1. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-1

2. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-2 Chapter 3: Project Organization organization a system to achieve goals Alternative organizational structures

3. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-3 Organization Designs there are a number of options Project Managers need to understand relative advantages and disadvantages of each

4. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-4 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

5. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-5 Alternative Structures there are a number of options best depends on goals, type of work, environment DIFFERENTIATION - organizational specialization –functional –geographic –product –customer –process

6. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-6 Functional Organization integration by rules, procedures, coordinated plans, budgets works well in repetitive, stable environments the most prevalent form

7. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-7 Geographic Differentiation Standardized accounting and reporting procedures Can tailor to unique requirements of locale Often used with functional within regions

8. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-8 Product Differentiation If produce a variety of products. Integration between subdivisions tends to be low use standardized financial & reporting

9. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-9 Customer Differentiation If a particular customer very important Integration level depends on interdependence of products (usually low)

10. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-10 Process Differentiation some logical process basis for differentiation need more integration, as problem in one area affects others; task forces, teams

11. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-11 Project Organization traditional organizational design –when change required, add layers of mgmt, rules –less flexibility, slow Projects complexitychange uncertaintyunpredictability

12. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-12 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

13. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-13 Comparison TraditionalProject rigid, clumsyhorizontal communication

14. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-14 Pure Project Organizations if high complexity, major resource requirements, heavy stake outcome PURE PROJECT organization appropriate separate organization created for this goal TYPESPROJECT CENTER STAND-ALONE PROJECT PARTIAL PROJECT

15. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-15 Project Center linked to parent organization draw resources & personnel as needed EXAMPLES: General Motors task force to develop suggestions for downsizing relocation operations

16. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-16 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

17. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-17 Partial Project project manager responsible for some activities other activities (support-oriented) remain with functional divisions TYPICAL ARRANGEMENT

18. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-18 Pure Project Disadvantages cost in personnel (facility duplication) lose training investment - no place else to use key people

19. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-19 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

20. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-20 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

21. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-21 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

22. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-22 Why MATRIX ORGANIZATION came from needs to –maintain advantages of specialization & resource minimization –meet government requirements –obtain coordination advantages of project management

23. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-23 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)

24. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-24 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

25. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-25 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

26. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-26 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

27. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-27 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

28. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-28 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