Professional Documents
Culture Documents
Contents
Executive Summary
A.
B.
C.
D.
E.
F.
Appendix
Executive Summary
Inputs- Business
need and
requirement
Management of
Projects
Mechanism
People,
techniques, tools,
equipment,
organisation
Output: Project
Deliverables,
Products and /or
services
Scope
Time
Organisation
Qualit
y
Cost
The above five functions form the basis of any project management activity. The
scope and the organization are the essential functions of project management. The
remaining three - time, quality and cost are the constraints under which the project is
to be executed and managed.
Project management provides the 'single point of integrative responsibility' needed to
ensure that everything on the project is managed effectively to ensure successful
project completion and delivery.
Program Management
A programme is a set of related projects and organisational changes put in place to
achieve a strategic goal. A programme is a series of specific, interrelated projects
and additional tasks which together achieve a number of objectives within overall
strategy or strategic goal. It articulates the organizations business strategy, which is
required to be implemented through projects.
Programme Management provides the framework for implementing strategies and
initiatives. It requires means and resources such as :
Portfolio Management:
A Portfolio is a set of projects and/or programmes which are not necessarily related
to each other, but are brought together for the sake of control, co ordination and
optimisation. Portfolio Management of projects and/or programmes cover the
prioritisation of projects and/or programmes within an organization.
B. Strategic Role of Programme and Project Management
The Evolution of Strategic Project Management
Project management began as a tactical tool to facilitate the execution of individual
projects and programs, such as building a new facility, installing new hardware or
implementing a new software initiative.
Organizations now use project management as a tactical tool to execute projects.
Projects are essential to the growth and survival of organizations today. They create
value in the form of improved business processes, are indispensable in the
development of new products and services and make it easier for companies to
respond to changes in the environment, competition and the marketplace. Often
changing business needs can be satisfied only through IT solutions, which require
projects to implement.
Strategic Role of Programme and Project Management
Project management has emerged as a strong discipline practiced by highly trained,
certified professionals as organizations have come to realize they cannot stay in
business if they cannot manage their projects. However, many companies even in
EPC are still limiting the application of project management to the tactical level. It is
vital to the very survival of the enterprise to ensure products are designed, created
and delivered to internal and external customers efficiently and effectively. In
addition, organizations recognize project management is a critical strategic tool. They
practice project portfolio management to select, manage and support a portfolio of
projects that have the best chance of moving the enterprise forward, keeping it
vibrant in the marketplace and returning maximum shareholder value. As
departments and divisions compete for scarce financial and human resources,
strategic project portfolio management provides the rational decision framework
necessary to make the right project investment decisions that enable organizations to
compete and win in the global economy.
This panoply of competitive advantage, strategic capabilities, and tacit knowledge
management constitute the new lens through which organization like L&T should
envisage Strategic Project Management. Many organizations that have transformed
their project management capability into a strategic asset. For those organizations
Project Management has become a source of superior performance, the knowledge
management process diverges from the
rule bound approach typical of much project management. In such organizations, two
features as key: the first is having senior project leaders who display a willingness to
bend the rules and on occasion take maverick action to get things done. They are
particularly good at managing relationships across organizational functions and
boundaries to break through organization inertia and bureaucracy.
Basics of Project Portfolio Management
time to think strategically. Those new to the process of strategic project management
may encounter challenges in the following areas.
1) Executive championship. Without buy-in from high-level decision-makers and their
ability to give guidance and support to the portfolio manager, strategic project
management will fail. Even in a strategic environment, portfolio managers sometimes
succumb to the politics and temptations of selecting projects that are the pet projects
of mid-level and lower-level managers. Even organizations that have established a
formal Project Management Office need an executive champion, particularly when
the office is understaffed.
2) Business acumen. A portfolio manager needs much more business acumen than a
traditional project manager because he or she has to decide which projects are
necessary in order to meet the organizations strategic objectives.
3) A solid project management process. Leadership may do an excellent job of
creating a strategic portfolio of projects and setting goals and ground rules. But if the
actual practitioners the project managers and their teams are in a just-do-it
mode or are inefficient or ineffective in managing their projects, all the strategic work
is for naught. Thats why strategy at the highest levels has to be paired with a
consistent, repeatable process that ensures that practitioners at the project level are
consistent and efficient. A repeatable approach is the strong foundation that ensures
that each project is contributing to the value that was anticipated on time and on
budget within certain permissible variances. Training and certification of project
management staff may be a wise investment. A well-respected mid-tier consulting
company, for example, has not learned how to transfer its strategic focus into tactical
projects. As a result it is always in reactionary mode, changing direction and
reshuffling project teams. The organization is still operating in the old strategic
planning mode rather than using project management as a strategic tool.
4) Timeframes and budgets. Executing projects efficiently and effectively across the
board depends on honest and realistic timeframes and budgets, so that projects are
not set up for failure from the start.
5) Requirements analysis. Portfolio managers need skill in gathering accurate
requirements, analyzing them and managing them properly throughout a projects
implementation to ensure a value added outcome that improves an organizations
bottom line. As a project proceeds, someone must keep an eye on value and
scrutinize costs in comparison with benefits to ensure the project remains sound.
Again, training in business analysis for portfolio and project managers may be
necessary.
6) Stay the course. One of the most common mistakes leading to project failure is not
staying the course. Even organizations that get off to the right start by establishing a
strategic portfolio of projects and giving marching orders to management, often toss
the entire strategy out the window as soon as anything goes wrong. They simply
return to a reactive, just-do-it mode. It takes a great deal of business acumen and
persistence to stay the course. Set the vision and strategy, and then leave it up to the
portfolio manager to manage the projects for the best business value.
However, while being reactive can throw off the entire portfolio, the portfolio manager
and executive champion also need to be flexible to adjust the portfolio as project risk
becomes too high, new opportunities arise, change occurs in the marketplace or
when a serious problem arises whose correction
depends on a new project not previously represented in the portfolio. For example,
when two Midwest banks merged about four years ago, the strategic portfolio to
implement the merger consisted of 50 high profile projects. Not only were these
projects competing for resources, they had to be carefully prioritized to satisfy the
needs of stockholders, regulators and customers. Wall Street expected the merger to
produce financial gain, cost reduction and elimination of duplication and would have
downgraded the banks stock had the merger not gone smoothly. The process also
had to be seamless for the sake of the customers of 300 branches. As these projects
evolved and new issues arose, it became necessary to redesign the portfolio and
reprioritize it to keep projects aligned with the tactical and strategic needs of all the
stakeholders. A powerful tool to get started with project portfolio management is a
facilitated planning session. A trained external facilitator meets with key individuals to
facilitate and outline the process. They layout goals, risks and issues on the table,
assemble the portfolio and establish the strategic project management process. It is
best when the facilitator comes from outside the company in order to avoid bias and
politics in leading the team through the process.
C. Role of Project Management Office (PMO)
The Project Management Office in a business or professional enterprise is the
department or group that defines and maintains the standards of process, generally
related to project management, within the organization. The PMO strives to
standardize and introduce economies of repetition in the execution of projects. The
PMO is the source of documentation, guidance and metrics on the practice of project
management and execution.
A good PMO will base project management principles on accepted, industry standard
methodologies .Increasingly influential industry certification programs such as
ISO9000 and the Malcolm Baldrige National Quality Award (MBNQA) as well as
government regulatory requirements such as Sarbanes-Oxley have propelled
organizations to standardize processes. Organizations like L&T need to define,
borrow and collect best practices in process and project management and need to
increase assigning the PMO to exert overall influence and evolution of thought to
continual organizational improvement.
90% of projects do not meet time/cost/quality targets. Only 9% of large, 16% of
medium and 28% of small company projects were completed on time, within budget
and delivered measurable business and stakeholder benefits. [Standish Group
Chaos Report, 1995] There are many reasons for such failures. As per a KPMG
survey of 252 organizations, technology is not the most critical factor. Inadequate
project management implementation constitutes 32% of project failures, lack of
communication constitutes 20% and unfamiliarity with scope and complexity
constitutes 17%. Accordingly 69% of project failures are due to lack and/or improper
implementation of project management methodologies.
Identifying excess project capital budget that can be reapplied to other critical
projects.
Depending on the scope, large, complex projects will require a more rigorous
application of project management processes than small, noncomplex projects. The
Project Manager assesses the project characteristics to determine how to customize
the processes for a specific project and determine which project management
processes will be required. The effort to customize the project is reflected in the
Project Management Plan.
Project Management Processes are overlapping activities that occur at varying levels
of intensity throughout each phase of the project. A process is defined as a set of
activities that must be performed to achieve a goal, in this case the project goal
The detail description of Project Processes are as below:
1. Scope Management
Includes the processes involved in defining and controlling what is or is not included
in the project; required to complete the project successfully. Scope is the way to
describe the boundaries of the project. It defines what the project will deliver and
what it will not deliver. This process ensures that the project has identified the goals
and objectives and those have been documented and that each objective has a well
defined set of indicators to monitor their progress.
2. Schedule Management
This process includes the actions required to ensure the timely completion of the
project. Schedule management is the development of a project schedule that
contains all project activities, the project schedule is a communication tool that
informs project stakeholders the status of the project and gives project team
members information, in the form of graphs and charts, as to when each activity must
begin and end.
3. Budget Management
Budget management processes are required to ensure the project is completed
within the approved budget. This is the area that receives a lot of scrutiny during and
after the project is completed. The projects ability to manage the financial resources
obtained by the organization will be a measure of the organizations probity, not only
in compliance with donors requirements but also a measure of its efficiency. Risks in
this area have the highest impact to the project, the organization and to the
beneficiaries; inadequate budget management can lead to misappropriations of
funds, improper assignment of expenses and losses that the organization may have
to cover using its limited funds.
4. Quality management
Quality management is the process to ensure that the project will satisfy the needs of
the beneficiaries. Quality is defined as a commitment to deliver the project outputs
and meet the expectations of the beneficiaries, which means that quality is ultimately
defined by the beneficiary.
5. Team Management
During the definition of the project activities a list is created that identifies the skills
needed by the project. These range from highly technical to administrative and
support functions. The project team is after all the team responsible for the project
and the project needs to be clear in acquiring the skills it needs.
Team management includes the processes required to make the most effective use
of the people involved in the project. The first step is identifying the roles,
responsibilities and reporting relationships. The second step is getting the people that
will be assigned to the project. These can come from within the organization or hired
through the Human Resource function of the organizational. This is where the project
manager needs to be heavily involved and participate in all interviews with possible
candidates; the success of the project will depend on the quality and commitment of
the team.
6. Stakeholder Management
Stakeholder management is one of the areas that receive the least amount of
thought and planning in development projects, this is due to the limited
understanding and agreement on who are the stakeholders and their role in the
project.
Stakeholders are all the people who have an interest in the project and they are the
most critical element for the success of the project. They include donors,
beneficiaries, local government, partner organizations and anyone who will be
impacted by the project. Each project has a different list of stakeholders, a range that
can include the local press, local organizations, institutions and even watchdog
organizations
Managing stakeholders is not an easy task; the projects objective is to improve the
way the relationships between the project and the stakeholders are managed, this is
achieved by taking a proactive approach that builds trust.
7. Information Management
Includes the processes required to ensure timely and appropriate generation,
collection, dissemination, storage, and ultimate disposition of project information.
80% of a project managers time is spent communicating via reports, email,
telephone, meetings and presentations. The first step of the plan is to define the
informations needs of the stakeholders, determine when they need it, how the
information will be distributed and how to evaluate the relevance and effectiveness of
the information.
8. Risk Management
Risk Management includes the processes concerned with identifying, analyzing, and
responding to project risk. Risk in projects is defined as something that may happen
and if it does, will have an adverse impact on the project. There are four stages to
risk management planning, they are: risk identification, risk analysis and
quantification, risk response, risk monitoring and control.
Risk identification deals with finding all possible risks that may impact the project, it
involves identifying potential risks and documenting their characteristics. The project
team members identify the potential risks using their own knowledge of the project,
its environment, similar projects done in the past. Risk identification results in a
deliverable, the project risk list
9. Contract Management
Contract Management includes the processes required to acquire goods and
services needed by the project from third parties, for most projects the procurement
process is usually managed by a support or administrative function of the
organizations. The role of the project is to supply, as detailed as possible, all the
procurement requirements including all the technical specifications, quantity and the
date when they will be needed; this is created in a project procurement plan.
Contract management consists of four steps; develop the resource plan, implement
the plan, review and update the plan. The resource plan identifies the what, when
and how many of the goods and services needed within the budgeted limits. It also
identifies potential sources and the strategies that the project will use to procure; this
is done in conjunction with the organizations procurement function
Work Processes identified for the Project Management Processes to be
executed are:
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E. Conclusion
Project Management has experienced an extraordinary growth in the last decade.
The growth of the profession can be attributed to globalization and the
unprecedented rate of change making transition complex and non-linear.
Modern project management is emerging as a separate discipline and is crucial
today for enterprises to maintain a competitive edge specially in EPC business which
is very competitive.
F. References