In initial planning phases In monitoring and execution phases

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1 Project management What is it? Project management is a framework for a range of tools for helping plan and implement development and change projects. A range of tools exist, including: Gantt charts (bar charts) Activity charts Flow charts Milestone charts Why used? To assist in the process of applying scarce resources to achieve an agreed goal within time and cost constraints. To support a team and to ensure that commitment is maintained by all people. To ensure that appropriate information is communicated to all interested parties to enable good decisions to be made. When used? In initial planning phases In monitoring and execution phases Joe Tidd and John Bessant John Wiley and Sons Ltd

2 Overall description A project is defined as an activity aimed at achieving a specific goal within an identifiable time scale and at an agreed cost. History is littered with examples of projects which did not live up to initial expectations. That is not to say that they were not eventually completed but the delays encountered and the extra expenditure incurred meant that the rate of return on investment was significantly reduced. At the extreme, some projects are never satisfactorily completed and companies can go bankrupt trying to make projects succeed when they ought instead to be terminated. The aim of good project management is to reduce the chances of this happening and to ensure, as far as is possible given the inevitable uncertainties, that an organisation achieves the best possible returns on its investment. The financial benefits from this aim are clear but there are many other less tangible benefits such as increased personal satisfaction; this leads to increased motivation and enhanced future performance. Experience over many years and a wide variety of situations has shown that although every project is almost by definition, unique, common features can be identified which provide the starting point for performance improvement. It is also generally applied but that consideration needs to be given to a number of organisational features if these are to be used to best advantage. What does this mean for practice and where should an organisation start? The following approach, which might be considered as a set of techniques, is recommended. Specific techniques The techniques described below do not need to be seen as mutually exclusive and in fact they can be used together. In particular, the bar chart is frequently used as a means of portraying the resource requirements and their timing, in short some of the key outputs from what all good planning methods do is to highlight key decision points, milestones or stage- gates. This information is vital for monitoring purposes and it is in this area that a very simple approach has been found to be of real value in assessing progress on projects. An analysis of progress against expectation can highlight the nature of the action which may be needed if corrective action is shown to be necessary. These techniques are clearly designed to help management in striving for improved performance. They are those most frequently encountered in practice and for which computer programmes are either readily available or can be tailor- made. Finally it must be stressed that adopting this form of planning and monitoring is of real value for gathering information which can help an organisation not only to improve the management of individual projects but also to assist in future planning and to identify areas of weakness within the organisation.

3 Clarify and agree objectives and gain commitment This should be done as early as possible and all the people who are going to be associated with the project should be involved in the process. Lack of clarity of objectives is one of the major causes of problems. Closely associated with this is the lack of commitment of all parties to the objectives. This can arise for a number of different reasons, for example a feeling by an individual that the objectives are not the correct ones. This can be overcome through the use of teambuilding approaches (see Portal for more). These approaches also help to encourage commitment by all parties to the success of the project and focus attention of the important role each person has to play to ensure a successful outcome. To reinforce and to support the commitment of individuals requires organisation support particularly with respect to the provision of adequate resources at the right time. It is therefore important to make effective use of planning techniques. These have proved to be very useful in practice especially when backed up by simple monitoring techniques. The latter focus attention on variations from the plans. Variations arise because projects have inherent uncertainty or because changes are made in other parts of the organisation. Such changes can have an impact upon resource availability or on technology development objectives. Projects often have to make a balance or compromise between the use of innovative technology and tried and tested technology. Bar chart (Gantt chart) Figure 1 shows what a bar chart looks like for a simple project. The descriptions on the left hand side are of the individual activities and the lines (bars) indicate both the duration and the timing of activities on a calendar basis. Figure 1 Example of Bar Chart

4 This provides very valuable information and would normally also be used to provide lists of forward requirements against each type of resource against each activity. In situations where other projects may also require similar resource it is possible to develop a multi project plan or schedule which is necessary for good portfolio management. The addition of cost information for each resource provides additional information about future cash flows which are essential for financial planning purposes. Flow chart Figure 2 shows a project presented in the form of a simple flow diagram. Figure 2 Flow chart The added advantage here is the specific identification of decision points, represented as diamonds, which are of particular value in a technology management context because they emphasise the possibility of discontinuation as well as recycling at key points or milestones. Activity based network (or critical path method) Figure 3 shows the way in which the same project would look if portrayed in the form of an activity based network.

5 The value of this formal presentation is that it shows the interrelationship between activities and the dependence, or not, of each one on any other. It allows for the calculation of specific characteristics of a project such as earliest finishing time, critical path and from this it is possible to identify the ways in which the time to market might best be shortened. Figure 3 Activity Based Network Milestone Monitoring (Progress/Slip Charts) When decision points, or milestones, have been identified it is not difficult to construct a progress chart which forces attention on the progress of a project against expectations. The design of such a chart as shown in figure 4 requires information to be provided about the expectation about when a particular milestone is likely to be reached, taking into account progress to date and also future expectations about for example, resource availability as well as possible technical problems. Figure 4 Progress/slip chart

6 Milestone Monitoring is important because it helps in: Identifying Main Goals. Establishing Time and Cost Targets. Identifying Intermediate Decision Points. Agreeing Management Information Requirements. Agreeing Reporting Intervals. Identifying Feedback Mechanisms. Focusing on Critical Variables. Benefits Project management will help to ensure that the agreed outputs from a planned activity match the expectations. Projects in which this is not likely to be the case can be terminated at an early stage and scarce resources released for alternative use. In other cases, activities can be accelerated or decelerated to take account of changing circumstances, when this will be of benefit to the organisation or its customers and suppliers.

7 Business performance can be improved because of the improved financial return on better- managed projects and especially by 'getting to market sooner' with an innovative new product. This target can now override many fold all other financial benefits arising from resource allocation and rescheduling. But these benefits cannot be allowed to override quality and safety and environmental factors. Watch out for For this form of planning and monitoring to be effective it requires, indeed demands, that all those concerned with the project are aware, and committed to the achievement, of the goals. Cross functional as well as cross discipline communication is therefore important and in many cases the involvement of suppliers and customers will be of real value. Projects may overlap organisational as well as geographical boundaries and where networking is involved it is vital that good communication is emphasised. In networked projects or what is now being described as a 'virtual team' the success of a project depends to a higher extent on trust between team members and to a lesser extent on authority or hierarchy. It might be considered that the needs of a client are paramount and that these needs will clarify all differences of opinion about how best to proceed but in some projects, especially those where new technology is being developed, some partners might join for their own reasons, to learn or acquire technology, and not primarily to satisfy the client or sponsor. The methods described in this TM tool description emphasise how to monitor or track progress in a project. Project management also needs an understanding of all those aspects of management that can prevent progress slipping or can bring it back on schedule. It also needs the ability to challenge estimates and schedules that must be changed to meet new requirements, or which were calculated inaccurately. Project management happens in the context of a portfolio of activities. Sometimes there might be a need to override the needs of one project in order to benefit another that is more urgent or more important. The project manager who does not respect this kind of situation, who perhaps has become too closely involved or obsessed with the success of 'his' own project can be a danger to his colleagues if there is insufficient flow of information about the overall picture. Watch out for software dictating project requirements and inhibiting necessary modifications to project progress. Flow diagrams help individuals to see the perspectives of other members; information about schedules and resources that is put into a software program can only represent the best estimate of what the project requires. Estimates might need to change as more information is obtained about the details of a project. If there are good external reasons which will fix when certain components of the project must be completed, then project management might need to use creativity techniques to help solve the problems in a different way.