Information Systems Project Management—David Olson
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Information Systems Project Management—David Olson
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Chapter 3: Project Organization
organization a system to achieve goals
Alternative organizational structures
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Organization Designs
• there are a number of options
• Project Managers need to understand
relative advantages and disadvantages
of each
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Information Systems Project Management—David Olson
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Organization Structure
• range of activities organization does
• management hierarchy
– reporting relationships
• major subdivisions
• responsibilities & type of work for each
subdivision
• official lines of authority & communication
Informal organization also important
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Alternative Structures
• there are a number of options
• best depends on goals, type of work, environment
• DIFFERENTIATION - organizational specialization
–
–
–
–
–
functional
geographic
product
customer
process
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Functional Organization
integration by rules, procedures, coordinated plans,
budgets
Hieronymus Botch
CEO
Bean Kounter
Accounting
Silas Marner
Finance
Snidely Whiplash
Marketing
Atlanta
John Doe
Production
Phoenix
works well in repetitive, stable environments
the most prevalent form
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Siegfried Hill
MIS
Butte
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Geographic Differentiation
Standardized accounting and reporting procedures
John McGraw
CEO
Dan McGann
St Louis
TV sales
Production
Joe Kelley
Baltimore
Telemarket
Production
Can tailor to unique requirements of locale
Often used with functional within regions
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Cy Seymour
New York
special order
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Product Differentiation
If produce a variety of products.
Megaglomerate
Octopi
Dr. Sweitzer
Tobacco
J. Ripper
Health Products
production
A. Onassis
Tankers
marketing
J. Helms
Environmental
marketing
legal
Integration between subdivisions tends to be low
use standardized financial & reporting
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Information Systems Project Management—David Olson
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Customer Differentiation
If a particular customer very important
Gunn Runner
Overnight Delivery
George Patton
Military Sales
Che Guevera
covert sales
functions
geographic
A. Nobel
special ops
explosives
peace prizes
Integration level depends on interdependence of
products (usually low)
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Information Systems Project Management—David Olson
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Process Differentiation
some logical process basis for differentiation
Little 600 Consulting
Phyllis Knight
Customer
Contactor
Systems
Analysis
Programming
need more integration, as problem in one area
affects others; task forces, teams
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Customer
Training
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Project Organization
• traditional organizational design
– when change required, add layers of mgmt, rules
– less flexibility, slow
• Projects
complexity
uncertainty
change
unpredictability
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Information Systems Project Management—David Olson
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Project Organizations
• need to be highly differentiated to meet variety of
problems
• need to be highly integrated to respond rapidly
• need to be highly flexible
• must integrate subunits through
horizontal relationships
• must have structures suited to unique
environments
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Information Systems Project Management—David Olson
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Comparison
Project
Traditional
project
manager
supreme
high ruler
big
boss
little
boss
big
boss 2
another
one
little
boss 2
etc
staff
people
designer
folk
rigid, clumsy
customer
liaison
worker
bees
horizontal communication
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Pure Project Organizations
if high complexity, major resource
requirements, heavy stake outcome
PURE PROJECT organization appropriate
separate organization created for this goal
TYPES
PROJECT CENTER
STAND-ALONE PROJECT
PARTIAL PROJECT
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Project Center
linked to parent organization
draw resources & personnel as needed
EXAMPLES:
• General Motors task force to develop
suggestions for downsizing
• relocation operations
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Stand-Alone Project
newly created organization for this mission
draw from several organizations
EXAMPLES:
• large-scale public works
• NASA space station development
• construction joint-ventures
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Partial Project
project manager responsible for some activities
other activities (support-oriented) remain with
functional divisions
TYPICAL ARRANGEMENT
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Pure Project Disadvantages
cost in personnel (facility duplication)
lose training investment - no place else to
use key people
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Matrix Organization
if organization continually operates on a project
basis (and many MIS shops do)
need to be able to quickly create large project
groups
Grid-like structure of reporting and authority
relationships overlaying traditional functional
organization
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Definition
• used to describe organizations that make more
than minimal use of project teams or product
groups
• can become an organizational pattern (TRW
Systems)
• combines project management (improved
coordination) and functional organization
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Origins
• NASA & Department of Defense initiated (1960s)
contracting practices requiring contractors to use
project management
• For each particular project, firm had to develop a
project organization
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Why
• MATRIX ORGANIZATION came from needs to
– maintain advantages of specialization &
resource minimization
– meet government requirements
– obtain coordination advantages of project
management
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Matrix Capabilities
• functional part provides repository for
technical expertise and physical
resources
• when in functional home, workers keep
up professionally (train)
• functional homes a place to go when
project over (no new job search)
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Hybrid Forms
• Firms combine matrix, functional, project
features, custom design their own
organization
• COST CONTROL: functional worst
• SCHEDULE: project best, functional worst
• TECHNICAL: functional worst
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Project Risks
• If high technical risk
– give project manager more authority
– matrix better (more skills readily available)
• If high cost risk
– clear goals paramount
– give project manager high authority
– more planning, monitoring, control
• If high schedule risk
– more project manager experience, monitoring
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Matrix Problems
• must be reinforced by information systems and behavior
supporting two-dimensional information flow, dual
reporting
“No Man Can Serve Two Masters!”
military principle of UNITY OF COMMAND
• chaos, confusion more common
• often project manager tells you what to do, but your raise comes
from functional manager
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Other criteria
• stake of the project
if high, matrix or pure give better control
• degree of technological uncertainty
if high certainty, task forces & teams
• criticalness of time & cost goals
if time & cost not major, task forces & teams
• project uniqueness
if unique, partial or full project
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Summary
• organization structure is means to
achieve goals & respond to problems
• differentiation
• project organizations more flexible
• need to know criteria for appropriate
project organization structure
© McGraw-Hill/Irwin 2004