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PM Notebook - Chapter 2: Organizations

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This notebook summarizes project management concepts and terms in PMP context. Chapter 2 focuses on organizations, enterprise factors, and project attributes. Contents of this chapter are as follow:
* Enterprise Environmental Factors (EEFs)
* * Project Management Information System (PMIS)
* Organizational Process Assets (OPAs)
* Organization System
* Organizational Structure
* * Project-Based Organizations (PBO)
* Project Expediter vs. Project Coordinator
* Organizational Hierarchy
* Project Management Office (PMO)
* Organizational Project Management (OPM)
* * Organizational Project Management Maturity Model (OPM3)
* * Capability Maturity Model Integration (CMMI)
* Project Environment
* Project Complexity
* Project Success Factors
* * Internal Factors
* * External Factors
* Additional Terms

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PM Notebook - Chapter 2: Organizations

  1. 1. PM Notebook Summarizing Project Management Concepts for the PMP Exam Mohammad Elsheimy Road to PMP
  2. 2. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ENTERPRISE ENVIRONMENTAL FACTORS (EEFS) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 1 DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA/INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA/INFORMATION IS A PROPERTY OF THE AUTHOR. NONE IS INTENDED TO MAKE A PROFIT IN ANY WAY. THIS IS FOR PERSONAL USE ONLY.
  3. 3. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ENTERPRISE ENVIRONMENTAL FACTORS (EEFS) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 2 No great man ever complains of want of opportunity. Ralph Waldo Emerson
  4. 4. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ENTERPRISE ENVIRONMENTAL FACTORS (EEFS) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 3 Table of Contents Chapter 2 – Organizations ..................................................................................................................................... 4 Enterprise Environmental Factors (EEFs) ........................................................................................................... 4 Project Management Information System (PMIS)...................................................................................... 5 Organizational Process Assets (OPAs).............................................................................................................. 5 Organization System............................................................................................................................................ 6 Organizational Structure..................................................................................................................................... 6 Project-Based Organizations (PBO) .............................................................................................................. 8 Project Expediter vs. Project Coordinator ....................................................................................................... 8 Organizational Hierarchy.................................................................................................................................... 9 Project Management Office (PMO)................................................................................................................. 9 Organizational Project Management (OPM)................................................................................................. 9 Organizational Project Management Maturity Model (OPM3) ............................................................ 10 Capability Maturity Model Integration (CMMI)........................................................................................ 10 Project Environment........................................................................................................................................... 10 Project Complexity............................................................................................................................................. 10 Project Success Factors..................................................................................................................................... 11 Internal Factors ............................................................................................................................................... 11 External Factors............................................................................................................................................... 11 Additional Terms ................................................................................................................................................. 11
  5. 5. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ENTERPRISE ENVIRONMENTAL FACTORS (EEFS) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 4 If you want something done right… better hope you are in the right kind of organization. Enterprise Environmental Factors (EEFs) Conditions, not under the control of the project team, that influence, constrain, or direct the project. It is the way your company is set up, the way people are managed, the processes your team needs to follow to do their jobs... they all can have a big impact on how you manage your project. Internal –  People – Skills and culture.  Databases  Standards  Risk Tolerance  Resource Availability  Authorization System – How work is assigned to people. Ensures that every work package is done at the right time and in the proper sequence.  Organizational Governance Framework – a structured way to provide control, direction, and coordination through people, policies, and processes to meet organizational strategic and operational goals. o Alignment with organizational mission o Performance on time, cost, and scope o Communication with stakeholders External –  Weather  Marketplace Conditions  Laws and Regulations  Politics  Government and Industry Standards
  6. 6. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ORGANIZATIONAL PROCESS ASSETS (OPAS) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 5 Project Management Information System (PMIS) Part of EEFs. A computer-driven system to aid in the development of the project. It can calculate schedules, costs, expectations, and likely results. An example of a PMIS is Microsoft Project. Features of a PMIS – Scheduling Tools Work Authorization System – For authorizing the start of work packages or activities. Configuration Management System – It is a tool for establishing and monitoring consistency of a project performance, functional, and physical attributes. It manages items that require formal change control. It can store project management plan, risk register, calendars, and other project documents. Change Control System (CCS) – Includes standardized forms, reports, processes, procedures, and software to track and control changes.  Configuration/Change Control Board (CCB) – A committee that evaluates the worthiness of proposed changes. Information Collecting/Distribution System Organizational Process Assets (OPAs) Templates, forms, and previous work of the company, stored in corporate knowledge base (KB).  Templates  Contracts  Registers  Assessment Tools  Historical Data  Databases  Project files  Lessons Learned  Corporate/Organizational Knowledge Repository/Base – Where historical data, databases, and other data are stored.  Project Governance Framework – The organization’s established criteria, procedures, and guidelines intended to make sure projects meet organization’s strategic goals.  Personnel Administration – Includes employee development and training records and competency frameworks that refer to knowledge sharing behaviors.  Industry Project Management Body of Knowledge – sets forth guidelines and criteria to tailor the organization’s processes to satisfy specific needs of the project.  Change Control Procedures  Configuration Management Knowledge Base  Versions
  7. 7. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ORGANIZATION SYSTEM DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 6  Baselines Organization System  Structure and governance  Permissions  Work authorization  Employee discipline  System dynamics o Relationship between components o Policies o Bureaucracy Organizational Structure An organizational structure defines how activities such as task allocation, coordination, and supervision are directed toward the achievement of organizational aims. During project formation, there is always an element of confusion or lack of clarity regarding the balance of power between the project manager and the functional manager. If not resolved, such confusion manifests itself in conflicts regarding technical decisions, resource allocations, and scheduling later in the project. Organic/Simple –  Loosely organized business or organization.  The project manager likely has little control over the project resources and may not be called a project manager. Pre-Bureaucratic –  Totally centralized.  Strategic leader makes all key decisions and most communications are done by one on one conversations. Functional/Centralized/Bureaucratic/Traditional –  People who do similar tasks are grouped together based on specialty. Functional organizations are organized around the functions the organization need to be performed.  Functions include – HR, IT, Sales, Marketing, Administration, etc.  The Project Management role will be performed by a team member of a functional area under the management of a functional manager.  Resources are controlled and authorized by functional managers.  The Project Management role would act more like a Project Coordinator or Project Expediter who do not usually carry the title of Project Manager.  Project Management is considered a part-time responsibility.  Authority of the Project Manager is very limited.
  8. 8. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ORGANIZATIONAL STRUCTURE DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 7  Major difficulties arise when multiple projects need to be managed because of conflicts over the relative priorities of different projects in competition for limited resources. Divisional –  People are grouped into teams based on the products or projects that meet the needs of a certain customer.  An example is a company that runs many brands that each brand acts as an individual company. Multidivisional –  Same characteristics as functional, however, it has duplication of efforts within the organization, but not within each department or division of the organization.  Project manager has little authority in this structure and the functional manager controls the project budget.  An example, having an IT group within financial and manufacturing departments. Matrix Organization –  Groups people into functional departments of specialization, then further separates them into divisional projects and products.  They are organizations with structures that carries a blend of the characteristics of functional and projectized organizations.  Best for complex projects because of the mix of functional expertise and project management.  Matrix organizations can be classified as weak, balanced or strong based on the relative authority of the Functional Manager and Project Manager.  Weak Matrix – o Team has a blend of departmental and project duties. o The Project Manager is given a role of more like Project Coordinator or Project Expediter. Team members report to functional manager.  Strong Matrix – o The Project Manager is given much more authority on resources and budget spending.  The differentiations between Functional Organization vs. Weak Matrix and also Projectized Organization vs. Strong Matrix are not very clear cut.  The primary condition leading to conflict in matrix structure is ambiguous jurisdictions that’s when two or more parties have related responsibilities, but their work boundaries and role definitions are unclear.  The dual reporting relationship should be fixed by the project manager. Project-Oriented/Composite/Hybrid/Projectized – Projectized Organizations are organized around projects for maximal project management effectiveness.  The Project Manager is given more authority and resources control.  The Project Manager is responsible to the Sponsor and/or Senior Management.
  9. 9. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | PROJECT EXPEDITER VS. PROJECT COORDINATOR DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 8  The Project Manager is usually a full-time role.  Project managers may compete for stockpile resources.  Team members are usually co-located within the same office / virtually co-located to maximize communication effectiveness.  There can be some functional units within organization, however, those units are having a supportive function only without authority over the project manager  Team members are from several departments and are selected to create a task force to implement the project. Virtual –  An organization involving detached and disseminated entities (from employees to entire enterprises) and requiring information technology to support their work and communication.  Project manager has low authority.  Single point of contact for each group.  Communications can be challenging. Hybrid – A blend of the functional, projectized and matrix organization styles. Project manager’s power is unique to the structure. PMO Structure –  Provides uniform approach to all projects. Can be supportive, controlling, or directive (highest control).  Can feel disconnected from project managers, stakeholders, or team. Flat/Flatarchy Structure – Management is decentralized. Each employee is the boss of themselves. Project-Based Organizations (PBO) Project-Based Organizations (PBO) – temporary structures created to facilitate the execution of projects. PBOs can exist within all forms of organizations. The project staff could be full time or part time, and they report to the project manager. The project managers report to the manager of project managers. PBO facilitates project execution by speeding up project based decision making. Project Expediter vs. Project Coordinator Project Expediter – A project expediter works as staff assistant and communications coordinator. The expediter cannot personally make or enforce decisions. He usually collects or reports data to the project manager. Project Coordinator – Project coordinators have the power to make some decisions, have some authority, and report to a higher-level manager.
  10. 10. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ORGANIZATIONAL HIERARCHY DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 9 Organizational Hierarchy 1. Top / Strategic Management – Managers at the highest level. Their job –  Long-term objectives  Policies  Organizing 2. Middle Management – Implement and control plans of top management. Examples are factory managers and division heads.  Departmental objectives  Assignment of duties  Coordination 3. Supervisory / Operational / Lower Management – Operate the schedule of actions desired from the staff. Examples are supervisors, foremen, and inspectors.  Discipline  Supervision  Training Project Management Office (PMO) Also called project office and project headquarters. A PMO is the center of excellence for project management in an organization. It is a central office that oversees all projects within an organization or within a functional department. A PMO supports the project manager through software, training, templates, policies, communication, dispute resolution, and other services (audits, resource management, etc.).  Supportive – Consultative role, templates, training, etc.  Controlling Compliance through a framework, governance, templates, etc.  Directive (highest) – o Directly manages the project. o Can set dates for beginning and terminating projects. o Can select, manage, and deploy resources. o Can manage shared resources. o PM is part of PMO. Organizational Project Management (OPM) OPM is the systematic coordination and management of projects, programs, and portfolios in alignment with the achievement of strategic goals. You can think of OPM as a framework for keeping the organization as a whole focused on the overall strategy. It provides direction for how portfolios, programs, projects and other organizational work should be prioritized, managed, executed, and measured to achieve strategic goals.
  11. 11. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | PROJECT ENVIRONMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 10 Organizational Project Management Maturity Model (OPM3) OPM3 is PMI’s organizational project management maturity model. It is designed to help organizations determine their level of maturity (process capability) in project management. Capability Maturity Model Integration (CMMI) CMMI is a process improvement approach that helps organizations improve their performance. It can be used to guide process improvement across a project, a division, or an entire organization. Currently, it addresses three areas of interest –  Product and Service Development – CMMI for Development (CMMI-DEV)  Service Establishment, Management, and Delivery – CMMI for Services (CMMI-SVC)  Product and Service Acquisition – CMMI for Acquisition (CMMI-ACQ) Project Environment  Physical Elements – o Location of project work o Working conditions o Weather o Constraints o External EEFs  Social and Cultural Influences – o Political climate o Codes of conduct o Ethics o External EEFs  Organizational Culture and Structure – o Vision and mission o Values and beliefs o Cultural norms o Hierarchy and authority o Internal EEFs  Infrastructure Environmental Factors o Facilities o Equipment o Telecommunication Channels o Internal EEFs Project Complexity Complexity is a characteristic of a program or project or its environment that is difficult to manage due to (dimensions of complexity) –  Human Behavior  System Behavior  Ambiguity
  12. 12. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | PROJECT SUCCESS FACTORS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 11 Project Success Factors Internal Factors Those 10 characteristics found to be critical to project implementation success – 1. Project mission – Initial clarity of goals and general directions. 2. Top management support – Willingness of top management to provide the necessary resources and authority/power for project success. 3. Project schedule/plans – A detailed specification of the individual action steps required for project implementation. 4. Client consultation – Communication, consultation, and active listening to all impacted parties. 5. Personnel – Recruitment, selection, and training of the necessary personnel for the project team. 6. Technical tasks – Availability of the required technology and expertise to accomplish the specific technical action steps. 7. Client acceptance – The act of “selling” the final project to its ultimate intended users. 8. Monitoring and feedback – Timely provision of comprehensive control information at each phase in the implementation process. 9. Communication – The provision of an appropriate network and necessary data to all key factors in the project implementation. 10. Trouble-shooting – Ability to handle unexpected crises and deviations from plan. External Factors In addition to these ten critical success factors, all of which to some degree are within the control of the project team, four additional factors are out of project team's control. 1. Characteristics of the project team leader – Competence of the project leader (administratively, interpersonally, and technically) and the amount of authority available to perform his/her duties. 2. Power and politics – The degree of political activity within the organization and perception of the project as furthering an organization member’s self-interests. 3. Environmental events – The likelihood of external organizational or environmental factors impacting on the operations of the project team, either positively or negatively. 4. Urgency – The perception of the importance of the project or the need to implement the project as soon as possible. Additional Terms Central Organization – where your team comes together for the duration of the project and they do not work on anything else. Co-creation – is a management initiative, or form of economic strategy, that brings different parties together (for instance, a company and a group of customers), in order to jointly produce a
  13. 13. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ADDITIONAL TERMS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 12 mutually valued outcome. An example is consulting with stakeholders who are most effected by the work. Cultural Norms – describe the culture and the styles of an organization that can affect how the project is managed, such as work ethics, hours, view of authority, and shared values. Governance Framework – describes the rules, policies, cultural norms, systems, processes and procedures that people within an organization abide by. McKinsey 7s Model – is a tool that analyzes firm’s organizational design by looking at 7 key internal elements in order to identify if they are effectively aligned and allow organization to achieve its objectives.  Hard Elements – 1. Strategy 2. Structure 3. Systems  Soft Elements – 1. Shared Values 2. Style 3. Staff 4. Skills Organization Breakdown Structure (OBS) – is a hierarchical model describing the established organizational framework for project planning, resource management, time and expense tracking, cost allocation, revenue/profit reporting, and work management. Organizational Enablers – the skills and knowledge, the tools and resources, and the culture of the organization that will enable it to achieve strategy. Steering Committee – a committee that decides on the priorities or order of business of an organization and manages the general course of its operations.

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