International Project Management

prof.dr MILOŠ D. MILOVANČEVIĆ

Plan of the course

1. week

Introduction to the project management

2. week

Project plan development, execution and control

3. week

Project cost management; International project financing

4. week

Project risk management

5. week

Project human resources management

Introduction

What is a project?

What is project management?

What is a project?

A little history…

One locates the appearance of the first projects at the time of construction of

the pyramids then, later, at the time of the construction of religious and

military buildings.

At the era of the industrial revolution in Europe, experts will be required for

their capacities to conceive and carry out a large variety of risky projects.

Large companies started to use the criterion of return on investment to make

their decisions of investments.

During the Second World War, international project teams will develop very

quickly the radar and the atomic bomb…

In 1957, within the framework of the Polaris rockets program, US Navy

developed the “PERT” (Program Evaluation Review Technic) which brought

the possibility to establish and to update the programs.

The word project comes from the latin word projectum from the Latin verb proicere, "to throw something forwards" which in turn comes from pro-, which denotes something that precedes the action of the next part of the word in time and iacere, "to throw".

The word "project" thus actually originally meant "something that comes before anything else happens".

When the English language initially adopted the word, it referred to a plan of something, not to the act of actually carrying this plan out.

Defining what a project is helps in understanding the project management methodology and its effectiveness for project management.

There are many definitions of project Create your own definition (in 10 minutes - groups of 3 students).

A project is a temporary endeavor undertaken to create a unique product, service or result. [Guide PMBOK – Third Edition]

A project is temporary process, which has a clearly defined start and end time, a set of tasks, and a budget, that is developed to solve a well-defined goal or objective.

Or,

a project is an extensive task undertaken by a student or group of students to apply, illustrate, or supplement classroom lessons.

International projects encompass international dimension of project environment, objectives, budget and project team.

What are the main characteristics of a project?

What are the diferences between a project and an operational work?

It is important to make the difference between a project and an operational work. Projects as well as Operational works combine a set of means to achieve a defined result. However they have different characteristics as shown below :

Characteristics Operation Project

Originality

Ongoing Single

Frequency

Repetitive Temporary

Associated decisions

Reversible

Irreversible

Autonomy

Weak

High standardization

Raised especially in

the initial phases

Creativity necessary

Projects VS Operations

Operations and projects share many characteristics.

They are:

Performed by people

Constrained by limited resources

Planned, executed, and controlled

Operations and projects differ primarily in that operations

are ongoing and repetitive while projects are temporary

and unique.

Newness of the task

Detailed specifications

Division into small steps

A one time process with specific time limits

An activity-based budget

Competition with other projects/activities for resources

Uncertainty about results and costs

Project is characterized by:

Projects require well-defined goals do determine project completion. Without well-defined goals and objectives, a project lacks purpose.

GOAL SETTING

(Alice said) “Would you tell me, please, which way I ought to go

from here?”

“That depends a good deal on where you want to get to”, said the

cat.

“I do not know where....” said Alice.

“Then it doesn’t matter which way you go” said the cat.

-Alice in Wonderland

By Lewis Carroll

Objectives of a project

Project objectives define target status at the end of the project, reaching of which is considered necessary for the achievement of planned benefits. They can be formulated as S.M.A.R.T.

Specific (but also: Significant, Stretching, Simple)

Measurable achievement (but also: Meaningful, Motivational, Manageable)

Achievable (but also: Attainable, Assignable, Appropriate, Actionable, Action-oriented),

Realistic (but also: Relevant, Results-focused, Resourced, Rewarding)

Time terminated (Time framed, Timed, Time-based, Time-Specific, Timetabled, Trackable ).

Other main characteristics of a project

Temporary activity

(every project has a definite beginning and a definite end; does not necessarily mean short in duration; however, the duration of a project is finite; temporary does not generally apply to the product or service created by the project since most projects are undertaken to create a lasting result)

Unique Product or Service

(a product or service may be unique even if the category it belongs to is large; since the product of each project is unique, the characteristics that distinguish the product or service must be progressively elaborated. Progressively means “proceeding in steps; continuing steadily by increments” while elaborated means “worked out with care and detail; developed thoroughly”

Uncertainty about results and costs

(Risk: uncertain event or condition, that, if occurs, has negative effect on a project’s objectives; Project risk management seeks to anticipate and address uncertainties that threaten the goals and timetables of a project. The uncertainties may include questions of material and parts quality; delays in delivery of sufficient materials to meet project needs; budgetary and personnel changes; and, incomplete knowledge or research )

Project constrains

Projects need to be performed and delivered under

certain constraints:

scope,

time, and

cost.

Thse constraints make so called "Project Management

Triangle,“ where each side represents a constraint.

One side of the triangle cannot be changed without

affecting the others.

Project constrains

The time constraint refers to the amount of time available to complete a project.

The cost constraint refers to the budgeted amount available for the project.

The scope constraint refers to what must be done to produce the project's end result.

These three constraints are often competing constraints: increased scope typically means increased time and increased cost, a tight time constraint could mean increased costs and reduced scope, and a tight budget could mean increased time and reduced scope.

The Project Management Triangle

Project constrains

Time

The time required to produce a deliveralble is estimated using several techniques (for example a work breakdown structure or WBS). The tasks are also prioritized, dependencies between tasks are identified, and this information is documented in a project schedule. The dependencies between the tasks can affect the length of the overall project (dependency constrained), as can the availability of resources (resource constrained).

Cost

Inculdes: resource costs, labor rates,, risk management, fixed asset (buildings, machines, equipment), direct and indirect costs. But beyond this basic accounting approach to fixed and variable costs, the economic cost that must be considered includes worker skill and productivity which is calculated by variation to project cost estimates. This is important when companies hire temporary or contract employees or outsource work.

Scope

Requirements specified to achieve the final result. A major component of scope is the quality of the final product. The amount of time put into individual tasks determines the overall quality of the project.

Work in the groups

Project:

Organization of the Day of promotion of your

institution

Projects are unique undertakings and they involve a degree of uncertainty. Therefore, organizations performing projects usually divide each project into several project phases to provide better management control and appropriate links to the ongoing operations of the performing organization.

Each project phase is marked by completion of one or more deliverables ( a feasibility study, a detail design, or a working prototype).

The conclusion of a project phase is generally marked by a review of both key deliverables and project performance in order to (a) determine if the project should continue into its next phase and (b) detect and correct errors cost effectively.

Each project phase normally includes a set of defined work products designed to establish the desired level of management control.

Project phases

All project phases make a project life cycle.

The project life cycle serves to define the beginning and the end of a project.

The project life cycle refers to a logical sequence of activities to accomplish the project’s goals or objectives.

Regardless of scope or complexity, any project goes through a series of stages during its life. There is first an initiation or birth phase, in which the outputs and critical success factors are defined, followed by a planning phase, characterized by breaking down the project into smaller parts/tasks, an execution phase, in which the project plan is executed, and lastly a closure or exit phase, that marks the completion of the project.

The purpose of project activities grouping into phases:

efficiently planing and organizing resources for each activity,

objectively measurement of the achievement of goals,

making decisions to move ahead, correct, or terminate with project activities.

Sample Generic Life Cycle

What is happening with the project progess with :

• the cost and staffing levels?

• the probability of successfully completing the project?

• the ability of the stakeholders to influence the final characteristics of

the project product and the final cost of the project?

Project life cycles generally define:

• What technical work should be done in each phase (e.g., is the work of the architect part of the definition phase or part of the execution phase)?

• Who should be involved in each phase (e.g., concurrent engineering requires that the implementers be involved with requirements and design)?

Project life cycle descriptions may be very general or very detailed. Highly detailed descriptions may have numerous forms, charts, and checklists to provide structure and consistency. Such detailed approaches are often called project management methodologies.

Project life cycle should be distinguished from the product life cycle.

For example, a project undertaken to bring a new mobile phone to market is but one phase or stage of the product life cycle.

It is of great importance to organize project phases into industry-specific project cycles.

Not only because each industry sector involves specific requirements, tasks, and procedures when it comes to projects, but also because different industry sectors have different needs for life cycle management methodology.

Paying close attention to such details is the difference between doing things well and excelling as project managers.

Project Life Cycle: the Case of Construction

Project Life Cycle: the Case of Pharmaceutical Projects

Think about the examples of the specific project life cycles in other industries!

Organization structure of a project

Projects are typically part of an organization larger than the

project—corporations, government agencies, health care

institutions, international bodies, professional

associations, and others.

Even when the project is the organization (joint ventures,

partnering), the project will still be influenced by the

organization or organizations that set it up.

The organizations can be of :

functional structure

project (projectized) structure

or matrix structure

Functional organization

Project’s staff is attached hierarchically to the respective directions. A

coordinator is assigned to the project. They are assigned partially to the project.

He (She) is attached to the Chief Executive for the decisions of the project.

Which are the strengths and the weaknesses of the functional organization?

Functional organization

Advantages

– No Structural Change

– Flexibility

– In-Depth Expertise

– Easy Post-Project Transition

Disadvantages

– Lack of Focus

– Poor Integration

– Slow

– Lack of Ownership

Matrix organization

Project’s staff is attached hierarchically to the respective directions or to

the Project Manager. They are partially or totally assigned to the project.

Which are the strengths and the weaknesses of matrix organization?

Matrix organization

Advantages

– Efficient

– Strong Project Focus

– Easier Post-Project Transition

– Flexible

Disadvantages

– Dysfunctional Conflict

– Infighting

– Stressful

– Slow

Project organization

Project’s staff is attached hierarchically to the Project Manager. They are totally

assigned to the project. It is generally the organization of companies working

typically “by projects” (engineering, construction…). The project managers have

a great deal of authority and independence.

Which are the strengths and the weaknesses of project organization?

Project organization

Advantages

– Simple

– Fast

– Cohesive

– Cross-Functional Integration

Disadvantages

– Expensive

– Internal Strife

– Limited Technological Expertise

– Difficult Post-Project Transition

Organization structures of a project

There is close relation between the organization and the project

characteristics. The more important (size, goals…), complex (uncertainty…) , durable is the project - the more autonomy the organization need for quick decisions.

Think about other factors that helps us to choose the right organizational structure for the given conditions on a specific project.

It is necessary to well distinguish the project from the program.

The program recovers several projects and sometimes a combination of projects and operations.

Homework

To find an example of international project and program on Internet (example: European programs).

To describe the characteristics of both of them in parallel (power point presentation: 10 minutes).

What is Project Management?

Create your own definition (in 10 minutes - groups of 3 students).

Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project. (PMBOK)

Project management is the discipline of planning, organizing, and managing resources to bring about the successful completion of specific project goals and objectives. (Wikipedia)

Meeting stakeholder needs and expectations involves balancing among:

• Scope, time, cost, and quality.

• Stakeholders with differing needs and expectations.

• Identified requirements (needs) and unidentified requirements (expectations).

The six phases of project management

1. Initiation phase

2. Definition phase

3. Design phase

4. Development phase

5. Implementation phase

6. Follow-up phase

Who are the project stakeholders?

They are the individuals or organizations implied in the project (actors of the project):

Customer/user (Owner).

Project manager (responsible for managing the project).

Performing organization (whose employees are more directly involved in doing the work of the project).

Project team members (the group that is performing the work of the project)

Project team management (members of the project team who are directly involved in project management activities)

Sponsor (person/ entity which finances the project)

Internal / external influencers (have positively or negatively impact on the project)

Project reporting

Crucial decisions must be taken at five points during a

project; these decision points correspond to the end

of each project phase, and they call for recording the

project’s current status and writing an intermediate

report. They also provide the opportunity to

reconsider the project phases that are yet to come.

Project reporting: Five important decision points in a project

Literature:

Project Management Institute, A guide to the project

management body of knowledge (PMBOK), 2004

Baars W., Project Management Handbook, DANS –

Data Archiving and Networked Services, 2006

www.wikipedia.org