CH-13-Appendix-A Project Management Organizational Structures – Successful Project Management : Chapter Notes

This Document Contains Chapter 13 to Appendix A CHAPTER 13: Project Management Organizational Structures Chapter Concepts Although there are various configurations in which people can be organized to work on projects, the most common types of organizational structures are functional, autonomous project, and matrix. The examples here relate to industrial companies; however, the concepts are applicable to other sectors, such as service businesses, government and public agencies, and not-for-profit organizations, including educational institutions, healthcare organizations, and charitable foundations. Based upon this chapter, students will become familiar with • The characteristics of the three types of organizational structures • The advantages and disadvantages of each • The role of a project management office Learning Outcomes After studying this chapter, the learner should be able to: • Explain the three types of project management organizational structures • Discuss the advantages and disadvantages of each type of project management organizational structure • Describe the role of a project management office in a matrix organizational structure Project Management Knowledge Areas from PMBOK® Guide Concepts in this chapter support the following Project Management Knowledge Areas of A Guide to the Project Management Body of Knowledge (PMBOK® Guide): • Project Integration Management • Project Human Resource Management Teaching Strategies 1. The two vignettes present information about the success of project management organizations. The first vignette depicts the limits of communication that occur in a functional organizational structure with a PMO that directs projects. The second vignette points out the success a company can have with the PMO having good communication and instituting processes that led to measurable improvements. Have students search for additional information about the companies to see how each has advanced their project management organization. 2. Have students examine the organizational structure of an organization of their choice. Have the students determine if the size of the organization influences the type of organizational structure. 3. Have students brainstorm ways in which a team could be structured. Have students evaluate the resulting structures to identify the advantages and disadvantages of each. 4. Have a guest from a local organization present information about the organization's structure and how they manage projects. Lecture Notes 1. Real-World Project Management Examples Vignette A: Knowledge Flows in a Functional Organization Structure with a PMO A large pharmaceutical firm in China with a functional organization structure analyzed its communication network using social network analysis. The hierarchical structure of the organization limits the communication of the PMO lead PM with project team members. Team members tend to communicate with those with whom they have worked and developed a level of trust. • Researchers examined the relationships and communications of the members of a project management office (PMO) in a large development and manufacturing company of medical and health care products in China. ○ Recently the company had changed to project orientation from a process orientation. The nearly 90 project managers hold professional certifications in project management and are assigned to projects based upon the type of project, its scope, and priority by their PMO managers in the different functional units within the company. ○ The PMO is a virtual project management office and is led by a central PMO manager and five virtual PMO managers in each of the functional unit lines of production. ○ The five virtual PMO managers work with the expert project managers for the lines of production to perform projects that are labeled A, B, of C based upon the project’s scope, complexity, and importance for the organization. ○ The central PMO manager serves as a director of all the projects to make sure the projects selected by the five PMO functional unit managers to be completed are aligned with the organization’s strategic plans and goals and does not interact with any of the day-to-day project management of the projects. ○ The hierarchical structure of the organization provides the organization centralized decision making and a central IT platform for knowledge collection and dissemination. • A social network analysis of the organization was conducted to investigate the formal and informal knowledge sharing between the central PMO manager, the five virtual PMO managers, and the project managers. ○ This analysis revealed that project managers overestimate the importance of their communications and recipients do not acknowledge the new knowledge as help or give credit to the source of the help. ○ Results indicated that these PMO managers had little communication between each other, shared knowledge with their expert project managers, and did not share as much information with the other project managers. ○ Further analysis of the PMO manager communication exchange revealed that communication usually occurred during formal meetings and rarely on ad hoc informal conversations. ○ The functional unit organization structure limits opportunities for project managers to work with others in the different production lines and for the PMO managers to work together. ○ A comparison of the collaboration and who they help/who helps them responses indicated that the project managers tend to seek information from those with whom they have collaborated in the past. These connections in the social network analysis confirmed that prior collaboration establishes trust and identification of expertise. The PMO office is valued by the project managers throughout the organization. The results of the communication analysis imply that the PMO office is not central in communication; however, when asked if they could accomplish all that they do without the PMO, an overwhelming majority replied that they could not. The project managers responded they need help from the PMO office and their fellow project managers. Vignette B: Verizon Wireless Wins Project Management Office of the Year Award Verizon wireless' marketing PMO won the PMO of the Year Award for its increases in the number of projects that were completed on time and within budget, reduction of cycle time, and alignment of resources to top priority projects. • The Verizon Wireless Marketing Program and Portfolio Office set a goal to have 90 percent of its top projects finish on time, to deliver its other projects at least 70 percent on time, reduce its cycle time by 50 percent, and have 100 percent alignment of the organizational resources to the top prioritized projects. • The challenge required the Marketing Project Management Office (PMO) to examine its goals and processes. ○ Not only did Verizon Wireless’ Marketing PMO meet their goals, they surpassed them. ○ The PMO has implemented new ideas, instituted processes that led to measure able improvements in project management, and realized business benefits. ○ In addition to exceeding their top project completion goal of 90 percent to have 100 percent of the top projects delivered on time, the PMO delivered the remaining projects 80 percent on time, reduced cycle time by 58 percent, and experienced 100 percent alignment of resources to the top projects. ○ The panel of judges concluded from the review of the application, “Verizon Wireless’ Marketing PMO is mature, thorough, innovative, and tightly woven into the fabric of the business.” PMOs oversee and coordinate multiple projects, provide support, establish consistent procedures, resolve priority conflicts, and centralize governance and document repositories including lessons learned. Verizon Wireless’ Marketing PMO’s mission is to be “the financial advisor and delivery arm for the strategies of the organization.” The Marketing PMO was recognized as the Project Management Office of the Year in 2012 due to its corporate strategy for enterprise-wide project improvement and 100 percent project alignment in its efforts to achieve its mission. 2. Functional Organizational Structure • Figure 13.1 depicts a functional organizational structure for an industrial business that sells standard electronics products. • A functional organizational structure is one in which individuals are organized in groups that perform the same function or have the same expertise or skills • This structure is typically used in businesses that primarily sell and produce standard products, for example, a company that manufactures and sells video recorders. • Work groups consist of individuals who perform the same function, such as engineering or manufacturing. ○ Each functional group concentrates on performing its own activities in support of the company’s business mission. • A company with a functional structure may periodically undertake projects, but these are typically in-house projects rather than projects for external customers. For such projects, a multifunctional project team or task force is formed. • Team members may be assigned to the project either full-time or part-time. ○ In most cases an individual who serves part-time on a project task force continues to perform a regular functional job. ○ One of the team members is designated as the project leader or manager. • In a functional-type organization, the project manager does not have complete authority over the project team, because administratively the members still work for their respective functional managers. • The project manager also needs to take the time to regularly update the other functional managers in the company on the status of the project and thank them for the support of their people assigned to the task force. 3. Autonomous Project Organizational Structure • Figure 13.2 depicts an autonomous project organizational structure, also known as projectized organizational structure, for a business that sells rapid transit projects to cities and counties. • One in which each project operates as its own somewhat independent entity with dedicated resources assigned solely to each project • Companies with this organization are in the projects business; they do not produce standard products. • They work on multiple projects at any given time. • As projects wind down and are completed, the company hopes to get contracts for new projects. • Each project team is dedicated to only one project. • In the project-type organization, each project is operated like a mini-company. ○ All the resources needed to accomplish each project are assigned full-time to work on that project. ○ A full-time project manager has complete project and administrative authority over the project team. • A project-type organization can be cost-inefficient both for individual projects and for the company. Each project must pay the salaries of its dedicated project team, even during parts of the project when they are not busy. • There is little opportunity for members of different project teams to share knowledge or technical expertise, because each project team tends to be isolated. • Project organization structures are found primarily in companies engaged in very large projects. ○ Such projects can be of high (multimillion) dollar value and several years’ duration. ○ Project organization structures are prevalent in the construction and aerospace industries. ○ They are also used in the nonbusiness environment, such as for volunteer-managed projects. 4. Matrix Organizational Structure • Figure 13.3 depicts a matrix organizational structure for a business that sells custom computer-based automation systems. • A matrix organizational structure is a hybrid of the functional and autonomous project organizational structures, in which resources from appropriate functional components are temporarily assigned to particular projects that have project managers from the project component of the organization. • With this structure, multiple projects are worked on at any one time, and these projects vary in size and complexity. ○ Projects are continually being completed and started. • The matrix organization is a hybrid—a mix of both the functional and autonomous project organizational structures. ○ It provides the project and customer focus of the project structure, but it retains the functional expertise of the functional structure. ○ The project manager is responsible for the project results, while the functional managers are responsible for providing the resources needed to achieve the results. • The matrix organization provides for effective utilization of company resources. ○ Project managers come under the projects component of the organization. ○ When the company receives an order for a new system, the vice president of projects assigns a project manager to the project. ○ A small project may be assigned to a project manager who is already managing several other small projects. ○ A large project may be assigned a full-time project manager. • Individuals are assigned to the project for the length of time they are needed. ○ Some individuals may be assigned to the project full-time, while others may be assigned only part-time. ○ Some people may be assigned to a project for its entire duration; others may work on only one part of the project. ○ Sharing of individuals’ time among several projects results in effective utilization of resources and minimizes overall costs for each project. ○ The objective is to maximize the number of functional person-hours applied to work on projects and minimize the unapplied time. • The company always needs to have new projects coming in as other projects are completed, in order to maintain a high applied-time rate for the functional staff. • Individuals can pursue career development through assignment to various types of projects. As they broaden their experience, they become more valuable for future assignments. • Each member of a project team has a dual reporting relationship; in a sense, each member has two managers—a (temporary) project manager and a (permanent) functional manager. • The project manager is the intermediary between the company and the customer. ○ The project manager is responsible for leading the development of the project plan, establishing the project schedule and budget, and allocating specific work activities and budgets. ○ Each functional manager in a matrix organization structure is responsible for deciding how the assigned work activities will be accomplished and who will do each task. • The matrix organization provides checks and balances and a fast response upon problem identification, because it has both a horizontal (project) and a vertical (functional) path for the flow of information. 5. Advantages and Disadvantages of Organizational Structures Table 13.1 depicts the advantages and disadvantages of organizational structures. A. Functional Organizational Structure • Advantages: ○ A functional-type organization reduces duplication and overlap of activities. ○ It provides the benefits associated with specialization and functional excellence. • Disadvantages: ○ Functional-type organizations can be insular, with each component concerned about only its own performance. ○ Teamwork is not emphasized; little cross-fertilization of ideas occurs among functions. ○ Decisions may be parochial rather than in the best interests of the overall project. ○ The hierarchical structure slows communication, problem resolution, and decision making. ○ There is a lack of customer focus. ○ There is a stronger allegiance to the function than to the project or the customer. B. Autonomous Project Organizational Structure • Advantages: ○ The project team has full control over the resources, including authority over how the work gets done and by whom. ○ The project organization is highly responsive to the customer. • Disadvantages: ○ This structure can be cost-inefficient because of underutilization of resources. ○ When things are slow, individuals have a tendency to stretch out their work to fill up the time available, or if they do not have any work activities to do for temporary periods, their unapplied time is still a cost to the company. ○ The potential exists for duplication of activities on several concurrent projects. ○ There is a low level of knowledge transfer among projects. ○ Individuals are dedicated to working on one project. ○ Project team members do not have a functional “home.” ○ At the end of a project, team members may be laid off if there is no new project to which they can be assigned, creating high anxiety about reassignment. C. Matrix Organizational Structure • Advantages: ○ It allows for efficient utilization of resources by assigning individuals from various functions to work on specific projects. ○ Because they have a functional home, individuals can be moved among projects. ○ It provides a core of functional expertise that is available to all projects. ○ Knowledge stays with the company, ready to be used on future projects. ○ People experience greater learning and growth, and their knowledge and skills are transferred from project to project. ○ The matrix structure also facilitates information flow. ○ Project team members can communicate easily with the project manager and the functional manager. ○ The matrix organization is customer-focused. • Disadvantages: ○ Members of a project team in a matrix organization structure have a dual reporting relationship, which can cause anxiety and conflict over work priorities. ○ A company that uses a matrix organization structure must establish operating guidelines to ensure a proper balance of power between project managers and functional managers. ○ Conflicts will arise between project managers and functional managers regarding priorities. 6. Critical Success Factors • In a matrix organization, it is important to delineate the project management responsibilities and the functional management responsibilities. • In a matrix organizational structure, operating guidelines should be established to ensure proper balance of power between project managers and functional managers. • Project teams should be kept as small as feasible throughout the project. 7. Summary • The three most common structures used to organize people to work on projects are functional, autonomous project, and matrix organizational structures. • The functional organizational structure is typically used in businesses that primarily sell and produce standard products. The advantages of a functional organizational structure are no duplication of activities and functional excellence. Disadvantages include insularity, slow response time, and lack of customer focus. • The autonomous project organizational structure is used by companies that are working on multiple projects at any one time and do not produce standard products. This structure has control over resources and responsiveness to customers as advantages. Cost inefficiency and low level of knowledge transfer among projects are its disadvantages. • The matrix organization is a hybrid of both the functional and the autonomous project organizational structures. The advantages of a matrix organizational structure include efficient utilization of resources, functional expertise available to all projects, increased learning and knowledge transfer, improved communication, and customer focus. Its disadvantages are the dual reporting relationships and the need for a balance of power. • In the matrix structure, the project manager is the intermediary between the company and the customer. • The project management office in the matrix organizational structure oversees and coordinates multiple projects. Questions 1. Describe what a functional organization is. Make sure you discuss the advantages and disadvantages of this structure. Functional organizations are businesses that primarily sell and produce standard products, for example, a company that manufactures and sells video recorders. Groups consist of individuals who perform the same function, such as engineering or manufacturing. Each group concentrates on performing its own activities in support of the company’s business mission. A company with a functional structure may periodically undertake an in-house project, but not one for external customers. The advantages are that activities are not duplicated and it provides the benefits associated with specialization and functional excellence. The disadvantages are that this type of structure tends to be insular, there is a slow response time, and there is a lack of customer focus. 2. Describe what an autonomous project organization is. Make sure you discuss the advantages and disadvantages of this structure. An autonomous project organization is a company that is in the project business. It does not produce standard products. It works on multiple projects at a time, and each project team is dedicated to only one project. The advantages of this structure include having control over resources and a high degree of responsiveness to customers. The disadvantages are potential cost-inefficiency and a low level of knowledge transfer among projects. 3. Describe what a matrix organization is. Make sure you discuss the advantages and disadvantages of this structure. A matrix organization works on multiple projects at any one time. It is a hybrid of a functional organizational structure and an autonomous project organizational structure in which projects are continually being completed and started. A matrix structure has many advantages, including efficient utilization of resources, functional expertise that is available to all projects, increased learning and knowledge transfer, a high degree of responsiveness, and customer focus. The disadvantages of this structure are dual reporting relationships and the need for a balance of power. 4. Which type of organizational structure is often used by companies that produce standard products? Why? The functional organizational structure is often used by companies that produce standard products because the focus is on the technical excellence and cost competitiveness of the company’s products, as well as on the importance of each functional component’s contribution of expertise to the company’s products. 5. Discuss some of the problems that might be encountered when a functional organization develops new products. Because the team members view their contribution to the project (developing a new product) in terms of their technical expertise, their allegiance remains to their functional managers. If there is conflict among the team members, it usually works its way through the organization hierarchy to be resolved, slowing down the project effort. In addition, decisions might reflect the interests of the project manager’s own functional component rather than the best interests of the overall project. 6. Why is an autonomous project organization considered to be like its own somewhat independent entity? An autonomous project organization is like a mini-company because all the resources needed to accomplish each project are assigned full-time to work on that project. A full-time project manager has complete project and administrative authority over the project team. 7. Why is an autonomous project organization sometimes considered to be cost inefficient? An autonomous project organization can be considered expensive because each project must pay the salaries of its dedicated project team, even during parts of the project when they are not busy. Also, resources or work activities may be duplicated on several concurrent projects. 8. Which organizational structure is considered to be a hybrid? Explain. The matrix structure is a hybrid—a mix of both functional and autonomous project organizational structures. It provides the project and customer focus of the project structure but retains the functional expertise of the functional structure. 9. How does a matrix organization provide for career development? A matrix organization provides for career development by assigning individuals to various types of projects. As they broaden their experience, they become more valuable for future assignments. 10. What are the responsibilities of the project manager in a matrix organization? The project manager is the intermediary between the company and the customer. He or she is responsible for leading the development of the project plan, establishing the project schedule and budget, and allocating specific work activities and budgets to the various functional components of the company organization. 11. What are the responsibilities of the functional manager in a matrix organization? Each functional manager in a matrix organizational structure is responsible for deciding how the assigned work activities will be accomplished and who will do each task. 12. What are the responsibilities of the vice president of projects in a matrix organization? The vice president of projects can resolve priority conflicts between two or more projects within the organization. 13. What is the role of a project management office? What organizational structure best supports having a project management office, and why? The project management office oversees and coordinates multiple projects. It can help to resolve priority conflicts between projects and can facilitate decisions regarding the priority among projects. The project management office may also provide project management training, provide administrative support staff for projects, establish consistent procedures, and develop best practices and templates for planning, monitoring, and controlling projects. The matrix organizational structure provides a core of functional expertise that is available to all projects and supports the project management office. Internet Exercises Assign the Internet Exercises to your students as homework or complete them together in a computer lab. Searchers for “functional organizational structures," "autonomous project organizational structures," "matrix organizational structures," and “project management office” result in definitions and techniques for managing the various organizational structures. The search for “project management successes and failures" yields lists for books, articles, and case studies of project success and failures. The Project Management Institute's website contains a number of events related to project management training, chapter meetings, and seminars. The calendar can be searched for dates and category. A search for “events” on the site may help find the link more easily. Case Study #1 Multi Projects This case study is about a company called Multi Projects, Inc., a well-established, rapidly growing consulting firm that has grown from 300 to 400 employees over the past two years. Multi Projects has a matrix organization structure. As new projects come in, a project manager is assigned. Multi Projects just got a call from Growin Corporation, which wants to go forward with a project that Multi Projects proposed nearly six months ago. Jeff Armstrong has been assigned as project manager for the Growin Corporation project and desperately wants to have Tyler Bonilla assigned to his project; however, Tyler is working full-time on a project run by Julie Capriolo for Good old Company. Answers to Case Questions 1. Why is Jeff so anxious to get started on the Growin project? Jeff has been assigned as project manager for the Growin Corporation project. He has been with Multi Projects for about a year and has been anxious to get a challenging project to manage. He also worked on the proposal for the Growin project. 2. What is wrong with Jeff’s approach to handling this situation? Jeff appears to think the whole world revolves around him and his new project. He also has twisted several people’s words and has attempted to make Julia think that Tyler is definitely being reassigned by telling her that he has already spoken to Tyler and Jennifer about the reassignment (although no real decisions have been made). 3. What should Jennifer do to resolve this situation? Jennifer needs to make some serious decisions about the assignment of Tyler on these two projects. She should start by sitting down with everyone involved (individually and as a group) to discuss the situation. 4. What advantages of the matrix organization are apparent from this story? • Because they have a functional home, individuals can be moved among projects. • A matrix provides a core of functional expertise that is available to all projects. • People can experience greater learning and growth in a matrix organization, and their knowledge and skills are transferred from project to project. 5. What disadvantages of the matrix organization are apparent from this story? • Members of a project team in a matrix organization structure have a dual reporting relationship, which can cause anxiety and conflict over work priorities. • A company that uses a matrix organization structure must establish operating guidelines to ensure a proper balance of power between project managers and functional managers. • Conflicts will arise between project managers and functional managers regarding priorities. Group Activity Have an open discussion among course participants regarding the following questions: • What should Jennifer do next? • What should Tyler do? • What could have been done to prevent this situation? • How could each of the four individuals have handled the situation better? Case Study #2 Organize For Product Development This case study describes a multi-division manufacturing company with a diversified product line. The medical instruments division is not growing as fast as the rest of the divisions in the company. Answers to Case Questions 1. How would you initiate your assignment with Kareem and the department managers? Open communications and clear objectives and guidelines will be important up front. 2. Develop a list of questions you would ask. Answers will vary among students. Questions may include: • What reporting structure is followed in each department? • How are project teams managed? • What process is used to decide the cost-benefit in product design? • What relationships work well within the organization? 3. Assuming the department managers tell you the same things they told Kareem, what recommendations would you make to the CEO, including any changes to the organization structure, to improve the management of product development projects? Let the class debate this topic and then lead them through an active discussion. Answers can suggest recommendations for changes to the organizational structure but should include reasons for the structural change. 4. What guidelines would you recommend for how the departments and/or new functions should work together on product development projects? First let the students develop their own lists individually. Next, let them work in teams of three or four to expand their lists. When they are finished, lead the class through an interactive discussion and create a master list of their guidelines and recommendations. Answers have included a series of recommendations that supported the structural change and the new roles and responsibilities of the project managers and functional managers. Group Activity Divide the course participants into groups of three or four members to develop responses to the case questions. Each group should choose a spokesperson to present its responses to the entire class. Optional Supplemental Activities 1. Have students read the real-world vignettes. 2. Let each student interview someone in business who is engaged in a project and summarize the project, describing the specific organizational structure it uses. 3. Have the students read the chapter and answer all the Reinforce Your Learning questions and the questions at the end of the chapter. 4. Ask students to interview the organizer of an event from the PMI website and present the results to the class. APPENDIX A: Project Management Information Systems Appendix Concepts Numerous project management information systems (PMISs) are available that help the user to plan, track, and manage their projects. In recent years, PMISs have become very easy to use and often can be customized to fit the needs of the user. A PMIS provides a powerful suite of Web-based tools to support many of the topics covered in this text. This appendix provides • A discussion of the common features available in most PMISs • Criteria for selecting a PMIS • A discussion of some advantages of using a PMIS • A discussion of some concerns about using a PMIS • A discussion of how to find vendors offering PMISs Teaching Strategies 1. Project management information systems range for simple tracking software to complex integrated systems. The systems have common features. Have students evaluate the common features and determine what features are most appropriate for their project situations. 2. Display several project management information systems to the class. Have the class suggest industries or project types that could use the systems. Lecture Notes 1. Project Management Information System Features Some features of project management information systems include: A. Budgeting and Cost Management One of the most important features that a project management information system provides is the ability to effectively plan and manage the costs of projects. Features often include: • Billing and billing methods • Cost-to-completion tracking • Earned value management • Multiple currency • Payroll integration • Percent-to-complete tracking • Project accounting and cost control • Project cost estimating • Time and expense reporting B. Communications The communication features of project management information systems have come a long way. Most systems provide a suite of tools such as those noted below. • Automatic e-mail notifications • Collaboration management • Customer collaboration • Discussion forums • Email integration • File attachments • International characters • Message center • Mobile access • Multiple languages • Online meetings C. Documentation Management One of the most important features of project management information systems is the ability to document a project from beginning to end. The following is a list of some features that are available to help. • Approval process and routing • Change order management • Contract management and automation • Meeting management and action items • Project charter information • Requirements management • Time-off requests D. Integration and Customization Most project management information systems allow for the customization of the user interface and the reports to suit the particular needs of a project. In addition, they provide linkages with many other popular information systems. • Customizable user interfaces • Importing/exporting • Multimedia integration E. Online Tutorials Online help tools for project management information systems often include very detailed demos, online help, in-depth tutorials, and even full video presentations. F. Project Planning All project management information systems allow the user to define the activities and resources that are needed to perform a project. The list below provides an overview of some of the important project-planning features. • Network diagrams and bar (Gantt) charts • Project time estimating • Scheduling • Task management and interdependencies • What-if analysis • Work breakdown structure G. Project Portfolio Management Many project managers today are running multiple projects and tracking significant issues related to those projects. The list below provides some features that can help. • Issue management • Knowledge management • Multiple project management H. Project Tracking and Control Tracking progress, actual costs, and actual resource use is a fundamental component of project management. Project management information systems allow the user to define a baseline plan and compare actual progress and costs with those in the baseline plan. Most systems can track tasks in progress, completed tasks, associated costs, time expended, start and finish dates, actual dollars committed or spent, and resources used, as well as remaining durations, resources, and expenses. Some of the features include: • Critical path analysis • Milestone tracking • Subcontractor tracking • Task priorities • Task reminders I. Report Generation The reports that new project management information systems can generate are: • reports on the project as a whole • reports on the major milestones • reports that provide a variety of information with respect to a date range • financial reports that show a full range of information • earned value analysis and management reports • resource allocation reports for each resource or group of resources involved in a project • baseline-to-actual variance reports The features provided by these systems thus include: • Customizable reporting • Dashboard indicators • Filtering • Real-time reporting • Sorting J. Resource Management Project management information systems can maintain a resource list consisting of resource names, the maximum amount of time resources are available, standard and overtime rates for resources, accrual methods, and textual descriptions of the resources. Constraints can be assigned to each resource, such as the number of hours or times that it is available. The system will highlight and help correct over-allocation and perform resource leveling and resource smoothing. Features available are: • Assignment tracking • Calendars • Resource allocation and planning • Resource utilization • Skills tracking K. Risk Management Project risks are uncertain events or circumstances that could have an impact on a project. The degree to which project management information systems support risk management varies greatly. Several tools allow the user to define possible risks, determine the probability that they will occur, and predict the impact on the schedule and budget if they occur. L. Sales and Business Development Several newer project management information systems include features related to business development. Some of the features include: • Automated lead generation • Client management • Sales dashboard M. Security and Access Controls A critically important feature in project management information systems is security and access rights features. Some systems provide password access to the project management program itself, password access to individual project files, and password access to specific data within a project file. Different views can be given to the project manager, team members, and the client. 2. Criteria for Selecting Project Management Information Systems Following is a list of factors to consider before purchasing a project management information system. • Capacity ○ Can the system handle the number of tasks you expect to perform, the number of resources you expect to need, and the number of projects you expect to be managing simultaneously? For most organizations the information system capacity is not an issue. • Documentation and online help facilities ○ Consider the readability of the online user’s manual, the logical presentation of ideas, and the level of detail of the manual and on-line help. • Ease of use ○ Assess the “look” and “feel” of the system, the menu structures, available short-cut keys, color displays, the ease with which data can be entered, consistency among screens, etc. • Features available ○ Does the system include work breakdown structures? How good are the resource-leveling and smoothing algorithms? Can the system sort and filter information, monitor the budget, produce customized calendars, help resolve over-allocation of resources, etc.? • Installation requirements ○ Check the memory required, the amount of hard disk space required, the processing speed and power required, the type of graphics display needed, and the operating system requirements. • Integration with other systems ○ Some systems allow very basic integration with a few popular information systems, whereas others provide sophisticated integration with distributed databases and even object-oriented databases. • Internet features ○ Although all modern project management information systems allow project information to be posted and shared directly through the internet, there is great variation in the web-based tools they contain. • Reporting capabilities ○ Systems vary in the number and types of reports they provide. • Security ○ Some project management information systems provide greater levels of security than others. • Vendor support ○ Give special attention to the price of support and the reputation of the vendor. 3. Advantages of Using Project Management Information Systems Some of the numerous advantages of using project management information systems are: • Ability to handle complexity for large-scale projects. • Accuracy. Information systems have accurate algorithms for calculating project information • Affordability. Excellent PC-based project management information systems can be purchased for just a few hundred dollars. • Ease of use. They can often be mastered with only a minimal amount of training. • Maintainability and modifiability. Any change in the data will automatically be reflected in all the project documents, such as the diagrams, the cost tables, and the resource allocation charts. • Recordkeeping. Data can be kept on individual team members’ schedules, each task, costs, and resources used. • Speed. Calculations and revisions can typically be performed in seconds. • What-if analysis. One further feature allows the user to see the effects of various scenarios on a project. 4. Concerns about Using Project Management Information Systems There are also a few concerns to consider. • Distraction. A manager can spend too much time focusing on the system and forget about the most important part of a project: the people. • False sense of security. Project managers might believe that, because they have a powerful project management information system, they can manage and accomplish more than is actually feasible. Managers might think that, although a project is slipping, the system will be able to figure out a way to get it back on track. Just because the system says everything is all right doesn’t necessarily make it so. • Information overload. Project managers have to resist the temptation to use features that produce more reports or more data without contributing to the successful completion of the project. • Learning curve. The amount of time required varies, depending on the individual’s background. • Overreliance on information system. Individuals with little or no knowledge of the fundamentals of project management sometimes use the system without really understanding what they’re doing. 5. Project Management Information Systems Vendors Numerous project management information systems provide support for the project management process. Almost all vendors provide online demos of their products or free trial software for download. A simple Internet search for “project management information system,” “project management software,” or “project management information system directory” will provide links for hundreds of vendors and consultants. Several of the websites provide a list of the top-selling project management information systems, as well as a review of their features. Other sites actually compare popular systems and list the features they provide, with the strengths and weaknesses of each. 6. Summary • The most common features of project management information systems are budgeting and cost management, communications, documentation management, integration and customization, portfolio management, online tutorials, project planning, project tracking and control, report generation, resource management, risk management, sales and business development, and security and access controls. • Criteria for selecting a project management information system include capacity, documentation and online help facilities, ease of use, features available, integration with other systems, installation requirements, reporting capabilities, Internet features, security, and vendor support. • The benefits of project management information systems include accuracy, affordability, ease of use, ability to handle complexity, maintainability and modifiability, recordkeeping, speed, and what-if analysis. • Concerns about project management information systems include the risk of becoming distracted by the system, a false sense of security, information overload, the learning curve, and overreliance on the system. Questions 1. Discuss at least 10 common features of project management information systems. In your opinion, which of these are the most important? Common features of project management information systems include: • Budgeting and cost management • Communications • Document management • Integration and customization • Online tutorials • Project planning • Project portfolio management • Project tracking and control • Report generation • Resource management • Risk management • Sales and business development • Security and access controls Opinions on the most important features will vary. Answers should include an evaluation of the features chosen. 2. Discuss how the Internet can facilitate project communications. The use of the Internet has greatly impacted project communication. Project management information systems are equipped with a suite of tools such as • Automatic e-mail notifications • Collaboration management • Customer collaboration • Discussion forums • E-mail integration • File attachments • International characters • Message center • Mobile access • Multiple languages • Online meetings 3. Discuss the criteria that should be considered when purchasing project management information systems. If you had to rank these in order of importance, how would you rank them? Some of the criteria that should be considered when purchasing project management information include: • Capacity • Documentation and online help facilities • Ease of use • Features available • Installation requirements • Integration with other systems • Internet features • Reporting capabilities • Security • Vendor support Rankings of the criteria will vary. 4. What are some of the advantages of using project management information systems? Some of the advantages are: • Ability to handle complexity • Accuracy • Affordability • Ease of use • Maintainability and modifiability • Recordkeeping • Speed • What-if analysis 5. What are some of the concerns about using project management information systems? Do the advantages outweigh the concerns? Explain your answer. Some of the concerns are: • Risk of becoming distracted by the software • False sense of security • Information overload • Learning curve • Overreliance on software The comparison between the advantages and the concerns will vary. Explanations should evaluate the advantages and concerns of project management information systems. Internet Exercises Assign the Internet exercises to your students as homework or complete them together in a computer lab. Search results for "project management information systems" and "project management information systems directory" include definitions, tools, techniques, and directory listings of project management information systems. Search term suggestions for reviews of project management information systems include “project management information system,” “rating,” “evaluation,” “comparison,” “review,” and “selection criteria.” The search for a website or recent article that compares two or more popular project management information systems results depict criteria that were used to evaluate the systems. Depending upon the requirements and needs of the organization, different criteria would have higher or lower weights in the evaluation. Microsoft Project 2013 is a popular project management information system. Visit the Microsoft website to review the features of Microsoft Project. Optional Supplemental Activities 1. Have the students read the appendix and answer the questions at the end. 2. Ask students to download a project management information system and evaluate it. 3. Have the students watch videos on using project management information systems and evaluate what systems would be easiest to use and the most appropriate for their project situations. 4. Invite a guest speaker to class to talk about how his or her organization uses project management information systems. Instructor Manual for Successful Project Management Jack Gido, Jim Clements 9781285068374