Projects are an integral part of any organisation, be it a for-profit or not-for-profit. It will identify some activities as projects and yet others occur through the systematic actions of working through a problem to find a solution. We could still define these as projects.
Projects are not just in the organisation’s realm, but also in our personal lives. The completion of my MBA is a project, which is broken down into smaller projects for each subject I study.
- The rise of remote work
- There’s no right or wrong way to manage projects
- The rise and importance of cross team collaboration
- A mixture of formal and informal project managers
- The continued popularity of Gantt charts
Defining a Project
People working in the Project Management space have adopted a specific language around the management of projects. It is important not to underestimate understanding the language, as it puts everyone on the same page when communicating. As you would expect, one of the key definitions is that surrounding the term “Project”. Project is defined by the Project Management Institute as a “temporary endeavour undertaken to create a unique product, service or result” (cited in Larson & Gray, 2020, p.6).
Program is another word frequently seen in the space and the terms of project and program are often confused. According to Larson and Gray (2020), the terms are also used interchangeably. They define a program as “a group of related projects designed to accomplish a common goal over an extended period of time” (Larson & Gray, 2020, p.7). It is important to distinguish between a project and a process. A project has a start and finish time, whereas a process is ongoing. That said, a project could be implemented to improve a process, but it is still limited in time and scope. Another term for a project is a “Project Life Cycle” which is the detailing of the activities and flow over time for the completion of the project. Larson and Gray (2020 p.9) provide an example of a Project Life Cycle with a software development project. It may comprise five distinct phases which would be the “definition, design, code, integration and test and maintenance”. They say though that a typical project examines four stages being:-
- Defining Stage
- Planning Stage
- Executing Stage
- Closing Stage
The Importance of Project Management
Project management has risen in importance today as it involves numerous aspects of running an organisation. In the past, it was only large projects such as a high rise building construction is where the term were applied. With Project Management, Larson and Gray (2020 p.16) cite five key drivers:-
- Shorter life cycles
- Knowledge explosion
- Triple bottom line
- Greater customer focus
- Small projects represent big problems
Small Projects Represent Big Problems
The last item on the list above resonated considerably with me because of my involvement with smaller organisations. As said in the project definition area, the concept has mainly related to large construction type projects in the past.
When it comes to small projects in small organisations, however, projects are not necessarily recognised as such and planning for projects is not undertaken. In fact, because of the lack of planning, many small organisations would not understand the inefficiencies created through poor project management. A further compounding of this issue is failing to recognise the impact of smaller projects on an organisation’s bottom line and also there may be several going on in the background at the same time. The situation can soon evolve into a major cost for the organisation and many of the hidden costs are not recognisable or measured in the traditional accounting system.
An Integrative approach to project management
Integration of projects with organisational strategy
Despite projects being singular activities, they should always contribute to the strategic objectives of the organisation. Consequently, all projects should be considered as a contributor to strategic objectives and it would be appropriate to identify these in the project definition.
Integration of projects through portfolio management
It can often occur that several projects have similarities. In such cases, it is good management practice to group these into portfolios according to type. Portfolios can facilitate better project management, as issues occurring in one project may be about to occur in another and preventative measures can be deployed.
Integration of the processes of implementing actual projects
As demonstrated by the image below, the considerations of both technical and social-cultural aspects need to be integrated within the project. The two are inextricably entwined and a project manager must be skilled in both areas to manage the project successfully.
Figure 1. A Socio-Technical Approach to Project Management
Project Management Institute Tool
The Project Management Institute provides a tool for benchmarking several factors of project management throughout the world. Unfortunately, it has a grouping for the Asia Pacific, which is too broad an area for identifying the situation in Australia. Based on some statistics I viewed, the Asia Pacific is behind world levels of statistics, which could be expected unless there were specific countries identified by that region.
Organisation strategy and project portfolio management
This subject will focus on the structure of thinking for integrating project management with the organisation’s strategic plan. It is essential that there is a strong nexus between projects and the organisation’s strategic plan. A focus on a project that is not contributing to the strategic objectives of the organisation can mean that resources are being spent in other areas at the expense of strategic objectives. In such cases, the question becomes whether or not to abandon the project or modify the strategic plan. Therefore, it follows that it is essential for management to understand and appreciate the organisation’s mission and strategic goals in order to pursue aligned projects.
The exception to the above is where a project may be implemented to consider an operational process with the intent of re-evaluation. For example, such a project could consider the value of replacing a repetitive process with a robot and the impact on operations, production and profits.
Project Portfolio Management
One advantage of portfolio management with similar projects is that it can afford management with the ability to prioritise projects and even actions within projects. A failure to adequately prioritise projects can cause several problems.
1. Implementation Gap
The implementation gap is the concept of where there is a lack of cohesion and agreement on strategy between top and mid-level management. An example of this lack of cohesion is where senior management may select a group of projects to be implemented to pursue strategic objectives. Each of these may be in different departments of the organisation, yet the individual departments will have different priorities given their own unique perspectives. Given this conflict of interest, it may be a better process for senior management to prioritise the projects in conjunction with the department heads.
2. Organisational Politics
Politics are endemic in all organisations and as a result, bias can exist when it comes to the prioritisation of projects. These issues provide all the more reason for establishing strong assessment criteria. The text mentions the term “sacred cow” referring to a project that is someone’s baby, usually a high-ranking person of power within the organisation. There is no problem with “sacred cows, ” providing they are subjected to the same assessment criteria as other projects.
3. Resourcing Conflicts and Multitasking
Because most projects exist within a multi-project environment, there can be competition for available resources. Recognition of this problem and prioritising the projects again can help avoid such conflict. If the problem is not addressed, then organisational politics could well come into play and compound the issue. The second component of this is the issue of multitasking, where staff are working on one project and then working on another. Multitasking is not an efficient way of working, as has been evidenced by several studies (Adler & Benbunan-Fich 2015; Lin et al. 2015).
Generally, projects within an organisation can be classified into one of three groups being:-
- Compliance – legal, emergency, anything that is a “must do”
- Operational – projects to support the organisation’s operations
- Strategic – projects designed to achieve the organisation’s long-term strategic objectives.
Figure 2: Project Classification
Project Selection Criteria
The criteria for selecting projects is generally regarded as those of a financial nature and those of a non-financial nature. It is understandable that most levels of management prefer to assess projects financially because it is measurable before, via budgets, during via cost to budget comparisons and finally in the same manner. Financial models also include such models as Net Present Value and Payback Period on the project. It is interesting the textbook does not mention Internal Rate of Return (IRR) which is frequently used in assessing projects.
Non Financial Criteria
Although financial criteria is both important and measurable, there are non-financial criteria and projects that organisations may need to pursue. For example, an advertising project could involve expending a particular amount of money, but it is difficult to measure the results. The project could result in increased sales or increased brand awareness, or both. How is the latter measured? Advertising can also have the effect of building a brand or impeding the entry into the market of a competitor. Restoring an organisation’s credibility following a bad incident can also be a project based on non-financial criteria. Consider Volkswagen and Rio Tinto as examples here.
Multi Criteria Selection Models
It should be obvious that several factors will come into play when assessing the viability of a project. Consequently, tools are required to consider these factors and provide weightings.
One of these is the checklist model which simply provides a list of questions to be addressed regarding the project.
Table 1 – Sample Selection Questions for Project Selection
Larson and Gray (2020) suggest that the checklist method has a number of flaws. The major problem is that the checklist is designed to assess a particular project as opposed to assessing all potential projects in terms of their strategic value to the organisation.
Conversely, the use of a multi-weighted scoring model can score each project against particular criteria. The higher the ratings, the more valuable the project in achieving strategic goals. Although the textbook does not mention it, it is reasonable to suggest that a weighting factor could be added to the checklist model to improve assessment.
Project success and failure
The critical role of projects being aligned with an organisation’s strategic goals has been addressed already. To achieve this, projects need to be successful and several factors can contribute to the success or failure of a project. Much of a project’s success or failure will depend on the practices in managing the project.
Figure 3: Time frame of success dimensions
Figure 4: Relative importance of success dimensions is time dependent
Figure 5: Relative importance of success dimensions is project-type dependent
In the images above, Shenar et al. (2001) argue that the success of a project depends on both the nature of the project and the time frame of completion. Stretton (2014) notes that the concepts of multidimensional project success have been explored by several academics and suggests an alternative model. Stretton’s model considers that project success involves the success of the project management, the actual project success in itself and the success of the business. Approaching the success of the project in this manner takes it into another dimension where additional factors are considered instead of just the project alone.
Having considered Project Success, it is also necessary to look at project failure. The notes refer to a paper by Discenza and Forman (2007), but the URL returns a 404 error and the article cannot be found anywhere online or in search results. Consequently, I have turned to two other papers to look at project failure. Both contain several factors that contribute to project failure, and Sompura and Roessling (2019) mention several issues.
- Under estimating the project costs
- Scope creep and change orders
- Surprise conditions
- Unclear specifications
- Financing issues
- Unreliable workers or sub contractors
- Communication gaps
- Improper planning
They go on to suggest that these performance considerations can be broken down into three distinct categories as shown in the image below.
Figure 6: Categorisation of Project Failures
In comparison, Sweis (2021) also identifies three distinct areas, but calls them by different names. He argues that failures fall into Process Driven Issues, Context Driven Issues and Content Driven Issues. Within these categories, he lists many of the issues identified above by Sompura and Roessling (2019). Furthermore, Stretton (2018) suggests five main areas for project failure being:
- Project Initiation related
- Project Management Operational related
- Organisational Leadership related
- Project Management Leadership related
- Other external related contributors to failure.
Figure 7: Five Main Groups of Project Failure
Stretton’s (2018) above chart indicates components of both technical and social aspects of project management. In turn, this shows that there is much involved in a project life cycle than the initial planning, action and closing stages. There needs to be strategic alignment with the organisation’s objectives and it always pays to have a project template to document how the project will be run. As the diagram above demonstrates, the bulk of failures can be attributed to the Project Initiation stage.
Organisation Structure for Project Management
When developing a system for project management, there are three that are suggested for an organisation (Larson & Gray 2020).
Functional Organisation Model
The first approach is to organise them within the functional organisational structure. When a project is determined by management, it is allocated to the relevant areas of the organisation responsible for particular aspects of the project. The entire project is managed through the standard channels within the organisation.
This model is also used frequently when a particular department plays a dominant role in the project. In such cases, a senior manager within that department is given responsibility for overseeing the project.
As with any model, there are both advantages and disadvantages with the Functional Organisation Model. Larson and Gray (2020) consider the major advantages to be:-
- No change – the structure of the organisation remains as is
- Flexibility – different specialists can work on the project and then return to normal duties.
- In-depth expertise – providing the project scope is narrow, specialised expertise can be utilised on the critical areas of the project.
- Easy post project transition – on project completion, the team members return to their normal roles.
In contrast, they also list several disadvantages of the model, which include:-
- Lack of focus – one department or individual may not consider aspects of the project as critical as other individuals or departments, which can lead to a disconnect between departments.
- Poor integration – specialists are only concerned with their area of the project as opposed to the big picture.
- Slow – projects can take longer to complete within this structure because of the disjointed nature of the teams. Everything has to flow through the organisational structure.
- Lack of ownership – project workers can see the project as not affecting their department or not helping their personal situation. A sense of belonging is not necessarily achieved.
Dedicated Project Teams
In total contrast to the Functional Organisation model is the Dedicated Project Teams model. Here, the team operates as a totally separate entity to the main organisation with a specialised project manager and individuals who work together on the project on a full-time basis.
Again, there are advantages and disadvantages with the model. Larson and Gray (2020) set these out as follows:-
- Simple – the organisation remains intact apart from the specialists who have been seconded to the project team.
- Fast – because the team is working full time on the project without the distraction of normal duties, the work is completed much faster.
- Cohesive – because it is a team environment, the members all share a common goal regarding the project.
- Cross-functional integration – specialists join the team from different departments and work together sharing the common goal of completing the project, not just their own specialties.
Although the dedicated project team would appear to be the best approach, it too can have disadvantages when perceived from the parent organisation’s perspective. Larson and Gray (2020) suggest three areas being:-
- Expensive – a new management position is created of Project Manager and resources are allocated on a full-time basis to the detriment of the departments from which they are drawn. Productivity gaps may need to be filled.
- Internal strife – project teams can become or be perceived as departments in their own right, which can cause conflict and undermining of the project. It can also result in difficulties bringing project team members back to their regular departments on completion of the project.
- Limited technical expertise – the specialists allocated to the team may not have complete specialisation in all areas of the project. Internal politics can prevent them from consulting with others in the organisation without formal sanction by the organisation and consequently opportunities may be missed.
Matrix Project Management
The Matrix organisation is regarded as a significant innovation in management. It is a hybrid system where project management is overlaid on the top of the existing functional hierarchy. Larson and Gray (2020) describe this situation as frequently having two chains of command, with one operating at a functional level and the other at the project level. It appears some organisations utilise this model temporarily and others on a more permanent level.
Within the Matrix model, there are three different forms being:-
- Weak matrix – somewhat like the functional approach but with a specific project manager.
- Balanced matrix – the standard form where the project manager defines the outcome and the functional management and determines how it will be achieved.
- Strong matrix – attempts to create the feeling of a project team where the project manager controls most of the project and assigns functional staff.
Again, there are advantages and disadvantages of the Matrix model. Larson and Gray (2020)
suggest the advantages as being:-
- Efficient – provides for the sharing of resources across multiple projects and multiple departments.
- Strong project focus – having a dedicated project manager affords the project stronger status and focus.
- More simple post-project transition – because the specialists continue relationships with their own departments, transition is easier on project completion.
- Flexible – because of the structure, greater flexibility is afforded because of access to wider resources within the organisation as needs arise.
Larson and Gray (2020) lists the disadvantages of the Matrix model as:-
- Dysfunctional conflict – a particularly interesting downside because the model is based on actually creating friction between the functional managers and the project managers. The concept is considered a requirement as it theoretically brings into balance the technical needs and project needs. I would consider this model requiring strong people skills and mature teams so it did not degenerate into open conflict.
- Infighting – similar to the above, where there are competing interests and priorities for the same resources.
- Stressful – project team members can end up with two bosses which can cause considerable stress and uncertainty in the workplace.
- Slow – despite the position of project manager to drive the project, they will always negotiate with functional managers for allocation of specialists across multiple departments.
The “Right” Structure for Project Management
Considerable evidence exists that the success of a project is linked intrinsically to the autonomy and level of authority of the project managers (Gray et al., 1990; Larson & Gobeli, 1987, 1988 as cited in Larson & Gray 2020).
Larson and Gray (2020) suggest that an organisation should utilise a dedicated project management team when project work is over 75% of the work. A further consideration is the availability and accessibility of resources for a project.
In addition to organisational considerations, aspects of the project also need to be considered. Seven factors identified by Hobbs and Menard (1993) should influence project management structure.
- Size of the project
- Strategic importance
- Novelty and the need for innovation
- Need for integration between departments and number involved
- The environmental complexity and number of external interfaces
- Budget and time constraints
- Stability of resource requirements.
The higher the score for each of these factors means that the project manager and team require greater levels of authority and autonomy to be successful.
The introduction to this project has been rather intense, with a lot covered and considerable reading. However, it has provided a solid grounding to the subject and structure of project management. The value of project management skills is becoming more important. The recent example of the need for organisations to pivot quickly because of Covid is one example where rapid movement was necessary and possibly best achieved through project management. With the increased incorporation of new technology into the world, such as AI, project management will be critical in managing the introduction of these technologies and the management of change within the organisation.References
- Larson, EW & Gray, CF 2020, Project management: The managerial process, 8th edn, McGraw-Hill, New York.
- Adler, RF & Benbunan-Fich, R 2015, ‘The Effects of Task Difficulty and Multitasking on Performance’, Interacting with Computers, vol. 27, no. 4, pp. 430–439, viewed 31 December 2022, <https://academic.oup.com/iwc/article-abstract/27/4/430/803735?redirectedFrom=fulltext>.
- Lin, L, Cockerham, D, Chang, Z & Natividad, G 2015, ‘Task Speed and Accuracy Decrease When Multitasking’, Technology, Knowledge and Learning, vol. 21, no. 3, pp. 307–323, viewed 31 December 2022, <https://link.springer.com/article/10.1007/s10758-015-9266-4>.
- Shenhar, AJ, Dvir, D, Levy, O & Maltz, AC 2001, ‘Project Success: A Multidimensional Strategic Concept’, Long Range Planning, vol. 34, no. 6, pp. 699–725, viewed 31 December 2022, <https://www-sciencedirect-com.aib.idm.oclc.org/science/article/pii/S0024630101000978>.
- Stretton, A 2014, ‘Series on Project Successes and Failures Some deficiencies in data on project successes and failures’, PM World Journal Series on Project Successes and Failures, vol. III, no. XII, viewed 3 January 2023, <https://pmworldlibrary.net/wp-content/uploads/2014/12/pmwj29-dec2014-Stretton-some-data-deficiencies-successes-failures-Series-Article1.pdf>.
- Discenza, R & Forman, J 2007, Seven causes of project failure: how to recognize them and how to initiate project recovery, Project Management Institute – (Returns 404), viewed 1 January 2023, <https://www.pmi.org/learning/library/seven-causes-project-failure-initiate-recovery-7195,>.
- Sompura, S & Roessling, J 2019, How to Recognize Project Failures and Initiate Project Recovery, October, viewed 31 December 2022, <https://pmworldlibrary.net/wp-content/uploads/2019/10/pmwj86-Oct2019-Sompura-Roessling-recognize-project-failures-initiate-recovery.pdf>.
- Sweis, R 2021, An Investigation of Failure in Information Systems Projects: The Case of Jordan | EndNote Click, Endnote.com, viewed 1 January 2023, <https://click.endnote.com/viewer?doi=10.5296%2Fjmr.v7i1.7002&token=WzM1OTI5NzMsIjEwLjUyOTYvam1yLnY3aTEuNzAwMiJd.FOsrvJYlaozzdJp2dg2k70qIKhg>.
- Dinsmore, PC 1993, The AMA handbook of project management, Amacom, New York.