11 Lecture 2 Planning and Control in Projects (Part 1) 1

11

Lecture 2Planning and Control

in Projects (Part 1)

1

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Why Strategy?Why Strategy?

• Changes in the Organization’s Mission and Changes in the Organization’s Mission and StrategyStrategy

– Project managers must respond to changes with Project managers must respond to changes with appropriate decisions about future projects and appropriate decisions about future projects and adjustments to current projects.adjustments to current projects.

– Project managers who understand their Project managers who understand their organization’s strategy can become effective organization’s strategy can become effective advocates of projects aligned with the firm’s advocates of projects aligned with the firm’s mission.mission.

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The Strategic Management Process: The Strategic Management Process: An OverviewAn Overview

• Strategic ManagementStrategic Management– Provides the theme and focus of the future Provides the theme and focus of the future

direction for the firm.direction for the firm.• Responding to changes in the external environment—Responding to changes in the external environment—

environmental scanningenvironmental scanning• Allocating scarce resources of the firm to improve its Allocating scarce resources of the firm to improve its

competitive position—internal responses to new competitive position—internal responses to new action programsaction programs

– Requires strong links among mission, goals, Requires strong links among mission, goals, objectives, strategy, and implementation.objectives, strategy, and implementation.

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Partial Analysis of Project FailurePartial Analysis of Project Failure

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Partial Analysis of Project FailurePartial Analysis of Project Failure

• Organisational strategy does not include role Organisational strategy does not include role fo projects in delivery of organisation fo projects in delivery of organisation objectivesobjectives

• Project management not viewed as a Project management not viewed as a strategic capabilitystrategic capability

• Organisation lacks a coordination mechanism Organisation lacks a coordination mechanism for resourcesfor resources

• Project goals not in line with organisational Project goals not in line with organisational goalsgoals

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The Strategy Process The Strategy Process

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The Strategy Process The Strategy Process • Four of Activities of the Strategic Four of Activities of the Strategic

Management ProcessManagement Process

1.1. Review and define the organizational mission.Review and define the organizational mission.

2.2. Set long-range goals and objectives.Set long-range goals and objectives.

3.3. Analyze and formulate strategies to reach Analyze and formulate strategies to reach objectives.objectives.

4.4. Implement strategies through projects.Implement strategies through projects.

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Characteristics of ObjectivesCharacteristics of Objectives

SS Specific Specific Be specific in targeting an objectiveBe specific in targeting an objective

MM Measurable Measurable Establish a measurable indicator(s) of progressEstablish a measurable indicator(s) of progress

AA Assignable Assignable Make the objective assignable to one person forMake the objective assignable to one person forcompletioncompletion

RR Realistic Realistic State what can realistically be done with availableState what can realistically be done with availableresourcesresources

TT Time relatedTime related

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Strategic Strategic Management Management

ProcessProcess

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Strategic Strategic Management Management

ProcessProcess

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The Aggregate Project PlanThe Aggregate Project Plan

• Steps:Steps:–Assessed workload of staffAssessed workload of staff–Stock take allocated resourcesStock take allocated resources–Evaluate requirements of projectsEvaluate requirements of projects–Rank the relative importance of Rank the relative importance of

projectproject–Re-allocate resourcesRe-allocate resources

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The Aggregate Project PlanThe Aggregate Project Plan

• Do the followings:Do the followings:–Assesses contribution Assesses contribution –Determine the criteriaDetermine the criteria–Rank the importanceRank the importance–Sets the timingSets the timing–Assesses the resources, capability and Assesses the resources, capability and

logic requirementslogic requirements

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The Aggregate Project PlanThe Aggregate Project Plan• Help to avoid the followings:Help to avoid the followings:– Take on too many projectsTake on too many projects– Failure to limit the scope of projectsFailure to limit the scope of projects– ““Emotional” projects with low yieldEmotional” projects with low yield– Setting goals that are not in line with Setting goals that are not in line with

organisational objectivesorganisational objectives– Ignore key issues Ignore key issues – Lack balance between short-term and long-Lack balance between short-term and long-

term goalsterm goals

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The Project OfficeThe Project Office• Assist all aspects of management of project Assist all aspects of management of project

workwork• Provides a central facility of skills and Provides a central facility of skills and

knowledgeknowledge• Supporting role in training and mentoringSupporting role in training and mentoring• Enhance checks and controlsEnhance checks and controls• Juggle and co-ordinate three objectives of Juggle and co-ordinate three objectives of

cost, quality and time – cost, quality and time – Trade-off decisionsTrade-off decisions

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The Project OfficeThe Project Office

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The Trade-off DecisionsThe Trade-off Decisions

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• Causes of Project Trade-offs– Shifts in the relative importance of criterions related

to cost, time, and performance parameters• Budget–Cost• Schedule–Time• Performance–Scope

• Managing the Priorities of Project Trade-offs– Constrain: a parameter is a fixed requirement.– Enhance: optimizing a parameter over others.– Accept: reducing (or not meeting) a parameter

requirement.


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Project and Organisational GoalsProject and Organisational Goals

• Dilemma of Dilemma of ConformanceConformance vs vs PerformancePerformance

– Time – Time – plannedplanned vs vs shortest possibleshortest possible– Cost – Cost – plannedplanned vs vs cheapest possiblecheapest possible–Quality – Quality – plannedplanned vs vs highest levelhighest level

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FIGURE 4.2


2020

• Good strategy deployment will result in :Good strategy deployment will result in :– Objectives aligned, visible and understoodObjectives aligned, visible and understood– Conflicts between functional and project Conflicts between functional and project

objectives resolvedobjectives resolved– All members in organisation responsible for All members in organisation responsible for

process thru’ contributionprocess thru’ contribution– Progress monitored with visible measuresProgress monitored with visible measures– Objectives based on customer needsObjectives based on customer needs

Project and Organisational GoalsProject and Organisational Goals

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Checklist Selection ModelChecklist Selection Model• Strategy alignment: What specific organization does this project align Strategy alignment: What specific organization does this project align

with?with?• Driver: What business problem does the project solve?Driver: What business problem does the project solve?• Success metrics: How will we measure success?Success metrics: How will we measure success?• Sponsorship: Who is the project sponsor?Sponsorship: Who is the project sponsor?• Risk: What is the impact of not doing this project?Risk: What is the impact of not doing this project?• Risk: What is the project risk to our organization? Risk: What is the project risk to our organization? • Benefits: What is the value of the project to this organization?Benefits: What is the value of the project to this organization?• Organization culture: Is our organization culture right for this type of Organization culture: Is our organization culture right for this type of

project? project? • Approach: Will we build or buy?Approach: Will we build or buy?• Training/resources: Will staff training be required?Training/resources: Will staff training be required?• Finance: What is estimated cost of the project?Finance: What is estimated cost of the project?• Portfolio: How does the project interact with current projects?Portfolio: How does the project interact with current projects?

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Non-financial CriteriaNon-financial Criteria• To capture larger market shareTo capture larger market share• To make it difficult for competitors to enter the To make it difficult for competitors to enter the

marketmarket• To develop an enabler productTo develop an enabler product• To develop core technology that will be used in To develop core technology that will be used in

next-generation productsnext-generation products• To reduce dependency on unreliable suppliersTo reduce dependency on unreliable suppliers• To prevent government intervention and To prevent government intervention and

regulationregulation

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Project Screening MatrixProject Screening Matrix

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Applying a Selection ModelApplying a Selection Model• Project ClassificationProject Classification– Deciding how well a strategic or operations project fits Deciding how well a strategic or operations project fits

the organization’s strategy.the organization’s strategy.

• Selecting a ModelSelecting a Model– Applying a weighted scoring model to bring projects to Applying a weighted scoring model to bring projects to

closer with the organization’s strategic goals.closer with the organization’s strategic goals.

• Reduces the number of wasteful projectsReduces the number of wasteful projects

• Helps identify proper goals for projectsHelps identify proper goals for projects

• Helps everyone involved understand how and why a Helps everyone involved understand how and why a project is selectedproject is selected

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Project ProposalsProject Proposals• Sources and Solicitation of Project ProposalsSources and Solicitation of Project Proposals– Within the organizationWithin the organization– Request for proposal (RFP) from external sources Request for proposal (RFP) from external sources

(contractors and vendors)(contractors and vendors)

• Ranking Proposals and Selection of ProjectsRanking Proposals and Selection of Projects– Prioritizing requires discipline, accountability, Prioritizing requires discipline, accountability,

responsibility, constraints, reduced flexibility, and loss of responsibility, constraints, reduced flexibility, and loss of powerpower

• Managing the PortfolioManaging the Portfolio– Senior management inputSenior management input– The priority team (project office) responsibilitiesThe priority team (project office) responsibilities

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Major Project Major Project ProposalProposal

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Risk Risk AnalysisAnalysis

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Managing the PortfolioManaging the Portfolio• Senior Management InputSenior Management Input– Provide guidance in selecting criteria that are aligned Provide guidance in selecting criteria that are aligned

with the organization’s goalswith the organization’s goals– Decide how to balance available resources among Decide how to balance available resources among

current projectscurrent projects

• The Priority Team ResponsibilitiesThe Priority Team Responsibilities– Publish the priority of every projectPublish the priority of every project– Ensure that the project selection process is open and free Ensure that the project selection process is open and free

of power politicsof power politics– Reassess the organization’s goals and prioritiesReassess the organization’s goals and priorities– Evaluate the progress of current projectsEvaluate the progress of current projects

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Project Project Screening Screening ProcessProcess

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Priority Priority AnalysisAnalysis

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Project Portfolio MatrixProject Portfolio Matrix

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Project Portfolio Matrix DimensionsProject Portfolio Matrix Dimensions

• Bread-and-Butter ProjectsBread-and-Butter Projects– Involve evolutionary improvements to current products Involve evolutionary improvements to current products

and services.and services.

• PearlsPearls– Represent revolutionary commercial advances using Represent revolutionary commercial advances using

proven technical advances.proven technical advances.

• OystersOysters– Involve technological breakthroughs with high Involve technological breakthroughs with high

commercial payoffs.commercial payoffs.

• White ElephantsWhite Elephants– Projects that at one time showed promise but are no Projects that at one time showed promise but are no

longer viable.longer viable.

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Project Performance MeasurementProject Performance Measurement

• Process measuresProcess measures– Product development cost, time and Product development cost, time and

conformance to quality proceduresconformance to quality procedures

• Short-term outcome measuresShort-term outcome measures– Product performance level, desirability to Product performance level, desirability to

market, flexibility of design to be changed market, flexibility of design to be changed to meet emergent customer needsto meet emergent customer needs

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Project Performance MeasurementProject Performance Measurement

• Long-term outcome measuresLong-term outcome measures– Payback period, customer satisfaction, Payback period, customer satisfaction,

percentage of business being generated by percentage of business being generated by the new product, market share, the new product, market share, customisability for high-margin marketscustomisability for high-margin markets

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Concept DevelopmentConcept Development

• Steps:Steps:–External customers provide brief or External customers provide brief or

terms of referenceterms of reference–Project manager develop proposal or Project manager develop proposal or

Project Initiation Document (PID)Project Initiation Document (PID)–Project personal used creativity and Project personal used creativity and

options to provide conceptualisationoptions to provide conceptualisation

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Concept DevelopmentConcept Development

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Concept DevelopmentConcept Development• During conceptualisation:During conceptualisation:–Allow time and space for explorationAllow time and space for exploration–Protect ownership of ideasProtect ownership of ideas–Encourage rapid prototyping to try Encourage rapid prototyping to try

ideas and see how they workideas and see how they work–Management support of projectManagement support of project–Rapid development process from Rapid development process from

concept into implementationconcept into implementation

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Defining the Project ScopeDefining the Project Scope• Important to ensure that concept

development is within project scope

• Project Scope Management consist of three parts:– Initiation– Scope change control– Scope plan

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Project Scope ManagementProject Scope Management

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Project Scope ManagementProject Scope Management• Project Scope– A definition of the end result or mission of the project—a

product or service for the client/customer—in specific, tangible, and measurable terms.

• Purpose of the Scope Statement – To clearly define the deliverable(s) for the end user.– To focus the project on successful completion of its goals.– To be used by the project owner and participants as a

planning tool and for measuring project success.

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Project Scope ChecklistProject Scope Checklist1. Project objective

2. Deliverables

3. Milestones

4. Technical requirements

5. Limits and exclusions

6. Reviews with customer

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Project Scope: Terms and DefinitionsProject Scope: Terms and Definitions• Scope Statements– Also called statements of work (SOW)

• Project Charter– Can contain an expanded version of scope statement– A document authorizing the project manager to

initiate and lead the project.• Scope Creep– The tendency for the project scope to expand over

time due to changing requirements, specifications, and priorities.

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The Project Planning ProcessThe Project Planning Process

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The Project Planning ModelThe Project Planning Model

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The Project Planning BenefitsThe Project Planning Benefits• Break down complex activities into

manageable chunks• Determining logical sequences of activities• Providing an input schedule including time

and resources requirement• Provide logical basis for making decisions• Showing effects on other systems

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The Project Planning BenefitsThe Project Planning Benefits• Filtering ideas and activities• Provide assessment framework for

programmes• Essential for revision and refinement

process• Accumulate learning experiences• Facilitating communication of ideas in a

logical form

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Project Planning Benefits and CostsProject Planning Benefits and Costs

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• Should the Project Plan be:Should the Project Plan be:

–Working Tool or Straitjacket ?Working Tool or Straitjacket ?

–Accuracy or Precision ?Accuracy or Precision ?

Project Planning Benefits and CostsProject Planning Benefits and Costs

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Creating the Work Breakdown StructureCreating the Work Breakdown Structure• Work Breakdown Structure (WBS)

– An hierarchical outline (map) that identifies the products and work elements involved in a project

– Defines the relationship of the final deliverable (the project) to its subdeliverables, and in turn, their relationships to work packages

– Best suited for design and build projects that have tangible outcomes rather than process-oriented projects

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How WBS Helps the Project ManagerHow WBS Helps the Project Manager

• WBS– Facilitates evaluation of cost, time, and technical

performance of the organization on a project– Provides management with information appropriate to

each organizational level– Helps in the development of the organization

breakdown structure (OBS), which assigns project responsibilities to organizational units and individuals

– Helps manage plan, schedule, and budget– Defines communication channels and assists in

coordinating the various project elements

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Hierarchical Hierarchical Breakdown Breakdown of the WBSof the WBS

FIGURE 4.3

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Work Breakdown StructureWork Breakdown Structure

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Work PackagesWork Packages• A Work Package Is the Lowest Level of the

WBS.– It is output-oriented in that it:

• Defines work (what)

• Identifies time to complete a work package (how long)

• Identifies a time-phased budget to complete a work package (cost)

• Identifies resources needed to complete a work package (how much)

• Identifies a single person responsible for units of work (who)

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FIGURE 4.4

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Integrating the WBS Integrating the WBS with the Organizationwith the Organization

• Organizational Breakdown Structure (OBS)– Depicts how the firm is organized to discharge its

work responsibility for a project

• Provides a framework to summarize organization work unit performance

• Identifies organization units responsible for work packages

• Ties the organizational units to cost control accounts

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FIGURE 4.5

Integration of WBS and OBSIntegration of WBS and OBS

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Coding the WBS Coding the WBS for the Information Systemfor the Information System

• WBS Coding System– Defines:• Levels and elements of the WBS• Organization elements• Work packages• Budget and cost information

– Allows reports to beconsolidated at any level in the organization structure

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WBS WBS CodingCoding

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Process MappingProcess Mapping

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Process MappingProcess Mapping

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THE GATED PROCESSESTHE GATED PROCESSES

• Use of check points or gates Use of check points or gates between phases provides check for between phases provides check for manager of progressmanager of progress

• Do not have to wait until project Do not have to wait until project budget to discover fundamental budget to discover fundamental problemproblem

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• Advantages of halting activities :Advantages of halting activities :

–Majority benefits already achievedMajority benefits already achieved

– Initial plans wildly inaccurateInitial plans wildly inaccurate

–New, more attractive alternativesNew, more attractive alternatives


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• Advantages of halting activities :Advantages of halting activities :

• Organisational strategy changesOrganisational strategy changes

• Key personnel resignsKey personnel resigns

• Higher level capability neededHigher level capability needed

• Endanger organisation financiallyEndanger organisation financially


Documents

11 Lecture 2 Planning and Control in Projects (Part 1) 1