PM Lecture 6

8/3/2019 PM Lecture 6

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Lecture April 7, 2011

Project Management


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Overview

Project planning III

Repetition

Project Organization

Summary


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adaptation

Model of Project Control

Project planning

content / deliveries

start and end dateteam members

Target values budget

Control

Activities

Project control

Real values

Monitoringdiscrepancies

Real values

Project execution scope change disturbance capacity problems

inter personal problems


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From the Structure to Scheduling of a Project

Work package

Work breakdown structure

2 6

7 12 153

4

5

8

9

10

11

13

14

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Schedule (e.g. network)

1

BCreate list ofrequirements

CProject sc hedule

DConduct

Feasibility study

EPhase plan

Projektmmgtcreation

F

Project reportstudy

GDesign

system concept

HDeterminefunctions

IPhase planconcept

JDetermine

development process

Project reportConcept

AProject

organization

Work Flow


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Example: Gantt-Chart


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0 0 0

0 0 0

Project start

0 1 1

2 2 3

1 2 3

3 2 5

5 4 9

5 0 9

9 0 9

project end

9 0 9

0 5 5

0 0 5

5 1 6

6 1 7

6 2 8

7 1 9

earliest starting date estimated duration earliest finishing date

latest start Total float latest finishing date

Determine Critical Path

Activity 1 Activity 3 Activity 5

Activity 2 Activity 4 Activity 6

1. step: forward calculation

2. step: backward calculation


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Top-down (global) estimation methods For a fast and easy, approximate estimation of projects cost. Uses parameters, key data (e.g. per volume)

Bottom-up (analytical, AP-based) estimation methods

Basis for detailed project cost planning Basis for cost based project controlling

Work packagecosts

Workpackages

Type ofcost

Projectcosts (PC)

Allocatio

n

PC overtime

Principles of Cost Estimation in Projects


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Project Organization


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Project Organization: Introduction

Classical (permanent) organization structure of a company

Determines leadership structure and organizational rules to manage thetask

Set up for recurring, well-known transaction

Mostly skill-orientated structure

But projects require: Intensive interdisciplinary cooperation

Specific tasks and workflows

Specific leadership and motivation of employees

Particular leadership tasks and structure

=> Project organization


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Definition: Project Organization

The term project organization refers to the organization,

which is assigned with a project and its integration in the

existing organization of the company.

(Kummer: Projektmanagement. 1986. S. 41)


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Organizational Structure of a Project

Organization

Structure

Process


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Tasks of the Structural Organization

Result- and fact oriented arrangement of the functionalstructure of the project

Clear allocation of task, responsibilities and competencies

Effective collaboration and cooperation of all partiesconcerned in the project

Fast alignment of the project organization to changes in theobjectives and boundary conditions

Source: Litke, H.-D.: Projektmanagement. Hanser 1995


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People in Projects

Steering committee

Project leader

Project team

Special

functions

Expert committee


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People in Projects

Steering committee

Project leader

Project team

Special

functions

Expert committee


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Steering Committee

Temporary, project accompanying committee

Superior authority to project leader and project team (to bereported to)

Gives a summary of decision-makers and responsiblepersons for the project (e.g. later user, systemresponsibility, commercial responsibility)

Take essential decisions for project together

Task ends after project is finished


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Main Tasks of a Steering Committee

Principals representative of the interests, the participating divisionsin the project or outsider

Definition of project objectives and project tasks (together withproject manager)

Agreement and assignment of members to the consulting team

Controlling and approval of the project plan Setting priorities

Verification and approval of the elaborated phase results

Support and advice of all major occurring problems

Make decisions, which exceed competency of the project manager

Resource allocation Mediation if conflicts occur

Enforcement of outside related topics of the project


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Steering Committee

Composition 1 representative of each relevant hierarchy level/line

Representatives of each essential involved parties

Project manager

Experts

Possibly representatives of external groups (politicalrepresentatives)

Criteria to choose members

Position, which enhance the implementation of the project

Expertise Position as an information carrier

Involvement


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People in Projects

Lenkungsausschuss

Projektleitung

Projektteam

SpezielleFunktionen

Fachausschuss Steering committee

Project leader

Project team

Special

functions

Expert committee


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Expert Committee

Should inform, support and advice the project team

Placement of expertise in terms of effects, risks,accompaniment

To carry out results of the project team into special fields

Committee with supporting and advising function, butwithout decision-making authority


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People in Projects

Lenkungsausschuss

Projektleitung

Projektteam

SpezielleFunktionen

Fachausschuss Lenkungsausschuss

Projektleitung

Projektteam

SpezielleFunktionen


Project leader

Project team

Special

functions

Expert committee


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Project Management

Is in charge of the attainment of the project goal, as regardscontent as well as competence

Has the duty to assure the best possible success of theproject, technical as well as economical

Prerequisites to carry out this duty:

- Clear project brief- Objectives which are agreed on, realizable and measurable

- Well-defined area of responsibility

- Sufficient resources

- Congruent tasks and authoritiesDuty of the project

management to intervene

or to refuse if those termsare not fulfilled!


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Tasks of the Project Management

To plan the project To align tasks, competencies, responsibilities, resources

To set priorities

To assure and control system and project tasks

To push the project, evolve initiative To take action to realize the project within the given specification

(activity, costs, deadlines)

To clear up conflicts

To prepare and procure decisions

To initiate contacts

To assure communication

To lead and motivate the project team


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People in Projects

Steering committee

Project leader

Project team

Special

functions

Expert committee


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People in Projects

Lenkungsausschuss

Projektleitung

Projektteam

SpezielleFunktionen

Fachausschuss Lenkungsausschuss

Projektleitung

Projektteam

SpezielleFunktionen


Project leader

Project team

Special

functions

Expert committee


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Special Functions

Consulting in methodology

Documentation management

Liaison people (to the concerned parties)

Power promoter

Technical promoter

Social promoter


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Overview of the Project and Organization Structures

Pure project organization

Influence project organization

Matrix project organization


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Pure Project Organization (1)

Department CDepartment BDepartment A

Projekt B

PM B

Board of

Management

Projekt A

PM A



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Pure Project Organization (2)

Virtually separate organization for a project

Managed in full responsibility by the project leader

Project team members are displaced, delegated for theduration of the project

Project team members get only briefed by the project

manager


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+ Full concentration of all involved members to the project goals

+ High identification with the project

+ Full line authority of the project manager

+ Clear managerial authority

+ Taut leadership of the project

+ Fast reaction to changes/ disturbances

+ Fast coping with difficulties

- Allocation of requisite dedicated resources- Little exchange of specialists with divisions

- Problematic capacity utilization of specialists

- Critical reintegration of the team members at the end of the project

Pros and Cons of a Pure Project Organization


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Influence Project Organization (1)

Board ofManagement

Department B

PM Staff

Department CDepartment A



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Influence Project Organization(2)

Minimum configuration of a project organization

Functional organization/ hierarchy remains unchanged

Organization is extended by a project leader in a executive

management team function (on a sufficient high level)

Project leader on management team function level- Has only information and advising rights towards the departments

- Has no decision and directive authority

- Tracks project regarding content, deadlines and costs

- Proposes measures to line managers- Motivates employees within the departments to actively participate in

the project towards the fulfilling of the project objectives


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+ Flexibility regarding work force usage (involvement in severalprojects possible)

+ Improved learning curve (experience from several projects)

+ No change of company organization necessary

+ Continued relation to department

- Limited identification and responsibilities

- Limited need to solve problems across departments

- Response and decision time low (involvement of lineorganization!)

Pros and Cons of the Influence Project Organization


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Matrix Project Organization (1)

Executive board

Project 1

Project 2

Department A Department B Department C

Projectrelated

directives

Function related directives



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Matrix Project Organization (2)

Main principle: Combination of a vertical (functional) and ahorizontal (project oriented) organization

Project executed by the departments as a service providerfor the project (focus on execution)

Project leader coordinates and is responsible for the projectas a whole (focus on project targets, planning andcontrolling)

More than one project leader may use same resources

Project members are assigned to department manager +

project leader


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+ balanced consideration of project dimension and professional

dimension+ Goal oriented coordination of different interests

+ High identification of all employees with the project

+ Simultaneous technical source for project team members

- Potential to conflict since different interest of line and project

- Cut of the authority of the line => danger of arguments concerningcompetencies and passive resistance

- Enormous coordination effort between line and project management

- Difficult situation for employees (servant of two masters)

Pros and Cons of the Matrix Project Organization


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Advantages of a Functional Home Base

A flexible deployment of staff is possible

Continuity of further training in expertise is rather assured

Special knowledge and specific experience can be transferredfrom one project to the next

Those employees, which are not completely moved out of

their original organization feel more comfortable and moresecure.



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Choice of the Adequate Organizational Structure

Project organization and project management can only besuccessful, if the existing management system and the projectorganization match up.

The choice of the project organization depends on:- structure of the existing organization

- size and duration of the project

- its importance for business policy reasons

- necessity of the interdisciplinary cooperation of different areas

- project risk

- availability of resources

- experience in project organizations

- number/ frequency of projects in one area


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Project Size

< 6

6-50

> 50

< 0,4

0,4-50

> 50

< 0,1

0,1-10

> 10

Small project

Medium sizedproject

Major project

Numberemployees

Mio. DMMan-year



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Reasons for a Change in Project Organization During a

Project

Different emphases and people in different phases

Changes of objectives and contents as the project runs

Exchange of important staff members

E l f Ch i P j t O i ti


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Example for a Change in Project Organization

Creativity and brainstorming

come to the fore. Performance

of the project uncertain.

High interdisciplinarycooperation needed.

Project has high importance

for business policy reasons.

Conceptual design largely

finished, no need anymorefor cooperation

with other departments.

ReasoningProfile of

project organizationPhaseInfluence-

project organization

Matrix-project organization

pure

project organization

Line organization

Definition

Draft

Realization

TrialSource: Litke, H.-D.: Projektmanagement. Hanser 1995


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Summary and Preparation for the Next Session

Pure project organization (p.o.): independent, PL in the fore Influence p.o.: existing organization is completed to a minimum Matrix p.o.: overlay of the vertical (functional) organization with a

horizontal (project orientated) organization

Preparation Post processing of today's lecture

Documents

PM Lecture 6