Sangram Pandit - PM1 Term Paper

THE BARTLETT

Faculty of the Built Environment

PM1 : PROJECT MANAGEMENT

TERM PAPER

SANGRAM PANDIT

STUDENT NO: 1049073

MSc. Project and Enterprise Management Full Time

Term Paper Brief:

November 2010

Many project management text books focus upon the tools and techniques of project management

(e.g. Levy, 2000 cited in Walker, 2007). Others would argue that these tools and techniques have

insufficient focus upon the needs of the client and stakeholders and that our inherently complex

construction and engineering projects need to operate as open systems in order to provide

innovation and “customer delight”.

Objective:

To read and assimilate material from books, journals and other sources. To present a literature

review with references.

Word Count:

Approximately 3150 words excluding Diagrams, Figures, Abstract and Table of contents.

Tags:

Open Systems ; Customer Delight ; Closed System ; Project Organisation.

TABLE OF CONTENTS

Page No.

1. Introduction 01

2. Closed Systems – Traditional Approach: Brief Overview 02

2.1 Nature of Project success 03

2.2 Why the need to look beyond traditional closed system? 04

3. Open Systems: Brief Overview 05

4. Analysis of the Dichotomy 06

4.1 Project Objective 06

4.2 Project : Organisation and Environment 06

5. Conclusions and Recommendations 10

ABSTRACT

Construction is one of the oldest professions in the history of mankind, so it is without

doubt that one presumes that project management has its roots in the construction

industry.

Project Management as a professional discipline came into existence due to the rapid

development of Defence and Aerospace projects in the 1950’s and 1960’s.

The systems theory developed by Von Bertalanffy in late 1960’s brought about the

evolution of the management process. The management science took a leap of its own.

The seedling which started as controlling and planning procedures for project

management took shape of a whole new discipline within the systems theory, generally

known as the Hard Systems or the Closed Systems. Contemporary thinkers of the time

contributed to management science, the Soft systems approach also known as the Open

Systems Theory which challenged the whole Construction management process. The

debate which started in the 1960’s has taken a stronghold in the wake of current spate of

project failures during the past decade. The Egan Report to the Prime Minister of UK in

1998 ‘Rethinking Construction’ entails the need for the traditional approach to be

changed or to have a progressive evolution in the Project Management Discipline. This

paper traces the Open systems theory and its focus on Innovation in the Construction

Project Management to achieve Customer Delight. It dissects the dichotomy it shares with

the Traditional tools and techniques of Project Management while forming a Open

thought process and approach towards Value added project success and Customer Delight

instead of just Profitability.

S. S. Pandit – PM1 Term Paper 1

1. Introduction: Project Management

Project management as a concept took root in the early nineteenth century. It was initially

adopted by the US aircraft industry, and it gained maturity as a discipline during the US defence

and aerospace projects of the 1950’s and 1960’s. This time period saw the emergence of the

modern day project management philosophy, and distinctive management tools and techniques.

Modern Project Management has its roots embedded in operation research and systems approach

to management (Walker 2007)

Tools and techniques like Program evaluation and review technique (PERT), Critical Path Method

(CPM), earned value, value engineering, work breakdown structure were developed by the

defence and aerospace industry namely DOD and NASA (Rory Burke, 2000).

Project management has evolved as a business process, which is put to practice among enterprise

project management system. After the recession of 1989-1993, implementing Project

Management became a necessity for the emerging companies (Kerzner, 2009).

Kerzner (2009) and Rory Burke (2000) point out that in today competitive markets, changing

technologies, fierce business environments, adoption of project management would offer a real

solution. The PIPC Global Project Management survey of 2005 reiterates the same fact with a

resounding 95% of the Companies stating that adopting and integrating project management is

vital for their success.

Modern day projects have grown in size and complexity. The current avatar of project

management offers a systematic structured approach to managing projects. Rory Burke (2000)

commonly refers it as Management-by-projects. Morris and Pinto (2004) make obvious references

to the same concept and refer to it as “Management of Project”. This encompasses the total

process of from initiation to delivering a project and not just the planning and control techniques.

Walker (2007) elaborates the definition of construction project management as

‘ The planning and coordination and control of a project from conception to completion (including

commissioning) on behalf of a client requiring the identification of the client’s objectives in terms

of utility , function , quality , time and cost, and the establishment of relationships between

resources , integrating , monitoring and controlling the contributors to the project and their output,

and evaluating and selecting alternatives in pursuit of the client’s satisfaction with the project

outcome.’

Experts in the field generally classify this systematic approach into two categories: Closed

Systems and Open Systems. It is fatuous to proceed with the dissection of their dichotomy before

understanding their individual perspectives.


2. Closed Systems – Traditional Approach: Brief Overview

The traditional approach according to PMBOK (2004) also known as the classical management is

considered to cater to 5 functions:

Project Initiation

Project Planning

Project Execution

Project Monitoring and Control

Project Closure

The sum of all these functions is regarded as the Project Life-Cycle.

Traditional project management uses a typical set of techniques and procedures intended to define

and direct the work. It uses a sequential procedural planning with time, cost and resources as its

central functions.

Fig 1: Overview of the traditional Project Management (Kerzner 2009)

Henry Gantt’s Development of bar chart in early 1900’s and the techniques developed during the

aerospace and defence projects of the 1950’s laid the foundations for the plethora of Project

management tools and software’s (Burke 2000).

All of them rely on the sequencing of activities within affordable time durations and resources and

cost budgets.

The Foremost software’s which implement most of these procedures and techniques are:

MSP : Microsoft Project

Primavera Project Planning

Primavera Enterprise Solutions

Many of the time taking calculations are becoming easier using these tools. With time these tools

and techniques have become more flexible in their usage and also provides a efficient solution for


multitude of quantitative tasks or purposes. The following table is a compilation of popular tools

and techniques and their purposes.

Techniques / Tools Purpose

WBS – Work Breakdown Structure Basic definition of the project work.

Precedes the project schedule and cost

estimations

Bar charts or Gantt Charts Simple representation of the project schedule.

Does not show the precedence relationships

among activities

Project Network techniques: PERT , CPM ,

PDM , GERT and other

Net work techniques for work scheduling.

Provide the analysis of the scheduling impacts

the activities have on each other and the

determination of critical activities and float

times. Base of cost estimation,

Resource allocation and management, and risk

analysis

Cost schedules Identification of the capital requirements for

resources. Estimation of realistic budgets that

provide standards against which project

performance is measured.

Project Control: PERT , Variance Analysis ,

Earned Value and others

Assessment of project performance with the

generation of performance indicators. Provide

for the detention of project overruns and the

need of corrective actions. The WBS , GANTT

Charts and other scheduling techniques are

usually incorporated in the project control

process.

Table 1: Overview of traditional Project Management Tools and Techniques (Rodrigues 1994)

2.1 Nature of Project Success

The ultimate aim of any project manager is to achieve project success.

PMBOK (2004) and Walker (2007) define success when project is

1) Within Time

2) Within Cost or Budget

3) At the desired performance /technology level – functional satisfaction


4) While utilizing the assigned resources effectively and efficiently

5) Accepted by the customer or Value for money

Project success parameters are derived from the intellectual perspective of project management

essentially as an execution discipline: of delivering a project “on time, in budget , to scope’

(Morris, 2003).

2.2 Why the need to look beyond traditional Closed systems?

The basic reason is due to inability to achieve project success in the current modern era.

The PIPC Global Project Management survey indicates that 58% of projects fail to deliver its true

business value. Most of the project managers and experts consider the traditional approach to be

immature.

Organisations are exposed to increasing rate of changes, along with the growing complexity of

projects and of the environment (Rodriguez 1994). The traditional approach is not conceived

keeping such complex environment in mind. The analysis given by closed systems is centered on

logic of the project work Structure (Rodriguez 1994).

Closed systems contains nothing detailed on project strategy , nothing on project definition , little

on value management , nothing on technology management and little on the linkage with

programs and portfolios. It concentrates only on implementation stage; there is no value addition

during front-end and initial stages of the project life-cycle (Burke 2000).

It fails to consider the broader aspect of project objectives (Morris 2003; Walker 2007; Kerzner

2009).

The industry was in a state of inertia to adapt a new approach to overcome all the shortcomings

till the Egan Report 1998 to the Prime Minister for Rethinking Construction, which stressed on 4

key areas namely Client engagement, Integrating teams and supply chain, People issues and

Enhancing the value of the product (Walker, 2007).

Experts and researchers use the word ‘Hard Systems’ with the same reference to Closed Systems.

The analysis of the dichotomy between Open and Closed systems will further throw light on the

same.


3. Open system: Brief overview

Systems theory took root in General Systems Theory (GST) by Ludwig Von Bertalanffy in 1968.

The open systems approach is based on Soft system methodology (SSM). Checkland (1981)

advocates the soft system methodology as a general problem solving approach but not a method,

while he denotes hard systems approach to problem solving as a method. Checkland (1981) uses

the terms ‘Systems Engineering’ and ‘Systems Analysis’ to describe these hard systems. The soft

systems approach to problem focuses on systems taken as a whole and not on their component

parts taken separately (Checkland, 1981; Ackoff, 1971). Checkland (1981) considers soft systems

as human activity systems and holds them on a higher level than just physical operations of a

system. Such an approach is concerned with the total system performance (Ackoff, 1971).

According to Ackoff (1971), the Open systems concept did not gain momentum despite of its

importance because there was no unified or integrated set of such concept and the literature was

widely dispersed.

Walker (2007) believes that open system approach to project management as a holistic view of the

project management process. This approach has a revolutionary impact on one’s thinking about

the relationship between performance and project objectives as it is more closely aligned with the

stake holders, project sponsors or client’s perspective (Morris, 2004). The project management

process is taken in a wider context including all soft factors, internal and external to the project.

Open systems focuses on the idea of customer delight and delivering value and in depth

understanding of their needs. It compliments the whole concept of business strategy and value

added project performance while adding value to its customers, known as ‘Value driven business’

(Blockey and Godfrey, 2000). The open system approach stresses the contribution of the

interrelationships of the parts or components of the systems and the systems adaption to its

environment in achieving its objectives. Walker (2007) explains the benefit of open systems to

construction project management is the structuring of organisation in a way as to achieve client’s

objectives. Understanding such reciprocal interdependencies requires more effort and systematic

approach rather than just linking or plan sequential activities which are interdependent. The

awareness of this aspect has encouraged more authors and experts to focus on the management

needs of Projects (Walker, 2007).


4. Analysis of the Dichotomy

The proliferation of personal computers & an explosion of software’s related to project

management during the 1990’s made the use of traditional tools and techniques a norm (Burke

2000). These tools and techniques are just monitoring devices that declare the position too late

after the event to take corrective action (Walker 2007). The defence and aerospace projects had

considerably stable conditions and almost no constraints on resources and budget when these tools

and techniques were developed. The current conditions faced by the construction industry and its

clients are very complex and face numerous uncertainties and are affected by numerous external

factors. Walker (2007) explains that projects are becoming increasingly complex, not necessarily

technologically but in terms of specifying objectives and hence organisationally. But the

engineering background of many in construction has instilled the closed system ethos (walker,

2007).

The changing need have dictated a new open outlook towards Project Management. The further

analysis is pertaining to the original argument of customer delight.

4.1 Project Objective

The clients brief is traditionally regarded as the objective of the project. But this brief is generally

unsatisfactory or unclear about time and cost or is deficient to the real needs of the customer. The

interest of stakeholders or beneficiaries also has to be taken into account. Working towards a

unified goal complicates the concept of establishing the project objective (Walker 2007). The

most important aim is to develop an objective at the front-end.

The closed system works with the assumption that the goals are clearly defined and need no

further development. They address the task of most efficiently reaching the defined goal

(Crawford & Pollack, 2004). Hall (1962) states that such a closed system is basically an

engineering one about how to meet a defined need (cf. Morris, 2004).

The current construction project involves numerous independent firms and professions. The

arising conflicting objective due to the same, increase the degree of uncertainty inherent in the

objective. Walker (2007) believes that open system approach helps all the contributors to be

aware of the uncertainties and respond accordingly, either to adopt the best approach towards the

unified objective or by contributing to identifying and rectifying deficiencies towards an objective

to achieve customer delight.

4.2 Project: Organisation & Environment

The traditional approach abides by the classical hierarchy in ordering and controlling

organisation. Walker (2007) points out that the general reaction to this hierarchy is negative and it


is out of date and inefficient. The construction projects under closed systems are still viewed as

method and process oriented. It neglects the organizational structures and business value of the

product (Kerzner 2000). A construction project organisation should therefore be designed to adapt

and reflect to its environment. Open system adapts to events and occurrences outside the system

also regarded as the System Environment (Walker 2007). Checkland (1981) explains the project

and its entire system including system environment as intelligible systems. He denotes all

complex modern projects as intelligible systems.

Closed systems tend to be non-participative. The open systems imbibes a participative,

collaborative and facilitative approach which promotes crossing professional boundaries to

express views while addressing and issues and problems (Crawford and Pollack, 2004)

Pryke and Smith (2008) explain the concept from a relationship point of view. The relationship

approach to project management aims to improve the performance on project delivery by adding

value and satisfying client’s needs by socially managing relationships between people, people and

firms and between firms. This is highly relevant to the current construction project scenario

involving coalitions, partnering and numerous professional disciplines (Pryke and Smith 2008).

Scott (1992) refers to original rational models of organisation like Taylor, Fayol, Webber and

natural models like Bernanrd , Mayo as closed system views as they did not formally incorporate

interaction with the environment within their system (cf. Walker 2007).

Kerzner (2000) disintegrates the interaction between organisation (project system) and its

environments into two broad categories namely: Macro-Environment and Micro-Environment.

The following figure aptly explains the systems and its environment and their factors.

Fig 2: Inferred from Kerzner 2000.


Walker (2007) states that there is no quantitative method to properly measure the impact of

environmental forces on construction projects , but stresses that just the recognition and

understanding of their effect on projects permits them to anticipate , adapt and respond to any

changes in the environment. Open systems is dynamic and adapts to its environment by changing

its structure and process. Business organisation are analysed as a function of open systems.

Micro-Environment

Internal Factors

Macro-Environment

External Factors

Customer Political

Stakeholders Economic

Beneficiaries Socio-cultural

Suppliers Technological

Competitors Environmental

Employers Legal

(Table 2: Data inferred from Kerzner, 2000; Walker, 2007; Winch 2010).

Assessing these factors from the table, Walker (2007) believes that the traditional organisational

structures does not possess the ability to adopt the changes in the system environment due to the

authoritarian reporting structures or lack of open relationship by all the contributors. The open

systems approach enables to establish relationships during design or organisation which in turn

allows a properly designed control function with appropriate feedback mechanisms to overcome

the deficiency and operate effectively. Walker (2007) further points out that this approach to

construction project management in structuring organisations effectively contributes to clearly

define the objective.

So the process of construction is now a subsystem of the clients system which needs to be

integrated at the established boundary. The objective of this integrative device is to recognise and

take action on changes in the client or construction process environment in terms of maximising

the benefit to the client (Walker, 2007).

Establishing and defining objectives at the front-end and managing evolutions of project to

achieve business success, brings the whole project organisation into a more sophisticated view in

terms of accomplishing project success. The new maturity models of project management reflect

this theory of improving overall performance and achieving customer delight than just achieving

initial baseline targets (Morris, 2004).


Objectives of Project Management in construction industry as defined by Walker (2007) are:

1) Identifying goals, communicating and adapting the systems objectives.

2) To ensure that subsystems of the system are working efficiently and towards a unified

goal.

3) To ensure that proper connections and relationships are established between the

subsystems.

4) To relate the whole systems to its environment and adapting the system as required in

response to changes in its environment.


5. Conclusion and Recommendations

Peter Morris (2004) points out that the execution view of Project Management is increasingly

being recognised as having shortcomings and not always the appropriate view of the discipline.

But the importance of the tools and techniques cannot be negated as well. Crawford and Pollack

(2004) state while qualitative data of open system approach provide rich indepth understanding of

the situation, the quantitative tools and techniques can be used to translate subjective judgements

into precise metrics. Companies still prefer quantitative techniques for performance measurement

as they are easy to record and analyze. Walker (2007) and Kerzner (2000) reiterate the use of

GANTT Charts, PERT, Cost Analysis and Earned Value Analysis as integral parts of the Project

management discipline.

Improved project management methodology can be achieved by exploring the potential synergy

of combining closed systems, traditional tools and techniques and open systems.

Each system is part of a larger system and also comprises of other systems. This ideology is apt to

be inculcated into the Project management evolution. Blockey and Godfrey (2000) elaborate on

the same by stating that all closed systems are understood and managed through open systems. in

fact it is better to interpret closed systems as being embedded in Open systems (cf. Walker 2007).

Project management which has its roots in management is not a proper science by definitions. It is

concepts and approaches towards the process of talking any issue. So one’s approach will depend

upon the extent of knowledge and personal experience.

The latest PRINCE 2 Methodology recognises the concept of customer delight as it stresses that

the ‘user’ should be involved in all stages of development and that the project should be managed

under the direction of all parties involved (Neal, 1995).

It took almost 40 yrs for the construction industry since the Phillip’s report of 1950 to Emmerson

report of 1962 to the Latham report of 1994 to realize the importance of Project Management and

establishing it as a professional discipline. The inertial within the building industry and

professions which stifled innovation (Marian Bowley 1966 cited in Walker 2007) has diminished.

The increased awareness has seen a spurt in growth of Project management certifications and

societies like PMI, APM, AIPM, IPMA, PRINCE 2, ProgM. Given the pace of change in the

construction industry, Project management as a discipline will surely evolve with the

amalgamation of traditional tools and techniques and Open system Approach. The current

recession might even act as a catalyst and bring about a fast change in the discipline and move the

focus from only ‘achieving profits’ to achieving ‘Value added business success’, ‘innovation’ and

‘Customer Delight’.


REFERENCES

1) Checkland, P (1981), Systems Thinking, Systems Practice, Chichester: John Wiley & Sons

2) PIPC Global Project Management Survey 2005

[Http://www.pmportal.co.uk/uploads/documents/PIPCsurvey.pdf], 2005.

3) Winch, G (2010), Managing Construction Projects: An information processing approach,

2nd ed., West Sussex: Wiley-Blackwell.

4) Walker, A (2007), Project Management in Construction, 5th ed., London: Blackwell

5) Pryke, S and Smyth, H (2008), Management of Complex Projects: A relationship

approach, (ed), Oxford: Blackwell.

6) Burke, R (2000), Project Management: Planning and control techniques, 3rd ed.,

Chichester: John Wiley & Sons.

7) Kerzner, H (2009), Project Management: A systems approach to planning, scheduling

and controlling, 10th ed., New York: John Wiley & Sons.

8) PMBOK Guide (2004), A Guide to Project Management Book of Knowledge, 3rd ed,

Project management Institute Inc.

9) Kerzner, H (2000), Applied Project Management: Best practices on implementation, New

York; Chichester: John Wiley & Sons.

10) Blockey, D & Godfrey, P (2000), Doing it differently: Systems thinking for rethinking

construction, London,: Thomas Telford publishing.

11) Crayford, L & Pollack, J (2004), Hard and Soft Projects: A framework for analysis,

International Journal of Project Management, (2004), Volume 22(2004), 645-653

12) Rodrigues, A (1994), The role of system dynamics in Project Management: A

comparative analysis with traditional models, International system dynamics Conference,

1994, 214-224.

13) Morris, P.W.G (2004), Science, Objective knowledge, and the theory of project

management, ICE – Civil Engineering, Volume 150(2), 82-90.

14) Morris, P.W.G (2003), The Irrelevance of Project management as a professional

discipline.

[Http://www.bartlett.ucl.ac.uk/research/management/moscow2003.pdf], 2003

15) Neal, R. A. (1995), Project Definition: The soft systems approach, International Journal

of Project Management, (1995), Volume 13(1), 5-9.

16) Ackoff, R.L (1971), Towards a Systems of Systems Concepts, Management Science,

(1971), Volume 17(11), 661-671.

17) Morris, P and Pinto, J (2004), the Wiley Guide to Managing Projects, New York: Wiley.

Sangram Pandit - PM1 Term Paper

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