PROJECT MANAGEMENT

2008
DR GRAZYNA LESNIAK-
LEBKOWSKA
 PROJECT MANAGEMENT ORIGINS

 ANCIENT PROJECTS
FIRST PROFESSIONAL
ATTITUDE TO PM
ADDING COMPUTER SUPPORT
TO PM
 CONTEMPORARY PROJECT
MANAGEMENT

 CHANGED BUSINESS ENVIRONMENT

 UNCERTAINTY
 TURBULENCE
 INTERCONNECTIVITY
 COMPLEXITY
 CONTINGENCY
 RISKS
 COMPETITIVENESS
 CONTEMPORARY PROJECT
MANAGEMENT

 CHANGING ORGANIZATIONS
 VALUE BUILDING GROWTH
 SEARCH FOR NEW COMPETITIVE ADVANTAGES
 AMBITIOUS GOALS
 NEW TARGETS
 COMPLEXITY OF IMPLEMENTATION
 SEARCH FOR PRODUCTIVE RESOURCES
 WHY PROJECTS?

 MANAGERS’ NIGHTMARE
 THE END OF CENTRALIZED MANAGEMENT
 NEEDED:
 ACCOUNTABILITY
 FLEXIBILITY
 INNOVATION AND CREATIVITY
 KNOWLEDGE BASED BEHAVIOR
 RISKS MANAGEMENT
 EVER LASTING ENTHUSIASM
 LEADERSHIP
 BUSINESS OPERATIONS

 INERTIA-BASED DEVELOPMENT IN TURBULENT

ENVIRONMENT- RISKY
 CONTINUOUS PROCESSES AND REPETITIVE GOALS,
TECHNOLOGIES, RESOURCES, METHODS AND
ASSUMPTIONS - DISFUNCTIONAL IN FRAGMENTED
MARKETS
 CONSTRAINED IMPLEMENTATION - TIME AND MONEY IS
AN ISSUE
 COMPLEX VENTURES - HEAVY TO MANAGE IN
TRADITIONAL SETTINGS
 BUSINESS SUSTAINABLE DEVELOPMENT

 STRATEGIC RESPONSES TO NEW CHALLENGES:

COMPETITIVE, SOCIAL, ENVIRONMENTAL
 STRATEGIC CHOICES AND VALUE PROPOSITION FOR
MAJOR STAKEHOLDERS
 SUSTAINING ABILITY TO FINANCE ONGOING BUSINESS
AND NEW VENTURES
 MASTERING ABILITY TO INTRODUCE CHANGES
 CONSTRAINED AVAILABILITY OF NONRENEWABLE
RESOURCES, GROWING SOCIAL PRESSURES
 NATURAL RESOURCES SUBSTITUTION BY KNOWLEDGE
BASED SOLUTIONS
 ACCOUNTABILITY: NEED-PROMISE-DESIGN-FLEXIBLE
RELOCATION-RESPONSIBLE IMPLEMENTATION
 PROJECTS AS VEHICLES FOR SUCCESFUL
COMPETITION

 COST AWARENESS
 FOCUS ON VALUE CHAINS AND SITUATIONAL
CONTEXT
 CUSTOMISED SOLUTIONS THROUGH
DIFFERENTIATION (QUALITY, TIME, PLACE, PRICE,
SERVICES) - UNIQUE VALUE FOR MONEY
 DEFINING NICHES AND SETTING FLEXIBLE
MANUFACTURING SYSTEMS
 UNIQUE CAPABILITIES IN EFFICIENT USE OF ALL
TYPES OF RESOURCES
 PROJECTS AS INSTRUMENTS
OF STRATEGY IMPLEMENTATION

COMPANY GROWTH LAGGING BEHIND THE MARKET

RECOMMENDED STRATEGY

ENLARGE THE SCOPE

INVEST IN NEW ACTIVITIES
OF PRESENT ACTIVITY

PRODUCTS PROCESSES PRODUCTS PROCESSES

TYPES OF PROJECTS
• NEW INVESTMENTS IN PRODUCTION AND DISTRIBUTION CAPACITY INCREASE
• INCREASED EMPLOYMENT (EG. SALESFORCE)
• BROADER MARKET SCOPE, NEW SEGMENTS, NEW CUSTOMERS
• NEW IT SYSTEM, MORE EFFICIENT TECHNOLOGY
• MERGERS AND ACQUISITIONS
 PROJECTS AS INSTRUMENTS
OF STRATEGY IMPLEMENTATION

MARKET SLOWS DOWN, COMPANY CAPACITY EXCESSIVE

RECOMMENDED STRATEGY

WITHDRAW DOWNSIZE

TYPES OF PROJECTS
•ABANDONING LOW VALUE ADDED PRODUCTS, TECHNOLOGIES, MARKETS, CUSTOMERS GROUPS,CONTRACTS
•SALE OF NONEFFICIENTLY USED ASSETS, WHOLE COMPANY SALE
•FOCUSING ON SURVIVAL, RELOCATING RESOURCES TO BEST APPLICATIONS
•REDUCING THE SCOPE, FIREING PEOPLE,
•OUTSOURCING NON- CORE ACTIVITIES
 PROJECTS AS INSTRUMENTS
OF STRATEGY IMPLEMENTATION- LACK OF FIT

RECOMMENDED
ACTIONS
Restructuring
Innovations Withdrawal

strategy structure
processes resources
relationships

TYPES OF PROJECTS
•Designing new business model, new development strategy concept, new value proposition
•Reorganization, new contractual and capital links, outsourcing, alianses
•New business processes map, reengineering (BPMS)
 PROJECTS IN THE CONTEXT OF STRATEGY

Strategic needs

Expected benefits from new Benefits from current Benefits from regular
projects projects operations

Evaluate project
Select criteria/priorities proposals and select
for proposed projects the best ones for
evaluation implementation

Include approved project

proposals to project portfolio
Portfolio of projects and
programs

BENEFITS FOR ORGANIZATION

SOURCE: R.Buttrick „Project Workout”, FT/Prentice Hall, 2000

 PROJECTS AS INSTRUMENTS OF STRATEGY
IMPLEMENTATION – STRATEGIC FIT

FOCUS ON OPERATIONS

Maintain strategic position, Prepare new projects,

business plans, train people,
consolidate resources, monitor environment

strengthen competitive advantage

TYPES OF PROJECTS
• Costs rationalization, better process management (faster, simpler), improved decision- making,
training and developing people, analysis of opportunities and threats, identifying new problems,
bottlenecks
•Business plans for new projects
 PROJECT EXTERNAL ENVIRONMENT
MARKET CLIENTS
TRENDS

PROJECT TEAM

INTEGRITY CUSTOMER FOCUS

new standards of CRM
Solutions not products COMPLEXITY
OF PROJECTS

COMPETI-
TIVENESS

COMPETITION

Harvey Maylor, „Project Management”, Financial Times, Prentice Hall, 2 wyd., 1999
 Project complexity dimensions

 RESOURCES: TANGIBLE, INTANGIBLE, HUMAN

(DIVERSITY AND SPECIFIC FEATURES OF EACH
RESOURCE)
 TECHNOLOGY AND KNOW HOW: PROFESSIONAL
KNOWLEDGE AND SKILLS, TECHNICAL
FACILITIES, INSTRUMENTS, STANDARDS
 ORGANIZATION: SCOPE, BUDGET, TIME SPAN,
METHODS

PROJECT COMPLEXITY = RC x TC x
OC
 PROJECT DEFINITION

PROJECT IS A NONREPETITIVE TYPE OF ACTIVITY AIMED AT ATTAINING SPECIFIC

GOALS IN THE SITUATION OF CONSTRAINTS, ESPECIALLY THE TIME AND
RESOURCES. ITS RESULTS ARE MEASURABLE AND ALWAYS BRING SOME
INNOVATIONS INTO ORGANIZATION (H.Maylor, 1999)
PROJECTS ARE THE INSTRUMENTS OF STRATEGIC MANAGEMENT AND IMMEDIATELY
BECOME CORE COMPETENCES OF THE MOST DYNAMIC ORGANIZATIONS. SINCE
APX 50% OF ACTIVITY IS RUN IN PPROJECTS THEY CAN’T STAY THE COMPETENCE OF
ENGINEERS AND SPECIALISTS, THEY SHOULD BECOME THE METHOD USEFUL TO ALL COMPANY
STAFF MEMBERS (R. Buttrick, 2000)
PROJEKT IS A SEQUENCE OF ACTIVITIES HAVING ITS START AND END PRECISLY
DEFINED, AS WELL AS RESOURCES AND EXPECTED RESULTS. PROJECT IS
ISOLATED FROM ROUTINE WORK, CAN BE RUN PARALELLY OR WITH FULL
DELEGATION OF TEAM MEMBERS FROM THEIR REGULAR DUTIES. ACHIEVED
RESULTS COULD RENOVATE THE COMPANY PERFORMANCE (GLŁ)
PROJECT IS A COMBINATION OF SEQUENTIAL AND SITUATIONAL ACTIVITIES, BASED
ON MODELLING OF 4 ELEMENTS: COMMON PROJECT LANGUAGE, COOPERATION
OF THE PROJECT TEAM MEMBERS, PROJECT CYCLE, METHODS AND TECHNIQUES
OF MANAGING THESE ACTIVITIES (K.Forsberg,H.Mooz, ,H.Cotterman”VISUALIZING
Project Management, WILEY,2000)
 PROJECT MANAGEMENT BODY OF
KNOWLEDGE (PMI)

1. Project integration management

2. Project scope management
3. Project time management
4. Project costs management
5. Project quality management
6. Project human resources management
7. Project communication management
8. Project risks management
9. Project procurement management

Source: PMI, 130 South State Road, Upper Darby, PA 19082 USA
 PROJECT MANAGEMENT VS LINE MANAGEMENT

LINE MANAGEMENT PROJECT MANAGEMENT

 Status quo control and  Change management
maintainance  Fuzzy split of power
 Authority defined by the  Changing tasks
structure
 Interfunctional
 Functional competences responsibility
 Relative stability of  Temporary project structure
structure model and
specialization  Innovative approach in
 problem solving
Focus on optimizing the
standard functions  Success can be achieved
 only through ongoing
Success consisting of collaboration of team
successes of separate members
actions and coordination
schemes  Uncertainty as a rule
 Limited complexity and
change
 EIGHT PARADOXES OF PROJECT MANAGEMENT
According to Tom Peters, good project manager has to balance features from the left column
with features from the right one

FULL EGO
SELF CONFIDENT IN HIS OWN SKILLS, LACK OF EGO
1 EASILY PASSING ORDERS AND LEADER SERVING OTHERS
REQUIRING EXECUTION

DELEGATOR
AUTOCRAT
2 CAN IMPOSE HIS DECISIONS
ENCOURAGES OTHERS TO SHOW
INITIATIVE AND TAKE RESPONSIBILITY

LEADER MANAGER
3 HAS VISION, INSPIRES PEOPLE, MICRO MANAGEMENT OF PROJECT
CRATES CONDITIONS DETAILS

OBSESSED FOR PRECISION

ACCEPTS AMBIGUITY
SOME TASKS REQUIRE PRECISE
4 SEARCH FOR PRECISION HAMPERS
DEFINITION- GOOD MANAGERS
PROGRESS
KNOWS WHICH ONES

SOURCE: P. Hobbs, Project Management, Amacom, Portugal

2000
 EIGHT PARADOXES OF PROJECT
MANAGEMENT(c’d.)
EFFECIIVE IN FACE TO FACE
EFFECTIVE IN WRITTEN
COMMUNICATION
5 Convincing in direct cntacts, builds
COMMUNICATION
EVERYTHING HAS A PAPER COVERAGE
bridges with people

FASCINATED BY COMPLEXITY PREFERS SIMPLICITY

BELIEVES THAT DIRECT ROAD IS NOT BELIEVES THAT SIMPLE RULES ARE
6 ALWAYS THE BEST ONE EASY TO COMPLY AND SIMPLE
SOLUTIONS ARE OFTEN EFFECTIVE

ALWAYS HAS AN OVERALL PICTURE IN

MIND
7 CAN TAKE INTO CONSIDERATION ALL
SITUATIONAL ASPECTS OF PROJECT
ENVIRONMENT
CONCENTRATES ON DETAILS
PAYS ATTENTION TO DETAILS AND
BELIEVES THAT THE SUCCESS AND
FAILURE DEPEND FROM DETAILS

PATIENT
IMPATIENT
SOMETIMES LISTENING IS MORE
FREQUENTLY BREAKS THE
8 STEREOTYPES AND OVERCOMES
IMPORTANT THAN SPEAKING.
EXCESSIVE CONTROL SLOWS DOWN
RESISTANCE TO ATTAIN THE GOAL
THE PROGRESS

SOURCE: P. Hobbs, Project Management, Amacom, Portugal

2000
 PROJECT CYCLE
SEQUENCE OF INTEGRATED ACTIVITIES PERFORMED IN
SUBSEQUENT STAGES LEADING TO FINAL SUCCESS

 CONSISTS OF SUBSEQUENT STAGES

 HAS THREE PERSPECTIVES:
TECHNICAL, FINANCIAL AND
BUSINESS
 AS A RULE IS DIVIDED INTO STAGES,
BETWEEN THEM THE GATES ARE SET
UP. THEY OPEN WHEN THE PROJECT
STATUS AT THE GATE IS
SATISFACTORY.
 PROJECT STATUS EVALUATES
COMPLIANCE WITH: TIME SCHEDULE,
TECHNICAL STANDARDS, PLANNED
BUDGET, PROPER RELATIONSHIPS
WITH CUSTOMERS AND SUPPLIERS IS
MAINTAINED, CURRENT PROBLEMS
SOLVED, RISKS UNDER CONTROL,
AVAILABLE RESOURCES FOR
CONTINUATION
 PROJECT MANAGEMENT STAGES

INITIATION PLANNING EXECUTION CONTROL CLOSURE

WBS Inauguration and leadership Achieved Transfer of the
Initiative Time scheme Team building and intermediary and project results
Priorities Resources development final results to sponsor or
compared to plan client
Objectives planning and Managment of the project
budget scheme team and project cycle Project status at Project closure
Project scope
gates Dissolving of
Preliminary Quality, Project operations and tasks
Communication Management of Analysis of the team
analysis of
deviations Integration of
feasibilityi Contracts communication and decision-
making Corrective actions project results
Risks and Risks
constraints Introducing changes Lessons learned with the
Reserves organization
Proposed team Risk management and
Project team
composition structure learning
Integration and coordination
of project activities
Managing contracts...
 MOST FREQUENT PROBLEMS WITH MODELLING
THE PROJECT LIFE CYCLE

 LACK OF UNIVERSAL APPROACH TO MANAGEMENT OF

PROJECT TECHNICAL (SEQUENTIAL MODEL, SPIRAL
MODEL, CASCADE MODEL, V MODEL)
 THE MAJORITY OF MODELS DO NOT DISTINGUISH
SEQUENTIAL FROM SITUATIONAL ASPECTS, WHAT
CAUSES THE INSUFFICIENT COORDINATION AMONG
ACTIVITIES OR THE LACK OF ADEQUATELY FAST
RESPONSE TO THREATS AND OPPORTUNITIES. THEY
ARE ESTIMATED PERIODICALLY AND NOT
CONTINUOUSLY
 Example: the spiral model of IT project cycle

1.PROJECT DEFINITION (CUSTOMER

9. WERYFIKACJA
NEEDS, REQUIREMENTS, MISSION)
I POPRAWKI 2.RISKS ANALYSIS

8. TECHNICAL
CONTROL

3. SYSTEM
ANALYSIS
7.
CONFIGURATION
MANAGEMENT

4. CONCEPT

6.PLANNING OF
IMPLEMENTATION AND 5. REQUIREMENTS
SYSTEM INTEGRATION DEFINITION

MISTAKES: 2.SITUATIONAL NOT SEQUENTIAL; 4. SHOULD BE AFTER 1.; 6.PLANNING SHOULD BE AT THE
BEGINNING WHILE INTEGRATION AT THE END; 6 AND 7 ARE CONTINUOUS ACTIVITIES, NOT SEQUENTIALI
 CASCADE MODEL OF IT PROJECT CYCLE
ROYCE 1970
SYSTEM
REQUIREMENTS

SOFTWARE
REQUIREMENTS

DRAFT PROJECT

DETAILED PROJECT

UNUSEFUL FOR COMPLEX PROJECTS

OF HIGH RISK ENCODING

SUPPORTS UNREALISTIC TIME AND

COST ESTIMATIONS
CTREATES IMPRESSION OF AN EASY TESTING
SEQUENCE,
NEEDED COORDINATION OF OPERATIONS AND
NONSEQUENTIONAL STAGES MAINTAINANCE
(UNDERSTANDING, TECHNICAL
FEASIBILITY)
 INITIATION PHASE

 Initiative
 Needs and Priorities
 Project objectives
 Project scope
 Preliminary feasibility
 Risks and constraints
 Proposed team
 Project placement within organizational structure
 PROJECT IDEAS AND INITIATIVES

 EVERY IDEA TO IMPROVE

ORGANIZATIONAL PERFORMANCE AND
BETTER USE OF RESOURCES
 EVERY IDEA TO IMPROVE COMPETITIVE
POSITIONING AT THE MARKETPLACE
 EVERY IDEA OF NEW PRODUCT, PROCESS,
VENTURE, RESPONSE TO EXTERNAL
CHALLENGES
 TO PUT THEM INTO LIFE A PROJECT
INITIATOR HAS TO CONVINCE
SPONSORS/CUSTOMERS/USERS
 PRIORITIES SETTING

 PRODUCTS
 TARGET MARKETS
 CUSTOMERS
 COMPETITIVE POSITION
 COMPETITIVE ADVANTAGE AND
UNIQUENESS
 SCALE AND SCOPE OF ACTIVITY
 PARTNERS
 EFFECTIVENESS
 SELECTION OF PROJECTS TO BE
IMPLEMENTED

1. Identification of realized and

recommended new projects
2. Attributing to each project:
 Weight
 Time of implementation
 Budget
 Feasibility
 Risk level
1. Selection of projects:
 important
 realistic
 DEFINING PROJECT GOALS AND
OBJECTIVES

 SPECIFIC
MEASURABLE
AMBITIOUS
REALISTIC
TIMELY
 PRINCIPLES OF DEFINING THE PROJECT SCOPE:
precIsion,, completness, responding to customer needs and
company capabilities
COMPONENTS
 SCALE OF THE PROJECT
 COMPLEXITY
 TIME OF EXECUTION
 ENGAGED RESOURCES
 QUALITY LEVEL
 EXPECTATIONS AND NEEDS OF
STAKEHOLDERS (IDENTIFIED AND
NOT IDENTIFIED)
 AGREED VERSION IN WRITTEN AS
THE STARTING POINT FOR
PLANNING (PIP) GLŁ
ORGANIZATIONAL CAPABILITIES
IN PROJECT MANAGEMENT

 REFER TO: PROCESSES, BEST PRACTICES AND

ACTIVITIES BUILDING VALUE OF AN ORGANIZATION
 LEADERS SHOULD BE CAPABLE OF TRANSFORMING
VISIONS INTO DECISIONS, OBJECTIVES INTO
STRUCTURED PROCESES
 ORGANIZATIONAL CAPABILITIES ARE THE BASE OF
CORPORATE IDENTITY AND ITS DISTINGUISHING
FEATURE

SOURCE: Sunny and Kim Baker „The Complete Idiot’s Guide to Project
Management”, Alpha Books, 1998
PLANNING PHASE
 MODEL ICOMs OF PLANNING PROCESS

INFLUENCING FACTORS AND CONTROLS

standards/procedures limitations

PROCES PLANOWANIA
INPUTS OUTPUTS
Informations Plan

tools/techniques project manager and teamł

MECHANISMS
PLANNING PHASE THREE MAJOR
COMPONENTS

 WORK BREAKDOWN STRUCTURE

 TIME SCHEDULE
 FINANCIALS + BUDGET
 PLANNING TASKS

IDENTIFY ACTIVITIES

IDENTIFY CAUSE-EFFECT RELATIONSHIPS

ESTIMATE TIME AND RESOURCES

PREPARE PLAN IN PRESENTATION FORM

 W orkB reakdownS tructure
decomposition of project goal into objectives,
milestones and tasks, setting up the hierarchy

Install new computer system

Define needs Select suppliers Start up of new system

Set up short list

Map Redesign Instal

Define
Organizational Processes Test Use
Business Train Hardware
processess Before system system
Case users And
automation software

Compare their offers and

Identify potential suppliers
Select the best one
 PROCESS MAPPING
Dimancescu, 1992
1. PROJECT TEAM MEMBERS

2. PROJECT
4. STANDARDS FOR
STAGES
WITH
EACH TASK
IN-OUT
CRITERIA
3. TASKS
B
IMPLEMENTATION
STREAM

D
 KEY COMPONENTS OF PLANNING

Cause-effect
Cause-effect Scheduling
Scheduling
Scope
Scope vrelationships
vrelationships
planning
planning
Defining
Defining
activities
activities
Estimating
Estimating
time
time duration
duration Budgeting
Budgeting
of
of activities
activities

Scope
Scope Resources
Resources
definition
definition planning
planning
Estymacing
Estymacing
costs
costs of
of PIP
PIP
each
each activity
activity

supportive processes of planning

 PLANNING SUPPORTIVE PROCESSES

RESPONSES
QUALITY IDENTIFYING MEASURING
TO RISK
PLANNING RISKS RISKS
EXPOSURE

CONTRACTS
PROCUREMENT
PLANNING
PLANNING
INCL. ADVISORY

COMMUNICATION PLANNING OF
PLANNING PROJECT
PROJECT
STAFFING
ORGANIZATION
EXAMPLE: SEQUENTIAL VS CONCURRENT
PLANNING OF NEW PRODUCTS

marketing
project
preparing
production
production

marketing

project
Preparing
production
production Saved time

time
 Concurrent planning model: advantages
and disadvantages

 SHORTER TIME TO  HIGHER OVERHEADS

MARKET WITH NEW (ADDITIONAL
PRODUCTS ADMINISTRATION)
 LOWER  REPLACEMENTS COSTS
ENGINEERING COSTS AND ADDITIONAL
(LESS CORRECTIONS) FURNISHING COSTS
 BETTER ADJUSTMENT  CULTURAL RESISTANCE
+
TO MARKET NEEDS  METHOD NOT FITTING
TO TYPE OF PROJECT

+ -
 PLANNING THE TIME SEQUENCE AND STRUCTURE OF
PROJECTS

 PDM (precedence diagramming

method)
(A-O-N)

 ADM (arrow diagramming method)

(A-O-A)

 CDM (conditional diagramming

method)
 A-0-N
EST EFT
NAME/ DURATION
SYMBOL TIME

LST LFT

Finish –to- start Start-to-start

Finish-to-finish Start-to-finish
 Activity on nodes network example
8 12 12 16 17 21
G5
D4 J4
12 17
0 5
7 11 11 15
S 5 17 21
A5 11 H6 F
T E6 12 18
I
0 5 15 I 6
A 5 11 11
N
5 8 8 12
R I
C3 15 21
T 0 4 F4
S
8 11 h
B4 11 15

7 11
 ACTIVITY ON ARROWS NETWORK EXAMPLE
TASK PRECEDENT
S
ACTIVITY a
t
a -
a
b - r b
c a t

d b FIRST STAGE

e b
f c, d
g e
c
f
a
start FINISH
d

b
e g
 COMPARISON

A-O-A A-O-N

EASIER TO ILLUSTRATE
SIMPLER TO PLAN AND
COMPLEX
MODIFY RELATIONSHIPS AS
EASIER TO START –TO-FINISH
UNDERSTAND BY NON NO DUMMY ACTIVITIES
EXPERTS
ALL INFO ON NODES,
MILESTONES BETTER EASIER NUMBERING OF
VISUALIZED ACTIVITIES
CLEARER ILLUSTRATION
OF MULTILATERAL
RELATIONSHIPS
 DETERMINISTIC AND PROBABILISTIC METHODS

CPM PERT
 TIME DETERMINED IN ONE  TIME PLANNED IN THREE
VERSION VERSIONS: OPTIMISTIC,
PESIMISTIC AND MOST
 CRITICAL PATH LIKELY
DISTINGUISHED  EXPECTED TIME=
(OPT+4MOST
LIKELY+PES):6
 ANALYSIS OF TIME
DURATION VARIATION
WARIANCJI =
[(P-O):6]2
 CLOSER TIME
ESTIMATION BASED ON
EXPERIENCE CURVE
 CDM

EXAMPLES:
 GERT (graphical evaluation and review technique)
 System Dynamics

APPLICATIONS:
 ModelLING OF NONSEQUENTIAL ACTIVITIES AND
LOOPS (E.G. REPETITIVE TESTS UNTIL POSITIVE
RESULTS OBTAINED),

 CONDITIONAL ACTIVITIES (EG. MODEL

VERIFICATION IF CONTROL REVEALS DEFECTS)
 COSTS ESTIMATES

 INITIAL based on rough figures,

uncertain, not precise nor
detailed, used for first
orientation before feasibility
study (25%)
 GENERAL based on major
contingencies and quantitative
data, used for presenting
proposals (15%)
 DETAILED based n precise project
and contingencies analysis, used
for offers (10%)
 FINAL used to obtain additional
funds necessary to complete
project (5%)
 Costs components
 BASE ESTIMATE
TOTAL COST OF ALL ACTIVITIES PLANNED
Salaries+ purchases of goods and
services

 SCOPE RESERVE
Reserve for not undentified but likely
scope changes

 CONTINGENCY RESERVE FOR NOT

IDENTIFIED RISKS
Released when the risks appears. Not
used for compensation of wrong
forecasts and plans
 PROJECT BUDGETING METHODS

COST PLUS LUMP SUM

BOTTOM-UP TOP-DOWN

TOTAL COSTS OF TOTAL COMPETITIVE

PROJECT COST OF PROJECT
PLANNED -DIRECT COSTS
PROFITS
-OVERHEADS

COMPANY
OVERHEADS -PROFIT

PROJECT
OVERHEADS
DIRECT COSTS:
LABOUR+MATERIALS
AND SERVICES
PURCHASED
 CHANGES IN COST STRUCTURE
 INPUTS : THE LONGER PROJECT DURATION THE MORE
CHANGES IN INPUTS
 CONTINGENCIES: THE LONGER THE PROJECT DURATION THE
MORE CHANGES AFFECTING PROJECT COMPLETION (BANK
RATES OF CREDITS, CASH AVAILABILITY, TRUST OF
INVESTORS
 MECHANISMS: CONINUOUS CHANGE OF STAFF AND
TECHNOLOGY
 FINANCIAL PLANNING METHODS AS BASE FOR
AUTHORIZING FUNDS FOR PROJECT RUN
 VALUATION OF INVESTMENT PROJECTS (CF)
 PREFERRED (DCF)
 INTERNAL PROJECTS: LEASR COST METHOD, NPV
 EXTERNAL PROJECTS (IRR)
 SCENARIO PLANNING
 SENSITIVITY ANALYSIS
 COST-BENEFIT ANALYSIS (WHEN ALSO NON FINANCIAL GOALS)
IMPORTANT ISSUES RELATED TO
PROJECT TEAM CONSTRUCTION
COMMON LANGUAGE

 EVERY PROJECT NEEDS ITS OWN LINGO

 THERE IS NO UNIVERSAL TERMINOLOGY FOR PROJECTS
 THE MAJORITY OF FIRMS DO NOT HAVE COMMON LANGUAGE (SILOS)
 THE SAME WORDS HAVE DIFFERENT MEANINGS IN DIVERSE
PROJECTS, FIRMS, INDUSTRIES
 PROJECT MANUALS ARE NEITHER PRECISE NOR COMPLETE
 ATTENTION PAID TO TERMINOLOGY IN PROJECT IS NOT SUFFICIENT
 TEAM WORK
EFFECTIVE TEAM WORK DEPENDS
FROM MANY FACTORS:
„CHEMISTRY”, ATTITUDE,
MOTIVATION

BUT
THREE COMPONENTS ARE CRUCIAL:
 GATHERING THE GROUP OF
PEOPLE CAPABLE TO
TRANSFORM INO TEAM
 CREATION AND SUSTAINING THE
ENVIRONMENT FACILITATING
TEAM WORK
 INSPIRING THE TEAM WORK BY
LEADERSHIP
 FRIENDLY ENVIRONMENT FOR TEAM
WORK

 COMMON GOALS AND OBJECTIVES (GOALS – COMMITMENT –

RESPONSIBILITY)
 EACH TEAM MEMBER IS INTERDEPENDENT FROM OTHERS IN ATTAINING
GOALS AND DESERVES RESPECT (1.define functions, tasks, individual
scope of responsibility2. design organizational structure and define
interdependencies 3. define job descriptions and decision power of
each team member
 COMMON CODE OF CONDUCT (ethical principles and legal regulations
covering all potential sources of conflicts and unclear situations. Main
cathegories of issues to be regulated: attitude toward customers, way
of using company / project resources, presence and time of work,
safety, sexual harassment, drinking, smoking, gambling, cheating,
corruption, stealing, quality standards, behavior standards)
 CONTINUED

 TEAM SPIRIT AND ENERGY depends

from individual attitude and
company culture. The following
issues should be agreed on:
 Sharing of resources
 Interdependence not independence
of each team member (role of
assertiveness, avoiding dominance,
subtle leadership techniques if
strong individuals)
 Undertaking any possible efforts
needed to succeed
 Team needs are more important
than individual in the project
 Unwanted individual tasks shouldn’t
be transferred to team (avoiding
individual responsibility)
 TECHNIQUES OF BUILDING AND
SUSTAINING THE PROJECT TEAM.
THE ROLE OF PROJECT MANAGER

 CLEAR DEFINITION OF RESPONSIBILITY,

WHEREVER POSSIBLE
 DEFINING AND COMMUNICATING THE
ORGANIZATION OF PROCESS AND
MANAGING STYLE
 EMPOWERMENT WHEREVER POSSIBLE
 TEACHING THE TEAM THE RESPONSIBILITY
 BALANCED SUPPORT AND DIRECTION
 TRAINING PEOPLE ON THE JOB, IN TEAM
WORK AND BY PERSONAL EXAMPLE
 PAYING MORE ATTENTION TO
UNDERPERFORMERS (PACE, QUALITY) IN
TEAM WORK
 SETTING UP TEAM REWARDS
 WORK PACKAGES FORMULATED IN A WAY
ENCOURAGING FOR COOPERATION
 CAREFULL PLANNING OF THE FIRST
MEETING OF A PROJECT TEAM

 OCCASION FOR PRESENTING THE VISION OF

PROJECT AND WINNING THE BRAINS AND HEARTS
FOR JOINT STRIVING TO ATTAIN PROJECT GOALS
 FIRST MEETING AGENDA. COMPONENTS:
-presentation of team members
-project definition (goals, objectives,
intended strategy of execution)
- key requirements, milestones,
contingencies, opportunities and threats
-links with other teams, reporting lines
-information channels and interfaces
-draft project implementation lan
-major risks and most likely problems
-responsibility split and sharing
-needed commitment and contribution
PLANNING THE TEAM WORK AND SOLVING
PROBLEMS

PLANNING IS A CONTINUOUS
ACTIVITY, NOT A ONE TIME
ONE

Communication patterns such

as „papers on the wall”, e-
mails, team agreements,
updates, corrections facilitate
team development and raises
motivation.
Problem solving- algorythmic
and heuristic techniques.
Talents appear, different
approaches. Joint solutions
lead to team integration
 DEFINING AND COMMUNICATING STYLE AND
DECISION MAKING PROCESS ORGANIZATION
THREE MODELS

TIME TO
ACHIEVE
RESULTS
TOTAL TIME

TIME FOR
TIME FOR DECISION MAKING
DECISION
EXECUTION

AUTHORITARIAN MUTUAL UNINIMITY

MODE AGREEMENTS MODE
MODE
 DECISION MAKING THROUGH CONSENSUS
AND MUTUAL AGREEMENTS

 MAY REQUIRE COMPROMISE BUT

NEVER THROUGH VOTING,
AVERAGING, BARGAINING,
EXCHANGE OF FAVOURS,
RANDOM CHOICE WITH THE
COIN
 IS THE MOST EFFECTIVE IN
THREE TYPES OF SITUATIONS,
WHEN:
 NO ONE IS AN EXPERT IN THE
FIELD
 INSUFFICIENT DATA SUPPORT
AND TEAM JUDGEMENT IS
NEEDED
 STRONG TEAM SUPPORT IS
NEEDED AT IMPLEMENTATION
PHASE
OTHER CONDITIONS FOR EFFECTIVE TEAM
WORK

 CREATION OF PROJECT INFO CENTER

the need for information evolves alongside
the project cycle. Information has to be
constantly updated to keep project on track
and people oriented and motivated

 UNDERPERFORMERS SHOULD BE
ELIMINATED FROM THE TEAM ASAP NOT
TO RUIN THE HARD WORK OF OTHERS.
Standards of expected results or behavior
are important to create the clear situation of
compliance or noncompliance. Fireing a
person from the team should be clearly
communicated to others with arguments.

 CELEBRATING SUCCESSES AT
MILESTONES integrates the team, allows to
forget problems and supports optimistic
expectations as to the future

 LEADER keeps training people, rewards

them and strengthens the team members
self confidence (you can do it!)
 INDICATORS OF HIGH QUALITY OF TEAM WORK

POSITIVE NEGATIVE
 CLIMATE FOR COOPERATION  CLIMATE OF SUSPECTION
 FREE INFORMATION FLOWS AND LACK OF TRUST
AMONG TEAM MEMBERS  INFORMATION FLOW
 ALL TASKS ARE COVERED, BLOCKED
NOBODY THROWS ITS OWN
 AVOIDING UNWANTED
TASKS ONTO OTHERS,
INITIATIVE IN UNDERTAKING TASKS (WHY ME? WHY NOT
DIFFICULT TASKS HE/SHE? NOT- MY-JOB
 SPONTANIC AND POSITIVE SYNDROM)
INTERPERSONAL  ANTIPRODUCTIVE GROUPS,
INTERACTIONS COLLUSIONS
 HIGH LEVEL OF POSITIVE  THE FAILURE AWARENESS
ENERGY IN THE TEAM HAMPERS ACTIVITY AND
PARALYSE THINKING
 KEY SUCCESS FACTORS OF
PROJECT TEAM WORK

 COMMUNICATION
 COOPERATION
 COORDINATION
 „7 S” OF PROJECT
MANAGEMEN(McKinsey)

 STRUCTURE of organizing project activities

 SYSTEMS covering: methods of planning and
organizing the work of a project team, progress
monitoring and controlling of final results
 STAFF - recruitment, manahement, leadership
 SKILLS– tools and techniques of management
available to project manager and team members
 STYLE – way of shaping interactions within a project
team and with a mother company
 STAKEHOLDERS – individuals or groups interested or
affected by a project having influence on its
development
 HOW TO ORGANIZE PROJECT ACTIVITIES

 Type of project
and goals
 Context (internal
and external
situation)
 Three types of projects

 External client
 Internal client
 Project pro
publico bono
 EXTERNAL CLIENT

ORGANIZATIONAL
PROBLEM:
HOW TO MEET
EXPECTATIONS OF
THE CUSTOMER AT
LOWEST POSSIBLE
COSTS
 INTERNAL CLIENT

PROBLEM OF
MANAGER-
ORGANIZER:
 How to maximize
organizational
benefits from existing
resources in short
term (operational
effectiveness) and in
long-term (strategic
effectiveness)
 Where to allocate
resources
 INNOVATIONS MAP

Slow evolution Fundamental Revolution in

of existing changes in a few product range
products and areas of activity and operations
operations
New clients

Old clients
 ORGANIZATIONAL STRUCTURES FOR
PROJECT MANAGEMENT

 TEAM STRUCTURE
IMPOSED ON
FUNCTIONAL STRUCTURE
 MATRIX STRUCTURE
 PURE PROJECT
STRUCTURE
 AMBIDEXTROUS
STRUCTURE
TEAM STRUCTURE IMPOSED ON FUNCTIONAL
STRUCTURE
Example of project: How to supply client with desired products and
services at competitive time, price, quantity, quality, place,
Interfunctional team has to decide on the most effective way.

CEO

MKTG PROD. SALES FINANCE ADM. &

HR

P
 MATRIX STRUCTURE

CEO F1 F2 F3 F4

P1

P2

P3

Stable part of the structure: functional

Changing project teams employ specialists from the
stable permanent units or from outside
 PURE PROJECT STRUCTURE

TOP MGT

P1 P2 P3 P4

Finance Finance Finanse Finance

Operations Operations Operacje Operations
Mktg and sales Mktg &sales Mktg & Sales Mktg & Sales

HR HR HR HR
Investments and
Purchasing Investments Purchasing Purchasing
R&D Legal Designing Technical service
techn.
Project structures may differ from project to project
 AMBIDEXTROUS STRUCTURE
FUNCTIONAL CORE, PROJECT DAUGHTER

ceo

EXISTING BUSINESS EMERGING BUSINESS

Production Sales R&D Production Sales R&D

Ch. O. Reilly III, M. L. Tushman, The Ambidextrous Organization, HBR April 2004
 ORGANIZATION

Strategic benefits  more retained customers

 higher market share
 strategy implementation capability
 capability to expand on new markets

Market benefits  lower prices

 higher customer satisfaction
 differentiated offer
 closer links with customers
 more efficient performance

Operational benefits  lower fixed costs

 better use of resources
 shorter materials cycles
 increased value added
 simplified processes

Ch. O. Reilly III, M. L. Tushman, The Ambidextrous Organization, HBR April 2004
 BUILDING THE PROJECT TEAM

NOMINATING THE PROJECT MANAGER


RECRUITING PROJECT TEAM MEMBERS

INTEGRATION

 PROJECT TEAM FUNCTIONING

 ACTIVE ROLE PLAYING

 LEARNING
 TAKING RESPONSIBILITY
 PROJECT TEAM INTERNAL STRUCTURE
Steering committee or project board:

sponsor, project manager, other

project management team members

managers specialists

Project team members

External
consultants
 Project team management structure
Company Project Program
Management lub management or management
team team team

Sponso
r or Client/user

External
coach Project
consultants
manager

Managers and team members

PROJECT LIFE CYCLE MANAGEMENT
EXECUTION PHASE

PROJECT IMPLEMENTATION
PLAN (pip)
 PROJECT IMPLEMENTATION PLAN

 •      executive summary

 •      project goals and objectives
 •      assumptions for design and risk areas
 •      milestones
 •      WBS
 •      schedule
 •     project resources
 •     draft budget
 •      project organization and management
 •      operational procedures
 •      key performance indicators
 •      contact persons, info
 •      signatures of persons responsible for project acceptance
 Example: assessing leadership
effectiveness in GE

Vision
Customer and quality focus
Integrity
Accountability/commitment
Communication and influence
Responsibility sharing/borderless
Team building/empowerment
Knowledge/experience/intellect
Initiative/Speed
Global mindset

D. Ulrich, J. Zenger, N. Smallwood, Results-Based Leadership, Harvard Business School Press, Boston, USA
1999
 Project human resources management
issues

 Planning of organization:
identification, formalization, design,
job descriptions, responsibility,
relationships
 Project staffing
 Leadership, communication,
negotiations
 Coaching, mentoring, HR
development, motivation
 Team building, integration,
coordination, conflict management
 Performance appraisal, employees
retention, complementary staffing,
relationships with trade unions, job
safety precautions,etc.
 Team processes

 leadership
 Decision-making
 Problem-solving
 Communication
 Meetings
 Planning
 Feedback and evaluation
 Conflicts management
 IMPLEMENTATIONPHASE COMPONENTS

 Official project
inauguration and activation
pf plan
 Setting up of leadership by
project manager
 Creating the project
structure
 Starting up operational
procedures
 Staring up information and
decision-making
procedures
 Management according to
plan
 
 Leadership style in project management

Leadershi
p style

planning Manag
Manag interpersonal
organizing erial
erial informational
motivating roles
functi decisional
controlling
ons
 LEADERSHIP ROLE DESCRIPTION

Delineates direction
(vision, mission, values,
aspirations, future, clients,
partners, etc.)
Demonstrates personality
Analytical thinking,
integrity, trust,
honesty,solidity,etc.
Builds
Mobilizes people organizational
- recruits capabilities
- inspires - creats teams
- designs roles - manages change
- empowers - builds
infrastructure
Sunny and Kim Baker „The Complete Idiot’s Guide to
Project Management”, Alpha Books, 1998
 CONFLICTS AND PERFORMANCE IN
PROJECTS

Conflicts stemming from the search for best solutions

can be used to accelerate project implementation, cost
reduction or attaining more ambitious goals

Conflicts based on negative premises lower the

discipline and commitment, can lead to project failure.
There are no people who cannot be replaced but
loosing rare specialists may lead to failure too.
 TYPICAL CONFLICT SOURCES IN PROJECTS

objectives inconsistent
no focus on tasks
ineffective administrative procedures
roles uncertainty
technical uncertainty
inadequate staffing and positioning
unproportional resources to tasks
unrealistic work time assumptions
interpersonal problems
 CONFLICT MANAGEMENT IN PROJECTS
withdrawal from unimportant
conflicts through agreeing on common
interests of parties involved

compromis but priorities secured,

concessions reduced

forcing the solutin beneficial for one

party

confrontation of forces but joint

formulating and solving of problem
 Additional persons and project time
managemet

czas

1 2 3 4 Number of persons
Introducing one additional personbrings important shortening of
activity completion time , the next – less effective improvement
while fourth- extending the time of completion as more time is
needed for learning and team management.
K. Lockyer, J. Gordon, Project Management and Project Network Techniques, wyd. 6, Financial Times – Prentice Hall, 1996, s. 65
 Project implementation- supporting
processes

 Information distribution
 Team development
 Consulting
 Choice of suppliers
 Management of contracts
 Quality assurance
 Project scope verification
 QUALITY MANAGEMENT IN PROJECTS
•Quality assurance through systematic evaluations
and controls
•Planning of quality standards and assurance systems
•Quality deviations immediately corrected
•Important qualitative issues in project management:
–Customer satisfaction (matching with
specification and real value
–Prevention is much cheaper than compensation
of demage
–Project manager overall responsibility
–Logic of commonly used methods (DEMING,
CROSBY, TQM, ISO...), continuous
improvement
 COMMUNICATION MANAGEMENT IN PROJECTS

 PLANNING OF
COMMUNICATION
SYSTEM
 DISTRIBUTION OF
INFORMATION
 REPPORTING
 IMPORTANT PROJECT
DOCUMENTS
 CONTROLLING::
IDENTIFYING DEVIATIONS FROM PLAN
ANTICIPATING PROBLEMS
PREVENTIVE ACTIONS OR COMPENSATING ACTIVITIES
WHAT IS CONTROLLED:

 DEADLINES OF TASKS COMPLETION (LATE OR EARLY DELIVERY)

 COSTS AGAINST PLENNED (HIGHER, LOWER)
 CHANGE MANAGEMENT ALONGSIDE PROJECT LIFE CYCLE
 ACTIVITIES COMPLETENESS
 PROJECT SCOPE CHANGES
 PROJECT SCHEDULE CHANGES
 BUDGETARY CHANGES
 QUALITY CHANGES
 RISKS REPORTING
 REACTING TO RISKS
 LESSONS LEARNED
 CONTROLLING DEVIATIONS FROM
PLANNED TIME AND COSTS OF PROJECT

 COST VARIANCE [BCWP-ACWP]

DEVIATION OF REAL COSTS VS PLANNED
(WITHOUT REFERENCE TO PROJECT PROGRESS)
 SCHEDULE VARIANCE [BCWP-BCWS]
DEVIATION OF REAL PROJECT PROGRESS VS
PLANNED (ALLOWS TO CALCULATE THE COST OF
DELAY)
 3 MEASURES OF DEVIATIONS:
 BCWS (BUDGETED COST OF WORK SCHEDULED)
 BCWP (BUDGETED COST OF WORK
PERFORMED)= EARNED VALUE (IF TASKS
COMPLETED AT PLANNED COST)
 ACWP (ACTUAL COST OF WORK PERFORMED),
CUMULATED SALARIES IN SPECIFIED PERIOD
 PROJECT STAGES AND CONTROL GATES
Cooper, 1990

STAGE 1 STAGE S
CONCEPT
G2
G1
 STOPPING PROJECT AT GATE WHEN::

 Main benefits already achieved

 Initial plans and estimations not
sufficiently accurate
 New more attractive opportunity appeared
 Company strategy changed
 Key project team members left the
company
 Project requires much more advanced
capabilities than available
 Project continuation may ruin company
finance
 BCWS curve

Labor Budget
Culumative Labor Cost

BCWS

Deadline
Time

J. P. Lewis, Project Manager’s Desk Reference, wyd. 2, McGraw-Hill, 1999, s. 200

 Cumulated planned expenditures

(40 H/T)(20$/H)=$800/T
TaskA
(100 H/T)(30$/H)=$3 000/T
TaskB
(60 H/T)(40$/H)=$2 400/T
TaskC

Weekle
800
800

200

400

400

400

400

400
3

2
expenditur
es
4 600

Cumulated
800

800

200

600

000

400

800
10

16

21

24

26

28
expenditure
s

J. P. Lewis, Project Manager’s Desk Reference, wyd. 2, McGraw-Hill, 1999, s. 201

 Budgeted Cost of Work Scheduled (BCWS)
curve
Cumulated expenditures in thousands

30

25

20

15

10

0
0 1 2 3 4 5 6 7 8
Working time in weeks

J. P. Lewis, Project Manager’s Desk Reference, wyd. 2, McGraw-Hill, 1999, p. 202

 BCWS Curve:
Project Behind Schedule and Overspent

Labor Budget
BCWS

60k

Deadline
CV
40k
SV

20k

Date of Analysis Time

CV – Cost Variance ACWP
SV – Schedule Variance BCWP
J. P. Lewis, Project Manager’s Desk Reference, wyd. 2, McGraw-Hill, 1999, p. 203
 BCWS curve:
Trends for the Project if Nothing Changes

Project
Labor Budget Overspen
d
60k

Deadline
CV
40k
SV

20k

Project
Delay

Date of Analysis Time

CV – Cost Variance ACWP
SV – Schedule Variance BCWP
J. P. Lewis, Project Manager’s Desk Reference, ed. 2, McGraw-Hill, 1999, sp 205
 BCWS curve:
Project Ahead of Schedule, But Spending Okay

Labor Budget
BCWS

60k
SV

Deadline
40k

20k

Date of Analysis Time

CV – Cost Variance ACWP
SV – Schedule Variance BCWP
J. P. Lewis, Project Manager’s Desk Reference, ed. 2, McGraw-Hill, 1999, sp 207
 BCWS curve:
Project Behind Schedule, But Spending Okay

Labor Budget
BCWS

60k

Deadline
40k
SV

20k

Date of Analysis Time

CV – Cost Variance ACWP
SV – Schedule Variance BCWP
J. P. Lewis, Project Manager’s Desk Reference, ed. 2, McGraw-Hill, 1999, p 209
 BCWS curve:
Project Ahead of Schedule and Underspent

Labor Budget
BCWS

60k

Deadline
CV
40k
SV

20k

Date of Analysis Time

CV – Cost Variance ACWP
SV – Schedule Variance BCWP
J. P. Lewis, Project Manager’s Desk Reference, ed. 2, McGraw-Hill, 1999, p. 203
 PROJECT TERMINATION (CLOSURE) PHASE
 ACTIVITIES BEFORE PROJECT CLOSURE:
 EVALUATION OF RESULTS FOR DIVERSE
STAKEHOLDERS
 FINAL REVIEW (POST IMPLEMENTATION
REVIEW-PIR): EVALUATION OF ACHIEVED
BENEFITS VS PLANNED, ADDITIONAL
BENEFITS, RECCOMMENDATIONS OF
CHANGE, LESSONS LEARNED
 ACTIVITIES CLOSING THE PROJECT:
 FINAL REPORT
 DECISION TO FINISH THE PROJECT
 CLOSING PROJECT BOOKS, CONTRACTS,
DISSOLVING PROJECT TEAM
 ACTIVITIES AFTER PROJECT COMPLETION
 INTEGRATION OF RESULTS WITH MOTHER
ORGANIZATION OR TRANSFER OF PRODUCT
TO CLIENT
 MANAGING PROJECT RESOURCES
 PROJECTS FILES STORAGE
 PROJECT RECYCLING (IN CASE OF PARTIAL
SUCCESS)