How to Improve Project Management in Your Organization

Benefits and Costs of System Project Management

A systematic formalized approach to project management has a number of advantages over other approaches based on functional management principles, i.e. when managers responsible for individual management functions informally coordinate work on a given project with colleagues from other functional units. At the same time, each of the managers, as a rule, adheres to the rules and procedures developed for his functionally oriented unit.

A systematic approach to project management is becoming increasingly popular for the simple reason that when it is used, the probability of successful implementation of each individual project implemented by the organization, and all projects of the organization as a whole, increases significantly. Each project is successfully implemented and concrete results are achieved in accordance with the adopted schedule and within the established budget. With the implementation of a separate project, the ability of the organization to conduct successful activities and its overall value objectively increase.

Among the main reasons for the successful application of the principles of the new approach to project management are the following:

the organization selects for execution only those projects that best correspond to the development strategy of the organization;
all commitments are made only for feasible purposes: technical, budgetary and calendar;
responsibility for the management of project portfolios, programs and projects is carefully distributed and strictly implemented;
each project is planned, executed and controlled (managed) so that all obligations under it are fulfilled;
project management teams should work collaboratively and in accordance with commitments to project objectives, plans and schedules
As for the costs of project management, their value will vary depending on the type, size and number of projects, as well as on the level of development of the project management system in a given organization. W. Ibbs and J.-H. Kwok, after analyzing the activities of 20 companies, reports that "80% of companies said that they spend less than 10% of the total project cost on work and services in the field of project management."

This study listed a range of project management costs that ranged from 0.13 to 15% of the project cost. The largest item of expenditure was salaries or other types of compensation paid to staff. The costs of licensing project management and related software, consultancy and project management training were also significant costs. However, no amount of cost or profit level can show the scale of the benefits and benefits that organizations derive from new approaches to project management. These benefits do not have a direct impact on ROI, but they can be objectively assessed and measured.

Currently, the managing managers of many companies have learned to effectively use in their practice various ways to determine the value of certain management methods and the overall value of the organization's management system. One of them is the Balanced Score Card Approach.

Multi factorial studies assessing the impact of project management methods in the organization on the level of its added value show that new project management methods significantly increase the business and organizational potential of the enterprise.

This conclusion was recently reached by the research group of one of the leading consulting companies in the field of project management RM Solutions, which has more than a hundred senior managers with extensive practical experience in the field of project management. According to this group, more than 94% of respondents said that "the application of project management techniques adds value to their organizations. This translates into significant improvements in financial performance, increased customer satisfaction, organizational capacity and staff training, as well as improved project/process management."

Recommended Method for Improving Project Management
A recommended approach to project management improvements is to take the following steps:

identification of symptoms of ineffective project management;
correlation of the identified symptoms with possible causes of ineffective project management by, firstly, studying the literature on project management, secondly, conducting an audit of current projects and, thirdly, analyzing completed projects;
identify opportunities for improvement in project management and rank those opportunities;
development of an improvement program or a special group of projects aimed at eliminating and correcting the possible causes of ineffective management;
execute the improvement program, evaluate results, and find additional areas for improvement.
A study carried out by the PM Solutions group found that "most companies rely mainly on a system of coordinated initiatives to improve project management in their strategy, rather than on one or two separate initiatives. Such organizational measures include: the creation of a special body for managing the organization's project system – the project office; development of methodological principles of project management, necessary software; integration of project management into the main processes of the company; training of personnel in project management methods and tools; Initiation of a development (professional development) programme for staff involved in the implementation of the project. Over 70% of the organizations surveyed have made more than three project management improvements in the last three years of their operation."

Identification of opportunities and needs for improvement in the field of project management.

An organization's need to improve performance and enhance its ability to manage projects can be determined by honestly answering a number of fundamental questions about each individual organization.

Are there any projects in your organization?

Does each project support your organization's adopted corporate strategy?
How effectively have the risks associated with each project been identified and how effectively are they managed?

Have these projects been completed or are being completed in accordance with the original (justifiably revised) schedule, budget, contract prices and other parameters established by the relevant contract or other authorized documents?

Have the profit targets for commercial projects been met? Have fines and compensation been paid?

Are your organization's existing management structure and planning, management, and control system suitable for the effective management of larger projects, a larger number of projects, or other projects necessary to implement the organization's growth and development strategy or for other long-term goals in the near or long term?

If the answers to these questions are yes, the organization's ability to manage projects can be assessed as exceptionally high. If not, your organization needs various improvements in the field of project management. Possible areas of activity in which changes are not necessary may be:

knowledge and professional skills of people;
the assignment and allocation of responsibilities;
project management policies, processes, procedures, systems, tools and methods of project management, or all areas at once.
Symptoms and possible causes of ineffective project management.

Among the symptoms of insufficiently high quality of project execution include:

non-compliance with deadlines – delays in the performance of work, cost overruns and fines under contracts; low performing level of person /ha - high turnover of personnel employed in the project, excessive level of psychological stress, insufficient motivation and unfavorable psychological climate in the organization;
insufficient financial discipline – actual costs exceed the planned budget;
low quality of management – excessive involvement of senior managers in the details of project execution;
low quality of resource management - too frequent switching from one type of work to others (multi-tasking), duplication of efforts, inefficient use of specialists of functional units.
Identifying and addressing the causes of these typical deficiencies in project execution typically requires a very vigorous effort by project management professionals.

Use of a formalized project management review process.

AT&T's Project Management Excellence Center has developed and implemented a formalized process for revising the project management system to develop "actionable methods for translating the concept of project management into practical work on... assessing and identifying performance improvement objectives." Reports on such formalized revision processes were published by management consultants based on the results of their practical work. An analysis of existing project management systems has also enabled them to highlight weaknesses in existing management practices, the identification of which is crucial in determining the necessary measures to improve performance.

Possible efforts to improve management.

To achieve significant improvements in such a complex area as project management, it is necessary to carry out changes in all areas of activity - human resources, organizational structures, processes, systems, procedures - and all these changes must be precisely linked to each other. Some typical projects and improvement tasks in each of these areas are listed below. Special situations will undoubtedly require additional efforts.

Strategic portfolio management.

Implement improvement projects in the field of:

development and implementation of an appropriate process for managing the organization's project portfolio;
formalization of procedures for selecting new projects and mutual ranking of all projects of each of the portfolios;
and the active use of risk and uncertainty management techniques in the implementation of programmes and projects.
Development of the management system and staff training.

Make the necessary efforts in the field of development of the personnel training management system in order to:

improving understanding and acceptance at all levels of the organization of the basic ideas and principles of project management, as well as practical measures for their implementation;
developing staff planning, management and monitoring skills, as well as other skills required from the point of view of project managers and project support specialists;
development of leadership qualities of program and project managers;
creation of the necessary understanding by personnel of project management policies, as well as modern methods, systems and tools of project management;
improving understanding of the basic principles and practices of teamwork.

Develop a policy and develop the necessary procedures in the field of:

selection criteria (appointments) of project managers by type and size of projects;
development and professional growth of personnel engaged in project management;
assessment of the level of achievement and remuneration of project managers and other persons involved in the implementation of projects.
Assignment and distribution of responsibilities.

Complete the following project management improvement projects that are required for your organization:

establish a project/program management office (project office) at a sufficiently high level of management of the organization, whose personnel will be responsible for the implementation and continuous improvement of project management processes, as well as for the creation and improvement of project management methods and tools;
establish an operational planning, management, and control office to provide support for common problems encountered during the management of small projects.
assign responsibility for the execution of each project portfolio, each program and each project at all levels of the organization and ensure that each responsible executive clearly understands and accepts his share of responsibility;
improve all project participants' understanding of the basic principles and practices of teamwork.
develop an appropriate policy in the field of determining the status and functions of senior managers, project portfolio managers, project sponsors, program and project managers, as well as the status of functional managers and project leaders;
Create a responsibility-sharing matrix based on project/work decomposition structures to clarify the relationships of all project managers and participants.
Provide a description of all items and a specification of key project management functions for all project types;
formalize the project-functional matrix of the distribution of responsibility and take the necessary measures to ensure that real appointments and performance control are carried out in accordance with this matrix.
Integrated systems, tools, methods and procedures.

Initiate improvement projects. Purpose:

identify and define the categories of projects implemented by the organization and document the integrated project lifecycle management system (AGCS) for each category;
Improve the AGCD for each project category (see below);
establish the necessary procedures to ensure the required coordination of plans and actions of all types of work/functions (marketing, technical support, procurement, production, etc.) during:
– acceptance of project proposals or acceptance of amendments to existing contracts;
– project execution;

introduce new or revise existing procedures necessary to:

– ensure that realistic commitments are made for all new projects;
– develop and introduce framework limits on the cost and timing of the execution of tender proposals for projects;
– authorize work on projects within supporting organizations and control the expenditure of project funds;
– timely control accounting reports on costs and cost of the project; monitor and control the expenditure of funds for payments to executors;
– plan projects using project/work decomposition structures and network planning methods;
– predict the required number of personnel employed in the project, and the need for other resources;
– create an information structure for project support;
– manage (arising during the implementation of projects) changes in the cost, schedules, as well as in the characteristics of the final product;
– regularly analyze projects and reassess the cost of projects for all types of work;

implement an integrated project management information system based on the use of the Internet and other means of communication;

establish a separate office for the management of the largest programs and projects and develop the necessary procedures to maintain its activities.

Depending on the specific situation, the responsible manager (project manager) should select the necessary tasks to improve project management, establish the existing relationships between them, determine the priority for each of these tasks and, taking into account the available resources, develop a comprehensive improvement program.

Pilot project method.

The nature of project-oriented situations provides a unique opportunity to develop and test individual groups of changes (project management improvements) on the basis of one carefully selected project even before making full commitments to improvements. The pilot project on performance improvement is not only a concrete mechanism for introducing and testing new approaches and methods of project management, but also an excellent experimental model for studying and using personnel management systems and its training.

When referring to the pilot project method, special attention should be paid to the choice of the project (program) that will be used in this capacity. Such a project should:

have a not too long life cycle;
be typical of this organization;

not to contain such intractable problems (e.g. commitments with impossible deadlines) that the benefits and benefits derived from improved governance cannot save the day.

There is always a danger that a pilot project will receive increased attention from management and other stakeholders. As a result, such a project may be so successful that the impact of the studied changes in management will simply be impossible to measure In a situation where all resources are invested mainly in one project, other projects will be in an unequal position and all comparative assessments of management effectiveness will lose their meaning. In addition, there are a number of changes that, in principle, cannot be implemented only on one of the projects.

If the goal is to maximize the benefits, such changes should affect all actively existing projects of the organization. For example, the design and implementation of a project portfolio management process obviously requires the inclusion of a whole group of projects in the experiment. The introduction of a computer system for planning, managing and controlling a package of projects is another example when a researcher cannot fully work with only one project.

Use of real and educational projects in the development of management and training systems.

Ono and R. Archibald provide a detailed description of how to form and train project management teams in the process of implementing real projects. This approach is most effective in mastering the principles of project management and improving existing management practices. Universities widely use training in project management on real examples.

Improvement of the project life cycle management system

To extend the concept of Total Quality Management (TQM) to the project management area of an organization, it is recommended that an approach be taken to avoid sketchy, non-systemic improvements and that proposes:

document an integrated project management process,

– document and describe the AGCD for each category of projects of the organization;
– define the phases of life cycles for each category of projects;
– identify the boundaries between the different phases of the life cycle;
– describe and identify the processes within each phase of the project, as well as identify the intermediate and final outputs/outputs/outputs for each phase;
– identify and mutually agree on the risk analysis, planning, management and control processes for each phase, as well as the relevant documents and confirmations to these processes;

carry out reengineering of the integrated project management process, apply appropriate reengineering methods to the AGCCP of each category in order to:

identification of "bottlenecks", "white spots" and weaknesses of the system;
correlating, where possible, undesirable project results with their possible causes relating to the AGC,
recycling of the AGCCP, starting with the most obvious "bottlenecks", "blind spots" and weaknesses;
Make improvements, obtain the necessary approvals, and conduct appropriate tests or analyses to justify the adequacy and feasibility of the proposed audit of the AGCP; plan, approve and execute an improvement project to implement the revised AGC.
Repeat all necessary steps until an optimal AGC has been established.
Improving the life cycle process of new products

R. Cooper et al. describe a useful approach to improving the process of developing new products, based on their extensive practical experience in a number of industries:

Many companies conduct internal audits only to conclude that their process of creating new products is not working. Projects are too protracted; the main types of work and tasks have not been completed; go/kill solutions (all or nothing) are problematic. As a result, they begin to revise the process, using the methods of stage control of processes (Stage / Gate).

Numerous winner/loser comparative studies point to the following list of goals recommended for the successful implementation of the new product development process:

Objective 1: Quality of performance...
Goal 2. clearer focus, better prioritization of projects...
Objective 3: Clear market orientation...
Objective 4: Qualitative preliminary elaboration and clear early identification of product characteristics...
Goal 5: A truly cross-functional team approach...
Goal 6: supply of products with competitive advantages – – differentiation of product types, unique benefits, value for the consumer...
Goal 7: Short quick steps and process flexibility...

In the past few years, bottleneck theory and its application to project management – the critical path method – have generated considerable enthusiasm among project management professionals and consultants.

In general, the theory is a reflection of common sense in the approach to understanding common systems: "Each system has special problem points ("bottlenecks") that limit the output of the system. In his work "What is the theory of "bottlenecks" and how to apply it?", E. Goldtratt argues that: "... before embarking on improvements to any part of the system, we must clearly define the global objectives of the system and the measurement methods that will help to assess the impact of any subsystem or any local decision within the system on this global goal."

The global goal of any is to move as quickly as possible from the stage of the initial design of the system to the complete completion and closure of the project, with maximum savings in resources (people, money, materials and equipment). L. Leach gives a detailed description of the theory of "bottlenecks", means and methods of its application together with the concept of TQM to the improvement of project management systems. It also describes how bottleneck theory and critical pathway method in project planning, control, and management can improve project execution in terms of timeline and cost.

Breaking down barriers to improvements in project management

The use of the practice of system project management and the necessary formalization of project management functions usually require significant changes in attitudes, positions, as well as in the understanding of responsibilities, methods and reporting relationships at all levels of the organization. Such changes may also affect the parent management organization and the organizations represented in the project teams.

The factors at work within the project, such as the level of organizational culture of the organizations involved, industry, geography and national characteristics, create persistent obstacles, or barriers, to change. Overcoming these barriers requires a very serious effort. However, if not overcome, such barriers can significantly reduce the effectiveness of actions aimed at improving project management.

To successfully implement the required changes, we recommend the following five-phase strategy to help overcome or soften these barriers:

try to identify and clearly understand possible obstacles that may arise in the way of the proposed changes;
create an atmosphere in which the need for change is clearly recognized, find and use motivation that helps to overcome barriers;
carry out the necessary explanatory work and, using the knowledge and experience gained in the previous two stages, train all the people involved in the project;
develop "change projects" to introduce new approaches to project management and use this practice to plan and execute these "projects";
modify and develop these approaches and how to apply them to overcome existing and prevent possible cultural and other barriers.
Identification of barriers.

To successfully overcome resistance to change, each organization must first identify and prioritize key changes aimed at creating an effective project management system. The barriers to each of these changes should then be identified so that a strategy to overcome them can be developed and implemented. Among the main barriers are the following:

inconsistency of directives from two chiefs - functional and project;
the difference in project and unit objectives;
combining teamwork and individual rewards.

In addition to the barriers related to the "pure art" of project management, one should not forget about the intercultural barriers associated with numerous misunderstandings on national-ethnic, historical and other grounds. They appear in the most unexpected places – joint venture projects (when different corporate cultures collide within the same enterprise), projects distributed between different industries, and, of course, in multinational projects, where people generally speak different languages.

Project management is change management. Improving an organization's ability to manage projects requires significant change. Implementation of improvements in project management in itself requires the application of effective management practices and should be considered only in the long term, aimed at radically increasing the value of the organization. There is no universal means by which you can solve all life situations at once and overcome all obstacles.

The management concept in each specific case should be formulated in strict accordance with the situation and taking into account the "industrial and cultural" characteristics of all teams involved in project management. The five-phase strategy described above can contribute to success in overcoming these barriers to effective management.