Advanced Project Management

A Structured Approach

Frederick Harrison, Dennis Lock

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351960700
• Edition: 4
• Topic: Business
• Subtopic: Management
• Index: Business

When Advanced Project Management first appeared it quickly acquired a reputation for excellence on both sides of the Atlantic as a book that successfully bridges the gap between introductory texts on project management and specialist works on professional practice. Its aim is twofold: to provide a guide for managers, engineers, accountants and others involved in project work, and a reference for advanced students of project and construction management. This fourth edition of the book has been heavily revised, with substantial material to reflect the changes in project management. The following topics are either new to the book or have been given greater emphasis: ¢ Project definition and appraisal ¢ Procurement and the supply chain ¢ Concurrent engineering ¢ Cost and management accounting ¢ Quality management ¢ More detailed explanations of critical path analysis, now predominantly using the precedence system ¢ Increased treatment of resource scheduling ¢ Planning with multiple calendars ¢ Planning within fixed time constraints, using crashing and fast-tracking methods ¢ Standard networks, modules and templates ¢ Risk management.

PART 1
Setting the Scene

CHAPTER 1
Introduction to Project Management

Project management is probably the fastest growing profession in today’s world. This is apparent in at least two ways:

1. Recognition, at least by enlightened senior managers, that a project management approach can be applied with profit to a wide range of business development and change endeavours far removed from the traditional concepts of commercial and industrial projects. Such projects can include, for example, internal management projects created to drive through an organizational change, to acquire and install some new capital asset or to manage a company relocation.
2. Rapid and continuous increase in individual membership of professional organizations. Indeed, those new to project management could do no better than contact one of the professional associations, such as the Project Management Institute (PMI) or a local national affiliate of the International Project Management Association (IPMA). More details are given at the end of Chapter 3.

The purpose of project management

Projects, as new endeavours, are often carried out in unfamiliar or even hostile environments. They require the use of untried designs and work processes, might have complex organizations, and must accomplish demanding requirements within strict time and cost boundaries. It is not surprising that many projects fail to achieve all their objectives, sometimes by wide margins. In other words, projects are prone to damage through risk.

The purpose of project management, and the principal role of the project manager, is to achieve all the set project objectives in spite of the risks.

Measurement of a project’s success or failure can be viewed from two different perspectives. First there are the primary objectives of the project manager, usually working for a group or organization that is committed to achieving closely defined performance, cost and time objectives. These primary project management objectives align with the objectives agreed between the customer (or client) and the project contractor.

We must allow the terms ‘customer’ and ‘contractor’ wide meaning in this context. In addition to its application in the familiar sense of business between two companies, we also consider as a contractor any group or company department that carries out an internal management project on the instructions of the company’s own senior management. In that case the corporate body becomes, in effect, the customer or client for its own project.

Then there are the wider measures of a project’s success or failure, as perceived by stakeholders not only within the contractor–client relationship, but also in the more diverse business and public environment.

THE THREE PRIMARY OBJECTIVES

Most projects are set up with firm objectives in mind. The only obvious exception is a project for pure research, which might lead either to no conclusive result or to some unexpected but important scientific discovery. We can describe the three primary objectives under the headings of specification, delivery date and cost.

Specification

A specification should define what outcome is expected from the project – the project deliverables in the current jargon. It must set out in unambiguous terms (and, where relevant, measurable quantities) the benefits that the project customer can expect in return for the investment or price paid. The specification should certainly include the scope of supply in a clear statement of what the contractor is committed to do.

Delivery date

Delivery date is the time when the project is completed and handed over in a state that satisfies the reasonable expectations of the customer. Much of the project management task is concerned with identifying the many activities needed to complete the project, placing them in a logical sequence, estimating the time required and allocating resources. A practicable plan, made in appropriate detail, is the main benchmark for controlling progress towards completion on time.

Delivery promises often have to be made to the customer early in the life of the project, at the proposal stage, when no serious thought can be given to detailed schedules. Then, when work is eventually authorized, the contractor’s project manager must attempt to devise a plan that can meet the preordained completion date.

Delivering a project on time is an extremely important objective, not only for the customer, because any project that runs late is at risk of being skimped in respect of quality and reliability, and late running almost always leads to spending over budget.

Cost

Although many project contractors are in business to make profits, by no means all projects are conducted for profit. Many internal management projects, projects carried out by charities and other not-for-profit organizations have no direct profit objective. In general terms, therefore, it is best to regard cost objectives in terms of authorized budgets.

BALANCING THE PRIMARY OBJECTIVES

The three primary objectives are dependent one upon another. Extend the project scope or enhance the specification, and it is clear that the time and budget limits must be extended to suit.

Some writers portray the three primary objectives as the corners of a triangle (see, for example, Chapter 1 in Lock, 2003). They argue that high-level decisions dictate which of the three primary objectives should be considered most important for project success, and which should be subjected to the greatest degree of management control. We prefer to regard this balancing decision as shown in Figure 1.1, where a project is portrayed as having three primary inputs that contribute to the final outcome or project deliverables:

Figure 1.1 Balancing the three primary project objectives

1. Specification: the nature and scope of what has to be achieved.
2. Time: the time span allocated to the project.
3. Cost: the amount of money and cost-consuming resources that can be expended on the project.

Many organizations manage their projects without making any conscious decision to distinguish between the primary objectives or to balance them. Yet most will have a corporate culture that emphasizes some attribute of their product or service. This might be quality (standard of specification and fitness for purpose) or customer service. It is possible to list circumstances where one of the primary objectives should assume greatest importance. Here are some examples:

• Projects where specification should have high priority: nuclear energy, petrochemical plants, aerospace and defence. Safety, reliability and the standard of performance in these projects should be paramount.
• Projects where time is especially important: preparation for any event where the date has been announced, such as a trade exhibition, public festival, stage show and so on. Product development where time-to-market is critical. Projects set up in emergencies to deal with natural disasters where lives are at risk also have to be carried out as quickly as possible.
• Projects where budget limits are especially important: some organizations need to be particularly economical with their spending plans – for example, when their funding is derived from public subscription or charitable donations, or in any other case where funds are scarce.

WIDER CONCERNS OF STAKEHOLDERS

From the project manager’s and contractor’s point of view, it is probable that any project which completely satisfies the three primary objectives will be viewed as an unqualified success. But these criteria might not determine the wider, longer-term view of project success or failure as seen by the entire body of stakeholders. A property developer that builds a high-rise office block to good specification, attracting desirable tenants who pay high rents, might consider the project to be a great success. Local shopkeepers and traders (secondary stakeholders of the project) could welcome the attraction of additional trade. Nearby residents who lives are blighted by increased road traffic, reduced natural light, noise and interrupted views would not see the project as such a great success.

People living near a new manufacturing plant will be more concerned about the specification (safety, levels of pollution, noise, and so on) than about the cost of the project or the length of time taken to build it. The local authority, emergency services, employment agencies, suppliers of raw materials and many other stakeholders would each have their own perception of what makes the project a success or failure.

Suppose that contractors build a new tollbridge over a Scottish loch that cuts 25 kilometres from the average journeys of road traffic drivers. If the project cost twice the budget and bankrupted the first contractor, that contractor and its workers might consider it as a terrible failure. The project owner might also be considerably upset in those circumstances, having to find another contractor, lose some sunk costs, and wait for far longer than anticipated before receiving toll revenues. The travelling public, however, might be very satisfied and grateful for the eventual outcome of the project.

Hundreds of examples can be visualized where true project success or failure cannot be measured simply by the three primary objectives alone. Thus each group of stakeholders will probably hold a different view of the way in which the objectives of a project should be valued and balanced. Hartman (2000) claims that a successful project is one that makes all the stakeholders happy. Although that ideal might not always be attainable, Hartman’s point is a good one that should be borne in mind by all who commission new projects.

The nature of project management

Project management can be defined as the achievement of project objectives through people and involving the organization, planning and control of resources assigned to the project. It requires the development of constructive human relations with and between all those concerned, both in the contracting company and in all the other organizations that might be involved. Projects demand specialized, information systems, scheduling and control techniques. They need managers who are skilled in dealing with human resource problems that arise because of the particular characteristics of projects and the specialized nature of project organizations.

Project management has evolved to become a general management-oriented and integrative activity, usually operating below board and top management levels. Effective project management integrates the various people and groups into one organization. It develops teamworking and commitment to project objectives. It is generally accepted that project management is essential for large, complex undertakings and that the effectiveness or otherwise of project management will have a profound effect on the cost of a project and the time taken to complete it.

PROJECT MANAGEMENT AS AN ADVANCED, SPECIALIZED BRANCH OF MANAGEMENT

Project management might be considered as a branch or specialized form of management, similar to production management, marketing management and so on. It does have its own range of special methods, systems and tec...