THE NEED FOR PROJECT MANAGEMENT.
- 1. 1 A DISCUSSION OF THE NEED FOR PROJECT MANAGEMENT. Abstract This report has studied project management through examples of the author's experience. Discussed elements of the project management and proposed some key aspects which enable business succeed in small and big projects. From the author's point of view most critical for the project is a communication management. Also, proposed to reinforce traditional approach to Project Management by using qualitative characteristics: relevance and reliability of the quality of project communications. Purpose of those actions oriented to reinforce project's Stakeholders the decision- making process and encourage mutual trust and respect among them through the project life. Project and Project management. Real life examples. In the learning materials of the Durham Business School (2012) is present a definition of a project as "a temporary group activity designed to produce a unique product, service or result". This definitions reminds me of a statement I have heard years ago from a Project Manager: "We are here for specific tasks, and in spite of the similarity of the workplace (the same oil field) and the scope of work (construction of new wells during modernization of an oil treatment plant), the work is a unique as unique as everyone on our team, because there is no similar project with these parameters; and thus all staff should pay close attention to their duties and not rely on the fact that if the previous project we participated in was successful, then you can do this one with less effort”. Slack, N. Chambers, S. Johnston, R. (2010, p.459) have defined a project as " a set of activities with a definite starting point and end point, which pursues a specific goal and uses a specific set of resources." Oxford Dictionaries (2012) has another definition «An individual or collaborative enterprise that is carefully planned to achieve a particular aim".
- 2. 2 Thus, project management focuses on the following elements: a) the purpose of the project, b) the beginning and end of the project (project period) and c) the resources needed for the project. In general, the primary goal of any business is making a profit, and the source of profits is the customer - the only participant in the project environment. Kotler, P. and Keller, K. (2006) says that the customer is often not interested in how business is conducted but in the outcome that will bring him added value. Therefore, the most effective approach is to implement "customer oriented business". In order to achieve this goal, you need to know to what extent these three parameters mentioned above are important for a particular customer. There are project stages for every project, large or small. Durham Business School (2012a). For instance, here is an example from family life on "buying clothes for a teenager" . The concept stage The goal - buy seasonal clothes for a teenager Time - buy on the weekend, and certainly before the season starts Value - commensurate with the family’s available income Design and quality - matching the child's age and conditions of use Talk with your child (customer) to determine the most appropriate type of clothes prior to buying, because in some cases the lack of prior discussion results in parents spending hours in the shop and using their own time to decide on the most appropriate clothing to buy. The planning stage Planning the place and time to meet and how to get to the store of interest. Considering external conditions: less traffic on the roads, or fewer people in the store, or the time of the most attractive discounts. Considering the opportunity to complete this purchase on time and still having time for personal activities (theater, meeting with friends, a trip to the country ..)
- 3. 3 The design stage This stage involves taking into account all the elements necessary to make the purchase. Determining the route to the store, that the car is filled with gas and properly equipped, and the availability of funds in the family. The child has a mobile phone and knows the appointed time to exchange calls to verify the meeting place. The implementation stage The choice of who will go shopping, considering it most likely that anyone who is a parent is busy and cannot go to the store. Considering the option to order it on the Internet, for anyone who is very busy and relying on previous successful experience of buying high quality. The closing stage On completing purchase, receiving the sales slips and also advice on how to use this clothing, i.e., what temperatures it is appropriate for and washing and ironing temperatures. This example gives a fairly colorful description of Project stages and the need to manage all stages of it; but in my opinion, the most important element in a project and project management is communication management. The importance of communication management in a project. In general, we have noticed that most newcomers pay more attention to work performance results and less to progress reports. Employees sometimes try to over-perform a job and keep quiet about current progress, thinking to gain more respect from their managers for surprising performance. In the worst cases, the employees have to helplessly look for solutions for the failed task and do not have the courage to share the problem with colleagues or with management, which could ultimately lead to failure of the interrelated elements of the project. The underlying reason for this is that despite the goal and mission of the project, each of the participants in the project has a lot of self-interest coming from level of training,
- 4. 4 experience, psychological characteristics and external and internal features, which ultimately leads to different interests and understanding of the need for individuals to share information for the benefit of the project. Communication management is a valuable element of project management, but it cannot be separated from the entire project, which consists of the following interlinked elements: Integration, Stakeholders, Scope, Resources, Time, Cost, Risks, Quality and Procurement. However, Communication is more important than the other elements listed above, because many experts say that people are the greatest Asset in a project, which leads to the conclusion that how effectively they are organized and informed is a prerequisite for the project’s success. People are the only driving force behind a project, and practical experience shows that in some projects replacing the project managers leads to acceleration and better project performance. Conditions for a project’s success are often not directly related to the new manager's experience and technical knowledge, but simply to the ability to organize teamwork and relying on the professionals in the project team. In most situations, implementation of communication management was needed to specify the aims of the project and role of the each project member. Most project managers try to get better information on the project as soon as possible in order to make timely and appropriate decisions and set objectives for professionals and teams of professionals to implement them. In this case, is possible to rephrase (Meredith and Mantel. 2012, p.460) and say the following: "It is important that the communication and information distribution system is a closed-loop cycle between the project team and stakeholders". Here is an example of this. More than 15 years ago, I was appointed as the project manager of a small project with several producing oil wells. The project was funded and managed directly by the shareholders, and so I regularly reported project's progress to them. Since my previous experience in geology, I carefully and professionally monitored the operating mode of the wells. Unfortunately, my previous experience was overruled by
- 5. 5 the shareholders’ instructions to increase production rates from the wells above current rates. I repeatedly justified my argument, referring to disastrous consequences of recovering oil in later phases of oil field development. This was a conflict of interests and I did not understand my place in the hierarchy. In reality, the reason was simple. The shareholders needed substantial funds to repay a loan and also needed to obtain new ones, and therefore they were interested in increasing production and improving the attractiveness of the project. If I had had this information beforehand, I would have been more proactive and able to follow their instructions and also mobilize a project taskforce to look for any appropriate compensatory measures to maintain oil field development. Slack, N. Chambers, S. Johnston, R. (2010, p.465) have proposed stakeholder's interest and power, which have to be considered by any project manager while establishing communication plan and definition information expectations among project team and stakeholders. (Figure 1.) High Keep satisfied Manage closely Stakeholder power Monitor Keep informed Low Low High Stakeholder Interest Figure 1. The stakeholder power interest grid. Source: Adapted from Slack, N. Chambers, S. Johnston, R. (2010, p.465). In the learning materials Durham Business School (2011b) have been stated "A good communications system will provide the stakeholders with what they genuinely need,
- 6. 6 without deterring them from asking for additional information that they may believe they would like." This information also enables stakeholders to reinforce the decision-making process during the project life cycle. In my opinion, it is worth using criteria recently defined in the financial accounting domain and which may be similar to them. The Governmental Accounting Standards Board (2012) is stating: "The objectives of Financial Reporting are relevance, understandability, comparability, timeliness, consistency, and reliability. The three keys to effective communication are intended audiences, multiple levels of reporting, and forms of communication. " Setting up such criteria makes it possible to distinguish more useful information from less useful for decision-making purposes. Some forms of these qualitative characteristics are currently used in traditional Project Management, but they limited to Budget and cost control. The traditional approach to Project Management could be reinforced by implementing practices using qualitative characteristics: relevance and reliability of controlling the quality of project communications, as it is implemented in accounting to determine the usefulness of financial information ( Elliot and Elliot, 2008, p 162.), Conclusion Effective project management can be built on mutual trust and respect exercised by all stakeholders in the project. One of the key elements of maintaining it is efficient communication over the project life based on the principle that each stakeholder is able to get relevant and reliable information on time, allowing them to make decisions. The scope and extent of communication management must be equal to the efforts and resources it consumes. In other words the cost of communication management needs to be balanced against the benefit the stakeholder will obtain from having this information.
- 7. 7 References Durham Business School (2012),Project Management, 311M, Version 12.1,Unit 1. p.5, Durham. Durham Business School (2012a),Project Management, 311M, Version 12.1,Unit 1. p.25, Durham. Durham Business School (2012b),Project Management, 311M, Version 12.1,Unit 4. p.14, Durham. Elliott, B. and Elliott, J. (2008); Financial Accounting and Reporting. (12th edn) London: Financial Times Kotler, P. and Keller, K. (2006). Marketing Management. (12-th edn), New Jersey: Pearson Education Limited. Meredith, Jack R.. Samuel J. Mantel, (2012) Project Management: A Managerial Approach. (8th edn). John Wiley & Sons, p. 460. Oxford Dictionaries (2012). Available at http://oxforddictionaries.com/definition/english/project?q=project (Accessed 24 November 2012) Slack, N. Chambers, S. Johnston, R. (2010). Operations Management. (6th edn) Essex: Financial Times. p.465 The Governmental Accounting Standards Board (2012). Available at http://www.gasb.org/jsp/GASB/GASBContent_C/GASBNewsPage&cid=1176156715119 (Accessed 27 November 2012)