Projects in organizations organization Structures.
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Transcript of Projects in organizations organization Structures.
Learning Objectives
• Understand the governance of projects within organizations
• Understand various organizational approaches to managing project work
• Understand the benefits and techniques of a Project Management Office
• Understand the importance and requirements for managing multiple projects within an organization
Definitions of organizational structures with projects
• Pure Functional organization• Projects fall within the organizational units
• Pure Project organization• Company consists solely of project teams• Used by companies that “do” projects
• Hybrid or Mixed organization• Some projects within the units • Some projects as self-contained units
• Matrix organization (Hybrid with prof PMs)• Various levels of matrix organizations• Project members belong both to project and
functional unit
Advantages of projects within functional organizations
• Highly flexible staff use• Ease of switching experts among
projects in same functional division• Technological continuity• Quicker career advancement of
specialists
Some problems of projects within functions
• Project not client focused• Different goals between functional
parent division and project• PM competes with FM for role of
central project responsibility• Slow response to client needs• Weaker project team motivation
than in pure project organization
Problem -- Complex Projects can overwhelm hierarchies
• Project Organization• Team members must coordinate complex
activities and process large amounts of information in tight time constraints
• Team members require multiple, complementary skills from multiple disciplines
• Project Processes• Fast track schedules and unplanned activities
require flexibility and commitment
Advantages of pure project
• PM with full project authority• Shorter communication lines than
hybrid organization• Higher project commitment of team• Faster decision making• Unity of command makes life easier
for staff• Organization is structurally simple
and flexible
Problems with pure project
• Stockpiling of expertise and equipment to assure critical state never reached
• Experts develop too much depth --- not enough breath
• Inconsistency in carrying out policies and procedures
• Projectitis: excessive attachment of team to project
• Team worries of “life after the project ends”
The Matrix Structure…
• Is a viable way to handle complex project activities within a hierarchical organization
• However, also has dangers• Imbalance of focus within the organization• Conflicts in responsibility, authority, and
power• Confusion for team members on evaluation
and career
Advantages of Matrix Approach• PM sole responsible for project
managing• Access to entire technology of firm• No worry about “life after project”• Rapid response to client need• Consistent with policies, procedures of
parent firm• Company wide sharing of resources• Flexible between “weak” and “strong”
matrix organization
Disadvantages of Matrix Approach
• Political infighting: PM against FM• Political infighting: PM against PM• Projects resist shutdown• Over reliance on negotiating skills of PM• Confusing for team members – who is
my boss?
Advantages of Strong Matrix
• Achieves coordination efficiencies• All specialists can be co-located• Faster resolution of interdisciplinary issues• Responsive to customer needs
• Ties incentives to customer needs• Rewards tied to customer goals
• Provides training for general managers• Exposes team to broad view of customer
needs and functional units• Uncovers leadership potential in team
Matrix organization – What is it trying to achieve?
• A matrix organization tries to achieve an optimum balance between two objectives• Growing and sharing deep technical expertise; vs• Responsiveness to rapidly changing customer
needs
• Emerging market trends are driving many organizations towards the strong matrix form
How to decide which approach is best?
• What is the critical success factor that makes your company competitive in the marketplace• Deep, current technical expertise• Fast response to market and customers
• Length of projects vs. appraisal cycles• Who do specialists need to please?• How much influence do the PMs have?
Policies required for Matrix approach
• Rules for assigning priorities to projects
• Authority and power of PMs• Physical location of project
specialists• Outsourcing policies• Budgeting and cost allocations
What is a Project Management Office?
• A PMO is a separate office, staffed with full time employees, to help coordinate all project activities within the organization.
Common Reasons why organizations formed a PMO
• Need for consistent project management - 65%
• Avoid project delays and help with planning - 50%
• Contain cost, improve project performance - 40%
• Improve customer satisfaction - 25%
Other Reasons to Establish PMO
• To establish and keep good project management processes
• To distribute project management expertise through organization
• To improve project success rate• To reduce project lead times• To consolidate project data• To own an “enterprise project
management” system
PMO Tasks (I)
1. Establish and enforce good project management processes
2. Assess/improve organizations project management maturity
3. Acquire enterprise project management system
4. Train and certify PMs5. Cultivate competent PMs
PMO Tasks (II)6. Consulting services for company PMs7. Help PMs with administrative details8. Risk evaluation9. Product “fit” for organization10.Monitor market changes and alert PMs
of potentially needed scope changes11.Review and limit organizations
OVERALL project risk portfolio
PMO Tasks (III)
12.Audits and project reviews13.Keep project management database14.Help launch new projects15.Recognize and reward project
management excellence16.“Home” for PMs17.Disseminate project management
knowledge
How to Build a PMO
• Get backing and sponsorship from senior management (VP or at least FM)
• Pilot project in VP/fm’s area of control• In second iteration, expand PMO to
cover the whole organization• PMO will self propagate due to it’s
usefulness
Potential PMO Problems
• Unrealistic expectations:• PMO may not save a project already in
trouble• PMO cannot correct upper management
failures such as:• Inflated project goals• Insufficient project support• Inadequate resource availability
What is Portfolio Management?
Projects
Programs
Portfolio
Portfolio – The prioritized set of all projects and programs
Program – a single, coordinated effort with multiple independent projects
Project – a unique effort with defined beginning and end with defined deliverables and resources
Why Portfolio Management?
• Unsure or what projects are active• Lack of understanding of project
interdependence• Uncertainty with regard to how projects
support organizational strategy• Resources that work overtime while
other resources are under-utilized• Consistent failure to meet project cost,
schedule, or milestones
Goals of Project Portfolio Management
• To limit the number of projects so that important ones get adequate attention
• To identify projects that support strategy• To eliminate undesirable projects – too
much risk, too many resources, too fuzzy, etc.
• To balance resources and needs• To balance short- medium- and long-term
returns
Getting Started
• Many companies are now doing portfolio management
• Usually start with PMO first• Many tools are available
• http://www.byu.edu/
Self Assessment Quiz
• List three organization structures to handle projects - What are the characteristics of each?
• What is the difference between a strong matrix and a weak matrix?
• List several responsibilities or activities that a PMO can do for an organization.
• What is project portfolio management? What benefits are derived from PPM?