All forms of management need good Project Management Skills
Projects are the main mechanism used by management for coping with the introduction of new systems, products and processes, and any changes outside the normal day-to-day operations of the organisation. Projects inevitably bring about change to some facet of the organisation and often all of the skills embodied in this book will be necessary to complete a project successfully. A project may be as small as the implementation of a word processing system, or as large as the building and equipping of a new factory. Large organisations will have highly developed bureaucratic systems of project submission, appraisal, presentation, approval and resourcing. Small organisations with short communication chains will often have very simple decision making processes and informal systems of project appraisal.
All projects involve elements of risk. The level of risk can be very high if the size of the project is large in relation to the size of the organisation carrying it out. Successful projects should enhance a company’s profitability, market position and self-esteem. However, projects often fail through poor appraisal of potential problems, inadequate organisation, lack of technical expertise and under-funding.
Good project management systems should embody the following aims:
* ensure that the organisation reacts to environmental pressures and changes in a rational manner; accurately estimate the resources required to complete the project successfully, and ensure that no resource needs are hidden or forgotten;
* fully appraise the total expenditure of resources in terms of the economic and organisational benefits;
* implement the project through a coordinated plan on a time scale appropriate to resources availability and organisational needs;
* develop the organisation’s current systems and resources to be able to cope with the changes that the project will bring.
The main skills in this phase of project management are perceptual. Change must be seen as possible or necessary due to internal or external opportunities. The ability of the organisation to respond to environmental stimuli will depend on a number of factors such as:
* attitude of mind of management to change;
* internal politics and management’s perception of the relative importance of the problem or opportunity;
* organisation’s size and structure;
* bureaucratic complexity and internal inertia in launching new ideas;
* perceived threats/risks of the change.
Small organisations may be quick to perceive new opportunities, but will sometimes lack the financial resources to exploit fully the environmental change. Large organisations will have the resources, but internal politics, bureaucratic systems and organisational inertia may stifle innovation. Most projects will be appraised on their economic justification. The stronger the economic justification, the more likely the project is to be raised to reality. The four main areas likely to generate new projects are:
* increased productivity
* resource constraints
* new products, services and markets
* government action.
Some projects may present obvious advantages and indisputable need through clear economic viability. Cost savings through increases in resource (labour, materials, space, equipment) productivity are vital to the survival of any organisation. The application of new knowledge and technology will provide the driving forces for change. Replacement of old facilities should also provide the opportunity to improve methods and implement new systems.
Many projects are forced upon management through shortages of labour, raw materials, space and equipment. Successful products and services may outgrow their operational resource provisions. Therefore, projects are devised to provide additional capacity, the cost of which must be balanced by cost savings and additional revenue generation. Other projects will be developed to cope with physical shortages of raw materials and office/factory space that are constraining operations.
New products, and markets
The introduction of new products, services and markets will generate projects which define the resources, timing and expenditures involved in the venture. The organisation will need to assess the impact of the new product on existing products in determining the possible viability of the project. The expenditures on R and D, new facilities and market launch must be matched by future forecasts of sales revenues.
New legislation often initiates new projects in order that an organisation’s facilities and systems comply with government requirements. It is unlikely that these projects will generate cost savings or additional revenues. Therefore, organisations may use the project as a mechanism for controlling and minimising costs.
Projects must be accurately defined as the research involved in the development of a project statement may involve substantial investment of resources. Therefore, a project may be categorised under one of the following headings:
* cost savings
· new products
· replacement of plant, vehicles and buildings
* product research and development
· exploration for mineral reserves
· expansion of product/service capacity
· marketing campaign to increase sales
· organisational development/training programme to enhance an organisation’s human resources
· environmental, health and safety enhancements.
All of the above categories would be expected to produce long term economic benefits, except for environmental projects which might be necessary to comply with legislation.
The initial sponsors of the project must clearly define its aims and objectives. This will require intense discussions about the ‘fit’ of the project with existing policies, resources and skills of the organisation. If the project is beyond the scope of the organisation’s current skills, then it may be necessary to employ consultants or approach specialists to frame the project appropriately. The rationales and hypotheses should be submitted to senior management for formal approval before starting the next project phase.
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