Project Management L2 PDF Ben-Gurion University

Project Management course number 364.1.1251 L2: Initiating Organizational structures, PMO, multi-criteria decision- making (AHP) ‫ י' חשוון תשפ"ה‬,11/11/2024 1  A reminder Project: “A tempo...

Project Management course number 364.1.1251 L2: Initiating Organizational structures, PMO, multi-criteria decision- making (AHP) ‫ י' חשוון תשפ"ה‬,11/11/2024 1  A reminder Project: “A temporary endeavor undertaken to create a unique product, service or result” (PMBOK® Guide, 2021) (credit: Zoho Projects) link 2  Why are we here? (course’s syllabus) Academia + Industry PM oriented content 3  Exit criteria from L2 Classify PM environmental characteristics Outline project management office (PMO) types and roles Understand the Initiating process components Practice multiple-criteria methodology for evaluating alternatives {exercise 1} 4  PM environments Internal characteristics: inside the organization External characteristics: outside the organization 5  PM internal environment - examples Process assets: tools, methods, templates, PMO resources Governance documentation: policies (of the organization) Data assets: databases, libraries, metrics Knowledge assets: lessons learned from past projects, subject experts' employees 6  PM internal environment - examples Security and safety: data protection, facility access, confidentiality Organizational culture: vision, mission, values, norms, ethics, leadership style Infrastructure: equipment, IT hardware, IT software, collaboration tools Resources availability: people and materials, contracting and procurement constraints, approved contractors 7  PM external environment - examples Marketplace conditions: competitors, market share, technology trends Social and cultural issues: political climate, local traditions, holidays Regulations: national and international laws on security, employment, licensing 8  PM external environment - examples Commercial database: standardized cost data, industry risk information Academic research: industry studies, publications, benchmarking Financial aspects: exchange rates, interest, taxes Physical environment: weather, working conditions 9  PM organizational structures Functional organization – structured with departments in specialized areas. Project managed through the management hierarchy Matrix organization – project manager coordinates project efforts through functional units for specific tasks Projectized organization – self-sufficient project team with complete control of all elements necessary to accomplish the project’s goals. For extremely complex, long-duration, and disparate organizations 10  PM organizational structures Functional organization General manager Staff Manufacturing Finance manager Chief engineer Marketing manage manager Supervisor software Supervisor IE&M engineering engineering Supervisor mechanical Supervisor electrical engineering engineering 11  PM organizational structures Matrix organization President Chief program Vice president Vice president Vice president Vice president manager engineering QA administration manufacturing Project A Project Quality Project manager engineer engineer scheduler Project B Project Quality Project manager engineer engineer scheduler Functional authority Project authority 12  PM organizational structures Functional organization Projectized organization Efficient use of technical personnel Good project schedule and control Advantages Career continuity and development for Single point of contact (POC) technical personnel Good technology transfer between projects Possible rapid reaction time Good stability, security Simple project communication Disadvantages Weak customer interface Decentralized technical direction Weak project authority Inefficient use of specialists Poor horizontal communications Insecurity regarding future job Poor cross-feed of technical information Discipline-oriented and less project-oriented between projects Based on Shtub, Bard, Globerson, 2005 13  Project Management Office (PMO) Project Management Office (PMO): “a management structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques” (PMBOK® Guide, 2021) 14  Project Management Office (PMO) Guided reading in academic paper 2004, Q1/Q2 journal, IF2022=6.2 2006, Q1 journal, IF2022=21 15  Project Management Office (PMO) (Hill, 2004) 16  Project Management Office (PMO) 3 PMO segments of roles: 4 PMO knowledge-archetypes Strategic level Supporter Tactical level Information manager Operational level Knowledge manager Coach Metrics to evaluate PMO (Desouza & Evaristo, 2006) 17  Project Management Office (PMO) Strategic level Tactical level Strategic objectives of the Close integration between organization project initiatives Strategic growth of the Consistent quality of products organization and services generated by Efficient and effective knowledge projects management Knowledge sharing (Desouza & Evaristo, 2006) 18  Project Management Office (PMO) Operational level PMO metrics: Conducting project evaluations Project-centric Integration of knowledge derived PMO-centric from projects Business value-centric Expert knowledge on project management Constant monitoring of customer satisfaction (Desouza & Evaristo, 2006) 19  Project Management Office (PMO) Additional information on PMO (from PMI) 5 key dimensions of PMO maturity: Governance Integration and alignment Processes Technology and data People Analyzing key attributes of the Top 10 Percent PMOs (2021) (2010) 20  PM process groups Initiating Planning Executing Monitoring and Controlling Guided “walk Closing through” 21  PM process groups Initiating: “processes performed to define a new project or a new phase of an existing project by obtaining authorization to start the project or phase” (PMBOK® Guide, 2021) Project charter, Stakeholders 22  PM process groups - Initiating Develop project charter: the formal “birth” of a project (kind of) Project charter: ”A document issued by the project initiator or sponsor that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activity” (PMBOK® Guide, 2021) 23  PM process groups - Initiating Stakeholder: ”An individual, group, or organization that may affect, be affected by, or perceive itself to be affected by a decision, activity or outcome of a project, program or portfolio” (PMBOK® Guide, 2021) It is important to identify, engage and update stakeholders (next process groups) (credit: Sandip Mungikar) link 24 Overhaul maintenance (and upgrade) of a helicopter – an example (credit: IAF) 25  Overhaul maintenance (and upgrade) of a helicopter – an example Is it a project?: yes. Conducted once in several years (temporary), each helicopter has different findings (unique) Internal environment examples: supply chain and procurement IT systems for spare parts, an organizational policy of independent in-house maintenance capability, etc. External environment examples: foreign air forces with the same type of helicopter, manufacturer catalog, and parts availability, US policy of selling and upgrading the aircraft, etc. 26  Overhaul maintenance (and upgrade) of a helicopter – an example Stakeholders: headquarters, operational squadron, units’ people, Ministry of the Environment… (plastic metal blasting) 27  PM initiating documents and popular abbreviations I RFP R F e s t F o r Reque P r o p s t F o r e q u o n o s a l s R a t i f o r m In 29  PM initiating documents and popular abbreviations Request For Information Request For Proposal (RFI) (RFP) A type of procurement document used to A type of procurement document whereby the request proposals from prospective sellers of buyer requests a potential seller to provide products or services. In some application areas, various pieces of information related to a it may have a narrower or more specific product, service or seller capability meaning. short explanation clip: short explanation clip: https://www.youtube.com/watch?v=xiEYzK5wlkE https://www.youtube.com/watch?v=fBQYPAe0p6M 30  Multiple-criteria methodology for evaluating alternatives One of the characteristics of the initiating phase is deciding between alternatives before the project starts Analytical Hierarchy Process (AHP) is a multi-criteria methodology for evaluating alternatives AHP was developed by Thomas Saaty (a clip of him explaining AHP https://www.youtube.com/watch?v=ChkBNabdfjo) 31  Multiple-criteria decisions in PM initiating Project alternatives/approaches/solutions Deciding on project contractor/sub-contractors/supplier Ranking and weighting decision criteria 32  Analytical Hierarchy Process (AHP) Structuring a complex, multi-person, multi-attribute problem hierarchically Pairwise comparison of factors (or alternatives/attributes/criteria) Using a scale to indicate the strength with which one factor dominants another (with respect to higher-level factor) Checking for consistency 33  Analytical Hierarchy Process (AHP) Axiom 1: for any two alternatives, i,j the pairwise comparison of a person for alternative aij under criterion is reciprocal: aij=1/aji for all i,j Axiom 2: a person never judges an alternative to be infinitely better than another, for any criterion: aij≠∞ for all i,j Axiom 3: the problem can be formulated as a hierarchy Axiom 4: all factors impacting the decision are represented (i.e., decision maker intuition) 34  Analytical Hierarchy Process (AHP) algorithm (1/2) 1. Define the problem and objective 2. Structure the hierarchy from the top (decision-makers viewpoint) through the criteria on which subsequent levels depend to the lowest level (list of alternatives/candidates etc.) 3. Construct pair-wise comparison matrices (size nxn, n is no. of factors) by using the AHP scale measurement (which element dominates the other on 1-9 scale). There are n(n-1)/2 judgments required to develop the set of matrices in step 3. Reciprocals (aij=1/aji) are automatically assigned in each pair-wise comparison 4. Weights calculations (weights of the criteria and the sum of all weighted eigenvector 𝑛 entries of the next lower level of the hierarchy) 𝑛 𝑣𝑖 𝑣𝑖 = ෑ 𝑎𝑖𝑗 = 𝑛 𝑎𝑖1 𝑎𝑖2 … 𝑎𝑖𝑛 𝑤𝑖 = , 𝑖 = 1, … , 𝑛 σ𝑛𝑘=1 𝑣𝑘 𝑗=1 36  Analytical Hierarchy Process (AHP) algorithm (2/2) 5. Calculate consistency index, CI=(max-n)/(n-1). max is determined by using the eigenvalue, n is the matrix size. max is used to assess the consistency of pairwise 𝐴𝑖 𝒘 = 𝜆 𝑖 𝒘 𝜆𝑖 = 𝐴𝑖 𝒘/𝒘 comparisons. 𝐴𝑖 is the ith row of matrix A 𝑓𝑜𝑟 𝑒𝑎𝑐ℎ 𝑟𝑜𝑤 𝑖 1 𝑛 1 𝜆𝑚𝑎𝑥 ≅ σ 𝜆 = 𝑛(𝜆1 + 𝜆2 +…+ 𝜆𝑛 ) 𝑎𝑖1 𝑤1 + 𝑎𝑖2 𝑤2 + ⋯ + 𝑎𝑖𝑛 𝑤𝑛 = 𝑛𝑤𝑖 , 𝑖 = 1, … , 𝑛 𝑛 𝑖=1 𝑖 6. Calculate consistency ratio, CR=CI/RI (RI is taken from the table according to no. of n). CR0.10, the judgment matrix is inconsistent, therefore judgments should be reviewed and improved 7. Repeat steps 3-6 for all levels in the hierarchy 37 Analytical Hierarchy Process (AHP) – scale for pair-wise comparison 38 Analytical Hierarchy Process (AHP) – scale for consistency ratio calculation 39  Analytical Hierarchy Process (AHP) example 1 – the US Army cargo handling problem 1. The problem: fast cargo handling in various environments with high maneuverability and survivability on the battlefield. Need to select from 3 alternatives: Baseline system Upgraded system Universal self-deployable cargo handler (USDCH) Alternatives are selected based on 4 criteria: Performance, risk, cost and program objectives Based on Shtub, Bard, Globerson, 2005 (Chapter 6, Appendix 6A) 40  Analytical Hierarchy Process (AHP) example 1 – the US Army cargo handling problem 2. Hierarchy structure Select next generation cargo handler Program Performance (P) Risk (R) Cost (C) objectives (PO) Baseline Upgraded USDCH system system Based on Shtub, Bard, Globerson, 2005 (Chapter 6, Appendix 6A) 41  Analytical Hierarchy Process (AHP) example 1 – the US Army cargo handling problem 3. Pair-wise comparison matrix A for selection criteria: Criteria (j) P R C PO Criteria (i) 1 2 3 4 Human subjective 1. Performance (P) 1 5 3 4 decisions based on: 2. Risk (R) 1/5 1 1/6 1/3 3. Cost (C) 1/3 6 1 4 4. Program Objectives 1/4 3 1/4 1 (PO) Reciprocals, i.e., aij=1/aji (can be generated automatically) 42  Analytical Hierarchy Process (AHP) example 1 – the US Army cargo handling problem 𝑛 4. Weights calculations: 𝑣𝑖 𝑛 𝑤𝑖 = , 𝑖 = 1, … , 𝑛 𝑣𝑖 = ෑ 𝑎𝑖𝑗 = 𝑛 𝑎𝑖1 𝑎𝑖2 … 𝑎𝑖𝑛 σ𝑛𝑘=1 𝑣𝑘 j 𝑗=1 P R C PO There are other options to calculate 𝑣𝑖 1 2 3 4 2.78 4 𝑤1 = = 0.511 𝑣1 = 1 ∙ 5 ∙ 3 ∙ 4 = 2.78 5.45 P 1 1 5 3 4 0.32 4 𝑤2 = = 0.06 R 2 1/5 1 1/6 1/3 𝑣2 = 1/5 ∙ 1 ∙ 1/6 ∙ 1/3 = 0.32 5.45 1.68 i C 3 1/3 6 1 4 4 𝑤3 = = 0.309 𝑣3 = 1/3 ∙ 6 ∙ 1 ∙ 4 = 1.68 5.45 0.66 PO 4 1/4 3 1/4 1 𝑣4 = 4 1/4 ∙ 3 ∙ 1/4 ∙ 1 = 0.66 𝑤4 = = 0.121 5.45 Performance (P) Note that 4 4 Risk (R) ෍ 𝑤𝑖 = 0.511 + 0.06 + 0.309 + ෍ 𝑣𝑘 = 2.78 + 0.32 + 1.68 + 0.66 = 5.45 Cost (C) 𝑘=1 𝑖=1 0.121 = 1 Program Objectives (PO) 43  Analytical Hierarchy Process (AHP) example 1 – the US Army cargo handling problem 𝐴𝑖 𝒘 = 𝜆 𝑖 𝒘 w (from the previous stage) 5. Calculate  and consistency index: 𝐴𝑖 is the ith row of matrix A 𝑤1 = 0.511 j 𝑤2 = 0.06 𝜆𝑖 = 𝐴𝑖 𝒘/𝒘 𝑤3 = 0.309 P R C PO 𝑓𝑜𝑟 𝑒𝑎𝑐ℎ 𝑟𝑜𝑤 𝑖 𝑤4 = 0.121 1 2 3 4 1 ∙ 0.511 + 5 ∙ 0.06 + 3 ∙ 0.309 + 4 ∙ 0.121 2.218 𝜆1 = = = 4.342 P 1 1 5 3 4 0.511 0.511 R 2 1/5 1 1/6 1/3 1 1 1 ∙ 0.511 + 1 ∙ 0.06 + 6 ∙ 0.309 + 3 ∙ 0.121 0.253 i C 3 1/3 6 1 4 𝜆2 = 5 = = 4.253 0.06 0.06 PO 4 1/4 3 1/4 1 𝜆3 = (1/3 ∙ 0.511 + 6 ∙ 0.06 + 1 ∙ 0.309 + 4 ∙ 0.121)/0.309 = 1.320/0.309=4.275 1 1 ∙ 0.511 + 3 ∙ 0.06 + ∙ 0.309 + 1 ∙ 0.121 0.504 𝜆4 = 4 4 = = 4.176 0.121 0.121 (𝜆𝑚𝑎𝑥 − 𝑛) (4.262 − 4) 𝐶𝐼 = = = 0.0873 1 (𝑛 − 1) 3 𝜆𝑚𝑎𝑥 ≅ (4.342 + 4.253 + 4.275 + 4.176) = 4.262 4 44  Analytical Hierarchy Process (AHP) example 1 – the US Army cargo handling problem 6. Calculate consistency ratio: j (𝜆𝑚𝑎𝑥 − 𝑛) (4.262 − 4) P R C PO 𝐶𝐼 = = = 0.0873 (𝑛 − 1) 3 1 2 3 4 𝑅𝐼 = 0.9 𝑓𝑜𝑟 𝑛 = 4 𝑓𝑟𝑜𝑚 𝑟𝑜𝑛𝑑𝑜𝑚 𝑐𝑜𝑛𝑠𝑖𝑠𝑡𝑒𝑛𝑐𝑦 𝑡𝑎𝑏𝑙𝑒 P 1 1 5 3 4 R 2 1/5 1 1/6 1/3 𝐶𝐼 0.0873 𝐶𝑅 = = = 0.097 < 0.1 i C 3 1/3 6 1 4 𝑅𝐼 0.9 PO 4 1/4 3 1/4 1 𝐶𝑅 < 0.1 𝑎 𝑏𝑖𝑡 ℎ𝑖𝑔ℎ 𝑏𝑢𝑡 𝑠𝑡𝑖𝑙𝑙 𝑖𝑛 𝑡ℎ𝑒 𝑎𝑐𝑐𝑒𝑝𝑡𝑏𝑙𝑒 𝑐𝑜𝑛𝑠𝑖𝑠𝑡𝑒𝑛𝑐𝑦 𝑟𝑎𝑛𝑔𝑒 45  Analytical Hierarchy Process (AHP) example 1 – the US Army cargo handling problem 7. Repeat steps 3-6 for all Select next generation cargo levels in the hierarchy handler Program objectives Performance (P) Risk (R) Cost (C) (PO) (0.511) (0.06) (0.309) (0.121) Baseline Upgraded USDCH system system Based on Shtub, Bard, Globerson, 2005 (Chapter 6, Appendix 6A) 46  Analytical Hierarchy Process (AHP) example 1 – the US Army cargo handling problem 7. Repeat steps 3-6 for pair-wise comparison matrices for the 3rd level in the hierarchy with respect to the 2nd level, i.e., humans questionees comparing the 3 alternatives to each of the criteria/local priorities (P, R, C, PO) Local priorities Performance Risk Cost Program Global Alternatives (0.511) (0.06) (0.309) objectives (0.121) priorities Baseline system 0.142 0.704 0.384 0.133 0.250 Upgraded system 0.167 0.229 0.317 0.162 0.217 USDCH 0.691 0.067 0.299 0.705 0.535 𝐵𝑎𝑠𝑒𝑙𝑖𝑛𝑒 𝑠𝑦𝑠𝑡𝑒𝑚 = 0.142 ∙ 0.511 + 0.704 ∙ 0.06 + 0.384 ∙ 0.309 + 0.133 ∙ 0.121 = 0.250 𝑈𝑝𝑔𝑟𝑎𝑑𝑒𝑑 𝑠𝑦𝑠𝑡𝑒𝑚 = 0.167 ∙ 0.511 + 0.229 ∙ 0.06 + 0.317 ∙ 0.309 + 0.162 ∙ 0.121 = 0.217 𝑈𝑆𝐷𝐶𝐻 = 0.691 ∙ 0.511 + 0.067 ∙ 0.06 + 0.229 ∙ 0.309 + 0.705 ∙ 0.121 = 0.535 47  Analytical Hierarchy Process (AHP) example 1 – the US Army cargo handling problem Which alternative is preferred? Select next generation cargo handler Program objectives Performance (P) Risk (R) Cost (C) (PO) (0.511) (0.06) (0.309) (0.121) Baseline Upgraded USDCH system system (0.535) (0.250) (0.217) Based on Shtub, Bard, Globerson, 2005 (Chapter 6, Appendix 6A) 48  Analytical Hierarchy Process (AHP) example 2 – selecting the most suitable contractor for a project Guided reading of the paper (Al-Harbi, 2001) 2001, Q1 journal, IF2022=8 49 Analytical Hierarchy Process (AHP) example 3 – project selection 50  AHP tools BPMSG - Business Performance Management Singapore (https://bpmsg.com/) – online calculator and Excel template with detailed explanations and documentation SCB – Excel template (https://www.scbuk.com/ahp.html) And many more… 51  Wrap up People Technology & engineering Exercise 1 Processes 52  Closing words Few words about people, decisions, and the human spirit (A wise man definition to FAIL, END, NO) 53 54