Project Management in a Changing Environment - Coursework Example

Project Management in the rapidly changing Environment Introduction Almost everybody is engaged in one or more projects directly or indirectly in his/her life. It can vary from doing a personal project such as obtaining a Degree to the construction of big industrial projects like Dams and Bridges. Projects have been carried out since the beginning of civilization. Every project involves a set of interrelated activities, which has a definite beginning and end. Since there are many aspects to be looked after for the attainment of project objective, the need for its proper management was seriously felt long back. The need was further compounded when business community started thinking of introducing project management for business purposes. Consequently, a new body of knowledge was evolved, which came to be known as Project Management. Over the years, the science of Project Management has developed enormously and many scholars and practitioners have introduced various tools and techniques to enrich it. Internet, computers, project management software etc have enhanced the pace of development of project management. Successful completion of project on time with the use of limited resources and minimum cost is the main objective of project management. But, project management in modern times is no longer possible by paying attention towards resources, cost and time alone. The project managers are forced to look beyond time, cost and resources. The traditional tools and techniques such as Gantt chart, PERT/CPM networks became powerless and attainment of project objective remained a dream for the competent project managers. A careful analysis has been made in various areas of project management and finally reached a way-out that project managers need to have a check on the rapidly changing environment in which the project needs to be materialized Project Environment Every project is carried out in a set of complex factors. The totality of all such factors is known as project environment. Time, organizational factors, legal system, political system, technology structure, economic system, socio-cultural system are some of the factors in the project environment. All these factors are likely to affect projects and the success depends upon how the project manager and his team respond and adapt to the changes. The basic principles of the project management still remain effective in any contexts regardless of size and time. But the resources, budgets, methods, and tools of the project depend upon the environment. If today’s projects are managed by the tools of the past, the probability of failing the project is very high. That does not mean that traditional tools are ineffective in the modern times. Thus, before implementing the tools, they must be made adaptable to the changed resources, budgets. The need for a rethinking about project management in the business context was aroused because of the following reasons: 1. Compression of the product life cycle Today, speed has become one of the important competitive edges of firms. Products with long life cycle are rarely seen in the market. Three decades back, products with 10 to 15 years life cycle could be seen. But, products having average life cycle with 1 to 3 years alone are capturing the market today. “A common rule of thumb in the world of high-tech product development is that a six-month project delay can result in a 33 percent loss in product revenue share”. (Harold Kerzner, Applied Project Management (New York: John Wiley & Sons, 2000, chapter 1., p.10) 2. Global Competition Today’s globalized market demands only quality products with international certification. The introduction of ISO 9000 has made it compulsory for the firms to maintain standards in respect of cover design, procurement, quality assurance, and delivery processes for everything from banking to manufacturing. Product Quality management and improvement essentially requires project management. (Harold Kerzner, Applied Project Management (New York: John Wiley & Sons, 2000, chapter 1. p.10) 3. Knowledge Explosion The growth in the knowledge has also necessitated the need for looking a project afresh. Constructing a bridge some years back was somewhat a little affair. But, today, owing to knowledge explosion, the environment of project has also changed. Consequently project managers have to consider knowledge explosion in all areas of their work such as materials, specifications, codes, equipment and required specialists. 4. Corporate Downsizing The past years experienced a new mantra for organizational success, i.e., corporate downsizing. Successful companies which once reflected their power and competitive edge through their large payrolls are now realizing the fact that corporate downsizing is the way out for success. Consequently, 1980s and 1990s experienced major shrinkages in the workforces of big companies. (The New Project Management: Tools for an Age of Rapid Change, Complexity, and Other Business Realities. Contributors: J. Davidson Frame - author. Publisher: Jossey-Bass. Place of Publication: San Francisco. Publication Year: 2002) 5. Increased Customer Focus Many factors in the modern business environment have resulted in increased competition, which necessitated the need for high attention on customer satisfaction. Customers have become knowledgeable about the products and their rights which led the firms to develop customized products to sustain in the market. Pitfalls of Traditional Project Management It is indubitable that traditional project management has enabled human beings to complete some incredible and unforgettable things on earth. For example, “it provided the U.S. National Aeronautics and Space Administration (NASA) with the management capability to put men on the moon. It makes possible the construction of oil drilling platforms in the North Sea. It provides airplane manufacturers with the discipline to design and build complex commercial aircraft”. (Frame 2002, p.5). In spite of the efficient tools and techniques and competent men, some of the project practices are failing in the modern times. In spite of much advancement in the area, many of the big projects turn out unsuccessful. Here are some of the examples of project failures from surveys. 1. Over half of the reengineering projects have failed. 2. Less than one-third of e-business efforts deliver the planned results 3. Many systems projects overrun their budgets and schedules 4. Many engineering and construction projects deliver unplanned problems and fewer benefits than planned. (Lientz and Rea 2002). Experts from all over the world have responded with different opinions and many reasons have been attributed to this problem. The opinion of majority of them rests on a common reason, i.e., changing project environment. The changes in the environment are perennial and uncontrollable. Human beings, of course, have control over some factors and majority of factors are beyond their control. It was also experienced that what served the project managers in the past is irrelevant today. A detailed list of reasons is enlisted below: 1. Inattention towards Customers Traditional project management paid no attention to the customers. Customer satisfaction is given prominence only after the triple constraints of time, budget and specifications. Project’s success or failure is decided by how well these factors are made in balance. The third constraint, i.e., specification is almost similar to customer satisfaction, but it does only in theory. When it comes to practice, the specifications do not contain the customer needs as they are prepared by experts and they lack skill and training to understand the customers’ business. 2. Single-minded focus on a fixed set of tools Another serious problem with traditional project management is the over- attention towards the tools and techniques for dealing with scheduling, budgeting, resource allocation etc. The expertise over the use of these tools no doubt enhances the knowledge base of the project management team and the same can be well applied in various contexts. The mastery over Gantt chart and PERT/CPM networks can improve the scheduling speed; the knowledge in S-Curves can enhance budgeting speed. But a single-minded approach is always dangerous because it may restrain the team to concentrate on important issues like customers’ needs and wants, motivating employees. 3. Narrow Project Life cycle This is another important issue of traditional project management. The project life cycle stages are confined to a few stages to limit the range of activities to be performed by the project men. Project life cycle typically involves a set of activities ranging from launching a project to closing it out. “This is captured in the perspective promoted by the world's principal project standards body, the Project Management Institute, which in its standards-setting document, A Guide to the project management Body of Knowledge (2000), identifies five basic processes that all projects address: initiating, planning, controlling, executing, and closeout processes”. (Frame 2002, p.7). 4. Limited role of Project Managers Traditional project management also takes a narrow look at the domain of project manager. It suggests only a limited role for the project manager as an implementer and he is not given opportunity for active involvement in decision making. Project managers are seen as mere implementers and their domain is well decided by someone. “A survey once conducted of 113 project managers showed that only 29 percent of them played a direct role in choosing the projects on which they worked. The survey revealed other deficiencies in the power of project managers: less than a third reported having profit-and-loss responsibilities. Indeed, most reported that they did not even have adequate budget data to take on meaningful cost responsibilities” This statement argues that such a limited view of what lies in the project manager's domain creates an environment in which it is difficult for project managers to serve their customers effectively. If customer satisfaction is an important ultimate goal of project management, the project manager's role must be redefined to allow it to be achieved. (Frame 2002, p.7). Modern Project Management In the context of increased instances of failing projects across various fields including business, experts and authorities seriously thought about the remedy to turn the future projects successful. As a result, a new idea came into being which overcomes all the deficiencies of traditional project management. The idea has been informally known as Modern Project Management in the Literature. Modern Project Management, of course is not a newly emerged body of knowledge. It is, indeed the adoption and implementation of polished traditional tools and techniques in the changed circumstances to achieve the project objective. The reason for such a fresh outlook is attributed to the fact that traditional tools are no longer valid in the project environment, which is subject to perennial changes. Mainly, three arguments are central to the modern project management approach: 1. Project management must be more customer-focused 2. It must explore the uses of traditional tools in the context of changed circumstances 3. It must redefine the role of project managers Customer Focus As already stated, inattention to customer is one of the serious deficiencies of traditional approach. On account of continuous failures, Project Managers across the glob have realized the relevance of changing their approach towards customers for whom a project is ultimately built up. Naturally, the traditional project management outlook underwent a radical change. “This point is clearly illustrated if we consider the project to build the opera house in Sydney, Australia. This project encountered horrific schedule slippages and cost overruns. By the traditional yardstick of the triple constraints, it was a failed project. However, once built, the opera house became Australia's number one object of civic pride. It is hard to find an Australian tourist poster that does not have a photo of the opera house somewhere on it. Soon after its construction, the citizens of Australia considered it a rousing success. What we see here is success rooted in customer satisfaction, even when the triple constraints are not met.” ((Frame 2002, p.8-9). The significance of customer focus can be further explained with the help of following grounds: First, customers in the modern era are more conscious about their buying habits and rights after the emergence of consumerism. The advent of Total Quality Management (TQM) further recognized the increased need for concentrating on customized products as they have become more sophisticated in their buying habits and the chance of missing customers is very high. Second, if the customers feel that the project management team is paying high attention to customer needs, the possibility of getting business again and over is unquestionable. Third, if the customers’ needs are continuously met through quality project, the firm will have reputation and customers always feel that nothing is going to have wrong with the project they have signed on. This will result in fast final payment, no extra expenses for collection of dues etc. Traditional Tools with new skills All facets of life have undergone radical change. Project environment is no exception to this general rule. Traditional project managers needed to possess only the basic skill in scheduling, budgeting, and allocating human and material resources. These tools could be applied blindly, if the project manager had basic skills on them. Because, the situations wherein these had been applied were more or less same. Traditional project managers had the role of mere implementers. But, to be successful in the modern complex environment, project mangers need to have different sets of skills which will have to be continuously polished in line with changed circumstances. This point is very well emphasized in the book ‘The New Project Management: Tools for an Age of Rapid Change, Complexity, and Other Business Realities’, which says “project staff should be proficient in such “hard” skills as the basics of contracting, business finance, integrated cost and schedule control, measuring work performance, monitoring quality, and conducting risk analyses. They should also be adept at such “soft” skills as negotiating, managing change, being politically astute, and understanding the needs and wants of the people they deal with (including customers, peers, staff, and their own managers). (Frame 2002, p.10). The redefined role In the light of changes in the project environment, project managers’ role must be redefined and they should have more responsibilities. The traditional ones are mere executors and they had no voice beyond what his superior decided as to what should be and should not be done. In fact, they should have been known as Project Executors rather than Project Managers. Their role has been rightly illustrated in the following statement. “Project managers are very much like noncommissioned military officers. The general develops the grand strategies, the major works out the mid-range strategies, the captain develops the tactics, and the sergeants are responsible for executing the tactics on the field.” (Frame 2002, p.10). The conventional approach can hold well in situations where the environmental factors and assumptions are constant. But, contrary to this, modern environment is neither stable nor is free from continuous pressure from various forces. This necessitates the need for a change in the role of project manager and the duties performed by him. He must be made active in the decision making process and more responsibilities must be laid upon his shoulders. When they are given profit and loss responsibility, as disclosed in a survey of 113 project managers, their performance outperform those who are not. (The New Project Management: Tools for an Age of Rapid Change, Complexity, and Other Business Realities. Contributors: J. Davidson Frame - author. Publisher: Jossey-Bass. Place of Publication: San Francisco. Publication Year: 2002 p no.11). It has also been accepted from the real business situation that when the project managers are tempted to take the role of entrepreneurs running their own business, they work extra ordinarily to reach the project goal. It is illustrated in the following statement. “One of the most effective projects in modern business history, the project to build the IBM personal computer in 1980 and 1981, was carried out as an independent business entity. The project manager was, in effect, the CEO of a small company. He had the same decision-making authority as an independent businessperson. This means that he had the authority to hire and fire. In addition, his decisions were not constantly monitored by a higher power. In the final analysis, his performance was to be measured by the bottom line. IBM's experience with the PC has been repeated many times in organizations throughout the world. The new business environment demands that project managers see themselves as more than mere technical implementers. They are, first and foremost, business people whose job is to satisfy their customers while conducting a profitable operation.” (Frame 2002, p.12). Project Manager’s Professional competencies in the new era Studies conducted among professional project managers reveal the following common results. (The New Project Management: Tools for an Age of Rapid Change, Complexity, and Other Business Realities. Contributors: J. Davidson Frame - author. Publisher: Jossey-Bass. Place of Publication: San Francisco. Publication Year: 2002 p.12) and (Project Management Competence: Building Key Skills for Individuals, Teams, and Organizations. Contributors: Davidson J. Frame - author. Publisher: Jossey-Bass. Place of Publication: San Francisco. Publication Year: 1999. Page Number: 46) An ideal project manager should have the following traits: 1. He must be result- oriented. A professional project manager should have always a longing for the achievement of project goal and in the course of his journey; he should not allow anyone and /or anything to keep him away from the defined goal. 2. He should have a good head for details. While he is confronted with variety of jobs and complexity of techniques to be applied in various contexts, he should not be relieved himself from the perplexities of collecting as much information as possible for the proper management of project. 3. He must be firmly dedicated to the project. Professional Project managers are committed to spend long hours to get their work done within the time constraint. 4. He should be aware of the organization’s goals. In pursuit of attaining the project goal, the project manager and his team should not forget the organizational goal within which the project goal is attainable. Moreover, he must facilitate his peer’s work and co-ordinate the efforts of whole organisation to achieve the cherished goal. 5. Politically savvy. One of the good competencies of a manager is the skill to influence others. As he is ought to work with many people and arrange many resources, the way he is negotiating with them determines his success to a great extent. 6. Cost consciousness and sound business knowledge. As cost has become an important determinant in attaining competitive advantage, the knowledge base of the project manager should be equipped with cost consciousness. Apart from that he should possess a thorough knowledge about the ABCs of all business operations 7. He must be capable of understanding the needs of the staff, customers and management. Project managers spend majority of their time in dealing people from different backgrounds. He must be sympathetic to the needs of people and must act proactively to the pulses of the people. In short, his emotional intelligence must be very high. 8. He must be capable of coping with ambiguity, setbacks and disappointments. In the course of his attempts to achieve the result on time, project manager is likely to face many obstacles and setbacks. He should try to tackle all obstacles and move positively towards the end. 9. He should possess the appropriate technical skill. No project manager can be successful with what are described above. Technical expertise is indispensable for the project manager to be effective and successful, and for being accepted by his team. This is not an exhaustive list of competencies of project manager. There are possibilities to add few more traits that project manager should possess. Moreover, it is not practical that every one should possess all the above capabilities to become a project manager. Maximum a person scores out of the above list, the more effective he/ she will be as a project manager. Acquiring professional competencies, no doubt, is essential for easy and timely completion of projects. Modern firms recruit only professional project managers. It is very evident from the rapid growth in the number of people earning project management professional certification from Project Management Institute (PMI), an International Society constituted in 1969 for project managers. PMI has accepted all the above attributes of Project Managers and provides certification as a Project Management Professional (PMP) on the basis of such qualities. (Modern Project Management. 2007). Another development in the field of project management in the 1990s is that instead of entrusting the tasks of project management wholly to one project manager, the task is divided among two or more people in the firm. The logic behind such a principle is that the responsibility is shared jointly by two or more persons. “For example, in the early 1990s, the information technology branch of the Administrative Offices of the U.S. Courts began heading IT projects with two people: a development manager, who played a lead role on technical issues, and a business manager, who understood the business side of management. The question of who was “really” the project manager was irrelevant. The real question was, how can these two people , working together, carry out the project management function?” “Many other organizations have similarly adopted two-person project leadership teams. NCR Corporation carried the concept further by creating five-person customer focus teams (CFTs) that included key business and technical people needed to deliver a project successfully (someone with marketing or sales skills, someone with manufacturing knowledge, someone with financial insights, and so on). The rationale underlying the creation of co-responsibility teams is simple: no one project manager will have a grasp of the knowledge needed to bridge the technical and business issues today's complex projects encounter”. (Frame 2002, p.16). Conclusion Project Environmental factors world wide are subject to continuous change and coping with such changes to do complex projects is a difficult affair. Project Management literature is enriched by abundant tools and techniques which have been developed by scholars and practitioners over the years. But, such tools and techniques remain ineffective in modern environment because of the perennial changes that are being taken place in various facets of project environment. The traditional tools are still valid, but they require some modifications before application. All the traditional tools and techniques are modified in line with the changing situations in the project management. Customer focus has been accepted as one important remedy for the successful completion. Acquiring project management skills is also given equal weightage. The role of project managers is to be revised by giving equal emphasis on both decision making and execution. Therefore, every project is planned, scheduled, budgeted and implemented in conformity with the nature of environment. Environmental factors are scrutinized and analyzed with utmost care before stepping into the first stage. Despite the fact that professional project managers are well qualified and competent enough to achieve the results in any situations, they also have some limitations. They may also fail, especially in the case of complex projects unless proper preparations are made for the analysis of the environmental factors. Bibliography FRAME, J. Davidson. (2002). The New Project Management: Tools for an Age of Rapid Change, Complexity, and Other Business Realities, 5, Jossey Bass. Modern Project Management. (2007). [online]. Last accessed 01 November 2008 at: http://highered.mcgraw-hill.com/sites/dl/free/0073525154/504266/gra25154_ch01_002_019.pdf FRAME, J. Davidson. (2002). The New Project Management: Tools for an Age of Rapid Change, Complexity, and Other Business Realities, 7, Jossey Bass. FRAME, J. Davidson. (2002). The New Project Management: Tools for an Age of Rapid Change, Complexity, and Other Business Realities, 8-9, Jossey Bass. FRAME, J. Davidson. (2002). 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Last accessed 01 November 2008 at: http://209.85.175.104/search?q=cache:vw9bpMdFVsAJ:www.ise.fiu.edu/SACS/Chapter%252001.ppt+modern+project+management&hl=en&ct=clnk&cd=6&gl=in Project Management: What is a Project. [online]. Last accessed 01 November 2008 at: http://209.85.175.104/search?q=cache:PexhEnDMYFsJ:acru.tuke.sk/doc/PM_Text/PM_Text.doc+notes+on+project+management&hl=en&ct=clnk&cd=2&gl=in The Origins of Modern Project Management. (2007). [online]. Mosaic: Project Services pty Ltd. Last accessed 01 November 2008 at: http://www.mosaicprojects.com.au/PDF_Papers/P050_Origins_of_Modern_PM.pdf WARD, William A. (2007). The Origins Of Modern Project Management. [online]. Practical PM Pty Ltd. Last accessed 01 November 2008 at: http://www.mosaicprojects.com.au/Resources_Papers_050.html Read More