This report has studied project management through examples of the author's experience. Discussed elements of the project management and proposed some key aspects which enable business succeed in small and big projects.
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THE NEED FOR PROJECT MANAGEMENT.
1. 1
A DISCUSSION OF THE NEED FOR PROJECT MANAGEMENT.
Abstract
This report has studied project management through examples of the author's
experience. Discussed elements of the project management and proposed some key
aspects which enable business succeed in small and big projects.
From the author's point of view most critical for the project is a communication
management. Also, proposed to reinforce traditional approach to Project Management by
using qualitative characteristics: relevance and reliability of the quality of project
communications.
Purpose of those actions oriented to reinforce project's Stakeholders the decision-
making process and encourage mutual trust and respect among them through the project
life.
Project and Project management. Real life examples.
In the learning materials of the Durham Business School (2012) is present a
definition of a project as "a temporary group activity designed to produce a unique product,
service or result".
This definitions reminds me of a statement I have heard years ago from a Project
Manager: "We are here for specific tasks, and in spite of the similarity of the workplace
(the same oil field) and the scope of work (construction of new wells during modernization
of an oil treatment plant), the work is a unique as unique as everyone on our team,
because there is no similar project with these parameters; and thus all staff should pay
close attention to their duties and not rely on the fact that if the previous project we
participated in was successful, then you can do this one with less effort”.
Slack, N. Chambers, S. Johnston, R. (2010, p.459) have defined a project as " a set
of activities with a definite starting point and end point, which pursues a specific goal and
uses a specific set of resources."
Oxford Dictionaries (2012) has another definition «An individual or collaborative
enterprise that is carefully planned to achieve a particular aim".
2. 2
Thus, project management focuses on the following elements: a) the purpose of the
project, b) the beginning and end of the project (project period) and c) the resources
needed for the project.
In general, the primary goal of any business is making a profit, and the source of
profits is the customer - the only participant in the project environment.
Kotler, P. and Keller, K. (2006) says that the customer is often not interested in how
business is conducted but in the outcome that will bring him added value.
Therefore, the most effective approach is to implement "customer oriented
business". In order to achieve this goal, you need to know to what extent these three
parameters mentioned above are important for a particular customer.
There are project stages for every project, large or small. Durham Business School
(2012a).
For instance, here is an example from family life on "buying clothes for a teenager" .
The concept stage
The goal - buy seasonal clothes for a teenager
Time - buy on the weekend, and certainly before the season starts
Value - commensurate with the family’s available income
Design and quality - matching the child's age and conditions of use
Talk with your child (customer) to determine the most appropriate type of clothes
prior to buying, because in some cases the lack of prior discussion results in parents
spending hours in the shop and using their own time to decide on the most
appropriate clothing to buy.
The planning stage
Planning the place and time to meet and how to get to the store of interest.
Considering external conditions: less traffic on the roads, or fewer people in the
store, or the time of the most attractive discounts.
Considering the opportunity to complete this purchase on time and still having time
for personal activities (theater, meeting with friends, a trip to the country ..)
3. 3
The design stage
This stage involves taking into account all the elements necessary to make the
purchase.
Determining the route to the store, that the car is filled with gas and properly
equipped, and the availability of funds in the family.
The child has a mobile phone and knows the appointed time to exchange calls to
verify the meeting place.
The implementation stage
The choice of who will go shopping, considering it most likely that anyone who is a
parent is busy and cannot go to the store.
Considering the option to order it on the Internet, for anyone who is very busy and
relying on previous successful experience of buying high quality.
The closing stage
On completing purchase, receiving the sales slips and also advice on how to use
this clothing, i.e., what temperatures it is appropriate for and washing and ironing
temperatures.
This example gives a fairly colorful description of Project stages and the need to
manage all stages of it; but in my opinion, the most important element in a project
and project management is communication management.
The importance of communication management in a project.
In general, we have noticed that most newcomers pay more attention to work
performance results and less to progress reports.
Employees sometimes try to over-perform a job and keep quiet about current
progress, thinking to gain more respect from their managers for surprising performance.
In the worst cases, the employees have to helplessly look for solutions for the failed task
and do not have the courage to share the problem with colleagues or with management,
which could ultimately lead to failure of the interrelated elements of the project.
The underlying reason for this is that despite the goal and mission of the project,
each of the participants in the project has a lot of self-interest coming from level of training,
4. 4
experience, psychological characteristics and external and internal features, which
ultimately leads to different interests and understanding of the need for individuals to share
information for the benefit of the project.
Communication management is a valuable element of project management, but it
cannot be separated from the entire project, which consists of the following interlinked
elements: Integration, Stakeholders, Scope, Resources, Time, Cost, Risks, Quality and
Procurement.
However, Communication is more important than the other elements listed above,
because many experts say that people are the greatest Asset in a project, which leads to
the conclusion that how effectively they are organized and informed is a prerequisite for the
project’s success.
People are the only driving force behind a project, and practical experience shows
that in some projects replacing the project managers leads to acceleration and better
project performance.
Conditions for a project’s success are often not directly related to the new manager's
experience and technical knowledge, but simply to the ability to organize teamwork and
relying on the professionals in the project team.
In most situations, implementation of communication management was needed to specify
the aims of the project and role of the each project member.
Most project managers try to get better information on the project as soon as
possible in order to make timely and appropriate decisions and set objectives for
professionals and teams of professionals to implement them.
In this case, is possible to rephrase (Meredith and Mantel. 2012, p.460) and say the
following: "It is important that the communication and information distribution system is a
closed-loop cycle between the project team and stakeholders".
Here is an example of this. More than 15 years ago, I was appointed as the project
manager of a small project with several producing oil wells. The project was funded and
managed directly by the shareholders, and so I regularly reported project's progress to
them.
Since my previous experience in geology, I carefully and professionally monitored
the operating mode of the wells. Unfortunately, my previous experience was overruled by
5. 5
the shareholders’ instructions to increase production rates from the wells above current
rates. I repeatedly justified my argument, referring to disastrous consequences of
recovering oil in later phases of oil field development.
This was a conflict of interests and I did not understand my place in the hierarchy.
In reality, the reason was simple. The shareholders needed substantial funds to
repay a loan and also needed to obtain new ones, and therefore they were interested in
increasing production and improving the attractiveness of the project.
If I had had this information beforehand, I would have been more proactive and able
to follow their instructions and also mobilize a project taskforce to look for any appropriate
compensatory measures to maintain oil field development.
Slack, N. Chambers, S. Johnston, R. (2010, p.465) have proposed stakeholder's
interest and power, which have to be considered by any project manager while establishing
communication plan and definition information expectations among project team and
stakeholders. (Figure 1.)
High
Keep
satisfied
Manage
closely
Stakeholder
power Monitor Keep informed
Low Low High
Stakeholder Interest
Figure 1. The stakeholder power interest grid. Source: Adapted from Slack, N. Chambers,
S. Johnston, R. (2010, p.465).
In the learning materials Durham Business School (2011b) have been stated "A
good communications system will provide the stakeholders with what they genuinely need,
6. 6
without deterring them from asking for additional information that they may believe they
would like."
This information also enables stakeholders to reinforce the decision-making process
during the project life cycle. In my opinion, it is worth using criteria recently defined in the
financial accounting domain and which may be similar to them.
The Governmental Accounting Standards Board (2012) is stating: "The objectives of
Financial Reporting are relevance, understandability, comparability, timeliness,
consistency, and reliability. The three keys to effective communication are intended
audiences, multiple levels of reporting, and forms of communication. "
Setting up such criteria makes it possible to distinguish more useful information from
less useful for decision-making purposes.
Some forms of these qualitative characteristics are currently used in traditional
Project Management, but they limited to Budget and cost control.
The traditional approach to Project Management could be reinforced by
implementing practices using qualitative characteristics: relevance and reliability of
controlling the quality of project communications, as it is implemented in accounting to
determine the usefulness of financial information ( Elliot and Elliot, 2008, p 162.),
Conclusion
Effective project management can be built on mutual trust and respect exercised by
all stakeholders in the project. One of the key elements of maintaining it is efficient
communication over the project life based on the principle that each stakeholder is able to
get relevant and reliable information on time, allowing them to make decisions.
The scope and extent of communication management must be equal to the efforts
and resources it consumes. In other words the cost of communication management needs
to be balanced against the benefit the stakeholder will obtain from having this information.
7. 7
References
Durham Business School (2012),Project Management, 311M, Version 12.1,Unit 1. p.5,
Durham.
Durham Business School (2012a),Project Management, 311M, Version 12.1,Unit 1. p.25,
Durham.
Durham Business School (2012b),Project Management, 311M, Version 12.1,Unit 4. p.14,
Durham.
Elliott, B. and Elliott, J. (2008); Financial Accounting and Reporting. (12th
edn) London:
Financial Times
Kotler, P. and Keller, K. (2006). Marketing Management. (12-th
edn), New Jersey: Pearson
Education Limited.
Meredith, Jack R.. Samuel J. Mantel, (2012) Project Management: A Managerial Approach.
(8th
edn). John Wiley & Sons, p. 460.
Oxford Dictionaries (2012). Available at
http://oxforddictionaries.com/definition/english/project?q=project (Accessed 24 November
2012)
Slack, N. Chambers, S. Johnston, R. (2010). Operations Management. (6th
edn) Essex:
Financial Times. p.465
The Governmental Accounting Standards Board (2012). Available at
http://www.gasb.org/jsp/GASB/GASBContent_C/GASBNewsPage&cid=1176156715119
(Accessed 27 November 2012)