Fiat Lux!

Introduction to Project Management

Instructor:
Massimo T. Rossi

Module II Projects and Programs
Module II
Projects and Programs

Contents

Projects and Programs
Attributes of a Project
The operational Context
Project Managements Organization
The Actors of the process
Responsibility and Authority of the P.M.
Characteristics of a P.M.

Projects and Programs


Projects and Programs

The Project Management Institute
defines Project Management
as:

The application of knowledge, abilities, tools and
techniques to the activities of the Project to satisfy or
exceed the needs and the expectations of the
Stakeholders (persons or organizations involved or
affected by the project).
Projects and Programs

Meeting or exceeding Stakeholders
needs and expectations invariably
involves balancing competing
demands among:
Scope, time, cost and quality.
Stakeholders with different needs and expectations.
Identifiable requirements (needs) and unidentifiable
requirements (expectations).
Projects and Programs
The terms Project and Program are generally used in an
ambiguous way. The following definitions should be used in
the business language:
Project it is a complex effort that embraces different
interconnected activities, executed by different organizations
with objectives, planning and budget well defined.

Program it is a long term initiative which may include
various project.

Project Management techniques may be applied in both
cases.
Attributes
of a Project


Attributes of a Project
A project is a process that produces
results previously determined.
A project may be considered as a
process required to produce a new
product, a new plant or a new system to
get other results.

Projects have got a start and an end
and they are not repetitive.

The life of a project develops through
well defined stages, which are not
clearly separated one by the other, as
shown in the following figure:
Fig. II.1
Stages of a Project
Conception
Definition
Organization
Construction
Commissioning
Individuating
opportunity
or necessity
Evaluating
Feasibility
Investment
Analysis
Budget
and
Financing
Engineering
Design
Specifications
Materilas
Procurement
Construction
Commissioning
Project
Delivery
S
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O
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P
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Project Life
Fig. II.2
Project Life
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Project Life
Construction
Attributes of a Project
The risk of the project decreases with the developing of
the project. At the start of the project, the risk is
maximum, because nobody can foresees what will
happen during the execution of the works. As the works
progress, the risk decreases up to its disappearance at
the end of the project.

It is therefore clear that it is necessary to make a
qualitative and quantitative analysis of the risk
before stating the project in order to focus those critical
areas which can affect cost and duration of the works.

The following graph shows the relation between project
duration and risk.
Fig. II.3
Risk of a project
-120
-100
-80
-60
-40
-20
0
20
40
60
80
1 2 3 4 5 6 7
R
i
s
k

-
P
r
o
j
e
c
t

V
a
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u
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Duration
Relation between Risk and Duration
Risk
Value
Attributes of a Project
A project is executed through a series of interconnected
activities. In the next chapter we will detail this aspect.
A project uses different resources.
A project has got an Owner. This means that the
Contractor is subject to comply with the Owners
instructions, which are conveyed through drawings,
specifications and contractual documents.
The decisions taken during the initial period of a
project have got a greater influence over the decisions
taken in the following stages. The concept of the Level of
Influence clarifies this statement.
Fig. II.4

High Influence Low Influence Result
Low Cost High Cost
Project Duration

Design
Construction
Use
Decreasing
Influence
Growing
Costs
The operational context
of the Project


The operational context of the Project
Each project must be conceived and managed in
accordance with his particular operational context.
The success of a project does not depend only
from the logic and the distribution of the roles,
the responsibilities and the resources but also
from to the adaptation of the different
parties to:

The external elements (authorities,
control agencies, suppliers of goods and
services)
To the final users of the project
And manly to the beneficiaries of the
project.
The operational context of the Project

It is very important to understand
from the beginning which will be the
context in which we will operate in
order to establish the most appropriate
connections.

Not all the elements of the context
are relevant. It is therefore essential
to determine the critical elements.

The operational context of the Project
The first are individuals, groups and institutions which
have the faculty to take actions which could have
consequences on the project.

The second are entities without a direct intervention.
Nevertheless, they can exercise an important
influence on the project (laws, regulations, uses,
customs, etc.)
The elements of the context may be divided in subjects
and aspects.
Project
Management
Elements of the context
Subjects Aspects
Project
Organization
They must be involved
in the organization of
the project. We must
explain the project and
try to understand the
reasons of the negative
reaction.
We must be sure that
the planning takes in
consideration the most
relevant aspects.
Project Team
Organization
We need to establish
formal and informal
relations with the
principal subjects.
We must consider the
subjects as members of
the Team.
We must take in
account their influence
in the organization of
the project. We must be
sure that the Team is
aware of these aspects.
Fig. II.5a
Project
Management
Elements of the context
Subjects Aspects
Works Planning

They must be involved
in the preparation of the
plans as far as possible.
They must participate in
the meetings.

We have to take in
account the information
about the principal
aspects in preparing the
Plan for the project.
Commencement of
Activities

Control of the
Works

The main subjects must
be kept informed.
They must be kept
under control in order to
avoid conflicts and
problems.
Fig. II.5b
Project
Management
Elements of the context
Subjects Aspects
Progress
Evaluation

Project
Coordination
They must be involved
in the evaluation of the
progress. We must
inform them about the
most important
changes.
Update periodically the
data base of each
external aspect
Project
Completion
They must be involved
in the planning and
implementation of the
activities required for
the completion of the
project.
Consider the aspects in
the planning of the
completion of the
project.
Fig. II.5c
Organization for
Project Management



Organization for Project Management

For the Planning and the Execution of
projects, we can make use of three
types of organization:

by Functions

by Matrix

by Projects
Organization for Project Management
Each type of organization has got advantages and
disadvantages, which can be more or less efficacious
depending on the characteristics of the entity in which it is
implemented and the projects executed by such an entity.
Companies have got the tendency to evolve in their
organizational model, combining in various ways the
three forms of organization above mentioned.

Usually, they start using the traditional hierarchical
organization, organized by functions, with operational
units (Line Units) like: engineering, production, etc. and
support units (Staff Units) like: accounting, human
resources, etc.
Organization for Project Management
When the number of projects increase and they become
more complex and the need to comply with time and cost
restrictions become a must, the companies leave behind
this first form of organization and shift to the
Organization by Matrix, structured by functions and by
projects or to organization oriented to projects.

Nevertheless, it is very rare to create an organization
completely dedicated to projects, due to the heavy load
of resources required by this type of organization.
In the majority of the cases, companies adopt some form of
Organization be Matrix.
Fig. II.6a
Organization by Functions
A
B
C
A
A
B
B
C C
Functional
Manager
Functional
Manager
Functional
Manager
General
Manager
Project
Coordination
Fig. II.6b
Organization by Matrix
Functional
Manager
Functional
Manager
Functional
Manager
General
Manager
Project
Coordination
Project
Manager
Fig. II.6c
Organization by Projects
Project
Manager
Project
Manager
Project
Manager
General
Manager
Project
Coordination
Organization by Matrix
This type of organization tries to combine the advantages of
the Organization by Functions with that oriented to the
projects.
This type of organization aims to
intersect the traditional hierarchical
structure , vertically articulated by
functions, with a second coordination
structure, horizontally articulated
by projects.
Organization by Matrix
The most important advantages of this type of
organization is the balance among the objectives, the
coordination of the functions and the evidence of the project
objectives, due to the action of the Project Manager.

The disadvantage consists in the fact that in this type of
organization, the participants to the projects report not
to one boss, like in the case of the traditional organization,
but to two: the Functional Manager and the Project
Manager.

Many times, the Project Manager believes that he doesnt
have enough authority with the functional departments,
while the Functional Managers resent of what they consider
an undue interference by the Project Manager.
Organization by Matrix
The problem can be solved defining clearly the
responsibility and the authority of each one of them.

In practice, the Project Manager establishes what must
be done, while the Functional Managers have got the
responsibility to decide how to do it.

In many cases, it is useful to unite physically the majority
of the Project Team in one place (in a Construction project,
this place is the Site).
This form reminds the structure of an Organization by
Projects, but in reality it is still a Matrix structure since each
component is still depending from the functional department.
Organization by Matrix
The three forms may be represented graphically in a
continuous medium in which an extreme is occupied by
the Organization by Functions, the other extreme by the
Organization by Projects and the central part is occupied
by the Organization by Matrix.

The Organization by Matrix may have a large variety of
solutions, from one similar to the Organization by
Functions (Weak Matrix) to the one similar to the
Organization by Projects (Strong Matrix).

The following figure illustrates this concept.
Fig. II.7
Coordinator
Separate
Team
Full Time
Project
Manager
Full Time
Partial
Time
No
Coordinator
By Projects By Matrix By Functions
Personnel assigned to the
Functional Units
Weak
Matrix
Strong
Matrix
Personnel assigned
to he Project
Placement of the Project Manager

When we start a new project and we
appoint a Project Manager, we have
to decide at which level and in which
part of the organization must be
placed.

Usually the Project Manager should depend from the Line
Manager who could solve the problems among the
different projects of the company and in each one of them.

Sometimes, depending of the case, it could be opportune
to place the Project Manager under the direction of a
Department Manager, a Division Director or the General
Manager in case of a big Project.
Placement of the Project Manager
Usually, the Project Managers think that their
performance could be more efficacious if they would be
placed under the direction of the Top Managers;
nevertheless, experience teaches that this is not
always true.

If the level is too high, conflicts can develop with the
Line Managers and we can experience communication
problems with the responsible heads of the units which
contribute to the project.

Vice versa, if the level is too low, the Project Manager
can have difficulties to get the cooperation of the other
units.
Placement of the Project Manager

An organization which must
managing a certain number of
projects can chose between two
alternatives:

A. To place the Project Managers under the Line
Managers, individuating for each project the most
appropriate unit.

A. To designate a manager responsible for all the
projects and place all the Project Managers with the
exception of the big projects.
Placement of the Project Manager
In this last case, we can create a Project Management
Department, whose Director depends from the Top
Management. This Director is in charge of the followings
activities:

Directing the Project Managers and the specialists
assigned to the Projects

Solving the conflicts of priority and allocation of
resources

Selecting and training the Project Managers and the
specialists

Informing the Top Management of the activities,
performance and conflicts of the various projects.
The Actors of the
Project Management


The Actors of the Project Management
In any organization there are different persons who have a
direct responsibility for the integration of the various
contributions to the project.
Top Management Level
The General Manager
Project Management Level
The Project Management Director
Project Level
The Project Manager
Functional Level
The Functional Project Leader
Te General Manager
The general Manager has got the responsibility of
integrating the processes of Project Management with
other aspects of the organization.
He is responsible that:
Projects are selected and organized
correctly.
Projects may count with the appropriate
resources.
Proper techniques of Project Management
are being implemented.
The progress of the works is carefully
kept under control.
The Project Management Director
The role of the Project Management Director is very
important in the organizations where a considerable part of
the activities is executed by projects.

He is responsible for the Project
Management Department from which
depend the various projects.

The various responsibilities have
been already listed.
The Project Manager
The role of the Project Manager is an
operational one. He is responsible for
organizing and directing the project
and for achieving the planned objectives in
terms of time and cost.
The P. M. is responsible to integrate the contributions of
all the individuals and all the units which participate to the
project.

His primary duties are:
Executing the project complying with the technical
specifications, the limits of cost and time, utilizing the
available resources.
The Project Manager
Integrating all the contributions of the various
participants to the project, acting as leader of the Project
Team.

Informing the Management any time when it seems
that the planned objectives are not achievable.

Taking decisions and convincing the others to take the
right decision to achieve the projects objectives.

Being the point of reference for the Client, the Top
Management and the Functional Managers.
The Functional Project Leader
In each project there are various
Functional Project Leaders in charge to
integrate the contribution supplied by the
functional department that they represent
(Engineering, Finance, etc.).
The Functional Project Leader acts on behalf of the
Functional Manager of the specific department.

These contributions already integrated at function level will
be integrated at the project level by the Project Manager.
Responsibility
and Authority of the
Project Manager


Responsibility and Authority

The General Manager will delegate
responsibilities to the Project Manager.
The responsibilities will be proportionate to
the magnitude of the project and to the
functions of the position.
Generally the Project Manager has got the responsibility
of the management and the coordination of the
project in all its stages and consequently for achieving
the prefixed objectives.

In practice, the P.M. is the General Manager of his
project.
Responsibility and Authority
The P.M. is responsible for the profit or loss of the
project and the completion of the works within the time
prescribed by the contract.

His main activity is the integration of the
contributions of all the participants to the project.

Differently from other management positions, the
authority of the P.M. derives mainly from his personal
capacity to gain said authority, more than by the
authority conferred to him.
Responsibility and Authority
With reference to authority, we can distinguish
between:

Authority by right, which derives by:
Organization Chart, position in the company, work or
position description, power of attorney, hierarchical
flow, funds control, etc.

Personal or by merit authority, which derives by:
Technical or management knowledge, experience,
good personal relations, solid alliances, conflict
solving, to be right.
Responsibility and Authority
A P.M. who needs contributions by persons who are not
under his chain of command, must rely on
interpersonal influences that overpass his formal
authorities.

With relation to interpersonal influences, we can
distinguish among:

A. The power to reward and to punish, which can be
an apparent or conferred power.
The real power to reward or to punish refers to
what a P.M. can do directly or indirectly to hinder or
facilitate the achievement of personal objectives for
the people who work for him.
It mainly derives from the authority conferred to him
by his superiors.
Responsibility and Authority
The attributed power to reward or to punish refers to the
power recognized to the P.M. by those who work for
him.

It is what these persons think that the P.M. may do to
hinder or facilitate their personal objectives when they do
not comply with his requirements.
If the P.M. has got a direct relationship with the Top
Management of the company, the members of the Project
Team will think that the P.M. may have some influence on
their careers.

The P.M.s power to reward or to punish depends from
what the others think he might have.
Responsibility and Authority

B. The power due to his knowledge refers to the
capacity of the P.M. of convincing the others to do what
he wants the others should do.
This happens because other people attribute to him
greater knowledge or they think that he is able to
evaluate in better way the consequences of certain
initiatives or to take decisions in the interest of the
project.

B. The power due to be the point of reference refers
to the degree of availability of the participants to
the project, that for certain reasons are attracted by the
P.M. appreciating his friendship or consideration.
Responsibility and Authority
Therefore the General Manager should choose a
P.M. with knowledge and experience which will
allow him the possibility to obtain the power of
knowledge and attraction by the participants to the
project.

Further, he should attribute enough authority by right
to allow him to have the possibility to reward and to
punish.
After that, it will be up to the P.M. to gain
additional authority.
Characteristics of a
Project Manager


Characteristics of a Project Manager
The efficiency of a P.M. depends by his
experience and his personal characteristics
The capacity to work with other
executives, to acquire authority, to
integrate the contributions of other
persons and to solve conflicts is essential
for the success of the P.M.
A. Personal characteristics:
Flexibility and adaptability
Predisposition to initiative and leadership
Confidence in his own capacities

Characteristics of a Project Manager

Capacity to communicate and to coordinate
Capacity of persuasion and speech
Variety of personal interests
Capacity to balance technical solutions with time and
cost considerations
Abilities of generalist more than of specialist
Capacity and availability to dedicate himself to
planning and control activities.
Capacity to individuate problems
Readiness to take decisions

and above all

a lot of
perseverance
Characteristics of a Project Manager
B. Competences
Competence in techniques and methods of Project
Management. It refers to the techniques of planning,
organizing, monitoring and controlling the project.
Competence in Team Work and in interpersonal
relations. It refers to the techniques to guide,
coordinate, motivate and train the Project Team

Technical competence. It refers to the academic
education of the P.M.
Commercial and administrative experience. It
refers to the organization of a company, the financial
management, the contractual knowledge, etc.