Project Management

von: David Nowak und Christina Lechelt

Table of Contents

1. How should projects be managed?  3

1.1. Introduction  3
1.2. What is a project?  4
1.3. Project Objectives  5
1.4. Project Organization  6
1.5. The Project Life Cycle  8

1.5.1. Project Selection  9
1.5.2. Planning  10
1.5.3. Build up  14
1.5.4. Implementation  16
1.5.5. Phase out  17

2. Why do projects fail? Analyse strengths + weaknesses of project work  19

2.1. Weaknesses of project management  19
2.2. Strengths of Project Management  23

3. The nature of project organisation, a "battle field" or a new possibility for learning?  24

Sources  28

1. How should projects be managed?

1.1. Introduction

"A project is a problem scheduled to be solved" (Dr. J. M. Juran). This citation briefly describes the highly demanding and complex task of project management. A more technical definition understands the nature of project management as "the entirety of managerial functions, managerial organisation, and managerial techniques and means for the carrying out of a project" (DIN 69 901)¹. Project Management requires organizational skills, the foresight to anticipate the unexpected, and the ability to monitor progress and change course as needed. The use of project management continues to grow in our society and its organizations. Companies nowadays are growing more rapidly but their conservative organisational structure, which is based on functional specialisation, is not able to deal with increasing complex tasks, thus many goals could not be achieved in traditional ways but with project management. This has lead to the fact that businesses are more and more focussing on a more project - oriented approach. Businesses take advantage of project management when unique outcomes have to be accomplished and resources and time are limited. Projects are even more familiar in the service sector, where mostly campaigns, seminars, etc. are structured as projects. Since the massive growth in this field has made project management so popular, many companies nowadays also use it for restructuring. Generally, projects tend to be established for special tasks, e.g. extraordinary order sizes that have to be processed within a sharp time frame. It is also very common to carry out research and development of new products as projects. Of course, almost anything can be organized as a project, no matter how large the scope or money involved is.

As long as the effort taken to achieve the determined goal is unique and does not reoccur in the same matter, it can be called a project.² To find out, how projects should be managed, we first of all need to define, what a project is.

1.2. What is a project?

A project is a plan that is mainly identified through the singleness of the conditions under which it is implemented. It is thus a nonrecurring event that differs from daily business routine. It is furthermore temporary due to its exactly fixed start and ending. For every project, detailed targets must be defined, and provided with different criteria. This has to be done in order to enable clear benchmarking after the project has been finished, to tell whether it was a success or failure. A project is also determined by its complexity. Therefore different means and techniques have to be used in order to achieve its goal. Specialists have to be deployed and their diverse knowledge has to be coordinated, taking into account their different ways of thinking and communicating. Since projects are connected with investments that can influence the economic outcome of a company, senior management must not forget to evaluate risks that are connected with the project. Therefore risk management is often very closely connected to project management. Projects are further identified through interdependencies, since they often interact with other projects or with ongoing operations, e.g. involving certain departments at certain project stages. Conflict also belongs to the nature of projects. That is because projects tend to compete with functional departments for resources and staff. Conflicts might also occur among the parties - of - interest, e.g. the client wants changes, which would reduce the profitability of the project if made. Last, projects can also be identified by their budget. Since they do not belong to daily work routine, they have their own budget. ³

1.3. Project Objectives

During the project′s duration, three main objectives can be found that are have to be watched very carefully: Quality (or performance), cost and time. These three objectives are also called the magic triangle of project management. That is because once the project is complete, its success or failure is measured through these three variables. When looking at them from a logical point of view, it can be concluded that they actually interrelate each other. Changing one factor automatically leads to the alteration of another factor. If, for example the time frame of a project shall be reduced, this can be only achieved through reducing quality of outcome or by locating additional funds for the project. Thus it is hardly possible to alter just one factor leaving the others constant. The primary task of the project manager is to manage these trade-offs. The figure below shows the three project targets.

Figure 1: Performance, cost, time project targets⁴ [figure only in downloadfile]

[...]

1 DIN = German Industry Norm

2 Cp. Meredith Mantel, 2000, p. vii, Heimerer, 2002, p.1, Duffy, 2002, p.1 ff., www.steuerlex.de 26.05.2002

3 Cp. EnBW Servicegesellschaft, 2001, p.3 ff., Heimerer, 2002, p.1, Meredith and Mantel, 2000, p. 8-11

4 Source: Meredith and Mantel, 2000, p.4