Project Planning, Management and Control - Literature review Example

3/10/2007 Subject Name | Student Name The management of external resources in a project, with particular reference to the management of communications, relationships and risks I. Introduction The Project Management Body of Knowledge (PMBOK®2004) defines the term project as follows: “A project is a temporary endeavor undertaken to create a unique product, service, or result”. (p. 1) The term project is associated with three distinguished characteristics, (1) temporary, (2) unique product, services, or results and (3) progressive elaboration. The first characteristic refers to the nature of the project which is temporary. Every project has definite beginning and definite end (PMBOK®2004). It has to go through the project life cycle phases, namely (1) initiating, (2) planning, (3) implementing, (4) monitoring, (5) evaluating, and (6) closing. These are essential phases for entire project life cycle. One phase success is influenced by the success of preceding phase. For example, the success of planning depends on the success of initiating. Similarly, the success of monitoring is dependent on the success of implementing. Therefore, every project has its unique process from the initiating phase thorough the its last phase of closing. At the last phase of the project, the objectives set at the beginning are known as the project has achieved or not achieved. Then the project has to be closed, terminated, or extended. However it must be noticed that the temporary nature does not mean that the time is short. In some cases, project may last for several years too. The second characteristic of the project is the unique product, services, or results. A project can produce unique product, services, or results (PMBOK®2004). A project is said to produce a deliverable output which is a quantifiable and measure product, or is a service such as business production or distribution. A project is also said to produce results such as documents for knowledge of production new cars. The third characteristic of the project is progressive elaboration (PMBOK®2004). The project may have a wide and broad definition of project scope definition in the beginning. In the later stages, it will be progressively elaborated to define the scope more details. With such unique characteristics, managing project poses several challenges. Project management is defined by PMBOK®2004 as “the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements” (p. 8). Therefore, project manager must integrate the knowledge, skills, tools, and techniques in the process of initiating, planning, executing, monitoring, evaluating, and closing in order to achieve the objectives. In order to distinguish between the project and project management it is necessary to develop distinct definitions for the two terms. A project can be considered to be the achievement of a specific objective, which involves a series of activities and tasks which consume resources. It has to be completed within a set specification, having definite start and end dates (Munns and Bjeirmi, 1996). In contrast, project management can be defined as the process of controlling the achievement of the project objectives. Utilizing the existing organizational structures and resources, it seeks to manage the project by applying a collection of tools and techniques, without adversely disturbing the routine operation of the company. The function of project management includes defining the requirement of work, establishing the extent of work, allocating the resources required, planning the execution of the work, monitoring the progress of the work and adjusting deviations from the plan (Munns and Bjeirmi, 1996). While managing An effective project management results in delivering the products within scope, on time, and within budget. A project management plan includes management of (1) scope, (2) schedule, (3) cost, (4) quality, (5) human resources, (6) communication, (7) risk, and (8) supply. Belassi and Tukel (1996) argue that the project must operate in an environment where resources are available for implementing the project. These resources include money, materials, human resources, and knowledge. In order to effectively manage the project and optimize the available external resources, the project manager must integrate project management knowledge areas into project management. Among them, this essay addresses managing of relationships, communication, and risk in a project management process. II. Relationship Management A collaborative working relationship should be maintained between the project owner and project manager, with both viewing the project as a partnership (Turner, 2004). Turner (2004) argues that there must be high levels of collaboration between the project manager and project owner. The project must be viewed as a partnership by all the project participants. The project is a temporary organization (Turner and Müller, 2003) and the people working for that temporary organization must work well together. This is fairly obvious, but unfortunately, so often the project becomes a fearful battle between the project manager and project owner. This is particularly the case between the owner and the contractor under confrontational contracting practices so often adopted. (Turner and Müller, 2003a) offer the principal-agency relationship between the owner and project manager as an explanation for why the latter happens. Turner (2004) asserts that the owner should only impose medium levels of structure on the project manager, not too much structure, not too little. Too much structure, and the project manager will not have sufficient flexibility to deal with risks and uncertainties that arise. Too little and laissez-faire management and anarchy will reign. The owner should agree clear objectives with the project manager (that is part of high collaboration) and then give the manager guidance about how those objectives should be best achieved, but leave the project manager room to maneuver to deal with risk and uncertainty. I would say that this means the project manager should be empowered. Empowerment is agreeing objectives, setting a framework, but leaving the manager flexibility to make choices within that framework. Unfortunately, the principal–agency relationship, and the associated adverse selection and moral hazard problems (Turner and Müller, 2003a) causes the owner to try to impose very tight and rigid working practices on the manager. III. Communications Management Communications between the project manager and project owner must be first managed. Ralf Müller (2003) investigates communication structures on projects. The success criteria should be agreed with the stakeholders before the start of the project, and repeatedly at configuration review points throughout the project. There should be an effective communication system between the owner and manager of a project. The owner should demand regular project performance reports. Müller (2003) discovered there was a mismatch between the project performance reports wanted by project owners and what project managers wanted to supply. It is the owners who must have strong desire to receive the project report form the project manager. Whether the project manager is willing to provide the project performance report or not, the project owner must demand. When the project owners request the project performance report, the chances of the project successfully implemented will be higher than those projects in which owners did not require the project performance report. It is noted that where the project owners demand the project performance report, their views are pessimistic of project performance. When the owners did not request the project performance reports, they feel that the project is performing better than what they think. Müller (2003) also noticed that clients who wanted the performance reports, wanted them quite frequently, once every two weeks. They were just about willing to accept them once a month, but no less frequently. Owners also wanted project managers to make a weekly verbal report in person. Although they liked the formal written reports, they wanted to be able to quiz the project manager and read their body language to tell whether they were telling the truth or not. In investigating success criteria on projects, John Wateridge (1995) discovered that a necessary condition for project success was for the stakeholders to have a common understanding of the success criteria before the project started. Where they did not, then it usually led to failure, at least in the eyes of some of the stakeholders. This is fairly obvious. The success criteria should be agreed with the stakeholders before the project starts because if you don’t: 1. Some stakeholders may not share the common view about what the project is doing. 2. Quite small differences in direction at the start can lead to quite large divergence in position at the end. For instance, the project team may agree the project objectives, but differences of opinion about the relative importance of time, cost or functionality can lead to quite substantially different outcomes. As well as agreeing the success criteria with the stakeholders before you start, I suggest you need to go on reminding yourself and the stakeholders what they are, and to agree any changes, at configuration review points throughout the project (Turner, 2004). Project managers use a variety of contents and media for their communications with clients. Formal reports are perceived by clients as the most credible source of information (Johnson et al., 1994). The contents of these reports should be based on the project plan and use defined control criteria for measuring progress and forecasting time and cost for completion (Turner, 1999). The review of project management literature (Müller, 2001) showed that six different categories of formal communication contents are suggested. These are: Status and achievements: reports based on the project plan showing plan adherence in terms of schedule, budget, and implemented functionality. This is the traditional triple-constraints (budget, time, and functionality) and the most basic form of status reporting. Changes to the project: agreed upon changes in project scope, plan, risks, quality requirements, etc, which require a re-baselining of the project plan. Issues and open items lists: a continuously maintained list of current issues and ‘open items’ that need to be resolved for project delivery. Next steps in the project: an update for the client on the near term activities within the project. It is the forward-looking update and complements the backward looking status and achievement reports. Quality and progress measure: the agreed upon quality metrics, such as defect measurements on the rate of software defect discovery and total defects. It also comprises integrated project performance measures, such as earned value management, which integrates scope, schedule and resource for performance measurement. Trends in the project: the tendencies within the project detected through analysis of project progress, such as increasing schedule deviation over time, often calculated from the project’s quality and progress measures. Formal communication takes place along official channels between the project manager and client by which they provide each other with timely information (PMI, 2000). It focuses communication to project related matters concerning the respective organizations (Johnson, 1993). Thus formal communication should follow an expressed purpose and agenda (Cooper, 2000). PMI (2000) defines reports and briefings as indicative of formal communication, whereas ad-hoc conversations are seen as informal communication. Formal situations and the associated communication are often referred to as being regimented, deliberate and impersonal in nature; as opposed to informal situations which are characterized by behavioral spontaneity, casualness, and interpersonal familiarity (Morand, 1995). Speakers in formal communication are said to be more committed to the topic communicated than to the relationship between the two parties, whereas in informal communication they are more committed to the relationship than to the topic (Mead, 1990). While formal communication is perceived as slow in speed and high in accuracy, informal communication is perceived to be high in speed and low in accuracy (Mullins, 1999). This was supported by research done by Johnson et al. (1994), which showed that formal communication is more credible than informal communication. This also explains research results which showed that managers receiving formal project reports feel more in control of the project (Kraut and Streeter, 1995). A summary of the differences of formal and informal communication is provided in Table 1. People’s perceptions of what constitutes formal as opposed to informal communication, are formed through their culture, environment and the situation in which their communication occurs (Mead, 1990). That implies that the borderline between formal and informal communication in the daily work of project sponsor and manager is not easily identifiable. Müller (2003) showed the extent to which informal and formal communication were used was determined by the frequency of interaction and the potential audience of the report. One-to-one interactions between project manager and client were mostly informal, using face-to-face meetings. Few or major project issues identified at these meetings were captured in emails, so they were not forgotten. The meetings outcomes and emails were then used to produce the periodic formal project report, which was potentially distributed to a wider audience, such as senior management in both organizations. With an increasing number of readers not personally involved in the project the nature of the report contents shifted from trust building (knowing what’s going on) to clear and formal report on control metrics. So control substituted trust in cases were informal communication was not possible. The client’s fear of a moral hazard problem as stated above, expressed as the desire for objective project data, like analysis data and other control metrics, increases with geographic distance because of the impossibility to build up trust through informal communication. This is balanced through a request for analytic data in formal reports, but also through use of verbal communication (phone calls) to check the credibility of the report contents. Table 1. Characteristics of formal and informal communication Characteristic Formal communication Informal communication Situation Regimented, deliberate, impersonal Casual, spontaneous, interpersonally familiar Commitment Higher for topic for relationship Higher for relationship than for topic Credibility of contents High Low Style Repots, briefings, etc. Ad-hoc conversations, memos etc. Speed Slow Fast Accuracy High Low Source: Turner and Müller (2003a) IV. Risk Management Ward (1999) argues that there is a common problem in project risk management processes which is the need to determine the relative significance of different sources of risk so as to guide subsequent risk management effort and ensure it remains cost effective. A common approach is to rank risks in terms of probability and impact to identify sources of risk which will receive the most attention. The shortcomings of this technique in guiding the analysis and management of risks and considers the information needed for a proper assessment of importance. For cost-effective management it is desirable to distinguish not only between the size of impacts and probability of impacts occurring, but also other factors such as the nature of feasible responses, and the time available for responses. The paper offers some practical suggestions for dealing with this problem. Whatever their limitations, the popularity of probability-impact grids and associated risk rating is a reflection of the felt need to indicate important risks over less important ones, and perhaps, to do this relatively quickly and simply. Typically the intention is that more highly rated risks should receive closer attention from (designated) project personnel. However, what this `closer attention' should consist of is unclear, whether in terms of more detailed analysis, or in terms of subsequent management of responses (Ward, 1999). To explore this question of important risks further, it is necessary to consider the tasks the risk manager needs carry out. The Association for Project Management's project risk analysis and management (PRAM) Guide describes these tasks in terms of a six phase process, summarized below: Define the project; Focus the PRAM effort; Identification of risks, and possible responses; Assessment involving structuring and ownership of risks and responses, estimation of uncertainty and evaluation of implications; Planning recommended proactive and reactive contingency plans; Management of planned responses, monitoring and controlling developments and revising plans as necessary. The question of which risks are important arises in the latter four phases, and in iterations through these four phases at intervals throughout the project life cycle (Ward, 1999). V. Conclusion In short, this study discusses the importance of project management knowledge areas, namely relationships, communications, and risks management in managing projects. However the other knowledge areas of the project management must not be ignored. ***** References: Belassi, W. and O. Tukel. 1996. A new framework for determining critical success/failure factors in projects. International Journal of Project Management Vol. 14, No. 3, pp. 141-151, Cooper, J.M. (2000) Collaborative communication: six building blocks for conversations that make things happen. In: Proceedings of the Project Management Institute Annual Seminars and Symposium, PMI, September 7–16, 2000, Houston, Texas, USA. Johnson, J.D. (1993) Organizational Communication Structure. Ablex Publishing, Norwood, NJ. Johnson, J.D., Donohue, W.A., Atkin, C.K., and Johnson, S. (1994) Differences between formal and informal communication channels, Journal of Business Communication 31(2). Kraut, R.E. and Streeter, L.A. (1995) Coordination in software development. Communication of the ACM 38(3). Mead, R. (1990) Cross-Cultural Management Communication. John Wiley, Chichester. Morand, D.A. (1995) The role of behavioral formality and informality in the enactment of bureaucratic versus organic organizations. Academy of Management Review 20(4), 831. Müller R. 2003. Communication of information technology project sponsors and sellers in buyer–seller relationships, DBA Thesis. UK: Henley Management College, Henley-on-Thames. Mullins, L.J. (1999) The nature of organisations. In Management and Organisational Behaviour (5th edn), ed. L.J. Mullins.Financial Times Management, London. Munns, A. K. and B F Bjeirmi. 1996. The role of project management in achieving project success. International Journal of Project Management Vol. 14, No. 2, pp. 81-87. PMI. 2000. Guide to the Project Management Body of Knowledge. Project Management Institute, Newton Square, PA. Turner JR, Müller R. 2003. On the nature of the project as a temporary organization. Int J Project Manage 2003; 21. Turner JR, Müller R. 2003a. Communication and cooperation on projects between the project owner as principal and the project manager as agent. In: Huemann M, editors. Proceedings of the Research Conference Vienna X, Vienna: Project Management Group, University of Economics and Business Administration; October 2003. Turner, J. R. 2004. Five necessary conditions for project success. International Journal of Project Management 22: 349–350 Ward, S. C. 1999. Assessing and managing important risks. International Journal of Project Management Vol. 17, No. 6, pp. 331-336, Wateridge, J. F. 1995. IT projects: a basis for success. Int J Project Manage 1995;13(3):169–72. ****** Read More