MANAJEMEN INDUSTRI TEKNOLOGI INFORMASI (PERTEMUAN 1)

Project 

• A project is a complex, non-routine, one-time effort limited by time, budget, resources, and performance specifications designed to meet customer needs
• The major goal: to satisfy a customer’s need 
• A project can be considered to be any series of activities and tasks that have the major characteristics: 
• An established objective  Have a specific objective to be completed within certain specifications 
• A defined life span with a beginning and an end  Have defined start and end dates 
• Usually, the involvement of several departments and professionals  Are multifunctional (i.e., cut across several function lines) 
• Typically, doing something that has never been done before 
• Specific time, cost, and performance requirements 
• Have funding limits (if applicable) 
• Consume human and nonhuman resources (i.e., money, people, equipment)

The Project Life Cycle

• The life cycle recognizes that projects have a limited life span and that there are predictable changes in level of effort and focus over the life of the project
• Project effort starts slowly, builds to peak, and then declines to delivery of the project to the customer
• Four typically stages:
• Definition
• Planning
• Execution
• Delivery

• Definition
• specifications of the project are defined
• project objectives are established
• teams are formed
• major responsibilities are assigned
• Planning
• The level of effort increases
• Plans are developed to determine:
• What the project will entail
• when it will be scheduled
• whom it will benefit
• what quality level should be maintained
• what the budget will be
• Execution
• A major portion of the project work takes place—both physical and mental
• The physical product is produced
• Time, cost, and specification measures are used for control
• Is the project on schedule, on budget, and meeting specifications
• What are the forecasts of each these measures
• What revisions/changes are necessary
• Delivery
• Delivering the project product to the customer
• Customer training
• Transferring documents
• Redeploying project resources
• Releasing project equipment/materials to other projects
• Finding new assignments for team members

Project Management

• Is the art of creating the illusion that any outcome is the result of a series of predetermined, deliberate acts when, in fact, it was dumb luck
• Is the planning, organizing, directing, and controlling of company resources for a relatively short-term objective that has been established to complete specific goals and objectives.
• Furthermore, project management utilizes the systems approach to management by having functional personnel (the vertical hierarchy) assigned to a specific project (the horizontal hierarchy)

• Involves project planning and project monitoring
• Project planning
• Definition of work requirements
• Definition of quantity and quality of work
• Definition of resources needed
• Project monitoring
• Tracking progress
• Comparison actual outcome to predicted outcome
• Analyzing impact
• Making adjustments

• The Importance of Project Management
• Compression of the Product Life Cycle
• Global Competition
• Knowledge Explosion
• Corporate Downsizing
• Increased Customer Focus
• Rapid Development of Third World and Closed Economies
• Small Projects Represent Big Problems

• Successful project management can then be defined as having achieved the project objectives:
• Within the allocated time period
• Within the budgeted cost
• At the desired performance/technology level (at the proper performance or specification level)
• While utilizing the assigned resources effectively and efficiently
• With acceptance by the customer/user
• With minimum or mutually agreed upon scope changes
• Without disturbing the main work flow of the organization
• Without changing the corporate culture

• The potential benefits from project management are:
• Identification of functional responsibilities to ensure that all activities are accounted for, regardless of personnel turnover
• Minimizing the need for continuous reporting
• Identification of time limits for scheduling
• Identification of a methodology for trade-off analysis
• Measurement of accomplishment against plans
• Early identification of problems so that corrective action may follow
• Improved estimating capability for future planning
• Knowing when objectives cannot be met or will be exceeded

• Unfortunately, the benefits cannot be achieved without overcoming obstacles such as:
• Project complexity
• Customer’s special requirements and scope changes
• Organizational restructuring
• Project risks
• Changes in technology
• Forward planning and pricing

The Project Manager

• Management decides and implements the ways and means to effectively and efficiently utilize human and nonhuman resources to reach predetermined objectives (money, manpower, equipment, facilities, materials, information/technology)
• Project managers perform the same functions as other managers: they plan, schedule, motivate, and control
• The project manager is unique because she/he manages temporary, non-repetitive activities and frequently acts independently of the formal organization
• Project managers are expected to marshal resources to complete a fixed-life project on time, on budget, and within specifications
• Project managers are the direct link to the customer and must manage the interface between customer expectations and what is feasible and reasonable
• Project managers provide direction, coordination, and integration to the project team, which is often made up of part-time participants loyal to their functional departments
• Project managers are responsible for performance (frequently with too little authority)
• Project managers must ensure that appropriate trade-offs are made between the time, cost, and performance requirements of the project
• Project managers generally posses only rudimentary technical knowledge to make such decisions
• Project managers must orchestrate the completion of the project by including the right people, at the right time, to address the right issues and make the right decisions

Discussion

• What are the habits of successful project managers?
• I’m an experienced individual contributor but very new to project management. How do I get my new project up and going?

The Project Manager-Line Manager Interface

• Successful project management is strongly dependent on:
• A good daily working relationship between the project manager and those line managers who directly assign resources to projects
• The ability of functional employees to report vertically to line managers at the same time that they report horizontally to one or more project managers
• The project manager actually works for the line managers, not vice versa  the project manager is simply the agent through whom this is accomplished
• Projects manager depend on line managers
• Effective project management requires an understanding of:
• Quantitative tools and techniques
• Organizational structures
• Organizational behaviour

The Project Manager’s Role

• The project manager is responsible for coordinating and integrating activities across multiple functional lines
• The integration activities performed by the project manager include
• Integrating the activities necessary to develop a project plan
• Integrating the activities necessary to execute the plan
• Integrating the activities necessary to make changes to the plan
• The project manager must convert the inputs into outputs of products, services, and ultimately profits
• The project manager needs strong communicative and interpersonal skills, must become familiar with the operations of each line organization, and must have knowledge of the technology being used

The Line Manager’s Role

• A specific role for the functional manager
• The functional manager has the responsibility to define how the task will be done and where the task will be done (i.e., the technical criteria)
• The functional manager has the responsibility to provide sufficient resources to accomplish the objective within the project’s constraints (i.e., who will get the job done)
• The functional manager has the responsibility for deliverable
• The line manager’s problems:
• Unlimited work requests (especially during competitive bidding)
• Predetermined deadlines
• All requests having a high priority
• Limited number of resources
• Limited availability of resources
• Unscheduled changes in the project plan
• Unpredicted lack of progress
• Unplanned absence of resources
• Unplanned breakdown of resources
• Unplanned loss of resources
• Unplanned turnover of personnel

The Evolution of Project Management Systems

• A three-phase model:
• Phase One: Ad Hoc Use
• Phase Two: Formal Application
• Phase Three: Project-Driven Organization
• Phase One: Ad Hoc Use
• Typically begins with an individual or department champion initiating the use of one or more the basic project management tools in a project
• The tools appear to hold potential for improving project success
• Top management will have little or no involvement in the decision to use these tools
• In a few cases, these attempts end in failure
• Near the end of this phase, conflicts across functional lines often appear as tensions arise over the control and directions of projects
• Phase Two: Formal Application
• Various needs and inadequacies are recognized as barriers to project success
• Typical of this phase is the recognition that project management training is needed for every management level in the organization
• Top management takes an interest in better management of projects
• The need for quality control becomes an issue
• The concept of a customer or client for each project becomes part of the organizational culture
• Projects managers are given more control over the projects
• Questions relating to the effectiveness of the current organization structure are heard in private conversations
• Top management is not active in project selection and prioritizing projects
• Management needs a retreat to integrate strategic planning and projects
• Phase Three: Project-Driven Organization
• The outlook is long run
• Top management is now playing a significant role in setting strategy, in developing a balanced project portfolio, and in setting project priorities
• Project management is a part of the organizational culture
• The organizational structure has shifted toward a project matrix and project teams with dedicated resources
• Projects are integrated with accounting
• Training and policy manuals have been written for each phase of the project life cycle
• Termination of projects includes a project audit and evaluation of time, cost, and technical performance
• The outcome of this effort is disciplined, integrated, organizational approach to managing and implementing projects linked to strategic plans
• These three phase occur at different times depending on the type and size of the firm
• It is probably desirous to move to phase three as quickly as possible to compete more effectively
• Migration to excellence can be expedited by developing the skills and capabilities of every manager in the organization through training in project management

An Integrative Approach

• As the world becomes more competitive, the importance of managing the process of project management and “getting it right the first time” takes on new meaning
• Piecemeal systems fail to tie to the overall strategies of the firm
• Piecemeal project priority systems fail to prioritize project selection to resources and those projects that contribute most to the strategic plan
• Piecemeal tools and techniques fail to be integrated throughout the project life cycle
• Piecemeal approaches fail to balance the application of project planning and control methods with appropriate adjustments in the organization’s culture to support project endeavour
• Today emphasis is on development of an integrated project management process that focuses all project effort toward the strategic plan of the organization and reinforces mastery of both the project management tools/techniques and the interpersonal skills necessary to orchestrate successful project completion
• Integration in project management directs attention to two key areas:
• Integration of projects with the strategic plan
• Integration within the process of managing actual projects
• Integration of projects with the strategic plan
• In some organizations, selection and management of projects often fail to support the strategic plan of the organization
• Strategic plan are written by one group of managers, projects selected by another group, and projects implemented by another
• An integrated project system is one in which all of the parts are interrelated
• Mission, objectives, and strategies are set to meet the needs of customers
• Development of a mission, objectives, and strategies depend on the external (political, social, economic and technological) and internal (management, facilities, core competencies, financial condition) environmental factors
• Implementing strategies are the most difficult step; strategies are typically implemented through projects
• Prioritizing projects so that scarce resources are allocated to the right projects

• Integration within the process of managing actual projects
• The technical side of the management process
• Consists of the formal, disciplined, pure logic parts of the process
• Relies on the formal information system available
• Includes planning, scheduling, and controlling: Scope, WBS, Schedules, Resource Allocation, Baseline Budgets, Status Reports
• Represents the “science” of project management
• The socio-cultural side of the management process
• Involves the much messier, often contradictory and paradoxical world of implementation: leadership, problem solving, teamwork, negotiation, politics, customer expectations
• Centres on creating a temporary social system within a larger organizational environment that combines the talents of a divergent set of professionals working to complete the project
• Involves managing the interface between the project and external environment
• Represents the “art” of managing a project

Project-Driven versus Non-Project-Driven Organizations

• Project-Driven Organization
• All work is characterized through projects, with each project as a separate cost centre having its own profit-and-loss statement
• The total profit to the corporation is simply the summation of the profits on all projects
• Everything centres around the projects
• Non-Project-Driven Organization
• Profit-and-loss are measured on vertical or functional lines
• Projects exist merely to support the product lines or functional lines
• Priority resources are assigned to the revenue-producing functional line activities rather than the projects
• Project management in a non-project-driven organization is generally more difficult for these reasons:
• Projects may be few and far between
• Not all projects have the same project management requirements, and therefore they cannot be managed identically. This difficulty results from poor understanding of project management and a reluctance of companies to invest in proper training
• Executives do not have sufficient time to manage projects themselves, yet refuse to delegate authority
• Projects tend to be delayed because approvals most often follow the vertical chain of command. As a result, project work stays too long in functional departments
• Because project staffing is on a “local” basis, only a portion of the organization understands project management and sees the system in action
• There is heavy dependence on subcontractors and outside agencies for project management expertise
• Non-project-driven organizations may also have a steady stream of projects, all of which are usually designed to enhance manufacturing operations.
• Some projects may be customer-requested, such as:
• The introduction of statistical dimensioning concepts to improve process control
• The introduction of process changes to enhance the final product
• The introduction of process change concepts to enhance product reliability
• If these changes are not identified as specific projects, the result can be:
• Poorly defined responsibility areas within the organization
• Poor communication, both internal and external to the organization
• Slow implementation
• A lack of a cost-tracking system for implementation
• Poorly defined performance criteria
• The tip-of-the-iceberg syndrome can occur in all types of organizations but is most common in non-project-driven organizations
• On the surface, all we see is lack of authority for the project manager. But, beneath the surface we see the causes; there is excessive meddling due to lack of understanding of project management, which, in turn, resulted from an inability to recognize the need for proper training

Marketing in the Project-Driven Organization

• Getting new projects is the lifeblood of any project-oriented business
• Marketing projects requires the ability to identify, pursue, and capture one-of-a-kind business opportunities, and is characterized by:
• A systematic effort
• Custom design
• Project life cycle
• Marketing phase
• Risks
• The technical capability to perform
• In spite of the risks and problems, profits on projects are usually very low in comparison with commercial business practices
• One may wonder why companies pursue project businesses
• Clearly, there are many reasons why projects are good business:
• Although immediate profits (as a percentage of sales) are usually small, the return on capital investment is often very attractive. Progress payment practices keep inventories and receivables to a minimum and enable companies to undertake projects many times larger in value than the assets of the total company
• Once a contract has been secured and is being managed properly, the project may be of relatively low financial risk to the company. The company has little additional selling expenditure and has a predictable market over the life cycle of the project
• Project business must be viewed from a broader perspective than motivation for immediate profits. Projects provide an opportunity to develop the company’s technical capabilities and build an experience base for future business growth
• Winning one large project often provides attractive growth potential, such as (1) growth with the project via additions and changes; (2) follow-on work; (3) spare parts, maintenance, and raining; and (4) being able to compete effectively in the next project phase, such as nurturing a study program into a development contract and finally a production contract

Classification Projects