Project Management for the 21st Century

Bennet Lientz, Kathryn Rea

• Publisher: Routledge
• Year: 2007
• ISBN:
  9781136371196
• Edition: 3
• Topic: Business
• Subtopic: Business General
• Index: Business

The challenge of managing projects is to combine the technology of the future with lessons from the past. In the Third Edition of Project Management for the 21st Century, noted authors Bennet Lientz and Kathryn Rea provide a modern, proven approach to project management. Properly applied without massive administrative overhead, project management can supply structure, focus, and control to drive work to success.
Third Edition revisions include: 35% new material; three new chapters on risk management, international and multinational projects, project culture; entire text rewritten to take advantage of the Web and Internet tools; new appendix covering web sites; additional materials on "what to do next"; more feedback from readers and lessons learned.

PART

Management Challenge

CHAPTER 1

Projects and Trends in the 21st Century

PROJECTS AND TIME

A project can be thought of as the allocation of resources directed toward a specific objective following a planned, organized approach. Almost all companies and agencies carry out major work as projects. Projects are shaped by their environment in society, culture, time, regulation, and technology. Organizations carry out multiple projects at a time. Critical issues are how to manage resources across projects and non project work, how to ensure result quality and schedule and budget performance, and how to improve project management through lessons learned.

Successful project management and projects are not new in the past 50 years. Throughout recorded history, vast projects have been undertaken across generations, many with great success. In this book, we will consider some of these—the pyramids, the Coliseum of Rome, the Taj Mahal, and others. People undertaking projects 2000 years ago may not have had the technology we have today, but they often had political and economic stability and a society that took a long-range view of life and the world. Understanding how they accomplished these projects can provide insight for us today. We can take these lessons learned and apply them to modern projects.

Over the past 50 years the pace of technology innovation has accelerated. Pressure is on for more rapid results. People seek cause–effect relationships within weeks or months as opposed to years and even decades. Immediate gratification and success are sometimes the name of the game. The pace has quickened in the past decade. People in every era or decade view their period as unique and, over the last 100 years, superior to previous periods. Current times represent a period of geopolitical and social change. Even weather patterns have changed, impacting societies, economies, and governments. The range of political and social issues is wider. Many issues previously given lower priority or simply ignored have now surfaced (e.g., political divisions, problems with large corporations). Technology has rapidly improved in computers and communications. All of these factors have impelled us to undertake many ambitious projects in restructuring, setting up whole new industries, and creating and modifying products.

These changes have impacted all aspects of projects. Time restraints have forced people to undertake projects with greater payoff in the short term and to neglect the long term. Patience is often in short supply on projects. Instead of seeing a project through to ultimate completion, many organizations plunge into the projects and attempt (remotely or directly) to micromanage it for quick results.

In this chapter, the nature of current and future projects will be examined from the perspective of how projects can be successfully undertaken and completed in this environment.

THE ENVIRONMENT OF A PROJECT

A project is set in time. It is also set in the context of organization, a legal system, a political system, a technology structure, an economic system, and a social and cultural system. How do these environmental factors affect projects? How should a project manager and project team respond? Outside factors impact the project, and the project must respond to the challenge. It is a variation of Toynbee’s theory of challenge and response. Take a simple example: for instance, the technology of electronic mail. If a company employs electronic mail widely, then its use is accepted and becomes a de facto rule. It follows that electronic mail will find use in the project. But to be effective its use must be organized. This is just one simple example of how technology use in a company shapes a project.

Why is the environment of a project important even though many of the general principles of project management are timeless and apply to projects of all sizes and types across time? The resources, budget, methods, and tools of the project depend on the environment. If today’s projects are managed with tools of the 1960s, they are more likely to fail. This does not imply that past experiences do not apply today. Management expectations, budgets, and competitive pressure may be different; however, many principles remain consistent over time. Only methods, techniques, and tools change. We will consider some of the trends in the decade. The challenge is how to combine the technology of the future with lessons from the past to successfully implement projects.

TREND: GLOBAL COMPETITION

As the world economy changes, there is more competition. Improved communications and transportation coupled with freer trade allow for firms halfway around the world to compete. For example, flower growers in South America can grow and ship fresh flowers into the United States cheaper than American firms can do it locally. Other examples abound in a variety of industries. More economies are expanding regionally or globally.

This trend has a number of impacts on projects and the project management process. Projects in organizations tend to be global, or at least regional. This compounds complexity within the project as well as management complexity. More complex issues arise from language and cultural differences. Also, because of increased competition and risk, projects have to be carried out on a more formal basis. People cannot afford to improvise with costly resources.

Consider the efforts by the major automobile manufacturers to build world cars. A world car is one that can, with few modifications, be manufactured and sold anywhere in the world. This is very difficult to accomplish. It requires an investment of billions of dollars and has high risk. All parts of the project must be carefully coordinated. Again, the use of project management is required.

TREND: RAPID TECHNOLOGICAL CHANGE

Change and advances in computer and communications technology are well known. Growth in microcomputer power, data communications, and image and graphics are just three examples. What is unique now is that changes are occurring simultaneously in different areas causing a multiplier effect and “cross-pollination” between technologies—synergy in action.

Taking advantage of technology for competitive advantage is a challenge because it is continuously improving. Where once a firm could implement a computer system for inventory and then just maintain it for 10 or 15 years, now the inventory system will be changed with new technology and will be integrated with ordering, pricing, shipping accounting, and other systems. Technology advances make possible corporate downsizing, business reengineering, and interorganizational systems.

To illustrate how much technology has changed, consider an old computer project of implementing a payroll system in a factory. In the 1960s the system would have had some terminals for entering data, but the basic system was programmed and set up for production on a large mainframe computer. Scores of programmers were required, even though the project was relatively simple, because it was confined in scope.

Today, it is vastly different. The payroll system should link to timekeeping monitoring systems in the factory. People can log what task they are doing using radio or cellular equipment. The system is tied automatically into accounting and benefits. It is an integrated, distributed system. It might link to several locations around the world. Now the system must handle different currencies, time zones, and work rules. As you can see, more opportunity and benefit, but also more complexity and greater risk. Hence, for successfully implementing new technology, we rely on the organization and structure of project management.

TREND: PRODUCT OBSOLESCENCE

The time between the initial design of a product and the production and sales of the actual, finished product used to be measured in years. Today, we have teams of people working in projects designing, prototyping, developing marketing strategies, and setting up manufacturing and distribution on a compressed time schedule. With computer-aided tools such as computer-aided design and manufacturing, the actual work processes are more integrated and abbreviated. Projects require more coordination and have to be more exact.

The stage is set for increasing pressure to produce new products more quickly and less expensively. There is also pressure to come out with new versions of the product. The many varieties of digital cameras, TVs, CD players, and camcorders attest to this. Developing and supporting products must be more organized and integrated. This is such an important area that we will devote to product management and its relationship to project management.

TREND: ORGANIZATION DOWNSIZING

Organizations are under pressure to improve financial results and to reduce their head count for greater efficiency. The downsizing relates to business reengineering and using new technology. However, in many cases, departments just downsize, and the remaining people have to pick up the pieces. Downsizing creates projects in developing plans for downsizing and sorting out reorganization.

Downsizing also has an impact on project teams. Teams are smaller. There is less administrative support. People on the team and the project manager must do more with less. This tends to force people to use technology in the hope of increasing speed and effectiveness as well as augmenting scarce resources.

Projects also face more technical challenges. With downsizing, many of the senior people who had knowledge of systems, processes, and the organization have left or retired. This void is felt in the projects as people struggle to uncover how things work and why they were designed the way they were. Twenty years ago, one senior person on a project team was worth his or her weight in gold because of the value of his or her experience and knowledge. This experience and knowledge eliminated learning curves and cut out work. When these people are no longer available, the project team may make the same mistakes that were made over 20 years ago.

TREND: PROCESS IMPROVEMENT

Business reengineering and process improvement are methods where an organization analyzes its basic business processes (product, manufacturing, sales, accounting, etc.) and may totally restructure them across departments with greater automation and management control. Major savings can result. In one company, an accounting staff of over 300 was reduced to 10. In another we were able to reduce a banking staff by over 80% while increasing efficiency by 100% with the same workload. Change is dramatic because we are willing to discard the old systems and procedures along with the old organization.

To undertake successful dramatic change requires a major project effort crossing many departments, which heretofore, had little contact: a challenge for the project manager and project management. The end products or milestones of reengineering can be vast in scope with new business processes, a new organization, new job descriptions and duties, different computer systems, and new control systems. In this changed environment there is greater accountability, measurement, and control—all of which have to be established in an organized manner. It is not surprising that many reengineering efforts have met with problems or failure.

TREND: E-BUSINESS

E-business is both less ambitious and more ambitious than reengineering. Organization change and radical change are not normally within the scope of ebusiness. However, e-business involves automating relations with employees, customers, and suppliers. E-business can be thought of the next logical extension of automation and networking. E-business projects are complex since they involve procedures, policies, transactions, and systems both outside and across the organization. How the e-business effort is organized as a project has shown to have a major impact on the outcome and results of e-business.

TREND: EMPOWERMENT

More companies are experimenting with empowerment of employees. The organization gets flatter and leaner. The people who are left in the organization often become empowered and accountable for improving their own business processes.

This empowerment can lead to chaos if every department adopts a different approach. A standard that is often imposed is a project management structure. A similar project structure across the organization can lead to greater synergies between departments and increase benefits across the company and the entire organization.

Empowerment for project management means that team members in a project play active roles in defining their own work (with project leader review and concurrence), gathering lessons learned from experience, and working on issues that arise in the project.

TREND: FOCUS ON QUALITY AND CONTINUOUS IMPROVEMENT

The Japanese pushed quality, and now everyone is talking about and trying to improve quality. Companies have found that by improving business processes and quality, sales and profits increase. Quality cannot be implemented by just telling people to work better and smarter. There must be a management philosophy. The management strategy has to be backed up by training projects, implementation projects, and quality control projects. Many firms now have had quality project teams in place for years. They stay in place and continuously improve. Quality can be traded off with cost and price to obtain value. The question is, “What level of quality is cost-effective?”

In decades past if you carried out improvements in an area, you might leave the area alone when you finished. You would let it stabilize and then measure the results. This is a luxury that we cannot afford today. Competition is biting at our heels. We have to continuously improve and keep looking for more savings and increased performance.

TREND: MEASUREMENT

Many organizations began measuring their basic business processes, such as assembly, inventory, marketing, and sales, through industrial engineering over 60 years ago. Today, integrated computer and communications systems allow for the measurement and collection of vast amounts of data. We can implement measurement on a constant basis. Continuous measurement feeds into quality, business reengineering, and continuous improvement.

A measurement program is sometimes seen as a set of projects that are carried out in parallel and are performed on a recurring basis. The notion of program management and its ties to project management is a subject treated in Chapter 9.

TREND: INTERORGANIZATIONAL SYSTEMS

Going hand in hand with some of the above trends is the growing interdependence among suppliers and customers, competitors, and generally within industry segments. Many industries now have standards for interchanging data electronically. Invoices, work orders, shipping information, and even project information are transmitted in standardized electronic formats. EDI (Electronic Data Interchange) and e-commerce have helped to change the industries and company organization structures by making consistent information available faster. Implementing and supportin...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• Preface
• PART I. Management Challenge
• PART II. Getting the Project Started Right
• PART III. Managing the Project
• PART IV. Project Management Methods and Tools
• PART V. Evolution, Revolution, and Termination
• Appendix 1. The Magic Cross Reference
• Appendix 2. Web Sites
• Index