Strategy & Project Management:
Project orientated organisations
Finnland 2005
Prof. (FH) Peter J. Mirski
Prof.(FH) Mag. Peter J. Mirski
Tel.: +43-512-2070-3510
E-Mail: peter.mirski@mci.edu
http://www.mci.edu
Current Position
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MCI, University of Applied Sciences: Director of studies
„Management & IT“, Head of IT-Services
Academical Profile
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Research
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projectmangement, knowledgemanagement strategic information
management, e-learning
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Education
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Publications and articles in journals
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process, project, information management
Practice Profile
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Management, R&D Project Management, CEO, CIO
Consulting & Training
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Agenda
10:00 – 14:00
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Brief project management overview
Project orientated organisations
Project scorecard
Discussion
Literature
De Marco T., „The Deadline“, Dorset House
Publishing Co ,1997
„ Goldratt E., “The Critical Chain“, North River
Press, 1997
„ Heerkins G., „project management“, briefcase
books 2002
„ PMBOK Guide, „A Guide to the Project
Management Body of Knowledge“, PM Institute,
2000
„
Links
•www.p-m-a.at (pm baseline english, german)
•www.pmi.com (pm information)
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project management overview
Importance of Project Management
• Projects represent change and allow organizations to
effectively introduce new products, new
processes, new programs
• Project management offers a means for dealing with
dramatically reduced product cycle times
• Projects are becoming globalised, making them more
difficult to manage without a formal methodology
– “mobile project paradigm”
Project management helps cross-functional teams to
be more effective!
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Management of IT Projects
• More than $250 billion is spent in the US each year on
approximately 175,000 information technology projects.
• Only 26 percent of these projects are completed on time and
within budget.
• Project management is an $850 million industry and is expected
to grow by as much as 20 percent per year.
Bounds, Gene. “The Last Word on Project
Management” IIE Solutions, November, 1998.
What characterises a Project?
• Goal(s)
• Time frame
• Risk & Opportunity
• Complex
• Quality
•…
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Why do Projects Fail?
Studies have shown that the following factors
contribute significantly to project failure:
• Improper focus of the project management system
• Fixation on first estimates
• Wrong level of detail
• Lack of understanding about project management tools; too much
reliance on project management software
• Too many people
• Poor communication
• Rewarding the wrong actions
Not all Projects Are Alike…
“[in IT projects], if you ask people what’s done and what remains to be
done there is nothing to see. In an IT project, you go from zero to 100
percent in the last second--unlike building a brick wall where you can see
when you’re halfway done. We’ve moved from physical to non-physical
deliverables….”
J. Vowler (March, 2001)
Engineering projects = task-centric
IT projects = resource-centric
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Why do IT Projects Fail?
• Ill-defined or changing requirements
• Poor project planning/management
• Uncontrolled quality problems
• Unrealistic expectations/inaccurate estimates
• Naive adoption of new technology
Source: S. McConnell, Construx Software Builders, Inc.
Good reasons for cooperation…
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Project management model
project oriented organisation: dynamic, global oriented environment
project oriented organisation: PM-office with portfolio management
idea
contract
planning
offer
implementation
approval
project controlling and coordination
project staffing
the organisation
within the organisation...
teaming
projekt marketing
communication
knowledge management
kickoff
pre
creativity
-
formalization
-
work
shop
kick
-out
milestone
coordination
-
post
innovation
Mirski 2005
Shenhar’s Taxonomy of Project Types
Degree of
Uncertainty/Risk
Super HighTech
ERP
implementation
in multi-national
firm
HighTech
New shrinkwrapped
software
MediumTech
LowTech
Advanced
radar
system
New
cellphone
Construction
Assembly
Projects
Auto repair
System
Projects
Array
Projects
High
System Complexity/Scope
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Required Resources
Project Life Cycle
Phase 1
Phase 2
Phase 3
Formation &
Selection
Planning
Scheduling &
Control
Phase 4
Time
Evaluation &
Termination
DESIGN
Design, Cost, Time Trade-offs
Required
Performance
Target
M
TI
E
)
LE
U
ED
CH
(S
Due Date
Budget
Constraint
COST
Optimal Time-Cost
Trade-off
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Phases of Project Management
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Project formulation and selection
Project planning
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Project scheduling
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Summary statement
Work breakdown structure
Organization plan
risk management
Subcontracting and bidding process
Time and schedule
Project budget
Resource allocation
Equipment and material purchases
Monitoring and control
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Cost control metrics
Change orders
Milestone reports
Project close out
Project environmental diagram
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project organisation
Role of Project Manager/Team
Client
Top
Management
Project
Manager
Subcontractors
Project Team
Regulating
Organizations
Functional
Managers
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Project interests
Special
Knowledge
Domains
General
Management
Project
Management
Supporting
Disciplines
Subcontracting = Business Alliance
„
When you subcontract part (or all) of a
project, you are forming a business
alliance....
Intelligent Business Alliances: “A business relationship for
mutual benefit between two or more parties with compatible
or complementary business interests and/or goals”
Larraine Segil, Lared Presentations
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Name 1 - Project Sponsor
Name 2
Name 3
Name 4
Name 5
Name 6
Name 7
Steering Committee
<Enter Name>
Project Sponsor
<Enter Name>
Project Manager
<Enter Name>
Project Engineer /
Sales Administration
<Enter Name>
Technical Team Lead
<Enter Name>
Team Lead 1
<Enter Name>
Team Lead 2
e.g. Sales
e.g. EDP
<Enter Name>
Name>
<Enter
Team Lead
Lead 33
Team
<Enter Name>
Change Management Team
<Enter Name>
Team Lead 4
<Enter Name>
Team Lead 5
<sales director>
<regional manager>
<district manager>
<area manager>
<sales rep>
Responsibilities of a Project Manager
To the organization and top management
• Meet budget and resource constraints
• Engage functional managers
To the project team
• Provide timely and accurate feedback
• Keep focus on project goals
• Manage personnel changes
To the client
• Communicate in timely and accurate manner
• Provide information and control on changes/modifications
• Maintain quality standards
To the subcontractors
• Provide information on overall project status
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Project Structure Plan
Project Organization Types
• Functional: Project is divided and assigned to appropriate functional
entities with the coordination of the project being carried out by
functional and high-level managers
• Functional matrix: Person is designated to oversee the project
across different functional areas
• Balanced matrix: Person is assigned to oversee the project and
interacts on equal basis with functional managers
• Project matrix: A manager is assigned to oversee the project and is
responsible for the completion of the project
• Project team: A manager is put in charge of a core group of
personnel from several functional areas who are assigned to the
project on a full-time basis
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Matrix-/Projectoranisation
executive management
acquisition
production
sales
product group
digital cameras
project-
product group
mobile phone
oriented
statement
PM-Office
function-related statement
Model of project oriented
organisation
definition:
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organisation to accomplish complex projects
to take responsibility and manage project portfolios
set a project culture and standards
important strucutral criterias of project-oriented
organisations as temporary or permanent
organistion forms.
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temporary supports differentiation (programs and project)
permanent supports integration and settings (personal
pools, pm-office)
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Projectmanagement Office
assignment of projects
& programmes
project management
organisation of POC
human-resourcemanagement POC
programme management
coaching, auditing of
projects & programmes
project networks
project portfoliomanagement
processes in project oriented
organisations
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projectmanagement
program management
commissioning of projects and programs
project coaching and auditing
organisational design
development and design of project networks
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Project ranking
A
all
project
applications
analyse of the project
relevance and support of
organisational targets
B
risk
analysis
C
analysis of
project
dependance
D
analysis of
operative
priority
high risk
low risk
high
strategic
meaning
low
strategic
meaning
priority-/ risk
portfolio
project
topology
high priority
low priority
project
ranking
E
priority/urgency
portfolio
Management of project portfolios
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the management of project portfolios requires the summary of all
projects of an organisation at a certain point of time.
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targets
coordination of all projects
improvement of the results
change management as ‚hyper‘ definition
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change
priority
management of ressources
learning within and from projects
profit
high
C
B
D
E
low
G
low
A
F
high
risk
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Key Elements of Project Portfolio Selection Problem
1. Multi-period investment problem
2. Top management typically allocates funds to different
product lines (e.g., compact cars, high-end sedans)
3. Product lines sell in separate (but not necessarily
independent) market segments
4. Product line allocations are changed frequently
5. Conditions in each market segment are uncertain from
period to period due to competition and changing
customer preferences
Programme management
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a programme is a definable unity of projects and
timely restricted tasks tied by common targets.
examples:
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reorganisational projects concerning all organisations
within a network
complex IT-solutions
program
orderer
program organisation
program team
program
manager
program
office
project A
project 1
project 2
project 3
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Project strategy process
Project-Vision
Project-Missionstatement
Project-strategy
Individual target agreements
Project-Organization
Project-Realisation
Scorecard
finances: financial ratios (Return on Project)
customers: customer satisfaction, customer loyality, customer
rentability, process time
processes:identification of new processes supporting customer
satisfaction
learning: securing the longterm groth of further development and
use of project outcomes
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Scorecard
balance of:
• time limits to reach targets
• monentary and nonmomentary figures
• late and early indicators
• external and internal performance outlook
How should we
arrange our
finances in order
to satisfy our
project partners?
Scorecard
How should we
integrate our
customers in order
to reach our
project target?
finances
targets, figures,
guidelines, measures
target
agreement
Which project
processes should
we optimize in
order to become
leader?
target
agreement
strategy
customer integration
targets, figures,
guidelines, measures
internal business processes
targets, figures,
guidelines, measures
vision
strategy
target
agreement
target
agreement
learning and
organisational development
targets, figures,
guidelines, measures
How should we
implement our
experiences in
order to let our
vision become
real?
Kaplan, Norton 2001
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Scorecard summary
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strategical overview of the project gathered and accordingly
coordinated with the executive management – results in a combination
of organisational strategy and in a project
controlled and traceable target agreement process which has strategic
(on the level of executive management) as well as operative character
(on project level). Motivation through a clear defined target hierarchy.
monitoring of the project progress through a clearly laid out number of
together developed figures integrating qualitative aspects (for example
customer satisfaction,...)
possibility of comparison (benchmarking) between projects through an
internal integrated system of project evaluation
improved integration and systematic consideration of project
stakeholder
Model of the Project-oriented
Organisation
A project-oriented organisation is an
organisation, which…
„ uses "Management by Projects" as an
organisational strategy,
„ uses temporary organisations to carry out
processes of a large scope,
„ manages various types of projects in a
project portfolio,
„ has specific permanent organisations for
integration,
„ applies the New Management Paradigm,
„ has an explicit project management culture
and
„ perceives itself as project-oriented.
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Projects & Strategy
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We have to focus and prioritise.
Sometimes even the most promising
ideas do not mature into innovations
for one reason or another.“ ..
„We need to have the courage to
shut down projects, because within
the parameters of business
efficiency, ideas have to be realised
within a certain framework of time
and ressources (Ansi Vanjoki, Head
Multimedia Division Nokia, 2005)
Thank you!
Management Center Innsbruck
Universitätsstraße 15
A-6020 Innsbruck
Tel: +43 (0) 512 / 56 48 00-0
Fax: +43 (0)512 / 56 48 00-700
peter.mirski@mci.at
www.mci.edu
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