Project & Operations Management PDF 2024

Better Managers for a Better World Project & Operations Management (November 2024) Antonio Alizzi International Master in Finance International Master in Pharma and Health Management International Master in Sustainability and Circular Bioeconomy International Master in Supply Chain Management and L...

Better Managers for a Better World Project & Operations Management (November 2024) Antonio Alizzi International Master in Finance International Master in Pharma and Health Management International Master in Sustainability and Circular Bioeconomy International Master in Supply Chain Management and Logistics  Better Managers for a Better World Project & Operations Management (November/December 2024) Antonio Alizzi International Master in Energy Management International Master in Food and Beverage Management International Master in International Business and Corporate Law International Master in Media and Entertainment Copyright No part of the following contents may be reproduced, copied, modified of adapted, without the prior written consent of the author, unless otherwise indicated for stand-alone materials. Copyright Rome Business School All rights reserved ABOUT ME Graduate in International Relations - Master’s degree in HR. PhD in Business Management and Author of scientific works on business innovations. From 2011 to 2014, Professor of Business Administration at the University of Verona. At the end of 2014, appointed as a Head of the Communication and Image Department in Calzedonia Russia, and 2 years later as a Coordinator of Calzedonia UK. At the end of 2016, in Moscow (Russia) joined the International Media Group ACMG (Forbes, L'Officiel, Geo, SNC, Numéro, Golf Digest and others) as the First Vice President. From December 2020 to October 2023, Organization and HR Director at Fondazione ENEA Tech e Biomedical Scientific Director of Fondazione Rizzola Academy. His last book is Vite da Funamboli (Sandro Teti Editore, 2019) ABOUT OUR 6 HOURS Better Managers for a Better World We will explore the dynamic relationship between project management and operations management, focusing on how these fields can be effectively integrated to enhance organizational performance. By examining the strategic alignment between project- driven and operations-driven activities, students will understand how to balance innovation (projects) with consistency (operations), crucial for businesses aiming to achieve sustainable growth. WHAT IS A PROJECT? Better Managers for a Better World “… a project is a temporary endeavor undertaken to create a unique product, service or result. A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources. A project is unique in that it is not a routine operation, but a specific set of operations designed to accomplish a singular goal. Project Definition | Project Management Office (uchicago.edu) What is a Project? Better Managers for a Better World Project: unique, one-time operational activity or effort Examples: - constructing houses, factories, shopping malls, athletic stadiums or arenas - developing military weapons systems, aircrafts, new ships - launching satellite systems - constructing oil pipelines - developing and implementing new computer systems - planning concert, football games, or basketball tournaments - introducing new products into market SUMMARY Better Managers for a Better World 1. Foundational Concepts Review 2. Strategic Alignment 3. Resource Allocation and Utilization 4. Performance Metrics 5. Change Management 6. Risk Management 7. Technological Integration 8. Case Study and Practical Examples 1. Foundational Concepts Review Better Managers for a Better World PROJECT vs. OPERATIONS Definition and Characteristics Project Management: Involves the planning, executing, and closing of projects, which are temporary endeavors undertaken to create a unique product, service, or result. Projects have defined scopes, timelines, and resources, and they are generally characterized by their uniqueness, temporary nature, and specific objectives that drive completion. Operations Management: Focuses on the ongoing activities that are necessary for producing goods or providing services. Operations are continuous and repetitive, aiming to maintain the business’s core functions and efficiencies. The focus here is on consistency, efficiency, and quality of output over time. PROJECT vs. OPERATIONS Better Managers for a Better World Project Life Cycle: Initiation: Defining the project at a broad level and authorizing it to begin. Planning: Outlining how to achieve the project's objectives with timeframes, costs, resources, and selecting methodologies. Execution: Actual performance of the project tasks and management of resources. Monitoring and Controlling: Measuring project progression and performance to ensure it aligns with the project plan. Closure: Formal closing of the project and assessment of the outcomes against the initial goals. PROJECT vs. OPERATIONS Better Managers for a Better World Operations Life Cycle: Design: Designing the operation system or product, considering capacity, supply chain, and workflow. Implementation/Execution: Establishing and conducting operations to produce goods or services continuously. Improvement: Ongoing efforts to enhance efficiency and effectiveness, incorporating feedback loops and quality management principles. TRANSITION POINTS: MANAGING INTERSECTIONS Better Managers for a Better World From Project to Operations: The handoff from project team to operations team is critical and must be managed to ensure that operational goals continue to be met without disruption. This includes training, documentation, and support systems integration. Feedback Mechanisms: Operations often provide valuable insights that can inform future projects. Effective feedback mechanisms help capture these insights and translate them into actionable project inputs. 2. STRATEGIC ALIGNMENT Better Managers for a Better World Integrating Projects with Strategic Operations Goals Aligning Project Selection with Business Strategy: Projects should be chosen not only for their intrinsic benefits but also for their potential to enhance operational capabilities or resolve operational deficiencies. The criteria for project selection should include strategic relevance to ensure that each project contributes to broader business aims. Project Portfolio Management (PPM): PPM is a crucial tool for aligning projects with organizational strategy. By managing and prioritizing a portfolio of projects, organizations can ensure they are not only aligned with operational needs but also strategically positioned for future growth and adaptation. 2. STRATEGIC ALIGNMENT (CASE STUDIES) Better Managers for a Better World Example 1: Technology Upgrade in Manufacturing: A case study where a manufacturing company implemented a technology upgrade project aimed at increasing production efficiency and reducing waste. The project was directly aligned with the strategic goal of cost leadership and had significant positive impacts on operational performance. Example 2: Service Expansion in Telecommunications: This case discusses a telecommunications company that undertook a project to expand its service offerings. The project was strategically aligned with the goal of market expansion and involved significant adjustments to operations to accommodate new services. TOOLS AND TECHNIQUES FOR STRATEGIC ALIGNMENT Better Managers for a Better World Balanced Scorecard: This tool can be adapted to link project outcomes with operational performance indicators, ensuring that both areas are aligned with strategic objectives. Strategy Maps: Visual representations that outline the cause-and-effect relationships between strategic objectives, projects, and operational processes. These maps help in communicating and understanding the alignment between strategy, projects, and operations. BALANCED SCORECARD Better Managers for a Better World BALANCED SCORECARD Better Managers for a Better World FINANCIAL MOMENT: Cash desk: you pay! ECONOMIC MOMENT: When you get the ownership of a product (others are limited to get that product) LIQUIDITY COMES FIRST BALANCED SCORECARD: A Strategic Management ToolBetter Managers for a Better World The Four Perspectives of the Balanced Scorecard 1. Financial: Measures reflecting financial performance, such as revenue growth, ROI, cost management. These indicators help managers see how well the organization is performing financially. 2. Customer: Focuses on customer satisfaction and retention. Metrics might include customer satisfaction scores, percentage of market share, and customer loyalty indices. 3. Internal Business Processes: Measures related to internal operational performance key to delivering customer satisfaction and financial returns. Common metrics include cycle times, quality rates, and productivity. 4. Learning and Growth: Looks at the organization’s ability to innovate and improve. These metrics may involve employees training hours, employees satisfaction, and retention rates, and technological innovation. IMPLEMENTING THE BALANCED SCORECARD Better Managers for a Better World Step 1: Define the Vision and Strategic Objectives Step 2: Develop Metrics and Targets Step 3: Data Collection and Analysis Step 4: Implement Initiatives Benefits of Using the Balanced Scorecard - Enhanced Strategic Alignment - Improved Communication - Better Performance Monitoring CHALLENGES IN IMPLEMENTING THE BALANCED SCORECARD Better Managers for a Better World Complexity in Developing Metrics: Finding the right metrics that align with strategic objectives can be challenging and requires deep understanding of both strategy and operations. Data Collection: Gathering accurate and timely data can be resource-intensive. Adaptability: The organization must be willing to adapt and change strategies based on what the metrics reveal. ENSURING COHERENCE AND SUPPORT Better Managers for a Better World Communication Strategies: Effective communication channels between project teams and operations staff are vital. Regular meetings, integrated teams, and shared platforms ensure that everyone is aligned with the strategic goals. Cultural Alignment: Developing a culture that values both project success and operational excellence is crucial. This includes training, shared values, and incentives that align with achieving both project and operational goals. STRATEGY MAPS: VISUALIZING ORGANIZATIONAL SUCCESS Better Managers for a Better World The Concept of Strategy Maps Strategy maps allow organizations to depict their objectives in clear, visual formats that illustrate the causal relationships between different strategic areas. They typically focus on the same four perspectives as the Balanced Scorecard—financial, customer, internal processes, and learning and growth—and show how objectives in these areas interconnect and drive each other. Building a Strategy Map 1. Identify Strategic Objectives 2. Arrange Objectives in Cause-and-Effect Chains 3. Connect Objectives with Arrows 4. Finalize and Communicate STRATEGY MAPS: VISUALIZING ORGANIZATIONAL SUCCESS Better Managers for a Better World STRATEGY MAPS: VISUALIZING ORGANIZATIONAL SUCCESS Better Managers for a Better World STRATEGY MAPS: VISUALIZING ORGANIZATIONAL SUCCESS Better Managers for a Better World UTILIZING STRATEGY MAPS EFFECTIVELY Better Managers for a Better World Communication Tool: Strategy maps are excellent for communicating corporate strategy across all levels of an organization, ensuring that everyone understands their role in achieving strategic goals. Planning and Execution: They can be used to identify key initiatives and projects that support strategic objectives, helping align resources and priorities. Performance Management: Strategy maps can help managers see how different parts of the organization contribute to achieving strategic goals, which can be particularly useful in performance reviews and operational adjustments. CHALLENGES IN CREATING STRATEGY MAPS Better Managers for a Better World Complexity in Visualization: Creating a clear and effective strategy map can be challenging, especially for complex organizations with many interrelated objectives. Dynamic Environments: Strategy maps need to be updated regularly to reflect the changing external and internal conditions affecting the organization. Buy-in Across the Organization: Effective strategy maps require understanding and support from all levels of the organization, which can be difficult to achieve without proper communication and engagement strategies. 3. RESOURCE ALLOCATION AND UTILIZATION Better Managers for a Better World Balancing Resource Allocation Between Projects and Operations 1. Assessing Resource Availability: Begin with a comprehensive assessment of available resources, including personnel, technology, finances, and time. Understanding what is available is crucial for effective allocation. 2. Prioritizing Resource Needs: Both projects and operations must be prioritized based on their strategic importance and resource intensity. This prioritization helps in making informed decisions about where to allocate scarce resources for maximum impact. 3. Developing Resource Allocation Strategies: Implement strategies that balance the short-term needs of projects with the long-term demands of operations. Techniques such as resource leveling and resource smoothing can be applied to optimize the use without overburdening resources. TECHNIQUES FOR EFFECTIVE RESOURCE UTILIZATION Better Managers for a Better World Resource Sharing: Implement systems that allow resources to be shared between projects and operations without conflict. Capacity Planning: Use capacity planning tools to ensure that the workload is matched to resource availability, minimizing bottlenecks and idle times. Performance Monitoring: Continuously monitor how resources are being used across projects and operations. TECHNIQUES FOR EFFECTIVE RESOURCE UTILIZATION Better Managers for a Better World Resource Sharing: Implement systems that allow resources to be shared between projects and operations without conflict. Capacity Planning: Use capacity planning tools to ensure that the workload is matched to resource availability, minimizing bottlenecks and idle times. Performance Monitoring: Continuously monitor how resources are being used across projects and operations. 4. PERFORMANCE METRICS Better Managers for a Better World Establishing Performance Metrics Identification of Metrics: Begin by identifying which metrics are most relevant to the goals of projects and operations. Metrics should be SMART: Specific, Measurable, Achievable, Relevant, and Time-bound. Metric Categories: Efficiency Metrics: Measure how resources are utilized and how effectively projects and operations convert inputs into outputs. Examples include resource utilization rates, cycle time, and throughput. Effectiveness Metrics: Assess the success in meeting the strategic objectives. These include ROI, customer satisfaction ratings, and market share for projects, and quality rates and compliance levels for operations. Innovation Metrics: Evaluate the performance in terms of innovation and improvement, crucial for long- term sustainability. These might include the number of new products developed, patent applications, or improvements in processes. We will see some of them  Better Managers for a Better World BREAK-EVEN POINT The "break-even point" is a fundamental concept in business and economics. It refers to the level of sales or revenue at which total costs equal total revenue, resulting in neither profit nor loss. In other words, it's the point at which a company neither makes a profit nor incurs a loss. Beyond this point, every additional sale contributes to profit.  BREAK-EVEN POINT Better Managers for a Better World  Better Managers for a Better World CASH FLOW Net amount of cash being transferred in and out of a business during a given period of time Important: Cash flow refers to the net balance of cash moving into and out of a business at any point in time. It is not to be confused with profit, as it only measures the cash transactions, ignoring other forms of revenue that haven't been collected or expenses that have not yet been paid.  PAYBACK PERIOD Better Managers for a Better World  Better Managers for a Better World PAYBACK PERIOD Number of years necessary for the complete compensation of investments Important: The Payback Period is the time it takes for the cumulative returns from an investment to equal the cumulative costs, essentially measuring how long it takes for an investment to become profitable.  PAYBACK PERIOD (simple formula) Better Managers for a Better World  Better Managers for a Better World ROI “ROI (Return on Investment) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost”. Source: Investopedia “ROI is a simple ratio of the gain from an investment relative to its cost. It is a versatile and straightforward metric for assessing the profitability of an investment, calculated by dividing the net profit by the initial cost of the investment, then multiplying the result by 100 to get a percentage” Source: The Balance Small Business  Better Managers for a Better World ROI Net Profit is the gain from the investment minus the cost of the investment. Investment Cost is the total amount initially invested. This formula will give you the ROI as a percentage, which helps in easily comparing the efficiency of different investments. 5. CHANGE MANAGEMENT Better Managers for a Better World Understanding Change Management in Project and Operations Management “Change Management refers to the approach and processes used to prepare, support, and help individuals, teams, and organizations in making organizational change”. Context: In the realms of project and operations management, change management plays a critical role in ensuring that adjustments to projects or operations are smoothly implemented, minimizing disruptions while maximizing the benefits of change. 5. CHANGE MANAGEMENT (2) Better Managers for a Better World Key Principles of Change Management: 1. Communication 2. Leadership 3. Engagement 4. Training and Support 5. CHANGE MANAGEMENT Better Managers for a Better World Strategies for Implementing Change in Projects and Operations Step-by-Step Approach: Assess: Identify the need for change and the desired outcomes. Plan: Develop a clear, actionable change management plan. Implement: Execute the change management strategies. Review: Evaluate the effectiveness of the change and make necessary adjustments. Integration with Project and Operations Management: Ensure changes in projects align with operational capabilities and business strategies. Use project management tools to monitor change progress and impact. Overcoming Resistance: Understand the root causes of resistance. Address concerns through dialogue, transparency, and involvement. 6. RISK MANAGEMENT Better Managers for a Better World “Risk Management involves identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events”. Relevance: Essential for preventing potential project failures and operational disruptions, ensuring that both domains can thrive even under uncertain conditions. Objectives: Minimize potential negative impacts on projects and operations. Enhance decision-making through better understanding of risks and their implications. 6. RISK MANAGEMENT (2) Better Managers for a Better World Risk Identification and Analysis Identifying and Analyzing Risks in Projects and Operations Risk Identification: Use tools like brainstorming, Delphi technique, SWOT analysis, and checklists to identify potential risks in projects and operations. Importance of continuous monitoring to detect new risks as they emerge. Risk Analysis: Qualitative Analysis: Assess risks based on their probability and impact using a risk matrix. Quantitative Analysis: Use numerical methods like Monte Carlo simulations and sensitivity analysis to predict the effects and likelihood of risks. 6. RISK MANAGEMENT (3) Better Managers for a Better World Risk Response and Monitoring Risk Response Strategies: Avoidance: Eliminating a risk by altering project plans or operational strategies. Mitigation: Reducing the likelihood or impact of a risk through intermediate steps. Transfer: Shifting the impact of a risk to a third party, such as through insurance or outsourcing. Acceptance: Acknowledging the risk and preparing contingency plans if the risk event occurs. Monitoring and Review: Regularly review and reassess risks and their management approaches. Update risk management plans as projects progress and as operational environments change. 7. TECHNOLOGICAL INTEGRATION Better Managers for a Better World “Technological integration involves incorporating advanced technologies into project management and operations to streamline processes, increase efficiency, and enhance decision-making”. Importance: In today's digital age, integrating technology is crucial for maintaining competitive advantages, adapting to market changes, and improving overall organizational performance. Key Technologies: Project Management Software (e.g., Asana, Trello, Microsoft Project) ERP Systems (Enterprise Resource Planning) AI and Machine Learning for predictive analytics and automation IoT (Internet of Things) for real-time data collection and monitoring 7. TECHNOLOGICAL INTEGRATION (2) Better Managers for a Better World Advantages of Integrating Technology in Management Practices: Efficiency and Speed Enhanced Data Analytics Improved Communication and Collaboration Scalability and Flexibility 7. TECHNOLOGICAL INTEGRATION (3) Better Managers for a Better World Implementing Technological Solutions Assessment and Planning: Conduct a needs assessment to determine the most beneficial technologies for your specific project and operational needs. Plan integration with a focus on minimal disruption and maximum uptake. Training and Support: Invest in training programs to ensure that staff are equipped to use new technologies effectively. Provide ongoing support to address technical issues and user concerns. Continuous Evaluation and Adaptation: Regularly evaluate the effectiveness of the implemented technology. Be prepared to adapt and upgrade technology as new advancements emerge and business needs evolve. 8. CASE STUDY Better Managers for a Better World WITH A GUEST LECTURER Thank you Via Giuseppe Montanelli, 5 00195, Roma RM romebusinessschool.com