ORGANIZING AND STAFFING

ME751 - ELECTIVE PROJECT MANAGEMENT

CHAPTER 3

Organization Definition Organization: A set of organizational units and

their different relationships with each other. Organizational units can be organized according to many

different categories, for example by function or by project type. Typical examples of organizational units: Functional organization: Research, Development, Marketing, Sales Project organization: Project 1, Project 2, ….

A organization usually has 3 different types of relationships between organizational units. Reporting structure: To report status information Decision structure: To propagating decisions Communication structure: To exchange of information

Organizational Structures Types of OrganizationFunctional organizationProject-based organizationMatrix organization

Parameters for each organization typeOrganizational Unit Key playersRoles and ResponsibilitiesStructure: Information flow between rolesBenefits and Challenges (“pros and cons”)

Groups, Teams and Committees Group: A set of people who are assigned to a common

task and who work individually to accomplish their assignment.

Team: A small group of people working on the same problem or sub-problem in a project. The team members depend on one another to do their tasks. Project Team: Based on the premise that every member can

and must make a valuable contribution to the project. Committee: Comprised of people who come together

to review and critique issues, propose recommendations for action.

The Project Team

• A “Project Team” is a group of people with complimentary skills who contribute towards the accomplishment of Project Goals and do so, with absolute harmony that brings about a lot of personal satisfaction.

Key Roles in Project Organizations Project Manager: The person ultimately

responsible for the successful completion of the project

Project Team Member: Participants who are responsible for performing individual activities and tasks (in a project or matrix organization)

Functional Manager: The team member‘s supervisor in the department (in a functional organization)

Upper management: People in charge of the departments or projects

Main Functions of a Project Manager Define scope of project Identify stakeholders & Leadership (decision

makers: Client, Parent organization, Project Team, Publics)

Evaluate project requirements Develop detailed task list (work breakdown,

structures) Develop initial project management flow chart Estimate time requirements Identify cost estimation and budget Identify required resources and evaluate risks

Main Functions of a Project Manager (Cont..)

Prepare contingency planIdentify interdependenciesIdentify and track critical milestonesSecure needed resources, manpowerParticipate in project phase reviewManage the change control processReport project status

Responsibilities of the Project Manager

Determine objectives, schedule and resource budgets Design a software project management plan (SPMP) Create and sustain focused and motivated teams Determine the team‘s work procedures, reporting systems and

communication infrastructure. Accomplish project objective within time and budget Monitor performance against the plan Resolve technical conflicts and interpersonal conflicts Control changes in the project Report on project activities to upper management Keep the client informed and committed Contribute to the team members performance approval

General Responsibilities of Team Members

• Technical responsibilities:– Perform assigned tasks within time and budget– Acquire technical skills and knowledge needed to

perform the work

• People responsibilities:– Identify situations and problems that might affect

your team members‘s tasks– Keep your team members informed of your

progress and problems you encounter

Skills and Abilities of a PROJCET MANAGER

• Knowledge: Must be well versed with project management. ?

• Performance: Application of project management knowledge

• Personal: Behavior of the project manager:– Effectiveness– Attitude– Personality characteristics (Michael Dell)– Leadership, guidance to balance project constraints

PROJECT ORGANIIZATION

“A Project Organization is a structure in which the various positions assigned with responsibilities, authority and accountability are arranged in order to effectively meet the project objectives of time, cost and specifications.”

TYPES OF PROJECT ORGANIZATION

Functional organizationProject-based organizationMatrix organization

Functional Organization

Definition: In a functional organization participants are grouped into so-called departments, each of which addresses a function.

Key Features of Functional Organization

Projects are usually pipelined through the departments of a functional organization. The project starts in research, then it moves to development, then it moves to production, ….

Only a few participants are involved in the complete project.

Separate departments often address the same cross-functional needs (Examples: configuration management, IT infrastructure)

Examples of Departments

Traditional businesses: Research, development, production, sales, finance.

In software companies the departments correspond to the activities in the software process: Analysis, design, integration, testing departments.

Example of a Functional Organization

Merits and Demerits of Functional Organizations

Merits Members of a department have

a good understanding of the functional area they support.

Departments don‘t compete with another to get the support of their support teams

Demerits Because each department has its

own support team, different work procedures and reporting systems are the rule.

It is difficult to make major investments in equipment and facilities. Example: Two departments with a

budget of 50,000 Euro each need a printer that costs 100,000 Euro.

Both need only 50% of the maximum capacity.

Neither department can buy it, because they don‘t have sufficient funds.

High chance for overlap or duplication of work among departments

When to use a Functional Organization?

• Projects with high degree of certainty, stability, uniformity and repetition.– Requires little communication– Role definitions are clear

• When?– The more people on the project, the more need for a

formal structure– Customer might insist that the test team be

independent from the design team – Project manager insists on a previously successful

structure

Project Organization

In a Project Organization participants are grouped into projects, each of which has a problem to be solved within time and budget.

Key Features of Project Organization

– Teams are assembled for a project as it is created. Each project has a project leader.

– All participants are involved in the complete project.

– Teams are disassembled when the project terminates

Merits and Demerits of Project Organizations

Merits Very responsive to new project

requests (because the project is newly established and can be tailored around the problem)

New people can be hired/selected who are very familiar with the problem or who have special capabilities.

There is no waste of staff workload

Demerits Teams cannot be assembled

rapidly. Often it is difficult to manage the staffing/hiring process.

Because there are „no predefined lines“, roles and responsibilities need to be defined at the beginning of the project

Matrix Organization

• In a matrix organization, participants from different departments of the functional organizastion are assigned to work on projects as they are created.

• The project manager and team members may be assigned to the project for <= 100 % of their time

Merits and Demeritsof Matrix Organizations

Merits– Teams for projects can be

assembled rapidly– Scarce expertise can be

applied to different projects as needed

– Consistent work and reporting procedures can be used for projects of the same type.

Demerits– Team members usually are

not familiar with each – Team member have different

working styles– Team members must get

used to each other

New Challenges in Matrix Organizations

Team members must respond to two different bosses with different focus: Focus of the functional manager: Assignments to different projects, performance

appraisal Focus of the project manager: Work assignments, project team support

Team members working on multiple projects have competing demands for their time Team members working on more than one project have even more project

members to report to Some people who have claim on the team member‘s time may be at similar

levels in the organization‘s hierarchy Multiple work procedures and reporting systems are used by different

team members Development of common procedures needs to be addressed at project kickoff

time

When to Use a Project or Matrix Organization?

• Project with degree of uncertainty– Open communication needed among members– Roles are defined on project basis

• When?– Requirements change during development– New technology develops during project

ACCOUNTABILITY IN PROJECT EXECUTION

• Closely related with Delegation of Authority.• Person vested or delegated with Authority is

also accountable for not achieving the results.• Person with authority to take decisions is also

accountable or answerable for not achieving the required progress in the project.

• Authority that accompanies responsibility is tied up with accontability.

CONTRACTS IN PROJECT MANAGEMENT

• A ‘CONTRACT’ is an agreement between two or more parties in writing, to do or not to do certain things.

• Business contracts are those agreements enforceable at law.

• A Consideration, in the context of a Business Contract, is made in return for a specific promise contained in the offer of the promisor.

3 ‘R’s of Contracting

• Contracting, whether it is for a consideration or otherwise is an essential arrangement for getting work done in an environment where authority relationship and responsibility delineations are unclear or non-existent.

• Contracting itself can be found to constitute the 3 ‘R’s:1. Responsibility2. Reimbursement and3. Risk

Types of Contracts

1. The Turn-Key Contracts2. Work Packages

Contract PlanningFactors that decide the Number of Contracts:

1. Speciality of the Works2. Location of the Work Site3. Value of the Contract4. Availability of Contractors5. Need to accommodate local contractors6. Need to obtain performance gaurantee for a system from a single

party.7. Concern for early completion8. Concern for completion at Minimum Cost.9. Concern for top quality 10. Current workload of the contractors and capability of the contractors11. Time schedule of the work12. Political pressure

General Conditions of Contract (GCC)

1. Definition of terms2. Contractor to inform himself fully3. Security for due performance4. Expenses of agreement5. Drawings6. Mistakes in Information7. Assignment8. Sub-letting9. Patent Rights10. Manner of execution11. Contractor’s equipment, labor, etc.12. Electricity Water and Gas13. Lifting Equipment

14. Variation in Scope15. Underground Works16. Contractor’s Default17. Bankruptcy18. Inspection19. Delivery20. Access to and possession of site21. Vesting of Plant and contractor’s

equipment22. Engineer’s Supervision23. Engineer’s Representative24. Clerk of Works25. Engineer’s Decision

TENDERING

• A Tender is defined as an offer to carry out certain work or supply certain material or services in accordance with clearly detailed descriptions and conditions.

• The tendering procedure deals with pre-qualification of contractors, preparation of tender documents, mode of floatation of enquiry, receipt of tender, guidelines for evaluation of tenders and selection of contractor.

Prequalification of Contractors

The Purchase Authority or Engineer would normally select and shortlist a contractor if:1. He has similar earlier experience and his performance reports are

satisfactory.2. His past turnover and present financial commitments indicate no

constraint on fund availability for execution of the proposed contract.

3. He has necessary infrastructure, adequate technical manpower, construction equipment and his present commitment would not prevent him from executing the proposed assignment.

4. His credibility in terms of his associates and associations with other agencies including foreign agencies, job performance and relationships with customers are sound.

Preparation of Tender Documents

A good Tender Document will include the following:1. Letter of Invitation to tender2. Instructions to tenderers3. General Conditions of Contract4. Technical Specifications5. Special conditions of Contract6. Scope drawings7. Bill of Quantities (BOQ)8. General Information about the site9. Form of Tender

Evaluation of Tenders

Tenders receive will be evaluated from the following angles:

1. Technical Bid2. Commercial or Financial Bid3. Contractual Obligations and 4. Managerial Capabilities

An adjusted contract price will be arrive at in each case and the lowest bidder who is also technically and managerially acceptable is awarded the contract.

SELECTION OF CONTRACTORS

A Contractor who has proved his worth and capability in terms of Technical, Managerial, Contractual and Commercial conditions and yet has given the least quote commercially is selected and a issued with a Work Order after complying with other formalities like executing an Agreement.