Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 1MGT610Lecture 2The Impact...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 2Module Topics and Objecti...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013Value PM: Core Conflict in Maximization ParadigmM...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013Plans are Nothing, Changing Plans isEverythingThe...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 5Conceptual Framework of P...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 6Conceptual Framework – Va...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 7Conceptual Framework – Va...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013Conceptual Framework – Variable MeasurementsFor a...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 9Empirical Findings - Samp...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 10Empirical Findings – Cor...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 11Empirical Findings – Pat...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 12Empirical Findings – Pat...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 13Empirical Findings – Eff...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 14GoalChangesEmpirical Fin...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 15Summary of Empirical Fin...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 16Summary of Empirical Fin...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013Definitions of Project Risk and Uncertainty• Proj...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013Exploratory case based interview study• 42 case s...
Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013• Stakeholder capabilities and dynamics are the m...
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Transcript of "Week02 slides spring_2013"

  1. 1. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 1MGT610Lecture 2The Impact of Project Risks andUncertainties
  2. 2. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 2Module Topics and ObjectivesThe role of project plans and changes– Importance of quality of project planning.– Recognize that plan changes and goal changes aredifferent.– Analyze the impact of plan and goal changes onproject value.– Analyze the impact of contextual factors on plan andgoal changes.
  3. 3. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013Value PM: Core Conflict in Maximization ParadigmMaximizeProjectValuePrerequisiteRequirementObjectiveThe management core problem:– Management of change: Opportunity discovery andexploitation.ExploitOpportunitiesNot ExploitOpportunitiesInitialRequirementsMetStakeholderExpectationsMetPM’sValueMindset3
  4. 4. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013Plans are Nothing, Changing Plans isEverythingThe Impact of Changes on ProjectSuccessFor academic use only. 4
  5. 5. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 5Conceptual Framework of Project Planning and ChangingEfficiency CustomerSatisfct.GoalChangesPlanChangesQuality ofPlanningContext++++++------+Hypothesized Relations between the Planning Variables and Success
  6. 6. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 6Conceptual Framework – Variable Definitions– Plan changes: frequency– Goal changes: importance and frequency– Planning quality: work breakdown, resourceallocation, scheduling, budget– Success: efficiency, customer satisfaction– Context• Technical Risks: demanding• Importance: usefulness, importance fororganization• Experience: similar project• Manpower: personnel losses or transfer• Parallel Projects: undertaken at the same time• Breakthrough: technological
  7. 7. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 7Conceptual Framework – Variable MeasurementsScale MeasuresEfficiency(Alpha:0.86)1. The project had come in on schedule2. The project had come in on budgetCustomersatisfaction(Alpha:0.81)1. The clients were satisfied with the process by which this projectwas completed2. The clients are satisfied with the results of the projectPlan changes The project plans (schedule, personnel, budget) were often changedGoal changes(Alpha:0.83)1. Project goals were often changed2. At least one major project goal was changed considerablyPlanning quality(Alpha:0.85)1. The entire project task (scope) was structured in work packages.2. Every work package was allocated with a specific time allowance.3. We knew which activities contained slack time or slack resources.4. All work packages had a predecessor and a successor workpackage (except the first and the last).5. There was a detailed budget plan for the project.6. The precise demand for key personnel (who, when) was specifiedin the project plan
  8. 8. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013Conceptual Framework – Variable MeasurementsFor academic use only. 8Scale MeasuresTechnical risks(Alpha:0.79)1. The task was technically demanding.2. The completion of the business goals included high risks.Importance(Alpha:0.78)1. It was important that the results of the project could be used assoon as possible2. The implementation of the project was important for theorganization’s policy3. The implementation of the project was important for the success ofthe organizationExperience The projecting company had experience with the solution of similarproblemsManpower The project team did not experience any significant personnel lossesor transfer during the project’s developmentParallel projects The completion of the project depended on other projects,undertaken at the same time.Break through The project was not subject to any recent technologicalbreakthrough, which could have rendered it obsolete.
  9. 9. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 9Empirical Findings - Sample DescriptionKind of Project Absolute frequency Relative frequencyMachine tool manufacturing 25 5.6%Plant construction 61 13.6Building construction 30 6.7Product development 116 25.9Reorganization 52 11.6Software 109 24.3Others 55 12.3Total 448 100.0%Returned Questionnaires: 43%, N= 448 (257 successful, 191 unsuccessful)Respondents: Project Leader 46%, Team 27%, Others 27%
  10. 10. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 10Empirical Findings – Correlations between Contextual andPlanning VariablesQuality ofPlanningGoalChangesPlanChangesPersonnel Constraints n.s. .226** .226**Parallel Projects n.s. .202** .174**Occurrence of Breakthrough n.s. .247** .127**Technical Risks n.s. .175** .165**Importance .204** n.s. n.s.Experience .170** n.s. n.s.**p<=0.01, n.s. – not significant
  11. 11. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 11Empirical Findings – Path ModelEfficiency CustomerSatisfct.GoalChangesPlanChangesQuality ofPlanning-.27 -.21+.50+.61+.14+.27-.16-.23n.s.n.s.
  12. 12. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 12Empirical Findings – Path Model (total)Efficiency-.20R2= 26%Cust. Sati.R2= 55%+.61TechnicalRiskGoalChangesPlanChangesQuality ofPlanningPersonnelConstr.ParallelProjectsBreakthroughImport.Experie.+.16 +.15 +.14 +.18+.11-.16-.21-.23+.50+.14+.16+.20-.27+.27
  13. 13. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 13Empirical Findings – Effects of Success FactorsPlanning Variables/ Impact onEfficiencyDirectEffectIndirectEffectTotalEffectQuality of Planning +.27 +.08 +.35Goal Changes -.21 -.10 -.31Plan Changes -.23 - -.23Planning Variables/ Impact onCustomer SatisfactionDirectEffectIndirectEffectTotalEffectQuality of Planning +.14 +.25 +.39Goal Changes -.15 -.19 -.34Plan Changes - -.14 -.14
  14. 14. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 14GoalChangesEmpirical Findings – Calculation of Effects (Ex.)• Indirect Effects of Goal Changes• (+.50 * -. 23) = -.10• = Indirect Effect -.10 ( )• + Direct Effect -.21 ( )• = Total Effect -.31Efficiency+.50-.23-.21PlanChanges
  15. 15. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 15Summary of Empirical Findings• The influences of planning and changes on project success– The positive total effect of the variable quality of planning (+.35and +.39) is completely overridden by the negative combinedeffect of plan and goal changes (-.54 and -.48)• The interactions between the planning variables– The quality of planning reduces the level of goal changes (−0.27),it does NOT affect plan changes– Changing project goals leads to changes of project plans (0.50)• The influences of context on the project planning activities– Strategic importance and the level of experience of the projectteam affecting only the quality of planning– The others influence goal changes and plan changes
  16. 16. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013For academic use only. 16Summary of Empirical Findings• Plan changes and goal changes are different!• Goal changes will lead to plan changes• The influence of frequent changes on project value issignificantly negative• The quality of project planning can reduce goal changes• The causes for changing project plans are contextual-related
  17. 17. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013Definitions of Project Risk and Uncertainty• Project Risk– Project risks also known as the Known-Unknowns arebasically events, circumstances, situations orconditions that have a potential negative impact onmeeting predefined project objectives.• Project Uncertainty– Unexpected and unforeseen project situations withpotential significant impact on the value of a project.For academic use only. 17
  18. 18. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013Exploratory case based interview study• 42 case studies• 90-minute interviews with semi-structured questionnaire• Creation of case study protocol and databaseResearch MethodProject Category FrequenciesInformation Systems Projects 20Product and Service Development Projects 9Construction Projects 4Business & Organization Change Projects 3Research & Development Projects 2Project-like tasks 4Total 42For academic use only. 18
  19. 19. Mgt 610 Strategic Perspectives on Project Management© Thomas Lechler 2013• Stakeholder capabilities and dynamics are the most frequent source ofuncertainties!• Mergers and acquisitions and politics lead to uncertainty.Categories of UncertaintiesUncertainty Categories Uncertainty Sources FrequenciesStakeholder uncertainty Inexperience, change, contracts 18Organizational uncertainty M&A, politics, unknown legacy system 9Technological uncertainty Tech. issues, tight specs 8Contextual turbulences Legal, market 6Project characteristics Unknown complexity 3Malpractice Self induced uncertainty 2For academic use only. 19
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