PROJECT MANAGEMENT: RENEWABLE

ENERGIES – RENAC
LOGIC FRAMEWORK APPROACH – LFA

PROJECT CYCLE MODEL – PCM

ENERGY EFFICIENCY - EE

RENEWABLE ENERGY- RE

ENTERPRISE RESOURCE PLANNING – ERP

PROJECT MANAGEMENT OFFICE - PMO

I. Project Fundamentals

Learning Targets
Man has always set out to accomplish specific objectives with limited resources since
civilisation began e.g. the construction of the pyramids some 4,500 years ago. However, the
use of the term "project management" in book titles probably first started in the 1960's [1].
Nowadays, projects have emerged as the means many organizations use to achieve their
strategic goals. Examples of projects could be implementing Energy Efficiency (EE) and
Renewable Energy (RE) programmes, an Enterprise Resource Planning (ERP) system,
constructing a wind park or implement a photovoltaic plant in South America, supply chain
optimisation in Africa, transporting wind turbine towers to Asia, outsourcing energy
auditing activities or starting up a new joint-venture.

After working through the chapter, the student should be able to provide answers to the
following questions:

 How do projects differ from ongoing operations?

 What are the four project constraints?
 How can projects be categorised?
 What are the different organizational forms?
 What are some of the reasons for project failure?

This chapter is structured as follows: First, projects are defined and distinguished from
ongoing operations, and the reasons for the ever increasing trend of management by
projects are given. The four main project constraints of scope, quality, time and cost are
then discussed. The following section presents some of the various attributes used for
categorising projects, in particular, project complexity. The next section focuses on the
various organizational structures in which projects take place. Section eight provides an
overview of the reasons for project failure. The final section briefly puts projects in the
broader context of programmes and portfolios.

Content
1.1 Definition of a Project

1.2 Projects versus Ongoing Operations

1.3 Reasons for Projects and Project Management

1.4 Constraints of Scope, Quality, Time and Cost

1.5 Project Categorisation

 1.6 Project Organization
1.6.1 Functional Organizations
1.6.2 Projectised Organizations
1.6.3 Matrix Organizations
1.7 Project Success and Failure
1.7.1 Reasons for Project Failure
1.7.2 Role of Professionalisation
1.8 Multi Projects

1.9 Summary

1.10 Self Testing

References

Introduction

Modern project management has been evolving for about half a century and is now
increasingly used in industries, governments and institutions throughout the world. Projects
are unique and temporary endeavours which exist to build new facilities, develop new
products, host events, to bring about organizational changes. This training material on
project fundamentals considers the characteristics of energy efficiency and renewable
energy projects and the environments in which they take place.

The traditional methods for managing ongoing and repetitive operations do not work well
for projects. Managing a project involves coordinating diverse tasks and utilising specialist
skills, which usually cannot be found in any one functional department. This requires an
integrative approach to management, coordinating many different processes, making trade-
offs and being proactive. The second part on project management fundamentals provides an
overview of the many aspects of project management. It includes the critical success
factors, processes, project life cycle models, and soft skills such as diversity management.

The following learning units detail the individual processes required for managing a
project. These processes are always carried out in the same sequence and independent of
the particular area of application.

The purpose of the initiating processes is to collect information for enabling a decision to
be made on whether to formally authorise the go ahead for a project. This involves
formulating the objectives, producing a project concept and performing a feasibility study,
if necessary. Definition of the user requirements and preliminary scope definition are also
performed in the initiating stage.
1.1 Definition of a Project

What is a project? This question is best addressed by looking at some of the various
definitions found in the literature:

 "A temporary endeavour undertaken to create a unique service, product, or result."

[2]
 "A unique, transient endeavour undertaken to achieve a desired outcome." [3]
 "A temporary organization that is needed to produce a unique and predefined
outcome or result at a pre-specified time using predetermined resources." [4]
 "A unique process, consisting of a set of coordinated and controlled activities with
start and finish dates, undertaken to achieve an objective conforming to specific
requirements,including the constraints of time, cost and resources" [5]
 "A series of activities aimed at bringing about clearly specified objectives within a
defined time-period and with a defined budget." [6]

From the preceding definitions it becomes clear that a project is built on activities. Three
other main points of the project definition may be extracted, along with their associated
parameters:

 Scope - A unique set of activities to produce a defined outcome (to reach a specific
objective/goal).
 Costs - Parameter for a specific allocation of resources (related to specific
activities).
 Time - Period between a specific start and end date ( schedule).

A project is usually performed in order to achieve some sort of benefit, business or

otherwise. A couple of alternative project definitions which express most importantly the
reason for doing a project are:

 "The work required to take an opportunity and convert it into an asset." [7]
 A management environment that is created for the purpose of delivering one or
more business products according to a specified business case." [4].

1.2 Projects versus Ongoing Operations

 The work performed by an organization falls into the categories of either projects
or ongoing operations. Take the example of a photovoltaic power plant: a project
might be the introduction of a new photo voltaic system whereas an ongoing
operation would be the production of solar energy. Projects and ongoing operations
are quite similar. They both consume resources and produce products or services.
They both cost money and require planning to be done successfully. Their
 difference lies in the temporal factor. Ongoing operations do not have definite
starting and stopping points whereas projects have a beginning and end. A project
ends when its objectives have either been reached or when it becomes clear that
they cannot be reached or when the original need for the project no longer exists. A
project provides a unique product or service and for this reason it must be planned,
otherwise one could just repeat exactly what had been done before. The temporary
nature of a project means that concerns about resources, finance, quality, risk and
communication arise, which would not normally be there when managing standard
operations. Projects tend to be more risky, more complex and have higher priority
than ongoing operations, though this is not always a reliable means of making the
distinction.

Project Ongoing Operation

Temporary - definite beginning and end Continuous - no definitive beginning and end
Produces a unique outcome Produces the same outcome repeatedly
Has its own budget Costs are booked to the appropriate cost centre
Usually involves risk Not usually risky
Usually complex Usually simple
Usually has a higher priority Usually has a lower priority

Table 1.1: Comparison of projects with ongoing operations

1.3 Reasons for Projects and Project Management

The number of projects, programmes and portfolios is growing at an exponential pace,

worldwide [8]. Every multinational company has hundreds of projects. One of the reasons
for this is that the process for managing projects is flexible and adaptable to nearly
anything. The processes taking place in project management can be categorised into
initiating, planning, executing, controlling or closing processes [2], and these will be
described in subsequent chapters. This model of doing things can be applied to almost any
activity. Some sectors such as construction, IT or new technologies, such as renewable
energy systems have always done business by projects. Other sectors like manufacturing
are moving toward using a managed-by-project approach, since they have to respond to the
ever increasing need for change. Projects bring about change and project management is
recognised as the most efficient way of managing change, since it can respond very rapidly
to changing conditions inside and outside of an organization.

As competition increases, organizations are being forced to develop high quality products
at lower cost and in shorter times. Project management helps organizations to make better
use of their resources, reduce development times and costs, anticipate risks and achieve
greater focus on results and quality. The use of proper project management in
predevelopment activities, such as product definition and planning, help companies to
better understand customer requirements and increase the chances of new product success.

1.4 Constraints of Scope, Quality, Time and Cost

The three project parameters of scope (defines project boundaries) cost (budget) and time
(schedule) constrain the project and a trade-off must typically be made among them. The
triple constraint is often depicted as the "iron triangle", first described in 1969 [1], with the
constraints forming its sides. Actually, there is a fourth project parameter, the quality grade
required by the project, so the constraints can be represented as a square or tetrahedron [9],
[10].

Figure 1.1: Project parameter tetrahedron

As shown in figure 2.1, each pair of parameters expresses a certain aspect. For example, the
scope-cost parameter pair expresses the viability of a project, i.e. whether it can actually be
done, and the time-cost pair expresses the effort being put in. The skill for any project
manager is in completing a project with an optimal trade-off of scope, quality, cost and
time. The logical sequence of the 4 project parameters is scope, quality, time and cost. This
is because cost depends upon time (duration of the activities), time depends upon quality
(level of effort required) and the scope (deliverables) must be defined before the quality
grade of the deliverables can be addressed [11]. Altering any one of the constraints has an
effect on the others. If the customer wants to bring forward the end date of the project, then
this is likely to increase its cost and/or reduce its scope and/or reduce its quality. Making
undocumented additions to the scope of the project as it progresses is likely to delay it and
increase its cost, a phenomenon known as scope creep.

Keeping other parameters constant, the variation of cost with time looks something like the
curve shown in figure 1.2:

Figure 1.2: Project cost as a function of project duration

There is a project duration for which the cost is a minimum. Trying to force the duration
below its optimal value introduces time pressure, which has the tendency to increase the
amount of errors made by the workers, which then induce extra costs by having to be
corrected later on. Similarly, overtime incurs higher labour costs and too much decreases
the overall productivity of the workers. On the other hand, letting the project last longer
than its optimal duration also decreases the worker productivity.

Trying to throw extra resources at a project running behind schedule may make things even
worse. For software projects in particular, it was observed in "The Mythical Man-Month"
first published in 1975 [12] that adding more workers to a late project makes it even later,
since the new programmers need time to make themselves familiar with the project and the
communication overhead also increases.
1.5 Project Categorization

Projects take place in all kinds of industries, institutions, governmental and non-
governmental organizations. Projects can be any size and can last anything from a few
hours to many years. They can take place at any level of an organization and involve only a
small part or nearly all of it. They can also take place among many geographically and
nationally dispersed organizations. Project categorization involves identifying types of
projects that have similar characteristics. The need for designing project categorization
systems includes the following reasons [13], [14]:

 Selecting the right projects. An organization wishes to prioritize projects within a

portfolio so that they are aligned with strategy and maximize the return on
investment.
 Executing the projects right. An organization wishes to determine the competencies
required for the project managers, develop them within the organization, and assign
them to the projects.

Project categorisation systems also benefit developers of project management software,

consultants, trainers, educators and professional associations. One system [14] has
categorised projects according to their area of application and end results. Besides common
project management practices, each area of application also has certain characteristics
peculiar to that particular area, such as technical terminology, sequence and interaction of
project management processes, project life cycle or impact on society.

Project category Project subcategory

Adaptation to climate change Altering farming practices
Construction of dams (sea walls)
Development of new crops
Green buildings
Aerospace/Defence Defense systems
Space
Military operations
Business and organisational Acquisition/Merger
change Management process improvement
New business venture
Organisation restructuring
Legal proceeding
Communication systems Network communications systems
Switching communications systems
Energy Wind energy parks/farms
Photovoltaic power plants
Solar thermal Energy (collectors/heating)
 Biogas plants
Geothermal energy
Energy Efficiency
Events International events
National events
Facilities Facility decommissioning
Facility demolition
Facility maintenance and modification
Facility design/procurement/construction
Information systems Developemt of new software
International development Agriculture/rural development
Education
Environment
Health
Nutrition
Population
Sanitation
Small-scale enterprise
Infrastructure
Water supply
Media and entertainment Motion picture
TV segment
Live play or music event
Video Games
Mitigation of Climate Change Greenhouse gas (GHG) emission avoidance /
reduction
Carbon Capture and Sequestration (CCS)
Increase energy efficiency (industrial/domestic)
Use Renewable energies
Product and service Information technology hardware
development Industrial product/process
Consumer product/process
Pharmaceutical product/process
Service (financial, other)
Research and development Environmental
Industrial
Economic development
Medical
Scientific

Table 1.2: Project categories

Examples of application area specific practices include:

• Construction. Almost all work is done under contract.

• Bioscience. This environment is very strongly regulated. New drug development projects
are highly risky, costly and have a small success rate.
• Government contracting. Government acquisition regulations apply.
• Consulting. Project manager also has sales and marketing responsibilities.

Another system [13] has listed 35 attributes for project categorization commonly used:

Nature of work Organisational Project phase Time critical Payment terms

benefits

Client/customer Deliverables Resources Risk type Key project

success factor

Complexity Priority Technology Sector Stage in project

life cycle

Cost Contract type Clarity of Organisational Project

goals/objectives involvement manager

Size Impact Time Technological Risk control

uncertainty

Strategic Funding source Discipline Customer Market

importance involvement uncertainty

Risk level Familiarity Geographical Client Regulatory/

location relationship compliance

Table 1.3: Project categorisation attributes

Project complexity is one of the most common attributes and usually signifies project
scope, technical complexity, and the number of functions or skills involved [15]. The
complexity referred to here should not be confused with the application of complexity
theory to project management, which is described in section 2.7.1. A project can be rated
on a points scale against the 7 factors, giving a total sum of points, which then determines
the level of performance required by the project manager. The tasks performed by a project
manager in different projects are usually quite similar but the level of competency required
of the project manager in performing those tasks will depend upon the complexity of the
project.
The Crawford-Ishikura factor table [16] identifies 7 factors that affect the management
complexity of a project as follows:

1. Stability of the surrounding permanent organisation.

2. Amount of different disciplines involved in performing the project.
 3. Implications of performing the project in legal, social or environmental terms.
4. Size of the possible financial gain or loss for the interested parties.
5. Strategic importance of the project to the performing organisation.
6. Degree to which the interests of the stakeholders with regard to the characteristics
of the project's product are in unison.
7. Number and variety of interfaces between the project and other organisational
entities.

1.6 Project Organization

Projects take place in a customer-supplier environment:

Figure 1.3: Customer-supplier environment

The customer-supplier environment can take many different forms. At the simplest level
both customer and supplier are the same entity. The other extreme may involve a
consortium or legal hierarchy of customers and/or suppliers. Both customer and supplier
may belong to the same corporate body (in-house), to separate bodies (external) or to a
mixture of both. A bidding process may sometimes be used to appoint the supplier. For the
purposes of running a project, a temporary organisation structure is created out of the
customer and supplier organisation structures. The project owner or project sponsor is the
individual or organisation ultimately accountable for the project's success or failure and
comes from the customer side. The project manager may come from either the customer or
supplier side or from outside.
The structure of the larger organisation(s) in which a project takes place will influence the
project, since this has a bearing on aspects such as the allocation of resources and reporting
relationships

1.6.1 Functional Organisations

This is the traditional and most common form of organisational structure, which groups
similar operations into departments, e.g. accounts, personnel, IT or marketing. All
employees in a department report to the department head, who in turn reports to a manger
in the next level of the hierarchy, e.g. the divisional head, or directly to the top management
level, i.e. the CEO, if no such intermediate level(s) exist. This type of organisation is
bureaucratic since formal communication must travel up and down the hierarchy. Project
managers in a functional organisation are usually part-time, dividing their time between the
project and their normal duties as a department head or member of staff. Full-time contract
project managers in functional organisations have little or no authority, since they must
consult with functional heads in order to get funds and resources released.

Figure 1.4: Functional organisation

Some of the advantages of the functional organisational form are that budgeting and cost
control are easier to perform, technical expertise concentrated in departments is easier to
develop, and each employee must report to only one person. Some of the disadvantages are
that the project coordination responsibility is spread across different departments (no
individual person is directly responsible). Also the response to customer needs is slow,
since customer communications go via the top management. Projects usually fall behind
schedule in the functional organisation.

1.6.2 Projectised Organisations

The projectised or pure product organisation is the opposite of the functional organisation.
This type of organisation is designed for doing projects. The project manager is full-time,
has full authority over the project and reports directly to the CEO. All project team
members work solely on the project and must only report to the project manager. Support
functions such as accounts and personnel also report to the project manager. Fast reaction
times are enabled and projects are usually completed on schedule.

Figure 1.5: Projectised organisation

Some of the disadvantages of the projectised organisation are that sharing personnel
between projects is not possible, which increases costs, and the development of strong
technical expertise in functional groups is impeded. Once a project is completed, the team
members are returned to a pool and may be laid off for a while. Competition for equipment
and facilities among projects is also a source of conflict.
 1.6.3 Matrix Organisations

As organizations take more multidisciplinary approaches to accomplishing work, Matrix

Management can prove to be an effective tool in Resource Management. The traditional
form of organizations often consists of horizontal layers with a distinct line of command,
Matrix Management is opposed to this traditional management structue and allows
individuals to report to multiple people for example to heads of functional and operational
departments. In other words, in Matrix Management organizational structure is often
associated with more multidisciplinary approaches to accomplish tasks and project team
member reports to, and is accountable to, two or more different managers. Matrix
organisations result from combining the functional and projectised forms and are the most
complicated. The project manager and functional managers share responsibility for the
project and must collaborate. The project managers coordinate the project activities and the
functional managers maintain the technical performance levels. The matrix organisation
exists in strong, balanced and weak forms, according to how much authority is bestowed
upon the project managers. In the strong matrix the authority of the project manager
approaches that of the projectised organisation, while in the weak matrix he or she has few
management powers over the team and other resources. In the balanced matrix the project
manager has partial authority to commit resources to the project. Functional staff members
are relieved from most of their functional duties for the duration of the project but have to
report both to their functional managers and the project manager. The staff can also be
shared between different projects, helping to reduce costs.

Figure
1.6:
Matrix
organisat
ion

Some of the disadvantages of the matrix organisation are that the work and communication
flows are multidimensional, making it harder to monitor and control, and double work can
also occur. As a result, more administration overhead is also needed to develop procedures
and policies. Nevertheless to be able to work in a Matrix management structure is often
demanded in the field of renewable energy as can be seen in this example:

Example
Project manager Job offer
One example from a job offer in the middle east (Egypt; Syria, Lybia)
(http://unjobs.org/vacancies/1240591736612):
Area: Climate Change; Development Plans; ERP; Electrical Engineering; Electrical
Engineer; Energy Efficiency; Industrial Sector; Natural Gas; Private Sector; Renewable
Energy; Sustainable Development

Senior Energy Specialist, Cairo

Closing Date: Tuesday, 28 April 2009 (closed)
Job Title Sr Energy Spec.,
Location Cairo, Egypt
Language Requirements Arabic [Essential]; English [Essential]
Appointment Type Term (Duration: 2 yrs)

Background / General description

...The Energy program in Egypt comprises four energy projects under supervision, and
additional electricity, energy efficiency, renewable energy and natural gas projects are in
the pipeline. In addition, the Bank is assisting the government through sector work in
energy pricing, energy efficiency, regulation and private sector participation as well as
commercial development of renewable energy. The program is the largest energy program
in the region.
The Senior Energy Specialist plays a key role within the ongoing energy program in Egypt,
and will be expected to be very proactive in deepening the Bank's knowledge of the sector,
building a network of contacts, and in identifying new opportunities.

Duties and Accountabilities

The specific responsibilities of the Senior Energy Specialist for the Egypt Energy
Program are:
1. Follow on a day-to-day basis the energy portfolio and pipeline through effective
communication with the key counterparts in Egypt and colleagues in the Cairo Office and
in HQ.
2. Have regular meetings with key clients and stakeholders to ensure quality and timely
deliverables; report back to Sector Manager and Task Team Leaders on progress of
deliverables and contributions (regular reports should be prepared on this basis).
...
6. Proactively pursue follow-up of project and sector work and back the Task Team Leader
based in HQ up with analytical and administrative support.
7. Provide input to key documents on the energy sector, key challenges and development
plans.
8. Ensure close collaboration with colleagues ... in activities related to energy, energy
efficiency, and climate change.
...
11. If requested, provide information on energy efficiency assessments and programs in the
Egyptian industrial sector.

General Competencies

1. Ability to operate effectively in a matrix management environment, both as a team

leader and team member.

2. Ability to lead a team of professionals in the execution of projects.

3. Ability to coach, mentor and develop more junior staff.
4. Ability to deal sensitively in multi-cultural environments and build effective working
relations with clients and colleagues.
5. Effective verbal and written communication skills.

Minimum Education/Experience at recruitment/selection

1. Minimum Education: MA/MS (in electrical engineering or related discipline)
2. Minimum Years of Relevant Experience: 8

1.7 Project Success and Failure

Martin Cobb from the Treasury Board of Canada Secretariat was once quoted as saying
back in the 1990's:

"We know why projects fail; we know how to prevent their failure - so why do they still
fail?" [17].

This apparent paradox remains true today, and the challenge still remains to dramatically
improve the success rate of projects.

For a project to be considered successful, the project must be completed on schedule, on

cost and with the scope and quality laid down in the project plan. These planned parameters
define a single point on the schedule, cost, scope and quality grid. Since very few projects
are not completed without some trade-offs between schedule, cost, scope and quality, one is
usually satisfied if the end result lies in some region about this special point. Some famous
examples of failure to meet this point include [18]:

 Concorde supersonic aeroplane (cost overrun by 1100 %).

 Sydney Opera House (cost overrun by 1400 %).
 Channel Tunnel (cost overrun by 230 %).

In fact, cost overruns can be found in 90 % of all construction mega-projects in 20

countries ranging from Europe to Asia [19].
In addition to keeping close to the planned scope, quality, schedule and budget, a definition
of project success also includes [20]:

 Not disturbing the main work flow of the project performing organisation.
 Not changing the corporate culture.

Most importantly, the customer or user must also accept the results of the project. The
IPMA definition of project success as the "appreciation by the various interested parties of
the project outcomes" [8] also hints to this.

1.7.1 Reasons for Project Failure

A recent global project management survey [21], involving 250 organisations from 12
different sectors in 16 different countries across the world, found that one in three projects
fails to deliver on time or within budget. The survey also found that more than half of all
projects delivered results creating no tangible business benefits. This is surprising, since the
driving force behind most projects in a business environment is ultimately to be more
profitable. Project return on investment depends upon a combination of the following
factors:

 The organisation's commitment to change and level of executive support.

 The scale, complexity and number of projects being driven simultaneously.
 The project environment and the level to which this fosters project success.
 The performance capability of the project teams and project individuals.

A study by the German Project Management Association (GPM Deutsche Gesellschaft für
Projektmanagement) [22] of 98 companies in Germany from 15 different sectors compared
the 15 most successful with the 15 least successful companies. The study identified the
following factors present in the most successful companies and lacking in the least
successful:

 Metrics in place for measuring project success.

 Gathering of lessons learned to develop best practices.
 Maintenance of a contract management knowledge base.
 Changes in customer requirements lead to revisions in scope and cost estimates.
 Purchasing department provides requested materials on time and to the desired
quality.
 Quality management is tightly integrated into the project processes.
 Customer's quality expectations are met.
 Project team members work enthusiastically on projects and there is no conflict with
the line organisation.
 Problems are openly communicated early on
 Project team members are regularly paid bonuses for good work.
The results of the Standish Group's CHAOS research [23] are the most widely quoted
statistics in the IT industry. The Standish Group have completed two surveys in the United
States on the success of projects, in 1994 the success rate of IT projects was found to be 16
%, and in 2003 the success rate had increased to 34 %.

The two components of failure are [20]:

 Planning failure. This occurs when achievable accomplishments differ from planned
accomplishments. Good project management practices can help to reduce this.
However, having unrealistic expectations about what is achievable will guarantee
planning failure to occur.
 Performance failure. This occurs when there is a failure to achieve what was
actually achievable, and is usually due to poor motivation, productivity, etc.

Figure 1.7: Failure components

Some of the factors that cause projects to fail include [24], [25]:

Area Reason for failure

Business case  Lack of business alignment.

Scope  Project objectives are unclear.

 Requirements have major changes.
 Unrealistic time pressures.
 High complexity.
 The project is too big and too ambitious.

Planning  Not enough time spent on planning and structuring the project.
 Plans are not used correctly or used to guide the project forward.
 The project organisation is not well defined, roles and responsibilities are
vague.

Controlling  Initial cost and schedule estimates are not revised when more
information becomes available as the project progresses.

PM Skills  The theory of project management is not put into practice.

 The incorrect methodology is used.
 Project manager's lack of knowledge and experience.

Sponsorship  Lack of active sponsorship.

Communication  Communications are poor.

 Lack of end-user involvement.

 Testing and/or inspections are poorly done.

Quality

 High level of risk.

Risk

 Use of technology that is not proven.

Technology

Politics  Failure to deal with political battles in the organisation.

 Strong resistance towards change.

Table 1.4: Reasons for project failure

Another reason for project failure could be the culture of the project performing
organisation. Middle and top management in organisations with programmes and portfolios
of projects do not always understand project management, and take the wrong approach,
preferring to command and control them. Changing attitudes and culture can take a long
time.

1.7.2 Role of Professionalisation

Despite the growth of project management as a profession, with more and more certified
practitioners, it is not clear that project managers are becoming better. Even the
construction industry, which is a more mature user of project management than the
renewable energies industry, struggles to deliver successful projects more than 30 % of the
time [26]. Merely having knowledge based credentials does not seem to guarantee
improved success rates. Therefore, some organisations are starting to move to the next level
in the evolution of professional project management, which is independently evaluated,
competency based credentialing [26].

1.8 Multi Projects

Projects do not necessarily exist in isolation but may form part of a larger programme or
portfolio carried out under the sponsorship of an organisation. A programme is a set of
related projects managed in a coordinated way to obtain benefits and control not available
from managing them individually, e.g. NASA's space programme. A portfolio is a group of
projects and programmes which may not necessarily be interdependent or directly related
[2]. Portfolio and programme management must be based on the real strategic goals of the
organisation. Multiple projects often compete for resources within an organisation.

The more projects an organisation runs simultaneously, the more there is a need for
organisational consistency and implementation of a common approach to project
management across the entire organisation. Many organisations achieve this centralised and
coordinated management of projects through use of an organisational body commonly
known as a project management office (PMO). The functions of a PMO include:

 Administrative support - maintain schedules, budgets, time sheets.

 Consulting and mentoring - consult within organisation on an as-needed basis.
 Methods and standards - software support tools, project management methodology,
project selection processes.
 Training - curriculum development, identify vendors, provide training.
 Project managers - maintain a pool of project managers, offer career development
opportunities.
1.9 Summary

 A project is a unique set of activities, using a limited allocation of resources over a

limited period of time to produce an outcome. Projects are always constrained in
scope, schedule, budget and quality. Organisations do projects since they are the
best way to respond to a rapidly changing business environment and provide a
means to make better use of limited resources, manage risks and create better
quality results. Projects are part of a programme of related projects or just one of
many unrelated projects in an organisation's portfolio. Projects can be categorised
by considering many types of attributes, such as size, risk or complexity. The
complexity of a project will dictate the required competencies of the project
manager. Projects are performed by a supplier for a customer. The customer and
supplier could be anything from being the same person to forming a complex
consortium of organisations. The organisational forms in which projects take place
range from the traditional functional organisation with its effective command and
control structures to the fast responding projectised organisation. The matrix form
attempts to combine the advantages of the functional and projectised forms. Projects
fail when they don't deliver according to the plan. This is may be either due to the
plan being wrong or a failure of the project team to perform.
Multiprojects need a consistent superior organisational structure (PMO - Project
Management Office) for the purpose of coordinating various projects.

References

[1] Weaver P., The Origins of Modern Project Management, 2007,

http://www.mosaicprojects.com.au/PDF_Papers/P050_Origins_of_Modern_PM.pdf

[2] A Guide to the Project Management Body of Knowledge, 3rd edition, PMI, Newtown
Square, Pennsylvania, USA, 2004

[3] APM Body of Knowledge, 5th edition, Association for Project Management, High
Wycombe, UK, 2006

[4] Managing Successful Projects with PRINCE2, 4th edition, The Stationery Office, 2005

[5] ISO 10006 - Guidelines for Quality Management in Projects, International Organisation
for Standardization, 2003

[6] Project Cycle Management Guidelines, European Commission, Europe Aid

Cooperation Office, Brussels, 2004

[7] Westney R., Risk Management: Maximizing the Probability of Success, in Project
Management for Business Professionals, edited by Joan Knutson, Wiley, NY, 2001

[8] ICB - IPMA Competence Baseline Version 3.0, 2006

[9] Wideman R., Triangles, Sex and Simplicity, 2003,
http://www.maxwideman.com/musings/irontriangle.htm

[10] Wideman R., Those Sexy Triangles Again, 2004,

http://www.maxwideman.com/musings/triangles.htm

[11] Wideman R., PMBOK® Guide, Third Edition - Is more really better? 2005,
http://www.maxwideman.com/papers/pmbok3/intro.htm

[12] Brooks F., The Mythical Man-Month, 2nd edition, Addison-Wesley, 1995

[13] Crawford L., Hobbs B., Turner J., Project categorization systems and their use in
organizations: An empirical study, in Innovations: Project Management Research, edited by
D.P. Slevin, C. David, J.K. Pinto, Project Management Institute, Newtown Square, PA,
2004

[14] Archibald R.D., The purposes and methods of practical project categorization,
International Project/Program Management Workshop 5, ESC Lille, France, Lille Graduate
School of Management, August 22 to 26, 2005

[15] Aitken A., Crawford L., A study of project categorisation based on project
management complexity, IRNOP VIII, Brighton, UK, 2007

[16] A Framework for Performance Based Competency Standards for Global Level 1 and 2
Project Managers, Global Alliance for Project Performance Standards, 2007

[17] Weaver P., Trends in Modern Project Management - Past, Present and Future, 2007,
http://www.mosaicprojects.com.au/PDF_Papers/P061_Trends_in_Modern_PM.pdf

[18] Osgood N., ESD.018J Project Management, MIT Open Courseware, 2004,
http://ocw.mit.edu/OcwWeb/Civil-and-Environmental-Engineering/1-040Spring-
2004/CourseHome/index.htm

[19] Lee Sang Hyun, ESD.018J Project Management - Lect. 12: Project Dynamics, MIT
Open Courseware, 2007, http://ocw.mit.edu/OcwWeb/Civil-and-Environmental-
Engineering/1-040Spring-2007/CourseHome/index.htm

[20] Kerzner H., Project Management: A Systems Approach to Planning, Scheduling, and
Controlling, 8th edition, Wiley, 2003

[21] Global Project Management Survey, PIPC, 2005,

http://www.pmportal.co.uk/uploads/documents/PIPCSurvey.pdf

[22] Engel C., Holm C., Ergebnisse der Projektmanagement Studie: Erfolgreich Projekte
Durchführen, PA Consulting Group, GPM Deutsche Gesellschaft für Projektmanagement
e.V., 2004, http://www.gpm-ipma.de/download/GPM_2004_Ergebnisse_final.pdf
[23] Latest Standish Group CHAOS Report Shows Project Success Rates have Improved
by 50%, The Standish Group, 2003, http://www.standishgroup.com/press/article.php?id=2

[24] Global Project Management, 2004,

http://www.eatonconsultinggroup.com/strategy/project_management.html

[25] Charvat J., Project Management Methodologies: Selecting, Implementing, and

Supporting Methodologies and Processes for Projects, 1st edition, John Wiley & Sons,
2003

[26] Giammalvo P., AACEi joins GAPPS - Why & What it means! PM World Today, VIII,
12, 2006
II. Project Management Fundamentals

Learning Targets
Modern project management had its origins in operations research and later in the science
of scheduling, as defined by the development of critical path analysis starting in the 1950's
[1]. Nowadays project management encompasses much more than the just planning,
scheduling and controlling, and is viewed as being more behavioural than quantitative [2].

After working through the chapter, the student should be able to provide answers to the
following questions:

 How is project management defined and what are its critical success factors?
 What is the project life cycle and what are the main life cycle models?
 What are the different project stakeholders?
 What are the essential soft skills of project management?

This chapter is structured as follows: The first section defines project management and
provides an overview of its essential elements. The next section considers project
management from a systems point of view and describes the various processes involved.
Section four introduces the concept of the project life cycle and its distinct phases, and
various life cycle models are presented. Section five provides descriptions of the different
kinds of project stakeholders. The subsequent section lists some of the most important
standards, methodologies and maturity models used in project management. Section seven
contains an introduction to the behavioural aspects of project management, including
communicating, leadership, negotiation, conflict resolution and managing meetings. The
final section takes a look at some of the current topics in project management.

Content
2.1 Definition of Project Management

2.2 Project Management System

2.3 Project Life Cycle

2.3.1 Waterfall Model
2.3.2 Incremental Model
2.3.3 Vee Model

2.3.3.1 Rapid Application Development

2.3.3.2 Spiral Model
2.3.3.3 Build and Fix
2.4 Project Stakeholders

2.5 Project Management Standards, Methodologies and Maturity

2.5.1 Global Standards in Project Management

2.5.2 Project Management Methodologies
2.5.3 Project Management Maturity

2.6 Behavioural Issues in Project Management

2.6.1 Communicating

2.6.1.1 Communication Types

2.6.1.2 Personality Types
2.6.1.3 Managing Meetings

2.6.2 Leadership
2.6.3 Motivation
2.6.4 Negotiation and Conflict

2.7 Current and Future Trends in Project Management

2.7.1 Complex Project Management

2.7.2 Agile Project Management

2.8 Summary

2.9 Self Testing

References
2.1 Definition of Project Management (1)

Some definitions of project management are presented:

 "The application of knowledge, skills, tools, and techniques to project activities to

meet the project requirements." [3].
 "The process, by which projects are defined, planned, monitored, controlled and
delivered such that the agreed benefits are realised." [4].
 "The planning, monitoring and control of all aspects of a project and the motivation
of all those involved in it to achieve the project objectives on time and to the
specified cost, quality and performance." [5].
 "The planning, organising, monitoring, controlling and reporting of all aspects of a
project and the motivation of all those involved in it to achieve the project
objectives" [6].
 "The process of achieving projective objectives through the traditional
organisational structure and over the specialities of the individuals concerned" [2].

Project management is a formal management discipline and is about achieving the optimal
trade-off between project scope, quality, schedule and cost in a series of steps. It can be
viewed as a process, producing a specified output via a structured set of activities. The
theory of project management is presented in numerous reference works, such as those
from professional project management associations like the PMI or IPMA. One may view
theory as a waste of time but time is also wasted in correcting errors which could have been
avoided by application of the theory. Application of project management theory does not
guarantee success but without it, failure is more likely. Industry research has shown that
there are definite productivity increases and cost savings over time of up to 35 % associated
with using a standard project management methodology [7]. Actually, successful project
management and successful projects are not the same, since successfully managed projects
can be prematurely terminated if they no longer fit the strategic direction of the project
performing organisation.

In broad terms, the elements involved in managing projects fall into two categories:

 Hard factors e.g. planning, contract management, problem solving.

 Soft factors e.g. communication, people management, leadership, negotiation,
persuasion, intuition, creativity.

The hard factors make project management a science and the soft factors also make it an
art. Project management requires a combination of technical and social skills, and for this
reason, it has been estimated that around 30 % of the population is not suited to project
management [8]. The soft factors are essential because people carry out projects and not the
plans. The project manager needs to focus not only on the product but also on the people
producing it, by motivating, leading and directing them and communicating with and
influencing all the other stakeholders [9]. In fact, two of the three arguably most important
project management skills of planning, communicating and persuading are soft skills [8].
The project manager has a lot of responsibility. The project manager must direct, supervise
and control the project from beginning to end and should not normally perform any of the
project work. Some of the essential elements in managing a project are [10]:

 Requirements. Involving the users of the project results to ensure they are
delivered what they really want.
 Organisation. Deciding upon the right project organisation structure (how the
responsibilities are accountabilities are resolved) to promote teamwork and
communications.
 Planning. Translating the requirements into a set of tasks to be performed by the
project team. Also, updating the plans to reflect any new information.
 Team. Getting people with the right skills to do the work.
 Leadership. Motivating the team to deliver results.
 Risks. Managing risks and making use of opportunities. Building adequate reserves
is important because plans cannot control the future. Plans are only a prediction of
what may happen. Therefore, uncertainty must be included as an integral part of
project management and managed accordingly.
 Monitoring and control. Measuring the project performance against the plan to
discover any problems. Reacting to any variances to bring the project back to plan
and proactively ensuring that the project stays on course.
 Communications. Providing project transparency for all the interested parties.

Depending upon the size and complexity of the project, this may be too much for one
person to carry out. In such cases there will be a project management team with
responsibilities divided up into areas like finance, procurement, risk analysis and quality,
though the project manager will still have the overall responsibility of managing the
project.

Elements critical to the success of all projects include:

 Clear consensus view of the project objectives by all the interested parties, as well
as their involvement and buy-in.
 Well-defined scope statement.
 Well-defined project management plan.
 Use of established project management practices.

2.2 Project Management System (1)

The systems based approach to project management is the one adopted by the most popular
project management knowledge guides and methodologies such as the PMBOK Guide [3]
and PRINCE2 [5].
A system is a group of interacting elements forming a collective entity, the elements of
which can also be systems, and in an engineering and management context are man-made
[11]. Systems are usually large and complex and the component parts interact to such a
degree that, making a change on one part is likely to affect many others. A system's inputs
are normally random and human judgement also enters into their operation.

A process is a naturally occurring or designed sequence of changes of properties or

attributes of a system [12]. In the case of a project, the system delivers the project's unique
products, services or results and project management is the associated process [13].

2.2 Project Management System (1)

The systems based approach to project management is the one adopted by the most popular
project management knowledge guides and methodologies such as the PMBOK Guide [3]
and PRINCE2 [5].

A system is a group of interacting elements forming a collective entity, the elements of

which can also be systems, and in an engineering and management context are man-made
[11]. Systems are usually large and complex and the component parts interact to such a
degree that, making a change on one part is likely to affect many others. A system's inputs
are normally random and human judgement also enters into their operation.

A process is a naturally occurring or designed sequence of changes of properties or

attributes of a system [12]. In the case of a project, the system delivers the project's unique
products, services or results and project management is the associated process [13].
Figure 2.1: System, process and the systems view of project management

The output e.g. satisfaction of the customer, measures the performance of the system.
Systems dynamics modelling techniques can be used to help understand the structure of
projects and how that structure creates patterns of behaviour, e.g. staffing levels as a
function of time [14]. The better understanding gained can be used to improve management
of projects.

Practitioners have observed that managing a project involves some common processes,
independent of the project being managed. There is considerable interaction between the
component processes. Integrating the individual processes into a functioning, unified whole
allows projects to be managed more effectively, and is what forms a good project
management methodology (see section 2.5.2). A breakdown of the process occurring in the
right hand side of figure 2.1 yields the type of structure shown in figure 2.2 below.
Figure 2.2: Processes in the project management system

The main process blocks are divided up into 3 levels of management.

The high level direction of the project lies with the sponsor, which is the role ultimately
responsible for the project. This role provides funding, resolves issues and scope changes
and approves major project results. A steering committee composed of high-level
interested parties may also provide some overall direction. The PRINCE2 project
management methodology defines a project board, which has the responsibility of
directing the project. The change control board shares authority with the sponsor to make
changes to the project scope, schedule, budget and quality .

The lowest management level contains the project team managers and/or team members
involved with developing the product. This typically follows a life cycle process composed
of a number of phases specific to the area of application of the project, such as the
installation of a wind power plant, or the development of solar cells.

The management level in between contains the project manager or a project management
team led by the project manager, who, by means of initiating, planning, monitoring,
controlling and closing the project activities, tries to ensure the success of the project.
 Initiating. Processes performed at the beginning of a project or project phase to
develop the concept and authorise the work.
 Planning. Processes to define the products of the project and create the project
schedule and budget.
 Monitoring. Processes to detect deviations from the scope, schedule, budget and
quality at any time of the project.
 Controlling. Processes to correct deviations from scope, schedule, budget and
quality.
 Closing. Processes performed at the end of a project or project phase to end all the
activities and transfer the results over to the customer or next phase.
 2.2 Project Management System (3)
 The sequence of the main processes is shown in figure 2.3. The project planning
follows after initiation and precedes execution. During execution, the project
progress is monitored for deviations away from the plan. The necessary corrections
to put the project back on course are made in the controlling process, which then
passes back to the execution process (step 5). Larger deviations may require the
project plan to be modified, in which case the controlling process passes on to the
planning process first (step 5'), before continuing with execution. In the last control
the decision is made that the project or phase objectives have been reached and the
closing process begins.

 Figure 2.3: Interaction of the main project management processes


The main processes interact with various support processes from subject areas
relevant to managing projects, such as risk and quality management. For example,
the knowledge areas in the PMBOK Guide [3] provide a source of reference for
these types of processes.
 At a lower level of granularity than that shown in figure 2.4 are the individual
management processes, such as the component processes of planning or risk
management. For example, the PMBOK Guide [3] describes 44 such processes. An
input to such a process could be information or a request and an output could be
updated information, a decision or an approval, as shown in figure 3.4. Techniques
are procedures utilised to get the work done e.g. earned value analysis, and tools are
aids used to facilitate the work e.g. project management software.
 Figure 2.4: An individual management process

2.3 Project Life Cycle

The path from the beginning of a project to its end is marked by a chronological sequence
of measurable and verifiable work products, commonly called deliverables or products.
The deliverables could be items such as a specification, a feasibility study report, a detailed
design document, a working prototype or a management decision. Once the final
deliverable is completed (built/delivered/done), the objective of the project has been
reached. The path can be split up into a series of adjacent sections known as phases or
stages, where the end of a phase is usually marked by the production of a deliverable or
deliverables for use in the next phase. Cost and schedule estimates, plans, requirements,
and specifications should be updated and evaluated at the end of each phase where
appropriate, sometimes providing a basis for the executive to decide about whether to
continue with the project. Thus, phase boundaries provide decision points or gates for the
executive management. However, in some situations the next phase is begun without
closing the current phase or several phases may run in parallel.
Figure 2.5: Stage-gate process

The collection of phases constitutes what is known as the project life cycle or life span,
since cycle implies something that repeats indefinitely, which is not the case with projects
[15]. The life cycle refers to the process used to build the project deliverables and is
specific to the industry and product. The project management process depends upon the life
cycle process in the areas of executing the project and the project deliverables. For
example, a lot of aspects of risk and quality management are related to the nature of the
project's product. The project life cycle is the only thing which really separates projects
from non-projects [16]. The project life cycle normally forms just a part of a product life
cycle.

The names and number of phases in the life cycle depend upon the organization/industry
but generally include [15]:

 Concept. Defining the objectives and developing the project parameters in outline.
 Development. Performing the defining, designing and planning before work can
start.
 Execution. Carrying out the plan and ensuring the project says on course by
monitoring and controlling it.
 Transfer. Closing the project and moving the completed project deliverables over
to operations.

Various life cycle process models exist, such as the waterfall, incremental, spiral and vee
models, which will be described in the next sections.

2.3.1 Waterfall Model

The waterfall model is the name given to a linear sequence of steps with little or no
backtracking, after a paper on software development by Royce in 1970 [17]. Each stage in
the sequence is completed before the next one is started. It was the primary systems
engineering process model during most of the 1980's. It generally consists of the following
phases:

 Define system requirements.

 Design and plan system.
 Build system.
 Test system with the involvement of its intended users and make any necessary
changes.
 Put system into use, either gradually or all at once.
 Evaluate system extensively once it is up and running. Maintain the system and
provide support to the users.

Figure 2.6: Waterfall model

The advantage of this approach is that it allows for

departmentalisation and managerial control.
However, this inflexible partitioning of the project
into distinct stages means that it does not
accommodate change and so will only produce
good results if everything goes according to the
original plan, i.e. risk is not addressed. This makes
it difficult to respond to changing customer
requirements or if problems are discovered in the
testing phase, it is very difficult to go back to the
design phase to make the necessary changes.
Therefore, this model is only appropriate when the
requirements and solution are well-understood and
changes will be fairly limited during the design
process.

If the time gap between requirements analysis and implementation is too long, then the
original requirements may no longer be valid. Few business systems have stable
requirements over the order of months and so this approach is adopted by few
organisations.

However, for construction projects, e.g. building a biogas plant or a photovoltaic power
plant, or a transport project organising the logistic chain, -such as the shipping/transport of
large wind turbines- the serialisation of tasks proposed by the Waterfall model is natural
and appropriate [18].
2.3.2 Incremental Model

This model is sometimes known as the iterative waterfall model. Rather than deliver the
system as a single delivery, the development and delivery is broken down into increments
with each increment delivering part of the required functionality. User requirements are
prioritised and the highest priority requirements are included in early increments. Once the
development of an increment is started, the requirements are frozen, though requirements
for later increments can continue to evolve.

Figure 2.7: Incremental model

The advantages of incremental development are:

 Customer value can be delivered with each increment, so system functionality is

available earlier.
 Early increments act as a prototype to help elicit requirements for later increments.
 Lower risk of overall project failure.
 The highest priority system services tend to receive the most testing.

In fact, the original paper by Royce on the waterfall model [17] recommended more than a
single pass through the phases.
An example could be the up-gradation of the capacity of a photovoltaic power plant by
incrementing the number of solar panels clustered in larger units (Increment 1,2...).
2.3.3 Vee Model

Vee models [19] visualise the project cycle in the form of a letter V, with decomposition
and definition on the left side and integration and verification on the right side, i.e. top-
down development and bottom-up implementation. The further one goes down the left side,
the greater the level of decomposition, and the further one goes up the right side, the greater
the level of integration. At each decomposition level, there is a direct correlation between
activities on the left and right sides of the Vee, since the method of verification to be used
on the right must be determined on the left.

Figure 2.8: Vee model

Vee models were developed for complex systems engineering projects, e.g. military, space,
spread over several companies [18]. Here, a prime contractor decomposes the system into
subsystems, which are developed by subcontractors, and then integrated by the prime
contractor to form the finished system. Vee models are suited to projects where the
requirements are very certain. They are heavy on documentation providing thorough audit
trails, and so popular with government departments.

The German V-Modell [20] originated in 1997 and has become the development standard
for systems projects in all civil and military federal agencies.

2.3.3.1 Rapid Application Development

Rapid application development (RAD) or rapid prototyping is a form of iterative
development, where the basic idea is to talk to the customer to get the initial requirements,
rapidly build a prototype, show it to the customer to get their reaction and then build the
next prototype, and so on. This process continues until the customer is satisfied. Such
projects using this method are difficult to plan and control and only suit small teams.
However, valuable time is devoted to actually developing the product rather than to the
management of documents. RAD is an agile method (see section 2.7.2).

2.3.3.2 Spiral Model

The spiral model [21] is a form of rapid prototyping and was developed to address the
shortcoming of the waterfall model by preceding the waterfall with a defined series of risk
management activities. The approach is to resolve requirements risks, technical feasibility
risks, and operational risks before deciding on a concept and a design for traditional
waterfall development. Its name comes from its graphical representation as a spiral, with
the radial direction corresponding to the cumulative cost incurred and the angular direction
corresponding to progress made in completing each cycle of the spiral. The spiral is
traversed clockwise beginning at the centre. Each traversal of the spiral usually results in a
prototype. The disadvantage of the spiral model is that the risk assessment is rigidly
anchored in the process. Risk assessment demands expertise and may not be always be
necessary.

2.3.3.3 Build and Fix

Although the most primitive, build and fix is actually the most common approach and is
used by individuals working alone or in small groups, typically in small start up firms [22].
The idea is basically to install a plant or and then keep modifying it until it works. In this
model further development is doen at the customer side which often leads to customer
dissatisfaction. Virtually no project management is used, so it can be very risky.

2.4 Project Stakeholders (1)

A stakeholder or interested party is a person or organisation who has an interest in the

execution and/or success or failure of a project. This, by definition, includes those players
directly involved with the project, such as the project manager, project sponsor, project
team and customer. It also includes those indirectly involved but able to influence the
course of the project in some way, both positively and negatively. A third group of
stakeholders are those individuals and organisations that have no real influence but are
likely to be affected by the existence of the project and its outcome. Positive stakeholders
are those persons and organisations who are likely to benefit from a project's success, while
negative stakeholders are those viewing the project as having a negative impact, such as
environmentalists against the construction of nuclear power stations.
Stakeholder Role and Responsibility

Project manager Creates plans, monitors, controls, manages team,

reports status

Project sponsor or Initiates and oversees project, resolves issues

owner

Functional managers Produce deliverables

Customer, client or Sets requirements, approves deliverables

user

Project team Completes the activities

Suppliers Provide goods and services

Table 2.1: Major project stakeholders

In the initiation phase of a project the project manager needs to identify all project
stakeholders and analyse their interests and requirements. Threats and opportunities
presented by stakeholders constitute risks and need to be managed as such. With this
knowledge the project manager can then communicate to the stakeholders which of their
expectations will be fulfilled or not fulfilled by the project. As the project progresses, the
project manager needs to note stakeholder changes and monitor stakeholder satisfaction.

Stakeholder analysis

The increasing scope and ambition of many projects require a commitment to dialogue and
collaboration with a diverse range of stakeholders. Projects are dependent upon
stakeholders influence and importance. Stakeholders are all those who need to be
considered in achieving project goals and whose participation and support are crucial to its
success. Analysing the stakeholders is an important activity of the project management
since all stakeholders will come to the process with their own biases.
A stakeholder analysis can be undertaken throughout all stages of the project cycle, but it
definitely should be undertaken at the outset of a project or programme. Different types of
stakeholders will be engaged in different ways in the various stages of the project, from
gathering and giving information, to consultation, dialogue, working together, and
partnership. There are a number of ways of undertaking a stakeholder analysis. Workshops,
focus groups and interviews are three common approaches. In order to get an overview
about the stakeholders involved and to analyse them the simple form of a table (matrix) can
be used.
The stakeholder analysis matrix can be designed with a set of quadrants in the following
manner:

Figure - Example of a stakeholder matrix

Source World Wildlife Foundation (WWF) -

http://assets.panda.org/downloads/1_1_stakeholder_analysis_11_01_05.pdf

Such a matrix should provide information about the different interests and influences of
those involved in a project. Good stakeholder analysis matrices should display each group's
(or persons) interest, the level of influence, and who will have a voice in the new
developments and project alterations. Examples of stakeholders may be ministries,
government and non- government organisations, investors, end-users or clients, public
and/or private companies.

2.5 Project Management Standards, Methodologies and Maturity

Standards and guidelines define the interdisciplinary tasks that are needed throughout the
project life cycle to transform the customer's requirements into a product. They usually
specify the requirements for the project process and its application throughout the project
life cycle but do not attempt to define the implementation of each process. Some examples
of standards and guidelines in project management published in the English language are
given in table 2.2.

The definition of standards and bodies of knowledge has been the enabler in the
development of project management as a profession. They identify the roles and tasks of
project managers, provide a common vocabulary and all the standards in table 2.2 (with the
exception of ISO 10006) act as a baseline in the assessment and award of professional
qualifications in project management. Above all, the PMBOK Guide has been an important
factor in the growth of project management and its dissemination has benefited from the
rapidly increasing use of the World Wide Web [23]. There is a multitude of project
management standards, all having differences in coverage, terminology, structure, which
also reflects the status of project management as a relatively immature profession.

Organisation Standard

International Project ICB - IPMA Competence Baseline

Management Association http://www.ipma.ch
(IPMA)

Project Management A Guide to the Project Management Body of

Institute (PMI) Knowledge (PMBOK)
http://www.pmi.org

Australian Institute of A Competence Standard, Level 4/5/6

Project Management (AIPM) http://www.aipm.com.au

International Association of Certified Project and Program Management Body of

Project and Program Knowledge (CPPMBOK)
Management (IAPPM) http://www.iappm.org

International Organisation ISO 10006 - Guidelines for Quality Management in

for Standardization (ISO) Projects
http://www.standardsdirect.org/iso10006.htm

Technical Survey Society of

Germany (TUEV)

Engineering Advancement P2M: A Guidebook of Project and Program

Association of Japan Management for Enterprise Innovation
(ENAA) http://www.pmaj.or.jp

Table 2.2: Examples of project management standards and guidelines

2.5.1 Global Standards in Project Management

Since the mid 1990's [24] there has been some movement among project management
associations (including the PMI and IPMA) in trying to introduce globally recognised
standards and qualifications in project management. In 1999 the IPMA initiated a series of
global working parties, defining 2 initiatives as follows [23]:

 Development of a global body of project management knowledge.

 Development of global performance-based standards for project management
personnel.

The main reasons for the interest in a global approach to project management include [23]:

 Demand by corporations for standards and qualifications that are applicable

throughout global operations as a basis for project management methodologies and
for selection, development, and deployment of project management personnel.
 Demand from practitioners for global recognition and transportability of
professional and academic qualifications in project management.
 Concern for international competitiveness by nations, corporations, and individuals.
 Potential fragmentation of an emergent project management profession because of
competition rather than cooperation in development and promotion of project
management standards and qualification.

Currently, the Global Alliance for Project Performance Standards (GAPPS,

www.globalpmstandards.org) is trying to foster mutual recognition for project and
programme management standards and qualifications. GAPPS aim is not to be another
competitor to the PMI, IPMA, PRINCE2, or any other organisation or institution. The
GAPPS competency standard has been put in the public domain (similar to open source
software) and enables governments, professional organisations or companies to compare
certifications in project and programme management against an independent, non-aligned,
non-commercial standard.

The possibility of the development of an ISO standard for project management has also
been of interest [23]. ISO standards are accepted across the world and an ISO project
management standard would carry a level of authority that is recognised beyond those
involved with project management professional associations such as the PMI or IPMA.

2.5.2 Project Management Methodologies (1)

In general terms, a methodology is the implementation of a specific process. This involves

tailoring a framework of process models, standards and guidelines and applying them to a
specific situation. This could be anything from an informal list of things to do to a mature
process using a specific approach with templates, forms, checklists and roles and
responsibilities [22]. The PMBOK Guide defines a project management methodology as a
"set of project management process groups, their related processes and the related control
functions that are consolidated and combined into a functioning unified whole" [3].

The use of a set of appropriate repeatable processes in a project management methodology

helps introduce consistency, flexibility and efficiency while improving quality. The key
elements for an effective methodology are [2] and [25]:

 Contains guiding processes for those who are new to project work.
 Easy for customer to understand and follow.
 Standardised planning, scheduling and cost control techniques.
 Standardised reporting format for both in-house and customer use.
 Flexibility for application to all projects.
 Flexibility for rapid improvements.
 Identifies key roles and responsibilities of all stakeholders, including customers or
clients.
 Cites skills or competences needed, by role, by process.
 Provides useful templates and examples.
 Supplies model project life cycles for projects of different types, with more detailed
work breakdown structure examples.
 Offers audit checklists to assure proper process, governance and results.
 Is customisable by enterprises and project teams.
 Readily accepted and used throughout the entire company.
 Based upon guidelines rather than policies and procedures.
 Is tool-neutral.
 Offers a range of rigour for different project needs.
 Based upon a good work ethic.
 Saves more effort and time than it costs.
 2.5.2 Project Management Methodologies (2)
 Examples of project management methodologies are given in table 2.3:

Organisation Methodology

UK Office of Government Projects in Controlled Environments

Commerce (OGC) (PRINCE2)
http://www.prince2.org.uk
For use on all types of projects

Swiss Federal Administration HERMES Method

http://www.hermes.admin.ch
For use on IT projects

German Federal V-Modell XT

Administration http://www.v-modell.iabg.de
For use on systems engineering projects

TenStep, Inc. TenStep Project Management Process

 http://www.tenstep.com
For use on all types of projects

IBM Corporation Rational Unified Process (RUP)

http://www-306.ibm.com/software/rational
For use on IT projects

German Technical Capacity works and Goal oriented Project

Cooperation Agency Planning, PCM
For use in Developemnt projects

European Commission Project Cycle Management (PCM)

http://ec.europa.eu/europeaid/
reports/pcm_guidelines_2004_en.pdf
For use on international development projects

Table 2.3: Examples of project management methodologies
 2.5.3 Project Management Maturity
 Successful organisations apply project management processes effectively and
consistently. Models exist for measuring and improving the maturity of project
management implementation in an organisation. Examples of maturity models are
given in table 2.4:

Organisation Maturity Model

UK Office of Portfolio, Programme and Project Management

Government Maturity Model (P3M3)
Commerce http://www.ogc.gov.uk/documents/p3m3.pdf

Project Organisational Project Management Maturity

Management Model (OPM3)
Institute http://opm3online.pmi.org

Software Capability Maturity Model Integration (CMMI)

Engineering http://www.sei.cmu.edu/cmmi
Institute (SEI)

Table 2.4: Examples of project management maturity models

 Example
 For example, the CMMI contains 5 stages of sophistication for process
implementation, ranging from having few common processes (stage 1) to process
optimisation and continuous improvement (stage 5).
2.6 Behavioural Issues in Project Management

2.6.1 Communicating

The ability to communicate well is probably the most important skill a project manager
must have in order to manage a project successfully. A project manager may spend up to 80
% of his or her time communicating. They are probably also the hardest skills for a project
manager to develop. This is because there are no set rules that can be followed, as in the
more technical aspects of project management like scheduling, where mathematical
formulae can be applied. The aim of improving communications skills is to increase the
efficiency of information transfer. The main communication skills a project manager needs
are:

 The ability to transfer information correctly and understand transferred messages.

These require good talking and listening skills.
 The understanding of different forms of communications e.g. written, oral,
nonverbal, formal and informal, and knowing when to use which.
 Presentation skills and the ability to manage meetings.
 Awareness of the different personality types of the project stakeholders and the
ability to tailor the communications approach according to the personality type.

In the basic model of communication, the sender has thoughts which must first be encoded
into a message for others to receive. During transmission, noise may interfere with the
message and alter its content. The receiver must then decode the message into thoughts.

Figure 2.9: Basic communications model

The communication process is only completely efficient when the thoughts received
coincide with those sent. The encoding, transmission and decoding process can provide
barriers to effective communication. Factors causing these barriers on the part of the sender
and receiver can include past experience, intelligence, personality, interests, expectations,
language, culture, assumptions or emotions. The organisational structure (see section 2.7)
can also have an effect on the efficiency of communications. In functional organisations the
communications are usually very efficient within functional departments but inefficient
horizontally between departments and vertically between management levels. In matrix
organisations people of different backgrounds are assigned to work on the same projects
and this can cause communication problems. There is also the difference in interests of the
vertical (functional management) and horizontal (project management) lines. The
projectised organisation is the most efficient for communications.

2.6.1.1 Communication Types

Verbal communications refer to written and oral forms of communication. Nonverbal forms
refer to body language and speech modulation. Conscious forms of body language can
depend upon the culture of the person involved, and this is important to know in
international projects. However, if unconscious body language is interpreted correctly, it
can reveal a persons intentions and attitude.

Signal Meaning

Eye pupils enlarged Increased interest

Shoulders lifted Tension

Shoulders dropped Relaxed

Shoulders lifted and head Losing, dissatisfaction, fear, uncertainty

dropped

Shoulders dropped and Openness, interest, orientation towards success,

head lifted feeling in control

Mouth corners dropped Tiredness, unhappiness, anger

Hand closing the nose and Uncertainty

lips

Head bent to the side Interested

Table 2.5: Unconscious body language

Helping a person to open up during a communication exchange is beneficial and can be

done by imitating the poses of the closed person and then slowly making changes to the
pose. This encourages the closed person to open up.

Listening is the most important skill of communication, followed by speaking. When

listening to a person the following rules should be followed:
  Value the wish of the communications partner to tell you something.
 Display genuineness at the beginning of the conversation.
 Keep eye contact with the person who is talking.
 Avoid interrupting the communications partner.
 Do not hastily jump to conclusions.

When speaking the following rules should be observed:

 Avoid trying to dominate the conversation.

 Avoid getting emotional.
 Avoid objecting immediately to what the communications partner is saying.
 Do not take a defensive position.
 Add pauses in the conversation.
 2.6.1.2 Personality Types
 Knowing the personality type of the receiver can help to provide an appropriate
encoding for the thoughts the sender would like to transmit. There are a number of
classification schemes and tests for personality types such as the Keirsey
Temperament Sorter [26] or McCrae and Costa's Five-Factor Theory [27]. One
of the most popular is the Myers-Briggs Type Indicator [28], developed in the
1940's and based upon Jung's theory of psychological type. The Myers-Briggs
classification scheme considers 4 dimensions of a person, characterising how the
person restores his or her energy level, gathers information, makes decisions and
what lifestyle he or she prefers. For each dimension, one or the other of a pair of
opposites applies to any particular person, e.g. for the energy recovery dimension
one can be either introverted (I) or extraverted (E). Thus, a total of 16 possible
personality types are possible, abbreviated as ENTJ, ESTP, etc.

Dimension Opposite Pairs (Dichotomies)

Energy Extraversion (E) Introversion (I)

recovery Gains energy from people, Gains energy from thoughts,
activities, etc. emotions, impressions, etc.

Information Sensing (S) Intuition (N)

gathering Gains information through Prefers to gain information
five senses. Pays attention to through perception. Pays
the real. attention to opportunities.

Decision Thinking (T) Feeling (F)

making Makes decisions based on Makes decisions based on
logic and objective personal beliefs and subjective
considerations. values.

Lifestyle Judging (J) Perceiving (P)

Prefers well-ordered and Prefers spontaneous and flexible
planned lifestyle. lifestyle.
 
Table 2.6: Myers-Briggs classification of personality types

The Myers-Briggs test is used by many organisations for recruitment and the
development of its personnel. Like many such tests, its validity has been questioned,
and so should only be used as a guide.

2.6.1.3 Managing Meetings (1)

Meetings have the following functions:

 A meeting helps to define the team. Those in the meeting feel a collective identity.
 In a meeting the group is able to revise, update and add to its collective knowledge,
experience and judgement. The group can often be more creative than individuals
working alone.
 The decisions made in a meeting usually carry greater authority than decisions made
by a single executive. All team members present in the meeting feel obliged to be
committed to the decisions made, even if they had disagreements. Opposition to
decisions is mostly due to people not being consulted beforehand.
 A meeting may be the only opportunity for the group to actually work as a team and
the project manager to function as a leader.
 A meeting provides an arena in which the relative status of its members can be
displayed.

Examples of the usual types of meetings in projects are project team meetings, project
board meetings, and change control board meetings. These are committee type meetings
which usually consist of up to about 10 people, all of whom have an equal right to speak
and are guided by a chairperson, which may or may not be the project manager. Usually
meetings can be categorised into 3 types according to their frequency:

 Daily meetings. These are the normal project team meetings and decisions are
informally made by general agreement.
 Weekly or monthly meetings, e.g. change control board meetings. Decisions are
usually made formally by the chairperson.
 Special or irregular meetings, e.g. project kick-off meetings. The interested parties
are brought together, who may have little in common apart from the fact that they
all wish the project to succeed. Some members may have power of veto.

Before a meeting takes place it is important to define its objectives. The objectives can
usually be categorised into the following types:

 Informative. This sort of objective is usually to provide clarification and comments

to information, e.g. making a progress report or reviewing a completed project. A
meeting with this type of objective usually requires no conclusion, decision or
action to be made.
  Constructive. This is usually when something new needs to be devised, e.g. a new
plan, policy or procedure. This sort of objective requires the participants to input
their knowledge, experience, judgement and ideas.
 Executive Responsibilities. This is usually the next step after the constructive
objective, when it is decided how to implement the new idea e.g. how the
responsibilities for the tasks to implement the new plan are to be distributed.
 Legislative. This sort of objective is aimed at changing the organisational
framework, i.e. the system of processes, rules and procedures.

2.6.1.3 Managing Meetings (2)

The meeting agenda should be drawn up by the chairperson beforehand and circulated not
too far in advance, i.e. 2 or 3 days before the meeting is adequate. Each topic on the agenda
should not be too vague and the reasons for discussing the topic should be provided.
Heading each topic with "for information", "for discussion" or "for decision" is useful. A
finishing time should also be given. Having too many people attend a meeting can threaten
its usefulness. The chairperson needs to decide whether two smaller meetings would be
better than one big one. It may also be the case that not everyone is required for every item
on the agenda, so participants could be arranged to arrive and leave during the meeting
according to when they are needed.

The order of items on the agenda needs careful thought. The start of a meeting is usually
the most creative phase and so topics which require a lot of thought should be done then.
Some items may cause disagreement and change the atmosphere of a meeting, so it might
be better to save them for last. An hour and a half should be enough for most meetings and
too much time should not be wasted on urgent but trivial items.

The chairperson's role is to assist the group in achieving the objectives of the meeting. This
involves providing interpretation and clarification, moving the discussion forward, bringing
it to resolution, and applying discipline and control to counter diversions and delays. At the
end of each agenda item the chairperson should give a summary of what has been achieved
or agreed for use in the minutes. After the meeting the minutes should be prepared and
distributed to the participants. The minutes of the meeting should include:

 Start and finish time, date, location and chairperson.

 Names of participants and absentees.
 Agenda items discussed and decisions made.
 Main arguments leading to the decisions.
 Time, date and location of the next meeting.
 2.6.2 Leadership
 The project manager will normally have to display both leadership and managerial
qualities. Management is important in performing the day-to-day execution of the
project. Leadership is the ability to influence people to make them achieve the
objectives and is particularly important in the initiation phase and when the project
does not run according to plan. In a functional organisation in particular (see section
1.7.1), the project manager does not normally have authority over the project team
members, and so will have to display some leadership in getting them to fulfil the
 project objectives. More generally, the project manager needs to be viewed as a
leader by all the project stakeholders. Leadership involves e.g. having vision, being
responsible, inspirational and charismatic, able to delegate and being skilled in
moderation. The style of leadership needs to be adjusted to the situation and can
range from authoritative to democratic, according to what degree the leader allows
the team to participate in the decision making process.

Manager Leader

Psychological Administrative Innovative

personality profile

Type of power and Administratively Inspiring

approach to making supported ordering. Admiration from
people do things Respect from subordinates
subordinates

Approach to task Objective-oriented task Overall vision (mission)-

execution fulfilment oriented movement

Approach to planning Acting on the basis of Fighting for their own goals
the goals set by others. with a great level of belief
Professionalism and commitment.
Enthusiasm

Ways of affecting people Logical Emotional

General Doing things right Doing the right thing


Table 2.7: Differences between management and leadership

The project manager needs to know what is best for the project, and not be
influenced by others into performing actions which might not serve the best
interests of the project. Instead, he or she must persuade others to take a course of
action to achieve the project goals. This can be done by e.g. communicating
decisions and the reasons for them, listening to and considering others' opinions and
creating enthusiasm.

2.6.3 Motivation

 Motivation is the process of giving the team the incentive to achieve the project
objectives. The project manager needs to engage and motivate the team so that they
want to be part of the project. Different team members are motivated by different
things and the project manager needs to know how to apply the right motivational
factors to the right people, allowing them to increase the performance and
productivity of the team.
  Creating a sense of ownership of the project by the team can increase their
motivation and productivity. This can be achieved by delegating some of the project
management responsibilities and allowing them more opportunities for independent
and creative work, a concept known as job enrichment.

2.6.4 Negotiation and Conflict

The aim of negotiation is to achieve a result in which at least the minimum acceptable
position of each interested party is realised. The project manager needs to use negotiation
skills in many areas, including staff acquisition, dealing with functional managers and
project managers, especially in a multi-project environment, and change requests.
Negotiation is also required when disagreements and conflicts arise. The project manager
must take note of emerging conflicts and act before they start to affect the productivity of
those involved and threaten the project. The project manager needs to be able to conduct
negotiations by collecting data about the sources of disagreement and presenting the
possible options. The project manager must be able to effectively present his or her own
position, understand the positions of others and try to constructively reach a solution in
which no side loses face. This problem solving approach to conflict resolution is the only
one which leaves all sides satisfied. Other less preferable approaches to conflict resolution
include:

 Withdrawal. One side temporarily removes itself from the conflict.

 Smoothing. The negotiator tries to make the problem seem less severe to
conflicting sides than it really is.
 Forcing. One side forces the other side to accept their position.
 Compromise. All sides have to give up something.

2.7 Current and Future Trends in Project Management

Some of the management trends affecting project management include [29]:

 Programme management. This is becoming more important as the number of

project oriented organisations increases.
 Commitment management. As more projects involve managing the supply chain,
and relations among project participants, the management of commitments is
becoming an important issue.
 Systems theory. This is important for relating everything together (see section 2.3).

Some of the other new trends discussed in the 22nd IPMA World Congress in 2008 [30]
included:

 Benchmarks and key performance indicators. This is about performance

measurement and continuous improvement. A benchmark is a recorded state of
something at a particular point in time and can be used to measure progress over
 time. Key performance indicators are metrics (things that are measured) which are
used to measure the achievement of the critical success factors of processes.
 Knowledge management. This is about capturing data and information putting
them into context/using it to create knowledge/understanding of how everything fits
together in a way that can be understood by others and used to make future
decisions, e.g. using lessons learned for achieving continuous improvement.
 Virtual organisations. This new type of organisational form is the result of
increasing global competition and the need to create and transform knowledge. As
well as relying on IT, it decentralises control, creating collaborative working
relationships and collective responsibility among co-workers. It facilitates
coordination, communication, decision making and the sharing of knowledge, skills
and resources.

Other topics include complexity in project management and agile project management,
which are described below.

2.7.1 Complex Project Management

The science of complexity applied to traditional project management challenges the

classical view of orderly planning and control, set in a predictable world in which one can
deliver goals in a defined manner [31]. Some of the features of a complex system are
uncertainties and the difficulty of making predictions based upon previous experience. The
complexity enters into project management as a consequence of the fact that it is people
who execute projects, and their attitudes and intentions are usually unknown. The complex
project management paradigm embraces the following ideas [32]:

 Recognition that the future is inherently unpredictable despite the implementation of

risk management activities. Uncertainty is inherent to projects and assuming that it
can always be completely eliminated is a false expectation.
 Acceptance that project control systems, i.e. plans, budgets, schedules etc. do not
actually control but rather enable an estimate of the uncertainty to be made.
 Training in leadership and motivation skills is essential for project managers and
top management. A well led, motivated and skilled project team will be able to
adapt quickly and effectively to the unpredicted changes in their environment.

2.7.2 Agile Project Management

 The notion of iterative and incremental processes (see section 2.3.3) originated as a
response to the more rigid approach of requirements, then design, then build from
the engineering field, which later became known as the waterfall model (see section
2.3.1) [33]. In 2001, iterative and incremental process experts met and formed the
Agile Alliance [34], coining the term agile methods. Agile methods are suited to
projects with rapidly changing requirements, which are more difficult to control
 than slow moving, predictable projects. Agile methods are light on planning and
documentation and better suited to small projects with small teams. They focus on
customer collaboration, thus delivering the required quality but projects using agile
methods are difficult to control in terms of scope, schedule and budget. Such
methods are needed in new evolving technologies such as the renewable energies.
From these agile methods evolved the more general agile project management,
which differs from traditional project management in being faster, more flexible,
and aggressively customer responsive [35]. Agile project management is
particularly suited to new product development. The principles of agile project
management revolve around creating both adaptive products that are easy and less
expensive to change and adaptive project teams that can respond rapidly to changes
in processes, information systems, resources, and facilities.

2.8 Summary

Project management is a process for successfully achieving project objectives. This

involves understanding user requirements, choosing the right form of project organisational
structure, making accurate plans, getting the right team and leading them to success,
managing risks, monitoring the progress and taking corrective actions to keep the project on
track. The main types of processes used in managing a project are initiating, planning,
monitoring, controlling and closing and they involve the various areas of project
management, such as scope management, risk management, communications management,
quality management, cost management, time management, procurement management and
resources management. A project divides up into phases, whose boundaries provide
decision points for moving on to the next phase. The way a project is broken up into phases
depends upon the area of application and various life cycle models exist, which broadly
come under the category of being either linear or iterative types of model. Some of the most
common life cycle models include the waterfall model, the vee model and the spiral model.
Project stakeholders are those parties with an interest in the success or failure of the project,
and always include the customer, project manager and team, project sponsor, functional
managers and suppliers. Proper stakeholder management is required to monitor stakeholder
satisfaction and risks. Following established project management practices is one of the
critical success factors for achieving project success and many standards and
methodologies are available, detailing the processes involved. Besides the use of planning,
monitoring and controlling techniques, project management also requires just as
importantly the application of a variety of soft skills. Of all the soft skills, communication
is probably the key success factor. Other soft skills include leadership, motivating the team,
resolving conflicts and managing meetings. The concept of complexity applied to project
management presents the viewpoint that, despite the use of risk management, uncertainty
can never be eliminated, and skills should be developed to enable the team to quickly adapt
to unpredicted changes. Agile methods are light on planning and documentation, and are
especially suited to small teams working on innovative projects with rapidly changing
requirements, e.g. renewable energies, automotive, IT.