Project Management 

Project Management Provides

an organization with
Day 2 by U Sann Lwin  powerful tools that improve its ability
23 - 1 - 2021  to plan, implement, and control its
activities
An Introduction Projects and Project
 as well as the ways in which it utilizes
Management - Part 1 its people and resources.
Introductory Lecture
Chapter 1+2 Management Pyramid
Introduction
 Rapid growth in project management
 In the past, most projects were external
- Building a new skyscraper
- New ad campaign
- Launching a rocket
 Growth lately is in internal projects
- Developing a new product
- Opening a new branch
- Improving the services provided

How Project Management Developed

 Historical projects Strategic Projects
- Tower of Babel  Mergers
- Egyptian pyramids
- Great Wall of China  New markets, products
 The Manhattan Project  Market dominance
 Modern credit for the development of  Expand into emerging economies
project management goes to the military  Form alliances within the customer /
- Navy's Polaris program supplier chain
- NASA's Apollo space program
- Development of "smart bombs" and "missiles"

Tower of Babel. Inside the. legendary city of

Babylon in modern-day Iraq
Tactical Projects
Forces Driving Project Management  Squeeze competitors out
1. Exponential expansion of human  Decentralization
knowledge  Marketing campaign
2. Growing demand for a broad range of  Global purchasing
complex, sophisticated, customized  Supplier tie-ins
goods and services.  Customer tie-ins
3. Evolution of world competitive markets
for the production and consumption of
goods and services.
4. Team-based problem solving versus
individual.
 - Flying: balloons plane
jet reusable rockets
 The more we can do, the more we try to do

Project Management Also Getting

Smaller
 More people are seeing the advantages
of project management techniques
 The tools have become cheaper
 The techniques are becoming more
widely taught and written about
Operational Projects
 Automate warehouse Three Project Objectives: The "Triple
 Outsource distribution Constraint"
 Refurbish buildings  Time
 Land acquisition  Cost
 Introduce hand-held data recording  Scope
devices
 Develop a company Intranet  Time, cost, and performance are all related
to a project
 We refer to these as 'direct' project
objectives or goals

Direct Project Goals: Scope, Cost, Time

How Project Management Developed

 business and other organizations learned
from government,
 nonmilitary government sectors, private
industry, public service agencies, and
volunteer organizations have all used Figure 1-1 Direct project goals: scope, cost, time
project management to increase their
effectiveness.
The Definition of a "Project"
 Project management has found wide
 A temporary endeavor undertaken to create
acceptance in industry
a unique product, service, or result
 It has many applications outside of
 Modern project management began with
construction
- Managing legal cases
the Manhattan Project
- Managing new product releases  In its early days, project management was
used mainly for large complex projects
Projects Tend to be Large  As the tools and techniques were
developed, the use of project organization
 Projects tend to be large
began to spread
- The Channel Tunnel, or Chunnel
- Denver International Airport (USA)
- Panama Canal expansion project The primary task of "the project manager"
- Three Gorges Dam, China  Although the functions vary from
 Projects are getting larger over time project to project, and from to time for
a given project,
 these relationships refer "trade-offs"
 The primary task of the project
manager is to manage these trade-offs.
 In the past 25 years some ancillary
objectives have been suggested
Some attributes that characterize
General Management projects
 Managing the status quo  Importance - crucial attribute, must be
 Authority defined by management important enough.
structure  Performance - the subtasks require careful
 Consistent for own function coordination and control in terms of
 Responsible for own function timing, precedence, cost, and performance
 Permanent organizational structure  Life cycle - with a Finite Due Date -
 Tasks - maintenance  Interdependencies - interact with other
 Limited set of variables projects being carried out simultaneously
 Success - achieves interim targets by their parent organization
 Uniqueness - Projects have limited
Project Management budgets, both for personnel as well as
other resources
 Conflict - The members of the project team
are in almost constant conflict for the
project's resources and solving project
problems

Non-Projects and Quasi-Projects

 Routine tasks are not projects "a flow of
standard products is a non-project".
Terms in Project Management - Ex: production of weekly reports, delivery of
mail, etc.
 To make a distinction between terms such
as project, program, task, and work  Quasi-projects
package. - No specific task identified
- No specific budget given
 The military, uses the term program to
- No specific deadline defined
refer to an exceptionally large, long-range
objective that is broken down into a set of
projects. Why Project Management?
 These projects are divided further into
tasks, which are, in turn, split into work
packages that are themselves composed of
work units.
 The Manhattan Project was a huge
"program", but a "task force" was created
to investigate the many potential futures of
a large steel company.
 a project is a specific, finite task to be
accomplished.
 Whether large- or small-scale or whether Project Lifecycle
long- or short-run is not particularly  Stages of a conventional project:
relevant. - Slow beginning
 What is relevant is that the project be seen - Build-up of size
as a unit. - Peak
- Begin a decline
- Termination
 How does this map onto a software
development lifecycle?
 Classic 'S Curve" Graph

Risk During the Life Cycle

 considerable uncertainty to meet project
goals?
 the uncertainty decreases as the project
moves toward completion
 project start time, the band of uncertainty
grows
 It is common to make new forecasts about
project performance, time, and cost either
at fixed intervals or when specific
technological milestones are reached
Time Distribution of Project Effort (the
 Dealing with the uncertainty surrounding
effort curve) this relationship is a major responsibility
of the PM

Time distribution of project effort (the

effort curve)

Another possible Project Life Cycle

What the text focuses
 Part 1 project initiation
 Chapter 2 describes how to evaluate and select projects
 Chapter 3, "The Project Manager", concerns the many roles of the (PM)
 Chapter 4 covers a subject of critical importance to PM
 Chapter 5 discusses various ways to establish the project organization
 Part 2 project planning
 Chapter 6 deals with project activity planning and staffing
 Chapter 7. Scheduling, a crucial aspect of project planning
 Chapter 8, scheduling models such as the Program Evaluation and Review and the Critical
Path Method (CPM),
 Part 3 actual project execution
 Chapter 10 the information requirements of a project and the need for monitoring critical
activities
 Chapter 11 the control process in project management
 Chapter 12 methods for both ongoing evaluations and terminal audits of a project
 Chapter 14 the different forms of project termination,
 Management Output
Project Management Performance
Day 3 by U Nyein Oo  Attain goals
30 - 1 - 2021  Quality Products
 Quality Services
Chapter - 3 The Project Manager  Efficiency
What is management?  Effectiveness
1. The attainment of organizational goals in
an effective and efficient manner through
planning, organizing, leading and
controlling organizational resources.
2. To get the Optimal Results by use of
Minimal Resources.
3. To solve the day-to-day problems

Functions of Management
Management Input
Resources
 Human Resource
 Financial Resource
 Raw Materials Resource
 Technological Resource
 Information Resource

Management Process Management Hierarchy

 C - Level Position at Enterprise  Finance Manager
 Production Manager
 Operation Manager
 Marketing Manager
 Sales Manager
 Procurement Manager
 Business Development Management
 Admin Manager...etc.

Project Related Management

The Project Manager

 The project manager can be chosen and
installed as soon as the project is selected
for funding
- This simplifies several start-up activities
 The project manager can be chosen later
- This makes things difficult
 Senior management briefs the project
manager
Inside of Project Management  Project manager begins with a budget and
 Project Integration Management schedule
 Project Scope Management  As people are added these are refined
 Project Cost Management
 Project Time Management Ten Important things to PM
1. People skills
 Project Quality Management 2. Leadership
 Project HR Management 3. Listening
 Project Risk Management 4. Integrity, ethical behavior, consistent
 Project Communication Management 5. Strong at the building trust
 Project Procurement Management 6. Verbal communication
7. Strong at building teams
 Project Stakeholder Management 8. Conflict resolution, conflict management
9. Critical thinking, problem solving
Project Management Framework 10. Understands, balances priorities

Functional Vs Project Management

Business Manager Positions

 Project Manager
 HR Manager
 Comparing Functional & Project  Preserve the integrity of the project
Managers - This may be difficult with all sides wanting
changes
 Keep the client informed of major changes

3 Major Questions Facing Project

Managers
 What needs to be done?
 When must it be done? The Project Team
 How are the resources required to do the  Very few people will work for the project
job to be obtained? manager
 The "team" will disband at the end of the
project
 The project manager must look out for
everyone
- This is in the best interest of the project,
otherwise as the project winds down, everyone
will be looking after themselves

Project Manager Responsibilities

 The parent-company
 The project and the client
 The project-team
Project Management Career Paths
 Might work on several projects
simultaneously
 Small short-term projects and work up to
large projects
 Start on small projects and work up to
large projects
 Experience as a project manager is often
seen as a desirable step on the corporate
ladder
The Parent Company
 Proper usage of resources
 Timely and accurate reports
 Keep project sponsor informed

Sample Career Path

 Trainee:
- a six-month position to learn about project
management
 Cost Analysis/Schedule Engineer:
- a 6-18month team position reporting to a
The Project and the Client project manager
  Site Manager:
- a 6-12month position responsible for a large
site and reporting to a program manager
 Small Project Manager:
- sole responsibility for a $ 1M to $ 3 revenue
project
 Project Manager:
- responsible for $ 3M to $ 25M projects
 Program Manager:
 responsible for multiyear projects and programs
over $ 25M

New PM Career Path

 Project Management
Day 4 by U Tun Tun Aung
6 - 2 - 2021
Chapter 2
Organization Strategy and Project
Selection

Characteristics of Objectives
S - Specific Be specific in targeting
an objective
M - Measurable Establish a measurable
indicator(s) of progress
A - Assignable Make the objective
Why Project Managers Need to assignable to one
Understand the Strategic person for completion
Management Process R - Realistic State what can
 Changes in the organization's mission and realistically be done
strategy with available resources
- Project managers must respond to T - Time related
changes with appropriate decisions
about future projects and adjustments to Project Portfolio Management Problems
current projects.  The Implementation Gap
- Project managers who understand their - The lack of understanding and consensus on
organization's strategy can become strategy among top management and middle-
effective advocates of projects aligned level (functional) managers who independently
with the firm's mission. and implement the strategy.
 Organization Politics
The Strategic Management Process: - Project selection is based on the persuasiveness
and power of people advocating the projects.
An Overview  Resource Conflicts and Multitasking
 Strategic Management - The multi-project environment creates
- Provides the theme and focus of the interdependency relationships of shared
resources which results in the starting,
future direction for the firm. stopping, and restarting projects.
 Responding to changes in the external
environment - environmental scanning
 Allocating scare resources of the firm to Benefits of Project Portfolio
improve its competitive position - internal Management
responses to new action programs  Builds discipline into project selection
- Requires strong links among mission, process.
goals, objectives, strategy, and  Links project selection to strategic metrics.
implementation.  Prioritizes project proposals across a
 Four of Activities of the Strategic common set of criteria, rather than on
Management Process politics or emotion.
1. Review and define the organizational  Allocates resources to projects that align
mission. with strategic direction.
2. Set long-range goals and objectives.  Balance risk across all projects.
3. Analyze and formulate strategies to
 Justifies killing projects that do not support
reach objectives.
organization strategy.
4. Implement strategies through projects
 Improves communication and supports
agreement on project goals.
 A Portfolio Management System
 Selection Criteria
- Financial: payback, net present value
(NPV), internal rate of return (IRR)
- Non-financial: projects of strategic
importance to the firm.
 Multi-Weighted Scoring Models
- Use several weighted selection
criteria to evaluated project proposals.

Financial Models
 The Payback Model
- Measures the time it will take to Applying a Selection Model
recover the project investment
 Project Classification
- Shorter paybacks are more desirable.
- Deciding how well a strategic or
- Emphasizes cash flow, a key factor in operations project fits the organization's
business. strategy.
- Limitations of payback:
 Ignores the time value of money.
 Selection a Model
 Assumes cash inflows for the investment - Applying a weighted scoring model to
period (and not beyond). bring projects to closer with the
 Does not consider profitability. organization's strategy goals.
 The Net Present Value (NPV) model  Reduces the number of wasteful projects
 Helps identify proper goals for projects
- Uses management's minimum desired
 Helps everyone involved understand how
rate-of-return (discount rate) to and why a project is selected
compute the present value of all net
cash inflows. Project Proposals
 Positive NPV: the project meets the
minimum desired rate of return and is  Sources and Solicitation of Project
eligible for further consideration. Proposals
 Negative NPV: project is rejected. - Within the organization
- Request for proposal (RFP) from external
sources (contractors and vendors)
 Ranking Proposals and Selection of
Projects
- Prioritizing requires discipline, accountability,
responsibility, constraints, reduced flexibility,
and loss of power.
 Managing the Portfolio
- Senior management input
- The priority team (project office)
responsibilities
 Project Portfolio Matrix Dimensions
Managing the Portfolio  Bread-and-butter projects
 Senior Management Input - Involve evolutionary improvements to current
- Provide guidance in selecting criteria that products and services.
are aligned with the organization's goals  Pearls
- Decide how to balance available resources - Represent revolutionary commercial advances
among current projects using proven technical advances.
 The Priority Team Responsibilities  Oysters
- Publish the priority of every project - Involve technological breakthroughs with high
- Ensure that the project selection process is commercial payoffs.
open and free of power politics.  White elephants
- Reassess the organization's goals and - Projects that at one time showed promise but
priorities are no longer viable.
- Evaluate the progress of current projects

Project Financial Analysis

 U Tun Tun Aung The Time Value of Money is a concept that
should be applied to each technique. The time
Four Tests for Feasibility value of money recognizes that a dollar today is
Operational feasibility - a measure of how well worth more than a dollar one year from now.
a solution will work or be accepted in an
organization. Payback Analysis
Usability analysis - a test of the system's user
Payback analysis - a technique for determining
interfaces.
if and when an investment will pay for itself.
Technical feasibility - a measure of the
practicality of a technical solution and the
Payback period - the period of time that will
availability of technical resources and expertise.
lapse before accrued benefits overtake accrued
Schedule feasibility - a measure of how
and continuing costs.
reasonable the project timetable is.
Economic feasibility - a measure of cost-
effectiveness of a project or solution. Present Value Formula
Present value – the current value of a dollar
Cost-Benefit Analysis Techniques at any time in the future.
Costs:
¨ Development costs are one-time costs PVn = 1/(1 + i)n
that will not recur after the project has Where n is the number of years and i is the
been completed/ discount rate.
¨ Operating costs are costs that tend to
recur throughout the lifetime of the Discount rate – a percentage similar to interest
system. Such costs can be classified as: rates that you earn on your savings.
 Fixed costs - occurs at regular intervals but
are relatively fixed rates. In most cases the discount rate for a business is
 Variable costs - occurs in proportion to the opportunity cost of being able to invest
some usage factor. money in other projects or investments
Benefits:
¨ Tangible benefits are those that can be
easily quantified.
¨ Intangible benefits are those benefits
believed to be difficult or impossible to
quantify.

Return-on-Investment Analysis
(ROI)
Return-on-Investment (ROI) analysis – a
technique that compares the lifetime profitability
of alternative solutions.

 The ROI for a solution or project is a

Three Popular Techniques to Asses percentage rate that measures the
relationship between the amount the
Economic Feasibility
business gets back from an investment and
¨ Payback Analysis
the amount invested.
¨ Return on Investment
¨ Net Present Value Lifetime ROI = (estimated lifetime benefits –
estimated lifetime costs) / estimated lifetime
costs
Annual ROI = lifetime ROI / lifetime of the
system
 Project Management
Day 5 by U Kaung Myat Htut
27 - 2 - 2021
Chapter 4 Negotiation and the
Management of Conflict

Conflict
 Conflict has sometimes been defined as
"the process which begins when one party 3 Situations for Negotiation
perceives that the other has frustrated, or is • Three situations commonly arising during
about to frustrate some concern of his" projects that call for the highest level of
(Thomas, 1976, p.891) negotiating skills that PM can muster
 Brute force is a time-honored method • the use of subcontractors
 Conflict resolution is the ultimate purpose • the use of input from two or more functional
of law units to design and develop the project’s
 The list of potential conflicts is endless mission
• the management of changes ordered in the
project’s deliverables and/or priorities after
Negotiation
the project is underway
 "Negotiation is a field of knowledge and
endeavor that focuses on gaining the favor
of people from whom we want things". Partnering
 Organizations, like groups, consists of • Project partnering is a method of
interdependent parts that have their own transforming contractual relationships into a
values, interests, perceptions, and goals. cohesive, cooperative project team with a
Each unit seeks to fulfill its particular goal. single set of goals and established procedures
. . and the effectiveness of the organization for resolving disputes in a timely and effective
depends on the success of each unit's manner.
fulfillment of its specialized task. Just as • diversification of technical risk, avoidance of
important as the fulfillment of the separate capital investment, reducing political risk on
tasks is the integration of the unit activities multinational projects, shortening the duration
such that each unit's activities aid or at of the project, and pooling of complementary
least do not conflict with those of the knowledge, among others
others.
 Ethical consideration is important. Building Partnered Projects
• Parent firm must make a commitment to
Pareto Optimization partnering, select subcontractor who will also
• Multiple criteria-decision making that is make such a commitment, engage in joint
concerned with mathematical team-building exercise and develop a
optimization problems involving more than “charter” for the project.
one objective function to be • Both parties must implement the partnering
optimized simultaneously. process
• Multi-objective optimization has been • Joint evaluation
applied in many fields of science, including • Method for resolving any problems or
engineering, economics and logistics, where disagreements
optimal decisions need to be taken in the • Acceptance of a goal for continuous
presence of trade-offs between two or more improvement (TQM)
conflicting objectives. • Continuous support for the process of
partnering from Senior Management of both
parties
• Joint review
 • Negotiations are difficult because most of the
stakeholders will have a strong interest in
maintaining the status quo.
• Change by mandate raises an additional
problem. Not only are the project’s
deliverables, budget, and schedule usually
changed, the priorities of other projects are
typically changed too, if only temporarily
while the mandate receives the system’s full
attention. Suddenly, a PM loses access to key
resources, because they are urgently required
elsewhere. Key contributors to a project miss
meetings or are unable to keep promised task-
delivery dates. All too often, the PM’s
Chartering response to this state of affairs is anger and/or
• The agreements between groups partnering discouragement. Neither is appropriate.
on large endeavors are often referred to as
charters.
• A project (program, etc.) charter is simply a Three Levels of Priority
written agreement between the PM, senior • First, there are the high-priority projects, that
management, and the functional managers is, the “set” of projects currently being
who are committing resources and/or people supported. When resource conflicts arise
to a specific project (program, etc.). within this high-priority set, precedence is
typically given to those projects with the
Scope Change earliest due date. (More about this is in
• The problem of changing the scope, or Chapter 9.)
performance, expected of a project is a major • Second, there are the lower-priority projects,
issue in project management and constitutes the projects “we would like to do when we
the second PMBOK knowledge area. have the time and money.”
• No matter how carefully a project is planned, • Third, occasionally, there are urgent projects,
it is almost certain to be changed before mandates, that must be done immediately
completion.
• No matter how carefully defined at the start, Categories of Conflict
the scope of most projects is subject to • Schedules
considerable uncertainty. • Priorities
• staff and labor requirements
Causes of Change • technical factors
• Initial assessments • administrative procedures
• Goal settings • cost estimates
• Technology uncertainty + Cheaper solutions • personality conflicts
• Increase in user or team knowledge
demanded for change

Different Categories of Conflict

• Groups working on the project may have
Beyond Change different goals and expectations
• Nothing endures but change
• Risk management
• There is considerable uncertainty about who organized as a weak matrix, the PM seeks a
has the authority to make decisions commitment of work from the functional
• There are interpersonal conflicts between departments
people who are parties-at-interest in the project. • As the project’s plans become detailed,
conflicts over technical issues build—again,
Project Formation conflicts between the PM and the functional
• In the initial stage of the project life cycle, most areas tend to
of the conflict centers around the inherent predominate.
confusion of setting up a project in the • PM is not a generalist but a specialist too
environment of matrix management
• Even the project’s technical objectives, not Main Program
clearly defined or established, are apt to be • Schedules are still a major source of conflict in
understood only in the most general sense. the main program phase of
• Moving from this state of semi-chaos to the the project life cycle, though the proximate cause
relatively ordered world of the buildup stage is of schedule-related
difficult conflict is usually different than in the earlier
stages.
Four Fundamental issues to handle
• Technical objectives of the project must be • Project plans have been developed and
specified to a degree that will allow the detailed approved by everyone involved and the actual
planning of the buildup stage to be accomplished work is under way
• commitment of resources to the project must be
forthcoming from senior management and from Project Phase-out
functional managers • Technical problems are comparatively rare
• priority of the project, relative to the priorities during phase-out because most have been solved
of the parent organization’s other projects, must or bypassed earlier.
be set and communicated. • Similarly, working interfaces have been
• the organizational structure of the project must developed and put in place.
be established to an extent sufficient for the • If the project involves implementing a
WBS and a linear responsibility chart, or its technology in an outside client’s system,
equivalent, to be prepared during the next stage technical conflicts will probably arise, but they
of the life cycle are usually less intense.
• personality conflicts are the second-ranked
Conflict Avoidance source of conflict during phase-out.
• Which of the functional areas will be
needed to accomplish project tasks? Principles of Negotiation
• What will be the required level of • Separate the people from the problem
involvement of each of the functional • Focus on interests, not positions
areas? • Before trying to reach agreement, invent
• How will conflicts over options for mutual gain
resources/facility usage between this • Insist on using objective criteria
and other projects be settled?
• What about those resource/facility Summary
conflicts between the project and the • Negotiation within the firm should be directed
routine work of the functions? at obtaining the best outcome for the
• Who has the authority to decide the organization, not winning.
technical, scheduling, personnel, and • There are three traditional categories of
cost questions that will arise? conflict: goal-oriented, authority-based, and
• Most important, how will changes in interpersonal.
the parent organization’s priorities be • There are also three traditional sources of
communicated to everyone involved? conflict. They are the project team itself, the
Project Buildup client, and functional and senior management.
• If the project’s organizational format is a strong We added the problem/discipline orientation of
matrix, the PM seeks a commitment of people people working on the project.
from the functional departments. If the project is • Critical issues to handle in the project
formation stages are delimiting technical
objectives, getting management commitment,
setting the project’s relative priority, and
selecting the project organizational structure.
• The total level of conflict is highest during the
project buildup stage.
• Scheduling and technical conflicts are most
frequent and serious in the project buildup and
main program stages, and scheduling conflicts in
particular during the phase-out stage.
• Project negotiation requirements are that
conflicts must be settled without permanent
damage, the methodology must foster honesty,
and the solution must satisfy both individuals’
and the organization’s needs.
• One promising approach to meeting the
requirements of project negotiation is called
“principled negotiation.”
 Project Management
Day 6 by U Tun Tun Aung
6 - 3 - 2021
Developing a Project Plan
¨ The Project Network
- A flow chart that graphically depicts
the sequence, interdependencies, and
start and finish times of the project job
plan of activities that is the critical
path through the network.
 Provides the basis for scheduling labor
and equipment.
 Enhances communication among project
participants.
 Provides an estimate of the project's
duration.
 Provides a basis for budgeting cash flow.
 Identifies activities that are critical.
 Highlight activities that are "critical" and
cannot be delayed
 Help managers get and stay on plan.
 • Maximum flexibility in the use of staff. Experts
Project Management can be temporarily assigned to the project, make
Day 7 by U Kaung Myat Htut the required contributions, and immediately be
reassigned to their normal work
13 - 3 - 2021 • Individual experts can be utilized by many
Chapter 5 Project in the different projects.
Organizational Structure • Specialists in the division can be grouped to
share knowledge and experience
Introduction
• The functional division also serves as a base of
• Focus of the structure is specialization of the
technological continuity when individuals
human elements of the group
choose to leave the project and even the parent
• As long as its organizational structure is
firm.
sufficient to the tasks imposed on it, the structure
• The functional division contains the normal
tends to persist
path of advancement for individuals whose
• When the structure begins to inhibit the work
expertise is in the functional area.
of the firm, pressures arise to reorganize along
some other line
• Once the projects are completed, they are Disadvantages of Functional Organization
integrated into the whole application system. • The client is not the focus of activity and
concern. The functional unit has its own work to
do which usually takes precedence over the work
Rapid growth of Project-Oriented
of the project, and hence over the interests of the
Organizations client
• Speed and market responsiveness have become • The functional division tends to be oriented
absolute requirements for successful toward the activities particular to its function.
competition. First-to-market is a powerful • No individual is given full responsibility for the
competitive advantage. project.
• The development of new products, processes, • Lack of coordinated effort tend to make
or services regularly requires inputs from diverse response to client needs slow and arduous
areas of specialized knowledge. • Tendency to sub-optimize the project
• Rapid expansion of technological possibilities • Motivation of people assigned to the project
in almost every area of enterprise tends to tends to be weak
destabilize the structure of organizations. • Complex technical projects cannot be well
• Transforming non-routine activities into designed unless they are designed as a totality
projects allowed her to ensure that accountability
was established, projects were properly planned,
integrated with other related activities, and
reported routinely on their progress.
• Moving from non-project environment to one
in which projects are organized and used to
accomplish special teaks to a full-fledged
project-oriented organization presents senior
management of a firm with an extra-ordinarily
difficult transition.

Advantages of Pure Project

Organization
• Project Manager has full line authority over the
project
• All members of the project work force are
directly responsible to the PM
• When the project is removed from the
functional division, the lines of communications
are shortened. The entire functional structure is
bypassed, and the PM communicates directly
with senior corporate management.
Advantages of Functional Organization • When there are several successive projects of a
similar kind, the pure project organization can
maintain a more or less permanent cadre of • There is less anxiety about what happens when
experts who develop considerable skill in the project is completed than is typical of the
specific technologies. pure project organization.
• The project team that has a strong and separate • Response to client needs is as rapid as in the
identity of its own tends to pure project case, and the matrix organization is
develop a high level of commitment from its just as flexible.
members. • Because authority is centralized, the • With matrix management, the project will have
ability to make swift decisions is greatly – or have access to – representatives from the
enhanced. • Unity of command exists. • Pure administrative units of the parent firm.
project organizations are structurally simple and • Where there are several projects
flexible, which makes simultaneously under way, matrix organization
then relatively easy to understand to implement • allows a better company balance of resources to
Organizational structure tends to support a achieve the
holistic approach to the project several different time/cost/performance targets of
the individual projects.
Disadvantages of Pure Project • While pure project and functional organizations
Organization represent extremes of the organizational
• When the parent organization takes on several spectrum, matrix organizations cover a wide
projects, it is common for each one to be fully range in between.
staffed.
• The need to ensure access to technological Disadvantages of Matrix Organization
knowledge and skills results in an attempt by the • In the case of functionally organized projects,
PM to stockpile equipment and technical there is no doubt that the
assistance in order to be certain that it will be functional division is the focus of decision-
available when needed. making power. In the pure project case, it is clear
• Though individuals engaged with projects that the PM is the power center of the project.
develop considerable depth in the technology of With matrix
the project, they tend to fall behind in other areas organizations, the power is more balanced.
of their technical expertise. • While the ability to balance time, cost, and
• Pure project groups seem to foster performance between several
inconsistency in the way in which policies and projects is an advantage of matrix organizations,
procedures are carried out. “They don’t that ability has its dark side. The set of projects
understand our problems.” must be carefully monitored as a set, a tough job.
• The project takes on a life of its own. Friendly • For strong matrices, problems associated with
rivalry may become bitter shutting down a project are almost as severe as
competition, and political infighting between those in pure project organizations.
projects is common. • In matrix-organized projects, the PM controls
• Another symptom of projectitis is the worry administrative decisions and the functional heads
about “life after the project ends.: control technological decisions. Success is
doubtful for a PM without strong negotiating
skills.
• Matrix management violates the management
principle of unity of command. Project workers
have at least two bosses, their functional heads
and the PM

Virtual Projects
• Virtual projects are those in which work on the
project team crosses time, space,
organizational, or cultural boundaries.
Advantages of Matrix Organization • Only use virtual teams for projects that are
• The project is the point of emphasis challenging and interesting. But also be sure the
• The project organization is overlaid on the project is meaningful to the company as well as
functional divisions, temporarily the team.
drawing labor and talent from them, the project • Solicit volunteers as much as possible—they’ll
has reasonable access to the entire reservoir of be more enthusiastic and dedicated to
technology in all functional divisions. the success of the project.
• Include a few members in the team who Risk Management
already know each other, and make sure one in • Risk Management Planning
every six or seven are “boundary spanners” with • Risk Identification
lots of outside contacts. • Qualitative Risk Analysis
• Create an online resource for team members to • Quantitative Risk Analysis
learn about each other (especially how they • Risk Response Planning
prefer to work), collaborate, brainstorm, and • Risk Monitoring and Control
draw inspiration. • Create and Maintain a Risk Management Data
• Encourage frequent communication, but not Bank
social gatherings (which will occur at more
natural times anyway).
• Divide the project work into geographically
independent modules as much as possible
• so progress in one location isn’t hampered by
delays in other locations.

Updating Data Bank

• Identification of all environments that may
impact on the project
• Identification of all assumptions made in the
preliminary project plan that may
Criteria of the selection of a project be the source of risk for the project
organization • All risks identified by the risk management
• Define the project with a statement of the group, complete with their estimated impacts on
objective(s) that identifies the major outcomes the project and estimates of their probability of
desired occurring • A complete list of all “categories”
• Determine the key tasks associated with each and “key words” used to categorize risks,
objective and locate the units in the parent assumptions, and environments so that all risk
organization that serves as functional “home: for management groups can access past work done
these types of tasks on risk management
• Arrange the key tasks by sequence and • The details of all qualitative and quantitative
decompose them into work packages estimates made on risks, on states of the
• Determine which organizational units are project’s environment, or on project
required to carry out the work packages and assumptions, complete with a brief description of
which units will work particularly closely with the methods used to make such estimates
which others. • Minutes of all group meetings including all
• List any special characteristics or assumptions actions the group developed to deal with or
associated with the project – for example, level mitigate each specific risk, including the
of technology needed, probable length and size decision to ignore a risk
of the project, any potential problems with the • The actual outcomes of estimated risks and the
individuals who may be assigned to the work, results of actions taken to mitigate risk
possible political problems between different
functions involved, and anything else that seems Risk identification through Failure Mode
relevant, including the parent firm’s previous and
experiences with different ways of organizing Effect Analysis (FMEA)
projects • RPN = S x L x D
• In the light of the above, and with full • RPN = Risk Priority Number
cognizance of the pros and cons associated with • S = Severity (1 = no effect, 10 = very severe)
each structural form, choose a structure
• L = Likelihood (1= remote, 10 = almost • Offer consulting services to the organization’s
certain) • D = Detect (1 = detectability is almost project managers
certain, 10 – will not be detected) • Help project managers with administrative
details such as status reports
Risk Management Team • Establish a process for estimation and
• A specialist in the science or technology of evaluation of risk
the proposed product • A market specialist • Determine if a new project is a good “fit” for
who can make an informed estimate of the the changing organization
total market size • Identifying downstream changes (market,
and amount of sales for the potential product organization) and their impacts on current
as well as the impact that the proposed product projects: Are the projects still relevant? Is there a
need to change any project’s scope? Are there
may have on the sales of the firm’s other
any cost effects on the projects?
products, and the state of potential competition
• Review and manage the organization’s project
• A manufacturing specialist who can foresee risk portfolio, including limiting the number of
risks in the firm’s (or its subcontractor’s) active projects at any given time and identifying
ability to manufacture the product with an and reining in runaway projects as well as
acceptable level of managing potential disasters
quality • Conduct project reviews and audits,
• A purchasing specialist who can foresee risks particularly early in each project’s life cycle, and
in the firm’s supply chain report project progress relative to the
• A product safety expert to foresee risks in the organization’s goals
area of product liability as well as public • Maintain and store project archives
relations professional and an attorney to help • Establish a project resource database and
deal with matters if safety claims are made manage the resource pool
against the firm • Serve as a champion to pursue project
• A patent attorney to assess the risks of patent management excellence in the organization and
infringement encourage discussion on the value of individual
• An individual (perhaps a program manager) projects in the firm
who understands the complete set of the firm’s • Serve as a “home” for project managers to
projects and can identify any projects that communicate with each other and with PMO
might contribute to or profit from the project staff
in question • Collect and disseminate information and
• The same or a different person who can techniques reported in project evaluations that
can improve project management practices
foresee possible personnel, resource, or
• Assist in project termination
scheduling conflicts caused by or threatening
this project
• A governmental relations expert who knows
Advantages of Empowerment for Project
what governmental licenses or approvals may Teams
be required for manufacturing processes or • It harnesses the ability of the team members to
manipulate tasks so that project objectives are
product release
met. The team is encouraged to find better ways
to do
Tasks of the Project Management Office things.
• Establish and enforce good project • Professionals do not like being micromanaged.
management processes such as procedures for Participative management does not tell them how
bidding, risk analysis, project selection, progress to work but, given a goal, allows them to design
reports, executing contracts, and selecting their own methods (usually within some
software constraints on their authority).
• Assess and improve the organization’s project • The team members know they are responsible
management maturity and accountable for achieving
• Develop and improve an enterprise project the project deliverables.
management system • There is a good chance that synergistic
• Offer training in project management and help solutions will result from team
project managers become certified
• Identify, develop, and mentor project managers
and maintain a stable of competent candidates