The Vital Role of Project Management - Essay Example

Report on the Role of Project Management in the Modern Business Enterprise Introduction 1. This report aims to briefly explain and discuss thevital role of project management in the efficient and effective management of the modern business enterprise. 1.2. A business enterprise desiring to succeed in today's complex world of global competition must learn to manage its resources well. As the late management thinker, Peter F. Drucker wrote (1986, pp. 264-265) over twenty years ago, among the vital questions an enterprise should ask are: "What is the next point at which we should review this project What results should we expect by then And how soon" He explained that strategic questions are important, but translating the questions to project-related objectives and following up on those objectives are the keys to manage well the resources of the enterprise and ensuring its long-term success. 2. Terms of Reference. 2.1. This report starts with basic definitions of four key terms used in this report: What is a Project What is Project Management And what is Efficiency and Effectiveness in the context of the modern business enterprise 2.2. We consider the historical development of significant Project Management Tools and Techniques and illustrate some examples of how these tools and techniques contributed and continue to contribute to management efficiency and effectiveness in managing the modern business enterprise. 2.3. We conclude with an important recommendation on the topics discussed. 3. Procedure and Method of Investigation: 3.1. The author used the books listed in the appropriate section marked Reference List. Each book was reviewed and their relevant contents included in this report. In-text citations refer to direct quotations lifted or paraphrased from these references. 4. Discussion: 4.1. Definitions: 4.1.1. A Project is a temporary endeavour undertaken to achieve a particular aim. Every project is time-bound, constrained by time and resources, temporary and unique, may involve human resources from one department or from the whole organisation, and require planning, execution, and control (PMI, 2004, p. 3-4). 4.1.2. Project Management is the "application of knowledge, skills, tools and techniques to a broad range of activities to meet the requirements of the particular project. Project management knowledge and practices are best described in terms of their component processes: Initiating, Planning, Executing, Controlling and Closing" (PMI, 2004, p. 8). 4.1.2.1. A project management team established to work on the project has the task of balancing and satisfying several (often competing) stakeholder interests as to the project's scope, deadlines, financial requirements, risk, and quality while achieving the project's objectives (PMI, 2004, pp. 9-10). 4.1.3. Efficiency and Effectiveness are respectively defined by Drucker (2003, pp. 66-67) as "doing things right" and "doing the right thing". He adds that balancing both is the mark of a business enterprise that is managed properly. 4.1.3.1. Modern business enterprises are characterised by complexity, the need for reaction speed to changes in the marketplace, and business competition. 4.1.3.2. Project management use in modern business enterprises range from the mundane (organising an employee party) to the extraordinary (moving the head office to another location), and from the simple (investigating the failure of a new product) to the complex (launching a marketing information system). All these involve the use of resources (people, finances, materials, and facilities) that need to be managed through a set of activities to achieve a defined objective within a specific timeframe and each provides a venue for the application of project management tools. 4.1.3.3. Several project management tools available to modern business enterprises enable them to manage projects with efficiency and effectiveness. Most of these tools developed in the 1950s from the scientific management theories of F.W. Taylor established in the late 19th century were "characterised by quantitative, or measurable, methods and techniques and contributed to the improvement of efficiencies in business enterprises" (Bedeian, 1985, 494). 4.2. Project Management Tools 4.2.1. Gantt Chart 4.2.1.1. The Gantt bar chart for production planning and control was developed in the early 20th century by the industrial engineer Henry L. Gantt, a close associate of Taylor. The chart specifies the starting and finishing times for each activity along a horizontal time scale. The chart provided managers with a tool to manage a list of distinct activities related to a common goal. 4.2.1.2. Below is an example of a simple Gantt chart. Figure 1: Gantt Chart for Project: Submit Report on Project Management Activity Days Week 1 Week 2 Week 3 Week 4 Research the topic 7 Write 1st draft 10 Rewrite draft 7 Finalise/Submit 4 4.2.1.3. This tool is useful for simpler projects but not for complex ones where "numerous interdependencies between the activities and where time-cost trade-offs need to be investigated" (Zimmerman, 1985, p. 597), which need a new set of tools. 4.2.2. Network Analysis 4.2.2.1. Network Analysis tools were developed for use in planning and scheduling complex projects. The two most familiar are CPM and PERT. 4.2.2.2. Network analysis tools use arrow diagrams (or a network) representing individual activities that lead from an initial event to an ultimate objective. The network shows the interdependencies that exist among the activities. 4.2.2.3. Below is an example of a simple network diagram where activity F is dependent on activities C, D, and E, which will give all those involved in the project an idea of how crucial these three activities are to the project. C E A B D F Figure 2: Simple Network Diagram 4.2.2.4. Network analysis is useful at all levels of management. Supervisors and managers can determine how to sequence project activities better and reduce times and costs, using it as a planning tool to help them know if the project objectives can be accomplished on time and on budget. The senior management use it to evaluate the progress of many projects that are a part of bigger and more complex projects in the whole enterprise (Pidd, 2003). 4.2.2.5. The Critical Path Method (CPM) was developed in 1957 by the DuPont Corporation as a tool to manage the maintenance shutdown and restarting of its chemical plants, a series of complex projects with several linked activities. CPM gives an overview of the time required to finish the project and identifies which activities are critical to achieve the project objective. The critical path is the sequence of activities through the network that will give the longest duration for the completion of the project. The project's managers monitor the activities along this critical path to avoid time loss, additional costs, and a delay in attaining the project's main objective. 4.2.2.6. Below is an example of a CPM diagram where the line connecting each node is an activity and numbers in between indicate the time to complete it. The sequence of activities -----marked by the red line will take [3+3+0+7+6=] 19 days to finish and is the critical path. Figure 3: Simple CPM diagram 4.2.2.7. The Program Evaluation and Review Technique (PERT), previously known as the Polaris evaluation review technique, was developed by the Lockheed Aircraft Corporation, consulting group Booz, Allen and Hamilton, and the U.S. Navy Special Projects Office in 1958 to develop the Polaris missile system (Zimmerman, 1985, p. 601). 4.2.2.8. PERT is very similar to CPM, but the main difference is the "estimation of activity times and the calculation of project time. CPM uses one time estimate for each activity, while PERT requires three time estimates, which can then be converted to calculate a probabilistic distribution of project completion times," (Smith, 1985, p. 748) which is why they are used together as PERT/CPM. 4.2.2.9. PERT involves time estimates of the best (optimistic), worst (pessimistic), and most likely scenarios of the time required to perform the activity based on how well its execution conforms to the plan. This is most useful for activities that have uncertain activity times, a project scheduling problem most common in research and development where many activities have never been attempted and where the project manager wants to account for these uncertainties. Using a series of equations, the expected time for each activity is calculated and the critical path can be easily determined (Anderson et al., 2001, pp. 487-494). 4.2.3. PERT/CPM allows managers to control the time-bound implementation of projects, but several other quantitative methods like linear programming and simulation are available to monitor and control other variables like costs, human resources, and many other processes, helping managers become effective and efficient change agents of the business enterprise (Kerzner, 2003, p. 342). 5. Conclusion and Recommendation. 5.1. Enterprises can use a wide range of project management tools like network analysis, PERT, and CPM and quantitative methods like linear programming and simulation to help them allocate efficiently and effectively their limited resources like time, money, and people in a challenging business environment. 5.2. Every manager must be familiar with how to use these tools to do his or her job of "directing the resources and the efforts of the business towards opportunities for economically significant results" (Drucker, 2003, 67). Without these results, using even the best tools would be useless. Word Count: 1,500 excludes title. Reference List: Anderson, D.R., Sweeney, D.J., and Williams, T.A. (2001). Quantitative methods in business. Australia: SWCP. Bedeian, A. (1984). Historical development of management, in Handbook for Professional Managers, eds. L.R. Bittel and J.E. Ramsey, p. 494-495. New York: McGraw-Hill. Drucker, P. F. (1986) Frontiers of Management: where tomorrow's decisions are being shaped today. New York: Truman Talley. Drucker, P. F. (2003). Peter Drucker on the Profession of Management. Cambridge, MA: Harvard Business School. Kerzner, H. (2003). Project management: a systems approach to planning, scheduling, and controlling. 8th ed. Canada: Wiley. Pidd, M. (2003). Tools for Thinking: Modelling in Management Science. New York: John Wiley. PMI (Project Management Institute) (2004) A guide to the project management body of knowledge (PMBOK). Newtown Sq.: PMI. Smith, L.A. (1985) Project Management in Handbook for Professional Managers, eds. L.R. Bittel and J.E. Ramsey, p. 748. New York: McGraw-Hill. Zimmerman, D. K. Network Planning Methods in Handbook for Professional Managers, eds. L.R. Bittel and J.E. Ramsey, p. 597. New York: McGraw-Hill. Read More