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Project ManagementProject Life Cycle,

Organization Structure andCulture

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Introduction

Once the management approves the project then

the question becomes how will the project be

implemented?

What will be the project life cycle?

How will the project be organized?

What will be the effects of organization

culture?

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Introduction

Projects and project management are

carried out in an environment broader

than the project itself. The projectmanagement team must understand this

broader context so that it can select the

life cycle, tools and techniques and

processes that appropriately fit the

project.

Project management structure and culture

of the organization constitute major

elements of the environment in which

projects are implemented.

It is important for project managers and

participants to know the lay of the land

so that they can avoid obstacles and take

advantage of pathways to complete their

projects.

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Introduction

Project management system provides a

framework for launching and

implementing project activities within aparent organization.

A good system appropriately balances the

needs of both the parent organization and

the project by defining the interfacebetween the project and parent

organization in terms of authority,

allocation of resources and eventual

integration of project outcomes into

mainstream operations.

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Project Life Cycle

Project life cycle is collectively all the phases

of the project.

It represents a relationship between project

managementand project delivery.

Project Deliverydetailed tasks that our team

is going to undertake to deliver project results

Project managers or the organization can divide

projects into phases to provide better

management control with appropriate

links to ongoing operations of the performingorganization.

Example:software development project may

have five phases: defin i t ion, design, code,

integrat ion test, maintenance.

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Project Life Cycle

There are a number of different life-cycle models. Many are

unique to specific industry or type of project.

Project life cycle typically passes sequentially through different

stages. The starting point being the moment the project is given

go ahead. Project efforts start slowly, builds to a peak, and then

declines to delivery of the project to customer.

Initiating

- Goals

- Specifications

- Tasks- Responsibilities

Planning

- Schedules

- Budgets

- Resources

- Risks

- Staffing

Executing

- Status Reports

- Changes

- Quality

- Forecasts

Monitoring

and Control

- Scope

- Schedule / Cost- Quality

- Performance

- Risk

Closing

- Project

- Contract Closure

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Project Life Cycle An Example

AcceleratedSAP(ASAP)is a comprehensive method for accelerating SAP R/3

implementation projects.

The combination of the set of ASAP components ensure quick and efficient

implementation of the SAP R/3 System.

The ASAP Roadmap, a process-oriented, comprehensible, compressed

project plan, leads the implementation process step by step. ASAP describes

how to implement an SAP product / solution.

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At the highest level the ASAP Roadmap comprises five phases:

1. Project Preparation - Inclusion of all relevant decision-makers for the SAP R/3 implementation

and selection of the internal and external members of the project team.

2. Business Blueprint - Determine the business requirements of the implementing company. The Business

Blueprint is a visual representation of the status of the company which is to be realized in theSAP R/3 implementation.

3. Implementation - Configuration and fine-tuning of the SAP R/3 System.

4. Final Preparation - Test all interfaces, train users, migrate business data into the SAP R/3 System.

5. Go Live & Support - Start SAP R/3 production operation, specify procedures and benchmarks to

permanently monitor the gains of the investment in SAP R/3.

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Project Life Cycle

Project life cycle is a corner stone of project management.

Projects have a limited life span and there are predictablechanges in level of effort and focus over the life of the project.

A Generic Project Life Cycle

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Project Life Cycle

There are three elements that you should

compare over the life of the project. Theseare:

Ability to influence the outcome of

the project

Cost and staffing levels

Level of uncertainty

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Cost and Staffing Level Across the Project Life Cycle

Cost and Staffing Levels to the project starts low and rises as the

project progresses, finally drops rapidly as the project draws to

conclusion.

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Stakeholders Influence Across the Project Life Cycle

Ability to influence the outcome of the projectis high in the

beginning and becomes more difficult (and expensive) as time

passes.

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Uncertainty (Risk) Across the Project Life Cycle

Level of Uncertaintyis highest and hence riskof failing to achieve

the objectives is greatest at the start of the project and drops off as

time progresses and the opportunity for problems lessens.

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Project Life Cycle and Product Life Cycle Relationship

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Phases of a Project

All projects can be thought of as a series of phases

that have a defined beginnings and defined end points.

These phases may overlap.

Phases usually have an endpoint that results in some

sort of deliverable.

A deliverableis a measurable, verifiable work product

such as a specification, feasibility study report, detailed

design document, or working prototype.

Deliverable from one phase are usually reviewed forcompleteness and accuracy and approved before work

starts at the next phase.

Phases are notthe same as project management

process groups.

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Phases of a Project

The purpose of the phased approach is to allow

management to decide whether to proceed with aproject without having to commit large amount of

resources.

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Characteristics of Project Phases

Completion and approval of one or more deliverables characterizes

a project phase.

Some deliverables can correspond to the project management

process, whereas other are the end product or components of the

end products for which the project was conceived.

The deliverables and hence the phases are part of a generally

sequential process designed to ensure proper control of the projectand to attain the desired product or service, which is the objective

of the project.

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In any specific project, for reasons of size, complexity, level of risk

and cash flow constraints, phases can be further subdivided into

sub-phases.

Each sub-phase is aligned with one or more specific deliverables

for monitoring and control.

Majority of these sub-phase deliverables are related to the primary

phase deliverable, and the phases typically take their names fromthese phase deliverables: requirements, design, build, test, startup,

turnover, and others, as appropriate.

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A project phase is generally concluded with a review of the work

accomplished and the deliverables to determine acceptance,whether extra work is still required, or whether the phase should

be considered closed.

A management review is often held to reach a decision to start

the activities of the next phase without closing the current phase.

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A phase can be closed without the decision

to initiate any other phases. For example, theproject is completed or risk is deemed too

great for the project to be allowed to

continue.

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Formal phase completion does not include authorizing the

subsequent phase. For effective control, each phase is formally

initiated to produce a phase-dependent out of the Initiatingprocess group, specifying what is allowed and expected for

the phase.

A phase-end review can be held with the explicit goals of obtaining

authorization to close the current phase and to initiate thesubsequent one. Sometimes both authorizations can be gained at

one review.

Phase reviews are also called phase exits, phase gates, or

kill points.

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Relationship between PM Processes and Project Processes

Project Processessuch as analysis, design, development,

implementation, etc.

Project Management Processesenveloping processes

(initiating, planning, executing, monitoring and control,

closing) to ensure project processes are executed. They are

carried out once per project or per phase of the project

Separate process groups for each phase of the project

Phase 1

Phase 2

Phase 3

Phase 4

Initiating

Planning

Executing

Monitoring & ControlClosing

Initiating

Planning

Executing

Monitoring & Control

Closing

InitiatingPlanning

Executing


Closing

Initiating

Planning

Executing


Closing

S

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Project Management Structures

Four types:

Functional Organization

Dedicated Project Teams

Matrix (Weak, Balanced and Strong) Organization

Network Organization

Working in Matrix system in one organization is

different from working in matrix in another

organization. Researches attribute this to the

organizational culture in the two organizations.

Organizational culture reflects the personal i ty of the

organization.

F ti l O i ti

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Chief

Executive

Human Resources Finance

Marketing Engineering Manufacturing Procurement

Customer

Services

Domestic

Sales

InternationalSales

Electronics

Engineering

Software

Engineering

MechanicalEngineering

Design

Fabrication

Assembly

Testing

Production

Scheduling

Purchasing

Receiving &

Inspection

F ti l O i ti

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Delta Manufacturing, Inc.

CEO

Functional

Manager

Functional

Manager

Functional

Manager

Functional

Manager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project

Coordination

Golden boxes represent staff engaged in project activities

F ti l St t

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Functional Structure

Advantages

No change in organizational structure

Flexibility

In-depth expertise

Easy post-project transition Easier management of professionals

Team members only report to one

supervisor

Similar resources are centralized,the company is grouped by specialists

Clearly defined career paths in

areas of work specialization

F ti l St t

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Functional Structure

Disadvantages

Lack of focus

Poor integration

Slow

Lack of ownership People place more emphasis on their

functional specialty to the determent of the project

No career path in project management

Project manager has little or no authority

These disadvantages are more pronounced when the scope of the project

is broader and one functional department does not take the dominant

technological and managerial lead on the project.

D di t d P j t T

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Dedicated Project Team


CEO


Marketing Engineering Manufacturing Procurement

Customer

Services

Domestic

Sales

InternationalSales

Electronics

Engineering

Software

Engineering

MechanicalEngineering

Design

Fabrication

Assembly

Testing

Production

Scheduling

Purchasing

Receiving &

Inspection

Project

Manager

Individuals from inside

and outside the

organization

P j ti d O i ti St t

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Projectized Organization Structure


CEO


Project 1

PM

Project 2

PM

Engineering

Manufacturing

Procurement

Marketing Legal

Other projectsOther projects

Electrical

Mechanical

Software

Fabrication

Assembly

Testing

Engineering

Subcontractor

Procurement

System

Hardware

Software

Subcontractor 1

Subcontractor 2


Project CoordinationProject Coordination

Projecti ed Organi ation Str ct re

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Advantages

Simple, fast and efficient project

organization

Cohesive

Cross functional integration Loyalty to the project

More effective organization than

functional


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Disadvantages

Expensive

Internal strife

Limited technology expertise

Difficult post-project transition No home when project is complete

Lack of professionalism in disciplines

Duplication of facilities and job functions

Less efficient use of resources

Matrix Organization Structure

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CEO


Marketing Engineering

Customer

Services

Domestic

SalesInternational

Sales

Electronics

EngineeringSoftware

Engineering

Mechanical

Engineering

Director of

Projects

Project

Manager 1

Project

Manager 2

Project

Manager 3

Different Matrix Forms

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Different Matrix Forms

In practice there are really different kind of matrix

systems, depending on relative authority of the projectand functional managers.

Functional, lightweightor weak matrixbalance of

authority strongly favors the functional managers.

Balancedor middleweight matrixtraditional matrix

arrangement.

Project,heavyweightor strong matrixbalance of

authority is strongly on the side of project manager.

Weak Matrix Form

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Weak Matrix Form


CEO

Functional

Manager

Functional

Manager

Functional

Manager

Functional

Manager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project Coordination


Project Managers role is more of that of a coordinator / expeditor rather than a true project manager.

Staff

Balanced Matrix Form

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Balanced Matrix Form


CEO

Functional

Manager

Functional

Manager

Functional

Manager

Functional

Manager

Staff

Staff

Project

Manager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff


Golden boxes represent staff engaged in project activities.

The need for a project manager is recognized but project manager does not have full authority over

the project and project funding.

Staff

Strong Matrix Form

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Strong Matrix Form


CEO

Functional

Manager

Functional

Manager

Functional

ManagerManager of

Project Managers

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project

Manager

Project

Manager


Golden boxes represent staff engaged in project activities.

Project Manager is a dedicated / specialized project manager.

Project

Manager


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Advantages

Efficient

Strong Project Focus

Easier Post-Project Transition

Flexible

Highly visible project objectives Improved project manager control

over resources

More support from functional organization

Maximum utilization of resources Better coordination

Better horizontal / vertical dissemination of

information compared to functional

Team membership maintain a home


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Disadvantages

Dysfunctional conflict

Infighting

Stressful

Slow Extra administration required

More than one boss for project team

More complex to monitor / control

Tougher problems with resource allocation

Need extensive policies and procedures

Functional managers may have different

priorities than project manager

Higher potential for conflict


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According to experts, it takes 3 to 5 years for a matrixsystem to fully mature.

Network / Composite Organization

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Network / Composite Organization


CEO

Functional

Manager

Functional

Manager

Functional

ManagerManager of

Project Managers

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Project

Manager

Project

Manager

Project A Coordination


Project

Manager

Project B Coordination

Corporate downsizing and cost control have combined to produce network

organizations.

In theory, network organization is an alliance of several organizational structures forthe purpose of creating products and services for the customers.


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Advantages

Cost Reduction

High level of expertise

Flexible

Disadvantages

Coordination breakthrough

Loss of control

Conflict

Tight Matrix

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Tight Matrix

It has nothing to do with matrix

organization Refers to locating the project

team offices in the same room

Organizational Structure Influences on Projects

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Organizational Structure Influences on Projects

Project Managers

Authority

Resource

Availability

BudgetOwnership

Project Managers

Role

Project Mgt.

Admin. Staff

Project Managers

Accountability

Project Managers

Skills

Staff Skills

Functional

Organization

Matrix Organization

Weak Balanced

Projectized

Organization

Little or

None

Unlimited Low to

Moderate

Strong

Moderate

to High

High to

Almost Total

Little or

NoneUnlimited Low to

ModerateModerate

to High

High to

Almost Total

FunctionalManager

FunctionalManager

ProjectManager

ProjectManager

Mixed

Part

Time

Part

Time

Full

Time

Full

Time

Full

Time

Part

Time

Part

Time

Part

Time

Full

Time

Full

Time

Part

Time

Part

Time

Full

Time

Full

Time

Full

Time

Wide range

of skills

Wide range

of skills

Wide range

of skillsHighWide range

of skills

Limited Limited High HighMixed

Relative Effectiveness of Organization Structures

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Relative Effectiveness of Organization Structures

Larson and Gobeli studied the relative efficacy of different project management structures. Their

work is based on a sample of more than 1600 project professionals and managers actively involved

in project management within their organization. Among the findings they report are the rated

effectiveness of different structures for product development and construction projects. The resultsindicate a strong preference for either the project team or strong matrix.

Very

Ineffective

Weak

Matrix

Balanced

Matrix

Strong

Matrix

Projectized

Organization

Ineffective

Effective

Very

Effective

Construction

Projects

New Products

Projects

Functional

Organization

Choosing Appropriate Project Management Structure

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Choosing Appropriate Project Management Structure

Project success is directly linked to the

amount of autonomy and authority projectmanagers have over their projects.

Best system balances the needs of the

project with those of the parent

organization.

What project structure should an

organization use? This is a complicated

question with no precise answer.

A number of issues need to be considered

at both the organization and project level.

Organization Considerations

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Organization Considerations

How important is project management to the success

of the firm?

What percentage of core work involves projects?

75% of work involves projectsfully projectized organization.

Both standard products and projectsmatrix organization.

Few projectsfunctional organization.

Temporary task forces could be created on an as-needed basisand the organization could outsource project work.

Resource availability.

Matrix share resources across multiple projects and functional

domains while at the same time creating legitimate projectleadership. For organization, that cannot afford to tie up

critical personnel on individual projects, a matrix system

would appear to be appropriate. An alternative would be to

create a dedicated team but outsource project work when

resources are not available internally.

Project Considerations

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Project Considerations

How much autonomy the project needs in order to be

successfully completed.

Hobbs and Menard identify seven factors that should

influence the choice of project management structure:

Size of project

Strategic importance Novelty and need for innovation

Need for integration (number of departments involved)

Environmental complexity (number of external interfaces)

Budget and time constraints

Stability of resources requirements

The higher the levels of these seven factors, the more

autonomy and authority the project manager and

project team need to be successful. This translates into

using either a dedicated project team or project matrix.

Example: Chaparral Steel

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p p

A mini steel mill that produces steel bars and beans from scrap metal.

Classifies projects into three categories:

Advanced development projects

High risk endeavors involving creation of breakthrough

product or process.

One or two advanced projects at one point in time.

Dedicated project teams are used.

Platform projects

Medium risk projects involving system upgrades that yield

new products and processes.

Three to five platform projects at one point in time.

Strong matrix is used.

Incremental projects

low risk short term projects that involve minor adjustments in

existing products and processes.

Thirty five to forty five incremental projects at one point in time.

Weak matrix is used.

Organizational Culture

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g

Strong connection between project management

structure, organization culture and project success.

Organization culture refers to a system of shared

norms, beliefs, values and assumptions which binds

people together, thereby creating shared meanings.

Reflects the personality of the organization and canenable us to predict attitudes and behaviors of

organizational members.

Culture is also one of the defining aspects of an

organization that sets it apart from other organizationseven in the same industry.


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g

It is important for project managers to

be culture sensitive so that they candevelop strategies and responses that

are likely to be understood and

accepted as well as avoid violating key

norms that would jeopardize theireffectiveness within the organization.


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g

Organizational culture often has a

direct influence on project:

A team proposing an unusual or

high-risk approach is more likely

to secure approval in anaggressive or entrepreneurial

organization.

A project manager with

participative style will haveproblems in hierarchical /

bureaucratic organization.


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g

Ten primary characteristics which in aggregate, capture

the essence of an organizations culture. These

characteristics exists on a continuum.

Page 73 of Gray and Larson

Member IdentityJob Organization

Team EmphasisIndividual Group

Management FocusTask People

Unit IntegrationIndependent Interdependent

ControlLoose Tight

Risk ToleranceLow High

Reward CriteriaPerformance Other

Conflict ToleranceLow High

Means-ends OrientationMeans Ends

Open System FocusInternal External


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g

Culture performs several importantfunctions in an organization

Provides a sense of identity

Helps legitimize the managementsystem

Clarifies and reinforces standards of

behavior

Helps create social order


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g

SubcultureOften aligned withinspecific departments or specialty areas.

It is not uncommon for norms, values

and customs to develop within aspecific field or profession such as

marketing, finance, operations, I.T.

CounterculturesReflect differentset of values beliefs and customs often

in direct contradiction with the culture

espoused by top management.

Project Organizational Structure

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Framework

Structural framework

Companys organization chart

Who reports to whom?

Human Resource

How an employee is treated?

Work ethics

Overtime expected?Training emphasis

Internal and External politics

Who has the power?

Where leadership lies?

SymbolicStyle of management

Dress code

Formal vs. informal

Structure

Functional organization

Projectized organization

Matrix organization

Scope

Corporate identity

How does the organization sees itself(leader, follower, environment friendly, etc.)

Corporate vs. individual emphasis

How Business Units integrate?

(share or compete for organization resources)

Risk tolerance (risk taker, risk averter, etc.)

Organizational focus (long-term vs. short-term)

Project / product / company maturity

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