strategy & project management: project orientated...

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Strategy & Project Management: Project orientated organisations Finnland 2005 Prof. (FH) Peter J. Mirski Current Position MCI, University of Applied Sciences: Director of studies „Management & IT“, Head of IT-Services Academical Profile Research projectmangement, knowledgemanagement strategic information management, e-learning Education process, project, information management Publications and articles in journals Practice Profile Management, R&D Project Management, CEO, CIO Consulting & Training Prof.(FH) Mag. Peter J. Mirski Tel.: +43-512-2070-3510 E-Mail: [email protected] http://www.mci.edu

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Page 1: Strategy & Project Management: Project orientated ...projekti.it.jyu.fi/liitetiedostot/tjtst11/PJM_finnland05.pdf · Strategy & Project Management: Project orientated organisations

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Strategy & Project Management:Project orientated organisationsFinnland 2005Prof. (FH) Peter J. Mirski

Current PositionMCI, University of Applied Sciences: Director of studies„Management & IT“, Head of IT-Services

Academical ProfileResearch

projectmangement, knowledgemanagement strategic informationmanagement, e-learning

Educationprocess, project, information management

Publications and articles in journalsPractice Profile

Management, R&D Project Management, CEO, CIOConsulting & Training

Prof.(FH) Mag. Peter J. MirskiTel.: +43-512-2070-3510 E-Mail: [email protected]

http://www.mci.edu

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Agenda

10:00 – 14:00

Brief project management overviewProject orientated organisationsProject scorecard Discussion

Literature

De Marco T., „The Deadline“, Dorset House Publishing Co ,1997Goldratt E., “The Critical Chain“, North River Press, 1997Heerkins G., „project management“, briefcasebooks 2002PMBOK Guide, „A Guide to the Project Management Body of Knowledge“, PM Institute, 2000

Links•www.p-m-a.at (pm baseline english, german)•www.pmi.com (pm information)

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project management overview

Importance of Project Management

• Projects represent change and allow organizations to effectively introduce new products, newprocesses, new programs

• Project management offers a means for dealing with dramatically reduced product cycle times

• Projects are becoming globalised, making them more difficult to manage without a formal methodology – “mobile project paradigm”

Project management helps cross-functional teams to be more effective!

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Management of IT Projects

• More than $250 billion is spent in the US each year on approximately 175,000 information technology projects.

• Only 26 percent of these projects are completed on time and within budget.

• Project management is an $850 million industry and is expected to grow by as much as 20 percent per year.

Bounds, Gene. “The Last Word on Project Management” IIE Solutions, November, 1998.

What characterises a Project?

• Goal(s)• Time frame• Risk & Opportunity• Complex• Quality• …

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Why do Projects Fail?

Studies have shown that the following factors contribute significantly to project failure:

• Improper focus of the project management system

• Fixation on first estimates

• Wrong level of detail

• Lack of understanding about project management tools; too much reliance on project management software

• Too many people

• Poor communication

• Rewarding the wrong actions

Not all Projects Are Alike…

“[in IT projects], if you ask people what’s done and what remains to be done there is nothing to see. In an IT project, you go from zero to 100 percent in the last second--unlike building a brick wall where you can see when you’re halfway done. We’ve moved from physical to non-physical deliverables….”

J. Vowler (March, 2001)

Engineering projects = task-centric

IT projects = resource-centric

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Why do IT Projects Fail?

• Ill-defined or changing requirements

• Poor project planning/management

• Uncontrolled quality problems

• Unrealistic expectations/inaccurate estimates

• Naive adoption of new technology

Source: S. McConnell, Construx Software Builders, Inc.

Good reasons for cooperation…

••••••

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Project management model

ideaoffer

contract

creativity - formalization - coordination - innovation

kick-off

workshop

approval

project staffing teaming

kick-out

project oriented organisation: PM-office with portfolio management

project oriented organisation: dynamic, global oriented environment

Mirski 2005

postpre mile-stone

implementation

projekt marketing communication

knowledge management

the organisationwithin the organisation...

planning

project controlling and coordination

Shenhar’s Taxonomy of Project TypesDegree of

Uncertainty/Risk

System Complexity/Scope

High

Low-Tech

AssemblyProjects

ArrayProjects

SystemProjects

Medium-Tech

High-Tech

Super High-Tech

Construction

Newcellphone

New shrink-wrappedsoftware

ERPimplementationin multi-national

firm

Auto repair

Advancedradarsystem

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Project Life Cycle

TimePhase 1 Phase 2 Phase 3 Phase 4Formation & Planning Scheduling & Evaluation &Selection Control Termination

Req

uire

d R

esou

rces

Design, Cost, Time Trade-offs

Target

COST

DE

SIG

N

TIME (SCHEDULE)

Due Date

Budget Constraint

Optimal Time-Cost Trade-off

Required Performance

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Phases of Project ManagementProject formulation and selectionProject planning

Summary statementWork breakdown structureOrganization planrisk managementSubcontracting and bidding process

Project schedulingTime and scheduleProject budgetResource allocationEquipment and material purchases

Monitoring and controlCost control metricsChange ordersMilestone reportsProject close out

Project environmental diagram

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project organisation

Role of Project Manager/Team

Project Manager

Client

Subcontractors

Regulating Organizations

Project Team

Functional Managers

Top Management

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Project Management

General Management

SupportingDisciplines

Special KnowledgeDomains

Project interests

Subcontracting = Business AllianceWhen you subcontract part (or all) of a project, you are forming a business alliance....

Intelligent Business Alliances: “A business relationship for mutual benefit between two or more parties with compatible

or complementary business interests and/or goals”

Larraine Segil, Lared Presentations

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Steering Committee

<Enter Name>Team Lead 3

<Enter Name>Team Lead 3

<Enter Name>Team Lead 2

e.g. EDP

<Enter Name>Team Lead 5

<Enter Name>Project Manager

<Enter Name>Project Engineer /

Sales Administration

Name 1 - Project SponsorName 2Name 3Name 4Name 5Name 6Name 7

<Enter Name>Technical Team Lead

<Enter Name>Project Sponsor

<Enter Name>Team Lead 1

e.g. Sales

<Enter Name>Team Lead 4

<Enter Name>Change Management Team

<sales director> <regional manager><district manager><area manager><sales rep>

Responsibilities of a Project ManagerTo the organization and top management

• Meet budget and resource constraints• Engage functional managers

To the project team• Provide timely and accurate feedback• Keep focus on project goals• Manage personnel changes

To the client• Communicate in timely and accurate manner• Provide information and control on changes/modifications• Maintain quality standards

To the subcontractors• Provide information on overall project status

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Project Structure Plan

Project Organization Types

• Functional: Project is divided and assigned to appropriate functional entities with the coordination of the project being carried out by functional and high-level managers

• Functional matrix: Person is designated to oversee the project across different functional areas

• Balanced matrix: Person is assigned to oversee the project and interacts on equal basis with functional managers

• Project matrix: A manager is assigned to oversee the project and is responsible for the completion of the project

• Project team: A manager is put in charge of a core group of personnel from several functional areas who are assigned to the project on a full-time basis

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Matrix-/Projectoranisation

executive management

PM-Office

product groupmobile phone

salesproductionacquisition

product groupdigital cameras

project-

oriented

statement

function-related statement

Model of project orientedorganisation

definition:organisation to accomplish complex projectsto take responsibility and manage project portfoliosset a project culture and standardsimportant strucutral criterias of project-oriented

organisations as temporary or permanent organistion forms.

temporary supports differentiation (programs and project)permanent supports integration and settings (personal pools, pm-office)

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assignment of projects& programmes

project management

programme management

coaching, auditing of projects & programmes

project portfolio-management

project networks

human-resource-management POC

organisation of POC

Projectmanagement Office

processes in project orientedorganisations

projectmanagementprogram managementcommissioning of projects and programsproject coaching and auditingorganisational designdevelopment and design of project networks

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all projectapplica-

tions

A

B

C

D

analyse of the project relevance and support of

organisational targets

risk analysis

analysis of project

dependance

analysis of operative priority

high risk

low risk

project topology

high priority

low priority

high strategic meaning

low strategic meaning

priority-/ risk portfolio

E project ranking

priority-/urgency portfolio

Project ranking

Management of project portfolios

the management of project portfolios requires the summary of all projects of an organisation at a certain point of time.

targetscoordination of all projectsimprovement of the resultschange management as ‚hyper‘ definition

changepriority

management of ressourceslearning within and from projects

low high

G F

E

C

D

BA

low

high

profit

risk

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Key Elements of Project Portfolio Selection Problem

1. Multi-period investment problem

2. Top management typically allocates funds to different product lines (e.g., compact cars, high-end sedans)

3. Product lines sell in separate (but not necessarily independent) market segments

4. Product line allocations are changed frequently

5. Conditions in each market segment are uncertain from period to period due to competition and changing customer preferences

Programme management

a programme is a definable unity of projects and timely restricted tasks tied by common targets.examples:

reorganisational projects concerning all organisationswithin a networkcomplex IT-solutions

programorderer

programmanager

programoffice

project A

project 1 project 2 project 3

program organisation

program team

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Project-Vision

Project-Missionstatement

Project-strategy

Individual target agreements

Project-Organization

Project-Realisation

Project strategy process

Scorecard

finances: financial ratios (Return on Project)

customers: customer satisfaction, customer loyality, customerrentability, process time

processes:identification of new processes supporting customersatisfaction

learning:securing the longterm groth of further development and use of project outcomes

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Scorecard

balance of:

• time limits to reach targets

• monentary and nonmomentary figures

• late and early indicators

• external and internal performance outlook

Scorecard

vision

strategy

strategy

financestargets, figures,

guidelines, measures

learning and organisational development

targets, figures, guidelines, measures

How should wearrange our

finances in order to satisfy our

project partners?

How should weimplement ourexperiences in order to let ourvision become

real?

customer integrationtargets, figures,

guidelines, measures

internal business processestargets, figures,

guidelines, measures

How should weintegrate our

customers in order to reach our

project target?

Which projectprocesses should

we optimize in order to become

leader?

targetagreement

targetagreement

targetagreement

targetagreement

Kaplan, Norton 2001

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Scorecard summary

strategical overview of the project gathered and accordinglycoordinated with the executive management – results in a combinationof organisational strategy and in a projectcontrolled and traceable target agreement process which has strategic(on the level of executive management) as well as operative character(on project level). Motivation through a clear defined target hierarchy.monitoring of the project progress through a clearly laid out number of together developed figures integrating qualitative aspects (for examplecustomer satisfaction,...)possibility of comparison (benchmarking) between projects through an internal integrated system of project evaluationimproved integration and systematic consideration of projectstakeholder

Model of the Project-oriented Organisation

A project-oriented organisation is an organisation, which…uses "Management by Projects" as an organisational strategy,uses temporary organisations to carry out processes of a large scope,manages various types of projects in a project portfolio,has specific permanent organisations forintegration,applies the New Management Paradigm,has an explicit project management culture andperceives itself as project-oriented.

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Projects & Strategy

We have to focus and prioritise. Sometimes even the most promisingideas do not mature into innovationsfor one reason or another.“ ..„We need to have the courage to shut down projects, because withinthe parameters of businessefficiency, ideas have to be realisedwithin a certain framework of time and ressources (Ansi Vanjoki, HeadMultimedia Division Nokia, 2005)

Thank you!

Management Center InnsbruckUniversitätsstraße 15A-6020 InnsbruckTel: +43 (0) 512 / 56 48 00-0Fax: +43 (0)512 / 56 48 [email protected]