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Titolo presentazione

Project and programme management B


sottotitolo
Project Organization
 Milano, XX mese 20XX
Prof Mauro Mancini

© Mauro Mancini

Learning objectives

• Basics on Organization
• Organizational structures for PM
• Roles in the project
• The project manager: weight, competences and
authoritativeness
• New Organizational issues in PM
• Advanced Competences, behaviors, PMO

© Mauro Mancini

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Basics of Organization

Every organized human activity creates two fundamental


and opposing needs

division of work coordination


into various tasks of the tasks

Organization can be defined as the series of methods by which


we effect the division of work into distinct tasks and by which we
then achieve coordination of these tasks

microstructure macrostructure

planning and coordination of the planning and coordination


tasks of single individuals of the tasks of
organizational units

© Mauro Mancini

Division of work: grouping criteria

Input-oriented grouping bases


(means/function)
required competences: knowledge and
skills (e.g. hospitals)
Functional criteria
(corporate functions)
type of process (e.g. purchasing, production,
marketing, R&D) or technique adopted
(e.g. founding, welding, tooling)

Output-oriented grouping bases


(aims/markets)
Divisional criteria
product (e.g. food company)
(corporate divisions /
customer (e.g. computer company) business units)
geographic area (e.g. multinational)

© Mauro Mancini

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Functional Structure

CEO

STAFF

R&D MANUFACTURING SALES ADMINISTRATION

Res 1 Res 1

Res 2 Res 2

© Mauro Mancini

Example of a Functional organization

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Divisional Structure

CEO

STAFF

BU 1 BU 2 BU 3

STAFF

R&D Manufacturing Sales Administration

Res 1

Res 2

© Mauro Mancini Res 3

Example of a Divisional organization

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Example of a Hybrid organization

© Mauro Mancini

Mechanisms of coordination
Ex post mechanisms

Manager
mutual adaptation Analyst

Operator Operator

direct supervision
Manager
Analyst

Operator Operator
Ex ante mechanisms

standardization
processes (e.g. assembly Manager
instructions for model aeroplane)
Analyst
output (e.g. taxi, budget)
Operator Operator
skills (e.g. operating theatre)

© Mauro Mancini

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Learning objectives

• Basics on Organization
• Organizational structures for PM
• Roles in the project
• The project manager: weight, competences and
authoritativeness
• New Organizational issues in PM
• Advanced Competences, behaviors, PMO

© Mauro Mancini

The organizational problem


• The project is temporary – The organization is temporary
• The project is multidisciplinary – The organization
(functions) monodisciplinary
• The project is unique – The organization is unique
• There is (sometimes!) a customer for the project, but who
manages the project?

• Someone defines objectives, but who manages


objectives?

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Project Objectives
(a mix between initiation and planning)

• Strategic Objectives
• Strategic reasons to start the project
• Long term results
These are the objectives needed to evaluate the investments, the
resource allocation, the risks etc

• Specific Objectives
SCOPE
expected projects results
• Scope
• Time
• Cost

COST TIME

© Mauro Mancini

Projects organization: main actors


involved
• Client
who pays for contractual services and signs the contract
• Customer
who uses the results of the project
• Owner (often it is the Client as well)
in legal terms, who has the property of the results of the project
• Contractor
who sign the contract with the client
• Project manager
who is responsible for project outcomes and activities
• Project team
people acting full-time or part-time in the project (designers, constructors, controllers, …)
• Sub-contractors / The trades
specialty firms working for the Contractor and people working for them
• Suppliers
companies providing materials and equipment
• Stakeholders
any other involved or interested in project outcomes or activities

© Mauro Mancini

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Project’s Organization
Functional Matrix Task Force
Pjt Organization Pjt Organization

Board Board Board

FM FM FM FM FM FM FM FM FM

PM

PM
Functional Part Time
FM
Manager team member

Project Full Time


PM
Manager team member

© Mauro Mancini

Organizational Forms

Structure Advantages Disadvantages When to use it


-
Efficiency in the use of -
Low control on project When it is possible to
resources
- objectives divide the project into
Functional Focus on functional- -
Coordination difficulties autonomous sub-projects
specific development of -
Structure resources
Interferences/noises that can be entrusted to
- from activities external functions; usually they are
Similar to day-by-day
to the project not very innovative
operations
-
- Duplication/low
Focus on project
flexibility of resources
objectives and results -
- Difficulties in finding
Clear responsibilities
Project Structure -
No interferences/ -
resources Used for strategic
Problems in resources projects, where failure is
(Task Force) noises from external
release not accepted at all
activities -
- Detachment from
Higher motivation for
functions (excessive
team members
autonomy)
-
Complexity (dual
- When the project is
Efficiency in the use of command, responsibility
innovative or a good result
resources without authority)
Matrix Structure -
Focus on project -
Interferences/noises
is desired, but it is not
- such strategic to justify
objectives and results Conflicts and
very high expenses
negotiations

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Different Matrix
Weak Matrix Strong Matrix

Board Board Board

FM FM FM FM FM FM FM FM FM

PM FP FP FP

PM PM

 PM doesn’t see the resources  PM sees and negotiate the resources


 Resources are managed by FM  PM plans and controls the detailed activities
 PM doesn’t plan and control the WP  PM is able to understand the technical
 PM doesn’t deal with technical contents contents
 PM is responsible towards the client of the
project quality
PLANNER and CONTROLLER
NEGOTIATOR
© Mauro Mancini

Choose a structure
Contingency factors

INTERMEDIATE STRONG
WEAK STRUCTURE
STRUCTURE STRUCTURE
Relevance of the
APPROPRIATE
project (HIGH)
Relevance of the
APPROPRIATE APPROPRIATE
project (LOW)
Critical objectives
APPROPRIATE
(HIGH)
Novelty of the project
INAPPROPRIATE APPROPRIATE
(HIGH)

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Choose a structure
Issues to be considered

INTERMEDIATE STRONG
WEAK STRUCTURE
STRUCTURE STRUCTURE
Role of PM NON CRITICAL CRITICAL
Role of Functional
CRITICAL CRITICAL LIMITED
Units
Release of resources
EASY EASY DIFFICULT
at the end of project
Performance
EASY COMPLEX EASY
measurement

© Mauro Mancini

Lilu Case
Lilu realizes multimedia applications for companies working in the entertainment industry.
Within Lilu several projects are managed, in order to develope applications, platforms,
infrastructures the company uses. Internal projects (i.e., those projects that require the
development of an application for an internal customer) are managed with a specific
procedure.
An internal customer requires a project formally to the planning department. This
department allocates a PM that has the responsibility to contact Functional Managers so to
define a project team. FMs define which person from their division will work on that project.
When the team is defined, the team analyses the request and, if this is formally complete,
the PM define a preliminary project plan and asks to each functional member of the team to
estimate time and costs required for the realization of that activity. The PM doesn’t know
who will really work on the the project and he is not allowed, during the project
development, to evaluate the work done by the different functional units. The PM organizes
team meetings at predetermined deadlines and prepares meeting in terms of agenda,
documents, etc.. When a significant variance is identified (e.g., a significant delay of a
milestone) he coordinates the team to review the project plan. If the customer needs
revisions, the PM coordinates the interaction between the customer and functional unit that
wil lbe managing the modification.

© Mauro Mancini

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What kind of organizational solution do you think
Lilu uses for managing its projects?

© Mauro Mancini

What kind of organizational solution do you think


this SME uses for managing its projects?

…and a structured aerospace company?

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Role of functional units

• Provide competences to develop and manage the


project plan
• Manage human resources consistently throughout
all projects
• Assign and manage resources coherently with the
relevance of the specific project
• Plan, coordinate and develop human resources
over the long run
• Manage resources assigned to specific teams
• Guarantee coherence throughout all projects

© Mauro Mancini

Learning objectives

• Basics on Organization
• Organizational structures for PM
• Roles in the project
• The project manager: weight, competences and
authoritativeness
• New Organizational issues in PM
• Advanced Competences, behaviors, PMO

© Mauro Mancini

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Organizational Breakdown Structure

• Describes projects’ organization


• It is specific for each project
• It includes all actors involved by the project
(eventually also external one, e.g., suppliers)

Project

Project
Engineering Information Logistics Production
Management Testing (TST)
(ENG) Assurance (IA) (LOG) (PRD)
(PM)

© Mauro Mancini

Project management roles

• Project manager
• He/She is responsible for the overall result of the Project and the
creation/execution of the supply, under all the aspects: creation of value
and economic-financial results, fulfillment of the contractual obligations and
constraints, progression of activities in terms of performance/terms based
on technical specifications/requirements, progress of costs, quality of
deliverables, risk management, trials and acceptance of the goods/services
supplied by the Customer/Client, etc.
• He/She ensures the coordination and motivation of ithe Project Team and
manages and represents the main interface and reference for the customer
(along with sales department).

© Mauro Mancini

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Project management roles

• Project Controller
• He/She oversees all the economic/financial aspects of the Project,
supporting the Project Manager in analyzing deviation between planned and
actual values.
• He/she performs project planning and control activities, to support the PM in
taking decisions for increasing the Project value (EVA/NPV)
• He/she ensures the gathering of data about the percentage of
completeness of the activities and evaluates the main Earned Value
performance indicators and supports the PM and the Organizational
Functions to analyze the variances between planned and actual values and
to define the Estimate at completion (EAC)

© Mauro Mancini

Project management roles

• Control account manager


• He/She is responsible for a limited part of the project that can be
considered “relatively” independent
• He/She acts like a PM at a lower organizational level
• He/She is the direct report of the PM for control
• Risk assessor
• He/She supports PM in risk management and assessment
• He/ShepProvides methodological support and experience
• He/She guarantees proper risk management in multi-project
contexts
• Contract manager
• He/She is a phase project manager: he managed the project only in
the first phases

© Mauro Mancini

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Learning objectives

• Basics on Organization
• Organizational structures for PM
• Roles in the project
• The project manager: weight, competences and
authoritativeness
• New Organizational issues in PM
• Advanced Competences, behaviors, PMO

© Mauro Mancini

Project Manager’s role

What does a Project Manager do?


• Estimates and plans (with the planner/controller and the Organizational
functions)
• Assembles the team (depending on the weight of the matrix)
• Reports with senior management
• Manages and co-ordinates the activities
• Manages unexpected changes

He/She is
• Responsible for project goals achievement
• Guarantor of the integration
• Controller of resources utilization
• Resolver of conflicts

© Mauro Mancini

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Project Manager’s weight

Light Medium Heavy


Weight Weight Weight

Functions/ Project
Divisions

Facilitator Co -ordinator Decisor


Role Solicitator Planner
Negotiator

Timing
Responsibility Timing Timing Costs
Costs Quality

© Mauro Mancini

Project Manager weight and


organizational structures

FUNCTIONAL
STRUCTURE Light weight

Functional Matrix
MATRIX STRUCTURE Balanced Matrix

Project Matrix

PROJECT STRUCTURE
(TASK FORCE)
Heavy weight

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Project Manager’s weight:
Authority vs. Authoritativeness

Responsibility Authority • Authority (formal)


• Hierarchical level
Authority Authoritaviness • Delegation of duties
(by right) (by Merit) • Budget control
• Participation in the
evaluation system
• Authoritativeness
(informal)
• Technical competences
• Managerial
competences
• Leadership style
• Communication skills
© Mauro Mancini
• Personality

PM Skills - PMI 9 Knowledge Areas


1. Integration Management (systemic View)
• Integration management are the various processes and
methodologies used to integrate all the knowledge areas of project
management and the various phases of the project life cycle.
• A Project can thrive only when good integration processes are
available to a project manager to effectively integrate all the project
elements
2. Scope Management
• Scope management deals with the various processes and
methodologies used to ensure that complete identification of the
deliverables required completing a project is done in a methodical
manner.
• Scope management is the basis for time and cost estimates plays
the most crucial step in achieving the project objectives without
tears.

© Mauro Mancini

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PM Skills - PMI 9 Knowledge Areas

3. Time Management
• The effective planning and accomplishment of activities' timing and
phasing is a central skill of project management. Time
scheduling/phasing comprises specifying the processes required
to ensure timely completion of the project.
4. Cost Management
• Cost Management is the process of estimating the proper cost that
should reasonably be expected to be incurred against a clear
baseline, understanding how and why actual costs occur, and
ensuring that the necessary response is taken promptly to ensure
that actual costs come under budget.

© Mauro Mancini

PM Skills - PMI 9 Knowledge Areas


5. Risk Management
• A risk in a project is an uncertain event or condition that has a
positive or a negative effect on project objectives if it occurs. Risk
includes both threats to the project's objectives as well as
opportunities to improve those objectives
• Risks are present in all projects, whatever their size or complexity
and whatever industry or business sector. Risk management
methodologies are used to identify, quantify and develop strategies
to respond to project risks.
6. Procurement Management
• Procurement is the process of acquiring new services or products.
Procurement management concepts help you to understand the
various processes and methodologies used to ensure the
complete mechanism of soliciting and procuring the relevant
services or products from the suppliers. Effective procurement
management is suppliers and buyers to work together in improving
project performance
© Mauro Mancini

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PM Skills - PMI 9 Knowledge Areas
7. Resource Management
• Human Resource management concepts help you to understand the
various processes and methodologies that are used to ensure the
effectiveness of a good team leader and effective team members.
The common denominator is effective team functioning, as it is the
men behind the machines who make the difference.
8. Quality Management
• Quality management concepts help you to understand the various
processes and methodologies used to ensure full compliance of
quality policy and guidelines in completing a project. Quality can
never be compromised for a long and sustainable business. Quality
applies to everything in Project Management: Commercial,
Organization, People, Control, Technical, etc.

© Mauro Mancini

PM Skills - PMI 9 Knowledge Areas


9 Communications Management
• Communications management is the various processes and
methodologies used to establish smooth information flow and
communication mechanism throughout the different phases of the
project life cycle
• Effective communication with all stakeholders is absolutely
mandatory to project success.

© Mauro Mancini

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Project Lifecycle

Executing
Initiating Planning Closing
Controlling

© Mauro Mancini 39

Why do we plan a Project?

© Mauro Mancini 40

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Why do we plan a Project?

• To decide wether we want to do it or not

• To control it during the execution

© Mauro Mancini 41

Relatioships among different phases

Initiating

Executing

Planning Closing

Controlling

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Initiating Planning Executing Controlling Closing
•Monitor and
Control Project
Integration •Develop •Develop Project •Direct and Manage Work
•Close Project
Management Project Charter Management Plan Project Execution •Perform
integrated
Change control

•Collect Requirements
•Verify Scoope
Scope Management •Define Scope
•Control Scope
•Create WBS

•Define Activities
•Sequence activities
Time Management •Estimate activities Resources •Control Schedule
•Estimate activity Durations
•Develop Schedule

•Estimate Cost
Cost Management •Control Costs
•Determine Budget

•Perform Quality •Perform Quality


Quality Management •Plan Quality
Assurance Control

•Acquire Project Team


Resource •Develop Human Resource
•Develop Project Team
Management Plan
•Manage Project Team

•Distribute information
Communications •Identify •Report
•Plan Communcations •Manage Stakeholders
Management Stakeholders Performances
expectations
•Plan Risk Management
•Identify Risks
•Perform •Operate the planned •Monitor and
Risk Management
qualitative/quantitative Risk mitigations control risks
Analysis
•Plan Risk Responses
Procurement •Administer •Close
© Mauro Mancini •Plan Procurement •Conduct Procurement 43
Management Procurements Procurements

Learning objectives

• Basics on Organization
• Organizational structures for PM
• Roles in the project
• The project manager: weight, competences and
authoritativeness
• New Organizational issues in PM
• Advanced Competences, behaviors, PMO

© Mauro Mancini

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… Best in class companies
may need more

• Performance Management
• Ability to measure a project performance and to identify
variance causes (if any) and the appropriate corrective
actions, also through the use of advanced performance
management tools (EV-Earned Value)

• Value Management
• Ability to evaluate and interpret and govern the value
creation logics

© Mauro Mancini 45

…and behavioral competences


• Team Management
• ability to interact with and coordinate several people with common
objectives in order to obtain active participation and collaboration
• Team Membership
• ability to integrate own efforts with those of others in order to achieve
common objectives whilst respecting the contributions of others
• Customer Orientation
• ability to understand and anticipate customers requirements with a
firm focus on achieving complete customer satisfaction and building
long term relationships
• Conflict Management
• ability to deal with conflicts among project team members and
stakeholders with the objective of achieving a mutually acceptable
resolution which will preserve the overall project objectives

© Mauro Mancini 46

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Prisoner’s Dilemma
 Two suspects, A and B, are arrested by the police.
 The police has insufficient evidence for a conviction, and, having separated both
prisoners, visit each of them to offer the same deal: if one testifies for the prosecution
against the other and the other remains silent, the betrayer goes free and the silent
accomplice receives the full 10-year sentence. If both remain silent, both prisoners
are sentenced to only six months in jail for a minor charge. If each betrays the other,
each receives a five-year sentence. Each prisoner must make the choice of whether
to betray the other or to remain silent. However, neither prisoner knows for sure what
choice the other prisoner will make. So this dilemma poses the question: How should
the prisoners act?
Suspect B

NOT Betray Betray

NOT Betray 0,5;0,5 10; 0


Suspect A

Betray 0; 10 5; 5

© Mauro Mancini

Leaders…

• Inspire others with a shared vision


• They create their own vision or obtain them by surrounding themselves with
others who are visionaries. A compelling vision is one that captures the
aspirations of the followers
• They must communicate the vision and reinforce it repeatedly to keep focus and
enthusiasm
• Lead by example
• They are driven to action, to change the status quo, to cause improvement.
They demonstrate their belief in their behavior – involved in every step of the
way, continually monitoring progress, recognizing achievement, and
troubleshooting problems
• Develop the team
• They rely on others. To get extraordinary results out of their team, they get to
know them individually on a skill, work preference, and a personal level
• They challenge team members to achieve their personal best by respecting
each contributor’s individuality and providing direction or freedom to make
responsible choices
• Give credit for actual contributions, use failures as learning opportunities, and
support changes that contributors recommend

© Mauro Mancini

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Many organizations find an IPT to be an
effective way of managing programs…

CEO
IPT
 Brings all of the functions
MKTG & together to execute a
PMO CTO/COO HR SALES
FINANCE
program
 Enables execution of the
program by
ENG MFG PROC. QA – Focusing on a single
program
– Removing outside
IPDT #1 responsibilities
 Gives the Program
Manager authority with
IPDT #2 responsibility for execution
 Breaks down
communication and
organization barriers

IPDT #11
© Mauro Mancini

The Integrated Project Team

• The IPT is an interfunctional structure responsible


for the management of the project along all its life
cycle
• Joint responsibility of all members for:
• Project plan
• Project execution
• The team is responsible
• Example of members of the IPT
• Sales Manager, Program Manager, Technical Head,
Procurement Manager, Engineering Manager,
Operation Manager, Customer Support Manager,
Quality Manager, etc.
© Mauro Mancini

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…enabling the lead function for the IPT to change
according to the life cycle of the program

Integrator Evolution Through the Program Life Cycle


Technology,
Customer Product, and Business Program Life-Cycle
Design Production
Understanding Process Capture Planning Support
Improvement

Example • Single face to • Market back • Win-win • Actionable • Design build • Value-added • Value-added
IPT Benefits program capabilities vs. contract for all program plan Enhancements Enhancements
• Design for
stakeholders pet projects stakeholders
supportability
Program Office/
System Integrator LEAD
Customers

Suppliers/
Partners

Finance

Engineering LEAD
Production

Procurement

Business
Development LEAD LEAD
Independent
Review

– Active participation – Functional lead – Managing organization


© Mauro Mancini

Program Management Office (PMO) is a support tool


to overcome potential program pitfalls
Program Management Office
Challenge Area Challenge Characteristics Benefits of PMO
 Lack of a clear process for escalating  Improves monitoring and control of
risks to senior management projects
 Project mission and tasks are poorly  Identifies gaps in realization of
defined strategic objectives
 Ineffective enforcement of project  Escalates current risks and
controls and policies identifies potential risks earlier
 Fragmentation of external suppliers in  Mediates issue resolution
Governance the project  Ensures proper communications to
 Insufficient reporting to support top- relevant stakeholders
management decisions
 Conflict between line and project
managers
 Cultural split between business and I/T
teams
 Projects do not meet deadlines /  Improves the management of
milestones business processes and systems
 Lack of standardized reports and integration
reporting frameworks for all projects  Increases efficiency in tracking
 Fragmented vendor project plans progress of projects and programs
Planning  Implementation procedures in  Integrates project plans for all
organization are not realistic, missing or dependent projects
unknown
 Drift of business requirements / specs
development and technical design

© Mauro Mancini

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Program Management provides the overall control and
overview of the different projects running within the company

Program Management Project Management


 Enable successful completion of selected  Ensure successful delivery of project and
group of projects within budget and time manage daily project activities
constraints  Overcome project specific issues
Objectives  Identify and resolve barriers to  Maintain awareness of project status
implementation
 Maintain awareness of program status
 p j
Ensure effective executive cross-project
 and cross-business
Departmental unit (VPs
sponsors communication
/ GMs /  Vendor and Client project managers
Directors)  Client business / technical
Key
 PMO members representatives
Stakeholders  Project managers (Vendor and – I/T &  Project team members
Business)
 Oversee multiple projects roll-out or  Monitor and track direct project team to
implementation complete project deliverables
 Approve project plans, targets and  Maintain the governing project plan and
integration requirements ensure project plans are adhered to
 Identify critical path, coordinate changes  Coordinate direct dependencies and
across projects and manage risks integration with other projects
Key Activities  Coordinate the resolution of cross-project  Ensure team members understand
issues and intra-program dependencies project management processes, roles and
 Escalate and communicate across project facilitate teaming – escalating issues
teams and to senior management when necessary
 Oversee day-to-day project operations
including budgeting and allocation of
project-specific resources

© Mauro Mancini

Q&A on Project Organization

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