Week 2 (Lec 5-8) PDF

PROJECT MANAGEMENT: PLANNING, EXECUTION, EVALUATION AND CONTROL Prof. Sanjib Chowdhury EL Vinod Gupta School of Management PT IIT Kharagpur N Module 02: Organization Strategy and Project Selection...

PROJECT MANAGEMENT: PLANNING, EXECUTION, EVALUATION AND CONTROL Prof. Sanjib Chowdhury EL Vinod Gupta School of Management PT IIT Kharagpur N Module 02: Organization Strategy and Project Selection Lecture 05: Non-Financial and Multi-criteria Project Selection Models Concepts Covered: Linkages between Strategy and Projects Integrated Management of Project Project Portfolio Management System – need for and major functions Project Governance - An Integrative Approach Design of project portfolio system EL PT Classifications of projects N Financial criteria of project selection (Financial Metrics – NPV, IRR, Payback period) Non-financial criteria of project selection Multi-criteria selection models Managing Portfolio system  Activity/Problem Solving 1. Alpha Co. is evaluating two similar projects whose initial investment and expected future cash flow are shown in the following table: Project X Project Y Year Cash flow ($) Cash flow ($) Y0 (800,000) (850,000) Y1 100,000 200,000 EL Y2 200,000 300,000 Y3 300,000 400,000 PT Y4 500,000 500,000 N Y5 300,000 - The company expects to earn at least 14 percent on its investment. The Financial Advisor of the company has informed that inflation would remain stable at 2 percent for the entire period. Based on financial consideration, determine the Payback period, NPV, and Profitability index of both projects, which project the company would fund? N PT EL Non-financial Strategic Criteria Capture larger market share Create difficulties for competitors to enter market Develop enabler product to↑ sales Develop core technology for next-gen product EL Reduce dependency on unreliable suppliers PT Prevent government intervention and regulation N ↑ corporate image, brand recognition Commitment for corporate citizenship, Support community development  Multi-criteria selection models Illustrative ‒ Checklist models Sample Selection Questions used In Practice Topic Question Strategy/alignment What specific strategy does this project align with? Driver What business problem does the project solve? Success metrics How will we measure success? EL PT Sponsorship Who is the project sponsor? N Risk What is the impact of not doing this project? Risk What is the project risk to our organization? Risk Where does the proposed project fit in our risk profile? Benefits, value, ROI What is the value of the project to this organization? Benefits, value, ROI When will the project show results? Objectives What are the project objectives?  Multi-criteria selection models Illustrative ‒ Checklist models Sample Selection Questions used In Practice Topic Question Organization culture Is our organization culture right for this type of project? Resources Will internal resources be available for this project? Approach Will we build or buy? EL Schedule How long will this project take? PT N Schedule Is the time line realistic? Training/resources Will staff training be required? Finance/portfolio What is the estimated cost of the project? Portfolio Is this a new initiative or part of an existing initiative? Portfolio How does this project interact with current projects? Technology Is the technology available or new?  Multi-criteria selection models Illustrative ‒ Multi-weighted scoring model Project Screening Matrix EL PT N  Activity/Problem Solving (Project Screening Matrix) 1. The Custom Bike Company has set up a weighted scoring matrix for evaluation of potential projects. Below are five projects under consideration. a. Using the scoring matrix below, which project would you rate highest? Lowest? b. If the weight for “Strong Sponsor” is changed from 2.0 to 5.0, will the project selection change? What are the three highest weighted project scores with this new weight? EL PT Part a. Part b. N Activity/Problem Solving (Project Screening Matrix) EL PT N Project Screening Process EL PT N Portfolio Management System Design of a project portfolio system: Classification of a project Selection criteria Sources of proposals EL Evaluating proposals PT Managing the project portfolio N ‒ Sr. management input ‒ PMO responsibilities ‒ Balancing portfolio for risks and types of projects  Project Portfolio Matrix EL PT N Source: David and Jim Matherson, The Smart Organization, Harvard Business School Press, 1998, pp.203-09 Conclusion: Further to the previous lecture, this module also illustrates non-financial criteria of project selection which is necessary for strategic and compliance projects. The chapter further discusses multi-criteria selection models such as check list model, and multi-weighted scoring model to design and manage a robust portfolio system. EL It also explains project screening process, and project portfolio matrix in terms of “technical PT feasibility/risk” and “net present value/commercial potential” of project, and categorized R&D N projects as four types, namely, Bread-and-butter, Pearl, Oyster, and white elephant projects. References: 1. Project Management – The Managerial Process, Gray, C.F., Larson, E.W., and Joshi, R., McGraw Hill Education, 8th edition. 2. Project Management – Achieving Competitive Advantage, Jeffrey K. Pinto, Pearson Publishing Ltd., 5th edition. EL 3. Projects Planning, Analysis, Selection, Implementation, and Review, Prasanna PT Chandra, McGraw Hill Education, 8th edition. N 4. Project Management, Pradeep Pai, Pearson India Education Services Pvt Ltd., 2019, 1st edition. N PT EL PROJECT MANAGEMENT: PLANNING, EXECUTION, EVALUATION AND CONTROL Prof. Sanjib Chowdhury EL Vinod Gupta School of Management PT IIT Kharagpur N Module 03: Organization Structure and Culture Lecture 06: Organization Structure Concepts Covered: Factors influencing success of the project What is an appropriate project management structure? What are the types of project management structure? What are the characteristics of each structure? EL Which structure is best for an organization? PT Organizational Culture and its characteristics N Relation between organization culture, project management structure and project success Key dimensions of organization culture Organization Structure Factors influencing success of the project Appropriate project management structure Project management structures are pre-dominantly 3-types and its combinations EL ‒ Functional form PT ‒ Dedicated project team / Projectized form N ‒ Matrix form  Functional Structure EL PT N Source: Project Management, Gray and Larson What is Functional structure? When do we use Functional structure? Advantages – No change, max flexibility, in-depth expertise, easy post-project transition Disadvantages - Focus, Integration, Ownership, Slow  Dedicated Project Team EL PT What is Dedicated Project Team? N When do we use Dedicated Project Team? Source: Project Management, Gray and Larson Advantages – Simple, Cohesive, x-functional Integration, Fast Disadvantages – Expensive, Internal Strife, Limited expertise, post-project Transition  Projectized Organizational Structure EL PT N Source: Project Management, Gray and Larson What is Projectized organizational structure? When do we use Projectized organizational structure?  Matrix Organization Structure EL PT Source: Project Management, Gray and Larson N What is Matrix structure? When do we use Matrix structure?  Matrix Organization Structure Hybrid organizational structure Optimize resources  Different Matrix Form Weak Form EL PT Balanced Form N Strong Form Advantages – Efficient (resource ), Focus, Transition, Flexible Disadvantages - Dysfunctional conflict, Infighting, Stressful , Slow  Project management organization structure continuum FM FM FM FM FM FM PM PM FM FM FM PM P.M. PM P.M. PM PM Lightweight project managers FM FM FM Pure functional PM Balanced EL organisation Increasing project PM matrix P.M. orientation PT Pure project organisation PM organisation N Heavyweight project managers PM PM P.M. FM FM FM FM FM FM PM PM PM PM P.M. PM P.M. PM PM FM = Functional manager PM = Project manager Conclusion: This module discusses an appropriate project management structure, and the factors that influence the success of a project. An appropriate project management structure balances the needs of the project with the needs of the organization. There is a strong relation between success of a project and the autonomy and authority of the project manager – i.e., the power he commands EL There are mainly three types of project management organization structure, namely, PT functional, projectized, and matrix structures. The characteristics and suitability of N each structure, their advantages and disadvantages, and project management organization structure continuum have been elaborated. References: 1. Project Management – The Managerial Process, Gray, C.F., Larson, E.W., and Joshi, R., McGraw Hill Education, 8th edition. 2. Project Management – Achieving Competitive Advantage, Jeffrey K. Pinto, Pearson Publishing Ltd., 5th edition. EL 3. Project Management: A Managerial Approach, Meredith, J.R. and Mantel, S.J., PT Wiley, PMBOK Guidelines Book N 4. Project Management for Business and Technology – Principles and Practice, John M. Nicholas, Prentice-Hall of India Ltd. N PT EL PROJECT MANAGEMENT: PLANNING, EXECUTION, EVALUATION AND CONTROL Prof. Sanjib Chowdhury EL Vinod Gupta School of Management PT IIT Kharagpur N Module 03: Organization Structure and Culture Lecture 07: Organization Culture Concepts Covered: Factors influencing success of the project What is an appropriate project management structure? What are the types of project management structure? What are the characteristics of each structure? EL Which structure is best for an organization? PT Organizational Culture and its characteristics N Relation between organization culture, project management structure and project success Key dimensions of organization culture N PT EL What’s the right Project Management Structure?  Organization (Form) Considerations Importance of the project Percentage core work Resource availability  Project Considerations EL Size PT Strategic importance N Novelty, innovation Integration (no. of depts.) Environmental complexity (no. of external interfaces) Budget and time constraints Stability of resource requirements Organizational Culture  What is Organizational Culture? A system of shared norms, beliefs, values, and assumptions which bind people together, thereby creating shared meanings (Deal & Kennedy, 1982) Culture of cooperation, Culture of competition, Riverboat trip EL  Relation between organization culture, project management structure PT and project success N Instances of successfully managing projects with functional structure; Failure of matrix structure; Relying on independent project teams Organizational Culture  What is meant by “personality” of the organization? Sense of identity to its members Legitimize management system of the organization Clarifies and reinforces standards of behavior EL  How to identify Cultural Characteristics of a Co.? PT Study the physical characteristics of an organization N Read about the organization Observe how people interact within the organization Interpret stories and folklore surrounding the organization Organizational Culture  Challenges for Project Managers in Navigating Org. cultures Interacting with the culture and subcultures of the parent organization ….. the project’s clients/customer ….. other organizations related to the project EL PT N  Key dimensions of defining an Organization’s Culture EL PT N Source: Project Management, Gray and Larson  Cultural dimensions of an Organization Supportive of Project Management EL PT N Source: Project Management, Gray and Larson Conclusion: Further to the previous lecture wherein we have discussed the various aspects of organization structure, in this class the relation between organization culture, project management structure and project success is elucidated. Further, it explains the importance of organizational culture for the success of the EL project, the effect of culture of cooperation and culture of competition; and how to identify cultural characteristics of a Co.? PT N It also dwells on challenges for project managers in navigating different organization cultures, and key dimensions of defining an organization’s culture supportive of project management. References: 1. Project Management – The Managerial Process, Gray, C.F., Larson, E.W., and Joshi, R., McGraw Hill Education, 8th edition. 2. Project Management – Achieving Competitive Advantage, Jeffrey K. Pinto, Pearson Publishing Ltd., 5th edition. EL 3. Project Management: A Managerial Approach, Meredith, J.R. and Mantel, S.J., PT Wiley, PMBOK Guidelines Book N 4. Project Management for Business and Technology – Principles and Practice, John M. Nicholas, Prentice-Hall of India Ltd. N PT EL PROJECT MANAGEMENT: PLANNING, EXECUTION, EVALUATION AND CONTROL Prof. Sanjib Chowdhury EL Vinod Gupta School of Management PT IIT Kharagpur N Module 04: Defining the Project Lecture 08: Project Scope of Work and Deliverables Concepts Covered: Defining the Project Scope Establishing Project Priorities Creating the Work Breakdown Structure (WBS) Integrating the WBS with the Organization EL Coding the WBS for the Information System PT Responsibility Matrices N Project Communication Plan Defining the Project (Step 1)  Project Scope Statement/SOW specific, tangible, measurable  Purpose of Scope Statement Clearly defined deliverables, focus on project completion, plan and EL measure PT  Project Charter N Expanded version, R&R, authorization  Scope Creep Defining the Project (Step 1)  Project Scope Checklist 1. Project objective 2. Deliverables 3. Milestones EL 4. Technical requirements PT 5. Limits and exclusions N 6. Reviews with customer Establishing Project Priorities (Step 2) Causes of Project Trade-offs ‒ Shifts in the relative importance of criterions related to cost, time, and performance parameters o Budget (Cost) o Schedule (Time) o Performance (Scope) EL Project Management Trade-off PT N Establishing Project Priorities (Step 2) Managing the Priorities of Project Trade-offs ‒ Constrain: a parameter is a fixed requirement ‒ Enhance: optimizing a criterion over others ‒ Accept: reducing (or not meeting) a criterion requirement Project Priority Matrix EL PT N Creating Work Breakdown Structure (Step 3)  What is a WBS?  How WBS helps Project Manager? Evaluate cost, time, performance Plan, schedule and budget EL Assign responsibilities, Level wise info, OBS PT Define communication channels, coordinate tasks N  What is a Work package? (Defines task/work, determine duration, budget, resource need, responsibility, monitoring point/milestones for measuring)  Creating Work Breakdown Structure (Step 3) EL PT N Source: Project Management, Gray and Larson Source: Project Management, Gray and Larson N PT EL Work Breakdown Structure Illustrative Conclusion: This module discusses the steps in defining the project, which include (i) defining the project scope, (ii) establishing project priorities: priority trade-off, concept of constrain, enhance and accept, and (iii) creating work breakdown structure (WBS) and work package, which are the keys to managing the project. EL It also explains how WBS helps project manager, clients, and other important stakeholders. PT N References: 1. Project Management – The Managerial Process, Gray, C.F., Larson, E.W., and Joshi, R., McGraw Hill Education, 8th edition. 2. Project Management – Achieving Competitive Advantage, Jeffrey K. Pinto, Pearson Publishing Ltd., 5th edition. EL 3. Successful Project Management, Gido, J. and Clements, J.P., Cengage Learning, PT 6th edition. N 4. Project Management: A Managerial Approach, Meredith, J.R. and Mantel, S.J., Wiley, PMBOK Guidelines Book N PT EL