1. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-1 Chapter 3: Project Organization

2. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-2 Learning Outcomes Students be able to explain organizatin structure in project management

3. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-3 Discussion Topics Organization a system to achieve goals Alternative organizational structures (1)

4. © 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.

5. © 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

6. © 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

7. © 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

8. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-8 Functional Organization integration by rules, procedures, coordinated plans, budgets works well in repetitive, stable environments the most prevalent form

9. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-9 Geographic Differentiation Standardized accounting and reporting procedures Can tailor to unique requirements of locale Often used with functional within regions

10. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-10 Product Differentiation If produce a variety of products. Integration between subdivisions tends to be low use standardized financial & reporting

11. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-11 Customer Differentiation If a particular customer very important Integration level depends on interdependence of products (usually low)

12. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-12 Process Differentiation some logical process basis for differentiation need more integration, as problem in one area affects others; task forces, teams

13. © McGraw-Hill/Irwin 2004 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 complexitychange uncertaintyunpredictability

14. © 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

15. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-15 Comparison TraditionalProject rigid, clumsyhorizontal communication

16. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-16 Advantages of the Traditional (Classic) Organization Easier budgeting and cost control are possible Better technical control is possible Flexibility in the use of manpower A broad manpower base to work with Continituity in the functional disciplines: policies, procedures, and lines of responsibility are easily defined and understandable Admits mass production activities within established specifications

17. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-17 Advantages of the Traditional (Classic) Organization (Cont’d) Good control over personnel, since each employee hone and only one person to report to Communication channels are vertical and well established Quick reaction capability exits, but may be dependent upon the priorities of the functional managers

18. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-18 Disadvantages of the Traditional (Classical) Organization No one individual is directly for the total project Does not provide the project-oriented emphasis necessary to accomplish the project tasks Coordination becomes complex, and additional lead time is required for approval of decisions Decision normally favor the strongest functional groups

19. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-19 Disadvantages of the Traditional (Classical) Organization No customer focal point Response to customer needs is low Difficulty in pinpointing responsibility; this is the result of little or no direct project reporting, very little project-oriented planning and no project authority Motivation and innovation are decreased Ideas tend to be functionally oriented with little regard for ongoing projects

20. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-20 Pure Project Organizations if high complexity, major resource requirements, heavy stake outcome PURE PROJECT organization appropriate separate organization created for this goal TYPESPROJECT CENTER STAND-ALONE PROJECT PARTIAL PROJECT

21. © McGraw-Hill/Irwin 2004 Information Systems Project Management—David Olson 3-21 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