
· Change, in particular, needs to be communicated to team members quickly and effectively.
It is to stress that apart from looking after the team performance, the project leader has to look inwards at his or her own performance and manage his own performance.
1.2 Funding the Project
This will be determined by:
a) The nature of the project
b) The nature of the organisation
1.2.1 The nature of the Project
A major capital scheme will call for a large injection of new finance into the organisation. A management project can often be managed by using existing staffing resources. However it should not be forgotten that there is an opportunity cost to this.
1.2.2 The nature of the organisation
Companies can use a variety of resources for capital projects.
· Share issues
· Long term loans
· Leasing
The ability of companies to raise finance will depend upon the perceptions of lenders of money. Public Sector organisations are often restricted in their sources of finance by government regulations.
5 Human Factors
5.1 Human Factors in Project Management
Project management involves managing people also
5.2 Motivation
Human motivation is a complex issue and a great deal of research has been done on how best to motivate employees of an organisation to achieve good performance.
Motivation is the creation of a keen enthusiasm or desire in a person for the achievement of a particular objective or set of objectives. Because human beings have free-will and have a great many other influences acting upon them, it is not surprising that motivation is a complex issue.
One very important quality needed by a project manager is the ability to motivate the project team. Different people respond to various techniques of persuasion in sometimes very different ways, and it is necessary to know how to approach a particular individual, or group of individuals, in order to optimise your likelihood of success in motivating them into appropriate action.
5.3 Project teams
The management of a project includes the creation and management of a team of people who are given the task of handling the project from its inception to successful completion.
The benefits of effective teamwork are clear to those who have experienced the synergy created by a team who work together well, who cooperate with each other, and who are all committed to the project.
Synergy is the state in which the team 'takes off', working together as a whole to achieve far more than the individuals, working separately, could have done.
The opposite of such a synergistic grouping is sometimes called dysfunctional conflict - the unpleasant state when everyone seems to be wilfully at cross purposes with everyone else, and the group achieves much less than the individuals working separately, could have done.
An effective team is more dependent upon the chemistry between the members of the group than a strict matching of the various roles suggested by Belbin et al. to the attributes of those group members. Mutual trust is an effective lubricant to the effectiveness of team work.
Teamwork depends upon being able to persuade people to work together, to cooperate, and to be committed to the project. By their very nature, projects are usually one-off situations and the project team will usually be an ad-hoc matrix of individuals chosen for their specialist skills and who may not be used to working together. The role of the project manager is particularly challenging under these conditions.
6 The Project Manager
The prime objectives of project management are performance, cost and time [Meredith, 2003]. Clearly there is a relationship between these three objectives, and there may be trade-offs between them to be managed by the PM.
The project manager is expected to integrate all aspects of the project, to ensure that the proper knowledge and resources are available when and where needed, and above all to ensure that the expected results are produced in a timely , cost-effective manner.
Meredith and Mantel (2003) discuss differences between a functional manager and a project manager. A functional manager being defined as a person in charge of a functional department such as marketing, engineering, finance etc., within an organization.
They argue that the functional manager is likely to be a specialist in the area being managed, and as such they are analytically oriented, so that when a technically difficult task is encountered they know how to analyse and tackle it.
By contrast, the PM is more likely to be a generalist, or non-specialist, with a wide background of both experience and knowledge, and who is required to manage a number of diverse functional areas, each comprising a group of specialists in their own fields. The PM's task then is to bring together all the bits of the project together to form a coherent whole - i.e. the PM must be more skilled in synthesis, whereas the functional manager must be more skilled in analysis. The authors argue that the functional manager uses an analytical approach whereas the PM uses a systems approach.
The analytical approach would break a system down into smaller and smaller parts, but the systems approach is one which attempts to understand the links between the components, as well as the components themselves, on the basis that the links between components are as important in determining the systems performance as the components themselves. In order understand the system better, it is necessary to understand the environment (or larger system) of which it is a part.
The authors maintain that the adoption of the systems approach is crucial for project management, with an understanding of the organisational programme of which the project is a part, and the organization in which the programme exists, as well as the environment within which the organization operates.
Another difference between the functional and project manager is that the functional manager is a direct, technical supervisor, whereas the PM is a facilitator. The facilitation of co-operation between those who have various kinds of specialised knowledge and those who need it.
Three questions face the PM at the outset of a project:
· What needs to be done?
· When must it be done?
· How are the resources needed by the project to be obtained?
The PM will often be reliant upon functional managers for answers to these questions, and for other specialist inputs and it is often the case that the functional managers will make some of the fundamental and critical project decisions. For example they may select the people who will be responsible for carrying out the project, and may develop the technological plan detailing how to accomplish the project's goals, as well as frequently influencing the precise deployment of the projects resources. It is this separation of powers between functional and project management that on the one hand makes for a successful outcome to the project, but on the other is a source of discomfort for both.
Clearly a good project manager will attempt to influence by negotiation or other means the choice of specific individuals making up the project team, and the PM cannot allow the functional manager to usurp control of the project, since if this happens the project is likely to become secondary to the work of that functional group and consequently the project is likely to suffer. Equally the functional manager cannot allow the PM to usurp his/her authority when it comes to making technical decisions in the functional area, or indeed to the assignment of duties to personnel within that functional department or section.
Guidelines for Managing Projects
· Set a clear Goal
· Determine the Objectives
· Establish Checkpoints, Activities, Relationships, and Time estimates
· Create a Schedule
· Develop people individually and as a team
· Reinforce the commitment and excitement of people
· Inform everyone connected with the project
· Vitalise people by building agreements
· Empower yourself and others
· Risk approaching problems creatively
Source: Randolph and Posner, Getting the Job Done! Managing Project Teams and Task Forces for Success, Prentice-Hall, 1992
6.1 The Attributes of Successful Project Management in an Organization
The effectiveness of project management is critical in assuring the success of any substantial undertaking. Areas of responsibility for the project manager include planning, control and implementation. A project should be initiated with a feasibility study, where a clear definition of the goals and ultimate benefits need to be established. Senior managers' support for projects is important so as to ensure authority and direction throughout the project's progress and, also to ensure that the goals of the organization are effectively achieved within this process. The particular form of support given can influence the degree of resistance the project encounters.
Projects normally involve the introduction of a new system of some kind and, in almost all cases, new methods and ways of doing things. This impacts upon the work of others: the "users". User consultation is an important factor in the success of projects and, indeed, the degree of user involvement can influence the extent of support for the project or its implementation plan. A essential quality of the project manager is that of being a good communicator, not just within the project team itself, but with the rest of the organization and outside bodies as well (the users may be internal or external).
Referenences
Meredith, Jack and Samuel Mantel, Project Management - A Managerial Approach, Wiley, 2003.
Tomas Sabol, Project Management Notes, available at (accessed on 27.11. 2008) http://acru.tuke.sk/doc/PM_Text/PM_Text.doc
(The notes was the base document for this article. The notes was modified to bring in and highlight certain points ignored in project management texts)
Originally posted in
http://knol.google.com/k/narayana-rao/project-management/2utb2lsm2k7a/536
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