Archive for Oktober, 2008

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A comprehensive model for selecting information system project under fuzzy environment (Chen & Cheng, in press)

Dienstag, Oktober 7th, 2008

A comprehensive model for selecting information system project under fuzzy environment (Chen & Cheng, in press)Chen, Chen-Tung; Cheng, Hui-Ling: A comprehensive model for selecting information system project under fuzzy environment; in: International Journal of Project Management, in press.doi:10.1016/j.ijproman.2008.04.001Update: this article has been published in:  International Journal of Project Management Vol. 27 (2009), No. 4, pp. 389–399.Upfront management is an ever growing body of research and currently develops into it’s own profession. In this article Chen & Cheng propose a model for the optimal IT project portfolio selection. They outline a seven step process from the IT/IS/ITC project proposal to the enterprise success

  1. IS/IT/ITC project proposal
  2. Project type classification
  3. Individual project analysis
  4. Optimal portfolio selection
  5. Portfolio adjustment
  6. Successfully selection
  7. Enterprise success

Behind the process are three different types of selection methods and tools – (1) crisp selection, (2) strategy development, and (3) fuzzy selection.The crisp selection is the first step in the project evaluation activities. It consists of different factual financial analyses, e.g. analysis of discounted cash flow, cost-benefits, total investment, payback period, and the return on investment.Strategy development is the step after the crisp selection, whilst it also impacts the first selection step by setting guidelines on how to evaluate the project crisply. Strategy development consists of a project strategic status analysis. According to Chen & Cheng’s framework a project falls in one of four categories – strategic, turnaround, factory, or support.The last step is the fuzzy selection. In this step typical qualitative characteristics of a project are evaluated, e.g., risk, feasibility, suitability, and productivity improvements. In this step lies the novelty of Chen & Cheng’s approach. They let the evaluators assign a linguistic variable for rating, e.g., from good to poor. Then each variable is translated into a numerical value, e.g., poor = 0, good = 10. As such, every evaluator produces a vector of ratings for each project, e.g., (0;5;7;2) – vector length depends on the number of characteristics evaluated. These vectors are then aggregated and normalised.[The article also covers an in-depth numerical example for this proposed method.]

Posted in IT Project, Life Cycle Managment, Multi-project management, Planning, Portfolio Management, Program initiation, Project Selection, Risk Management, Tools, Uncertainty management, Value | 4 Comments »

Preparing project managers to deal with complexity (Thomas & Mengel, 2008) and Preparing the mind for dynamic management (Hartman, 2008)

Dienstag, Oktober 7th, 2008

 Preparing project managers to deal with complexity (Thomas & Mengel, 2008) and Preparing the mind for dynamic management (Hartman, 2008)

Thomas, Janice; Mengel, Thomas: Preparing project managers to deal with complexity – Advanced project management education; in: International Journal of Project Management, Vol. 26 (2008), pp. 304-315.
doi:10.1016/j.ijproman.2008.01.001

Hartman, Francis: ; in: International Journal of Project Management, Vol. 26 (2008), pp. 258-267.
doi:10.1016/j.ijproman.2008.01.007

Complexity is a meme that just doesn’t want to die. I wrote before about articles on the foundamentals of complexity theory and project management, about the use of autonomous cells in project organisations and how they prevent complex project systems from failing, and the complex dynamics of project entities in a programme. Not surprisingly this meme has spread into the coaching and project management education world where there is some money to make of it.

Thomas & Mengel argue that the current project manager education is not suited at all to prepare for complex projects. The focus on standardisation, control, and hard systems thinking stands in direct opposition to the actuality of projects, which show high complexity in roles, high degrees of chaos and uncertainty.
Theoretically Thomas & Mengel base their discussion on three complexity/chaos theory concepts

  • Chaos theory – explaining the behaviour of dynamic and unstable systems
  • Dissipative structures – explaining moment of dynamic stability and instability
  • Complex adaptive systems – explaining behaviour of systems with a large number of independent agents, and organisational evolution and learning

So what does it take to be a Complex Project’s Manager?
Thomas & Mengel propose that understanding the complex environment is far more important than using tools and techniques of project management. Furthermore they outline three key capabilities to manage complexity

  • IQ – possessing the self-knowledge to adapt existing tools
  • EQ – possessing the emotional skills to coach and manage people
  • SQ – possessing the capacity for finding meaning

In their framework Thomas & Mengel see most of today’s project managers as Experts, these are project managers heavy on the IQ side of their IQ-EQ-SQ-Triangle. The authors see two developmental strategies. One is coping with uncertainty by moving towards the sense-making SQ corner of the triangle and becoming a Leader. The other developmental direction is coping with complexity by strengthening the EQ corner and becoming a Manager.

Similar ideas are discussed in the paper by Hartman. Altough he does not call the elephant on the table complex project management but he names it dynamic management. Blink or not Blink – Hartman argues that wisdom and intuition are the two desired qualities in a leader with a mind for dynamic management. Furthermore he identifies three traits absolutely necessary

  • Pattern recognition & decision-making
  • Relationship building & communication
  • Integrity & trust

Posted in Complexity, Leadership, Methodology, Personality, Program Management, Standards | 3 Comments »

From organising as projects to projects as organisations (van Donk & Molloy, 2008)

Dienstag, Oktober 7th, 2008

From organising as projects to projects as organisations (van Donk & Molloy, 2008)

van Donk, Dirk Pieter; Molloy, Eamonn: From organising as projects to projects as organisations; in: International Journal of Project Management, Vol. 26 (2008), No. 2, pp. 129-137.
http://dx.doi.org/10.1016/j.ijproman.2007.05.006

van Donk & Molloy use two case studies to analyse the antecedents of a chosen project structure. Based on the work of Minzberg (1979) the authors identify five different forms of projects which can be mainly distinguished by their coordination mechanism

  • Simple structure → direct supervision
  • Machine bureaucracy → standardisation of processes
  • Professional bureaucracy → standardisation of skills
  • Divisionalised form → standardisation of outputs
  • Adhocracy → mutual adjustment

The authors identify which antecendents impact the choosen project structure

  • Age and size
  • Regulation and sophistication of the technical system
  • Environmental stability, complexity, market diversity, hostility
  • External control
  • Internal power

Posted in Actuality Research, Control, Organisation, Temporary organisation | 2 Comments »

Multicriteria cash-flow modeling and project value-multiples for two-stage project valuation (Jiménez & Pascual, 2008)

Dienstag, Oktober 7th, 2008

 Multicriteria cash-flow modeling and project value-multiples for two-stage project valuation (Jiménez & Pascual, 2008)

Jiménez, Luis González; Pascual, Luis Blanco: Multicriteria cash-flow modeling and project value-multiples for two-stage project valuation; in: International Journal of Project Management, Vol. 26 (2008), No. 2, pp. 185-194.
http://dx.doi.org/10.1016/j.ijproman.2007.03.012

I am not the expert in financial engineering, though I built my fair share of business cases and models for all sorts of projects and endeavours. I always thought of myself as being not to bad at estimating and modelling impacts and costs, but I never had a deep knowledge of valuation tools and techniques. A colleague was claiming once that every business case has to work on paper with a pocket calculator in your hands. Otherwise it is way to complicated. Anyhow, I do understand the importance of a proper NPV calculation, to say the least even if you do fancy shmancy real options evaluation as in this article here, the NPV is one of the key inputs.

Jiménez & Pascual identify three common approaches to project valuation NPV, real options, and payback period calculations. Their article focusses on NPV calculation. They argue that a NPV calculation consists of multiple cash flow components and each of these has different underlying assumptions, as to it’s risk, value, and return.

The authors start with the general formula for a NPV calculation
NPV = V0 = -I0 + ∑Qi ∏e-rk = -I0 + ∑Q e-∑rk
This formula also gives the internal rate of return (IIR) if V0=0 and the profitability index (PI) is defined as PI = V0/I0. Furthermore Jiménez & Pascual outline two different approaches on how to model the expected net cash flow Qi either as cash flow Qi = ∑qj,i or as value based period gj,k = ln (qj,k/qj,k-1).

The next question is how to model future values of the cash flow without adjusting your assumptions for each and every period. The article’s authors suggest four different methods [the article features a full length explanation and numerical example for each of these]

  • Cash Flow = Cash Flow + independent variable
  • Cash Flow = Cash Flow + function of the cash flow
  • Cash Flow = Function of a stock magnitude
  • Cash Flow = Change in stock magnitude

Finally the authors add three different scenarios under which the model is tested and they also show the managerial implications of the outcome of each of these scenarios

  • Ratios, such as operating cost and expenses (OPCE) to turnover (T/O), labour costs to T/O, depreciation to TIO, not fixed assets to T/O, W/C to T/O
  • Valuation multiples, such as Sales, Ebitda
  • Financing structure, such as short term, long term debt, after tax interests

Posted in Decision Making, Methodology, Planning | 3 Comments »

Embedding projects in multiple contexts – a structuration perspective (Manning, 2008)

Freitag, Oktober 3rd, 2008

Embedding projects in multiple contexts – a structuration perspective (Manning, 2008)

Manning, Stephan: Embedding projects in multiple contexts – a structuration perspective; in: International Journal of Project Management, Vol. 26 (2008), No. 1, pp. 30-37.
http://dx.doi.org/10.1016/j.ijproman.2007.08.012

Manning argues that projects are embedded in multiple contexts at the same time. These context facilitate and constrain the project at the same time and dynamically he describes this as „projects partly evolve in idiosyncratic ways as temporary systems, embedding needs to be understood as a continuous process linking projects to their environments“ (p.30).

Manning bases his analysis on Structuration Theory. It’s premise is to analyse action and structure (to interdependent concepts) in practice. Structuration Theory is defined by three key concepts – (1) structure, (2) actors, and (3) reflexive monitoring.

Structure is the set of symbolic and normative rules found in organisations. Furthermore the structure is set by authoritative and allocative resources. Actors are defined as potentially powerful and knowledgeable agents, who apply rules and resources in interactions, thus impacting the flow of events. As such structure impacts actions, which in turn impacts the structure. Reflexive monitoring is exactly this feedback loop from action to structure.

Applying structuration theory to projects Manning builds the concept of the project as temporary organisation, which is characertised by its tasks (=specification), times (=constraints), and teams (=relations). The author furthermore notices a constant process of disembedding and re-embedding into different contexts.

Which contexts are there? Manning identfies three. (1) organisations which are the collecitve actors engagned in coordinating projects, (2) interorganisational networks which are relations of legally independent organisations, and (3) organisation fields which are areas of institutional life by organisations and their members. Projects are embedded in all three of these contexts at the same time.

Lastly, Manning describes two embedding and re-embedding activities. Enactment of social contexts takes place top-down, that is from organisation fields –> interorganisational networks –> organisations –> projects, whereas the reproduction of social contexts takes place bottowm up.

Posted in Context, Organisation, Organisational capabilities, Temporary organisation, Theory | 1 Comment »

Organisational control in programme teams – An empirical study in change programme context (Nieminen & Lehtonen, 2008)

Freitag, Oktober 3rd, 2008

 Organisational control in programme teams - An empirical study in change programme context

Nieminen, Anu; Lehtonen, Mikko: Organisational control in programme teams – An empirical study in change programme context; in: International Journal of Project Management, Vol. 26 (2008), No. 1, pp. 63-72.
http://dx.doi.org/10.1016/j.ijproman.2007.08.001

Nieminen & Lehtonen search for control mechanisms and modes in organisational change programmes. Therefore the authors investigated four cases of organisational change programmes with a significant share of IT in them. Overall they identified 23 control mechanisms, which are used complimentary rather than exclusively.

The identified control mechanisms fall into three basic categories – (1) Bureaucratic Control, (2) Clan Control, and (3) Self Control. For each of these Nieminen & Lehtonen describe the focus, basis, and mechanisms of control.

Bureaucratic Control focuses on performance, i.e., behaviour, and outcomes, i.e., results and actions. The basis of bureaucratic control are rules and surveillance. Mechanisms typically employed are boundary and diagnostic mechanisms.

Clan Control focusses on socialisation, i.e., values, attitudes, and beliefs. The basis of clan control are interactions, values, and norms. Mechanisms typically employed are belief mechanisms, interactive mechanisms, and team control.

Self Control focusses on self-regulation, i.e., own actions vs. perceived organisational goals. It is based on self-monitoring and typically useses autonomoy as control mechanism.

In their empirical study Nieminen & Lehtonen find that a broad mix of control mechanisms is found in any programme, though significant differences exist between programmes. Furthermore the level of self-control seems to be positively related to other control mechanisms. Lastely the authors show that the physical environment strongly impacts the control mechanisms.

In their managerial implications Nieminen & Lehtonen conclude, that although ease of implementation is lowest for bureaucratic control – environments with ambigous goals need mechanisms of clan- and self-control.

Posted in Control, IT Project, Multi-project management, Program Management | 3 Comments »

Perceptions of the impact of project sponsorship practices on project success (Bryde, 2008)

Freitag, Oktober 3rd, 2008

 Perceptions of the impact of project sponsorship practices on project success

Bryde, David: Perceptions of the impact of project sponsorship practices on project success; in: International Journal of Project Management, in press.

Bryde investigates in this article the question which impact on the project stakeholder practice has.
The impact on the project is simply measured as perceived performance score of the project. The different practices are operationalised in three factors (with items sorted according to their factor loading)

  • External focus
    • Responsible for defining benefits and requirements
    • Take delivery at completion
    • Establish strategy, set priorities
    • Define success criteria
    • Define project and objectives
    • Monitor benefits
  • Internal focus = supporting
    • Create an environment for projects to succeed
    • Make senior management commitment
    • Give training when necessary
  • Internal/external focus = championing
    • Cancel project if appropriate
    • Champion project, make resources available
    • Monitor business environment

Finally Bryde uses a stepwise regression to quantify the impact of each factor on the perceived project success score. Resulting in a two factor model where ‚External focus‘ (standardised β = 0.373) and ‚Internal focus‘ (standardised β = 0.268) impact the project success. Adjusted R2 is 0.326.

Unfortunately in this article the performance is just scored up although a multi-item measurement exists, factor analysis has not been employed. Furthermore the article does not detail the consistency of scale neither for the antecendents nor consequence (Cronbach’s Alpha) and does not test for heteroscedasticy or distribution. Thus this article falls short in advancing the development of a multi-item measurement of project success from a stakeholder point of view. 

Posted in Stakeholder Management | 1 Comment »

The effectiveness in managing a group of multiple projects: Factors of influence and measurement criteria (Patanakul & Milosevic, in press)

Freitag, Oktober 3rd, 2008

The effectiveness in managing a group of multiple projects: Factors of influence and measurement criteria (Patanakul & Milosevic, in press)Patanakul, Peerasit; Milosevic, Dragan: The effectiveness in managing a group of multiple projects: Factors of influence and measurement criteria; in: International Journal of Project Management, in press, corrected proof.http://dx.doi.org/10.1016/j.ijproman.2008.03.001Update: This article has been published inInternational Journal of Project Management, Vol. 27 (2009), pp. 216–233. Multi-project management. I covered a similar topic yesterday looking at it from a Complexity Theory viewpoint. The authors argue that multi-project management is increasingly used in the industry mainly for reasons of better utilisation. [Having worked as a multi-project manager for marketing projects back in the old days, I don’t know if that is really true. My projects always culminated in a week with crazy workload, followed by dry spells, where I bored myself to death.]Patanakul & Milosevic analyse the critical success factors for managing multi-projects from a ‚bundle of projects‘-perspective, i.e., by interviewing a multi-project manager and his/her supervisor. Thus they build six case studies of organisations using multi-project-management. Accordingly the authors define multi-project as the middle state in the project continuum, where single projects are on one end, and programmes are on the other end of the scale.What do Patankul & Milosevic find? The antecedents of multi-project management effectiveness are

  • Organisational field
    • Project assignments
      • Projects‘ strategic importance
      • Required fit to managers‘ competencies
      • Organisational & personal limitations
    • Resource allocation
      • Sufficient resource allocation
      • Sustainable resource allocation
    • Organisational culture
      • Commitment
      • Communication
      • Teamwork
      • Rewards
  • Operational field
    • Project management processes
      • Individual processes
      • Inter-project processes
      • Interdependency management
    • Competencies of the multi-project manager
      • Competencies for leading individual projects
      • Competencies for coordinating between projects

Finally the authors identify the consequences of multi-project management effectiveness as

  • Organisation
    • Resource productivity
    • Organisational learning
  • Project
    • Time-to-Market
    • Customer satisfaction
  • Personal
    • Personal growth
    • Personal satisfaction

Posted in Case Study, Complexity, Critical Success Factors, Leadership, Multi-project management | No Comments »

Integrating diverse knowledge through boundary spanning processes – The case of multidisciplinary project teams (Ratcheva, in press)

Freitag, Oktober 3rd, 2008

Integrating diverse knowledge through boundary spanning processes – The case of multidisciplinary project teams (Ratcheva, in press)

Ratcheva, Violina: Integrating diverse knowledge through boundary spanning processes – The case of multidisciplinary project teams; in: International Journal of Project Management, in press, corrected proof.
http://dx.doi.org/10.1016/j.ijproman.2008.02.008

The author argues that diverse, multi-disciplinary teams have knowledge boundaries which make information sharing difficult. An issue even more difficult if the team is geographically separated.

Ratcheva conceptualises the diverse project team as being embedded in the macro environment and organisational environment. The team itself is characterised at its starting point by three factors – (1) interpersonal, interactions & relational capital, (2) knowledge diversity, and (3) establishing workpractice. These three factors influence each other. Starting with this diverse team context or setting the team goes on to integrate it’s knowledge which ultimately leads to a project outcome.

Which knowledge boundaries exist in such a project team? Ratcheva identifies three different knowledge domains and at the edge of these knowledge boundaries. First of all there is the project team, surrounded by it’s projectation boundary, outside this boundary lies the occupational knowledge. Which simply means that each project team member is rooted in a broader knowledge of his profession which goes beyond the boundaries of the current project.
Secondly, the team has contextual knowledge which is confined by the project knowledge boundary. Thirdly, the broader project relevant knowledge lies inside the project’s social boundary.

How does the concept look like in motion? Which boundary spanning activities does the team perform? Ratcheva describes a four step process which combines all knowledge related and boundary spanning activities.

  1. The project core team works on the project, solves problems and issues = understanding occupational knowledge, and realising and spanning the projectation boundary
  2. The team understands the context knowledge, e.g., customer needs, stakeholder requirements = realising and spanning the project knowledge boundary
  3. The team understands  it’s personal diversity, thus understanding which personal knowledge is project relevant knowledge = realising and spanning the project social boundary
  4. The team integrates all knowledge, a knowledge which then feeds back into the first step

Posted in Boundary, Complexity, Culture, Knowledge Management | No Comments »

Construction client multi-projects – A complex adaptive systems perspective (Aritua et al., in press)

Donnerstag, Oktober 2nd, 2008

 Construction client multi-projects – A complex adaptive systems perspective

Aritua, Bernard; Smith, Nigel J.; Bower, Denise: ; in: International Journal of Project Management, Article in Press, Corrected Proof.
http://dx.doi.org/10.1016/j.ijproman.2008.02.005

The meme of Complexity Theory is unstoppable in recent project management research. On the other hand it does make sense. Research such as this and, of course, common sense, indicate that the project’s context is a field better not left unmanaged. Since reality is quite complex  and peoples‘ behaviour is anyway – a view like this increases the pre-existing complexity of projects management.

In this article Aritua et al. analyse the special complexity which presents itself in multi-project environments. I posted about complexity theory before and in more detail here.
A quick recap. Complexity theory has 6 distinctive features, which make the outcomes of decisions, actions, and events increasingly unpredictable

  • Inter-relationships
  • Adaptability
  • Self-organisation
  • Emergence
  • Feedback
  • Non-linearity

Aritua et al. model the multi-project environment as being two-fold – (1) strategic environment and (2) tactical environment. The strategic environment builds the business context for the projects, programmes, or portfolio. The authors conceptualise the typical strategic cycle as consisting of vision – mission- strategic blueprint & objectives.

The tactical environment is the project portfolio/programme itself. Consisting of a couple of projects, it does provide a Risk:Value ratio for each project, which leads to an overall risk:value ration for the whole portfolio/programme, as such it feeds back into the strategic cycle in the business context environment.

In a second step the authors analyse the dynamics of such a system – what happens to a mulit-project portfolio if its external environment changes?
First of all, the boundary spanning activity in this conceptualisation is the information exchange with the environment. The information exchange into and out of the project portfolio triggers dynamics inside and between each project. Self-organising local relationships emerge into complex adaptive behaviour which feeds back, positively or negatively into the self-organising relationships. Huh?

Firstly, the project portfolio/programme is a complex system and therefore adapts itself when the environment changes. The one and only pre-requisite for this is, as the authors argue, that information and feedback freely flows inside, into, and out of the system.

Secondly, the self-organising relationships simply imply that individual components of the system affect each other and influence behaviour and actions. That is no project in a portfolio is independent from others. The authors cite the ant colony example, where ants make individual decision based on decisions by their closest neighbours. Thus complex interaction emerges.

Thirdly, self-organisation is the driving force behind creating stability in this open system. As the authors put it: „This aspect of the relationship between complexity theory and multi-project management would imply that programme managers and portfolio managers should not be bogged down with detail and should allow and enable competent project managers to act more creatively and on their own. This understanding also influences multi-project managers to seek a balance between trusting project managers and allowing them to concentrate on details – on the one hand – while seeking the necessary level of control and accountability.“

Fourthly, emergence is the effect that the group behaviour is more than the sum of behaviours of each individual project. Which implies, that risk and value can better be managed and balanced in a portfolio. On the flipside non-linearity shows that small changes in the system have unpredictable outcomes, which might be quite large. Thus management tools which don’t rely on non-linearity are needed. Moreover „it also emphasises the need for the multi-project management to react to the changing business environment to keep the strategic objectives at the fore while providing relative stability for the delivery of individual projects“.

So what shall the manager of a programme/portfolio do?

  • Find a right balance between control and freedom for the individual projects (self-organisation)
  • Enable information flow between the environment and the projects, as well as in between the projects (adaptability)
  • Adapt strategic objectives, while stabilising project deliveries (feedback)
  • Balance risk and value in the portfolio (emergence)
  • Use non-linear management tools (non-linearity), such as AHP, Outranking, mental modelling & simulation

Posted in Complexity, Critical Success Factors, Program Management, Tools | 3 Comments »

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