PROJECT MANAGEMENT

"Project management is the methodology employed to accomplish a specified

objective or task in a cost effective manner."

We are interest in studying management from this perspective because:

1. Technical people are likely to be hired to work on projects.
2. Their management career is likely to commence at the project level starting as a
project engineer/supervisor going either into functional or project management.
What are the characteristics of a project?
Unique on time activity
Specific beginning and end
It can be defined into required work
Requires resources which usually come from within the organization
Will have a budget
Specifically organized to accomplish an objective and then disbanded.
Project

Participants and Interested Parties

Customer/Funder

Management of Organization doing the work

Project Manager

Project Participants

Subcontractors

Each has a difficult perspective interest and priorities

How should you define authority and responsibilities to
minimize conflicts, motivate cooperation and enhance
communication between the various participants.
Project Management Goal
Generally the specified objective is to complete projects that performs in
accordance with specifications within budget costs and scheduled time. The
contract serves as a frame of reference.I like another specification of the objective
which is to have a satisfied customer (i.e. Project conceivably could be over cost
time, be less than anticipated, but customer is nevertheless satisfied with the result
and visa versa).

Product vs. Capital Project Management

Similarities

Applicable Software and Methodology

Communication and Coordination problems
Management Structure
Risk Management
Systems Thinking
Top Management Support
Differences

Project Life Cycle

Staffing, Organizational Fit
Location
Implementation
Experience Required

Modern Form of Project Management

-

Fast Track

Concurrent Engineering

Simultaneous Engineering

Purpose Speed
Better Utilization of Resources

Features
-

Activities Done in Parallel instead of Sequentially

Require Close Coordination between the Participants

Negatives

a. Scope Creep
b. Costly Rework Possible
c. Overlap Management Required

d. Riskier
In reality, satisfying is practiced. Specifically the administrative goal is to produce
the project within
The time planned
The cost budgeted

And of course meet performance expectations.

Obviously the larger the project the more complex it will be, hence more project
management effort required.
Usually some thinking about how the project will be managed is initiated at bidding
time since the contemplated.

Project manager and key personnel have been already identified.

By having the project manager involved early he/she will be familiar with the
contract
Customer requirements
Key to the success is a good project manager.

Prime responsibilities of the project manager:

Produce the end item with the available resources and within the constraints of
time, cost and performance/technology

Meet contractual profit objectives

Make all required decisions including those involving alternative choices or

termination of activities

Act as the customer (external) and upper-level management representative

Negotiate with all functional disciplines for accomplishment of the necessary

work packages, within time, cost and performance/technology Resolve conflicts
that surface to best degree possible.

Project managers pay is quite good $250,000 + for $500 million projects.

How do you get to be one?

Necessary Conditions for Employees to do Their Best..
Must know what they are supposed to do, preferably in terms of an
end product
Must have a cleat understanding of what their authority is, and of its
limits
Must know what their relationship with other people is
Should know what constitutes a job well done in terms of specific
results
Should know when and what they are doing exceptionally well

Must be shown concrete evidence that there will be just rewards for
work well done
Should know where and when they are falling short
Should be aware of what can and should be done to correct
unsatisfactory results
Must feel that their supervisor has an interest in him as an individual
Likewise must feel that their supervisor believes in him and is anxious
for him to succeed and progress.

Project Manager Key Required Attributes

1. Human relation skills

2. Political skills to sell ideas
3. Communication skills
4. Decision making ability
5. Technical competence
6. Detailed Knowledge of Project
7. Business skills
Legal, financial, marketing, cash flow, cost estimating
8. Administrative know how
a. organized and disciplined
b. forceful ability to say NO
c. react fast
d. balanced outlook
9. Initiative, flexibility and adaptiveness
10. Leadership
11. Systems Thinking
12. Maintain Top Management Support
Project Manager Background

Requirements Depends On

Level of Technical Expertise Required

Available Expertise

Experience Required

Project Importance/Risks Involved

Human Relations/Political Skills Required

In a lot of cases the type of degree not important to be a successful project

manager.
Difference between Project Manager and Project Engineer
-

Technical (PE)

Managerial (PM)

Difference between Functional and Project Managers

Functional Has who, how, where, work responsibility
Project Has where, when, why resources available and
project business responsibility
The overall objective is to minimize administrative (project management) cost
(since it is a none value added cost)
As in all management the project management process involves:
planning

organizing
staffing
directing
controlling
1. The problem is how to organize the project so as to fit into a formal existing
organizational structure.
2. How to get resources which often have to be taken those available in the
organization.
The extent of the organizational task depends on the size, duration, complexity
of the job.
Can range from Euro Tunnel
Two countries, languages, unknowns railroads, construction, technical
problems
To simple modernization of a packaging line where you have a project
engineer who:
Selects the machine
Supervises installation
Here the project is fit into an existing organization while with the Euro Tunnel.
One has to be set up from scratch.
So lets see how projects are typically organized.
1. Simple narrow based requiring one discipline are set up in the context of
the department having the expertise and assigned to a person or group of
persons
i.e. Marketing study
Productivity improvements

Telecommunication expansion.

2.Quality improvement new product development involves interdisciplinary

effort here people are lent to a group often described as a task force headed up
by project task force leader.
3. If required task takes time and requires substantial resources has to be
managed separately. The project is set up, headed up by an individual
responsible for accomplishment

The Project Manager

Can have own staff and line or use company staff, i.e. payroll, personnel,
miscellaneous.These project organizations methods are described in the literature
in the following categories:
1. Project done within a functional department.
Likely in the function with the technical expertise. Allows flexibility in
use and coverage of many. If people leave, project continuity is not
threatened. Also technical people motivated since, they are directly tied
into project success.
Negative likely emphasis more on technical than commercial aspects
and/or achieving results. Possible if project is small not of interest will
be ignored (i.e. low motivation).
2. Task force-Interdisciplinary team set up to accomplish a specific purpose. Does
not involve setting up a separate project organization.
3. Separate project organization
Since goal is achievement of project, most focused on that. Single
minded responsibility and authority. Communication less cumbersome
than functional. Decisions are likely to be made faster. Easier to
organize, reorganize as conditions change.

Negative Duplication of staff, may be hard to find competent people for

non-permanent positions. Moral concerns, procrastination if no
assurance that the project member will reassigned to other projects.
Fosters specialization, which may make such reassignment difficult.
Matrix Tries to combine the advantages of both these and avoid
disadvantages.
Here project is self-contained with defined accountability (project
manager). Has access to technical specialists. Customer focus can be
structured. Avoids excessive duplication and theoretically is flexible.
Less anxiety about job security since part of functional unit
Major negative potential authority conflict, between functional and
project manager, dual reporting also causes problems, competition
between project managers for same pool of resources.
Large firms are likely to have projects following all of these structures since many
different types and sizes of projects are being done.
Deciding on the Appropriate
Organizational Structure
New Product Development Project- (for example)
Definition of Primary Task

Responsibility for Doing

1. Define Product

Marketing/Engineer

2. Write Specifications

Marketing/Engineer

3. Design Hardware & Software

R&D Engineer
Computer Software Engineer

4. Engineering Drawing and

Engineering/Mfg.
Specifications for Production
5. Set up Pilot Line to Produce Small Engineering/Mfg
Quantity
6. Test and Make Appropriate
Engineer, QA Software
Changes
7. Set up Production Line

Purchasing, Mfg. Engrg.

Maintenance

8. Write Necessary Repair and User

Manuals
9. Integrate with Service Dept.,
Spare Part

Engrg, QA Technical Writer

10 Develop and Implement

Marketing Program

Marketing

Service/Marketing

Basically What is Involved

1. Design the appropriate product.
2. Pilot production and testing

3. Production and support structure.

4.Service system
5. Marketing program development and implementation

Likely Members of Project Team

If large, may be important to warrant specific positions of:

Project Manager

Could be assigned full-time as part

of Department Head job.

Project Engineer

Technical person responsible for

product design specification, QA
changes, documentation

Mfg. Engineer

Set up production process, tooling,

scheduling, etc. to produce product

Marketing

Represents marketing requirements,

price, features

Quality Engr.

Quality specifications, testing

Possible

Design and development

Software

Installation, testing

Field Manager

Training at customer

Contract
Admin./Controller

Class Question:

Paperwork, Administration, Finance

What type (example) of projects would you recommend be organized as a:

1. Project which should be done in a functional setting?
2. Set up as a separate project?
3. Matrix?

A typical engineering project (assume $40,000,000 size)

Estimated 3 years duration
Involving: Multiple subcontractors and vendors
(Could be remediation, construction, renovation, telecommunications, etc.)
To Start
Project Manager must:
1. Set up project office
2. Develop an organization chart
3. Recruit project team
Staff Activities Done by Project Office
Contract Administration
Subcontractor Management
Planning and scheduling
Cost Engineering- Project Cost Control
Quality Assurance
Project Controller and Accounting
Configuration Management

Documentation
Change Control
Personnel
Purchasing- Procurement

Functional Activities Done by Project Personnel

Design Engineering
Project Engineering
Field Construction/ Manufacturing
Testing
Start Up

The most usual organization format for a project of this type is Matrix
Management. As noted previously it is:
A temporary structure that integrates peoples effort from various functions toward
project goal- facilitates interdisciplinary effort.
Borrows functional people who after project is complete get reassigned to another
one.
Can be hard to administer
1. It can produce conflict between functional and project managers. (power
and control)
2. Two or more bosses are confusing.
3. Duplication of administrative people.

It can work well with good management and good will.

The alternative would be to hire and staff for the project. Once done everyone is
then let go. In this case any experience gained would be lost to the firm.