Chapter Two Project Organization

Types of Project Organization Functional Organization Pure Project Organization Matrix Organization

Project Organization Functional Organization Project is made a part of one of the functional divisions of the firm Major Advantages Maximum flexibility in the use of staff Individual experts can be utilized by many different projects Specialists in the division can be grouped to share knowledge and experience. The functional division also serves as a base of technological continuity when individuals choose to leave the project and even the parent firm. Functional division contains the normal path of advancement for individuals whose expertise is in the functional area.

Functional Organization (Contd) Disadvantages Client is not the focus of activity and concern Functional division tends to be oriented toward the activities particular to its function Occasionally in functionally organized projects, no individual is given full responsibility for the project. Response to client needs is slow and arduous. Project issues that are directly within the interest area of the functional home may be dealt with carefully, but those outside normal interest areas may be given short shrift, if not totally ignored. Motivation of people assigned to the project tends to be weak. Such an organization arrangement does not facilitate a holistic approach to the project.

Pure Project Organization The project is separated from the rest of the parent system. It becomes a self-contained unit with its own technical staff, its own administration, tied to the parent firm by the tenuous strands of periodic progress reports and oversight Advantages The project manager has full line authority over the project. All members of the project work force are directly responsible to the PM.

Pure Project Organization Marketing Manufacturing R&D Finance Personnel Manager, Project A Marketing Manufacturing R&D Finance Personnel Manager, Project B

Pure Project Organization Advantages The lines of communication are shortened and PM communicates directly with senior corporate management. The project team that has a strong and separate identity of its own tends to develop a high level of commitment from its members. Because authority is centralized, the ability to make swift decisions is greatly enhanced. Unity of command exists. Pure project organizations are structurally simple and flexible which makes them relatively easy to understand and to implement.

Pure Project Organization (Contd) Disadvantages When the parent organization takes on several projects, it is common for each one to be fully staffed. This can lead to considerable duplication of effort. PM may stockpile equipment and technical assistance in order to be certain that it will be available when needed Pure project groups seem to foster inconsistency in the way in which policies and procedures are carried out. In pure project organizations, the project takes on a life of its own. Team members form strong attachments to the project and to each other. Worry about “life after the project ends”.

The Matrix Organization It couples some of the advantages of the pure project organization with some of the desirable features of the functional organization, and to avoid some of the disadvantages of each, the matrix organization was developed. In fact, the functional and the pure project organizations represent extremes.

Matrix Organization PM1 3 1 1/2 1/2 4 1/2 PM2 1 4 1/4 1 1/2 PM3 1/2 3 1/2 3 1

Matrix Organization Advantages The project is the point of emphasis. PM takes responsibility for managing the project, for bringing it in time, within cost, and to specifications There is less anxiety about what happens when the project is completed Response to client needs is as rapid as in the pure project case Consistency with the policies, practices, and procedures of the parent firm tends to be preserved.

Matrix Organization (Contd) Where there are several projects simultaneously under way, matrix organization allows a better company wide balance of resources to achieve the several different time/cost/performance targets of the individual projects. Disadvantages The movement of resources from project to project in order to satisfy the several schedules may foster political infighting among the several P.Ms.

Matrix Organization (Contd) For strong matrices, problems associated with shutting down a project are almost as severe as those in pure project organizations. Division of authority and responsibility inherent in matrix management is complex. Matrix management violates the management principle of unity of command. Project workers have at least two bosses.

Causes of Project Failure Projects can fail for many reasons that are predictable and avoidable. Projects failures fall into three broad categories: Project process-related factors, Project-related factors, and Uncontrollable factors. Some common project process-related factors include: too many concurrent projects, too few individuals who can manage projects effectively, poorly defined roles and reporting relationships among those engaged in a project. wavering priorities and resource commitments to the project.

Causes of Failure (Contd) Projects that have failed generally display several of the following characteristics: The customer’s conditions of satisfaction have not been negotiated. The project no longer has a high priority. No one seems to be in charge. The schedule is too optimistic The project plan is not used to manage the project. Sufficient resources have not been committed. Project status is not monitored against the plan.

Causes of Failure (Contd) No formal communications plan is in place. The project has lost sight of its original goals. There is no change management process in place. Foreign aided projects: Sluggishness and bureaucracy of the Government.

Project Management - 20 Steps to Success Execute the Project Plan Carry out Quality Assurance Develop your Project Team Issue Status Reports Manage Procurement of External Resources Executing Ensure the viability of your project Develop the Project Charter Initiating Establish the Project Notebook/Extranet Hold the Project Kickoff Meeting Develop the Project Plan 5.1 Develop the Scope Statement 5.2 Develop the Work Breakdown Structure 5.3 Define Project Activities 5.4 Sequence Project Activities 5.5 Estimate Project Activity Durations 5.6 Develop the Project Schedule 5.7 Estimate Project Costs 5.8 Determine Resource Requirements 5.9 Develop the Risk Response Plan Subsidiary Management Plans 5.a Develop the Scope Management Plan 5.b Develop the Schedule Management Plan 5.c Develop the Cost Management Plan 5.d Develop the Quality Management Plan 5.e Develop the Staffing Management Plan 5.f Develop the Communications Management Plan 5.g Develop the Risk Management Plan 5.h Develop the Procurement Management Plan Planning Control Project Changes Manage Project Issues Ensure Formal Acceptance of all Deliverables Control the Project Scope, Schedule and Cost Control the Project Quality Report Project Performance Control Project Risks Monitoring and Controlling Document Lessons Learned Close the Project Celebrate Project Success Closing 17

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