Assignment PM 01

Contents

1.0 Case Overview...........................................................................................................................3

2.0 Organizational Strategy and Its Relationship with Projects........................................................4

3.0 Project Selection........................................................................................................................4

4.0 What Is Project Failure or Terminate?........................................................................................5

5.0 Project Management Knowledge Areas.....................................................................................6

5.1 Project Scope Management................................................................................................6

5.2 Project Time Management......................................................................................................7

5.3 Project Cost Management.......................................................................................................8

5.4 Project Quality Management...................................................................................................8

5.5 Project Human Resource Management..................................................................................9

5.6 Project Communication Management.....................................................................................9

5.7 Project Risk Management.....................................................................................................10

5.8 Project Procurement Management.......................................................................................11

5.9 Project Integration Management...........................................................................................11

6.0 Project Monitoring....................................................................................................................11

7.0 Project economics, initial budgets, comparison actual to budget, analysis of deviations, corrective actions...........................................................................................................................12

8.0 Quality management, quality control, rationalizing of processes to optimize performance, change control, risk management, security....................................................................................12

9.0 Human resources management, knowledge management, change Management, leading project teams..................................................................................................................................13

10.0 Project key success factors....................................................................................................14

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Charitha Kandage (UWIC/MBA/MT/01/07)

11.0 Reasons for and avoidance of failure.....................................................................................14

12.0 Crisis management and contingency planning.......................................................................15

13.0 References.............................................................................................................................15

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1.0 Case Overview

This case reveal the classic example of project abundance or a failure and also the difficulties that

project managers’ are facing when it comes to doubtful terminations or dilemma of coping to such

situation. This case is all the about situation where Olaf, the project manager of the maximum

megahertz project which was a product development related project in wireless telecom industry,

had been facing great amount of difficulties when the particular project came to abundance.

Having exceeded the cost budget as well as the allotted time, he was in a verge of demanding

more on both constraints. Nevertheless he is still having doubt on the success of the project. But

by killing the project, his six bright project associates future would be on a stake.

As a sensible approach, he had two options left; consulting a few expert judgment to make a Yes,

No answer and if the answer comes out as ‘Yes’; review to the total project scenario again or if the

answer comes ‘No’, which indicate that something were wrong with the project portfolio selection,

this has to put forward to the top management.

Due to the fact that this has to be addressed as critical business importance, the following case

review will be present in order to evaluate the underpinning issues of failing project and how to put

up a mitigation plan to overcome such draw backs technically and how to safeguard the human

assets from the public harassment resulting from the failures.

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2.0 Organizational Strategy and Its Relationship with Projects

Project management is a discipline or tool which has been playing a phenomenal role in modern

management arena. To cope up to the rapid changing and volatile business environment is

common visible fact in recent economic world. Corporate strategies are facing huge amount of

hardship when it comes to the implementation process. In order to overcome such setbacks and

as a prominent solution to the strategic drift , the project management principles have reshape the

way of running the most modern organizations by being a corporate life saver. In simple terms

strategies are being cascade down to the projecterized elements and project becomes the vehicle

to drive those strategies. It can curtail expenses by providing a better defendable cost structure

against allotted budget while maintaining the scope, time and quality parameters as expected

which will lead to increasing competitive advantage towards maximization of shareholder wealth.

3.0 Project Selection

Project selection is being done from the PMO Project management Office or from the Top

Management. It is the most critical point, since wrong selection can be lead to biggest disaster

than not being even attending to the project in relation with impact placed upon after the failing the

project is enormous. Project has to inline with its existing strategy and structure. The scope

compatibility is very much essential. In the process of project selection it has to be examined

whether project financial indicators are meeting the desired levels. For instance, by evaluating

payback period, NPV, IRR or non financial scoring models has to be placed and reviewed.

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TEC

HN

ICA

L

FEA

SIB

ILIT

Y

Followed by the feasibility study or pilot programs will leverage the further risk components and

will enable to have a faith on the project success. In the process of the selection it has to be

advised to document stakeholder analysis, scope statement, proper charter document in order to

have a tab on the risk factors, uncertainties, assumption made by and constraints.

It is very much essential that the corporate strategy and the project selections are in line and has

be with incongruence.

HIGH

BREAD&BUTTER PEARL

WHITE ELEPHANT OYSTER

LOW HIGH

COMMERCIAL POTENTIAL

Nature of the product development projects and its feasibility is briefly elaborated in above

mentioned quadrant. With respect to this, Maximum Megahertz Project can be placed in an

‘Oyster’ project due its low technical feasibility though it would deliver high profit for the

organization.

4.0 What Is Project Failure or Terminate?

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Though it is a proactive mechanism, it still has its own pitfalls or things which has to be careful

about or would result in failing. Some complex business requirements always challenge the

capabilities of contemporary organizational when the projects are being introduced. Projectorized

environment always demands supporting structure, sophisticated management skills, better open

systems, role and relationships.

Maximum Megahertz Project is a product development project which has a high risk component

due to it nature of the scope. Projects are being failed or terminate due to two main reasons. It

can be due to the wrong selection of the project which has to be a liability of the top management

or PMO. Or it can be due to the incompetence of the project handling which is due to the fact that

missing the bit and pieces of the project management nine knowledge areas.

5.0 Project Management Knowledge Areas

Projects are handled through five managerial phrases. Each Knowledge management areas must

be blend with managerial phases in order to derive the expected result.

Project Phrases are as follows,

1.0Initiation

2.0Planning

3.0Executing

4.0Controlling

5.0Closing

All the nine project knowledge areas should process via all phrases and non conformities are

leading to the discrepancies or cause of failures.

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5.1 Project Scope Management

Project scope in the Maximum Magahertz Project means both a product scope and project

scope; which concerns the characteristics, tools and techniques required by the product

and work required for the project completion such as deployment of all kind of resources.

The project got failed due to;

1.0 Poor scope planning ; (no proper product description, Project Charter, Project

Constraints, project assumptions, Alternative identification, expert judgment)

2.0 Not using proper Scope Planning tools and techniques , such as ROI calculations

,Cost benefit Analysis

3.0 Poor Scope Statement(Poor understanding of project justifications ,requirements,

objectives and deliverables)

4.0 Poor Scope Management Process(decomposing the deliverables, creation of

(WBS)Work Break Down Structure, defining work package)

5.0 Poor Communication Plan (The communication plan has to be developed and

informed and Stakeholders , establishing of frequent meetings and

documentation of roles and responsibilities)

5.2 Project Time Management

Time management is keeping the activities on track and managing the schedule tasks to ensure

that the project is running smoothly. As per the case illustrates, the project was being held four

months and would expect another six more month for the completion. This can be due to;

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1.0Poor activity definition due to lack of understanding or due to mistake taken from Scope

Management

2.0Weak activity sequence (dependencies are not being identified properly)

3.0Poor Activity duration estimates

4.0Lack of technical knowledge in Network Diagram, Critical Path and PERT Calculations)

5.3 Project Cost Management

This all about how project budgets are being laid and the costs are being controlled in

accordance. Value engineering techniques and project life cycle costing will be applied. Maximum

Megahertz project budget was $ 600,000 though they asking another $ 800,000 on top of the

budget line. This can be due to;

1.0 Poor Resource planning

2.0 Inaccuracy in cost estimating(not proper utilization of cost estimating tools, such as analogous

estimating, parametric modeling, so on)

3.0 Inadequate cost management plan

4.0 Miscalculation of cost base line (poor usage of cost budgeting tools and techniques)

5.4 Project Quality Management

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This concern with the identifying quality standards and devising plans to meet and satisfy those

standards. This ensures the project meet the requirements eventually and there will not be any

compromising with this constraints.

1.0Not being laid out proper quality policy , standards or regulations

2.0Poor utilization of quality planning tools such as cost benefit analysis, benchmarking,

flowcharting, Check List

3.0 No Proper Periodic Reviews, Quality Audits

5.5 Project Human Resource Management

This ensures that human resources which assigned to the project are utilized in effective and

efficient manner. Simply it deals with all the aspects of people management issues including

mentoring, leading, coaching, dealing with conflicts, performance appraisals, etc.

In this Maximum Megahertz project, it is visible fact that there is no proper motivation towards the

project success throughout the project team.

1.0 Inadequate team building activities (Poor team focus, poor reward and recognition system,

lack of sense of belongings)

2.0 Poor HR Plan(No proper Role and Responsibilities, Responsibility matrix, Staff management

Plan, Project structure and chart, HR pool description)

3.0 Conflict Resolution mechanism

5.6 Project Communication Management

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This ensures the effective exchange of information among the project environment. All the

channels of communication has to be managed in a way to encompass the desired massage

while eliminating the other noises. Project managers are using 80% of their time and effort on this

due its operational importance for effective running the projects.

Communication plan has to be in line with stakeholder analysis. Project report, Project records

and Project presentations has to properly implemented Project manager attention should be

drawn to the communication skills, information retrieval, information distribution methods,

Performance reviews and administration closures in order to govern best project management

practice which would lead to the success of the project.

5.7 Project Risk Management

This process include Risk planning, risk identification, quantitative and qualitative risk analysis,

risk response planning and risk monitoring and control which concerned the identifying, analyzing

and planning the potential risk while minimizing probabilities of risk occurrence in order to sustain

or improve project outcome. Poor understanding of Risk Management areas would be lead to a

disaster.

For instances,

1.0Poor emphasis on risk parameters in Risk Planning(No proper risk tracking or historical

information, No proper risk management policies, undefined risk responsibilities, poor

understanding of stakeholders risk tolerance)

2.0Under utility of risk assessment tools such as brainstorming, Delphi technique, Nominal group

technique, checklist, assumption analysis,

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3.0Poor Understanding of the impact of Risk out puts or triggers

4.0Poor qualitative Risk Analysis(Risk probability analysis, Probability Scale and matrix, Risk

Impact Scale, Risk Ranking)

5.0Poor Quantitative Risk Analysis (Sensitivity analysis, Decision Tree, Simulation)

6.0Poor Risk Response Planning (Mitigation plans, contingency plans)

5.8 Project Procurement Management

The process involved with purchasing goods and services from the outside suppliers, vendors,

contractors. This process includes procurement planning, solicitation, source selection, contract

administration and closure.

5.9 Project Integration Management

This ensures that project activities are coordinating and interacting to perform the all aspect of

project plan. Project plan development, execution and integrated change control are the key

element of this knowledge area.

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6.0 Project Monitoring

Project monitoring is the one of the most important aspect in project management which enables

to project activities to be in line with project plan by adjusting its deviation appropriately. Project

monitoring and controlling processes out comes indicates whether to terminate project early or

where it has been gone wrong; which ultimately put forward via corrective and preventive action

plans to back on to the track again. This is the most important review area when it comes to

project termination or project failure. If there is any significant deviation which not being managed,

would result in failing the project as described in the maximum megahertz case.

In order to do proper project monitoring plan, it has to be monitor and reviewed in regular basis

and bench mark performance indicators , variance analysis, trend analysis, earned value analysis

indicators to have comparisons to get necessary updates and change request should be made

timely. Further this requires integrated change control; verification of scope via inspection,

configuration management blending with project management information system to implement

proper monitoring process and outcome of the process would lead to the corrective action plan. In

the corrective action plan should answer to the question of changing need of all the knowledge

areas for instance scope change control, schedule control, cost control, quality control, risk

monitoring control, so on.

7.0 Project economics, initial budgets, comparison actual to budget, analysis of deviations, corrective actions

Understanding of project economics and financials are inevitable for the project success. Cost

planning, cost estimating is one of the major cost accounting tasks which will facilitate to establish

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proper budget baseline for the project. By using the costing techniques like vendor bid analysis,

value engineering, activity base costing, life cycle costing , Time value money concepts , the

budget will be forecasted which will known as initial budget. When the activity moves on,

deviations can be seen which has to address by looking to its cash flows and its reserves to cope

up gap created. The budget optimization should practice as a corrective measure and failing to

cope up the deficit would create funding need.

8.0 Quality management, quality control, rationalizing of processes to optimize performance, change control, risk management, security

This is basically describes how project will perform its quality policy by coping up to its deviations.

This has to be implemented on the process of establishing quality base line, quality assurance

and quality control mechanism. Quality has to define at the project charter, communication plan,

and stakeholder analysis. The cost base line can be develop in accordance with total quality

management(TQM),ISO 9000:2008, six sigma , DMAIC methodology. Quality assurance can be

aligned to PDCA model (Plan-DO-Check-Act) by determining what to measure with Data

collection, metrics and flow charts. Quality tools and quality audits are identified lessoned learned

which allow project manager to learn from the mistakes which will further help to improve the

quality.

To optimize the project performances it can be aligned with project balance score card system. It

will review holistic picture of the entire project in four different perspectives. Integrated change

control mechanism ensures that healthy effectiveness, highly securing its objectives.

9.0 Human resources management, knowledge management, change Management, leading project teams

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Acquiring the right project members are one of the versatile element of the project success.

Having on board the desired team, it should be further develop to a high performing project team

while negotiating the ground rules with them. In process of building team capacity demonstration

of Project management leadership is very much essential. By using the project management tools

roles and responsibilities should be assigned while enabling situational leadership as and when it

requires. Creation of team identity, personal responsibility and the respect also very much needed

and Learning Cycle has to be identifies as training and development tool. Since the project

manager is totally depending on this team performance, it is a needing talent that various forms of

power types and leadership styles should be applied in par with situational demand.

Project manager should always keep an issue log. Lessoned learned from the mistakes done at

the various stages can be elevated to the future problems via knowledge management framework.

Documentation of the all the important captions and countermeasures taken will add rational

foundation for the future projects.

10.0 Project key success factors

Top management or senior executive support is one the main success factor. Project

responsibility for funding, budgets, charter requirements, sign off on risk plans should be

shoulder and deviation of the actual results from the planed status be knowledgeable.

Clients and Users also should have active ownership of the project, by providing resources,

actively involve with project initiative, sign off the requirement and schedules and

concurring with scope changes and risk management process

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Know how in the business process; Project team has to be demonstrated knowledge in

business process

Project should be chosen based on sound business decision which aligned to its corporate

strategy and its risk tolerance level.

Project Scope should be clearly defined and identified in the charter itself.

Effective Change Control process must be exist

Project Drivers must be identified

Limited experimentation with new technology

11.0 Reasons for and avoidance of failure

As stipulated above project will fail or terminate on the basis of two premises. It is because of the

mistake done at project selection or at the project managerial process. As elaborated above

project selection failures has to be addressed to the PMO or top management and best thing is to

prevent such situation rather ending as terminated abundance. On the other hand, Project fails

due to malfunctioning of project management principles and its knowledge areas. This can be

avoided from the implementing proper monitoring and controlling mechanism which lead to

corrective action plan duly upon.

12.0 Crisis management and contingency planningCrisis can be created due to high volatile nature of macro environment. Project managers should

be ready to counter attack such setback in more concise manner by using crisis management

applications. Contingency Plan is one of the tools of the crisis management. It plans out the

activities in advance and are applied to crisis or risk events by reducing the cost of action plan and

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opportunity cost. For instance when the milestone is missed, additional resources that were

identified and estimated in the contingency plan are added to a specific task to get back on track.

13.0 References

1.0 A Guide to the Project Management Body of Knowledge, PMI , 2004

2.0 Kim Heldman, Project Management Professional Study Guide, BPB Publication 2004

3.0 Terri Wagner, Project Management Street Smart, Wiley India,2009

4.0 Timmothy J. Kloppenborg, Contemporary Project Management

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Assignment PM 01

Documents

Transcript of Assignment PM 01