How To Manage Project Management

Transcription

1 MASTER OF BUSINESS ADMINISTRATION Project Management Contact details: Regenesys Business School Tel: +27 (11) Fax: +27 (11)

2 Version number: 7.2_e_f Date of Publication: January, 2014 Publisher: Regenesys Management: Sandton Document Change History Date Version Initials Description of Change 7 September LC First draft 25 September LC Reviewed and updated 25 September JN SME review 25 September LC Amendments as per SME recommendations 15 October _e LvN Editing 4 October PL Approved 27 June _e_f FVS Formatting 22 August CT Referencing revised 16 October _f FVS Formatting 29 October CT New recommended textbook, articles, and multimedia; rewrite to include revised learning outcomes, current knowledge and resources 4 November PL & RS Reviewed 6 November CT Inclusion of review comments and feedback from PL 14 January CT Inclusion of review comments and feedback from RS 24 January _f FVS Formatting 5 February _e_f CJ Proofreading This study guide highlights key focus areas for you as a student. Because the field of study in question is so vast, it is critical that you consult additional literature. Copyright Regenesys, 2014 All rights reserved. No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording or otherwise) without written permission of the publisher. Any person who does any unauthorised act in relation to this publication may be liable for criminal prosecution and civil claims for damages.

3 CONTENTS 1. WELCOME TO REGENESYS INTRODUCTION TEACHING AND LEARNING METHODOLOGY ALIGNING ORGANISATIONAL, TEAM AND INDIVIDUAL OBJECTIVES ICONS USED IN THIS STUDY GUIDE STUDY MATERIAL FOR THE MODULE RECOMMENDED RESOURCES RECOMMENDED BOOKS RECOMMENDEDARTICLES RECOMMENDEDMULTIMEDIA ADDITIONAL SOURCES TO CONSULT LEARNING OUTCOMES CONTENT SCOPE AND LEARNING GUIDANCE LOCATING PROJECT MANAGEMENT WITHIN THE CURRENT CONTEXT DEFINING PROJECT MANAGEMENT THE IRON TRIANGLE LAUFER'S VIEW ON PROJECT MANAGEMENT PROJECT LEADERSHIP PROJECT MANAGEMENT VS PROJECT LEADERSHIP COMMUNICATION 'HIGH TECH' OR 'HIGH TOUCH'? PROJECT TEAM DYNAMICS PROJECT MANAGEMENT LIFE CYCLE PROJECT LIFE CYCLE PROJECT INITIATION PROJECT PLANNING PROJECT IMPLEMENTATION INCLUDING MONITORING AND CONTROL PROJECT CLOSURE POST PROJECT EVALUATION PHASE PROJECT DOCUMENTATION AND REPORTING PROJECT MANAGEMENT INFORMATION SYSTEMS (PMIS) WORK PERFORMANCE REPORTING EFFECTIVE PROJECT REPORTING OUTSOURCING, CONTRACT AND TENDER MANAGEMENT OUTSOURCING CONTRACT MANAGEMENT TENDERS (BIDS) PROJECT SUCCESS FACTORS PROJECT SUCCESS VARIABLES ETHICAL DECISIONS AND STANDARDS POLICIES AND PROCEDURES CLOSING DISCUSSIONS MATURITY OF PROJECT PROGRAMME PORTFOLIO REFERENCES APPENDIX 1: QUICK REFERENCE - PLANS, DOCUMENTS AND REPORTS APPENDIX 2: PROJECT TEAM CHARTER APPENDIX 3: STAKEHOLDER REGISTER (SAMPLE) GLOSSARY OF TERMS

4 List of Tables TABLE 1: SUB-SAHARAN AFRICA - CULTURAL PATTERNS, VALUES AND HABITS TABLE 2: DISTINGUISHING BETWEEN MANAGEMENT AND LEADERSHIP IN PROJECTS TABLE 3: CLOSED AND OPEN COMMUNICATION TABLE 4: PROJECT LIFE CYCLE PROCESSES AND ACTIONS TABLE 5: SALIENCY GRID TABLE 6: STAKEHOLDER ENGAGEMENT ASSESSMENT MATRIX TABLE 7: KEY CONCEPTS IN THE PLANNING PROCESS TABLE 8: COST OF QUALITY TABLE 9: PROBABILITY AND IMPACT MATRIX TABLE 10: GENERIC RISK RESPONSES TABLE 11: PROJECT MANAGEMENT PLAN GUIDELINES TABLE 12: EARNED VALUE MANAGEMENT (EVM) TERMS TABLE 13: EVM ANALYSIS TABLE 14: SELECTION OF CONTRACT TYPES FOUND IN PROJECT MANAGEMENT TABLE 15: PROJECT MANAGER SUCCESS FACTORS TABLE 16: PROJECT PLANS TABLE 17: PROJECT DOCUMENTS TABLE 18: PROJECT REPORTS TABLE 19: STAKEHOLDER REGISTER (SAMPLE) List of Figures FIGURE 1: HIERARCHY STRATEGIC OBJECTIVES, PORTFOLIOS, PROGRAMMES AND PROJECTS15 FIGURE 2: A PORTFOLIO OF PROJECTS FOR AN ORGANISATION FIGURE 3: THE IRON TRIANGLE FIGURE 4: TIME, COST AND QUALITY FIGURE 5: EXTENDED FRAMEWORK FOR PROJECT MANAGEMENT SUCCESS FIGURE 6: THEORETICAL FRAMEWORK FOR TEAM CULTURE FIGURE 7: THE COMPLEXITY OF THE PROJECT MANAGEMENT ENVIRONMENT FIGURE 8: PMBOK'S EXAMPLE OF A SINGLE-PHASE PROJECT FIGURE 9: PMBOK'S EXAMPLE OF A THREE-PHASE PROJECT FIGURE 10: PMBOK'S EXAMPLE OF OVERLAPPING PHASES FIGURE 11: CUSTOMISED PROJECT LIFE CYCLE FIGURE 12: POWER/INTEREST MATRIX FIGURE 13: SALIENCE MODEL FIGURE 14: STAKEHOLDER ANALYSIS TOOL FIGURE 15: WORK BREAKDOWN STRUCTURE (WBS) FIGURE 16: TOP-DOWN AND BOTTOM-UP ESTIMATING FIGURE 17: PROJECT MANAGEMENT IMPLEMENTATION AREAS FIGURE 18: THE RELATIONSHIP BETWEEN COST, TIME AND CHANGE FIGURE 19: MONITORING AND CONTROL LOOP FIGURE 20: FROM DATA TO REPORTING FIGURE 21: MATURITY MODEL

5 1. WELCOME TO REGENESYS Have a vision. Think big. Dream, persevere and your vision will become a reality. Awaken your potential knowing that everything you need is within you. Dr. Marko Saravanja At Regenesys, we assist individuals and organisations to achieve their personal and organisational goals, by enhancing their management and leadership potential. We approach education and development holistically, considering every interaction not only from an intellectual perspective but also in terms of emotion and spirituality. Our learning programmes are designed to transform and inspire your mind, heart and soul, and thus allow you to develop the positive values, attitudes and behaviours, which are required for success. Having educated over students based in highly reputable local and international corporations across over 100 countries since Regenesys' inception in 1998, we are now one of the fastest-growing and leading institutions of management and leadership development in the world. Regenesys ISO 9001:2008 accreditation bears testimony to our quality management systems meeting international standards. Regenesys is accredited with the Council on Higher Education. Our work is rooted in the realities of a rapidly changing world and we provide our clients with the knowledge, skills and values required for success in the 21 st century. At Regenesys, you will be treated with respect, care and professionalism. You will be taught by business experts, entrepreneurs and academics who are inspired by their passion for human development. You will be at a place where business and government leaders meet, network, share their experiences and knowledge, learn from each other and develop business relationships. You will have access to a campus, in the heart of Sandton, with the tranquillity of a Zen garden, gym and meditation room. We encourage you to embark on a journey of personal development with Regenesys. We will help you to awaken your potential and to realise that everything you need to succeed is within you. We will be with you every step of the way. We will work hard with you and, at the end celebrate your success with you. Areas of Expertise Regenesys Business School 1

6 2. INTRODUCTION Welcome to the module on Project Management. The purpose of this module is to analyse and evaluate the processes and techniques required to select and manage projects that will meet the strategic objectives of an organisation. Whilst project management may be perceived as a 'hard' skill, experienced project managers continue to emphasise that 'soft' skills are equally, if not more, important. Therefore, this module not only focuses on the current body of technical project management knowledge but also places a strong emphasis on leadership, team dynamics and stakeholder management. Current thinking also suggests that in our increasingly changing world we must work differently. "All of the world's trade in 1949 happens in a single day today, all of the foreign exchange dealings in 1979 happen now in a single day, as do all the telephone calls made around the world in A year in a day is exactly how it feels sometimes like navigating in permanent white water." (Handy in Laufer, 2012) As the speed of change increases it becomes harder to maintain centralised control and the previously accepted ideology of controlled environments (e.g. PRINCE2 PRojects IN Controlled Environments) is being regularly challenged. In this module we emphasise the need for both control and flexibility, and the inherent leadership challenges associated with these. Project managers must be adept at delegating responsibility (e.g. to risk owners), reprogramming schedules for the least incremental cost, and must use creative and innovative ways to meet seemingly impossible demands. In short, project managers must be able to solve both technical (controlled) and adaptive (uncontrolled) problems. The Project Management Body of Knowledge (PMBOK) remains the leading authority on the subject it is compiled by the world's largest and most respected institute of project managers. This study guide includes reference to many of their well-established principles and practices (latest version published in 2013). In addition to this we prescribe a comprehensive textbook and provide a range of recommended articles and multimedia to support a rich learning experience. The study guide begins (Section 7.1) by locating project management within our current world context challenging some of the long-established practices and drawing attention to a more systemic view of project management. This is followed by a section devoted specifically to project leadership (Section 7.2), incorporating the expertise of several experienced project managers. In Section 7.3, we cover the project life cycle project initiation, planning, implementation, monitoring and control, and closure. This section points to significant learning areas, including definitions, theories, models and principles, together with appropriate strategies and tools in use. Regenesys Business School 2

7 Sections 7.4 and 7.5 turn to project documentation, reporting techniques and important points relating to outsourcing, contract and tender management. Our study guide concludes with project success and failure factors and, importantly, includes reference to ethical standards and decisions faced by project managers. 2.1 TEACHING AND LEARNING METHODOLOGY Regenesys uses an interactive teaching and learning methodology that encourages self-reflection and promotes independent and critical thinking. Key to the approach utilised is an understanding of adult learning principles, which recognise the maturity and experience of participants and the way that adult students need to learn. At the core of this is the integration of new knowledge and skills into existing knowledge structures, as well as the importance of seeing the relevance of all learning via immediate application in the workplace. Practical exercises are used to create a simulated management experience to ensure that the conceptual knowledge and practical skills acquired can be directly applied within the work environment of the participants. The activities may include scenarios, case studies, self-reflection, problem solving and planning tasks. Training manuals are developed to cover all essential aspects of the training comprehensively, in a user-friendly and interactive format. Our facilitators have extensive experience in management education, training and development. Please read through this study guide carefully, as it will influence your understanding of the subject matter and the successful planning and completion of your studies. Regenesys Business School 3

8 2.2 ALIGNING ORGANISATIONAL, TEAM AND INDIVIDUAL OBJECTIVES This course will draw on a model developed by Regenesys Management, which demonstrates how the external environment, the levels of an organisation, the team and the components of an individual are interrelated in a dynamic and systemic way. The success of an individual depends on his/ her self-awareness, knowledge and ability to manage successfully these interdependent forces, stakeholders and processes. The degree of synergy and alignment between the goals and objectives of the organisation, the team and the individual determines the success or failure of an organisation. It is, therefore, imperative that each organisation ensures that team and individual goals and objectives are aligned with the organisation s strategies (vision, mission, goals and objectives, etc.); structure (organogram, decision-making structure, etc.); systems (HR, finance, communication, administration, information, etc.); culture (values, level of openness, democracy, caring, etc.). Hence, an effective work environment should be characterised by the alignment of organisational systems, strategies, structures and culture, and by people who operate synergistically. Regenesys Integrated Management Model Regenesys Business School 4

9 3. ICONS USED IN THIS STUDY GUIDE Icons are included in the study guide to enhance its usability. Certain icons are used to indicate different important aspects in the study guide to help you to use it more effectively as a reference guide in future. The icons in this study guide should be interpreted as follows: Definition The definitions provide an academic perspective on given terminology. They are used to give students a frame of reference from which to define a term using their own words. Examples The example icon is used to indicate an extra/ additional text that illustrates the content under discussion. These include templates, simple calculation, problem solution, etc. Video clip or presentation This icon indicates a URL link to a video clip or presentation on the subject matter for discussion. It is recommended that students follow the link and listen/ read the required sources. Interesting source to consult The source icon is used to indicate text sources, from the Internet or resource centre, which add to the content of the topic being discussed In a nutshell This icon indicates a summary of the content of a section in the workbook and to emphasise an important issue. Calculations This icon indicates mathematical or linguistic formulae and calculations. Self-reflection Students complete the action of selfreflection in their own time. It requires students to think further about an issue raised in class or in the learning materials. In certain instances, students may be required to add their views to their assignments. Tasks The task icon indicates work activities that contact students must complete during class time. These tasks will be discussed in class and reflected upon by students and facilitators. E-learning students can use these tasks simply to reinforce their knowledge. Note This icon indicates important information of which to take note. Regenesys Business School 5

10 4. STUDY MATERIAL FOR THE MODULE You have received material that includes the following: Study guide Recommended reading Assignment These resources provide you with a starting point from which to study the contents of this module. In addition to these, other resources to assist you in completing this module will be provided online via the link to this module. Guidance on how to access the material is provided in the Academic Handbook that you received when you registered for this qualification. 5. RECOMMENDED RESOURCES A number of recommended resources have been identified to assist you in successfully completing this module. 5.1 RECOMMENDED BOOKS The following textbook is recommended and must be used to complete the module: Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, New Jersey: Pearson Education Limited. The author provides valuable case studies to support learning. Please ensure that you order or download your textbook before you start with the module. Other useful sources include: Laufer, A. 2012, Mastering the Leadership Role in Project Management, New Jersey: Pearson Education Ltd. PMBOK. 2013, A Guide to the Project Management Body of Knowledge, 5 th ed., Pennsylvania: Project Management Institute. Regenesys Business School 6

11 5.2 RECOMMENDED ARTICLES Antonioni, D. 2009, 'Crafting the art of stakeholder management', Industrial Management, January 2009 ed. Ebbesen, J.B. and Hope, A.J. 2013, 'Re-imagining the Iron Triangle: Embedding sustainability into project constraints', PM World Journal, 2 (3). Green, S. 2005, Strategic project management: From maturity model to star project management, Projects Center, (accessed 28 October 2013). Jetu, F.T., Riedl, R. and Roithmayr, F. 2011, 'Cultural patterns influencing project team behavior in Sub- Saharan Africa: A case study in Ethiopia', Project Management Journal, 42 (5), Pasian, B., Sankaran, S. and Boydell, S. 2012, 'Project management maturity: A critical analysis of existing and emergent factors', International Journal of Managing Projects in Business, 5 (1), PMI. 2013a, Code of ethics and professional conduct, Project Management Institute, (accessed 25 October 2013). Sharma, V.K. 2013, 'Earned value management: A tool for project performance', Advances in Management, 6 (5). Shenhar, A.J., Dvir, D., Levy, O. and Maltz, A.C. 2001, 'Project success: A multidimensional strategic concept', Long Range Planning, 34 (2001), Ward, J. and Daniel, E.M. 2012, 'The role of project management offices (PMOs) in IS project success and management satisfaction', Journal of Enterprise Information Management, 26 (3), Additional articles that may prompt discussions and further assist you in completing this course will be saved on Regenesys Online under the relevant course. Please visit the site regularly to access these additional sources. Regenesys Business School 7

12 5.3 RECOMMENDED MULTIMEDIA izenbridge Consultancy Pvt Ltd. 2013, 'Project life cycle, PMBOK 5, Lesson 2: Part 4, [video], (accessed 9 September 2013). Litten, D. 2012, 'Learn PMP critical path in 17 minutes flat!', [video], (accessed 11 July 2013). Litten, D. 2011, 'Learn PMP earned value in 10 minutes flat on [video], (accessed 11 July 2013). PMI. 2013b, 'PMI's code of ethics and professional conduct', [video], Us/Ethics/Movie-PMI-Ethics-Video.aspx (accessed 25 October 2013). PUBP , 'Excel cost benefit tutorial', [video], (accessed 11 July 2013). Regenesys Business School 8

13 5.4 ADDITIONAL SOURCES TO CONSULT As a higher education student, you are responsible for sourcing additional information that will assist you in completing this module successfully. Below is a list of sources that you can consult to obtain additional information on the topics to be discussed in this module: Emerald: NetMBA: MindTools: Brunel Open Learning Archive: ProvenModels: 12manage.com: Alliance Online: The Free Management Library: The Charity Village: Project Management Lexicon This is an online database containing journal articles that are relevant to your modules. Please refer to the attached Emerald manual to assist you to download required articles. Information on how to access Emerald is provided to you in your Academic Handbook. You will receive access to the database once you register as a student. This is one of several web addresses that provide a selection of MBA constructs and discussion. It is one of the better of these addresses. MindTools.com is a very useful source of ideas, constructs, management models, etc. with even more useful commentary and description. A Brunel University support-site that provides an easily accessible library of ideas, concepts, constructs techniques, tools, models, etc. ProvenModels' Digital Model Book presents digitalised management models categorised in a clear, consistent and standardised information structure to improve the usability and reusability of management literature. Management models are important generalisations of business situations when applied in context and are powerful tools for solving business issues. This is a website on which one can access numerous models as well as global comments on the models and principles. This could also serve as a place where you could voice your ideas and get feedback from all over the world. The Alliance for Non-profit Management's general introduction to strategic planning is built around 15 questions that cover just about all aspects in brief. (Click on Strategic Planning ) The Free Management Library can be used to improve your organisation, and for your own personal, professional and organisational development. This is by far the most comprehensive overview of all aspects of strategic planning covering all stages of the process. A series of twelve very short articles, by Ron Robinson, an independent Canadian consultant, appeared on Charity Village between November 2001 and October These articles are refreshing in that they do not advocate a one best way for all types of non-profit organisations. They discuss various way of approaching the strategic planning process. This is a comprehensive online dictionary of project management terms, which are largely consistent with the Project Management Body of Knowledge terminology. There are many more sites and articles available that can help you to successfully complete this module. You are encouraged to post the website addresses or URLs of any additional interesting sites that you come across on the Regenesys Learning Platform. In this way, you can assist other students to access the same wonderful information that you have discovered. Regenesys Business School 9

14 A word of caution not all information available on the Internet is necessarily of a high academic standard. It is, therefore, recommended that you always compare information that you obtain with that contained in accredited sources such as articles that were published in accredited journals. 6. LEARNING OUTCOMES Upon completing this course, students should be able to: Review current project management research and identify current issues and trends Interrogate the link between strategic, programme and project management Examine the skills and processes necessary to manage group dynamics and lead project teams effectively Critically evaluate project management definitions, theories, models and principles Select and apply relevant strategies and tools used in the project management life cycle: o Initiate o Plan o Execute o Monitor and control o Close a project Identify, understand and involve stakeholders appropriately in the project management life cycle Manage time, costs and quality effectively and efficiently in complex and dynamic environments Critically analyse the impact that human resources have on projects Evaluate project risks and develop a proactive risk management plan Review project management software as a project management tool Make autonomous ethical decisions and contribute to the development of ethical project management standards Compile professional project documents and reports Critically review key issues relating to outsourcing, contract and tender management Evaluate key project success and failure factors Critically evaluate current project management policies and procedures Regenesys Business School 10

15 7. CONTENT SCOPE AND LEARNING GUIDANCE A number of topics will be covered to assist you in successfully achieving the learning outcomes of this module. It is important to study each of these sections to ensure that you expand your knowledge in the subject and are able to complete the required assessments. The sections that will be dealt with include: Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Locating Project Management within the Current Context Project Leadership Project Management Life Cycle Project Documentation and Reporting Outsourcing, Contract and Tender Management Project Success Factors A more detailed framework of what is required for each of these topics follows under each section heading. A number of questions to probe discussion and guide you towards comprehension and insight are also provided. The timetable under each section heading provides guidance on the time to be spent to study each section. It is recommended that you follow the given timetable to ensure that you spend the appropriate amount of time on each section. Following the timetable will ensure that you have covered the required sections relevant to each assignment and have appropriate time to prepare for the examination. Regenesys Business School 11

16 7.1 LOCATING PROJECT MANAGEMENT WITHIN THE CURRENT CONTEXT Timeframe: Learning outcomes: Recommended reading: Section overview: Minimum of 20 hours Review current project management research and identify current issues and trends. Interrogate the link between strategic, programme and project management. Chapter 1: Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, Pearson Education Limited. Ebbesen, J.B. and Hope, A.J. 2013, 'Re-imagining the Iron Triangle: Embedding sustainability into project constraints', PM World Journal, 2 (3). Jetu, F.T., Riedl, R. and Roithmayr, F. 2011, 'Cultural patterns influencing project team behavior in Sub-Saharan Africa: A case study in Ethiopia', Project Management Journal, 42 (5), Ward, J. and Daniel, E.M. 2012, 'The role of project management offices (PMOs) in IS project success and management satisfaction', Journal of Enterprise Information Management, 26 (3), In this opening section we define project management and locate it within the broader concepts of strategic goals, portfolio and programme management. Given the evolving nature of project management, we consider some of the current issues and trends, and explore the complex and systemic nature of the project environment Defining Project Management The concept of projects has been around since the beginning of history, enabling leaders to initiate, plan and manage projects within the designated constraints of time, cost and quality. Projects exist in all sectors government, private, not-for-profit and development and in some cases they involve multiple entities (e.g. consortiums on collaborative projects). These projects range from a single day to twenty years or more. China's Three Gorges Dam: Their largest engineering project since the Great Wall (and the world s largest hydroelectric dam) spans 2.4km, creates a reservoir big enough to bring cargo ships 2 414km inland and has turbines that generate nearly 10 percent of China's electricity supply. It was constructed using a team of workers scheduled in round-the-clock shifts; 1.3 million people were relocated to make way for the dam, and 100 towns were levelled in the process. After the dam's completion in 2012 (taking approximately 16 years), China continues with its post-construction project work, which includes ecomanagement and helping people resettle. Some of the project's primary objectives include the reduction of China's carbon emissions and economic ascension. (Zhou, 2013) Regenesys Business School 12

17 Woolworths (South Africa) staff transport project: As part of Woolworths' Enterprise Development Programme, they financed a project that would not only support entrepreneurial development in South Africa, but would create jobs and decrease the distance and time travelled by Woolworths employees. Jabulani, a taxi driver in KwaZulu-Natal, was granted a loan of R3.3 million to purchase his fleet of vehicles and employ drivers. This was a pilot project for Woolworths, which they aim to replicate across the country. Jabulani's fleet regularly loops 15 collection points (14 stores and the distribution centre), collecting staff and dropping them off where they can connect with other forms of transport to get them home faster. (Woolworths, 2013) Electric Vehicles Accelerated Development in the North East (England) Consortium of several companies to develop the electronic car industry: They were awarded 5.4 million by the Technology Strategy Board in 2009 for a four-year project. The objective was the scaling up of electric vehicles from trials to mass market and the integration of recharging with the energy supply grid. The project was completed in April 2013, providing valuable information that a single company could not justifiably have achieved on its own. (Technology Strategy Board, 2013) Projects exist to bring about a product, service and/or result that did not exist before. Consider the following definitions. A project is an endeavour undertaken to create a unique product, service or result. A project has a definite beginning and end that is reached when the project's objectives have been achieved (in some cases the project may end if the objectives will not or cannot be met or if the need for the project no longer exists). (Adapted from PMBOK, 2013:3) ISO defines a project as a "unique set of processes consisting of coordinated and controlled activities with start and finish dates, undertaken to achieve an objective". (ISO in Bernitz, 2013) "A project is a unique activity that adds value, expends resources, has beginning and end dates, and has constraints and requirements that include scope, cost, schedule performance, resources, and value." (Vaidyanathan, 2013:2) Regenesys Business School 13

18 Task Questions 1. Brainstorm projects that you have been involved with (or are familiar with) under the categories of: a) Product b) Service, and c) Result 2. Select one of each and determine the following: a) Project's objectives, and b) Start and end dates 3. Determine what distinguishes a project from day-to-day activities. Projects are unique; they are temporary in nature (definitive beginning and ending dates), have specific objectives and are deemed successful when the project objectives are achieved. However, bear in mind that in some instances projects may be discontinued because the project is no longer viable (e.g. innovations in the industry render the product obsolete). Importantly, projects are planned to include decision points, at which time 'go/ no go' and other important decisions are made. We will look closely at these decision points in this study guide when we discuss the life cycle of a project. A successful project is one that meets or exceeds the expectations of its stakeholders (e.g. funders, shareholders, management, client, community, employees, etc.) those who care about or who have a vested interest in the project. As Watt (2013) states: "Key stakeholders can make or break the success of a project. Even if all the deliverables are met and the objectives are satisfied, if your key stakeholders aren't happy, nobody's happy." Given the importance of stakeholder management, we will analyse stakeholder identification, assessment and engagement in detail when we discuss project planning. Distinguishing between portfolios, programmes and projects In project management, a portfolio refers to a collection of programmes and projects (including sub portfolios and sub programmes where appropriate). A portfolio is a set of projects and/ or programmes that are not necessarily related but are brought together for the sake of control, coordination and optimisation. Regenesys Business School 14

19 A portfolio is a collection of programmes and projects that are grouped together to facilitate effective and efficient management of the work required to meet the organisation's strategic objectives. The projects, or programmes of the portfolio, may not necessarily be interdependent or directly related. (Adapted from Pinto, 2007: ) A programme is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. (Adapted from Pinto, 2007:479) Consider the hierarchy in the following diagram. Note that portfolios, programmes and projects derive their purpose from overarching strategic objectives, e.g. satisfying organisational needs and priorities. And note that projects within a programme are related as inferred by the definitions given above (horizontal connectors between projects under a programme). Figure 1: Hierarchy Strategic Objectives, Portfolios, Programmes and Projects (Adapted from PMBOK, 2013:5) Soltis (2013) provides a useful way of viewing the differences, as shown in the figure below. Regenesys Business School 15

20 Figure 2: A Portfolio of Projects for an Organisation (Soltis, 2013) As you can see from Soltis' (2013) diagram, the portfolio of projects represents all the projects in the pipeline for the current year in the organisation, including the beginning of the next year. Three projects fall under one programme and there are three further projects running independent of each other. Using a timeline assists in understanding the potential need for competing resources (e.g. human and financial). The project management office For organisations running multiple projects, on an ongoing basis, a Project Management Office (PMO) is justified. As Soltis (2013) emphasises, "It is not enough to say you completed your project on time, and to schedule or budget if you can't prove those projects brought value to the company." Consider how Soltis (2013) views the role of the Project Management Office (PMO), especially in terms of adding value: Strategic role: PMO works with senior leadership to select projects that best align with the strategic goals of the organisation and have sound business cases (e.g. provide the best returns on investment) especially when there are resource constraints. The technique to achieve this is: Regenesys Business School 16

21 o Portfolio optimisation: "Allows you to find a set of projects that yields the maximum portfolio value when you have cost, resource, and other constraints" (Huhn, 2010). For example, imagine that you have 30 potential projects that would cost a total of $40 million and require 30 full-time employees but you only have a budget of $20 million and 22 full-time employees. Consider too that you must achieve a minimum return on investment of 15% and you must control the average portfolio risk a possible solution to this challenge is 'portfolio optimisation' (Huhn, 2010). Governance role: Projects are monitored to ensure process and procedures are followed (e.g. using electronic portfolio dashboards and other tools such as Microsoft Project). Where projects fall short of their scheduled deliverables in terms of, for example, time and cost they are flagged and escalated up the chain of command. Historical role: This provides a learning platform for future projects (archive) and most importantly validates that what was delivered was according to the project charter (to be discussed further in this study guide). The archive (all the project documents created during the project) is an electronic and/ or paper-based repository. This is particularly important if the organisation is in a regulated industry. The types of questions that should be asked include: o Did the project meet the objectives it set out to achieve? o What lessons can be learned from the project? o Did the project deliver the benefits that were defined in the business case did it add value? Task Questions 1. Argue for and against the concept of a Project Management Office (PMO). 2. Is a PMO justified in your organisation? Why/ why not? 3. Conduct your own search on 'portfolio optimisation'. Significant to the above hierarchy is aggregate performance. Aggregate performance: The success of a project will be measured by its deliverables in terms of specific variables, e.g. cost, time, quality, etc. The success of the portfolio or programme will be measured by the aggregate performance of the components against the strategic objectives. For the purposes of this module our focus is on 'project management'. However, keep in mind the overarching framework within which projects are located, their aggregate performance and the contributions that projects make to business value. Regenesys Business School 17

22 Task Questions 1. Brainstorm a portfolio and related programmes and projects that you have been involved with in your organisation (or one with which you are familiar). 2. Sketch a diagram that shows the relationship between the strategic objectives, portfolio and its programmes and projects. 3. Consider the integrity between the stated strategic objectives (or overarching goals) and the objectives that flow from this into the portfolio, programmes and projects (e.g. deliverables and potential timeframes, budgets, costs, resources, quality and risks). Read the following journal article before continuing with the next discussion. In the last few years PMOs have been the subject of an increasing number of research studies. Ward, J. and Daniel, E.M. 2012, 'The role of project management offices (PMOs) in IS project success and management satisfaction', Journal of Enterprise Information Management, 26 (3), The Iron Triangle For many years academics and practitioners have attempted to define the criteria against which project success should be measured. The 'Iron Triangle', based on the criteria of quality, time and cost, has provided such a framework. Figure 3: The Iron Triangle Quality Time Cost Regenesys Business School 18

23 The Iron Triangle includes three mutual constraints, e.g. increasing quality will increase the amount of time needed, which will also lead to an increase in cost. A change in one variable has implications for the other two (uses the basic principle that constraints automatically involve tradeoffs). Consider the diagram below. Figure 4: Time, Cost and Quality Project Scope A allows for relatively low cost and little time; therefore, the quality achieved will also be relatively low. Project Scope B allows just as little time, but by greatly increasing cost, managers achieve a high level of quality. And Project Scope C achieves the same high level of quality at a much lower cost by increasing the timeline for the project. Current thinking suggests that whilst these three constraints are important, they can narrow the focus away from other crucial project success factors sustainability being one such factor (Ebbesen and Hope, 2013). Read the following recommended journal article, which discusses the emerging prominence of sustainability within the field of project management. It is argued that key stakeholders may not perceive projects that are delivered on time, within budget and quality specifications as necessarily successful on their own. Ebbesen, J.B. and Hope, A.J. 2013, 'Re-imagining the Iron Triangle: Embedding sustainability into project constraints', PM World Journal, 2 (3). Regenesys Business School 19

24 As Ebbesen and Hope (2013) argue, when placing sustainable development in an organisational or business project context, the concept of the 'triple bottom line' becomes increasingly relevant. Task Questions 1. Referring back to our Woolworths example (the staff transport project), the concept of 'sustainability' is evident. Consider that the pilot project's success was measured against time, cost and quality alone. What would the likely consequences be for the longevity of Jabulani's business and the strategic objectives of Woolworths? 2. Based on the article by Ebbesen and Hope (2013), what are the drivers for sustainability? Do you agree that Project Management is then ideally placed to contribute to sustainability and the 'triple bottom line'? When referring to success as defined by PMBOK (2013), it is clear that the original framework for success (the Iron Triangle) may be limited in its scope: Defining project success: "The success of a project should be measured in terms of completing the project within the constraints of scope, time, cost, quality, resources, and risk as approved between the project managers and senior management Project success should be referred to the last baselines approved by the authorised stakeholders." (PMBOK, 2013:35) As suggested by PMBOK (2013), there are more than the three original constraints (time, cost and quality), as depicted in the framework below. Depending on the nature and goals of the project, an organisation may add, for example, 'sustainability' to this framework. Note, too, that project management together with stakeholders are central to the framework. Regenesys Business School 20

25 Figure 5: Extended Framework for Project Management Success Scope Risk Time Project management and stakeholders Resources Cost Quality (Adapted from PMBOK, 2013:35) This study guide explores each of the components, which are typically included in the Project Plan. Refer to Appendix 1 for an overview of the project plans Laufer's View on Project Management Consider the following excerpt by Laufer (2012): The classical model of project management, in which standards are developed for virtually all situations, expects the project manager to serve primarily as controller: to ensure that team members adhere to the established standard. This role entails only a minimal requirement for judgment and no requirement for adaptation. In reality, the project manager must constantly engage in making sense of the ambiguous and changing situation, and he must adjust the common practices to the unique situation. This process requires a great deal of interpretation and judgment " (Laufer, 2012:218) Laufer (2012) emphasises that the external environment of contemporary projects is full of surprises, can produce novel problems (e.g. the partial shutting down of US government for 16 days in October 2013), and this environment can be described as messy and ill-structured. Regenesys Business School 21

26 It is useful to reflect on two sorts of 'order' together they provide the context for modern day project management. 'Geometric order' and 'living order' Bergson (in Laufer, 2012) states that there are two sorts of order: geometric order (the traditional concept of order) and living order (created by constantly changing environments and uncertainty). In a perfectly ordered world projects can be initiated, planned, executed and closed with little interference and unquestionably this is the aim of project management. However, given the permanent white waters of our world today, it is unlikely that geometric order will prevail throughout the project. Laufer (2012) rather describes it as follows: "All projects aim to reach a perfectly functioning product with geometric order. At the start, they may face great uncertainty living order that does not completely disappear over the entire course of the project. Gradually, some parts of the project approach geometric order, though in an era of 'permanent white water', the project as a whole does not assume geometric order until late in its life." (Laufer, 2012:214) Several significant factors emerge as a consequence of this 'new order', including issues relating to: leadership, context, project teams, anticipation of problems, communication, culture and ways in which to navigate projects during uncertainty. Guided by the work of Laufer (2012), we have highlighted some of these below. Leadership qualities and context Firstly, project managers must be able to demonstrate strong leadership qualities. Whereas managers seek order and control, leaders can tolerate and navigate chaos/ lack of structure and uncertainty. For this reason we have dedicated a full section specifically to understanding and evaluating leadership qualities in complex and dynamic projects. "Lead so you can manage." (Laufer, 2012:236) The second important factor pertains to context. The traditional one best way approach to project management may not work in all situations. The successful project manager, and team, must be flexible and make necessary adjustments to their practices on the one hand they must rely on the accumulated knowledge of the organisation, but on the other hand they must be comfortable with switching to creative and innovative practices. And, at times, this will include challenging the status quo. "Adjust your practices to the uniqueness of each situation." (Laufer, 2012:218) Regenesys Business School 22

27 The 'right' people Then there is arguably one of the most important considerations recruiting the right people (at the right time) onto the project (including the project manager). People matter most because they make the systems work. And making the systems work means using insightful and systemic thinking that will ensure the project is successful even in turbulent waters. "With the right team, almost anything is possible with the wrong team failure awaits." (Laufer, 2012:229) Anticipation Traditionally, monitoring and control has been the central pillar of project management. Whereas planning establishes the targets and how these will be achieved, monitoring and control ensures that these targets are reached. Given the argument that we work in turbulent waters, greater significance is being given to anticipation and the concept of 'feed forward'. Whilst techniques such as 'Earned Value Management' provide predictions about the future costs and timeframes for project completion, different tactics are required to foresee the passage of the project through turbulent waters (e.g. the type of feedback that will help the project team to learn faster and perform better tomorrow). "Anticipating problems leaves sufficient time to attenuate and often eliminate their impact on the project." (Laufer, 2012:229) Communication Communication is a long-established debate over the past decade technology has enabled reach and speed, but arguably it has also diminished the value of face-to-face communication. Large projects spanning vast distances make face-to-face communication expensive, but without it active listening is impoverished and without active listening many of the issues we have raised above have little chance of happening leadership, understanding the context, recruiting the right people, establishing an appropriate culture in a relatively short timeframe and anticipating problems. "Use communication appropriately, from high tech to high touch." (Laufer, 2012:230) Regenesys Business School 23

28 Culture To drive a specific culture in an organisation is a substantial task even more so in a project, which has a relatively short lifespan. The project manager and team may come from multiple professional backgrounds, each contributing divergent assumptions, values and perceptions of reality that combine to create sometimes serious implications for project performance (Laufer, 2012). In support of Laufer (2012), Balden, Price and Dainty (in Jetu, Riedl and Roithmayr, 2011) argue that, "the behaviour of people needs to change in order to create an appropriate project culture for successful project delivery." However, as Jetu et al's (2011) framework suggests, project team behaviour has its roots, in part, in cultural patterns, values and habits. The theoretical framework provided by Jetu et al. (2011) explains how cultural patterns, values and habits translate into behavioural manifestations that in turn affect project team behaviour and ultimately affect project success. Figure 6: Theoretical Framework for Team Culture Cultural Patterns Project Team Project Team Behaviour Context Values Habits Behavioral Manifestation (Interactions, Activities, and Sentiment) Teamwork Behaviour Task Behaviour Project Success (Jetu, Riedl and Roithmayr, 2011) Significant to the model is an understanding of the fundamental cultural patterns, values and habits of the team members and how these flow to and impact on the project team and, consequently, the success of the project. Consider, for example, the cultural patterns, values and habits in Sub- Saharan Africa in the table below (Jetu et al., 2011). Regenesys Business School 24

29 Table 1: Sub-Saharan Africa - Cultural Patterns, Values and Habits Cultural patterns Cultural values Cultural habits For example, cultural patterns such as respect for elders, consensus decisions, respect for authority, family orientation, collectivism, etc. are apparent across most African countries. There are well-perceived cultural values commonly referred to in existing literature that characterise project environments in Sub-Saharan Africa including: Traditionalism Extended family orientation High-context communication Autocratic leadership, and Bureaucratic controls and procedures The above prevailing cultural patterns and values are believed to largely inhibit productivity, undermine proper communication and transparency, restrain individual initiatives and commitment, and instead encourage the habits of shirking accountability and responsibility. (Jetu, Riedl and Roithmayr, 2011) In considering project team behaviour (refer to the framework provided above), two complementary elements are important: Task behaviour (inherent in the technical aspects of the tasks and contribute to task accomplishment), and Teamwork behaviour (characteristics of work teams and needed to ensure shared understanding and the viability of working teams) Cultural patterns, values and habits have a direct impact on project team behaviour and tend to manifest themselves in both teamwork and task behaviour an understanding of which is central to project success. Read the full journal article by Jetu et al. (2011). Whilst the article uses Sub-Saharan Africa as the basis for research, arguably the same principles governing culture in project management across other continents (cultural patterns, cultural values and cultural habits) apply. Jetu, F.T., Riedl, R. and Roithmayr, F. 2011, 'Cultural patterns influencing project team behavior in Sub-Saharan Africa: A case study in Ethiopia', Project Management Journal, 42 (5), Regenesys Business School 25

30 Task Questions 1. Given the examples of Sub-Saharan African cultural patterns, values and habits, discuss your interpretation of the impact of these on project task behaviour and teamwork behaviours. 2. After reading the full journal article, evaluate the significance of Jetu et al's (2011) framework for project managers in other parts of the world. 3. "Culture is presented as the fabric of individual behaviours including shaping the project team members' behaviour." Discuss this concept in the context of projects that you have been a part of. To what extent do you attribute culture to project success? Justify your assertions. In addition, it must be considered that projects are not free from the influence of organisational climate and its management styles (a part of the context within which the project is located) representing institutional influences. Further, consider that environmental factors play a significant role in team behaviours; for example, economic pressures that transfer to task behaviours (e.g. infighting over limited resources). This systemic view of 'influences' on project team behaviour is complex but cannot be ignored. How, then, is project culture shaped? Appropriate project culture Arguably, project culture can be shaped; and the positive aspects in a cultural context can be carried over to project work, thus contributing to project success. Further, organisational culture is extremely important in "mediating the influence of societal culture on project team behaviours" (Jetu et al. 2011). In light of our discussions, two important questions emerge: What forms of project team intervention strategies are the most useful to support project success? (For example, these might include defining project team goals, negotiating and assigning tasks, empowerment especially to risk owners, creating a productive climate, clarification of functions and boundaries, clarification of reward systems for team efforts and programmes geared to members' training and development.) What specific project team values, attitudes and behaviours are important to bring about project success? (For example, these might include project specific norms and rules relating to project work requirements and demands, accountability and responsibility for results, supportive attitudes, trust in and respect for each other and established conflict resolution methods.) Regenesys Business School 26

31 Kloppenborg and Petrick (in Jetu et al., 2011) propose the following stages to develop appropriate team cultures that run in parallel with the life cycle of a project: First stage (i.e. in project initiation) intellectual virtues: To set goals (including priorities), identify final deliverables, identify potential roadblocks and risks and determine overall feasibility of the project using rational intelligence. Second stage (i.e. project planning) social and emotional virtues: To negotiate activities, cost schedules and resolve human resource requirements using emotional intelligence. Third stage (i.e. project implementation) moral virtues: To make decisions, solve problems, take actions and do what it takes to get the project done using moral intelligence Fourth stage (i.e. project monitoring and control) political virtues: To objectively assess performance and recognise contributions to project objectives using social intelligence. Task Questions 1. Critically evaluate the following statement: "By integrating project team management activities, project team intervention strategies and the desired project team values, attitudes and behaviours into the project life cycle, project practitioners and managers can avoid or mitigate the negative impacts of cultural habits, thereby improving the performance of these projects." (Jetu et al., 2011) 2. How might the 'virtues' offered by Kloppenborg and Petrick contribute to developing an appropriate project culture? 3. What have you learned from this section on culture and its influence over project success? 4. How does what you have learned change the way in which you think about culture and project management? Navigating projects Before we draw all of the above together into a mind map it is useful to reflect on Laufer's (2012) analogies on how project managers act. Consider the following excerpt and the questions that follow: Task Questions Comparison between the European and Trukese navigator The European navigator begins with a plan a course that he has charted according to certain universal principles, and he carries out his voyage by relating his every move to that plan. His effort throughout his voyage is directed to remaining 'on course'. If unexpected events occur, he must first alter the plan, then respond accordingly. The Trukese navigator begins with an objective rather than a plan. He sets off toward the objective and responds to conditions as they arise in an ad hoc fashion. He utilises information provided by the wind, the waves, the tide and current, the fauna, the stars, the clouds, the sound of the water on the side of the boat, and he steers accordingly. His effort is directed to doing whatever is necessary to reach the objective. If asked, he can point to his objective at any moment, but he cannot describe his course. (Suchman in Laufer, 2012) Regenesys Business School 27

32 Task questions: 1. There is an important lesson here for project managers. The European navigator exemplifies the use of prevailing scientific models, whereas the Trukese navigator uses techniques consistent with the environment. In your opinion, which one is 'right'? Justify your response. 2. Do you agree that the European method is more suitable to stable environments and few project uncertainties (in 'geometric order') and that the Trukese method is more suitable when project uncertainty is high and the environment is less stable (in 'living order')? 3. Which approach is more likely if the project involves the development of a new product using an immature technology (or threat of a disruptive technology)? Note: 'Disruptive technologies' are those that will displace earlier technologies and may even transform life, business and possibly even global economies (e.g. advanced robotics, next generation genomics, and energy storage are imminently disruptive technologies in 2013/ 14). Now that we have challenged some of the traditional ways of thinking about project management and sensitised you to the complex nature of projects, let us draw these insights together in a mind map. Throughout the module, take time to pause and reflect on the implications of these elements especially in terms of decision-making and your actions. Regenesys Business School 28

33 Figure 7: The Complexity of the Project Management Environment Navigation Strategic objectives Success criteria Communication Anticipation/ foresight PROJECTS "Unique" Geometric order vs living order Leadership People Context Culture (Adapted from Laufer, 2012) Task Mind Map Given the extent of the knowledge contained in the field of project management, you are encouraged to develop your own personal mind map. As you progress through this study guide, the recommended reading, and your own research, continue to build your mind map adding important knowledge and reflective insights as they occur. Regenesys Business School 29

34 7.2 PROJECT LEADERSHIP Timeframe: Learning outcome: Recommended reading: Recommended reading Section overview: Minimum of 20 hours Examine the skills and processes necessary to manage group dynamics and lead project teams effectively. The following book contains eight project management case studies that provide insightful accounts of successful project leadership: Laufer, A. 2012, Mastering the Leadership Role in Project Management, New Jersey: Pearson Education Ltd. Green, S. 2005, Strategic project management: From maturity model to star project management, Projects Center, ement.pdf (accessed 28 October 2013). Project management is a subset of management and, therefore, much of what you have learned about management should apply here. Significant to this section is that project managers too often trivialise the role of leadership in project management, believing that if they use project management techniques they will have no problem in planning and managing projects. This could not be further from the truth. As Msengana (2012:37) says: "When working with human beings, you cannot expect to push a button to make something happen as would be the case with a machine human beings are driven by emotions and most of the time it is tapping into these emotions that drives progress." The more advanced your project management role, the more vital it becomes to understand human behaviour. Influence, persuasion and relationships play important roles, all of which rely heavily on an understanding of human behaviour Project Management vs Project Leadership Msengana (2012) and Laufer (2012) argue that the human aspect of project management can be easily overlooked over the years project managers have become so preoccupied with the technical dimensions of implementing projects that they have completely neglected the sociocultural dimension. Msengana (2012) argues that project managers are not mere stewards of policies, procedures, plans and human machines. When project managers give up what is essential to being human "they create people who are devoid of spirit, will, passion, compassion, emotions and even intelligence" (Msengana, 2012:6). Regenesys Business School 30

35 What we call 'soft skills' is, ironically, hard to master, and there are some important lessons to be learned, some of which include (Msengana, 2012:6 9): Meaning: People are motivated by something that creates meaning in their lives. Good virtues: When good virtues, such as empathy and understanding, fall by the wayside, a project manager will have difficulty connecting with his/ her team. Power: Power (based on trust) should be given to project team members to make effective decisions about the daily challenges facing them. "The project manager's role extends beyond merely making project plans, implementing projects and monitoring progress they are actually facilitators of a process. They bring together people with diverse views and backgrounds to create sustainable solutions we cannot direct people into excellence, we can only engage them enough so that they want to do excellent work." (Msengana, 2012:11) Given that much hinges on the relationship that project managers establish with their project teams consider the following steps in growing relationships as proposed by Msengana (2012:12 14): Expect the best of others (positive behaviours are intuitively understood or 'read') Seek first to understand (despite our different backgrounds, values and ways of thinking and acting there is always some unifying factor) Reward open communication (don't 'kill the messenger' who brings bad news as this stifles the relationship notwithstanding that open communication has a direct impact on risk identification) If offended take the initiative (by failing to confront people and situations a project manager runs the risk of destroying the very same thing that s/he created a relationship; in most cases taking the initiative can strengthen the relationship) Admit your mistakes (recognise your mistakes and make changes pursuing an incorrect course to save face will lead to diminished relationships; relationships are built through providing team members opportunities to step up to the plate/ fill the voids; it is not worth sacrificing everything for the sake of being right) Know when to push and when to pull (if you are always pushing you run the risk of credibility because to you everything is urgent) "Project managers who are conscious of the feelings of others always evaluate their actions before acting. They put themselves in other people's shoes this is the basis for empathy. Project managers who do not have empathy for others will never win the respect of their team members." (Msengana, 2012:16) Regenesys Business School 31

36 Task Questions 1. Discuss the dilemma that project managers face: on the one hand project managers must put in place tight control processes, especially in terms of costs, timeframes and quality; however, on the other hand the era of 'Command and Control' even in project management has passed. 2. Read the following excerpt and then reflect on your perspectives toward 'pushing' and 'pulling'. Excerpt from Msengana (2012:38): "Project managers are notorious for pushing the boundaries when it comes to projects. This is usually interpreted as pushing people around, and they are often hated for it. Creating progress in projects is not only about pushing the boundaries sometimes things don't go your way, and you have to listen to people around you when they say something cannot be done in accordance with your expectations. As a project manager you have to maintain a balance between pushing and pulling away, so that you can let your teams be creative about the challenge at hand. Excellent leadership skills give a project manager the ability to discern when to push and when to pull. If you are always pushing, you run the risk of losing credibility, because to you everything is urgent. In the long run, project managers who keep coming up with urgent tasks are not take seriously; the reality of the matter is, not everything is urgent all the time." "Life is not measured by the number of breaths we take, but by the moments that take our breath away. Although most of the time project managers perform managerial activities, the incidences in which they act as leaders are what define them in the eyes of their team members as leaders who they willingly follow." (Laufer, 2012:238) The statement by Laufer (2012) emphasises the difference between project managers and project leaders in a world perceived as being in 'geometric order' all projects would require plan-driven management. However, in our real world of 'living order' there is a strong case for both management and leadership. Good managerial skills are required to solve technical problems as Laufer (2012) argues, they might require great flexibility, strong team relationships and high responsiveness but they can still be resolved by maintaining the status quo. Other problems that are not so well defined and may even require new learning and changes in behaviour (i.e. challenging the status quo) require leadership. This clear distinction between management and leadership is significant for project managers remember projects are unique and not everything will be according to plan. Consider the distinctions summarised below: Regenesys Business School 32

37 Table 2: Distinguishing Between Management and Leadership in Projects Management Leadership Practices requiring routine activities: Planning, monitoring and anticipating Using face-to-face communication as the primary communication mode Being action-oriented and focusing on results Practices requiring non-routine interventions: Challenging the status quo Negotiating to obtain the right people at the right time Shaping the right culture Navigating the 'turbulent waters' Technical skills: Scheduling Planning resource allocation Creating baseline budgets Preparing status reports Putting in place effective processes Sociocultural skills: Effective problem-solving Teamwork Negotiating win-win situations Managing expectations Managing stakeholders (Adapted from Laufer 2012:236; Msengana, 2012:21) Strategic project management leaders Green (2005), in his paper titled 'Strategic Project Management', states that: "PM Standards, training and software are overwhelmingly rational and analytic. They seek to reduce uncertainty and risk and diminish the importance of the human factor." He argues that the project management 'books of knowledge' which are essentially toolkits of procedures and rules obviate the need for high level management just a need for everyone to follow orders. Some companies, however, want to take project management to a higher level a strategic level where they can create a sustainable competitive advantage via project management through developing the "scarce, firm specific resource of star project leaders and the tacit knowledge they help to create" (ibid). Green (2005) describes these progressive organisations as: "Leveraging their skills widely, and appreciate the value that these people bring through their judgement, experience, political nous and diplomacy as much as through their technical competence and assiduous following of procedures the two great functions of management, differentiation whereby tasks are divided into bite size chunks and integration whereby these tasks are then integrated is the very stuff of project management." (Green, 2005) Regenesys Business School 33

38 Read Green's (2005) full article at the following link and then complete the tasks that follow: Green, S. 2005, Strategic project management: From maturity model to star project management, Projects Center, df (accessed 28 October 2013). Task Questions 1. One of the most common assumptions in Project Management is that technically skilled people can simply be promoted to project management roles. Explain why this assumption might be flawed. 2. Project failures are forcing organisations to introduce more project controls argue for and against this. 3. The economic downturn is forcing organisations to be even more prudent in spending money, especially on projects. What are the consequences for project management and project leadership? 4. Research the following leadership concepts and then write a two-page, insightful evaluation of these in terms of their suitability for current project management: a) Taylorism b) Trait Theory c) McGregor's Theory X and Y d) Blake and Mouton's Managerial Grid e) Fiedler's Contingency Model f) Servant leadership g) Transactional leadership, and h) Transformational leadership Important: At Master s Level, National Qualifications Framework (NQF) Level 9, you must be able to present a text that is guided by the framework described below: A. Knowledge content (factual, conceptual and procedural knowledge) B. Understanding/ explanation (definitions, theories, models, relationships, frameworks, processes/ procedures) C. Application (use of knowledge for a specific purpose, e.g. citing of explained examples) D. Analysis (breaking down/ segmenting into parts and describing how the parts relate to the whole in examples given) E. Synthesis (drawing together of the discussion to formulate conclusions) F. Evaluation (making of judgements based on specific criteria and/ or standards), and G. Insight (recognising components of a new structure, creating something new, demonstrating original thought) Students will be penalised both in the assignment and examination by failing to demonstrate the above. Applying synthesis, evaluative competence, and providing insights (original thought) will significantly elevate the quality of your submissions, but only if these are supported by the early stages in the framework (e.g. knowledge, understanding, application and analysis). If you are unsure as to the requirements for answering questions at NQF Level 9, please revert to your facilitator or academic head for guidance. Regenesys Business School 34

39 7.2.2 Communication 'High Tech' or 'High Touch'? The rapid evolvement of information and communication technology (ICT) has led to significant changes in organisational processes including project management processes. New technologies are creating real-time information sharing and feedback. Tools are being developed for more effective and collaborative ways of working, communicating and problem-solving using advanced technologies (e.g. collaborative platforms). However, many project management practitioners (Laufer, 2012:230) still argue in favour of face-to-face communication as the primary communication mode. Task Questions 1. Given your experience and knowledge of communication theory, brainstorm the likely issues relating to high tech and high touch communication in the field of project management. 2. It is argued that one of the reasons for project failure includes the failure to obtain cooperation among multiple stakeholders who have competing objectives. Given this and other similar scenarios, discuss when high tech and high touch communication are appropriate/ inappropriate. Use theory-based knowledge to support your arguments. When projects might suffer from high uncertainty, the role that communication plays becomes even more important, and not only face-to-face communication but also strategies employed in face-toface communication. High-touch project communication Given the centrality of language in the project life cycle, it is surprising how few project managers pay any attention to it. Few recognise that many common elements of operational conversations are in fact active barriers to successful strategic conversations. Conversations form the basis of all project decisions, both strategic and operational, so managing the language (the currency of business knowledge) must become a project management capability. Operational conversations rely on the knowledge gained from the past and present, whereas strategic conversations rely on creating the knowledge that will be necessary for the future success of the project. These two dissimilar contexts require different approaches. Regenesys Business School 35

40 Strategic conversations require team members to: Focus on building shared meaning, not on who is right Leave authority at the door Remove time pressures Create space for something new to take shape Move into new and unfamiliar territory, and Talk about areas that have never been talked about before If adversarial tones emerge in strategic conversations and participants strenuously advocate their own versions of 'the truth' to see whose version prevails, perspectives will be limited and the potentially successful outcome of the project will be impoverished and compromised. Operational conversations require participants to: Focus on the established, shared operational language, using brevity and clarity Assume responsibility for the specific set of agreed objectives, and Avoid prolonged conversations adopt a need for speed and efficiency Project managers will need to take cognisance of the appropriate style for the given context. Think back on project team meeting conversations was the language appropriate to the need, i.e. strategic or operational? What effect did this have on the meeting? Could the outcome of the meeting have been more productive (effective and efficient) if the right approach had been used? What other communication tactics should be considered and when? For example, highly collaborative when a decision needs to be taken that affects the whole team versus directive (one-way) when imparting information. Open versus closed communication To achieve and maintain an effective team, it is necessary to achieve a high degree of cooperation and collaboration. Open, honest and timely communication is an essential part of achieving this. A 'closed' climate may be a direct outcome of a management style or it may be a symptom of the pressure being experienced within a project team. Unfortunately, the 'closed' communication climate is particularly common in under-resourced conditions where project teams are overworked. The 'open' and participative style of communication is simply squeezed out by the pressure to get the job done. The table below highlights the warning signs of a 'closed' communication climate developing and offers alternative approaches to re-establishing the 'open' and supportive climate required for the successful completion of the existing project. Regenesys Business School 36

41 Table 3: Closed and Open Communication Judgmental Controlling Deceptive The Closed Communication Climate Emphasis on allocating blame Feedback becomes negative People made to feel incompetent People made to feel inferior People made to feel that they acted out of line Conforming to certain types of behaviour is made explicit Attitudes and behaviours that are inconsistent with the norm are not tolerated Hidden meanings Insincerity Manipulation The Open and Supportive Communication Climate Descriptive Solutionoriented Open and honest Switch communication to being informative rather than evaluative Focus on problem solving rather than on what cannot be done Encourage divergent thinking Encourage constructive criticism Avoid hidden messages Aim to help and improve Non-caring Detached Self-centred Impersonal Little obvious concern for others Caring Place emphasis on empathy and understanding Superior Difference in status, skills and knowledge emphasised Egalitarian Encourage communications that value everyone regardless of role or status Dogmatic Little discussion Unwillingness to accept other points of view Little compromise Forgiving (within certain parameters) Recognise the inevitability of error Accept that misjudgement can happen Take supportive action to minimise future error Hostile Predominantly negative approach Little interest placed on the needs of others Feedback See feedback as positive Recognise feedback as essential to high levels of performance (Author unknown) Use the table above to analyse the last (project) team meeting you attended. Tick the behaviours you witnessed. Then, tick the behaviours you personally brought to the meeting. What have you learned from the table of information about your teams and yourself? Regenesys Business School 37

42 7.2.3 Project Team Dynamics From our other modules, and/ or based on your knowledge of team dynamics, you will have encountered the team development phases of: forming, storming, norming, performing and disbanding (the Tuckman ladder). Here our focus moves to: How to expedite this process in the shortest timeframe: Get to 'high performing' sooner rather than later. How to manage the changing dynamics of the team, especially as new members enter and leave the project, which inevitably retards the process (may cause a high-performing team to regress unnecessarily to storming). Burke (2013) suggests that a 'team charter' is a possible solution to the above. "The team charter outlines the purpose of the project team and lays the ground rules for the project team's effective operation it serves as a contract between the project manager and the project team, and within the project team it serves as a contract between the team members." (Burke, 2013:350) The project team owns the team charter. It is compiled in conjunction with the project manager using organisational knowledge, best practices, project objectives and team members' needs. This 'ownership' helps to ensure buy-in and that, most importantly, the project team are assigned sufficient authority to make decisions relevant to their assigned work packages and responsibilities. Whilst such a charter can contain different elements, Burke (2013:350) suggests the charter is a mechanism to: "Initiate the project team selection Give the team an identity Outline how the project team will be led and managed Outline the project team's objectives Outline how the project team's objectives are to be achieved Outline the team roles Outline the team building process". The charter in itself can function as a 'forming and storming' tool while the team are settling into their roles. The objective is not to remove the 'storming' stage through this mechanism but to facilitate a smoother passage through what can be a rocky period in project establishment. Refer to Appendix 2 for a sample template of a Team Project Charter and then complete the tasks below: Regenesys Business School 38

43 Task Questions 1. Brainstorm other potential benefits of a Project Team Charter. 2. Reflect critically on the pitfalls of such a charter. 3. Based on your experiences of projects, teams and leadership, evaluate the merits of a Project Team Charter. 4. What other tactics can you suggest to move the team to a high-performing state in the shortest possible time (e.g. colocation, where the project team members are physically located close to one another in order to improve communication, working relationships and productivity)? Project management practitioners advocate that team building, on an ongoing basis, is crucial to project success (PMBOK, 2013:276). They are quoted as saying, "Changes in a project environment are inevitable, and to manage them effectively, a continued or a renewed teambuilding effort should be applied." People are motivated if they feel they are valued and this value is demonstrated by the rewards given to them tangible and intangible. A good strategy for the project manager is to reward his/ her team at strategic points in the life cycle of the project (e.g. at the end of planning) rather than waiting until the project is completed. PMBOK (2013:278) recommend various tools to assess team members, including: Attitudinal surveys Specific assessments Structured interviews Ability tests, and Focus groups Task Questions 1. Evaluate the extent to which the above five strategies can improve: understanding, trust, commitment and communication between the project manager and his/ her team. 2. Some project managers might argue that team building, surveys, assessments, interviews, tests and focus groups take up valuable time and may even create unnecessary problems. What would your response to this be? Be prepared to justify your position. 3. What other competencies and techniques might contribute to achieving a high-performing team within a short timeframe? Whilst most of the people skills you have learned in your other modules apply equally to project management, a skill that is deemed significantly important by project management practitioners is the power to persuade. Regenesys Business School 39

44 Persuasion Arguably, the ability to persuade is significant to project success and yet it is seldom spoken about. Organisational structures (e.g. functional, matrix, etc.), whilst intended to provide the most effective ways in which to achieve goals and objectives, continue to provide challenges; especially those relating to the allocation and use of resources more specifically, human resources and environmental factors continue to place project managers at the forefront of seemingly impossible challenges (i.e. living order). "Influence is an extension of power; it is the mechanism through which people use power to change behaviour or attitudes. Unlike power, influence can produce an effect without the apparent exertion of force, compulsion, or direct command. In a sense, it is power in a velvet glove." "Persuasion is closely related to influence but it is also very different. It isn't a force and has no coercive component. Instead, it is a process through which one aims to change or reinforce the attitudes, opinions, or behaviours of others." (Reardon, subject advisor in Harvard Business Essentials, 2005) Task Questions 1. Reardon (2005) makes the statement, "Every business and virtually every human society operates with the help of power, influence and persuasion. They are as essential to organisational interpersonal functions as the air we breathe." Draw on your knowledge of these three concepts and reflect on Reardon's statement in the broader context of management and then in the context of project management. What might make power, influence and/ or persuasion different in the management of project teams? 2. Do you agree with Reardon's assertion that influence is an extension of power, whereas persuasion is not instead, persuasion is a process through which one aims to change or reinforce attitudes, opinions or behaviours? 3. Why might persuasive power be more suited to project management than the power of influence? Persuasion requires preparation and planning. Reardon (2005:58) draws our attention to four important elements: Credibility An understanding of the audience (in this case the team) A solid argument (business case), and Effective communication Consider the long-lived fable of the child who cried wolf too often crying wolf repeatedly in a project management context, as with any other, would have a limited effect. Credibility manifests itself on two levels: Expertise, e.g. your ideas (the new product concept you have proposed must make sense in light of current market conditions, technology, and business concerns), and Trust, e.g. you as a person (the data to support the proposal is well researched and accurate) Regenesys Business School 40

45 In understanding the team, it is important to know who the 'thinkers', 'sceptics' and 'followers' are, and who the 'controller' is. For example, a thinker can be described as a logical, risk-averse person who needs lots of detail before making a decision. With a thinker in the team it is unlikely that you will persuade him/ her to drastically reduce his/ her schedule without providing a detailed approach of how this can be logically achieved. A solid argument derives from a rigorous business case. Consider the following response to your suggested change in scope, "We cannot argue with you about this, Lebo it is perfectly sensible let's do it." In terms of communication, Reardon (2005:70) emphases two important factors keep your argument simple and straightforward (avoid confusing team members with complex evaluations; outline action plans with clear deadlines) and create an emotional link by sharing personal anecdotes. A solid argument may only take you so far in an environment that is highly charged with 'political' agendas communicating an emotional (empathetic) link reinforces the concept of 'team'. Task Questions 1. In concluding this section on project leadership, sketch a mind map that draws together key learning and reflection points. 2. Determine areas for further reading on "skills and processes necessary to manage group dynamics and lead project teams effectively" and set aside time to pursue these. Regenesys Business School 41

46 7.3 PROJECT MANAGEMENT LIFE CYCLE Timeframe: Learning outcomes: Recommended reading: Recommended multimedia: Section overview: Minimum of 60 hours Critically evaluate project management definitions, theories, models and principles. Select and apply relevant strategies and tools used in the project management life cycle: o Initiate o Plan o Execute o Monitor and control, and o Close a project Identify, understand and appropriately involve stakeholders in the project management life cycle. Manage time, costs and quality effectively and efficiently in complex and dynamic environments. Critically analyse the impact that human resources have on projects. Evaluate project risks and develop a proactive risk management plan. Review project management software as a project management tool. Chapters 2 10 in: Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, Pearson Education Limited. Antonioni, D. 2009, 'Crafting the art of stakeholder management', Industrial Management, January 2009 ed. Sharma, V.K. 2013, 'Earned value management: A tool for project performance', Advances in Management, 6 (5). izenbridge Consultancy Pvt Ltd. 2013, 'Project life cycle, PMBOK 5, Lesson 2: Part 4, [video], (accessed 9 September 2013). Litten, D. 2011, 'Learn PMP earned value in 10 minutes flat on [video], (accessed 11 July 2013). Litten, D. 2012, 'Learn PMP critical path in 17 minutes flat!', [video], (accessed 11 July 2013). PUBP , 'Excel cost benefit tutorial', [video], (accessed 11 July 2013). To begin this section we discuss the project life cycle and its inherent characteristics, and then we discuss each of these in more detail: Initiation Planning Execution Monitoring and control, and Closure Relevant definitions, theories, models and principles, together with appropriate strategies and tools, will be dealt with under the respective stages in this life cycle. Regenesys Business School 42

47 7.3.1 Project Life Cycle The term 'project life cycle' has become synonymous with the lifespan of a project. It is comprised of processes, each of which requires inputs, tools and techniques and is designed to produce distinct outputs (or deliverables). This life cycle typically comprises five processes (PMBOK, 2013:5), briefly summarised below: Project initiation (selection and definition of new project including authorisation to start) Project planning (refining of the objectives and development of actions to attain the objectives in terms of scope, time, cost, quality, changes when required, and risks) Project executing (coordination of people and resources according to the project objectives) Project monitoring and controlling (regular measurement and analysis including corrective actions), and Project closure (conclusion of tasks and hand-over procedures) The following diagram shows the interaction between the processes in a single-phase project. Notably, monitoring and control is a continuous process that is carried out at every stage of the project life cycle (initiating, planning, executing and closure). Figure 8: PMBOK's Example of a Single-Phase Project (PMBOK, 2013:42) Each of the project processes will be explored separately in this study guide. However, before we look at these it is important to understand the concept of 'project phases' (PMBOK 2013:41): Regenesys Business School 43

48 "A project phase is a collection of logically related project activities that culminate in the completion of one or more deliverables." "Project phases typically are completed sequentially, but can overlap in some project situations." There may be multiple phases and "Different phases typically have a different duration or effort." "The work [in each phase] has a distinct focus that differs from any other phase. This often involves different organisations, locations, and skill sets." "The closure of a phase ends with some form of transfer or hand-off of the work product produced as the phase deliverable." (PMBOK, 2013:41) Now look at PMBOK's (2013:43) examples of three-phase projects (Figure 9) and overlapping phases (Figure 10). In Figure 9 (three-phase project), the full life cycle (initiating, planning, executing, closing and monitoring and control) occurs in the facility decommissioning phase, again in the waste removal/ clean-up phase and for a third time in the landscaping phase. The three phases are sequential. Notably, if Phase 1 (facility decommissioning) is not completed on time, within budget and to required scope, this will impact on the second and third phases (e.g. revised schedules, budgets and scope requirements). Figure 9: PMBOK's Example of a Three-Phase Project (PMBOK, 2013:43) When phases are sequential the closing, process will include some form of transfer or hand-over of the work these points are referred to as phase exits, milestones, phase gates, decision gates, stage gates or kill points (if the project is to be discontinued). In Figure 10 (overlapping phases), the executing and closing phases of the design phase of this particular project overlap (happen simultaneously) with the initiation and planning processes of the construction phase. This is common in projects in which the closure of one project phase is dependent on inputs from the next project phase. In Figure 10 below, the completion of the design phase may be dependent on initiation processes in the construction phase (e.g. ground condition test results to complete the design phase which are only available once the construction team have access to the construction site in the construction phase). Regenesys Business School 44

49 Figure 10: PMBOK's Example of Overlapping Phases (PMBOK, 2013:43) Be careful not to confuse a 'process' with a 'phase' a phase contains the five generic processes of initiating, planning, executing, monitoring and control, and closing. The number of phases, the need for phases and the degree of control applied depends on the size, complexity and potential impact of the project. The next important set of concepts to understand includes: Predictive life cycles Iterative or incremental life cycles, and Adaptive life cycles Predictive life cycles (fully plan-driven product/ service is well understood) A predictive life cycle occurs when the deliverables are well understood and there is a substantial base of project management experience and knowledge relating to the project. The major constraints of time, cost and quality are determined ahead of time and in detail and the project phases occur sequentially (or may even overlap) (PMBOK, 2013:45). Iterative or incremental life cycles (plan driven per phase large and complex projects) As the term 'iterative' suggests, the project undergoes repeated cycles, which incrementally add to the functionality of the deliverables. Unlike the predictive life cycle, the scope is not determined ahead of time at a detailed level, except for the first iteration or phase of the project. During the iterations, activities from all of the project phases will be performed. This approach is preferred when partial delivery of a product is beneficial, in the case of large and complex projects, and to reduce risk by allowing the team to incorporate feedback and lessons learned between iterations (PMBOK, 2013:45 46). Regenesys Business School 45

50 Adaptive life cycles (plan driven per phase product is not well understood, with rapidly-changing environments) This approach is intended to facilitate high levels of change and stakeholder involvement inherent in fast-changing contexts. Similar to iterative and incremental cycles, except that here the iterations are rapid and are included in time and cost planning (PMBOK, 2013:46). Watch the following recommended video which consolidates your understanding of the following terms: phases, effort, costs, deliverables, sequential, overlapping, in parallel, predictive, iterative/ incremental and adaptive: izenbridge Consultancy Pvt Ltd. 2013, 'Project life cycle, PMBOK 5, Lesson 2: Part 4, [video], (accessed 9 September 2013). Task Questions Recall projects which you have been a part of (or which your department has been a part of) in the last two years. 1. Classify the projects as single-phase or multiple-phase projects. 2. In the case of multiple-phase projects, were the phases sequential or overlapping? Give possible reasons. 3. Discuss whether these projects can be described as: predictive, iterative (incremental) or adaptive. 4. Explain why it is important to distinguish between these concepts and how an understanding of these assists in selecting appropriate life cycles. Now that we have explored several views of a project we will look at the individual processes and selected tools and techniques. For ease of understanding we have summarised the processes and methods contained in each part of the life cycle; thereafter, we will discuss important elements pertaining to each part of the life cycle. Regenesys Business School 46

51 Table 4: Project Life Cycle Processes and Actions Integrated management tasks Scope management Time management Cost management Quality management Human resource management Communications and stakeholder management Risk management Procurement management Initiation Planning Executing Select project; develop project charter; determine resources Determine objectives Determine initial deliverables Determine initial estimates Determine quality processes Define roles and authority Identify stakeholders; determine needs and expectations Identify initial business risks General project planning; choose processes and tools; estimate value; determine performance metrics Create scope and work breakdown structure Develop schedules, milestones, and critical paths Create initial budget Determine quality standards Create organisational structure; recruit project team Plan meetings; plan all means of communication Identify all risks, evaluate and put in place risk responses Determine procurement needs Execute all activities and manage project progress Execute with scope in mind Manage time Manage cost Manage quality Develop and train team; manage team Hold progress meetings; communicate with stakeholders Manage all risks Monitoring and control Performance measurement, monitor and control; perform change control Monitor scope; control scope; ensure compliance with scope Monitor and control schedule Monitor and control costs Evaluate and control quality Monitor and control team Produce performance reports Monitor and control risks Closure Close project; determine lessons learned and add to organisational knowledge (assets) Financial closure Final acceptance Transfer team to other projects Survey satisfaction Manage Audit procurement procurement (Adapted from Vaidyanathan, 2013:36) The functions of project management, scope management, time management, cost management, quality management, human resource management, communications and stakeholder management, risk management and procurement management, in the main, span the complete project life cycle: Initiation Planning Implementation Monitoring and control, and Closure The stages in the project life cycle give rise to gateways at which point 'go' and 'no go' decisions can be made. Regenesys Business School 47

52 Whilst the framework given above is common to most project contexts, some organisations prefer to customise their project life cycle to suit the nature of their projects. The example below shows the emphasis placed on 'feasibility' before gates two and three and that part the way through execution there is a further 'go/ no go' decision point. Figure 11: Customised Project Life Cycle Project Initiation For the purposes of this study guide we will refer to the generic project management life cycle. Project initiation is the launching process aimed at obtaining authorisation for a new project. In this process (PMBOK, 2013:54): The scope is defined (sum of the products, services and results to be provided as a project) Initial financial resources are committed Internal and external stakeholders are identified, and The project manager is selected All of the above are captured in the Project Charter. Project literature provides varying definitions of the project charter; consider the following by Burke (2013:90): "The project charter outlines the purpose of the project, critical success factors, the project participants, and the project's objectives and how to achieve them. It provides an outline of roles and responsibilities, identifies the main stakeholders, and assigns the authority for the project manager to use company [budgetary] resources." (Burke, 2013:90) Regenesys Business School 48

53 In Rowley's (2012) outline of a project charter, he includes the following significant elements: 1. Project purpose or justification (fit with need and strategic plan) 2. Project objectives 3. High-level requirements (deliverables) 4. Project assumptions, constraints, high-level descriptions and boundaries 5. Project success criteria 6. High-level risks 7. Summary schedule including budget 8. Stakeholder list 9. Project approval requirements and approval authority, and 10. Project manager assigned to the project Task Questions 1. What is the equivalent of the 'Project Charter' in the projects with which you have been involved? 2. Evaluate the following statement: "The key benefit of a Project Charter is a well-defined project start and project boundaries, creation of a formal record of the project, and a direct way for senior management to formally accept and commit to the project." (PMBOK, 2013:426) During project initiation various tools and techniques may be required; for example, stakeholder identification, cost-benefit analyses and feasibility studies. Stakeholder management A stakeholder is anyone who has a vested interest in the project and consequently someone who may impact positively or negatively on the inputs, processes and outcomes. A stakeholder is a "person or organisation (e.g. customer, sponsor, performing organisation, or the public) that is actively involved in the project, or whose interests may be positively or negatively affected by execution or completion of the project. A stakeholder may exert influence over the project and its deliverables." (Pinto, 2013) Project governance is closely aligned to stakeholder management it is a framework within which the project manager (and sponsors) make(s) decisions that satisfy both stakeholder needs and expectations, and organisational strategic objectives. It should address circumstances where these may not be in alignment. Project governance is "the alignment of the project with stakeholders' needs or objectives it is critical to the successful management of stakeholder engagement and the achievement of organisational objectives." (PMBOK, 2013:30) Regenesys Business School 49

54 Stakeholders can only be people or groups who have the power (or influence) to directly affect the project absent that power (or influence) and they are not stakeholders. Evaluate the merits of this statement. What about the needs of the 'powerless'? One of the most critical issues in project management is the identification, analysis and engagement of project stakeholders. If stakeholders are not involved from the beginning of the project (from the initiation process), they may sabotage the implementation of the project, or they may not support it. However, too much stakeholder participation may also become frustrating, time consuming and destructive. Therefore, project managers must identify their key stakeholders and plan how to engage and manage them successfully. In the project initiation process, the project manager must "give the stakeholders visibility about the scope and objectives, and show how their participation in the project and its associated phases can ensure that their expectations are achieved involving stakeholders during initiation creates a shared understanding of success criteria, reduces the overhead of involvement, and generally improves deliverable acceptance, customer satisfaction and other stakeholder satisfaction." (PMBOK, 2013:54 55) Whilst stakeholder management may be seen as a priority in Project Initiation, it remains a high priority task throughout the life cycle of the project. Read the following article to appreciate the significance of this: Antonioni, D. 2009, 'Crafting the art of stakeholder management', Industrial Management, January 2009 ed. On large and/ or complex projects, a stakeholder register is recommended. This is a document that includes: Identification information (e.g. name, organisational position, role in the project, contact information) Assessment information (e.g. major requirements, expectations, potential influence on project inputs, processes and outcomes), and Stakeholder classification (e.g. internal/ external, supporter/ neutral/ resistor) The stakeholder register must be updated throughout the project to reflect current assessment and classification. Refer to Appendix 3 for a sample Stakeholder Register and then consider some of the tools and techniques used to compile this information, as provided below: Regenesys Business School 50

55 Stakeholder analysis tools and techniques There are several tools available to manage stakeholders. The following matrix is commonly used to identify and position stakeholders according to their power and influence: Figure 12: Power/ Interest Matrix Power High Low Keep(satisfied Monitor((minimum( effort) Low Interest ( ( Engage(closely(and( influence(actively Keep(informed High Task Questions 1. Select a project that you have worked on recently (or are familiar with). 2. Identify examples of stakeholders that fit into each of the quadrants in the stakeholder analysis given above. 3. Exchange the vertical and horizontal axes with other criteria; for example, you might substitute 'power' with 'influence' (e.g. a specific aspect of power). 4. Evaluate why it might be important to carry out multiple variations of this type of analysis. As with all matrices, there are multiple approaches; depending on the focus of analysis, for example (PMBOK, 2013:396): Power/ interest grid (as shown above based on the stakeholders' level of authority/ power and their level of concern/ interest regarding project outcomes) Power/ influence grid (based on level of authority and active involvement with/ influence on the project) Influence/ impact grid (based on their active involvement/ influence in the project and their ability to effect changes to the project's planning or execution, i.e. impact), and Salience model (describes classes of stakeholders based on their power/ ability to impose their will, urgency/ need for immediate attention, and legitimacy/ appropriateness of their involvement as shown in the diagram and table below) Regenesys Business School 51

56 Figure 13: Salience Model Key: 1 = Dormant; 2 = Discretionary; 3 = Demanding; 4 = Dominant; 5 = Dangerous; 6 = Dependent; 7 = Definitive While power and legitimacy are common themes in stakeholder literature, the addition of urgency adds a further dimension. When the above is classified into levels we have the following: Table 5: Saliency Grid LEVEL 3 (High Priority) LEVEL 2 (Medium Priority) LEVEL 1 (Low Priority) 7 = Definitive Power, legitimacy and urgency combine to make this a high-priority stakeholder 4 = Dominant 5 = Dangerous 6 = Dependent Power and legitimacy Power and urgency Legitimacy and urgency 1 = Dormant 2 = Discretionary 3 = Demanding Power Legitimacy Urgency Once stakeholders have been identified and analysed they can be prioritised and appropriate participation (engagement) tactics can be formulated. Consider the tool below, which provides possible participation tactics based on an assessment of the unique facts about the stakeholders and their expectations: Regenesys Business School 52

57 Figure 14: Stakeholder Analysis Tool List of All Stakeholders (Stakeholders Prioritised) Unique Facts and Expectations Unique Facts Expectations Significant 1. Mr X (Board Member) contributions to projects over past eight years. Experience across multiple project types. Positional and knowledge power. Experienced negotiator. Etc. 2. Etc. Very demanding and detail focussed. Likely to push for reduced budget. Etc. Possible Participation Tactics and Resources Required Use his expertise and experience to manage high-level negotiations. Engage in appropriate brainstorming activities (leverage his experience). Justify and agree budgets. Etc. Task Questions 1. Again, there are multiple variations of this analysis tool. Identify a project that you have participated in recently (or one with which you are familiar) and create an analysis tool based on the structure above. 2. Discuss the objectives of stakeholder identification and analysis. For example, an objective might be to leverage the unique strengths that each stakeholder possesses. 3. Carry out your own research on 'stakeholder identification and analysis tools' applicable to project management. Be prepared to critique the tools in terms of their effectiveness for projects on which you are working (or are familiar with). Recommend areas for improvement in line with your organisational needs. Success depends on satisfying key stakeholders according to their definition of what is 'valuable', either to them directly or their interests. How does this statement affect the possible participation tactics you select for each stakeholder? How might the possible participation tactics change over time (at different stages in the project), if at all? Consider the following five engagement techniques that could be assigned to each stakeholder (Bryson, 2004): Inform: We will keep you informed. Consult: We will keep you informed, listen to you and provide feedback on how your input influenced decisions. Involve: We will work with you to ensure your concerns are considered and reflected in the alternatives considered and provide feedback on how your input influenced the decision. Collaborate: We will incorporate your advice and recommendations to the maximum extent possible. Empower: We will implement what you decide. Regenesys Business School 53

58 An alternative to the above is the stakeholder engagement assessment matrix, as shown below: Table 6: Stakeholder Engagement Assessment Matrix Stakeholder Unaware Resistant Neutral Supportive Leading Stakeholder 1 C D Stakeholder 2 C D Stakeholder 3 D/ C Key: C represents current engagement; D represents desired engagement (PMBOK, 2013:403) In the above analysis, gaps between current and desired engagement levels are evident in the first two stakeholders (1 and 2), whereas the third stakeholder (3) is at the desired engagement level. Based on this form of analysis, tactics can then be employed to move the stakeholder to the desired level of engagement. Stakeholder management information is sensitive (potentially damaging/ defamatory). The information, including underlying assumptions, should be reviewed regularly to ensure continued accuracy and relevancy. Task Questions 1. Evaluate the following statements: a) "The ability of stakeholders to influence the project is typically highest during the initial stages and gets progressively lower as the project progresses." b) "Active management of stakeholder involvement decreases the risk of the project failing to meet its goals and objectives." c) "Stakeholders are a major factor in the risk profile of a project what they value, their attitudes, and actions can have significant positive or negative consequences." 2. What will happen if there is little buy-in from a highly influential stakeholder? Or, what are the likely outcomes if the project manager is in conflict with a highly influential stakeholder? Integrate your learning from your other modules to help you to reflect on and answer these questions (e.g. building trust, resolving conflict, active listening, overcoming resistance to change, emotional and spiritual intelligence, etc.). Regenesys Business School 54

59 Cost-benefit analysis A description of the project objectives must be developed, including why a specific project is the best alternative to satisfy the requirements. A common tool to determine the best alternative is cost benefit analysis. You may or may not have encountered cost-benefit analysis in your prior studies. Please view the definition and recommended video clip below to ensure you understand this form of analysis: Cost benefit analysis (CBA) is the process of quantifying costs and benefits of a decision, programme or project (over a specified period) and those of its alternatives (within the same period) in order to have a single scale of comparison for unbiased evaluation. CBA estimates the net present value (NPV) of the decision by discounting the investment and returns. It often includes those environmental and social costs and benefits that can be reasonably quantified. (Business Dictionary, 2013) Notably, this video clip shows you how to use this form of analysis in Microsoft Excel, which is an important competence for both project managers and financial managers assigned to projects. PUBP , 'Excel cost benefit tutorial', [video], (accessed 11 July 2013). Task Questions Cost benefit analysis seeks to quantify all the cost and benefits into a numerical analysis. Whilst this may be possible, to a large degree, there may be other factors that are not reflected in this analysis. Identify examples of these and reflect on the importance of thinking systemically when carrying out a cost benefit analysis. Feasibility study Common to large-scale projects is the need for a feasibility study. A feasibility study is the analysis and evaluation of a proposed project to determine if it is: 1. Technically feasible 2. Feasible within the estimated cost 3. Going to add value (or be profitable depending on the nature of the project) (Business Dictionary, 2013) Regenesys Business School 55

60 The feasibility study should help to answer the question, "Should we proceed with the proposed project?" It must provide the various scenarios examined, together with the implications, strengths and weaknesses of each. The project manager must challenge the underlying assumptions since these will form the basis for measurement in implementation (e.g. the cost of resources, the time it will take to complete work packages, the quality metrics and whether these can be achieved, etc.). In large-scale projects the feasibility study determines the go/ no go and is a sound business practice. Consider some of the reasons to conduct feasibility studies: Affirms the project objectives Narrows the project alternatives (removes unfeasible options) May identify alternative opportunities through the investigative processes Will identify reasons not to proceed Will surface risks and identify mitigating factors Should provide quality information (albeit assumptions in some cases) that can inform decision making, and Assists in the securing of funding Task Questions 1. Why are cost benefit analyses and feasibility studies important in determining project selection? 2. What are the consequences of poor project selection? 3. Carry out your own research on different cost benefit analysis tools and review these in terms of project management requirements. 4. Obtain copies of cost-benefit analyses and feasibility studies carried out in your workplace (or from other sources). Compare and evaluate the importance of these in the decision making in the project initiation process Project Planning The key document that emerges from the planning process is the project management plan. Project planning consists of "those processes performed to establish the total scope of the effort, define and refine the objectives, and develop the course of action required to attain those objectives." (PMBOK, 2013:55) The project management plan sets out "how the project will be executed, monitored and controlled". (PMBOK, 2013:554) Regenesys Business School 56

61 The scope of the project is the work to be performed to produce the products, services and/ or results to be achieved through the project. In order to achieve the project scope, objectives must be defined and a course of action determined to achieve these objectives. Remember that objectives must be stated in SMART terms specific, measurable, achievable, relevant and time-based. Vague objective versus a SMART objective: Vague: Improve awareness of conservation issues. SMART: Educate households within the XYZ Council on ways to reduce energy and water usage by 10%. The course of action (the how ) is included in the project management supplementary plans. Appendix 1 lists the supplementary plans that combine to formulate the project management plan, including a brief description of each: Scope management plan Requirements management plan Schedule management plan Cost management plan Quality management plan Process improvement plan Human resource plan Communications management plan Risk management plan Procurement management plan, and Stakeholder management plan Key definitions that you should be familiar with are included in the following table: Regenesys Business School 57

62 Table 7: Key Concepts in the Planning Process Planning Process Scope statement Work breakdown structures (WBSs) Scheduling and resource planning Costing and budgets Quality assurance plan Human resource recruitment and management Communication strategies Risk management plan Procurement plan Description of Key Issues The work to be performed to deliver a product, service, or result with the specified features and functions (project objectives). It includes baselines, which cannot be changed without a formal change control procedure. These baselines are essential for the purposes of monitoring and control. The scope statement informs the WBSs. A hierarchical decomposition of the total scope of work into manageable parts (or work packages). The decomposition is guided by the degree of monitoring and control required to effectively manage the project. A WBS must include unique identification codes. Scheduling means sequencing activities (derived from the WBS work packages) for the timely completion of the project. This includes defining activities, sequencing these activities, estimating activity resources (quantities of material, human resources, equipment, etc.), estimating activity durations and then developing the schedule to determine the shortest time in which the deliverables can be achieved (time baselines). Two better known scheduling methods include critical path method (CPM) and critical chain method (CCM). Scheduling is depicted in activity lists, bar charts (e.g. Gantt Chart) and/ or network diagrams. The process of approximating the monetary resources required for each activity in a work package. The budget is the aggregated costs of individual activities (or entire work packages) to establish the authorised cost baseline. Cost management should establish the following: units of measure, level of precision (e.g. to the nearest rand or R100), level of accuracy (e.g. ± 10%) and control thresholds (i.e. agreed variations). Quality assurance is required to ensure the project will satisfy the needs for which it was undertaken. Typically the organisation's quality management systems including standards are applied. Failure to meet these can render the project unacceptable to stakeholders. Cost of quality includes prevention costs, appraisal costs and the costs incurred by nonconformance. This is a process of documenting roles and responsibilities, mapping the required skills and reporting relationships and creating a staffing plan. Once the plan is complete the releasing of the persons must be negotiated with the respective functional managers. Their competencies may need to be improved and team interaction will need to be managed. Typical tools include organisational charts, responsibility matrices and role description documents. Strategies are based on stakeholder analysis and engagement strategies together with management and team requirements. The potential dimensions that need to be considered include: internal and external, formal and informal, vertical and horizontal, official and unofficial, and written and oral. Various tools should be considered, e.g. an issues log, minutes of meetings, etc. The first task is to identify and quantify risks in terms of likelihood (probability) and impact. Then options (avoid, transfer, mitigate, or accept) are identified together with contingent responses in the event of a risk occurring. A risk register contains the identified risks and risk owners, authorised risk responses and symptoms and warning signs of risk. The project manager is responsible for carrying out risk audits throughout the project life cycle. WBSs, schedules, budgets, stakeholder strategies, risk registers and legislation combine to inform procurement. (Adapted from PMBOK, 2013) Regenesys Business School 58

63 For the purposes of this module we will explore the following in more depth: Work breakdown structures Scheduling Costing and budgeting Risk analysis, and The project management plan Work breakdown structure (WBS) The work breakdown structure (WBS) organises and defines the total scope of the project. Each descending level represents an increasingly detailed definition of the project work. Consider the diagram below (Figure 15). In this case, the WBS shows that the construction of a shed has three major work packages: the foundations, the external work and the internal work. For each level of detail the percentage work is recorded and in this particular case, the allocated budget is also incorporated. The WBS provides a visual representation of work packages. How the WBS is put together will depend on what the project manager wants to communicate. Here, his/ her emphasis is on percentage work per level and on the respective costs. The WBS helps to identify the risk areas, which will be used to formulate the risk management plan. As you can imagine, the number of levels increases according to the size and complexity of the project. High-risk activities should be broken down further in order to ensure that thorough plans for the monitoring and control of those risks can be made. Tasks within the WBS structure should be numbered using a logical and applicable system. The WBS dictionary is a supporting document that provides a detailed account of each work package as follows (adapted from PMBOK 2013:132): Identifying code (a unique activity-identifying code; numeric or alphanumeric) Description of the work (a unique description) Any assumptions or possible constraints (e.g. a delivery date constrained by the suppliers) Responsible person(s) Schedule milestone (significant points in the completion of the work package, e.g. testing points) Any associated schedule activities (e.g. the activities that must precede or follow) Resources required Cost estimates Quality requirements Acceptance criteria (e.g. minimum levels) Technical references (e.g. standards to which the work package must comply), and Any agreement (contractual) information (e.g. with suppliers) Regenesys Business School 59

64 Figure 15: Work Breakdown Structure (WBS) Construc2on of a shed Work: 100% Budget: R Founda2on Work: 24.00% Budget: R External Work: 30.40% Budget: R Internal Work: 45.60% Budget: R Excavate Work: 18.20% Budget: R Pour concrete Work: 7.90% Budget: R Electrical Work: 11.80% Budget: R Task Questions Note the hierarchical breakdown of project information. Identify other forms of WBS and compare these in terms of logical flow and content. You might, for instance, see that some WBSs flow horizontally rather than vertically, or that they are computer-generated, using specific software. Scheduling A WBS facilitates the identification of the work packages needed to accomplish project deliverables. However, the WBS does not show the dependencies or sequence between these. Consequently the WBS does not show the time to completion (i.e. the critical path which we explain in the simple network diagram below). Project scheduling is the "conversion of work breakdown structures and logical sequencing into an achievable methodology for their completion; it creates a timetable and reveals the logic that relates project activities to each other in a coherent fashion." (Pinto, 2007:281) Regenesys Business School 60

65 To show this logical sequencing the project manager uses a range to techniques, two of which are: Network diagrams, and Bar charts (Gantt Chart) These project-scheduling techniques are not only fundamental to project planning, but will be essential to monitoring and control in the implementation process. For reasons of simplicity, consider that a project has five activities (see the diagram below), and that Activities 3 and 4 can run parallel to Activity 2, but that Activities 2, 3 and 4 must be completed before Activity 5 can happen. The sequencing, including duration estimating, could look like this: Simple Network Diagram The entire duration of the project, in our example, is 15 days: 3 days which is Activity days which is Activity days which is Activity 5 Activities 1, 2 and 5 represent the critical path. Remember: Activities 3 and 4 are running parallel to Activity 2, and Activity 2 takes five days, whereas Activities 3 and 4 together only take three days. The critical path is the path through the project with the longest duration. In a project you must know the critical path because if the project is to be completed on time, no delays must occur on this path. Using our example above, if Activity 3 is delayed by one day this will not affect the total number of days of the project, but if Activity 2 is delayed by, say, four days (now nine days), this will affect the duration of the project (i.e. the critical path will now be = 19). Regenesys Business School 61

66 Now let us turn to Gantt Charts. A Gantt Chart is one of the most common tools for scheduling project information. They are simple to understand (provide a visual representation) and are easy to modify and update. There are also many software programmes available (e.g. Microsoft Project) to facilitate the use of this type of scheduling tool. A Gantt Chart is a type of bar chart that shows both the scheduled and completed work over a period. A time scale is given on the chart's horizontal axis and each activity is shown as a separate horizontal rectangle (bar) whose length is proportional to the time required (or taken) for the activity's completion. (BusinessDictionary, 2013) Consider the example of a Gantt Chart shown below and note the following: 1. The vertical dotted line marks 'TODAY', which means that WBS Element 1 is 57% complete and WBS Element 2 is 0% complete (both elements are behind schedule). 2. 'Start-to-start' means the two activities A and B can start together (share the same start date). 3. 'Finish-to-start' means that the one activity (B) must finish before the next activity (C) can start. 4. 'Finish-to-finish' means that two linked activities share the same completion point (i.e. C and D). 5. The total time for the project is 10 weeks. (Tuthill, 2012) Regenesys Business School 62

67 Now watch the video clip indicated below, to understand the following terminology relating to the critical path: Critical and non-critical tasks Float, and Forward and backward pass Litten, D. 2012, 'Learn PMP critical path in 17 minutes flat!', [video], (accessed 11 July 2013). Task Questions 1. Explain the statement, "Critical tasks have zero float". 2. Explain the significance of critical and non-critical tasks. 3. Explain the concept of 'float'. 4. Assume you are a project manager on Phase 1 of a three-phase project. What are the consequences of missing deadlines on the critical path of Phase 1 in terms of the remaining project phases (2 and 3)? The project manager may be asked to complete a project earlier than the current critical path suggests it is possible. In this case, s/he will need to take action to reduce the length of time spent on project activities a technique referred to as 'crashing'. Crashing means "shortening the schedule duration for the least incremental cost by adding resources." (PMBOK, 2013:535) The project manager could pile resources into each and every project activity (critical and parallel running) to bring down time spent on each. This would probably consume huge additional resources. A more efficient method would be to look only at the activities on the critical path and increase resources on this path; after all, non-critical activities will not save time. This would shorten the overall project time, provided that there is still enough float time to complete the parallel activities. Regenesys Business School 63

68 Task Questions Select a simple project, with a SMART objective, and formulate the following: 1. A WBS 2. A network diagram, and 3. A Gantt Chart Assume that the project must be reduced in time by 20%. Determine the critical path and then explain the actions you could take to 'crash' the project by 20%. Project Assignment Matrix This is a useful tool, which goes alongside the WBS is a Responsibility Assignment Matrix (RAM). A RAM will quickly point out where there are deficiencies in team member recruitment. Project Assignment Matrix Tasks Sue Jon Carl Anne Lebo Susan Wezi Sibo 1.1 A In P P S In R 1.2 R P S A In 2.1 In In R A P S Etc. Key: P: Participate A: Accountable R: Review In: Input required S: Sign-off required People need to be informed as to their work tasks and movement in and out of projects so as to reduce uncertainty. The project manager will need to negotiate with team members and their managers to ensure availability. Consider that working on projects should form part of an employee's performance management contract, and this should be communicated via the appropriate channels. Negotiating project tasks For relatively simple undertakings, it may be practical to agree on work allocation at a team meeting. However, more complex negotiations regarding individual objectives and tasks will need to take place on a one-to-one basis. Regenesys Business School 64

69 Suggested steps in negotiating objectives with project team members include the following (adapted from Mealiea and Baltazar, 2005:143): Explain your view of the objective and task. Provide the necessary background information. Invite the team member to plan how to achieve the objective or carry out the task. Discuss potential problems. Agree on what resources and support will be needed. Agree to a time scale. Agree on procedures for reporting back. Check that you have a shared understanding of the objective and standards. Make sure that other team members know what work objectives and tasks have been agreed upon. Costing and budgeting The object of costing is to create reasonable budget baselines for the project against which costs can be controlled. We define this as: Cost estimating: Developing an approximate schedule of the costs for the resources needed to complete project activities Cost budgeting: Aggregating the estimated costs of individual activities or work packages to establish a cost baseline, and Cost control: Influencing the factors that create cost variances and controlling changes to the project budget The first two of the above activities fall into the planning process (preceding implementation), and the third into the monitoring and control process, which unfold with implementation. What is the difference between a cost and a budget? A cost is the value of a unit of measure, e.g. semi-skilled labour is R35 per hour. A budget is the aggregation of the costs of all the resources needed to perform the project on a timeline e.g. Month 1, Month 2, etc. Consider the following example of a baseline budget plan. All the costs relating to Task A are aggregated (e.g. R5 200) over their respective timeline (e.g. R1 600 in Month 1 plus R3 600 in Month 2). Regenesys Business School 65

70 Example of a Baseline Budget Plan Monthly budget (Rand) Task Estimate A B C D E F G H I Different approaches to costing (estimating) include: Top-down estimation (use of similar past project data; not very accurate but useful for high-level estimates), and Bottom-up estimation (detailed estimate that considers each aspect separately e.g. direct costs and indirect costs; fixed and variable costs; labour costs; material costs, etc.) Consider the diagram given below (Figure 16). The top-down estimate will be a ballpark figure (e.g. ± 20% accuracy), whereas the bottom-up estimate is likely to be far more accurate (e.g. ± 5% accuracy). Regenesys Business School 66

71 Figure 16: Top-Down and Bottom-Up Estimating (Adapted from Burke, 2013:235) Contingency reserves may be included to take account of cost uncertainties or may be included as reserves intended to cover the known-unknowns that can affect a project (e.g. rework). The contingency may be a fixed amount or a percentage of the estimated cost. These reserves should be clearly identified in the cost baseline and, as more precise information becomes available, the contingency reserve may be used, reduced or eliminated (PMBOK, 2013:206). An aspect often over-looked in costing is the Cost of Quality (COQ). PMBOK provide a useful set of examples to consider (see table below). Failure costs may be identified internally (found by the project team) or externally (found by the client). Regenesys Business School 67

72 Table 8: Cost of Quality Cost of Conformance Prevention costs: Training Document processes Equipment Time to do it right Appraisal costs: Testing Destructive testing (loss) Inspections Money spent during the project to avoid failures Internal failure costs: Rework Scrap External failure costs: Liabilities Warranty on work Lost business Cost of Non-Conformance Money spent during and after the project because of failures (PMBOK, 2013:235) Task Questions 1. What are some of the key challenges faced when costing projects? Think about the environmental factors, e.g. inflation rate, exchange rates, etc. 2. In your own words, explain the concept of 'baseline' and why it is necessary to establish baselines. Risk analysis A risk is the likelihood of a given threat and the resulting impact of that adverse event on the project. Typically, organisations maintain a set of policies and procedures pertaining to risk management, which include the management of projects in which it engages. As with day-to-day organisational activities, projects must comply with corporate governance, industry standards, professional codes, legislation, and organisational policies and procedures. Consider the following factors: Governance (e.g. The King III Report on good corporate governance, South Africa; Sarbanes-Oxley Act, United States) ISO standards as they apply to the organisation Professional codes of practice (e.g. building, electrical, etc.) All relevant laws, including contract law, bye-laws and regulations (e.g. health and safety) Organisational policies and procedures, e.g.: o Risk Management Policy o Risk Management Strategy and Framework, and o Risk Management Standards Risks associated directly with the project (e.g. supplier delay, unsatisfactory performance) Regenesys Business School 68

73 A risk management plan defines how risks associated with each project will be identified, analysed and managed. It outlines how risk management activities are to be performed, by whom (the risk owners), and how these activities will be monitored and escalated throughout the life cycle of the project. The notion of risk involves both uncertainty and some kind of loss (or damage). It is necessary to analyse both likelihood (probability) and impact (cost) whenever the future is unpredictable. In some instances, such as in research and development, the risks may be great. Keep in mind that risks are both internal and external. Project managers and stakeholders can control internal risks they originate from all the stages in the project life cycle (e.g. not meeting time, cost and scope). External risks include those that impact on the project from the wider organisation and the external environment (e.g. functional, political, societal, economic, etc.). The tools and techniques used to identify risks include: Brainstorming Cause-and-effect diagrams Checklists Nominal grouping technique Mind mapping Delphi technique, and Lessons learned Task Questions 1. Review your understanding of the techniques provided above using your recommended textbook and other credible sources. 2. Evaluate the strengths and weaknesses of each tool. Risk analysis The analysis tool commonly used to analyse risk is the Probability and Impact Matrix shown in the table below. Table 9: Probability and Impact Matrix Probability Very High % 9% 18% 36% 72% High % 7% 14% 28% 56% Medium % 5% 10% 20% 40% Low % 3% 6% 12% 24% Very Low % 1% 2% 4% 8% Very Low 0.05 Low 0.1 Medium 0.2 High 0.4 Very High 0.8 Impact (numerical scale) on an objective (e.g. cost, time, scope or quality) Regenesys Business School 69

74 Each risk should be rated in terms of its probability of occurrence and impact on the project. These figures should be multiplied together to determine an individual rating for each risk (the grid does this for you, e.g. Low Impact 0.1 x High Probability 0.7 = 0.07 or 7% risk percentage rating). Risk Percentage = Probability x Impact x 100 The risks are graded (light to dark green/ grey) to help guide risk responses (refer to the ratings and table below for the risk responses): <5% (light green/ grey) monitored but have no reactive or proactive treatment applied, e.g. accept the risk and/ or make a contingency plan >5% to <15% (medium green/ grey) requires reactive management, e.g. contingency plan >15% (dark green/ grey) requires proactive management, e.g. deflect, mitigate or eliminate the risk Depending on the nature and scale of the risk, there are a number of generic risk responses, as shown in the table below. The treatment of the risk will depend on the nature and scale of the project. Table 10: Generic Risk Responses Eliminate (avoid) the risk Mitigate the risk Deflect (transfer) the risk Accept the risk and/or make a contingency plan Plan to avoid the risk completely during the initial design phase when the cost of changes made in order to remove the cause (or plan an alternative course) will be less costly. This might include extending the schedule, changing the strategy, or reducing the scope. The most radical avoidance strategy is to shut down the entire project. Try to reduce the risk's likelihood and impact. Strategies could include adopting less complex processes, conducting more frequent tests, choosing more reliable suppliers, holding more stock (especially scarce resources). Transfer the risk to another party, for example by contracting out a particular work package or insuring against anticipated risks. It is natural to try and eliminate a risk, mitigate or deflect the risk. However, every response to a risk involves costs, so a cost-benefit analysis must be done to determine whether it will be more cost effective to simply accept the risk (of course health and safety risks should not be dealt with in this manner). Regenesys Business School 70

75 Vaidyanathan (2013:270) points out that scope is one of the factors prone to many risks. Consider the following actions to reduce the likelihood of risk: Defining the needs of each task clearly Specifying customer or user acceptance requirements clearly Including the customers true requirements and eliminating 'wishes' Establishing a clear change management process including impact assessment of such changes Managing scope changes well Knowing the involved technology well before project commitment Building a prototype or model Testing products or systems with users often to uncover problems and manage expectations Defining the deliverables clearly Designing a complete and thorough WBS to include all tasks Anticipating defects and problems across processes Anticipating defects in dependent tasks, products, systems and services, and Planning well to reduce defects and problems Ensure that you read Chapter 6 in your recommended textbook. Risk is a significant component of project management: Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, Pearson Education Limited. The project management plan In the main, the project management plan sets out how the project will be executed, monitored and controlled (combines a number of individual plans as already discussed) (PMBOK, 2013:554; Burke, 2013:141). To ensure an effective and efficient process, it is essential that stakeholders and the project manager have a common understanding of the project plan. The elements commonly found in the plan are summarised in the table below, together with comments. The key challenge is to ensure an integration and optimisation of all the individual elements and plans to achieve the purpose of the project within the identified boundaries and constraints (e.g. time, cost, quality, risks, etc.). Regenesys Business School 71

76 Title page Version history/ control 1. Introduction Purpose of the plan 2. Executive summary of the project charter 2.1 Purpose of the project 2.2 Assumptions and constraints 3. Scope management 3.1 Work Breakdown Structure 3.2 Responsibility matrices 3.3 Change control management 4. Schedule/ time management 4.1 Milestones 4.2 Project schedule Table 11: Project Management Plan Guidelines Project name Version number Intended audience of the plan (stakeholders) Policy/ need/ strategic objectives/ deliverables If applicable, key issues from viability and feasibility studies Boundaries and any deviations from project charter, e.g. assumptions and constraints Success criteria and key risks Scope management plan (or reference to where it is stored) WBS (or reference to where it is stored) Matrices (or reference to where they are stored) Change control policy/ agreement Milestone list and estimated completion timeframe Responsible person(s) for updating data and frequency, e.g. daily/ weekly. Variance control, e.g. 10% Schedule (e.g. Gantt Chart) including dependencies and critical path (or reference to where it is stored) 5. Cost/ budget management Cost management plan (or reference to where it is stored) Cash flow based on timing of expenses 6. Quality management Quality policy/ standards/ measures How quality is ensured (inspection/ audit/ testing/ pre-qualifying of personnel) Defect tracking system to ensure defects are fixed, retested and closed Quality management plan (or reference to where it is stored) 7. Human resource management 8. Communications management Human resource management plan (or reference to where it is stored) Collection, storage and dissemination of information Lines of communication Schedule of project meetings, progress reporting and documentation control 9. Risk management Risk register Risk management plan (or reference to where it is stored) 10. Issue management Issues log (or reference to where it is stored) 11. Procurement management Policies and procedures (or reference to where they are stored) Suppliers list, sub-contractors and/ or tender documents (or reference to where they are stored) 12. C Compliance related planning List of compliance related processes (e.g. ISO, PPPFA, health and safety, etc.) (Adapted from CDC, 2013; Burke, 2013: ) Regenesys Business School 72

77 Updates arising from approved changes during implementation, monitoring and control processes, and closure may significantly impact on parts of the project management plan and the respective plans that contribute to this plan. Consequently, updates across the respective plans and the overall project management plan must be implemented in order to maintain integrity of the deliverables with respect to schedule, costs and resource requirements to meet the defined project scope. Task Questions 1. Critique the guidelines provided in the table above against project plans that you have worked with in the past. 2. What challenges do you anticipate in compiling a project plan? For example, the trade-offs and compromises between conflicting stakeholder objectives. 3. How will an effective project management plan assist with the time-cost trade-off over the project's lifespan? 4. Discuss the following statement, "The project management plan is an essential communication tool." 5. In your own words, explain the importance of an integrated and robust project management plan Project Implementation, Including Monitoring and Control For the purposes of this module we focus on implementation challenges across the key areas of the project management plan. Remember that, as discussed in the previous section, the plan encompasses the elements in the diagram below. Figure 17: Project Management Implementation Areas Scope management Requirements management Schedule management Project Management Plan Cost management Quality management Process improvement Human resource management CommunicaMon management Risk management Procurement management Stakeholder management Regenesys Business School 73

78 Our areas of focus include: 'Creeping' scope (scope management) Levelling and smoothing (schedule management) The challenges of multi-tasking (human resource management) Control loops (schedule, cost and quality management), and Earned Value Management (schedule and cost management) Scope change Changes to project scope must be managed on even the simplest projects because of the cumulative effects created by many small changes to the project. 'Creeping' scope describes the way in which a number of minor changes have major effects on the outcome of the project, i.e. in terms of time, cost, etc. Depending on the nature of the project, various tools and techniques can be employed to monitor and manage scope changes: Requirements traceability matrix (a grid that links product requirements from their origin to the deliverables; helps to monitor that each requirement adds business value by linking it to the business and project objectives), and Variance analysis (a technique for determining the cause and degree of difference between the baseline and actual performance) Product changes (e.g. due to changing needs) may be required. However, there is a point at which change becomes prohibitively expensive, as shown in the diagram below. Figure 18: The Relationship Between Cost, Time and Change Regenesys Business School 74

79 The time for change is ideally before the end of the planning process has been completed. Levelling and smoothing There are two important techniques to keep in mind when planning and implementing a schedule, and we have chosen to deal with this here. Resource levelling, and Resource smoothing Resource levelling is used "when the start and finish dates are adjusted based on resource constraints with the goal of balancing demand for resources [e.g. skilled human resource, equipment, funds, etc.] with available supply. Resource levelling can cause the original critical path to change (usually to increase)." (PMBOK, 2013:179) Consider the following example in which two activities have been scheduled simultaneously, but require the expert skills of Nozi: Activities Before and After Resource Levelling (Adapted from PMBOK, 2013:179) Regenesys Business School 75

80 Whilst the above appears simplistic and logical, consider the complex use of resources over multiple projects and across several programmes. Consider, too, that resources do not only refer to human resources; consider the above example in terms of cash resources. Resource smoothing is a technique that adjusts the activities of a schedule such that the requirements for resources on the project do not exceed certain predefined resource limits. In resource smoothing (as opposed to resource levelling), the project's critical path is not changed and the completion date is not be delayed. (PMBOK, 2013:180) In other words, activities may only be delayed within their free and total float. The challenges of multi-tasking There is no such thing as multi-tasking; we only task switch. This task switching has consequences for project management, since the more you switch tasks the more time you lose (stopping and starting takes additional time). Notwithstanding this, many project managers fail to recognise the resource demands of other projects and the implications for their resource requirements. Consider the following mini case study and then answer the questions that follow: Mini Case Study The problems of multi-tasking A department found itself way behind schedule and over budget on an important strategic programme comprised of several projects. Both the budgets and schedule baselines had begun slipping almost from the beginning and as the projects progressed the lags became severe enough to call in a project consultant. After investigating the department's project management practices it was determined that there were serious shortcomings in the project managers' abilities to accurately forecast resource requirements per project. Too many of the project team members were currently working on two or more projects simultaneously a clear example of attempting to multi task. Unfortunately, the programme leaders developed their ambitious schedules without reflecting on the availability of resources to support each project's milestones. With their excessive functional and team responsibilities, neither project managers nor team members were willing to take ownership of their work on the programme. People were juggling assignments, and everyone was getting further and further behind across all the projects in the programme. Project issues would come up and there would be no one there to handle them. The issues were left unattended (and unrecorded) and eventually grew into bigger problems. The schedules continued to lag and employee morale began to bottom out. Following their recognition of the problem, the first step by the consultant was to get the project managers to renegotiate the work assignments with the project teams. First, the core team was freed from other responsibilities so they could devote their full time to the programme. Then, other support members of the project were designated specific work packages and these were negotiated alongside their functional departmental tasks. The result, coupled with other suggested monitoring and control mechanisms, was to finally match up the project schedules, activity duration estimates with a realistic understanding of resource needs and availability. In short, the programme was put back on track because it was 'resource levelled'. (Adapted from Pinto, 2007:405) Regenesys Business School 76

81 Task questions: 1. Using what you have learned, explain why the concept of multi-tasking does not exist in project management. 2. Could the project managers incorporate resource smoothing into their schedules? How? 3. In your own words, explain the following concepts and how they applied to projects on which you have worked (or of which you are familiar) a) Scope creep b) Resource levelling, and c) Opportunities for change Monitoring and control loops Arguably the most significant challenges with project management pertain to 'control' in the main because we control 'things' and we manage people. If projects were made up entirely of machines then the process of control would be purely scientific. However, this is rarely the case and transparent and agreeable techniques need to be implemented to monitor and 'control' the actions of people. One such technique is a control loop, as shown in the diagram below. Figure 19: Monitoring and Control Loop Or Take action to correct performance START Or Revise the standard Continue unchanged if corrective action is not needed Select measurement (time, cost, quality) Compare performance with agreed standard and decide whether corrective action is needed Measure performance Monitoring begins by selecting the appropriate baseline measure and then using this against actual performance to determine variance. If the variance is acceptable, the activity can continue unchanged. However, if the variance is unacceptable, then a decision must be taken to: Revise the standard, or Correct performance Regenesys Business School 77

82 Let us take a simple example of budget items. Consider that it is acceptable for Budget Items A and B to have variances of 2%, but anything above (or below) this signals a problem. At the end of Month 1, the budgeted items for A and B reflect variances of 6% and 4% respectively. The project manager investigates the over expenditures and finds that budget item A has been costed incorrectly and, therefore, s/he must revise the standard (e.g. apply the correct costing) and that waste has occurred with Budget Item B, which requires action to correct performance. Clearly, going forward the budget will need to be adjusted to take into consideration the increased costs for Budget Item A, and improved performance (e.g. through training) should bring Budget Item B back on track. In our example, budget variance is carried out on a monthly basis. However, given that there is a performance issue with Budget Item B, the project manager may decide to monitor this item more frequently until s/he is satisfied that it is under control. Therefore, we can say the 'when' is largely dependent on circumstances. The project manager must also consider the cost of monitoring and control his/ her and the team's time spent on monitoring and control must be justified (e.g. cost vs. benefit) with the higher risk items receiving greater attention. Continuous monitoring provides the project team with insights into: o The health of the project, and o Areas requiring attention. Control facilitates project compliance with the project management plan. A missed activity finish date may require adjustments and trade-offs between budget and schedule objectives. In multi-phase projects, monitoring and control has implications for other phases. Quality methods This module is not specifically about managing quality, but quality is a significant factor in project management. Consider that the following quality methods can be applied to projects to improve and accelerate performance: Lean Six Sigma Total Quality Management (TQM) Value engineering Agile project management, and Scrum project management Task Questions 1. Carry out your own investigation into each of the above five methods that can be used to improve quality. 2. Critically evaluate the application of each in the context of projects being undertaken in your organisation. Regenesys Business School 78

83 Earned value management (EVM) Earned Value Management (EVM) is now used on projects worldwide. The purposes of EVM are to: Firstly, track the progress and status of a project (past to present), and Secondly, determine the future performance of the project (future) This technique is widely used in organisations that are responsible for large-scale projects that warrant the additional costs to measure and monitor progress. In this section we look at how this is achieved. Earned Value management is a "methodology that combines scope, schedule and resource measurements to assess project performance and progress." (PMBOK, 2013:538) Many project managers manage their project performance by comparing the planned results with the actual results, but while this method means they can be on time, it can also mean overspending according to the plan. A better method is Earned Value (EV) because it integrates the following (Nagrecha, 2002): Scope Schedules, and Costs It is an early warning tool that enables project managers to identify and control problems before they become out of control (insurmountable). It uses work-in-progress to indicate what will happen to work in the future. Three quantities form the basis for cost performance measurement using EVM (Nagrecha, 2002): Budgeted Cost of Work Scheduled (BCWS): The Planned Value (PV): o The sum of budgets for all work packages scheduled to be accomplished within a given time period Budgeted Cost of Work Performed (BCWP): The Earned Value (EV): o The sum of budgets for completed work packages and completed portions of open work packages Actual Cost of Work Performed (ACWP): The Actual Cost (AC): o The actual cost incurred in accomplishing the work performed within a given time period (for equitable comparison it is important that ACWP is only recorded for the work performed to date against tasks for which a BCWP is also reported, i.e. comparing apples with apples) Regenesys Business School 79

84 From the above three quantities the project manager can determine the total programme budget, make a determination of schedule and cost performance, and provide an estimated cost of the project at completion. However, first you need to familiarise yourself with the following terminology (Nagrecha, 2002): Performance Measurement Baseline (PMB): The sum of all work packages for each time period calculated for the total project duration. Budget at Completion (BAC): The sum of all the budgets allocated to a project, including management reserves. Schedule Variance (SV): The difference between the work actually performed (BCWP) and the work scheduled (BCWS). Cost Variance (CV): The difference between the planned cost of work performed (BCWP) and actual cost incurred for the work (ACWP). Cost Performance Index (CPI): The ratio of cost of work performed (BCWP) to actual cost (ACWP). CPI of 1.0 implies that the actual cost matches the estimated cost. CPI greater than 1.0 indicates work is accomplished for less cost than what was planned or budgeted (and vice versa). Schedule Performance Index (SPI): The ratio of work accomplished (BCWP) versus work planned (BCWS) for a specific time period (i.e. the rate at which the project is progressing). Estimate at Completion (EAC): A forecast of most likely total project costs based on project performance and risk quantification. Estimate to Complete (ETC): The difference between EAC and AC; this is the estimated additional cost to complete the project from any given time. Variance at Completion (VAC): The difference between BAC and EAC; this is the rand value by which the project will be over or under budget. Whilst the above may seem complicated, the following summary puts the terms into perspective: Table 12: Earned Value Management (EVM) Terms PV (BCWS) Planned Value What is the estimated value of the work planned to be done? EV (BCWP) Earned Value What is the earned value of the work actually accomplished? AC (ACWP) Actual Cost What is the actual cost incurred? BAC Budget at Completion How much did you budget for the total job? EAC Estimate at Completion What do we currently expect the total project to cost? ETC Estimate to Complete From this point on, how much more do we expect it to cost to finish the job? VAC Variance at Completion How much over or under budget do we expect to be? (Nagrecha, 2002) The table below provides an interpretation of the above: Regenesys Business School 80

85 Table 13: EVM Analysis Cost Variance (CV) EV AC Negative is over budget Positive is under budget Schedule Variance (SV) EV PV Negative is behind baseline schedule Positive is ahead of baseline schedule Cost Performance Index (CPI) EV/ AC I am (only) getting cents out of every R1. Schedule Performance Index (SPI) EV/ PV I am (only) progressing at % of the rate originally planned. Estimate at Completion (EAC) BAC/ CPI As of now how much do we expect the total project to cost: R? Estimate to Complete (ETC) EAC AC How much more will the project cost? Variance at Completion (VAC) BAC EAC How much over budget will we be at the end of the project? (Nagrecha, 2002) To illustrate the above, a simple example has been compiled. You will notice that using this method provides an accurate picture. In the following four periods the project expects to complete R100 of work. Work scheduled (Rand) (Planned value PV) Total As time progresses, we can see what was actually spent on each period. Work scheduled (Rand) (Planned Value PV) Actual Cost (Rand) (Actual Cost AC) Total or 8% From an accounting sense, it appears that this project is experiencing an underrun of R8. What is missing from this equation is the value of how much work was actually completed or performed. Work scheduled (Rand) (Planned Value PV) Accomplished Value (Rand) (Earned Value EV) Actual Cost (Rand) (Actual Cost AC) Schedule Variance (SV) (SV=EV-PV) Cost Variance (CV) (CV=EV-AC) Total or 20% or 15% Regenesys Business School 81

86 We now have a clearer picture of the actual status of the work. There is currently a schedule variance of R20 (scheduled to complete R100 of work and have only completed R80). In addition, the work that was completed (R80) has cost more than we had planned (R92), creating a cost variance of R12. The actual cost variance is not 8% as calculated by the traditional approach but it is 15%, which is more accurate as it also considers the work accomplished. (Nagrecha, 2002) Watch the following video clip and read the recommended journal article to consolidate your understanding of Earned Value Management: Litten, D. 2011, 'Learn PMP earned value in 10 minutes flat on [video], (accessed 11 July 2013). Sharma, V.K. 2013, 'Earned value management: A tool for project performance', Advances in Management, 6 (5). Task Questions 1. Why is it important to have a thorough understanding of the combined effect of project costs and timeframes? 2. Evaluate the 'Earned Value Management' approach to monitoring projects. Your evaluation should include possible pitfalls of the approach and how to overcome these. 3. Refer back to Figure 5 Extended Framework for Project Management Success. What are the implications of poor monitoring and control of one variable in terms of the other variables and, consequently, on the project objectives? For example, poor time management impacts on risk, cost and scope management which could lead to say client penalties. 4. Critically evaluate the importance of a systemic approach to project management. Regenesys Business School 82

87 7.3.5 Project Closure There are four main reasons for projects to be terminated (Pinto, 2007: ): 1. Termination by extinction 2. Termination by addition 3. Termination by integration, and 4. Termination by starvation Termination by extinction: Termination occurs when the project is completed successfully (or it is suspended because it is unsuccessful). In a successful completion, the project is transferred to its intended users and all final phase-out activities are conducted. The project's final budget is audited, team members receive new work assignments and any material assets are either handled according to company policy or in terms of the contract (Pinto, 2007:445). Unsuccessful projects can be terminated at any point, but as our earlier sections indicated the costs increase significantly at the end of planning and beginning of implementation. Termination by addition: This approach institutionalises the project as a formal/ official part of the organisation in effect, the project is promoted to formal status within the entity. Termination by integration: In this case, the project's resources, including the project team, are integrated back into the organisation's existing structure following the conclusion of the project. For example, consider that the project involved a new IT system and the project team was drawn from IT, finance and various administrative departments. The team (and any resources) are reabsorbed back into their functional departments to perform their original duties or wait for new project assignments. It is not uncommon to lose key employees at this point (the idea of re-integration into 'old' roles may no longer be appealing). Termination by starvation: Termination by starvation is not an outright act of termination, but rather a suspension with a view to possible termination. There are two reasons for this: Political reasons for keeping the project on the books (e.g. a powerful sponsor with a pet project), and Budget cuts (e.g. the project is suspended until the economic situation improves) The danger of this approach is that the project may no longer fulfil the strategic need for which it was originally intended, or it may simply become out-dated. Reflect on the ways in which projects in your organisation have been terminated and what led to these types of termination. Regenesys Business School 83

88 Project acceptance The acceptance of projects refers to the acceptance from the customer (internal or external) that "the deliverables, value and outcome of the project are in alignment with the requirements and expectations" (Vaidyanathan, 2013:429). To ensure acceptance the preparation for this is included in the initiation and planning processes. The accepted deliverables are part of the project scope document. Handing over the project The process of handing over is often complex and may go beyond the simple and formal transfer of ownership. In some cases it might constitute a full project phase including initiation, planning, implementation and closure of handing over. Some of the considerations include: Establishing training programmes for users Transferring and sharing technical designs and features Connection and commissioning Licences, certifications and registrations Defect liability periods, including maintenance and callouts New supplier contracts, and New end user policies and procedures (including manuals) Project audit (or process audit) Given that projects are faced with many obstacles and possibly early termination, project audits are recommended. The audit can take place at any point during the life cycle or on completion to record lessons learned. "Project audit is a systematic process of objectively obtaining and evaluating evidences of issues in a project and communicating the results." (Vaidyanathan, 2013:430) Key to project auditing is obtaining evidence and evaluating this against project processes and project plans. The project audit aims to: Provide a level of assurance that project success factors are under control, e.g. scope, time, cost, quality, resources, risks and stakeholder management, and Obtain recommendations from the audit results that could be used to improve either the existing project processes, tools and techniques or those on future projects Regenesys Business School 84

89 An audit is different to monitoring and control in that it is broader. Whereas monitoring and control is aimed at, for example, monitoring and controlling costs, the audit is aimed at the effectiveness and efficiencies applied in project cost management. For this reason the audit should include the following knowledge areas: 1. Scope management 2. Time management 3. Cost management 4. Quality management 5. Human resource management 6. Communication management 7. Risk management 8. Procurement management 9. Stakeholder management, and 10. Relevant project policies and procedures A designated audit team reviews the above and passes judgement on the effectiveness and efficiency of the audit areas, which is in turn reviewed by the project manager (and functional managers) before being released as a report. An example of the type of review areas pertaining to scope management is shown below: Scope management audit: 1. Does an approved scope plan exist? If so, is it kept up to date and by whom? 2. Is scope management documented and followed? 3. Do scope-related processes exist? 4. Do the existing scope-related processes ensure that the project is managed efficiently and effectively? 5. Are there guidelines to scope process? Are they followed effectively? (Vaidyanathan, 2013:436) Task Questions 1. Distinguish between monitoring and control and a project audit. 2. Critically evaluate the value of project audits using a simple cost-benefit approach. Regenesys Business School 85

90 Project closure processes Several aspects of the project require closure. Consider the following: Administrative closure, for example: o Finalise documentation including closing checklists o Settle final accounts, establish project value and compile final reports (e.g. management accounts) o Consolidate lessons learned and add to organisational knowledge bank o Relocate team o Reassign other resources (e.g. equipment), and o Close project office Formalise contract closure, and Hand over project product, services, and/ or result Task Questions 1. What is the relationship between project audits and risk analysis? Explain. 2. An R&D project to develop a new drug has very low termination costs, has spent more than $200 million, and may have significant sunk costs. Would you terminate such a project? Why/ why not? What are the impacts of terminating this project? 3. Select one of the projects that you have worked on recently (or one with which you are familiar) and design a simple audit process. How would you plan to close this project? Post Project Evaluation Phase Some authors recommend a post project evaluation stage in the project life cycle (Archibald, Filippo and Filippo, 2012) a sixth stage after project closure. The reason for the sixth stage is to determine project value as opposed to simply project success. Consequently, different factors are used in the evaluation phase. A project ends when its final results (products and/ or services) have been delivered to the owner, investor, marketer, or user in accordance with the project contract/ project charter and the final closeout stage is complete. However, the product life cycle begins at the moment the product begins to be used, sold or placed in operation thus producing the benefits that justified the project in the first place. (Archibald et al., 2012) Regenesys Business School 86

91 Archibald et al. (2012) argue that current project management standards fail to fully recognise the importance of post-project evaluation of the success of both the project and its operating results. They argue that the post project evaluation stage will identify weaknesses and threats that can be turned into opportunities that lead to improved initiation phases of future projects for the organisation. Arguably, the post project evaluation stage is customer focussed and asks questions such as: "What changes can we make to our framework to better serve you on the next project?" "How is the product performing and is this performance meeting your expectations?" Archibald et al. (2012) recommend four dimensions for measuring project value in this post evaluation stage: 1. Project management dimension a. How closely did the project achieve the original project objectives as defined and agreed in the Project Charter (business case)? b. Did the project meet the specified product within the constraints of project time, cost and scope? 2. Product dimension How well does the product meet its key performance indicators/ critical success factors? a. Example 1: Does the new chemical plant (the project) produce the specified products at the specified costs and comply with the established regulations? b. Example 2: Do the users of the new IT system (the project) like and actually use the system, including achieving the specified benefits from using it? 3. Stakeholder satisfaction dimension What level of satisfaction (or dis-satisfaction) exists in each of the project stakeholders (e.g. accomplishment, enjoyment, pleasure, anger, frustration, etc.)? Examples of stakeholders include project manager, core project team, owners, users/ customers, regulatory agencies, communities, etc. 4. Cognitive constraint dimension These refer to how the project team handle: a. Decelerations and accelerations during the project b. Risk and contingency factors that were hard to manage c. Internal conflicts d. Competence Borderline Syndrome (I am going to do just what I have to do, no more!) e. Parkinson's Law (work expands so as to fill the time available for its completion), and f. The Student Syndrome (the phenomenon that many people will start to apply themselves to a task at the last possible moment before a deadline leading to wasting any slack built into individual task duration estimates) Regenesys Business School 87

92 Task Questions 1. Distinguish between project success and project value. 2. Critically evaluate Archibald et al's (2012) proposition for a sixth stage in the project life cycle post-project evaluation. 3. Evaluate the merit in making Archibald's sixth stage a completely new project phase, e.g. including the five stages of initiation, planning, implementation and closure rather than an additional stage in project life cycle. Regenesys Business School 88

93 7.4 PROJECT DOCUMENTATION AND REPORTING Timeframe: Learning outcome: Section overview: Minimum of 10 hours Compile professional project documents and reports. Depending on the nature of the organisation and the types of projects it runs, there are a variety of project management information systems available. The system should facilitate improved and faster project management information, reporting and hence decision-making. This is particularly important for satisfying multiple stakeholders and in the case of multiple projects. Work performance reporting (or project status reports) contributes significantly to project decisionmaking. For this reason, we focus on this form of report in particular Project Management Information Systems (PMISs) Consider that organisations are managing multiple projects with different scopes, complexities, timelines and documents. Project managers may become overwhelmed by the amount of information that is available for decision-making and may even lose sight of relevant information. In general, poor information management leads to impoverished decision making. The implementation of a Project Management Information System (PMIS) is considered advantageous particularly when faced with multiple, large or complex projects. PMIS is a framework, tool or system for: Collecting Organising Storing Processing, and Disseminating project information (documentation) That: Provides answers to stakeholder questions Facilitates communication among stakeholders and team members Assists in what if analyses, and Helps organisational learning (Barry, 2013) A PMIS helps to plan and execute project management goals. For example, in the planning process a PMIS provides a budget framework, which includes a function for the estimating of costs. As the project management team collects actual financial data and inputs this into the system (database) the PMIS compares the baseline data with the actual accomplishment of each activity, which in turn is used to generate reports. The PMIS can retain already completed project data. For example, costs, work packages and risks of different projects are stored and new projects, in their planning process, can benefit from those data. Regenesys Business School 89

94 Access to the PMIS from any location is one of its primary attractions especially in the case of virtual teams. There are multiple project management software solutions, depending on which platform the organisation prefers: Basecamp (cloud based, fast and easy to use for professionals managing complex projects) Genius project (used by many of the world's largest brands; hosted on site and customisable to a range of industries), or Microsoft Project (primarily desktop project management software with full user collaboration capabilities) Work Performance Reporting During project implementation, data is collected and analysed in the context of the project to provide information for stakeholders (e.g. circulated in a Project Work Performance Report). Project performance reports are the physical or electronic representation of work performance information collated on a regular basis intended to "generate decisions or raise issues, actions, or awareness" (PMBOK, 2013:59). Figure 20: From Data to Reporting Work performance data (collected) Raw observations and measurements (e.g. % of work completed; actual cost; quality and number of defects; number of change requests, etc.) Work performance information (analysed) Analysed in context (e.g. status of deliverables; status of change requests; forecasted estimates to completion) Work performance report (for circulation to relevant stakeholders) Physical or electronic representation of work performance in documents; intended to generate decisions, raise issues/actions/awareness Status reports Memos Electronic dashboards Recommendations Updates (Adapted from PMBOK, 2013:59) Regenesys Business School 90

95 7.4.3 Effective Project Reporting It is useful to review generic best practices in effective project reporting. Hazen (2004) proposes the following three objectives in maximising the effectiveness of written reports: Demonstrate knowledge and expertise (proficient use and understanding of project management principles and practices applicable to the context) Maximise reader insight (logical development of report leading to conclusive findings and prioritised and realistic recommendations/ actions where appropriate), and Minimise reader effort (organise text logically using appropriate headings; reader should be able to choose the level of technical detail s/he wishes to read through the use of headings, sub headings, display techniques and appendices) In the main, a report should contain: A title page A summary (state the purpose of the report, key findings and recommended action; assume that the reader only has time to read the summary and, therefore, s/he must obtain a crisp understanding of the salient issues, how these will be managed e.g. scope, time, cost, quality, resources, risks) A table of contents (optional depending on the length of the report) An introduction (provide the background, project goals and a more precise explanation of the key problems and/ or successes depending on the motive for the report; include restrictions, assumptions and an overview of the content of the full report) Analysis section (the objective is to maximise reader insight; description of standards/ measurements, tools and techniques together with data analysis where appropriate to demonstrate systemic understanding of the situation including any limitations; use figures, tables, graphs and appendices where appropriate) Conclusions (findings) and recommendations (prioritised and realistic actions where appropriate) A reference section, and One or more appendices (depending on the level of detail and credibility required) In the analysis section, use figures, tables, graphs and appendices to facilitate understanding, e.g. data should be summarised in a table and the supporting text should explain particular numbers for the purposes of insight or emphasis. Results should be explained rather than merely described provide an intuitive justification for the results based on your (your team's) knowledge and experience. Conclusions and recommendations should consider systemic factors, especially those of a human nature (e.g. implications of people's needs and competencies and environmental factors including assumptions and risks). Where important questions remain, state these and how the team will approach them (e.g. questions relating to stakeholder management, scarce resources, etc.). Regenesys Business School 91

96 Professional reports are error free (e.g. in structure, fluency, figures/ data, spelling, grammar, punctuation). Mistakes jar the reader out of the report and to the project manager in unflattering terms. Proofread project management reports for: Project management knowledge and expertise Maximum reader insight Minimum reader effort, and Errors Task Questions 1. Select two to three project management reports (e.g. project proposals, progress status reports) and evaluate these against the above four points. 2. Determine any shortfalls in the report (e.g. in the summary, introduction, analysis, conclusions and recommendations). Explain how you would have compiled and/ or written the report differently and why. 3. Discuss why the following three factors are of particular importance in a project performance report: a) Overall progress b) Milestones, and c) Issues 4. Assume that your organisation would like to implement a PMIS. Using an appropriate technique, select and evaluate four PMISs using appropriate criteria. Write a short report, proposing a pilot run. Regenesys Business School 92

97 7.5 OUTSOURCING, CONTRACT AND TENDER MANAGEMENT Timeframe: Learning outcome: Recommended reading: Section overview: Minimum of 15 hours Critically review key issues relating to outsourcing, contract and tender management. Chapter 11, pp on 'Outsourcing': Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, Pearson Education Limited. Chapter 5, pp on 'Contracts': Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, Pearson Education Limited. In this section, we focus on outsourcing as an alternative way in which to complete a project (or part of a project), keeping in mind the benefits and inherent risks. Aligned to outsourcing is the issue of contract management. We conclude with a discussion on tenders and tender management Outsourcing Outsourcing is the process whereby a strategic partner implements the organisation's projects. The reason that outsourcing has become so popular is that the scope of knowledge required in many industries is far greater than the organisation's own employees' knowledge pool and/ or it is more cost effective. Various options exist (Vaidyanathan, 2013:502): Offshoring (to another country; a South African electrical component maker may outsource a software product development application to a company in India that specialises in application development to take advantage of expertise/ specialist knowledge and lower costs) Nearshoring (to another company in a nearby location; as with the above example, the organisation wants to make use of specialist knowledge and/ or low cost advantages) Insourcing (the process of moving a project within an organisation to utilise specialist skills; the HR department uses the IT department to build an HR database) Co-sourcing (a combination of internal staff of an organisation and an external contractor; minimises outsourcing risks and brings control over the project to the organisation), or Multi-sourcing (brings multiple sources from both inside and outside the organisation; reduces outsourcing risks; also known as the 'best-of-breed' outsourcing model as it typically includes experts in the field) A project may be outsourced in its entirety, or only a portion of it, to an external provider a contractual agreement is formulated involving the exchange of services and payments. Vaidyanathan (2013:503) points out, however, that outsourcing can be viewed as an alternative as long as organisations do not contract out their core competencies (i.e. specific factors that are critical to an organisation which fulfil three key criteria technical expertise, reliable processes and close relationships with customers and suppliers). Regenesys Business School 93

98 A core competence of Honda is the design, development and manufacture of small engines. Software engineering is not its core competence. In summary, organisations outsource projects for the following reasons (Vaidyanathan, 2013:503): Cost savings Lack of knowledge Improved performance Access to talent Reduced time to market/ faster completion Risk transfer To allow organisation to focus on its core business, and Overall flexibility The key reasons for project outsourcing are based on benefits (time, cost, performance) and risks. Read the following pages pertaining to 'outsourcing' in your recommended textbook: Chapter 11, pp , and then answer the questions that follow in the task bar. Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, Pearson Education Limited. Task Questions 1. What are the key drivers for outsourcing projects? 2. Evaluate the possible issues and problems with outsourcing relating to: a) Selection of projects b) Selection of outsourcing company c) The requirements of the project d) Delivery and documentation of projects e) Hidden costs f) Project control g) Knowledge transfer h) Conflict management i) Communication management j) Contracts k) Relationships, and l) Exit strategy Regenesys Business School 94

99 7.5.2 Contract Management Contracts are integral to project management from small projects to large complex programmes and, therefore, an understanding of the different types of contracts is essential for project managers. A contract is a legal and binding agreement between two parties the contractor and the client. The contractor agrees to perform a service and the client is obligated to pay for the service. This document governs the relationship spelling out the conditions, responsibilities, and legal rights should there be a breach of the contract. (Adapted from Vaidyanathan, 2013:220) Refer to the following section in your recommended textbook: Chapter 5, pp on 'Contracts': Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, Pearson Education Limited. We consider three basic types of contract: Fixed price or lump sum contracts Cost reimbursable contracts, and Time and materials (T&M) contracts We have summarised these in the table below for ease of reference. Whilst contracts are described differently across various authors, the objective is to determine the advantages and disadvantages of each type based on the project at hand. Table 14: Selection of Contract Types Found in Project Management Fixed price or lump sum Description A specific price is agreed for the good or service with well-defined deliverables. A fixed price plus incentive contract falls into this category and includes an incentive or bonus typically for the early or on-time completion of the deliverable. Considerations The greater risk is borne by the seller since they must make a profit in the face of some unknowns such as increasing costs. Can be very problematic for both buyer and seller if there are not well-defined deliverables. The buyer will have to pay more for change requests when the seller is no longer willing to compromise around the agreed upon deliverables. Regenesys Business School 95

100 Cost reimbursable Time and materials (T&M) All the costs that the seller incurs during the project are charged back to the buyer (seller reimburses costs). The costs that are allowable are clearly defined in the contract. Three types: Cost plus fee (CPF) or cost plus percentage of cost (CPPC) Cost plus fixed fee (CPFF), and Cost plus incentive fee (CPIF) This type of contract is a cross between fixed-price and cost-reimbursable contracts. In this contract more risk is borne by the buyer, as the final cost is uncertain. If unforeseen problems arise during the project then the buyer will have to spend more. The advantage of this type of contract to the buyer is that scope changes can easily be made to the work being done. A problem with this type of contract is the seller has little incentive to be efficient and productive (complete the work timeously) unless a fixed or incentivised fee is agreed (CPFF or CPIF). This type of project is most often used when there is a lot of uncertainty associated with the final deliverable. The CPIF is specifically designed to encourage increased cost performance by the seller and there is potential for both buyer and seller saving if the performance criteria are exceeded. Time and materials is a standard phrase in a contract for construction in which the buyer agrees to pay the contractor based upon the work performed by the contractor's employees and subcontractors, and for materials used in the construction (plus contractor's mark-up), no matter how much work is required to complete construction. T&M contracts are not common because of the lack of an upper limit for the price paid by the buyer. However, if there is no time to send the job out for bids and complete construction, a time and materials arrangement can save time. It is a common arrangement where the original fixed price contractor abandons the work and another contractor must repair any damage caused by the first contractor and complete the work. Often T&M contracts also carry a guaranteed maximum price, which puts a limit on what the contractor may charge but at the same time allows the buyer to pay a lesser amount if the job is completed more quickly. (Adapted from Heydari, 2013) Regenesys Business School 96

101 Task Questions 1. Vaidyanathan (2013: ) explains six types of contracts. Capture the salient information in a table showing the appropriate uses, advantages and disadvantages of each type of contract from the client's and contractors' viewpoints: a) Fixed-price contracts b) Fixed-price incentive fee contracts c) Cost-plus fixed fee contracts d) Cost-plus percentage fee contracts e) Cost-plus incentive fee contracts, and f) Guaranteed maximum-shared savings contracts 2. In each of the following instances, determine an appropriate type of contract from the client's viewpoint and justify your selection: a) The client does not understand the extent and the scope of the project at hand for a very big project, and b) A project where the client knows the total price before the project starts Tenders (Bids) The project scope document is a key document used to develop the Request for Tender Proposal. The clearer you are about the project the better the request for tender proposal will be. This, in turn, will improve the quality of the tender submissions. Remember, the project scope statement clearly puts forward what needs to be accomplished: Product scope description, service description and/ or result description The list of deliverables together with acceptance criteria Important information regarding technical issues or concerns that could impact cost estimating, and Identified constraints (e.g. required delivery dates, organisational policies and procedures) Project managers select contractors on the basis of the relative (weighted) importance of tender evaluation criteria such as experience, expertise, past performance and cost. Whilst evaluation criteria may differ from one project type to another (e.g. a significant criteria might be cost for Project A, but Quality for Project B) findings indicate that the preferred criteria for evaluating tenders are those which provide a measure of contractors' ability in terms of their (Watt, Kayis, Willey, 2009): Management and technical capability Past experience and performance Reputation, and Proposed method of delivery or technical solution. Regenesys Business School 97

102 Once evaluation criteria are determined, weightings are applied depending upon the nature of the project. Sample Evaluation of a Contractor (Vaidyanathan, 2013: ) Category Weight Score (1 5) Weighted Score Scope Clear understanding Specifications Cost Products and services Other Schedule Delivery history Communication history Resources Project managers Process managers Flexibility Expertise Performance Quality awards Certifications Six Sigma/ TQM Past quality standards Value Reputation Financial stability Trust TOTAL Weighted Score = Score 5 x Weight After comparing the scores with other contractor scorecards, the project manager can choose the best contractor for the job. Task Questions 1. What is the purpose of a tender? 2. Carry out your own research to determine the difference between a tender and a negotiated tender. Evaluate the strengths and weaknesses of each. 3. Find out what is meant by 'Post Tender Negotiations' and why these might be desirable from the project manager's perspective. Regenesys Business School 98

103 7.6 PROJECT SUCCESS FACTORS Timeframe: Learning outcomes: Recommended reading: Recommended multimedia: Section overview: Minimum of 15 hours Evaluate key project success and failure factors. Make autonomous ethical decisions and contribute to the development of ethical project management standards. Critically evaluate current project management policies and procedures. Chapter 12 in: Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, Pearson Education Limited. PMI. 2013a, Code of ethics and professional conduct, Project Management Institute, (accessed 25 October 2013). Pasian, B., Sankaran, S. and Boydell, S. 2012, 'Project management maturity: A critical analysis of existing and emergent factors', International Journal of Managing Projects in Business, 5 (1), Shenhar, A.J., Dvir, D., Levy, O. and Maltz, A.C. 2001, 'Project success: A multidimensional strategic concept', Long Range Planning, 34 (2001), PMI. 2013b, 'PMI's code of ethics and professional conduct', [video], (accessed 25 October 2013). In this section we draw together important areas of learning to evaluate key project success and failure factors. Our study guide then concludes with an excerpt on ethics and a critical reflection of current project management policies and procedures in your organisation Project Success Variables Consider the following core project success variables: Those contained in the project management plan: o Scope o Time o Cost o Quality o Human resources o Communication o Risks o Procurement, and o Stakeholders Project manager commitment and competence Team commitment and competence Organisational commitment, and External factors Regenesys Business School 99

104 Given that the project manager is accountable to the project sponsors (e.g. organisation) and is largely responsible for the variables in the project management plan it suffices to say that project success can be largely measured by the actions of the project manager. Vaidyanathan (2013: ) suggests the following factors as some of the key determinants of project manager success, which we have included in a checklist format: Table 15: Project Manager Success Factors Factors Y/ N 1 Understand strategic goals of the organisation and the project. 2 Select key project team members with proven track records. 3 Maintain appropriate relationships with team and stakeholders. 4 Involve team members in decision making and problem solving. 5 Understand the scope of the project and keep it in mind throughout project execution. 6 Develop and maintain realistic schedules and budgets. 7 Identify risks and implement appropriate risk management strategies. 8 Use appropriate project management technology, tools and techniques. 9 Leverage existing processes and manage costs. 10 Demonstrate appropriate business skills. 11 Use effective communication skills. 12 Institute, evaluate, measure and achieve clear performance metrics. 13 Control all six success factors during project execution: scope, schedule, costs, resources, performance and value. 14 Other: Read Chapter 12 in your recommended textbook, paying attention to 'project success', not only in view of the organisation but also in view of all stakeholders, e.g. the team, customers, etc., and in terms of duration (from the short-term to the longer term). A further information source has also been included below. Then answer the questions in the task bar that follows: Chapter 12, pp on 'Contracts': Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, Pearson Education Limited. Shenhar, A.J., Dvir, D., Levy, O. and Maltz, A.C. 2001, 'Project success: A multidimensional strategic concept', Long Range Planning, 34 (2001) Regenesys Business School 100

105 Task Questions 1. Based on your experience of projects, discussions in this study guide and your recommended textbook, complete the list of project manager success factors in the checklist above. What does this tell you about the competencies required by project managers? 2. Select a project on which you have worked recently (or one with which you are familiar) and evaluate the actions of the project manager. Read the mini case study below and then answer the questions that follow. Task Questions Mini Case Study A tale of two projects (Howard, 2008) A business tale of what it takes to turn around troubled projects. The year is 2005 and times are good. The business environment is vibrant and the economy is strong. Large businesses are committing large amounts of capital and resources to implement new strategies, establish new capabilities, and open new markets. It was no different at PintCo, where Jack works as a Director of Customer Relationship Management. Jack walked into work on Monday morning like any other. He dropped his briefcase in his office, grabbed a cup of coffee and headed down the hall to meet with his boss, Brandon, about one of the company's troubled projects. Although Jack had substantial experience, he had only recently joined PintCo after being hired away from a chief competitor. He was still learning about some of the nuances of his current employer. After the typical morning banter, Brandon and Jack got to the topic at hand. "Jack, I'll get straight to the point. I need to you to take over the Customer Master File project from Paul." Brandon said. He continued, "We hired you because of your significant project management expertise. I know that you've turned around a lot more difficult situations than this." Over an hour later, Jack emerged from Brandon's office and set out to learn more about the challenge that Brandon had posed to him. Jack was an experienced business leader and project manager. He had seen more than his fair share of ugly projects; some he turned around while others had spun hopelessly out of control. He would be able to tell very quickly how this one would go based on the makeup and culture of the project team. Troubled waters Over the course of the next few weeks, Jack took over the Customer Master File project, met with key project team members, and conducted dozens of interviews with key stakeholders. It was only a few weeks since Brandon had handed the keys to him for this troubled project, and now Jack was back in Brandon's office to give a rather stark update on the situation. "Brandon, I've talked to the project team and to key stakeholders, and I know why this project is in trouble," Jack started. "If you truly want me to turn this project around, I'll need your support to make some critical changes." Brandon, a 20- year veteran at PintCo, knew what was coming. He had seen too many projects start, flounder, and then fail at the Regenesys Business School 101

106 company. He didn't want to hear that another project was on the brink of failure, but he asked anyway, "What did you find out, Jack, and what can I do to help?" Jack drew a deep breath and began to explain his findings. "Brandon, as you know this project has been in flight for nearly 6 months now and it is already behind schedule and over budget." Jack went on, "In talking to the project team and other stakeholders, I don't see the situation getting better without making some pretty significant changes." Jack's experience helped him to quickly identify a number of critical issues with the project, which he carefully outlined for Brandon: "The scope of the project is not well defined," "The IT architects are sitting in their ivory towers and disagree with the project's direction," "The project team is not functioning as a team," "There is a lack of clear executive sponsorship, and "Steve from Marketing is trying to manipulate this project for his own political gain." "I'm not going to sugar coat this for you Brandon," Jack explained. "I've seen this situation far too often in my career, and if we don't change the situation this project will fail in glorious fashion." Foundations for success Brandon knew that what Jack said was true, and he also knew that changing the situation would be difficult, painful, and potentially costly. He reluctantly agreed with Jack, and together they laid out several key changes. "Thanks for working with me on this Brandon," Jack said. "Just to confirm, let me summarise the changes that we agreed to implement: "First, we're going to stop the current project and recreate a clear and well-defined scope and get consensus buy-in on the new scope." "Second, we're going end the architectural holy wars by assigning key IT architects to the project on a full time basis." "Third, we're going to co-locate the team and assign members to a full-time basis on the project. No more parttime participation." "Fourth, Brandon, you agree to be much more visible and an active participant to drive key decisions for the project, and" "Finally, Brandon you are going to have a heart-to-heart with Steve and if necessary his boss - to eliminate any political agendas that could derail the project." Brandon and Jack both agreed with the plan. Jack knew that some of these changes would be unpopular, but without them the project would be doomed. He left Brandon's office with a sense of relief and apprehension. There was still a lot of hard work and heavy lifting yet to be done... Celebrations Six months later, Jack ran into Brandon in the break room as they both were angling for their morning coffee refill. "Jack!", Brandon shouted while patting Jack on the back. "Congratulations on getting the Customer Master File project into pilot. By all accounts, it has been a resounding success!" Brandon crowed. "Thank you," Jack smiled and answered, "but you know it was pretty touch and go after we met in your office to plan the project turnaround. There were a lot of unhappy campers and several of them didn't like the idea of being assigned 100% to the project if you recall." Regenesys Business School 102

107 "But we quickly converted them and now I see a project team that is hitting on all cylinders," Jack added. "In fact, Sharon told me she was ready to quit six months ago and now she's happier than ever and up for promotion." Jack explained. "I love it when a plan comes together," Jack said proudly as he turned to walk away and take on his next big project. Task Questions: 1. Evaluate the challenges facing the project in terms of 'hard' and 'soft' issues. 2. Is it possible to separate hard issues from soft issues? Why/ why not? 3. Critically evaluate the leadership role in this case study. 4. What have you learned from this case study in terms of project management and leadership? Ethical Decisions and Standards The Code of Ethics is a written set of guidelines issued by the Project Management Institute (PMI) to guide project managers in the use of primary values and ethical standards of the project management profession. Begin by viewing the following video clip: PMI. 2013b, 'PMI's code of ethics and professional conduct', [video], Us/Ethics/Movie-PMI-Ethics-Video.aspx (accessed 25 October 2013). PMI's Code of Ethics and Professional Conduct The vision of PMI's Code of Ethics is to set standards for project managers globally that will instil confidence in the project management profession the credibility and reputation of the project management profession, as with all professions, is shaped by the collective conduct of individual practitioners. The code is based on four guiding principles (PMI, 2013): Responsibility (duty to take ownership for the decisions made, or failed to make, the actions taken or failed to take, and the consequences that result) Respect (duty to show a high regard for ourselves, others and the resources entrusted to us including people, money, reputation, safety of others and natural or environmental resources; an environment of respect engenders trust, confidence, and performance excellence by fostering mutual cooperation an environment where diverse perspectives and views are encouraged and valued) Fairness (duty to make decisions and act impartially and objectively; conduct must be free from competing self-interest, prejudice and favouritism), and Honesty (duty to understand the truth and act in a truthful manner both in communication and in conduct) Regenesys Business School 103

108 Go to the following link and read the full code of conduct: PMI. 2013b, 'PMI's code of ethics and professional conduct', [video], Us/Ethics/Movie-PMI-Ethics-Video.aspx (accessed 25 October 2013). Task Questions Consider the following ethical dilemmas and formulate a response: 1. Sipho, a team member, has worked on numerous projects with Sam, a well-seasoned project manager. The project on which they are currently working is an information systems upgrade, but things are not going well. Sipho is reluctant to report negative information concerning the project and its status after all Sam has managed far more challenging projects in the past and he always leads the team to success. 2. Sasha is new in the organisation and eager to establish a reputation in the project team. She is responsible for budgeting, including monitoring and control of project costs. Since this is her first project she decides to pad the budget items after all, 'contingency planning' is a responsible response to uncertainty Policies and Procedures Most organisations have a set of project management policies and procedures specifically written to the types of projects in which they engage. The National Gallery (United Kingdom) Examples of major gallery projects include: building works, exhibitions, the preparation of a scholarly catalogue and the restoration of a painting. The policies and procedures document is a broad set of guidelines for projects in excess of relating to: 1. Approval 2. Funding 3. Project Management 4. Project Plans 5. Procurement 6. Project monitoring including budgets 7. Risk management 8. Project completion 9. Training, and 10. Post-project monitoring (National Gallery, 2013) Regenesys Business School 104

109 Task Questions 1. Obtain a copy of your organisation's policies and procedures relating to projects and critically evaluate the content in light of your current studies. 2. Select one specific area, e.g. risk management, and propose improvements to reflect current project management principles and practices Closing Discussions Maturity of Project Programme Portfolio It is argued that project, programme and portfolio management are significantly demanding, with a direct correlation found between project management maturity, predictability of performance and reduction of cost (Author Unknown, Building4Business, 2013). As we have seen throughout this study guide, project management methods, tools and techniques are used to facilitate governance and provide consistently well-executed projects. In most cases, organisations tailor their approach to provide a complete Project, Programme and Portfolio framework to enable them to (Ibid, 2013): Provide a single organisational view of the project portfolio in which projects can be prioritised and managed Show alignment with business plans Provide visibility to Project Review Boards/ Project Review Committees to enable strategic decision-making and ensure continued business and technical approval, and Provide awareness of interdependencies and a clearer understanding of resource requirements The project management maturity model assists organisations to improve the likelihood of successful outcomes and reduce the risks that impact projects adversely. The levels shown in the model below describe the transitional states for an organisation from an immature state (Level 1) to a mature and capable organisation (Level 5) (Ibid, 2013). At the two ends of the scale: Immature organisations may deliver individual programmes and projects that produce excellent results occasionally, managers typically work in a reactive mode, i.e. focussed on solving immediate issues, programme and project schedules and budgets are likely to be exceeded because of the lack of sound estimating techniques, and quality is often compromised to meet schedules. Mature organisations possess organisation-wide competencies to effectively, efficiently and economically manage programmes and projects based on a framework of standard and defined processes which are typically tailored to meet the specific needs of the organisation (e.g. specific authorities, specific risk policies and procedures). There is a coordinated approach to communication with stakeholders and activities are carried out seamlessly in accordance with the project management plans and defined processes. Roles and responsibilities are defined and made clear and there are systems in place to include knowledge gained into future projects (e.g. costing and budgets, etc.). Regenesys Business School 105

110 Figure 21: Maturity Model (Office of Government Commerce UK and the Project Management Institute, in Author Unknown, Building4Business, 2013) Task Questions Critically evaluate the maturity of your organisation against the levels described below: 1. LEVEL 1 Reliant on the skills of the individual project manager heroic model. 2. LEVEL 2 Recognise the need for localised standards and a Project Management Office (includes the introduction of Project Management Methods). 3. LEVEL 3 Recognise the need for organisational consistency in processes, policies, standards and methodology. Includes the introduction of technology to support project, programme and portfolio management. Also includes the requisite knowledge and competencies. 4. LEVEL 4 The organisation has instilled project management practices and is realising the effective, efficient and economical outcomes and benefits including reduced risk. 5. LEVEL 5 Represents continuous improvement adding value and delivering on business strategy. Discuss the relationship between 'uncertainty/ time and cost' and 'consistency/ predictability of performance' as shown in the top left of the model. Regenesys Business School 106

111 Read the following journal article which argues that "projects lacking definition may engage unique processes and practices in their management that may not be repeatable and/ or predictable (from project to project)." Pasian, B., Sankaran, S. and Boydell, S. 2012, 'Project management maturity: A critical analysis of existing and emergent factors', International Journal of Managing Projects in Business, 5 (1), Task Questions 1. Identify the key points raised in the journal article given above. 2. How does this article change your perspective on the maturity model presented previously? 3. Under what circumstances might the maturity model be beneficial (not beneficial)? Regenesys Business School 107

112 8. REFERENCES Antonioni, D. 2009, 'Crafting the art of stakeholder management', Industrial Management, January 2009 ed. Archibald, R.D., Filippo, I.D and Filippo D.D. 2012, The six-phase comprehensive project life cycle model, including the project incubation/ feasibility phase and the post-project evaluation phase, International Institute for Learning, Inc., (accessed 5 November 2013). Barry, M.L. 2013, PMIS presentation, [video], (accessed 28 October 2013). Berniz, A. 2013, 5 Keys on Project definition in ISO 21500, (accessed 21 October 2013). Bryson, J.M. 2004, 'What to do when stakeholders matter', Public Management Review, 6 (1) Burke, R. 2013, Project Management Techniques, 2 nd ed., China: Burke Publishing. BusinessDictionary. 2013, 'Definition of cost benefit analysis', (accessed 14 October 2013). BusinessDictionary. 2013, 'Definition of feasibility study', (accessed 14 October 2013). BusinessDictionary. 2013, 'Definition of Gantt Chart, (accessed 1 July 2013). CDC. 2011, 'Project management plan', (accessed 11 September 2013). Ebbesen, J.B. and Hope, A.J. 2013, 'Re-imagining the Iron Triangle: Embedding sustainability into project constraints', PM World Journal, 2 (3). Green, S. 2005, Strategic project management: From maturity model to star project management, Projects Center, nt.pdf (accessed 28 October 2013). Regenesys Business School 108

113 Hazen, G.B. 2004, Writing effective project reports, Department of Industrial Engineering and Management Sciences: Northwestern University. Heydari, A. 2013, 'Types of contracts in project management', (accessed 12 September 2013). Howard, R. 2008, A tale of two projects, (accessed 28 October 2013). Huhn, G.F. 2010, 'Maximising project portfolio value with real optimisation', [video], (accessed 13 January 2014). izenbridge Consultancy Pvt Ltd. 2013, 'Project life cycle, PMBOK 5, Lesson 2: Part 4, [video], (accessed 9 September 2013). Jetu, F.T., Riedl, R. and Roithmayr, F. 2011, 'Cultural patterns influencing project team behavior in Sub-Saharan Africa: A case study in Ethiopia', Project Management Journal, 42 (5), Laufer, A. 2012, Mastering the Leadership Role in Project Management, New Jersey: Pearson Education Ltd. Litten, D. 2011, 'Learn PMP earned value in 10 minutes flat on [video], (accessed 11 July 2013). Litten, D. 2012, 'Learn PMP critical path in 17 minutes flat!', [video], (accessed 11 July 2013). Mealiea, L. and Baltazar, R. 2005, 'A strategic guide for building effective teams', Public Personnel Management, 34 (2), Msengana, L. 2012, The Missing Link in Projects, Randburg: Knowres Publishing. Nagrecha, S. 2002, Introduction to earned value analysis, PMI Great Lakes Chapter, (accessed 1 July 2013). National Gallery, 2013, Project management policy, (accessed 28 October 2013). Pasian, B., Sankaran, S. and Boydell, S. 2012, 'Project management maturity: A critical analysis of existing and emergent factors', International Journal of Managing Projects in Business, 5 (1), Pinto, J.K. 2007, Project Management: Achieving Competitive Advantage, Pearson International Edition, New Jersey: Pearson Education Inc. Regenesys Business School 109

114 PMBOK. 2013, A Guide to the Project Management Body of Knowledge, 5 th ed., Pennsylvania: Project Management Institute. PMI. 2013a, Code of ethics and professional conduct, Project Management Institute, (accessed 25 October 2013). PMI. 2013b, 'PMI's code of ethics and professional conduct', [video], Us/Ethics/Movie-PMI-Ethics-Video.aspx (accessed 25 October 2013). PUBP , 'Excel cost benefit tutorial', [video], (accessed 11 July 2013). Reardon, K.K. 2005, Harvard Business Essentials: Power, Influence and Persuasion, Boston: Harvard Business School Publishing. Rowley, J. 2012, Project charter vs. project scope statement, (accessed 23 October 2013). Sharma, V.K. 2013, 'Earned value management: A tool for project performance', Advances in Management, 6 (5). Shenhar, A.J., Dvir, D., Levy, O. and Maltz, A.C. 2001, 'Project success: A multidimensional strategic concept', Long Range Planning, 34 (2001), Soltis, A. 2013, 'Breaking down project, program and portfolio management', (accessed 13 January 2014). Soltis, A. 2013, 'Three roles of the project management office', (accessed 13 January 2014). Technology Strategy Board. 2013, Newcastle leads in the electric car race, (accessed 21 October 2013). Tuthill, J.M. 2012, Project management, (accessed 1 July 2013). Vaidyanathan, G. 2013, Project Management: Process, Technology and Practice: International Edition, Pearson Education Limited. Ward, J. and Daniel, E.M. 2012, 'The role of project management offices (PMOs) in IS project success and management satisfaction', Journal of Enterprise Information Management, 26 (3), Watt, A. 2013, Project Management, [e-book], (accessed 21 October 2013). Regenesys Business School 110

115 Watt, D.J., Kayis, B. and Willey, K. 2009, 'Identifying factors in the evaluation of tenders for projects and services', International Journal of Project Management, 27 (3), Woolworths. 2013, Woolworths staff transport project creates jobs, (accessed 18 October 2013). Zhou, P. 2013, Three gorges dam, Dam.htm (accessed 21 October 2013). Regenesys Business School 111

116 9. APPENDIX 1: QUICK REFERENCE PLANS, DOCUMENTS AND REPORTS The following three tables are intended as quick references to plans, documents and reports encountered in project management (adapted from PMBOK, 2013; Project Management Lexicon, 2013). Table 16: Project Plans Document Project management plan Scope management plan Requirements management plan Schedule management plan Cost management plan Quality management plan Process improvement plan Human resource plan Communications management plan Risk management plan Procurement management plan Stakeholder management plan Explanation How the project will be executed, monitored and controlled. A component of the project management plan that describes how the scope is defined, developed, monitored, controlled and verified. A component of the project management plan that describes how requirements will be analysed, documented and managed. A component of the project management plan that establishes the criteria and the activities for developing, monitoring and controlling the schedule. A component of the project management plan that describes how costs will be determined, planned, structured and controlled A component of the project management plan that describes how an organisation's quality policies will be implemented. A subsidiary plan of the project management plan that details the steps for analysing processes to identify activities that enhance value. A component of the project management plan that describes how the roles and responsibilities, reporting relationships and staff management will be approached and structured. This may include a Staffing (Team) Management Plan that describes when and how project team members will be acquired and how long they will be needed. A component of the project management plan that describes how, when and by whom information about the project will be administered and disseminated. A component of the project management plan that describes process, roles and responsibilities, identification, analysis, response planning, execution, monitoring and control. A component of the project management plan that describes how a project team will acquire goods and services from outside the organisation (including legislative regulations) A subsidiary plan of the project management plan that defines the processes, procedures, tools and techniques to effectively engage stakeholders in project decisions and execution based on the analysis of their needs, interests and potential impact. (Adapted from PMBOK, 2013; Project Management Lexicon, 2013) Regenesys Business School 112

117 Table 17: Project Documents Document Project charter Stakeholder register Project team directory Project scope statement Project Statement of Work (SOW) Project calendar Project organisation chart Baselines Work breakdown structure Project schedule Resource calendar Procurement documents Responsibility Assignment Matrix (RAM) Risk register Change log Explanation There are several definitions provided in the study guide. In the main it is a high-level view of the project. Derived from the Project Statement of Work (business need, scope description, strategic plan); Business Case (e.g. market demand, organisational need, legal requirement, etc.); Agreements (e.g. MOU, SLA, etc.); Organisational Environmental Factors (e.g. standards, structures, macro and micro factors, etc.); Organisational Process Assets (e.g. policies and procedures, lessons learned, etc.). Expert judgement (e.g. industry experts, SMEs) and facilitation are used to compile the charter. A list of all the project stakeholders containing relevant details per project needs (e.g. contact information, role details, expectations, type of influence, etc.). A list of project team members with their roles and contact information. Documents the project requirements, scope description, objectives, deliverables, project boundaries, constraints, acceptance criteria, assumptions and milestones. It facilitates a common understanding of project scope among stakeholders and the project team and is a basis for future project decisions (i.e. scope baseline and scope change management). Description of products and services to be delivered for the project. May also include the Procurement Statement of Work. The SOW can also be used as part of a bid document (i.e. request for information, request for proposal or as a part of a contract). A calendar that identifies working days (and shifts/ working hours) available for the scheduling of activities. This is used as an input to the planning process including schedule development. A graphical (visual) representation of team members and their interrelationships per project (or across projects) including direct and indirect reporting relationships. A range of baselines exists, e.g. cost, schedule and scope baselines. The scope baseline will, for example, include the project scope statement, work breakdown structure and WBS dictionary, which will be used during scope change management. Hierarchical decomposition of work to be performed by the project team to meet project objectives (note that other breakdown structures exist, e.g. Cost Breakdown Structure) Represents the start and finish dates for schedule activities, durations, and due dates for milestones along with the resource assignments. A calendar that identifies the working days and shifts on which each specific resource is available. The documents utilised in bid and proposal activities (e.g. request for quotation). In the Public Sector these documents may be governed by legislative regulations (e.g. the Preferential Procurement Policy Framework Act in South Africa). A matrix is a grid with each location in the grid containing information. The RAM maps the project's organisational breakdown structure with the WBS work packages to make sure that each one is assigned to an appropriate resource. Documents/ lists the results of risk analysis and risk response planning. Records the changes and their impact to the project in terms of time, cost, quality, resources and risks (includes rejected change requests). (Adapted from PMBOK, 2013; Project Management Lexicon, 2013) Regenesys Business School 113

118 Table 18: Project Reports Document Work performance reports Explanation Work performance data (quantitative and qualitative) and information (data analysed in context) are used to compile reports. Examples include: Status Reports and Electronic Dashboards (e-dashboard). Feasibility study/ report Standard reports in MS Project Evaluation reports Determines how the project: Is in accordance with predetermined needs Is the most suitable technical solution to the needs Can be implemented within constraints (e.g. resource, capacity, etc.) Has been subjected to due diligence (e.g. legally, physically, environmentally and socially compliant) Is fully costed over the whole life of the project Has taken due cognisance of the associated risks, and Is affordable to the institution responsible for the project in the context of the available budget Microsoft Project provides a suite of reports that are generated from the data, e.g. Critical Tasks Status Report, Baseline Work Report, Budget Cost Report, etc. May be used at any stage of the project, e.g. Pre, Mid-term or Post Implementation Evaluation Reports. Independent, external experts generally conduct evaluations. An 'evaluation' is the systematic and objective assessment of an ongoing or completed project (or programme) including design, implementation and results. The specific aims may vary; however, in the main they determine fulfilment of objectives and the extent to which these have achieved the desired outcomes and impact (including unintended outcomes and impact). (Adapted from PMBOK, 2013; Project Management Lexicon, 2013; CIDB, 2013) Regenesys Business School 114

119 10. APPENDIX 2: PROJECT TEAM CHARTER Burke (2013: ) recommends the following format for a Project Team Charter. Essentially, this represents the ground rules to decrease misunderstanding and increase productivity. Section Team name Team objectives Team motto Team leadership Team roles Responsibility and authority Team ethics and etiquette Conflict resolution Stakeholders Resources Constraints Problem solving Decision-making Description Creates a separate identity to the organisation to which members belong. Outlines the purpose of the project team: Why the project (and the team) is required The team's objectives Administrative duties that do not relate to project work packages but are required for the functioning of the project office, and How success will be verified and measured To establish the team's status (helps team to establish a work culture, personality and character of its own). Over and above the project manager other leadership roles may be required, e.g. to lead stakeholder engagement. Clarifies how functional roles (e.g. technical skills, product knowledge, work experience and practical ability) and team roles (i.e. Belbin's team roles) are subdivided. This may include a responsibility matrix and what formal authority they have to make decisions and use company resources. Norms and standards of behaviour including members' ethics and governance specific to the project. All teams experience conflict from time to time. Therefore, a mechanism through which it can be addressed and reconciled timeously is required (e.g. interpersonal conflict, stakeholder conflict, project management conflict, etc.). Unmanaged conflict can lead to prolonged disagreements and may even result in project delays and missed deadlines. Internal and external stakeholders must be identified and each team member's role established in terms of the management of these stakeholders' needs and expectations. Here the company resources and support that the team can draw on to achieve the objectives is spelled out. The charter should identify the constraints (e.g. project, internal and external) that could impact on the team members specifically those that could limit team members from achieving their objectives. A project is unique which implies that new problems will emerge. The team must agree on a framework within which to anticipate and solve problems including a range of tools (e.g. fishbone analysis). Here the project manager and the team agree on how decisions will be made (essentially this determines where on the continuum between autocracy and democracy the project team sits). Regenesys Business School 115

120 11. APPENDIX 3: STAKEHOLDER REGISTER (SAMPLE) The following sample (Vaidyanathan, 2013:169) shows three levels of analysis: roles and expectations, influence level and level of interest. Assume that the project is for the design and development of a new product range targeted at a niche market of shoppers who purchase high end products. Table 19: Stakeholder Register (Sample) ID Stakeholder Roles and Expectations 1 Project Sponsor CIO; looks for value, profits and ROI in projects; expects that the project is customer-focussed Influence Level 2 Marketing Manager 1 Concern for speed to market Medium High 3 Customer Profile A Looks for the best value for money Low Low 4 Customer Profile B Looks for the best quality High High 5 Etc. High Interest Level High Regenesys Business School 116

121 12. GLOSSARY OF TERMS The list below will help you to understand important terminology used throughout this guide. It is largely compiled from the Project Management Body of Knowledge (2013). Use it as a point of reference as you work through the material and feel free to add your own terms to the list in the space provided at the end. Term/ Abbreviation Activity Baseline Benchmarking Budget Change control Constraint Contingency reserve Conformance Control Cost-benefit analysis Crashing Criterion Critical path Deliverable Duration Earned value Earned value management Explanation A distinct, scheduled portion of work performed during the course of a project. The approved version of a work product that can be changed only through formal change control procedures and is used as a basis for comparison. Benchmarking is the comparison of actual or planned practices (e.g. processes and operations) to those of comparable organisations to identify best practices, generate ideas for improvement, and provide a basis for measuring performance. The approved estimate for the project as a whole, or any work breakdown structure component or any schedule activity. A process whereby modifications to documents, deliverables, or baselines associated with the project are identified, documented, approved or rejected. A limiting factor that affects the execution of a project, programme, portfolio, process or activity. Budget within the cost baseline or performance measurement baseline that is allocated for identified risks that are accepted and for which contingent or mitigating responses are developed. Within the quality management system, conformance is a general concept of delivering results that fall within the limits that define acceptable variation for a quality requirement. Comparing actual performance with planned performance, analysing variances, and evaluating and recommending appropriate corrective action as needed. A financial analysis tool used to determine the benefits provided by a project against its costs (e.g. Net Present Value). A technique used to shorten the schedule duration for the least incremental cost by adding resources. A standard, rule, or test on which a judgement (or decision) can be based, or by which a product, service, result, or process can be evaluated. The sequence of activities that represents the longest path through a project, which determines the shortest possible duration for the project. A quantifiable product, result, or capability to perform a service that is required to complete a process, phase, or project. The total number of work periods required to complete a work breakdown structure component or scheduled activity (e.g. 5 hours, 3 days, 1 week). The measure of work performed expressed in terms of the budget authorised for that work. A methodology that combines scope, schedule and resource Regenesys Business School 117

122 Fishbone analysis Dr Ishikawa, a Japanese quality control statistician, invented the fishbone diagram (also known as the 'Ishikawa diagram' or 'The Cause and Effect' diagram). This diagram is a tool that provides a systematic (and systemic) way of looking at effects and the causes that create or contribute to those effects. The design of the diagram looks much like the skeleton of a fish. Float (slack) Gantt Chart Input Milestone Network analysis Organisational breakdown structure The total float is the amount of time that a schedule activity can be delayed or extended from its early start date without delaying the project finish date or violating any schedule constraints. A bar chart of schedule information where activities are listed on the vertical axis, dates are shown on the horizontal axis and activity durations are shown as horizontal bars placed according to start and finish dates. Any item, whether internal or external to the project, required by a process before that process proceeds. Typically an output from a predecessor process. A significant point or event in a project, programme or portfolio. Can also be referred to as a 'Gate' as it typically indicates approval/ authorisation to proceed. A 'Phase Gate' signals a review at the end of a phase in which a decision is made to continue to the next phase to continue with modification, or to end a project or programme. Benefits to milestones include: Signal the completion of important project steps Can motivate the project team Offer points at which to re-evaluate needs and any potential change requests Help co-ordinate schedules with suppliers and sub-contractors Identify key project review gates Signal other team members when their participation is expected to begin, and Delineate the various deliverables developed in the WBS and, therefore, enable the project team to develop a better overall view of the project The breaking down of complex project data into component parts (e.g. activities, events, durations) and plotting of these to show their logical interdependencies and interrelationships. The project schedule network diagram is the graphical representation of these logical relationships among the project schedule activities. A hierarchical representation of the project organisation that illustrates the relationship between project activities and the organisational units that will perform those activities. Regenesys Business School 118

123 Output Process Project scope Quality Resource breakdown structure Resource levelling Risk Risk breakdown structure Root cause analysis Schedule compression Scope (and scope creep) Specification (or spec for short) Sponsor Stakeholder management Standard Threshold Variance Work breakdown structure Work package A product, result or service generated by a process. Typically this is an input to a successor process. A systematic series of activities directed towards causing an end result such that one or more inputs will be acted upon to create one or more outputs. The work performed to deliver a product, service, or result with specified features and functions. The degree to which a set of inherent characteristics fulfils the specified requirements. A hierarchical representation of resources by category and type. A technique in which start and finish dates are adjusted based on resource constraints with the goal of balancing demand for resources with the available supply. This is different to Resource Smoothing which is a technique that adjusts the activities of the schedule model such that the requirements for resources on the project do not exceed certain predefined resource limits. An uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives. A hierarchical representation of risks according to their risk categories. An analytical technique used to determine the basic underlying reason that causes a variance or defect or risk. Techniques used to shorten the schedule duration without reducing the project scope. The total products, services and results to be provided by a project. Any scope changes must follow scope change controls (scope creep is the uncontrolled expansion to products, services or results without adjustment to time, cost and resources). A document that sets out in complete, precise and verifiable terms the requirements, design, behaviour, or other characteristics of a system, component, product, result, or service and most importantly the procedures for determining whether these provisions have been satisfied. The person (or group) who provides resources and support for the project, programme or portfolio and is accountable for enabling success. Includes the processes required to identify all people (or organisations) impacted by the project, analyse stakeholder expectations and their impact on the project and develop appropriate management strategies to effectively engage stakeholders in project decisions and execution where appropriate. A document that provides (for repeated use and to ensure consistency) the rules, guidelines, or characteristics for activities or their results aimed at the achievement of the optimum degree of order in a given context (e.g. ISO standards, South African Bureau of Standards). A cost, time, quality, technical or resource value used as a parameter and which may be included in product specifications. Crossing the threshold (positive and negative) should trigger some action, such as generating an exception report. A quantifiable deviation, departure or divergence away from a known baseline or expected value. A hierarchical decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables. The work defined at the lowest level of the work breakdown structure for which cost and duration can be estimated and managed. (Adapted from PMBOK, 2013; Project Management Lexicon, 2013) Regenesys Business School 119