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Information Systems Project Management—David Olson 3-1 Chapter 3: Project Organization © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-2 Learning Outcomes • Students be able to explain organizatin structure in project management © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-3 Discussion Topics • Alternative organizational structures (2) © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-4 References • • Information Systems Project Management, David Olson, Olson, David L., 2003, Introduction to Information Systems Project Management, 2nd Ed., McGrawHill, ISBN: 0-07-282402-6. Schwalbe, Kathy, 2003, Information Technology Project Management, 3rd Ed., Course Technology, Inc., ISBN: 0619159847. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-5 Organization Designs • there are a number of options • Project Managers need to understand relative advantages and disadvantages of each © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-6 Organization Structure • range of activities organization does • management hierarchy – reporting relationships • major subdivisions • responsibilities & type of work for each subdivision • official lines of authority & communication Informal organization also important © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-7 Alternative Structures • there are a number of options • best depends on goals, type of work, environment • DIFFERENTIATION - organizational specialization – – – – – functional geographic product customer process © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-8 Functional Organization integration by rules, procedures, coordinated plans, budgets Hieronymus Botch CEO Bean Kounter Accounting Silas Marner Finance Snidely Whiplash Marketing Atlanta John Doe Production Phoenix works well in repetitive, stable environments the most prevalent form © McGraw-Hill/Irwin 2004 Siegfried Hill MIS Butte Information Systems Project Management—David Olson 3-9 Geographic Differentiation Standardized accounting and reporting procedures John McGraw CEO Dan McGann St Louis TV sales Production Joe Kelley Baltimore Telemarket Production Can tailor to unique requirements of locale Often used with functional within regions © McGraw-Hill/Irwin 2004 Cy Seymour New York special order Information Systems Project Management—David Olson 3-10 Product Differentiation If produce a variety of products. Megaglomerate Octopi Dr. Sweitzer Tobacco J. Ripper Health Products production A. Onassis Tankers marketing J. Helms Environmental marketing legal Integration between subdivisions tends to be low use standardized financial & reporting © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-11 Customer Differentiation If a particular customer very important Gunn Runner Overnight Delivery George Patton Military Sales Che Guevera covert sales functions geographic A. Nobel special ops explosives peace prizes Integration level depends on interdependence of products (usually low) © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-12 Process Differentiation some logical process basis for differentiation Little 600 Consulting Phyllis Knight Customer Contactor Systems Analysis Programming need more integration, as problem in one area affects others; task forces, teams © McGraw-Hill/Irwin 2004 Customer Training Information Systems Project Management—David Olson 3-13 Project Organization • traditional organizational design – when change required, add layers of mgmt, rules – less flexibility, slow • Projects complexity uncertainty change unpredictability © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-14 Project Organizations • need to be highly differentiated to meet variety of problems • need to be highly integrated to respond rapidly • need to be highly flexible • must integrate subunits through horizontal relationships • must have structures suited to unique environments © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-15 Comparison Project Traditional project manager supreme high ruler big boss little boss big boss 2 another one little boss 2 etc staff people designer folk rigid, clumsy customer liaison worker bees horizontal communication © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-16 Pure Project Organizations if high complexity, major resource requirements, heavy stake outcome PURE PROJECT organization appropriate separate organization created for this goal TYPES PROJECT CENTER STAND-ALONE PROJECT PARTIAL PROJECT © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-17 Project Center linked to parent organization draw resources & personnel as needed EXAMPLES: • General Motors task force to develop suggestions for downsizing • relocation operations © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-18 Stand-Alone Project newly created organization for this mission draw from several organizations EXAMPLES: • large-scale public works • NASA space station development • construction joint-ventures © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-19 Partial Project project manager responsible for some activities other activities (support-oriented) remain with functional divisions TYPICAL ARRANGEMENT © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-20 Pure Project Disadvantages cost in personnel (facility duplication) lose training investment - no place else to use key people © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-21 Matrix Organization if organization continually operates on a project basis (and many MIS shops do) need to be able to quickly create large project groups Grid-like structure of reporting and authority relationships overlaying traditional functional organization © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-22 Definition • used to describe organizations that make more than minimal use of project teams or product groups • can become an organizational pattern (TRW Systems) • combines project management (improved coordination) and functional organization © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-23 Origins • NASA & Department of Defense initiated (1960s) contracting practices requiring contractors to use project management • For each particular project, firm had to develop a project organization © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-24 Why • MATRIX ORGANIZATION came from needs to – maintain advantages of specialization & resource minimization – meet government requirements – obtain coordination advantages of project management © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-25 Matrix Capabilities • functional part provides repository for technical expertise and physical resources • when in functional home, workers keep up professionally (train) • functional homes a place to go when project over (no new job search) © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-26 Hybrid Forms • Firms combine matrix, functional, project features, custom design their own organization • COST CONTROL: functional worst • SCHEDULE: project best, functional worst • TECHNICAL: functional worst © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-27 Project Risks • If high technical risk – give project manager more authority – matrix better (more skills readily available) • If high cost risk – clear goals paramount – give project manager high authority – more planning, monitoring, control • If high schedule risk – more project manager experience, monitoring © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-28 Matrix Problems • must be reinforced by information systems and behavior supporting two-dimensional information flow, dual reporting “No Man Can Serve Two Masters!” military principle of UNITY OF COMMAND • chaos, confusion more common • often project manager tells you what to do, but your raise comes from functional manager © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-29 Other criteria • stake of the project if high, matrix or pure give better control • degree of technological uncertainty if high certainty, task forces & teams • criticalness of time & cost goals if time & cost not major, task forces & teams • project uniqueness if unique, partial or full project © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-30 Project Management Processes • Project Processes: – Initiating processes –recognizing that a project or phase should begin and committing to do so – Planning processes –devising and maintaining a workable scheme to accomplish the business need that project was undertaken to address – Executing processes – coordinating people and other resources to carry out the plan – Controlling processes – ensuring the project objectives are met by monitoring and measuring progress and taking corrective action when necessary – Closing processes –formalizing acceptance of the project or phase and bring it to an orderly end © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-31 Process Interactions • Inputs: documents or documentable items that will be acted upon • Tools and Techniques –mechanisms applied to the inputs to create the outputs • Outputs –documents or documentable items that are a result of the process © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-32 Executing Processes • • • • • • • • Project Plan Execution Scope Verification Quality Assurance Team Development Information Distribution Solicitation Source Selection Contract Administration © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-33 Controlling Process • • • • • • Overall Change control Scope change control Schedule Control Quality Control Performance Reporting Risk Response control © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-34 Summary • organization structure is means to achieve goals & respond to problems • differentiation • project organizations more flexible • need to know criteria for appropriate project organization structure © McGraw-Hill/Irwin 2004