Quick Quiz

 THE PROJECT MANAGEMENT AND INFORMATION TECHNOLOGY.

Many of the theories and concepts of project management are not difficult to understand. What is difficult is implementing them in various environments. Project managers must consider many different issues when managing projects. Just as each project is unique, so is its environment. This chapter discusses some of the components involved in understanding the project environment, such as using a systems approach, understanding organizations, managing stakeholders, matching product life cycles to the project environment, understanding the context of information technology projects, and reviewing recent trends affecting IT project management.

A Systems View a Project Management.

Even though projects are temporary and intended to provide a unique product or service, you cannot run projects in isolation. If project managers lead projects in isolation, it is unlikely that those projects will ever truly serve the needs of the organization. Therefore, projects must operate in a broad organizational environment, and project managers need to consider projects within the greater organizational context. To handle complex situations effectively, project managers need to take a holistic view of a project and understand how it relates to the larger organization. Systems thinking describes this holistic view of carrying out projects within the context of the organization.

What Is a Systems Approach?

The term systems approach emerged in the 1950s to describe a holistic and analytical approach to solving complex problems that includes using a systems philosophy, systems analysis, and systems management. A systems philosophy is an overall model for thinking about things as systems. Systems are sets of interacting components working within an environment to fulfill some purpose. For example, the human body is a system composed of many subsystems the nervous system, the skeletal system, the circulatory system, the digestive system, and so on. Systems analysis is a problem-solving approach that requires defining the scope of the system, dividing it into its components, and then identifying and evaluating its problems, opportunities, constraints, and needs. Once this is completed, the systems analyst then examines alternative solutions for improving the current situation, identifies an optimum, or at least satisfactory, solution or action plan, and examines that plan against the entire system. Systems management addresses the business, technological, and organizational issues associated with creating, maintaining, and making changes to a system. Using a systems approach is critical to successful project management. Top management and project managers must follow a systems philosophy to understand how projects relate to the whole organization. They must use systems analysis to address needs with a problem-solving approach. They must use systems management to identify key business, technological, and organizational issues related to each project in order to identify and satisfy key stakeholders and do what is best for the entire organization. In the opening case, when Tom Walters planned the laptop project, he did not use a systems approach. Members of his IT department did all of the planning. Even though Tom sent an e-mail describing the laptop project to all faculty and staff, he did not address many of the organizational issues involved in such a complex project. Most faculty and staff are very busy at the beginning of fall term and many may not have read the entire message. Others may have been too busy to communicate their concerns to the Information Technology department. Tom was unaware of the effects the laptop project would have on other parts of the college. He did not clearly define the business, technological, and organizational issues associated with the project. Tom and the Information Technology department began work on the laptop project in isolation. If they had taken a systems approach, considering other dimensions of the project, and involving key stakeholders, they could have identified and addressed many of the issues raised at the February faculty meeting before the meeting.

The Three-Sphere Model for Systems Management.

• What will the laptop project cost the college?
• What will it cost students?
• What will support costs be?
• What will the impact be on enrollments?

Not simple by any means, are probably the least difficult to identify and resolve. However, projects must address issues in all three spheres of the systems management model. Although it is easier to focus on the immediate and sometimes narrow concerns of a particular project, project managers and other staff must keep in mind the effects of any project on the interests and needs of the entire system or organization. Many information technology professionals become captivated with the technology and day-to-day problem solving involved in working with information systems. They tend to become frustrated with many of the people problems or politics involved in most organizations. In addition, many information technology professionals ignore important business issues such as, Does it make financial sense to pursue this new technology? or, Should the company develop this software in-house or purchase it off-the-shelf? Using a more holistic approach helps project managers integrate business and organizational issues into their planning. It also helps them look at projects as a series of interrelated phases. When you integrate business and organizational issues into project management planning and look at projects as a series of interrelated phases, you do a better job of ensuring project success.

Understanding Organizations.

The systems approach requires that project managers always view their projects in the context of the larger organization. Organizational issues are often the most difficult part of working on and managing projects. For example, many people believe that most projects fail because of company politics. Project managers often do not spend enough time identifying all the stakeholders involved in projects, especially the people opposed to the projects. In fact, the latest edition of the PMBOK® Guide added a new initiating process under project communications management called identify stakeholders. (See Chapter 10 for more information.) Project managers also often do not spend enough time considering the political context of a project or the culture of the organization. To improve the success rate of information technology projects, it is important for project managers to develop a better understanding of people as well as organizations.

The Four Frames of Organizations.

Organizations can be viewed as having four different frames: structural, human resources, political, and symbolic: 1

• The structural frame deals with how the organization is structured (usually depicted in an organizational chart) and focuses on different groups roles and responsibilities in order to meet the goals and policies set by top management. This frame is very rational and focuses on coordination and control. For example, within the structural frame, a key information technology issue is whether a company should centralize the information technology personnel in one department or decentralize across several departments. You will learn more about organizational structures in the next section. 

• The human resources (HR) frame focuses on producing harmony between the needs of the organization and the needs of the people. It recognizes that there are often mismatches between the needs of the organization and the needs of individuals and groups and works to resolve any potential problems. For example, many projects might be more efficient for the organization if personnel worked 80 or more hours a week for several months. This work schedule would probably conflict with the personal lives of those people. Important issues in information technology related to the human resources frame are the shortage of skilled information technology workers within the organization and unrealistic schedules imposed on many projects. The political frame addresses organizational and personal politics. Politics in organizations take the form of competition among groups or individuals for power and leadership. 

• The political frame assumes that organizations are coalitions composed of varied individuals and interest groups. Often, important decisions need to be made based on the allocation of scarce resources. Competition for scarce resources makes conflict a central issue in organizations, and power improves the ability to obtain scarce resources. Project managers must pay attention to politics and power if they are to be effective. It is important to know who opposes your projects as well as who supports them. Important issues in information technology related to the political frame are the power shifts from central functions to operating units or from functional managers to project managers.

• The symbolic frame focuses on symbols and meanings. What is most important about any event in an organization is not what actually happened, but what it means. Was it a good sign that the CEO came to a kickoff meeting for a project, or was it a threat? The symbolic frame also relates to the company s culture. How do people dress? How many hours do they work? How do they run meetings? Many information technology projects are international and include stakeholders from various cultures. Understanding those cultures is also a crucial part of the symbolic frame.

W H A T  W E N T  W R O N G ?

Several large organizations have installed or tried to install enterprise resource planning (ERP) systems to integrate business functions such as ordering, inventory, delivery, accounting, and human resource management. They understand the potential benefits of an ERP system and can analyze its various technical issues, but many companies do not realize how important the organizational issues are to ERP implementations. For example, in early 2001, Sobey s, Canada s second largest grocery store chain with 1,400 stores, abandoned its two-year, $90 million investment in an ERP system. The system was developed by SAP, the largest enterprise software company and the third-largest software supplier. Unfortunately, the system did not work properly due to several organizational challenges. People in different parts of the company had different terms for various items, and it was difficult to make the necessary decisions for the ERP system. Also, no one wanted to take the time required to get the new system to work because they had their daily work to do. Every department has to work together to implement an ERP system, and it is often difficult to get departments to communicate their needs. As Dalhousie University Associate Professor Sunny Marche states, The problem of building an integrated system that can accommodate different people is a very serious challenge. You can t divorce technology from the sociocultural issues. They have an equal role. Sobey s ERP system shut down for five days and employees were scrambling to stock potentially empty shelves in several stores for weeks. The system failure cost Sobey s more than $90 million and caused shareholders to take an 82-cent after-tax hit per share. 2
Project Managers must learn to work within all four organizational frames to function well in organizations. Chapter 9, Project Human Resource Management, and Chapter 10, Project Communications Management, further develop some of the organizational issues. The following sections on organizational structures, organizational culture, stakeholder management, and the need for top management commitment provide additional information related to the structural and political frames.

Organizational Structures.

Many discussions of organizations focus on organizational structure. Three general classifications of organizational structures are functional, project, and matrix. Most companies today involve all three structures somewhere in the organization, but one is usually most common. Figure 2-2 portrays these three organizational structures. A functional organizational structure is the hierarchy most people think of when picturing an organizational.

chart. Functional managers or vice presidents in specialties such as engineering, manufacturing, information technology, and human resources report to the chief executive officer (CEO). Their staffs have specialized skills in their respective disciplines. For example, most colleges and universities have very strong functional organizations. Only faculty in the business department teach business courses; faculty in the history department teach history; faculty in the art department teach art, and so on.

A project organizational structure also has a hierarchical structure, but instead of functional managers or vice presidents reporting to the CEO, program managers report to the CEO. Their staffs have a variety of skills needed to complete the projects within their programs. An organization that uses this structure earns their revenue primarily from performing projects for other groups under contract. For example, many defense, architectural, engineering, and consulting companies use a project organizational structure. These companies often hire people specifically to work on particular projects.