MPM_ProjectManagementFundamentals_06

Assistant Professor Dr. Aurangzeb Zulfiqar KhanDepartment of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 1

PART II: ADVANCED TOPICS IN PROJECT MANAGEMENT


Outline of Presentation Part II

Brief Overview of Part II

Introduction to Project Organization

Organization Examples

The Functional Organization Form

Advantages and Disadvantages of the Functional Organization Form

The Project Matrix Organization Form

The Functional Project Matrix

The Balanced Project Matrix

The Strong Project Matrix

Advantages and Disadvantages of the Strong Project Matrix Form

Project Teams

Advantages and Disadvantages of Project Teams

Which Project Organization Form is Best?

The Project-Based Organization

Impact of Organizational Culture on Projects

The Project Management Office (PMO)

Functions, Advantages and Disadvantages of the PMO

Introduction to Project Portfolio Manage-ment

The Project Portfolio Management Process

Portfolio Selection: Qualitative Models

Portfolio Selection: Quantitiative Models

Project Portfolio Management Software

Issues in Project Portfolio Management

The Project Management Methodology

Review of Selected Project Management Methodologies:

PMBOK

APMBOK

IPMA Baseline

PRINCE2


Projects in the Functional Organization Form


The Functional Form of Organization

In the functional form of organization, work activities are structurally segmented according to their “function’ – i.e. their similarity of purpose. For example:

- Accounting & Finance- Production- Research & Development- Marketing - IT Support- Procurement- General Administration

These are the typical functions one would expect to find in most commercial organizations.


University of Texas at Austin, USA



Functional Area of the Organization (E.g.: IT or HR)

Staff

Staff

Staff

The functional form of organizing projects is best suited for those projects whose scope of work is

basically confined to one functional area of the

organization only and for which there is no (or only

minimal) necessity for interaction with separate

functional areas.

Staff

Staff

HRIS Project



Functional Area A Functional Area B Functional Area C

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

If more than one functional area is involved in a project, the coordination of project activities takes place through the hierarchy

Project Coordination


Corporation XCorporation X

Human Resources

Human Resources

MarketingMarketing EngineeringEngineering ProcurementProcurementManufacturingManufacturing

ElectronicsEngineering

ElectronicsEngineering

Customer Service

Customer Service

Finance &Administration

Finance &Administration

SoftwareEngineering

SoftwareEngineering

MechanicalEngineering

MechanicalEngineering DesignDesign PurchasingPurchasing Receiving

& Inspection

Receiving & Inspection

DomesticSales

DomesticSales

InternationalSales

InternationalSales FabricationFabrication AssemblyAssembly TestingTesting Production

Scheduling

ProductionScheduling

Project Coordination in Functional Organizations

Project Coordination


No alteration in the existing structure and operations of the organization is necessary as functional units are already well established.

The project simply avails the existing structure and diverse resources which are available in its functional areas in order to undertake the projects which it wants.

The Functional Form- Advantages


The functional form of project organization offers high flexibility in assigning personell employed in the different functional units to work on projects.

Functional employees can divide their time working on different projects and can be immediately reassigned to other projects once their work has been completed.

The Functional Form - Advantages


The functional form of organiza-tion offers the possibility of (very) focussed utilisation of knowledge, expertise and experience on a pro-ject by employees in any given functional area. Also, as these em-ployees are familiar with each other, communication between them would normally be good, re-action time to issues quick, and authority and responsibility clear defined. The project work may be simpler to estimate because of past experience with similar projects.



Functional employees work-ing on projects can maintain their normal career paths in their respective functional areas or „home bases“. This is important because it allows functional employees to keep abreast of developments concerning them in their respective areas, which they may not be able to do in a (dedicated) project team, and it does not jeopardize their promotional chances.



If a project has a comparatively broad scope, and crosses several functional lines, the different functional areas may have different perceptions as to the priority level which should be accorded to the project. Hence, reluctance by one functional area to support the project and provide the resources needed for it may result in delays to the project.

The Functional Form - Disadvantages


Inadequate integration across different functional areas is a common criticism of managing projects in the project functional form. Functional specialists tend to be concerned primarily with their specific part of the project work and not the whole project. Thus, a holistic perspective is often lacking and this is not a good way for managing projects, particularly of a complex kind.



Functional staff working on a project may display a lack of identification with, and committment to the pro-ject. This is because project work is often seen as additional work which distracts them from their routine functional work (which for them usually has priority) and for which there may be no incentive or reward system. A sense of „project ownership“ is frequently lacking and the high level of motivation usually found among (dedicated) project teams is absent.



In cross-functional projects, project response and overall completion times tend to be higher due to the require-ment of channeling (poten-tially large amounts of) project information, as well as decision-making and


problem-solving through the „normal“ management channels. Lack of horizontal communication across functional areas may require rework of work performed. Conflict and rivalry bet-ween functional areas may also impede communication. Res-ponse times to clients and changing environmental conditions are slow.


A strong criticism of the functional form of organi-zing projects is that there is no individual who has full authority and responsibility for the project. Instead, authority and responsibility is shared between different individuals from different parts of the organization in which case no proper accountability fo the project can be expected.



The Project Matrix Organization


What is the Project Matrix Organization?

The Matrix organization is a form of project organization within the framework of which temporary horizontal (project) levels are applied over the permanent vertical (functional) levels of the organization.

Project Management defines three basic project matrix forms: the Functional Matrix, Balanced Matrix, and Project Matrix.

In practice, the matrix structure can assume many different manifestations and these may change over the course of the project life-cycle.


Project Level

Project Level

Functional Level A

Functional Level B

Functional Level C

Project 1Project 1

Project 2Project 2

Project 4Project 4

Project NProject N

FI

FI

FI

FI

FI

FI

FI

FI

FI

FI

FI

FI

The Project Matrix Organization Form

GENERAL MANAGER

Functional Level D

FI

FI

FI

FIFunctional Interfaces


In the Functional or „Weak“ Project Matrix, an individual is selected who will oversee and coordinate the project activities across the various involved functional levels of the organization.

Functional managers are responsible for managing their respective segments of the project, decide who does what and when the project is to be completed, and evaluate the participants.

Their influence is greater than that of the project manager, who has indirect authority to expedite and monitor the project.

The Functional Project Matrix


Functional Manager

Functional Manager

FunctionalManager

FunctionalManager

FunctionalManager

FunctionalManager

StaffStaff

StaffStaff

StaffStaff

The Functional (“Weak”) Project Matrix

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

Project CoordinationProject Coordination


In the Balalanced Project Matrix an individual is selected who will manage the project across the various functional levels of the organization and who will interact with the functional managers on an


equal basis and jointly approve technical and operational decisions. The project manager defines what needs to be accomplished and the functional managers decide how and by whom it will be accomplished within the plan, various desig-nated functional inputs, standards and schedules established by the project manager.


Functional Manager

Functional Manager

FunctionalManager

FunctionalManager

FunctionalManager

FunctionalManager

StaffStaff

PMPM

StaffStaff


StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff



In the Project – or „strong“ - Matrix a project manager is selected to oversee the completion of the project across the various involved functional levels of the organization.

The project manager is ultimately is responsible for the project‘s completion, has final say on major project deci-sions and controls most aspects of the project, including the assignment of functional personell, what they do and when.

The functional managers maintain title over their respective personell and have consultation rights.

The Strong Project Matrix


Functional Manager

Functional Manager

FunctionalManager

FunctionalManager

FunctionalManager

FunctionalManager

StaffStaff

StaffStaff

StaffStaff

The (Strong) Project Matrix

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff


Manager of Project Mgrs.

Manager of Project Mgrs.

ProjectManager

ProjectManager

ProjectManager

ProjectManager

ProjectManager

ProjectManager

ProjectManager

ProjectManager


Senior ManagementSenior Management

Lead Project Manager

Lead Project Manager ENGINEERINGENGINEERING MANUFACTURINGMANUFACTURING MARKETINGMARKETING

PM X

PAPA E1E1 E2E2 E3E3 MA1MA1 MA2MA2 MA3MA3 M1M1 M2M2 M3M3

PM Y

PM Z

11 2 1 3 2 1

11 3 1 4 0,5 1

0,50,5 1 3 7 2 0,5

Example of a Strong Project Matrix System


Resources are scarce in any organization! A big advantage of the matrix is that it allows for the sharing of diverse resources across multiple projects within the respec-tive functional areas, enabling the functional personell to flexibly divide their attention, effort and time among these projects and thereby reducing the costly duplica-tion of resources which is inherent in setting up (dedicated) project teams.

The Strong Project Matrix - Advantages


The matrix ensures a strong project focus by having a project manager who performs a coordinating and integrating role across functional areas, enabling a more holistic approach towards undertaking the project than is possible in the purely functional form of project organization where the different functional areas are usually only concerned with their portion of the project work.



By using a project matrix, the entire spectrum of the functional areas‘ technology, expertise and experience which can be brought to bear on the project can easily be and flexibly be accessed since all project work is performed within the area.



Functional personell can maintain close ties with their respective areas.

They are not required to leave their home bases in the orga-nization which they may have to do if they are assigned to work on a project full-time as in a (dedicated) project team and hence they will feel more confident as they can keep abreast of developments directly concerning them and their future in the organiza-tion.



A major criticism of the project matrix is that it explicitly violates the established hierarchical principle „Unity of Command“ (Fayol, 1916) which demands that an employee report to only one superior and not two as is the case in the matrix.

Dual Reporting (i.e. to both a project and functional manager) may cause stress for the employee, especially when both managers do not get along and issue diverging or conflicting orders.

The Strong Project Matrix - Disadvantages


In the matrix environment, there is a potential for conflict between project managers and functional managers due to diverging agendas, possibly unclear patterns of authority and accountability and so forth, and this may occasionally engender a personal animosity which will be detrimental for the project.



Unhealthy competition over the sharing of project inputs, equip-ment, human resources and faci-lities etc. may arise in the matrix environment between project managers who each are endeavou-ring to acquire the best available inputs for their respective projects from the functional areas.

Consequently, there is the possi-bility that underhand „deals“ may be made between project and func-tional managers.



• Failure to understand the key principles and roles in the matrix organizational environment

• Distrust in organizational forms which are not based on Fayol‘s „unity of command“

• Apprehensions of functional managers over the apparent superority of the project goals over those of the functional entity

• Senior management shortcomings in terms of clearly delineating in writing the formal and reciprocal roles of all the key managers involved in the project

Problems With Matrix Organizations


• Lacking understanding by the project team to understand the role and responsibilities of the functional professionals and their managers

• Incompetent project and functional managers / project managers who manage less and coordinate more / decision referall by project managers to senior management

• Inadequate stakeholder management

• Lack of trust, integrity, loyalty and committment by project team members

Problems With Matrix Organizations


• Visible and Sustained Commitment by Top Management• Supportive Organizational Culture• Tackling Resistance to Change• Effective Project Prioritization System• Commitment by Functional Managers and Employees• Delineation of Roles and Responsibilities• Decision-Making Conflicts between Project and Functional Areas• Empowerment • Communication, Cooperation and Coordination • Professional Project Managers• System of Rewards and Incentives• Meeting Training Needs (e.g. in Teamwork, Interpersonal Skills,

Conflict Resolution) • Learning from Experience• Institutional and Infrastructural Framework (e.g. PMO)

Issues of Concern in the Project Matrix


Case Study of a Project Matrix Organization

Adtranz, Sweden

Students are required to read the Case Study working paper Exploring the Multi-Project Matrix: Process Dynamics of a

Projectified Organization by Mats Engwall & Anna Sjoegren Kaellqvist (2001)


The (Pure) Project-Based Organization


About the Project-Based Organization

In a project-based organization, most of the work performed is project work and this is reflected in the organization‘s structure which is not based on the functional paradigm but changes acccording to the projects which the organization has in its portfolio.

Project-based organizations are often found in the defence and construction industries, in the movie industry, in some NGOs and in some outsourced industries.


ProjectManager

ProjectManager

ProjectManager

ProjectManager

ProjectManager

ProjectManager

StaffStaff

StaffStaff

StaffStaff

The Project-Based Organization

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff

StaffStaff



Corporation X

MarketingHuman

Resources

Finance andAdministration

Legal

Project Manager(Project A)

Project Manager(Project B)

Engineering Manufacturing Procurement EngineeringSubcontractors

(X, Y, Z)

Manufacturing Procurement

Structure of a Project-Based Organization

Other Projects

Other Projects

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