Key Principles, Processes and Methodologies€¦ · Deﬁ ne the roles of the project sponsor,...

PART IKey Principles, Processes and Methodologies

c01.indd 1c01.indd 1 18-03-2013 18:20:4518-03-2013 18:20:45

COPYRIG

HTED M

ATERIAL

c01.indd 2c01.indd 2 18-03-2013 18:20:4618-03-2013 18:20:46

CHAPTER 1 Introduction to Project Management Techniques

Learning Outcomes

After reading this chapter you should be able to:

Defi ne what a project is

Defi ne what project management is

Defi ne the roles of the project sponsor, project manager and the project steering board

Defi ne what project success is

Project Management Techniques has been updated to enable the project manager to use the latest planning and control techniques, processes and methodologies to complete projects successfully.

Project success is usually expressed as completing the project deliverables on time, within budget and to the required quality as outlined in the project charter. It is, therefore, essential that the project man-ager understands the features and characteristics of project management techniques.

This chapter will introduce a number of basic defi nitions that underpin project management and introduce the topics discussed in the book.

As project management is developing into a profession, the project manager ’s challenge is to develop an understanding of the project management systems approach to manage the project, and an appropri-ate leadership style to lead the project team and other stakeholders.

This is the second book in the project management series. It assumes that the project manager is already familiar with the basic tools and techniques (these are explained in my fi rst book – Fundamentals of Project Management ) and that the project manager has a number of years of relevant work experi-ence. This enables the book to focus on the management of projects at the project manager level and focus on how to plan and control complex projects using a fully integrated planning and control system.

c01.indd 3c01.indd 3 18-03-2013 18:20:4618-03-2013 18:20:46

4 PART I KEY PRINCIPLES, PROCESSES AND METHODOLOGIES

How to Use This Book

Project Management Techniques is subdivided into the following sections for ease of presentation and understanding.

Part 1

The fi rst part introduces the key project management principles, processes and methodologies. These structures and formats form the backbone of the project management systems approach:

• Project lifecycle • Project management process • Project methodology • Project stakeholders • Project selection.

Part 2

The second part outlines the content and project management processes within each phase of the pro-ject lifecycle:

• Corporate strategy phases • Project feasibility phase • Project defi nition phase • Project execution phase • Project commissioning and handover phase • Operation phases.

Part 3

The third part outlines the content, tools and techniques within each knowledge area:

• Project plan • Project scope management • Work breakdown structure (WBS) • Project time management • Critical path method (CPM) • Gantt charts • Project procurement management

c01.indd 4c01.indd 4 18-03-2013 18:20:4618-03-2013 18:20:46

CHAPTER 1 INTRODUCTION TO PROJECT MANAGEMENT TECHNIQUES 5

Client and Project Sponsor

A project has a project sponsor (client) who has developed a business case to address certain corporate requirements and corporate strategies (vision and values).

Stakeholders A project has a range of stakeholders who have particular needs and expectations that have to be identifi ed and addressed.

Project Lifecycle

A project has a lifecycle that is presented as a number of sequential phases along the project ’s timeline. The phases group similar work as the most efficient way of producing a number of distinct deliverables.

• Project resource management • Project cost management • Project cash fl ow • Earned value • Project quality management • Project risk management • Project communication management • Project leadership • Project teams • Project organization structures.

1. What is a Project?

The starting point for most project management courses is to defi ne ‘what is a project’ so that the pro-ject management techniques can focus on how to achieve the project ’s objectives.

Consider the following defi nitions:

The PMBOK 5ed (2012) defi nes a Project as, a temporary endeavour undertaken to create a unique product or service.

Temporary means that every project has a defi nite end. Unique means that the product or service is different in some

distinguishing way from all similar products or services .

The APM BoK 6ed (2012) defi nes a Project as, a unique, transient, endeavour undertaken to achieve a desired

result, which could be an output, an outcome or a benefi t .

The distinctive characteristics and features of a project can be summarized in the table below as:

Table 1.1 Attributes of a Project

c01.indd 5c01.indd 5 18-03-2013 18:20:4618-03-2013 18:20:46


Within the context of this book a project can be defi ned as a benefi cial change that uses special project management techniques to plan and control the scope of work in order to deliver a project to satisfy the client ’s business case and stakeholders ’ needs and expectations.

2. Types of Projects

Traditionally project management techniques were developed to manage large capital projects for the construction industry, defence procurement, petrochemical and IT type projects. But, in recent years, most proactive industries, commercial businesses and government departments have re-structured their work as projects. Consider the following types of projects:

Project Charter

A project has a project charter that outlines what the project has to achieve (scope of work) and how to achieve the stated objectives (build-method), and gives the project manager the authority to use company resources.

Project Manager

A project is managed by a project manager as the single point of responsibility. This means that the project manager will be held responsible and accountable for delivering the project deliverables.

Project Team A project is administered by a project team working in the project management office (PMO). The project manager leads and manages the project team, the suppliers, contractors and consultants.

Scope of Work A project has a unique scope of work that defi nes what is included and what is not included in the project. A product breakdown structure (PBS) can be used to subdivide the project into a number of deliverables that relate directly to the operational confi guration. The work breakdown structure (WBS) can be used to subdivide the work to make the deliverables into work packages.

Project Schedule

A project has a schedule, which uses the CPM to calculate the start and fi nish of all the activities together with the list of critical activities that determine the duration of the project. The Gantt chart is one of the key documents for outlining schedule information.

Budget A project is assigned a budget to complete the work, which the WBS subdivides into a budget per work package. The project cash fl ow statement helps the project manager to balance income and expenditure.

Resources A project uses resources (equipment and workforce) to make the project. The resource histogram helps the project manager balance resource requirements and resource availability.

Procurement A project procures material and components from outside suppliers and outsources work to other companies. This is achieved through the procurement process and the procurement schedule.

Quality A project has to achieve predetermined quality requirements. This is achieved through the quality assurance plan and the quality control plan.

Risks A project is subjected to unknown risks that threaten to prevent the project achieving its objectives. These risks are addressed by the risk management plan.

Table 1.1 Continued

c01.indd 6c01.indd 6 18-03-2013 18:20:4718-03-2013 18:20:47


Construction and Engineering Projects

Construction and engineering projects are most people ’s perception of a project – this could be the construction of a building, a bridge, a motorway, a railway station, an airport, a power station or a sports stadium. These types of projects are usually unique and built in situ , requiring temporary site offices and a temporary workforce. These features are clearly those of a project – temporary and unique.

Military and Aerospace Projects

The military and aerospace sector includes a range of high tech projects that could be a military vehicle (tank) project, a frigate project, an aircraft carrier project, a spacecraft project, etc. These projects tend to be large, complex capital projects using innovative technology based on the latest R&D. They are usually manufactured in a highly controlled environment that is characterized by detailed design, extensive model and prototype testing, and a high level of documentation with full traceability of components. Because of the nature of defence issues, these projects are conducted under tight security and secrecy.

Military projects have been the driving force behind the development of most of the project management tools and techniques used today; Gantt charts, PERT, WBS, project lifecycles and earned value can all be attributed to military projects.

Table 1.2 Types of Projects – shows the different types of projects that benefi t from using project management techniques

Photo (Public Domain): Wembley Stadium – shows the stadium in the fi nal stages of

construction, with a number of cranes positioned outside the structure – note the temporary

project management offi ce in the foreground

Source: ProhibitOnions

c01.indd 7c01.indd 7 18-03-2013 18:20:4718-03-2013 18:20:47


Offshore and Petrochemical Projects

Offshore and petrochemical projects include the search for oil and gas (particularly offshore) and the large scale refi ning of fuels on shore. These major projects are often in remote locations, making logistics, communications, workforce recruitment and accommodation a challenge.

On these types of projects safety standards are a big concern especially with the workforce working in close proximity to highly infl ammable products. BP ’s blowout in the Gulf of Mexico highlighted what can go seriously wrong when a project pushes the limits of technology.

Photo : Courtesy of BP © Press Images Petrochemical Plant – shows a highly complicated

network of pipes and valves

Source: Secl

IT and Computer Projects

IT projects include both computer hardware and computer software projects. These projects range from large capital projects, such as computerizing the medical records of everyone in the UK costing billions of dollars, to designing a small personal website costing just a few hundred dollars.

Large IT projects have a history of budget blowouts and schedule overruns. These problems have been attributed to difficulty in defi ning the scope of work, commencing the work too early and failing to involve the right stakeholders and interested parties at the right time.

Table 1.2 Continued

c01.indd 8c01.indd 8 18-03-2013 18:20:4718-03-2013 18:20:47


Product Development Projects

Product development projects include the design and development of consumer products. In this highly competitive market, project teams fast-track the design and development so that they can beat their competitors to market. The Japanese led the use of multi-disciplined project teams to enable them to fast-track the design of consumer products. Concurrent design and development is obviously much faster than sequential design and development, and also more client and product focused, therefore concurrent design is an ideal arrangement for developing highly competitive consumer products.

Examples of product development projects would include the designing, developing and testing of a prototype car, a washing machine or a mobile phone.

Photo : Courtesy of Morgan Cars © Press Images – shows an artist ’s impression of its latest

concept car raring to go

Source: Morgan Motor Company Ltd, reproduced with permission

Advertising and Marketing Project

Most companies launch their new products with an advertising and marketing campaign. These campaigns need to work in conjunction with the new product ’s development and manufacture.

The advertising and marketing profession see the launching and promoting of a new product as a project, where the marketing promotion campaign runs in parallel with the production schedule and culminates in a co-ordinated new product release.

Bank Projects Banks and fi nancial service companies are not usually thought of as project orientated companies, but designing and implementing a new fi nancial product has all the characteristics of a complex project, and typically banks have many fi nancial products. The project manager ’s challenge, when implementing a new mortgage product for a bank, would involve co-ordinating the staff training, the IT systems and brochures between hundreds of branches, in conjunction with an advertising and marketing launch date.

Table 1.2 Continued

c01.indd 9c01.indd 9 18-03-2013 18:20:4718-03-2013 18:20:47


3. What is Project Management?

The PMBOK 5ed (2012) defi nes Project Management as, the application of knowledge, skills, tools, and techniques

to project activities to meet the project requirements .

The APM BoK 6ed (2012) defi nes Project Management as, the application of processes, methods, knowledge,

skills and experience to achieve the project objectives .

Having established some of the special characteristics and features of a project, it follows that the management of a project might also require some special project management techniques. Consider the following:

Event Management

Events, exhibitions, concerts, conventions and shows typically have all the characteristics of a project, as they are temporary (happen on a certain day) and unique (different from the previous events). They have the distinct lifecycle profi le of a long preparation phase, followed by a very short implementation phase. This introduces many special challenges for the project manager and project team members.

Consider the following type of events: sporting events, music concerts and fashion shows – these events must hit the ground running as there is little time to get it right once the event starts.

Table 1.2 Continued

Photo (Public Domain) : London Boat Show – shows the powered cruiser

section nested together for the viewing public. The yachts would have been delivered in

a planned sequence so that the organizers were able to set up the show within the tight

time frame allowed

c01.indd 10c01.indd 10 18-03-2013 18:20:4718-03-2013 18:20:47


Table 1.3 Characteristics of Project Management

Project Charter The project charter is one of the special project management documents that translates the project sponsor ’s business case into project objectives. These project objectives outline the scope of work, how the project should be managed and the critical success factors for the project manager to achieve (time, cost and quality). The issuing of the project charter also serves as the authority for the project manager to initiate the project and use company resources.

Tools and Techniques

The management of projects uses a number of special tools and techniques, combined with subject related knowledge and skills that have been developed over the years to manage different aspects of the project and facilitate the processing of large amounts of data. These include the CPM analysis, the Gantt chart, the resource histogram, the earned value graph and tables, activity crashing and matrix organization structures.

Project Plan The project plan is a special project management document integrating the knowledge areas ’ individual plans to form one combined baseline plan. This integration process manages the trade-offs and compromises between the different plans to enable the project to focus on one optimum arrangement that outlines what needs to be done, when, by whom and to what standards. Through the project plan the project manager issues instructions, monitors progress and takes corrective action to ensure project success.

Project Management Processes

The project management process is a special management technique for managing a linear sequence of steps or interrelated actions performed to achieve a specifi ed set of products, results or services. The project management process is subdivided into the following sub processes (initiation, planning, execution and closing).

Project Organization Structure

The project organization structure is a special management technique that enables the project manager to form temporary organization structures and project teams that can be designed to suit the needs of the project and the project participants. This enables the project leader to build and motivate the team, and co-ordinate their work.

Project Methodology

The project lifecycle format is a special management technique subdividing the project into a number of identifi able phases that each produce a distinct deliverable. This sequence of phases forms the backbone of the project methodology, interlinking all the topics within a phase and between phases.

Project Management Profession

Over the past years, the scope of project management has grown from basic planning and control tech-niques, notably the Gantt chart (1920s) and CPM (1950s), to a fully blown profession with its own body of knowledge, code of practice and certifi cation.

There are a number of project management institutes, associations and societies with national and international chapters. A number of them publish their own body of knowledge, which outlines how to manage a project (see list below). The two main bodies of knowledge this book is aligned to are:

• PMBOK 5ed (2012) • APM BoK 6ed (2012)

c01.indd 11c01.indd 11 18-03-2013 18:20:4818-03-2013 18:20:48


The PMI ’s PMBOK subdivides project management into ten knowledge areas, and these are used inter-nationally to structure most project management courses:

Table 1.4 Knowledge Areas

Project Scope Management

Is the process of defi ning and controlling what is included in the project, together with any scope changes to meet the client ’s and the stakeholders ’ objectives.

Project Time Management

Includes the process required to ensure timely performance of the project. It consists of activity defi nition, activity sequencing, duration estimating, schedule development and time control.

Project Cost Management

Includes the process required to ensure that the project will satisfy the needs for which it was undertaken. It consists of cost estimating, cost budgeting, cash fl ow and cost control.

Project Quality Management

Includes the process required to ensure that the project will satisfy the needs for which it was undertaken, consisting of determining the required condition, quality planning, assurance, control and continuous improvement.

Project Human Resource Management

Includes the process required to make the most effective use of the people involved with the project. It consists of organizing planning, staff acquisition and team development.

Project Communication Management

Includes the process required to ensure proper collection and dissemination of project information. It consists of communication planning, information distribution, project meetings, progress reporting and administrative closure.

Project Risk Management

Includes the process concerned with identifying, quantifying and responding to project risk. It consists of controlling the risk management plan and being prepared for disaster recovery.

Project Procurement Management

Includes the process required to acquire goods and services from outside the company. It consists of procurement planning, solicitation, source selection, contract administration and contract closeout.

Project Integration Management

Integrates the three main project management processes of planning, execution and control where inputs from several knowledge areas are brought together.

Project Stakeholder Management

Identifi es the key stakeholders and determines their needs and expectations. It develops the strategies to engage the stakeholders and involve them in the decision-making process.

4. Different Types of Management

There are a number of different types of management project managers should be aware of as they might interface with them at different times during the project both inside and outside their own company. Consider the following types:

c01.indd 12c01.indd 12 18-03-2013 18:20:4818-03-2013 18:20:48


General Management

Although this book is about project management, the successful project manager must also be competent in a wide range of general management skills in addition to the ten knowledge areas. These include:

• Recruiting and team selection • Personnel and human resources • Sales and marketing • Accounts and salaries • Project economics • Computer systems • Legal contracts.

The project manager would obviously not be expected to be an expert in all these fi elds but, for a project to be successful, all the fi elds might need to be addressed at one time or another and, as the single point of responsibility, the project manager will be responsible for either performing the work or delegating it.

Production Management

Although projects are deemed to be unique, in reality they usually consist of a number of similar and repetitive tasks that could be grouped and made using a production line approach.

Henry Ford emphatically showed in 1913 that production lines are the quickest and most cost effective way to manufacture a car (the Model T in this case). The same applies to a project: if there are repetitive tasks then the tasks should be grouped and manufactured on a production line.

Process Management

Process management is used by companies that manage a product that typically fl ows from one process to another. These types of projects would include petrochemical companies and breweries. Embedded in the process might be a number of projects such as setting up the facility and the scheduled maintenance.

Programme Management

A programme is a set of related projects and organizational changes put in place to achieve a strategic goal and to deliver the benefi ts that the organization expects.

A programme is a series of specifi c, interrelated undertakings (projects and additional tasks) which together achieve a number of objectives within one overall strategy or strategic goal. The programme identifi es and manages the delivery of the benefi ts that the organization expects.

Where the project office is managing a large capital project, e.g. the London Olympics, the project will be subdivided into a number of smaller related projects that focus on achieving a single common goal.

The APM BoK 6ed (2012) defi nes Programme Management as, the co-ordinated man-

agement of projects and change management activities to achieve benefi cial change .

Table 1.5 Types of Management

c01.indd 13c01.indd 13 18-03-2013 18:20:4818-03-2013 18:20:48


Portfolio Management

Portfolio management could be used by a project office that is running a number of unrelated projects such as managing the repairs and maintenance of a large telecom type company, a power station or a water utility.

A portfolio is a set of projects and/or programmes that are not necessarily related but are brought together for the sake of control, co-ordination and optimization.

Portfolio management is mainly applied to groups of projects and programmes that might not be related in the business sense but draw on a common pool of scarce resources. The portfolio manager co-ordinates all the projects and possible programmes within an organization during the process of evaluation, selection, monitoring and controlling, reprioritization and closure. The division of a complex project into sub projects is part of normal project management.

The APM BoK 6ed (2012) defi nes Portfolio Management as, the prioritisation, selection

and co-ordination of an organisation’s projects and programmes in line with its strategic

objectives and capacity to deliver. Its goal is to balance organisational change and busi-

ness as usual whilst optimising return on investment .

Small Projects

The management of small projects have their own challenges and unique problems; although small projects might appear to be simple, they are often associated with a lack of defi nition (no drawings, no specifi cations and no contract), instructions are given verbally, and minimum standards are not established. There are no arbitration mechanisms, no exit strategies and, because small projects are usually only for a short duration, the project manager does not have the time to establish a management system.

5. Role of the Project Sponsor

Although this book focuses on the project manager ’s role in managing projects, it is important to rec-ognize that the purpose of the project is to implement the project sponsor ’s business case and corporate strategy. This section will, therefore, start by introducing the role of the project sponsor before intro-ducing the role of the project manager.

In small companies the project sponsor and the project manager might well be the same person, but in larger companies and on large capital projects they will be different people because their roles are distinctly different.

The table below considers the differences between the project sponsor and the project manager:

Table 1.5 Continued

c01.indd 14c01.indd 14 18-03-2013 18:20:4818-03-2013 18:20:48


Table 1.6 Role of the Project Sponsor

Project Sponsor Project Manager

Appointment The project sponsor is appointed by the portfolio manager or CEO.

The project manager is appointed by the project sponsor.

Responsibility The project sponsor is responsible for realizing benefi ts for the company as outlined in the business case.

The project manager is responsible for achieving the critical success factors as outlined in the project charter.

Authority The selection of the business case by the portfolio manager gives the project sponsor the authority to use company resources.

The issuing of the project charter gives the project manager the authority to use company resources.

Management System

The project sponsor uses the company ’s project methodology to guide the project through the strategy phases, project phases and operational phases.

The project manager uses the project ’s planning and control system to issue instructions and to monitor and control the work.

Cost The project sponsor is responsible for raising the funds to fi nance the investment in the project with the objective of obtaining a return on the investment.

The project manager is responsible for managing the project cost management to complete the project within budget.

Time The project sponsor determines the project ’s completion date to meet the market.

The project manager is responsible for completing the project on time as set out in the project charter.

Quality The project sponsor determines the required quality to suit the niche market for the project.

The project manager is responsible for completing the project to the standard outlined in the project charter.

Scope of Work The project sponsor is responsible for ensuring the project ’s deliverables (as determined by the PBS) are right for the operation confi guration.

The project manager is responsible for determining the work packages that are required to make the deliverables.

Scope Changes The project sponsor is responsible for determining how any scope changes impact on the operational confi guration.

The project manager is responsible for determining how any scope changes impact on the project plan, build-method and execution strategy.

Risks The project sponsor is responsible for identifying and responding to any business risk or anything that will prevent or limit the company from realizing benefi ts from the project.

The project manager is responsible for identifying and responding to any project risk or anything that will prevent the project from achieving its project objectives.

Perspective The project sponsor ’s perspective of the project looks outwards at the market where the implementation of the project will strive to realize benefi ts for the company.

The project manager ’s perspective of the project looks inwards at the execution of the project, and strives to achieve the objectives as outlined in the project charter.

c01.indd 15c01.indd 15 18-03-2013 18:20:4818-03-2013 18:20:48


The APM BoK 5ed (2012) defi nes the Project Sponsor as,

(1) The individual or body for whom the project is undertaken, the primary risk taker .

(2) The individual representing the sponsoring body and to whom the project manager reports .

(3) A person or organization providing funds for the project .

Photo : Courtesy of Brunel University Library © – Isambard Kingdom Brunel

standing in front of the drag chains of the Great Eastern on the day of her launch

Source: Robert Howlett

6. Role of the Project Manager

The PMBOK 5ed (2012) defi nes the Project Manager as, the person assigned by the performing organization to lead

the team that is responsible for achieving the project objectives .

Experience has shown that the selection of the project manager is a key appointment, which can infl u-ence the success or failure of the project. As the single point of responsibility, it is the project manager who is responsible for delivering the deliverables and who integrates and co-ordinates all the contribu-tions, and guides them to successfully complete the project. The following lists some desirable project manager attributes and duties:

c01.indd 16c01.indd 16 18-03-2013 18:20:4818-03-2013 18:20:48


Appointment The project manager is appointed by the project sponsor as the single point of responsibility for completing the project as outlined in the project charter.

Management Skills The project manager will require a range of management skills to plan and control all aspects of the project.

Leadership Skills

The project manager will require appropriate leadership skills and persuasive powers to lead, infl uence and negotiate with the project team, the contractors, the suppliers, the consultants and the stakeholders.

Project Charter Although the project manager is not responsible for issuing the project charter, the project sponsor might require the project manager to develop the project charter as the project manager is usually an expert in the fi eld of the project.

Project Team The project manager is responsible for selecting and leading the project team.

PMO The project manager is responsible for setting up and managing the project management office (PMO) with the necessary resources and systems to carry out the administration of the planning and control system.

Project Organization Structure

The project manager is responsible for setting up the temporary project organization structure to integrate and interlink the resource providers (functional departments and contractors), suppliers and consultants.

Stakeholder Management

The project manager is responsible for identifying the project stakeholders and interested parties to determine and infl uence their needs and expectations. This process also engages the stakeholders to involve them in the decision-making process.

Project Plan The project manager is responsible for developing the project plan, which integrates all the individual plans. The integration process has to make certain trade-offs and compromises between confl icting parameters so that the baseline plan can converge on an optimum arrangement.

Planning and Control System

The project manager is responsible for setting up and managing the planning and control system to issue instructions, monitor progress, review performance and take corrective action where necessary.

Scope Management The project manager is responsible for identifying and defi ning the complete scope of work. The breakdown structure might use the PBS to identify the deliverables and the WBS to identify the work packages to make the deliverables.

Scope Change Management

The project manager is responsible for managing the scope change process to assess the impact on the project ’s objectives and control any unnecessary scope creep.

Build-Method The project manager is responsible for developing an efficient and feasible build-method to make the project.

Execution Strategy The project manager is responsible for developing the execution strategy, which makes the ‘make or buy’ decision and selects the best option for the project.

Procurement Management

The project manager is responsible for setting up the procurement management system to procure all the required materials and components at the best price and at the right time. This process includes expediting to make the procurement happen.

Resource Management

The project manager is responsible for developing the resource histogram and analysing the resource loading.

Table 1.7 Role of the Project Manager

c01.indd 17c01.indd 17 18-03-2013 18:20:4818-03-2013 18:20:48


Communication The project manager is responsible for setting up the project ’s communication system to keep all the stakeholders informed.

Quality Management

The project manager is responsible for setting up the project ’s quality management system to ensure that the project is built to the required condition.

Risk Management The project manager is responsible for managing the risk management system that identifi es, quantifi es, responds and controls risk. The project manager should ensure that the project risk is in line with the corporate acceptable level of risk.

Problem Solving The project manager is responsible for setting up a problem solving culture, with the project team and other interested parties, that is able to anticipate problems, generate innovative and creative solutions and spot entrepreneurial opportunities.

Decision-Making The project manager is responsible for setting up a decision-making system to gain collective support from the team that implements the project.

Rules and Regulations

The project manager is responsible for ensuring the project complies with the rules and regulations (health and safety) that apply to the project.

Project Governance

The project manager must comply with the corporate values that are outlined in the project governance and ethics.

The APM BoK 6ed (2012) states that, the project manager is responsible for day-to-day management of the project

and must be competent in managing the six aspects of a project i.e. scope, schedule, fi nance, risk, quality and

resources. He must also be a competent manager of people with well-developed skills such as leadership, communi-

cation and confl ict management .

7. Role of the Project Steering Board

The project steering board usually consists of a small group of eminent professionals who have a wealth of knowledge and experience in the fi eld of the company and the disciplines of the project; this enables them to foresee the project ’s pitfalls and offer impartial advice on how to make the project and imple-ment it into its operating environment.

All companies have an element of project work that falls outside of their normal ‘business as usual’ work. It is these strategic projects that benefi t from having a project steering board advising and looking at the bigger picture, both internally and externally, and acting as a safety net to ensure that the project is working within the guidelines outlined in the corporate values (governance and ethics).

The project steering board members are usually appointed by the CEO and the board of directors, and work in conjunction with the portfolio manager, the project sponsor and the project manager. The project steering board membership is typically restricted to a handful of eminent professionals (about six) who have a wealth of relevant experience. It follows that, as the scope of the project changes, so the membership of the project steering board might also need to change to refl ect the needs of the project and the needs of the company.

Table 1.7 Continued

c01.indd 18c01.indd 18 18-03-2013 18:20:4918-03-2013 18:20:49


This section will discuss how the project steering board represents the interests of the key players under the following headings:

Table 1.8 Role of the Project Steering Board

Shareholders It is the project steering board ’s responsibility to ensure that the shareholders ’ long-term fi nancial interests are considered and that the project does not expose the company to unnecessary fi nancial risk. Therefore, it is essential that at least one of the members is an expert in corporate fi nance.

CEO/BOD The project steering board should ensure that the company ’s commercial interests are considered and that the proposed projects align with the corporate vision, and address the corporate requirements to enable the company to maintain competitive advantage. Therefore, it is essential that at least one of the members is an expert in corporate strategy.

Project Sponsor The project steering board should work closely with the project sponsor to ensure that the proposed method of implementing the project is feasible and the confi guration of the project is likely to realize benefi ts for the company, as outlined in the business case. Therefore, it is essential that at least one of the members is an expert in the implementation of corporate strategy.

Project Manager The project steering board should work closely with the project manager to ensure that the proposed build-method and execution strategy are feasible and the project is likely to achieve its critical success factors, as outlined in the project charter and the project plan. Therefore, it is essential that at least one of the members is an expert in project execution and the use of consultants, contractors and suppliers. The person providing the appropriate perspective and expertise could be a senior representative for the suppliers.

Operation Manager The project steering board should ensure that the operation manager ’s interests are considered and, specifi cally, how they relate to the operational confi guration. Therefore, it is essential that one of the members is an expert in company operations and the operation start-up strategy.

Users The project steering board should ensure that the users or operators of the facility ’s interests are considered and, specifi cally, how they relate to the ease of operation and well-being of the operators. Therefore, it is essential that at least one of the members is an expert in promoting the users ’ concerns.

Consumers The project steering board should ensure that the consumers ’ interests are considered and, specifi cally, how they relate to product quality, lifecycle costing, cost of maintenance, repair and upgrade. Therefore, it is essential that one of the members is an expert in promoting consumer concerns, as this is likely to lead to repeat business and brand loyalty.

Stakeholders The project steering board should ensure that the stakeholders ’ interests are considered and, specifi cally, the interests of those stakeholders who are not directly linked to the project and might not be known to the project sponsor but who could derail the project if their concerns are not addressed. Therefore, it is essential that at least one of the members have good networking skills to broker relationships with the stakeholders and interested parties.

c01.indd 19c01.indd 19 18-03-2013 18:20:4918-03-2013 18:20:49


Within the project methodology, the project steering board members are responsible for considering the wider aspects of the corporate change management process. It is essential to have such a steering board because, in a large company, there are corporate considerations the project sponsor and project manager will not necessarily be aware of.

By sitting above the project, the project steering board is more aware of what is happening inside and outside of the company. For example, the company direction is infl uenced by trends in the market or environment within which the company operates, together with the other projects the company is car-rying out. The project steering board is, therefore, in a better position to advise on how to prioritize and balance the use of company resources. It is also able to consider the wider implications of the business case and changes to the build-method and operational confi guration to ensure that the company real-izes benefi ts from the project.

8. Project Success

The ultimate purpose of a company and a project is to be successful. This section will discuss the mean-ing of success as it relates to the project sponsor and the project manager.

The media are always quick to portray projects that are late and over budget as a failure. The build-ing of the Sydney Opera House was a project that fell into this category – but was it really a failure? To answer this question we have to clarify how to determine project success, and that will be shown to depend upon from whose perspective it is being considered.

Project Manager’s Perspective

Project success from the project manager ’s perspective is related to delivering the project deliverables. These deliverables are usually quantifi ed and verifi ed using the project management critical success factors as outlined in the project charter. The classic question would be to ask, ‘Was the project deliv-ered on time, on budget and to the required quality?’ If the answer is ‘yes’ to all of these questions then the project would be deemed to have been a success from the project manager ’s perspective.

Project Sponsor’s Perspective

Project success from the project sponsor ’s perspective generally relates to whether benefi ts were real-ized by the company as outlined in the business case. These benefi ts are usually quantifi ed as imple-menting corporate strategy to solve a problem, address a requirement, maintain competitive advantage, exploit an opportunity, increase profi t, increase sales fi gures or enhance a brand image.

This means that the project manager and the project sponsor both have different criteria for deter-mining project success and, if a project ’s success is only considered from the project manager or pro-ject sponsor ’s perspective, this can be misleading, particularly if it relates to a project in a changeable market. Consider the following example, which is generally accepted as a project manager failure but a project sponsor success.

c01.indd 20c01.indd 20 18-03-2013 18:20:4918-03-2013 18:20:49


Case Study : Sydney Opera House

The NSW Government ’s original vision (1950s) was for a suitable venue for large cultural and theatrical productions. A design competition was held and Jørn Utzon ’s innovative design of the Sydney Opera House selected.

The building of the Sydney Opera House did not go smoothly; it was many years late, many times over budget and reported to be an ‘ aesthetic and acoustic disaster’ . It was generally deemed a failure from a project manager ’s perspective.

But now the Sydney Opera House is one of Australia ’s national icons and tourist attractions. It is described as a World Heritage building of which UNESCO says, the Sydney Opera House is a great architectural work of the 20th century. It represents multiple strands of creativity, both in architectural form and structural design, a great urban sculpture carefully set in a remarkable waterscape and a world famous iconic building .

Therefore, from a client ’s perspective the project is now considered a resounding success.

Photo: Sydney Opera House , courtesy of Angelica Payne © – shows the Opera House ’s innovative and impressive architecture

Source: Angelica Payne

c01.indd 21c01.indd 21 18-03-2013 18:20:4918-03-2013 18:20:49


Exercises:

1. In your own words, outline the features and characteristics of three projects you are familiar with.

2. In your own words, outline the features and characteristics of project management and point out how they differ from other forms of management.

3. Consider a project you are familiar with and outline the role of the project manager. 4. Consider a project you are familiar with and outline the aspects of the project that were a success.

c01.indd 22c01.indd 22 18-03-2013 18:20:4918-03-2013 18:20:49

Key Principles, Processes and Methodologies€¦ · Deﬁ ne the roles of the project sponsor,...

Documents

Transcript of Key Principles, Processes and Methodologies€¦ · Deﬁ ne the roles of the project sponsor,...