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Reinventing Project Management Part 1 slides

The Increasing Share of Projects Operations Time 1800 s 1900 s 2000 s Agricultural society Industrial society Information society Industries, Companies, Society

The motivation • The assumption: – Different projects are managed in different ways. • The literature and the discipline assume: – “a project is a project. ” • There is no accepted framework • The need: – A framework to distinguish among projects – Practical guidelines on how to manage projects in different ways

The Questions • How to Distinguish Among Projects – Dimensions? • How to Classify Projects on Each Dimension? • How to Manage Different Project Types? • Is There More than One Way?

What Impacts Project Type? Environment Product Project UCP Task NTCP Technology Complexity Novelty Pace

The UCP Model

Four Dimensions for Distinction Among Project Types • Novelty – How new is the product to customers and users – Derivative, Platform, Breakthrough • Technology – How much new technology is used – Low-tech, Medium-tech, High-tech, Super High-tech • Complexity – How complex is the system and its subsystems – Assembly, System, Array • Pace – How Critical is the Time frame – Regular, Fast/Competitive, Time-Critical, Blitz

The Project Diamond - Assessing a Project’s Risk/Benefit and Selecting the Right Management Approach

Technology Super-High Tech High-Tech Automatic Bag – Handling System Medium-Tech Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Airport Construction Project Fast/ Competitive Time-Critical Blitz Pace Denver International Airport Project

Project Success Efficiency Impact on Customer Impact on Team Business & Direct Success • Meeting schedule • Meeting budget • Changes • Yield • Other efficiencies • Meeting requirements and specifications • Benefit to customer • Extent of use • Customer satisfaction & loyalty • Brand name recognition • Team satisfaction • Team morale • Skill development • Team member growth • Team members’ retention • No burnout • Sales • Profits • Market share • ROI, ROE • Cash flow • Service quality • Cycle-time • Organizational measures • Regulations approval Specific Success Measures Preparing for Future • New technology • New market • New product line • New core competencies • New organizational capabilities

Success Dimensions Preparing for Future Project Success Business & Direct Success Impact on Team Impact on Customer Efficiency Timeframe Short Medium Timeframes of Success Dimensions Long

Importance Preparing for Future Business & Direct success Impact on Customer & Team Efficiency Low Medium High Uncertainty Relative Importance of Success Dimensions is Project. Dependent

Technology Super-High Tech High-Tech Medium-Tech Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Fast/ Competitive Time-Critical Blitz Pace The NTCP Framework

The NTCP Diamond

Definition Planning Execution Termination Revise Plans Revise Definition Classical Project Phases Modified to an Adaptive Iterative Approach

From traditional to adaptive project management Approach Traditional project management Adaptive project management Project goal Getting the job done on time, on budget, and within requirements Getting business results, meeting multiple criteria Project plan A collection of activities that are executed as planned to meet the triple constraint An organization and a process to achieve the expected goals and business results Planning Plan once at project initiation Plan at outset and re-plan when needed Managerial approach Rigid, focused on initial plan Flexible, changing, adaptive Project work Predictable, certain, linear, simple Unpredictable, uncertain, nonlinear, complex Environment effect Minimal, detached after the project is launched Affects the project throughout its execution Project control Identify deviations from plan, and put things back on track Identify changes in the environment, and adjust the plans accordingly Distinction All projects are the same Projects differ Management style One size fits all Adaptive approach; one size does not fit all

Entire Adaptive Iterative Approach Freeze Requirements Planning Freeze Design Specs Design, Build, Test Complete Revise Design Revise Plans Revise Requirements Adaptive Approach Traditional PM

Importance Impact on Customer & Team Business & Direct success Preparing for Future Efficiency Project Completion Time Relative Importance of Success Dimensions - A Matter of Time

Critical Success Factors Generic Projects l l l l l Project Mission Top Management Support Project Planning Project Control Client Consultation Skills Personnel Management Project Communication Client Acceptance Trouble Shooting Product Development Projects l l l l Clear and Early Product Definition Defined Product Strategy Early Top Management Involvement High Quality Process Adequate Resources Integrated Planning Empowered and Communicating Team Voice of the Customer

Technology Super-High Tech High-Tech Medium-Tech Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Fast/ Competitive Required style Time-Critical Dr = (Pl, HT, Sy, FC) Da = (Pl, MT, As, FC) Actual style Blitz Pace The FCS Project

Technology Later design freeze More design cycles Less market data Later requirement freeze Complexity Novelty Complex organization Formality Autonomy Pace The Impact of the NTCP Dimensions on Project Management

Benefits and risks of high NTCP levels Dimension Expected benefit Potential risk Novelty Exploiting new market opportunities; leapfrogging competition; gaining first mover advantage Having difficulty predicting exact market needs; missing sales targets; attracting competitors to copy your ideas Technology Improving performance and functionality Experiencing technology failure; lacking needed skills Complexity Bigger programs, bigger payoffs Having difficulty in coordinating and integrating Pace Gaining early market introduction, mounting quick response Missing deadlines; making haphazard mistakes

Reinventing Project Management Part 2 slides

Definitions and examples of project novelty Level of project novelty Definition Examples Derivative project Extending or improving existing products or services Developing a new version of a personal computer; upgrading a production line; streamlining organizational procedures Platform project Developing and producing new generations of existing product lines or new types of services to existing markets and customers Building a new automobile generation; developing a new aircraft; creating a new generation of a cellular system Breakthrough project Introducing a new concept, a new idea, or a new use of a product that customers have never seen before The first enterprise resource planning (ERP) package; the first photostatic copying machine (Xerox); the first Walkman; the Segway personal transportation system

Technology Super-High Tech High-Tech Medium-Tech Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Fast/ Competitive Required style Time-Critical Dr = (Br, HT, Sy, -) Da = (Pl, HT, Sy, -) Actual style Blitz Pace The Segway Project

Product novelty and project success: Expectations Success dimensions and possible failure Level of project novelty Derivative Platform Breakthrough Efficiency High efficiency is critical; no room for overruns Time to market is important for competitive advantage Efficiency is difficult to achieve and may not be critical (unless competitors work on the same idea); overruns likely Impact on customer Gaining additional customers and market segments Having high strategic impact on customers; retaining previous generation customers Outstanding improvements in customer’s life and work Impact on the team Team members extend their experience in quick product modifications. Team members gain technical and managerial experience in introducing new-generations. Team members explore new fields and gain extensive experience in unknown markets Extends life of existing products; additional revenues and cash cow current products High strategic impact on the business; expectation of years of revenues and building of additional derivatives Long-term, significant business success; may come later after initial products have been tested and refined Almost none Maintaining a strategic position in the market Creating new markets and establishing substantial leadership positions Business and direct success Preparation for the future

Impact of product novelty levels on project management Managerial aspect Level of product novelty Derivative (De) Platform (Pl) Breakthrough (Br) Market data Accurate market data exists from previous products and market research Extensive market research and careful analysis of previous generations, competitors, and market trends Unreliable market data; market needs unclear; no experience with similar products; customer base not defined Product definition Clear understanding of required cost, features, functionality, etc. Invest extensively in product definition, involve potential customers in process Product definition based on intuition and trial and error; fast prototyping to obtain market feedback Requirements freeze Early freeze of product requirements, usually before or immediately after project launch Freeze requirements later, usually at mid–project Very late freeze of requirements, often after prototype feedback Marketing Emphasize product advantage in comparison to previous model; focus on existing as well as new customers Create product image. Emphasize product advantages; differentiate from competitors Create customer attention through new and innovative marketing techniques; educate customers about potential of product; hidden customer needs; create industry standard

Technology Super-High Tech High-Tech Medium-Tech Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Fast/ Competitive Required style Time-Critical Dr = (Pl, HT, Sy, -) Da = (De, MT, Sy, -) Actual style Blitz Pace Financial Middleware Software Project

Technology Super-High Tech Automatic Bag – Handling System High-Tech Medium-Tech Airport Construction Project Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Fast/ Competitive Time-Critical Blitz Pace Denver International Airport Project

Project types based on levels of technological uncertainty Level of technological uncertainty Low-Tech Medium-Tech High-Tech Super-High-Tech Definitions Uses only existing, wellestablished, and mature technologies Mostly existing technologies; limited new technology or a new feature Uses many new, recently developed, existing technologies Key project technologies do not exist at the time of project initiation Examples Construction, road building, utilities, build-to-print Derivatives or improvements of products; new models in established industries (e. g. , appliances) New systems in a fastmoving industry (e. g. , computers, military systems) New, unproven concepts beyond the technological state of the art (e. g. , Apollo moon landing program)

Project characteristics and technological uncertainty levels Variable Level of technological uncertainty Low-Tech Medium-Tech High-Tech Super-High-Tech Development, testing, and prototypes No development; no testing Limited development; some testing Considerable development and testing; prototypes usually used Need to develop key technologies during project effort; intermediate small-scale prototype Design cycles and design freeze Only one cycle; design freeze before start of project execution One to two cycles; early design freeze At least two or three cycles; design freeze usually at midpoint during second or third quarter Typically three cycles after the final technologies have been selected; late design freeze Project reviews Formal progress and status reviews; some technical reviews Technical reviews with experts in addition to formal progress reviews Extensive peer reviews by technical expert teams critical to success Management style and attitude Firm style; sticking to the initial plan Less firm style; readiness to accept some changes More flexible style; many changes are expected Highly flexible style; living with continuous change; “looking for trouble” Communication and interaction Mostly formal communication; scheduled meetings More frequent communication; some informal interaction Frequent communication through multiple channels; informal interaction Many communication channels; informal interaction Project manager and project team Manager with good administrative skills Manager with some technical skills; considerable proportion of academicians Manager with good technical skills; many professionals on project team Project manager with exceptional technical skills; highly skilled professionals Contingent resources 5% 5 -10% 10– 25% 25– 50%

Resources Legend: A- Low-Tech B- Medium-Tech C- High-Tech D- Super High-Tech D C Planned Resources D: n+3 B B: 1 -2 – Number of design cycles A n – No. of cycles required to choose the final technologies C: 2 -3 B: 1 -2 A: 1 Time Project Initiation Project Scheduled Completion Possible time ranges for design freeze Risk area Possible Time Ranges for Design Freeze, Number of Design Cycles, and Risk Areas for Project Outcomes

Low- and medium-tech versus high- and superhigh-tech projects Managerial issue Project type Low- and Medium-Tech High- and Super-High-Tech Managerial style Rigid, no-nonsense, “get it done” approach Flexible, ready to accept many changes and tolerate long periods of uncertainty Project reviews Formal, top management approval of major phase completion Formal executive reviews plus technical peer reviews by experts Saving time by overlapping phases Phase overlaps possible Phase overlaps not recommended Best contract type Fixed-price Cost-plus; fixed-price is possible at a later stage of development Development approach Linear development Spiral development Additional concerns Lower cost, on time Risk management, systems engineering, quality management

Space Shuttle

The Space Shuttle Program 1969 1972 1978 1981 1982 1986 2003 Initial proposal - to go to Mars in 1980 s Encountered low priorities, Were asked to look for low-cost alternatives (August) Program approved; Shuttle only Based on known technologies -“success oriented” (November) Design freezeconfiguration and technologies First flight scheduled Actual first flight - 60% budget overrun System declared operational Challenger accident Columbia accident

Space Shuttle Program Initial Uncertainties n n n n First two-medium space vehicle First reusable space vehicle Liquid fuel engines and an external tank Huge 75 Ton glider 5000 Miles glide from reentry to landing First orbital flight with a live crew No crew escape system

Technology Super-High Tech High-Tech Medium-Tech Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Fast/ Competitive Required style Dr = (Br, SHT, Sy, Re) Da = (Pl, HT, Sy, FC) Time-Critical Actual style Blitz Pace The Space Shuttle Program

Space Shuttle Project Management Style Actual Style Alternative Style Success oriented Off-the-shelf items Early configuration and design freeze Low flexibility Early operational Limited communication Look for trouble Alternative technologies Late freeze; Build a small-scale prototype High flexibility Extended development Intensive communication Type C High-Tech Type D Super High-Tech

The three levels of project complexity Product complexity Examples of projects Assembly project Material, component, subsystem, assembly Development of a PDA, Post-it notes, design of a single service System project System, platform of systems Missile development, new computer development, new automobile model, a single building construction, restructuring a production plant Array project Array, system of systems English Channel tunnel, national missile defense system, new neighborhood construction, nationwide cellular system

Technology Super-High Tech High-Tech Medium-Tech Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Fast/ Competitive Required style Time-Critical Dr = (Pl, MT, Ar, -) Da = (Pl, MT, Sy, -) Actual style Blitz Pace The Chunnel Project

Technology Super-High Tech High-Tech Medium-Tech Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Fast/ Competitive Required style Time-Critical Dr = (Br, HT, Sy, TC) Da = (Pl, MT, As, TC) Actual style Blitz Pace Mars Climate Orbiter Project

Four levels of pace Regular Fast/Competitive Time-Critical Blitz Definitions Time not critical to organizational success Project completion on time is important for company’s competitive advantage and/or the organization’s leadership position Meeting time goal is critical for project success; any delay means project failure Crisis projects; utmost urgency; project should be completed as soon as possible Examples Public works, some government initiatives, some internal projects Business-related projects; new product introduction, new plant construction in response to market growth Projects with a definite deadline or a window of opportunity; space launch restricted by a time window; Y 2 K War; fast response to natural disasters; fast response to business -related surprises

Technology Super-High Tech High-Tech Medium-Tech Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Fast/ Competitive Required style Dr = (Pl, MT, Sy, TC) Da = (Pl, MT, Sy, Bl) Time-Critical Actual style Blitz Pace The Y 2 K Case Project

Reinventing Project Management Part 3 slides

Benefit and Opportunity High Approve Immediately Low Further Consideration Reject Immediately Risk or Difficulty Low High Risk and Benefit Assessment Matrix

Technology Radical Technological Innovation Incremental Technological Innovation Super-High Tech High-Tech Medium-Tech Incremental Market Innovation Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Architectural Innovation Modular Innovation Fast/ Competitive Radical Market Innovation Time-Critical Blitz Pace Innovation Categories and Project Types

Product Performance Manage by Breakthrough Projects Manage by Platform Projects ng taini Sus ess r prog dd h-en d n ema s Hig g e tiv p d man de -end Low s re o pr ru s Di Time The Innovator’s Dilemma and Project Management Adopted from Clayton M. Christensen, the Innovator’s Dilemma, 1997 and modified by the authors

Novelty Breakthrough Platform Derivative Technology Medium to Super-high-tech Mediumtech Medium to Low-tech Goal Strategic Operational The Evolution of Project Types along the Product Life-cycle Adopted from Geoffrey A. Moore, Crossing the chasm, 1991 and modified by the authors

The Microwave Oven Patent Filed Original Microwave Oven Patent by Doctor Percy L. Spencer, US Patent No. 02495429, Filed Jan. 24, 1950

The first Microwave Oven

Characteristics of projects for various customers Characteristic Customer type Consumer (B 2 C) Industrial/Business (B 2 B) Government/Public (B 2 G) Examples of products MP 3 player, PC, cars AS/400, B 777, ERP systems Hubble telescope, FCS, Army communication Value to customer Impact on quality of life Impact on business Impact on public goals and needs Producer’s objective High volume, market share Industry leadership, preferred provider Long-term relationship Project focus High focus on time, cost, and quality High focus on time and cost High focus on performance Product definition Defined by marketing; perceived customer needs, market research Continuous customer involvement Defined by or with customer Project scope: work, goals, deliverables Defined by producer with customer Defined by or with customer Contractual obligations No contract, internal commitment Either external contract or internal commitment Contracted project, obligations to customer Customer involvement No direct involvement; focus groups or market trials Sometimes direct customer involvement Intense customer involvement; often customer representative on the team Financing Internally financed, or contracted by customer Financed by customer according to contract Marketing Mass marketing, advertisement; brand management; Industry image creation Competition for bids; focused on major decision makers Reliability High reliability required Reliability may be traded off for timely delivery Reliability focused on safety Product support Service availability Training, documentation, on-call support

Technology Super-High Tech High-Tech Medium-Tech Low-Tech Array System Novelty Assembly Derivative Platform Breakthrough Complexity Regular Fast/ Competitive Required style Dr = (Br, HT, Sy, Bl) Da = (Br, HT, As, Bl) Time-Critical Actual style Blitz Pace Wire and Cable Coating Project

Project Management The Two + One Processes Product Definition Process Managerial Process Technical Process When are you shooting?

Definition Planning Execution Termination Revise Plans Revise Definition Classical Project Phases Modified to an Adaptive Iterative Approach

A Framework for Adaptation Category Project Types Strategic Goal Strategic, Operational Customer External, Internal Combined Business Objective NPD, Product Improvement, Maintenance, Infrastructure, Research NCTP Novelty Derivative, Platform, Breakthrough Complexity Assembly, System, Array Technology Low-tech, Medium-tech, Hightech, Super High-tech Pace Regular, Fast/Competitive, Time. Critical, Blitz PM Impact

Uncertainty of Technical Specs and Design Project Start Ideal World Levels Determined by Novelty, Technology, And Other Uncertainties Real World Requirements Freeze Specifications and Design Freeze Uncertainty of Requirements Reducing Requirements and Design Uncertainty

Entire Adaptive Iterative Approach Freeze Requirements Planning Freeze Design Specs Design, Build, Test Complete Revise Design Revise Plans Revise Requirements Adaptive Approach Traditional PM

Iterative Process of Requirements and Design Freeze Change Until Requirements Freeze Product Requirements Specifications and Design Freeze Technical Specifications Design, Build, Test Product Prototype Complete final product # of Design Cycles # of Requirements Change Cycles Initial Market Data Market Research and/or Market Testing Time Adaptive project management Traditional project management

Typical project activities across project phases Phase Definition Activity Details Market/customer identification; Customer need Business objective Define the expected business objective Product definition Product description; Product requirements Project definition Statement of work (scope); duration; budget; PM and team Identifying project type Categorize a project based on strategic or operational, internal or external user, novelty, technology, complexity, pace Success and failure criteria Planning Market definition Define management’s expectation on relevant success dimensions Impact of type on project management Decide how each project category will affect project organization, processes, plans, activities, and team WBS Break scope into detailed work packages and activities Organization Project team structure Project process plan Major phases, gates, and milestones Schedule Detailed network and timing of activities Budget Detailed cost of project based on WBS items Risk management Risk identification and mitigation plan based on project type Integration plan Timing and duration of integration activities Procurement Subcontracting and vendor management plan Communication Reporting structure and meeting schedule Human resources Team development and training; Team motivation Product creation plan Initial technical specifications; product design and testing plan

Typical project activities across project phases (cont. ) Phase Execution Activity Details Refine product requirements Freeze product requirements Product building Product design Prototype building and testing Additional design cycles (redesign, rebuild, retest) Freeze product design Product building and testing Project monitoring Progress and status of budget, time, and activities performed Project replanning Termination Product requirements Update plans and make changes Customer preparedness Training materials and means Commercialization Product introduction plan Project wrap-up Project summary report Next generation planning

Risk Assessment

Master plan – Entire project Medium detail plans – 4 to 6 Months Detailed work plans – Weeks Time The “Rolling Wave” Planning Concept

Outsourcing Work Packages

Possible Outsourcing Regions