PROJECT MANAGEMENT A project may be defined as a series of related jobs usually directed toward some major output and requiring a significant period of time to perform. Project management can be defined as planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of the project.

Structuring Projects Before the project starts, senior management must decide which of three organizational structures will be used to tie the project to the parent firm: pure project, functional project, or matrix project. If the matrix form is chosen, different projects (rows of the matrix) borrow resources from functional areas (columns). We next discuss the strengths and weaknesses of the three main forms.

Pure Project Peters favors the pure project (the nicknamed skunk works), where a self-contained team works full-time on the project. Advantages. The project manager has full authority over the project. Team members report to one boss. Lines of communication are shortened. Decisions are made quickly. Team pride, motivation, and commitment are high.

Pure Project Disadvantages. Duplication of resources. Equipment and people are not shared across projects. Organizational goals and policies are ignored, as team members are often both physically and psychologically removed from headquarters. The organization falls behind in its knowledge of new technology due to weakened functional divisions. Because team members have no functional area home, they worry about life-after-project, and project termination is delayed.

9 Functional Project President Research and Development EngineeringManufacturing Project A Project B Project C Project A Project B Project C Project A Project B Project C

Functional Project At the other end of the project organization spectrum is the functional project, housing the project within a functional division. Advantages. A team member can work on several projects. Technical expertise is maintained within the functional area even if individuals leave the project or organization.

Functional Project The functional area is a home after the project is completed. Disadvantages. Aspects of the project that are not directly related to the functional area get short-changed. Motivation of team members is often weak. Needs of the client are secondary and are responded to slowly.

Matrix Project The classic specialized organizational form the matrix project attempts to blend properties of functional and pure project structures. Each project utilizes people from different functional areas. The project manager (PM) decides what tasks and when they will be performed, but the functional managers control which people and technologies are used.

12 Matrix Project President Research and Development EngineeringManufacturingMarketing Manager Project A Manager Project B Manager Project C

Matrix Project Advantages. Communication between functional divisions is enhanced. A PM is held responsible for successful completion of the project. Duplication of resources is minimized. Team members have a functional home after project completion, so they are less worried about life-after- project than if they were a pure project organization.

Matrix Project Policies of the parent organization are followed. This increases support for the project. Disadvantages. There are two bosses. Often the functional manager will be listened to before the PM. It is doomed to failure unless the PM has strong negotiating skills.

Continue Sub-optimization is a danger, as PMs hoard resources for their own project, thus harming other projects. Note that regardless of which of the three major organizational forms is used, the project manager is the primary contact point with the customer. Communication and flexibility are greatly enhanced because one person is responsible for successful completion of the project.

Work Breakdown Structure A project starts out as a statement of work (SOW). The SOW may be a written description of the objectives to be achieved, with a brief statement of the work to be done and a proposed schedule specifying the start and completions dates. It could also contain performance measures in terms of budget and completion steps (milestones) and the written reports to be supplied.

Continue A task is a further subdivision of a project. It is usually not longer than several month in duration and is performed by one group or organization. A subtask may be used if needed to further subdivide the project into more meaningful pieces. A work package is a group of activities combined to be assignable to a single organizational unit.

Continue It still falls into the format of all project management; the package provides a description of what is to be done, when it is to be started and completed, the budget, measures of performance, and specific events to be reached at points in time (called milestones). Typical milestones might be the completion of the design, the production of a prototype, completed testing of the prototype.

Work Breakdown Structure The work breakdown structure (WBS) defines the hierarchy of project task, subtask, and work packages. Completion of one or more work packages results in the completion of a subtask; completion of one or more subtask results in the completion of a task; and finally the completion of all tasks is required to complete the project. A representation of this structure is shown in the diagram.

4 Work Breakdown Structure Program Project 1Project 2 Task 1.1 Subtask Work Package Level Task 1.2 Subtask Work Package

5 Work Breakdown Structure Allow the elements to be worked on independently Make them manageable in size Give authority to carry out the program Monitor and measure the program Provide the required resources

Continue The WBS is important in organizing a project because it breaks the project down into manageable pieces. The number of levels will vary depending on the project. How much detail or how many levels to use depend on the following: 1. The level at which a single individual or organization can be assigned responsibility and accountability for accomplishing the work package.

Continue 2.The level at which budget and cost data will be collected during the project. There is not a single correct WBS for any project, and two different project teams might develop different WBSs for the same project. Activities are defined within the context of the WBS and are pieces of work that consume time.

Project Control Chart Charts are useful because their visual presentation is easily understood. Exhibit is a sample Gantt Chart, sometimes referred to as a bar chart, showing both the amount of time involved and the sequence in which activities can be performed.

6 Project Control: Gantt Chart Activity 1 Activity 2 Activity 3 Activity 4 Activity 5 Activity 6 Time (See Exhibit 3.2 for other project control reporting tools)

Network-Planning Models The two best-known network-planning models were developed in the 1950 year. The Critical Path Method (CPM) is based on the assumptions that project activity times can be estimated accurately and that they do not vary. The Program Evaluation and Review Technique (PERT) was developed to handle uncertain time estimates.

Continue Features that distinguished CPM from PERT have diminished; so in our treatment here we just use the term CPM. The critical path of activities in a project is the sequence of activities that form the longest chain in terms of their time to complete. If any one of the activities in the critical path is delayed, then the entire project is delayed.

16 Critical Path Scheduling A project must have: well-defined jobs or tasks whose completion marks the end of the project; independent jobs or tasks; and tasks that follow a given sequence.

17 CPM with Single Time Estimate Consider the following consulting project: Develop a critical path diagram and determine the duration of the critical path and slack times for all activities ActivityDesignationImmed. Pred.Time (Weeks) Assess customer's needsANone2 Write and submit proposalBA1 Obtain approvalCB1 Develop service vision and goalsDC2 Train employeesEC5 Quality improvement pilot groupsFD, E5 Write assessment reportGF1

18 First draw the network A, 2B, 1 C, 1 D, 2 E, 5 F, 5 G, 1

19 Determine early start and early finish times ES=0 EF=2 ES=2 EF=3 ES=3 EF=4 ES=4 EF=9 ES=4 EF=6 ? A, 2B, 1 C, 1 D, 2 E, 5 F, 5 G, 1

20 When I can start depends on when predecessors finish ES=9 EF=14 ES=14 EF=15 ES=0 EF=2 ES=2 EF=3 ES=3 EF=4 ES=4 EF=9 ES=4 EF=6 A, 2B, 1 C, 1 D, 2 E, 5 F, 5 G, 1

21 Determine late starts and late finish times ES=9 EF=14 ES=14 EF=15 ES=0 EF=2 ES=2 EF=3 ES=3 EF=4 ES=4 EF=9 ES=4 EF=6 A, 2B, 1 C, 1 D, 2 E, 5 F, 5 G, 1 LS=14 LF=15 LS=9 LF=14 LS=4 LF=9 LS=7 LF=9 ?

23 Critical Path & Slack ES=9 EF=14 ES=14 EF=15 ES=0 EF=2 ES=2 EF=3 ES=3 EF=4 ES=4 EF=9 ES=4 EF=6 A, 2B, 1 C, 1 D, 2 E, 5 F, 5 G, 1 LS=14 LF=15 LS=9 LF=14 LS=4 LF=9 LS=7 LF=9 LS=3 LF=4 LS=2 LF=3 LS=0 LF=2 Duration = 15 weeks Slack=(7-4)=(9-6)= 3 Wks