PART II: ADVANCED TOPICS IN PROJECT MANAGEMENT
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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Outline of Presentation Part II
Brief Overview of Part II
Introduction to Project Organization
Impact of Organizational Culture on
Projects
Organization Examples
The Project Management Office (PMO)
The Functional Organization Form
Functions, Advantages and Disadvantages
of the PMO
Advantages and Disadvantages of the
Functional Organization Form
The Project Matrix Organization Form
The Functional Project Matrix
The Balanced Project Matrix
Introduction to Project Portfolio Management
The Project Portfolio Management Process
Portfolio Selection: Qualitative Models
The Strong Project Matrix
Portfolio Selection: Quantitiative Models
Advantages and Disadvantages of the
Strong Project Matrix Form
Project Portfolio Management Software
Issues in Project Portfolio Management
Project Teams
The Project Management Methodology
Advantages and Disadvantages of
Project Teams
Review of Selected Project Management
Methodologies:
Which Project Organization Form is
Best?
The Project-Based Organization
PMBOK
APMBOK
IPMA Baseline
PRINCE2
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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Projects in the
Functional Organization Form
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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The Functional Form of Organization
In the functional form of organization, work activities are
structurally segmented according to their “function’ – i.e.
their similarity of purpose. For example:
-
Accounting & Finance
Production
Research & Development
Marketing
IT Support
Procurement
General Administration
These are the typical functions one would expect to find
in most commercial organizations.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
4
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
5
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
6
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
7
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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University of Texas at Austin, USA
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
10
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
11
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
12
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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Projects in the Functional Organization Form
Functional Area of the Organization (E.g.: IT or HR)
Staff
Staff
Staff
Staff
HRIS
Project
Staff
The functional form of
organizing projects is best
suited for those projects
whose scope of work is
basically confined to one
functional area of the
organization only and for
which there is no (or only
minimal) necessity for
interaction with separate
functional areas.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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Projects in the Functional Organization Form
If more than one functional area is involved in a project, the coordination
of project activities takes place through the hierarchy
Project Coordination
Functional Area A
Functional Area B
Functional Area C
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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Project Coordination in Functional Organizations
Corporation X
Project
Coordination
Human
Resources
Marketing
Electronics
Engineering
Customer
Service
Finance &
Administration
Engineering
Software
Engineering
Domestic
Sales
Manufacturing
Mechanical
Engineering
International
Sales
Design
Fabrication
Assembly
Procurement
Purchasing
Receiving
& Inspection
Testing
Production
Scheduling
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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The Functional Form- Advantages
No alteration in the existing
structure and operations of
the organization is necessary
as functional units are already
well established.
The project simply avails the
existing structure and diverse
resources which are available
in its functional areas in order
to undertake the projects
which it wants.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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The Functional Form - Advantages
The functional form of project
organization offers high
flexibility in assigning personell
employed in the different
functional units to work on
projects.
Functional employees can divide
their time working on different
projects and can be immediately
reassigned to other projects
once their work has been
completed.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
18
The Functional Form - Advantages
The functional form of organization offers the possibility of (very)
focussed utilisation of knowledge,
expertise and experience on a project by employees in any given
functional area. Also, as these employees are familiar with each
other, communication between
them would normally be good, reaction time to issues quick, and
authority and responsibility clear
defined. The project work may be
simpler to estimate because of past
experience with similar projects.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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The Functional Form - Advantages
Functional employees working on projects can maintain
their normal career paths in
their respective functional
areas or „home bases“. This
is important because it allows
functional employees to keep
abreast of developments
concerning them in their
respective areas, which they
may not be able to do in a
(dedicated) project team, and
it does not jeopardize their
promotional chances.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
20
The Functional Form - Disadvantages
If a project has a comparatively
broad scope, and crosses
several functional lines, the
different functional areas may
have different perceptions as to
the priority level which should
be accorded to the project.
Hence, reluctance by one
functional area to support the
project and provide the
resources needed for it may
result in delays to the project.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
21
The Functional Form - Disadvantages
Inadequate integration across
different functional areas is a
common criticism of managing
projects in the project functional
form. Functional specialists tend
to be concerned primarily with
their specific part of the project
work and not the whole project.
Thus, a holistic perspective is
often lacking and this is not a
good way for managing projects,
particularly of a complex kind.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
22
The Functional Form - Disadvantages
Functional staff working on a project
may display a lack of identification
with, and committment to the project. This is because project work is
often seen as additional work which
distracts them from their routine
functional work (which for them
usually has priority) and for which
there may be no incentive or reward
system. A sense of „project
ownership“ is frequently lacking and
the high level of motivation usually
found among (dedicated) project
teams is absent.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
23
The Functional Form - Disadvantages
In cross-functional projects,
project response and overall
completion times tend to be
higher due to the requirement of channeling (potentially large amounts of)
project information, as well
as decision-making and
problem-solving through the „normal“ management channels.
Lack of horizontal communication across functional areas may
require rework of work performed. Conflict and rivalry between functional areas may also impede communication. Response times to clients and changing environmental conditions
are slow.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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The Functional Form - Disadvantages
A strong criticism of the
functional form of organizing projects is that there is
no individual who has full
authority and responsibility
for the project. Instead,
authority and responsibility is
shared between different
individuals from different
parts of the organization in
which case no proper
accountability fo the project
can be expected.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
25
The Project Matrix Organization
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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What is the Project Matrix Organization?
The Matrix organization is a form of project organization
within the framework of which temporary horizontal
(project) levels are applied over the permanent vertical
(functional) levels of the organization.
Project Management defines three basic project matrix
forms: the Functional Matrix, Balanced Matrix, and Project
Matrix.
In practice, the matrix structure can assume many different
manifestations and these may change over the course of
the project life-cycle.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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The Project Matrix Organization Form
GENERAL MANAGER
Project
Level
Functional
Level A
Functional
Level B
Functional
Level C
Functional
Level D
Project 1
FI
FI
FI
FI
Project 2
FI
FI
FI
FI
Project 4
FI
FI
FI
FI
Project N
FI
FI
FI
FI
Functional
Interfaces
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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The Functional Project Matrix
In the Functional or „Weak“ Project Matrix, an individual is
selected who will oversee and coordinate the project
activities across the various involved functional levels of the
organization.
Functional managers are responsible for managing their
respective segments of the project, decide who does what
and when the project is to be completed, and evaluate the
participants.
Their influence is greater than that of the project manager,
who has indirect authority to expedite and monitor the
project.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
29
The Functional (“Weak”) Project Matrix
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Project Coordination
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
30
The Balanced Project Matrix
In the Balalanced Project
Matrix an individual is
selected who will manage
the project across the
various functional levels of
the organization and who
will interact with the
functional managers on an
equal basis and jointly approve technical and operational
decisions. The project manager defines what needs to be
accomplished and the functional managers decide how and by
whom it will be accomplished within the plan, various designated functional inputs, standards and schedules established
by the project manager.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
31
The Balanced Project Matrix
Functional
Manager
Functional
Manager
Functional
Manager
Staff
Staff
Staff
Staff
Staff
Staff
PM
Staff
Staff
Staff
Staff
Staff
Project Coordination
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
32
The Strong Project Matrix
In the Project – or „strong“ - Matrix a project manager is
selected to oversee the completion of the project across the
various involved functional levels of the organization.
The project manager is ultimately is responsible for the
project‘s completion, has final say on major project decisions and controls most aspects of the project, including
the assignment of functional personell, what they do and
when.
The functional managers maintain title over their respective
personell and have consultation rights.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
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The (Strong) Project Matrix
Functional
Manager
Functional
Manager
Functional
Manager
Manager of
Project Mgrs.
Staff
Staff
Staff
Project
Manager
Staff
Staff
Staff
Project
Manager
Staff
Staff
Staff
Project
Manager
Staff
Staff
Staff
Project
Manager
Project Coordination
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
34
Example of a Strong Project Matrix System
Senior Management
Lead Project
Manager
ENGINEERING
PA
E1
E2
PM X
1
2
1
PM Y
1
3
1
PM Z
0,5
1
3
MANUFACTURING
E3
MA1
MA2
M1
M2
2
3
4
7
MA3
MARKETING
M3
1
0,5
1
2
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
0,5
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The Strong Project Matrix - Advantages
Resources are scarce in any
organization! A big advantage of
the matrix is that it allows for the
sharing of diverse resources across
multiple projects within the respective functional areas, enabling the
functional personell to flexibly
divide their attention, effort and
time among these projects and
thereby reducing the costly duplication of resources which is inherent
in setting up (dedicated) project
teams.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
36
The Strong Project Matrix - Advantages
The matrix ensures a strong
project focus by having a
project manager who performs
a coordinating and integrating
role across functional areas,
enabling a more holistic
approach towards undertaking
the project than is possible in
the purely functional form of
project organization where the
different functional areas are
usually only concerned with
their portion of the project
work.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
37
The Strong Project Matrix - Advantages
By using a project matrix, the
entire spectrum of the functional
areas‘ technology, expertise and
experience which can be brought to
bear on the project can easily be
and flexibly be accessed since all
project work is performed within
the area.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
38
The Strong Project Matrix - Advantages
Functional personell can
maintain close ties with their
respective areas.
They are not required to leave
their home bases in the organization which they may have
to do if they are assigned to
work on a project full-time as
in a (dedicated) project team
and hence they will feel more
confident as they can keep
abreast of developments
directly concerning them and
their future in the organization.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
39
The Strong Project Matrix - Disadvantages
A major criticism of the project matrix is
that it explicitly violates the established
hierarchical principle „Unity of
Command“ (Fayol, 1916) which demands
that an employee report to only one
superior and not two as is the case in the
matrix.
Dual Reporting (i.e. to both a project and
functional manager) may cause stress for
the employee, especially when both
managers do not get along and issue
diverging or conflicting orders.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
40
The Strong Project Matrix - Disadvantages
In the matrix environment,
there is a potential for
conflict between project
managers and functional
managers due to diverging
agendas, possibly unclear
patterns of authority and
accountability and so forth,
and this may occasionally
engender a personal
animosity which will be
detrimental for the project.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
41
The Strong Project Matrix - Disadvantages
Unhealthy competition over the
sharing of project inputs, equipment, human resources and facilities etc. may arise in the matrix
environment between project
managers who each are endeavouring to acquire the best available
inputs for their respective projects
from the functional areas.
Consequently, there is the possibility that underhand „deals“ may
be made between project and functional managers.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
42
Problems With Matrix Organizations
• Failure to understand the key principles and roles
in the matrix organizational environment
• Distrust in organizational forms which are not
based on Fayol‘s „unity of command“
• Apprehensions of functional managers over the
apparent superority of the project goals over
those of the functional entity
• Senior management shortcomings in terms of
clearly delineating in writing the formal and
reciprocal roles of all the key managers involved
in the project
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
43
Problems With Matrix Organizations
• Lacking understanding by the project team to
understand the role and responsibilities of the
functional professionals and their managers
• Incompetent project and functional managers /
project managers who manage less and
coordinate more / decision referall by project
managers to senior management
• Inadequate stakeholder management
• Lack of trust, integrity, loyalty and committment
by project team members
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
44
Issues of Concern in the Project Matrix
•
•
•
•
•
•
•
•
•
•
•
•
Visible and Sustained Commitment by Top Management
Supportive Organizational Culture
Tackling Resistance to Change
Effective Project Prioritization System
Commitment by Functional Managers and Employees
Delineation of Roles and Responsibilities
Decision-Making Conflicts between Project and Functional Areas
Empowerment
Communication, Cooperation and Coordination
Professional Project Managers
System of Rewards and Incentives
Meeting Training Needs (e.g. in Teamwork, Interpersonal Skills,
Conflict Resolution)
• Learning from Experience
• Institutional and Infrastructural Framework (e.g. PMO)
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
45
Case Study of a Project
Matrix Organization
Adtranz, Sweden
Students are required to read the Case Study working paper
Exploring the Multi-Project Matrix: Process Dynamics of a
Projectified Organization by Mats Engwall & Anna Sjoegren
Kaellqvist (2001)
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
46
The (Pure) Project-Based
Organization
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
47
About the Project-Based Organization
In a project-based organization, most of the work
performed is project work and this is reflected in
the organization‘s structure which is not based on
the functional paradigm but changes acccording
to the projects which the organization has in its
portfolio.
Project-based organizations are often found in
the defence and construction industries, in the
movie industry, in some NGOs and in some
outsourced industries.
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
48
The Project-Based Organization
Project
Manager
Project
Manager
Project
Manager
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Staff
Project Coordination
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
49
Structure of a Project-Based Organization
Corporation X
Marketing
Other
Projects
Finance and
Administration
Manufacturing
Other
Projects
Legal
Project Manager
(Project B)
Project Manager
(Project A)
Engineering
Human
Resources
Procurement
Engineering
Subcontractors
(X, Y, Z)
Manufacturing
Procurement
Assistant Professor Dr. Aurangzeb Zulfiqar Khan
Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan
50