You currently work for a retail store that carries basic household goods, some g

Question

You currently work for a retail store that carries basic household goods, some groceries, and health and beauty products. The store is located in the small community (approximately 5,000 total residents) in which you live and is looking to expand its operations in some way. For this assignment, you are required to develop a major project proposal to be undertaken by your employer. You may decide to expand your product offerings or open an additional store in an adjacent community, for example. You may use figure 2.4A and B in chapter 2 of your textbook as a general outline of what your proposal should entail. Your project proposal must include the following components: Project title Project manager (yourself) Problem definition or project rationale: Describe the problem or opportunity for improvement. Goal definition: Describe the project goals. Objective definition: Quantify the savings or benefits you expect from completing this project. How much will it cost (hours, materials, methods, equipment, etc.)? Estimate how long the project will take to complete. Resources: Identify the resources necessary to complete the project. Risk analysis: Identify the major risks associated with undertaking this project. How likely is it that these risks will occur? How will the project be impacted if these risks occur?

Explanation / Answer

What Is a Project

Defining the Project

Step 1: Defining the Project Scope

Step 2: Establishing Project Priorities

Step 3: Creating the Work Breakdown Structure

Step 4: Integrating the WBS with the Organization

Step 5: Coding the WBS for the Information System Responsibility Matrices Project Communication Plan

The Project Management Institute provides the following definition of a project: A project is a temporary endeavor undertaken to create a unique product, service, or result. Like most organizational effort, the major goal of a project is to satisfy a customer’s need. Beyond this fundamental similarity, the characteristics of a project help differentiate it from other endeavors of the organization. The major characteristics of a project are as follows: 1. An established objective. 2. A defined life span with a beginning and an end. 3. Usually, the involvement of several departments and professionals. 4. Typically, doing something that has never been done before. 5. Specific time, cost, and performance requirements. First, projects have a defined objective—whether it is constructing a 12-story apartment complex by January 1 or releasing version 2.0 of a specific software.

package as quickly as possible. This singular purpose is often lacking in daily organizational life in which workers perform repetitive operations each day. Second, because there is a specified objective, projects have a defined endpoint, which is contrary to the ongoing duties and responsibilities of traditional jobs. In many cases, individuals move from one project to the next as opposed to staying in one job. After helping to install a security system, an IT engineer may be assigned to develop a database for a different client. Third, unlike much organizational work that is segmented according to functional specialty, projects typically require the combined efforts of a variety of specialists. Instead of working in separate offices under separate managers, project participants, whether they be engineers, financial analysts, marketing professionals, or quality control specialists, work closely together under the guidance of a project manager to complete a project. The fourth characteristic of a project is that it is nonroutine and has some unique elements. This is not an either/or issue but a matter of degree. Obviously, accomplishing something that has never been done before, such as building a hybrid (electric/gas) automobile or landing two mechanical rovers on Mars, requires solving previously unsolved problems and breakthrough technology. On the other hand, even basic construction projects that involve established sets of routines and procedures require some degree of customization that makes them unique. Finally, specific time, cost, and performance requirements bind projects. Projects are evaluated according to accomplishment, cost, and time spent. These triple constraints impose a higher degree of accountability than you typically find in most jobs. These three also highlight one of the primary functions of project management, which is balancing the trade-offs between time, cost, and performance while ultimately satisfying the customer.

What a Project Is Not Projects should not be confused with everyday work. A project is not routine, repetitive work! Ordinary daily work typically requires doing the same or similar work over and over, while a project is done only once; a new product or service exists when the project is completed. Examine the list in Table 1.1 that compares routine, repetitive work and projects. Recognizing the difference is important because too often resources can be used up on daily operations which may not contribute to longer range organization strategies that require innovative new products.

Program versus Project In practice the terms project and program cause confusion. They are often used synonymously. A program is a group of related projects designed to accomplish a common goal over an extended period of time. Each project within a program has a project manager. The major differences lie in scale and time span. Program management is the process of managing a group of ongoing, inter- dependent, related projects in a coordinated way to achieve strategic objectives. For

TABLE 1.1 Comparison of Routine Work with Projects

example, a pharmaceutical organization could have a program for curing cancer. The cancer program includes and coordinates all cancer projects that continue over an extended time horizon. Coordinating all cancer projects under the oversight of a cancer team provides benefits not available from managing them individually. This cancer team also oversees the selection and prioritizing of cancer projects that are included in their special “Cancer” portfolio. Although each project retains its own goals and scope, the project manager and team are also motivated by the higher program goal. Program goals are closely related to broad strategic organization goals.

The Project Life Cycle Another way of illustrating the unique nature of project work is in terms of the project life cycle. Some project managers find it useful to use the project life cycle as the cornerstone for managing projects. The life cycle recognizes that projects have a limited life span and that there are predictable changes in level of effort and focus over the life of the project. There are a number of different life-cycle models in project management literature. Many are unique to a specific industry or type of project. For example, a new software development project may consist of five phases: definition, design, code, integration/test, and maintenance. A generic cycle .The project life cycle typically passes sequentially through four stages: defining, planning, executing, and delivering. The starting point begins the moment the project is given the go-ahead. Project effort starts slowly, builds to a peak, and then declines to delivery of the project to the customer.

1. Defining stage: Specifications of the project are defined; project objectives are established; teams are formed; major responsibilities are assigned.

2. Planning stage: The level of effort increases, and plans are developed to determine what the project will entail, when it will be scheduled, whom it will benefit, what quality level should be maintained, and what the budget will be.

3. Executing stage: A major portion of the project work takes place—both physical and mental. The physical product is produced (a bridge, a report, a software program). Time, cost, and specification measures are used for control. Is the project on schedule, on budget, and meeting specifications? What are the forecasts of each of these measures? What revisions/changes are necessary.

The Project Manager

In a small sense project managers perform the same functions as other managers. That is, they plan, schedule, motivate, and control. However, what makes them unique is that they manage temporary, nonrepetitive activities, to complete a fixed life project. Unlike functional managers, who take over existing operations, project managers create a project team and organization where none existed before. They must decide what and how things should be done instead of simply managing set processes. They must meet the challenges of each phase of the project life cycle, and even oversee the dissolution of their operation when the project is completed. Project managers must work with a diverse troupe of characters to complete projects. They are typically the direct link to the customer and must manage the tension between customer expectations and what is feasible and reasonable. Project managers provide direction, coordination, and integration to the project team, which is often made up of part-time participants loyal to their functional departments. They often must work with a cadre of outsiders—vendors, suppliers, subcontractors—who do not necessarily share their project allegience. Project managers are ultimately responsible for performance (frequently with too little authority). They must ensure that appropriate trade-offs are made between the time, cost, and performance requirements of the project. At the same time, unlike their functional counterparts, project managers generally possess only rudimentary technical knowledge to make such decisions. Instead, they must orchestrate the completion of the project by inducing the right people, at the right time, to address the right issues and make the right decisions. While project management is not for the timid, working on projects can be an extremely rewarding experience. Life on projects is rarely boring; each day is different from the last. Since most projects are directed at solving some tangible problem or pursuing some useful opportunity, project managers find their work personally meaningful and satisfying. They enjoy the act of creating something new and innovative. Project managers and team members can feel immense pride in their accomplishment, whether it is a new bridge, a new product, or needed service. Project managers are often stars in their organization and well compensated. Good project managers are always in demand. Every industry is looking for effective people who can get the right things done on time. Clearly, project management is a challenging and exciting profession. This text is intended to provide the necessary knowledge, perspective, and tools to enable students to accept the challenge.

Small Projects Represent Big Problems

The velocity of change required to remain competitive or simply keep up has created an organizational climate in which hundreds of projects are implemented concurrently. This climate has created a multiproject environment and a plethora of new problems. Sharing and prioritizing resources across a portfolio of projects is a major challenge for senior management. Many firms have no idea of the problems involved with inefficient management of small projects. Small projects typically carry the same or more risk as do large projects. Small projects are perceived as having little impact on the bottom line because they do not demand large amounts of scarce resources and/or money. Because so many small projects are going on concurrently and because the perception of the inefficiency impact is small, measuring inefficiency is usually nonexistent. Unfortunately, many small projects soon add up to large sums of money. Many customers and millions of dollars are lost each year on small projects in product and service organizations. Small projects can represent hidden costs not measured in the accounting system

Organization Strategy and Project Selection

The Strategic Management Process: An Overview

Scenario Planning: A Supplement to Traditional Strategic Planning

The Need for an Effective Project Portfolio Management System

A Portfolio Management System

Applying a Selection Model

Managing the Portfolio System.

Strategic Management Process.

Strategic management is the process of assessing “what we are” and deciding and implementing “what we intend to be and how we are going to get there.” Strategy describes how an organization intends to compete with the resources available in the existing and perceived future environment.

Four Activities of the Strategic Management Process

The typical sequence of activities of the strategic management process is outlined here; a description of each activity then follows:

1. Review and define the organizational mission.

2. Set long-range goals and objectives.

3. Analyze and formulate strategies to reach objectives.

4. Implement strategies through projects.

Set Long-Range Goals and Objectives

Objectives translate the organization mission into specific, concrete, measurable terms. Organizational objectives set targets for all levels of the organization. Objectives pinpoint the direction managers believe the organization should move toward. Objectives answer in detail where a firm is headed and when it is going to get there. Typically, objectives for the organization cover markets, products, innovation, productivity, quality, finance, profitability, employees, and consumers. In every case, objectives should be as operational as possible. That is, objectives should include a time frame, be measurable, be an identifiable state, and be realistic. Doran created the memory device shown in Exhibit 2.1, which is useful when writing objectives. Each level below the organizational objectives should support the higherlevel objectives in more detail; this is frequently called cascading of objectives. For example, if a firm making leather luggage sets an objective of achieving a 40 percent increase in sales through a research and development strategy, this charge is passed to the marketing, production, and R&D departments. The R&D department accepts the firm’s strategy as their objective, and their strategy becomes the design and development of a new “pull-type luggage with hidden retractable wheels.” At this point the objective becomes a project to be implemented—to develop the retractable wheel luggage for market within six months within a budget of $200,000. In summary, organizational objectives drive your projects.

Project Complexity and Risk Assessment

Cost-

Investment portfolio management

Time

Routine, Repetitive Work Projects Taking class notes Daily entering sales receipts into the accounting ledger Responding to a supply-chain request Practicing scales on the piano Routine manufacture of an Apple iPod Attaching tags on a manufactured product Writing a term paper etting up a sales kiosk for a professional accounting meeting Developing a supply-chain information system Writing a new piano piece Designing an iPod that is approximately 2 3 4 inches, interfaces with PC, and stores 10,000 songs Wire-tag projects for GE and Wal-Mart

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