1. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 1 PART II: ADVANCED TOPICS IN PROJECT MANAGEMENT

2. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 2 Outline of Presentation Part II Brief Overview of Part II Introduction to Project Organization Organization Examples The Functional Organization Form Advantages and Disadvantages of the Functional Organization Form The Project Matrix Organization Form The Functional Project Matrix The Balanced Project Matrix The Strong Project Matrix Advantages and Disadvantages of the Strong Project Matrix Form Project Teams Advantages and Disadvantages of Project Teams Which Project Organization Form is Best? The Project-Based Organization Impact of Organizational Culture on Projects The Project Management Office (PMO) Functions, Advantages and Disadvantages of the PMO Introduction to Project Portfolio Manage- ment The Project Portfolio Management Process Portfolio Selection: Qualitative Models Portfolio Selection: Quantitiative Models Project Portfolio Management Software Issues in Project Portfolio Management The Project Management Methodology Review of Selected Project Management Methodologies: PMBOK APMBOK IPMA Baseline PRINCE2

3. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 3 Projects in the Functional Organization Form

4. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 4 The Functional Form of Organization In the functional form of organization, work activities are structurally segmented according to their “function’ – i.e. their similarity of purpose. For example: - Accounting & Finance - Production - Research & Development - Marketing - IT Support - Procurement - General Administration These are the typical functions one would expect to find in most commercial organizations.

5. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 5

6. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 6

7. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 7

8. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 8

9. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 9

10. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 10 University of Texas at Austin, USA

11. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 11

12. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 12

13. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 13

14. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 14 Projects in the Functional Organization Form Functional Area of the Organization (E.g.: IT or HR) Staff The functional form of organizing projects is best suited for those projects whose scope of work is basically confined to one functional area of the organization only and for which there is no (or only minimal) necessity for interaction with separate functional areas. Staff HRIS Project

15. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 15 Projects in the Functional Organization Form Functional Area AFunctional Area BFunctional Area C Staff If more than one functional area is involved in a project, the coordination of project activities takes place through the hierarchy Project Coordination

16. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 16 Corporation X Human Resources Human Resources Marketing Engineering Procurement Manufacturing Electronics Engineering Electronics Engineering Customer Service Customer Service Finance & Administration Finance & Administration Software Engineering Software Engineering Mechanical Engineering Mechanical Engineering Design Purchasing Receiving & Inspection Receiving & Inspection Domestic Sales Domestic Sales International Sales International Sales Fabrication Assembly Testing Production Scheduling Production Scheduling Project Coordination in Functional Organizations Project Coordination

17. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 17 No alteration in the existing structure and operations of the organization is necessary as functional units are already well established. The project simply avails the existing structure and diverse resources which are available in its functional areas in order to undertake the projects which it wants. The Functional Form- Advantages

18. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 18 The functional form of project organization offers high flexibility in assigning personell employed in the different functional units to work on projects. Functional employees can divide their time working on different projects and can be immediately reassigned to other projects once their work has been completed. The Functional Form - Advantages

19. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 19 The functional form of organiza- tion offers the possibility of (very) focussed utilisation of knowledge, expertise and experience on a pro- ject by employees in any given functional area. Also, as these em- ployees are familiar with each other, communication between them would normally be good, re- action time to issues quick, and authority and responsibility clear defined. The project work may be simpler to estimate because of past experience with similar projects. The Functional Form - Advantages

20. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 20 Functional employees work- ing on projects can maintain their normal career paths in their respective functional areas or „home bases“. This is important because it allows functional employees to keep abreast of developments concerning them in their respective areas, which they may not be able to do in a (dedicated) project team, and it does not jeopardize their promotional chances. The Functional Form - Advantages

21. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 21 If a project has a comparatively broad scope, and crosses several functional lines, the different functional areas may have different perceptions as to the priority level which should be accorded to the project. Hence, reluctance by one functional area to support the project and provide the resources needed for it may result in delays to the project. The Functional Form - Disadvantages

22. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 22 Inadequate integration across different functional areas is a common criticism of managing projects in the project functional form. Functional specialists tend to be concerned primarily with their specific part of the project work and not the whole project. Thus, a holistic perspective is often lacking and this is not a good way for managing projects, particularly of a complex kind. The Functional Form - Disadvantages

23. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 23 Functional staff working on a project may display a lack of identification with, and committment to the pro- ject. This is because project work is often seen as additional work which distracts them from their routine functional work (which for them usually has priority) and for which there may be no incentive or reward system. A sense of „project ownership“ is frequently lacking and the high level of motivation usually found among (dedicated) project teams is absent. The Functional Form - Disadvantages

24. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 24 In cross-functional projects, project response and overall completion times tend to be higher due to the require- ment of channeling (poten- tially large amounts of) project information, as well as decision-making and The Functional Form - Disadvantages problem-solving through the „normal“ management channels. Lack of horizontal communication across functional areas may require rework of work performed. Conflict and rivalry bet- ween functional areas may also impede communication. Res- ponse times to clients and changing environmental conditions are slow.

25. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 25 A strong criticism of the functional form of organi- zing projects is that there is no individual who has full authority and responsibility for the project. Instead, authority and responsibility is shared between different individuals from different parts of the organization in which case no proper accountability fo the project can be expected. The Functional Form - Disadvantages

26. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 26 The Project Matrix Organization

27. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 27 What is the Project Matrix Organization? The Matrix organization is a form of project organization within the framework of which temporary horizontal (project) levels are applied over the permanent vertical (functional) levels of the organization. Project Management defines three basic project matrix forms: the Functional Matrix, Balanced Matrix, and Project Matrix. In practice, the matrix structure can assume many different manifestations and these may change over the course of the project life-cycle.

28. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 28 Project Level Project Level Functional Level A Functional Level A Functional Level B Functional Level B Functional Level C Functional Level C Project 1 Project 2 Project 4 Project N FI The Project Matrix Organization Form GENERAL MANAGER Functional Level D Functional Level D FI Functional Interfaces

29. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 29 In the Functional or „Weak“ Project Matrix, an individual is selected who will oversee and coordinate the project activities across the various involved functional levels of the organization. Functional managers are responsible for managing their respective segments of the project, decide who does what and when the project is to be completed, and evaluate the participants. Their influence is greater than that of the project manager, who has indirect authority to expedite and monitor the project. The Functional Project Matrix

30. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 30 Functional Manager Functional Manager Functional Manager Functional Manager Functional Manager Functional Manager Staff The Functional (“Weak”) Project Matrix Staff Project Coordination

31. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 31 In the Balalanced Project Matrix an individual is selected who will manage the project across the various functional levels of the organization and who will interact with the functional managers on an The Balanced Project Matrix equal basis and jointly approve technical and operational decisions. The project manager defines what needs to be accomplished and the functional managers decide how and by whom it will be accomplished within the plan, various desig- nated functional inputs, standards and schedules established by the project manager.

32. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 32 Functional Manager Functional Manager Functional Manager Functional Manager Functional Manager Functional Manager Staff PM Staff The Balanced Project Matrix Staff Project Coordination

33. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 33 In the Project – or „strong“ - Matrix a project manager is selected to oversee the completion of the project across the various involved functional levels of the organization. The project manager is ultimately is responsible for the project‘s completion, has final say on major project deci- sions and controls most aspects of the project, including the assignment of functional personell, what they do and when. The functional managers maintain title over their respective personell and have consultation rights. The Strong Project Matrix

34. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 34 Functional Manager Functional Manager Functional Manager Functional Manager Functional Manager Functional Manager Staff The (Strong) Project Matrix Staff Project Coordination Manager of Project Mgrs. Manager of Project Mgrs. Project Manager Project Manager Project Manager Project Manager Project Manager Project Manager Project Manager Project Manager

35. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 35 Senior Management Lead Project Manager Lead Project Manager ENGINEERING MANUFACTURING MARKETING PM X PA E1 E2 E3 MA1 MA2 MA3 M1 M2 M3 PM Y PM Z 1 1 213 21 1 1 31 40,51 137 2 Example of a Strong Project Matrix System

36. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 36 Resources are scarce in any organization! A big advantage of the matrix is that it allows for the sharing of diverse resources across multiple projects within the respec- tive functional areas, enabling the functional personell to flexibly divide their attention, effort and time among these projects and thereby reducing the costly duplica- tion of resources which is inherent in setting up (dedicated) project teams. The Strong Project Matrix - Advantages

37. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 37 The matrix ensures a strong project focus by having a project manager who performs a coordinating and integrating role across functional areas, enabling a more holistic approach towards undertaking the project than is possible in the purely functional form of project organization where the different functional areas are usually only concerned with their portion of the project work. The Strong Project Matrix - Advantages

38. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 38 By using a project matrix, the entire spectrum of the functional areas‘ technology, expertise and experience which can be brought to bear on the project can easily be and flexibly be accessed since all project work is performed within the area. The Strong Project Matrix - Advantages

39. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 39 Functional personell can maintain close ties with their respective areas. They are not required to leave their home bases in the orga- nization which they may have to do if they are assigned to work on a project full-time as in a (dedicated) project team and hence they will feel more confident as they can keep abreast of developments directly concerning them and their future in the organiza- tion. The Strong Project Matrix - Advantages

40. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 40 A major criticism of the project matrix is that it explicitly violates the established hierarchical principle „Unity of Command“ (Fayol, 1916) which demands that an employee report to only one superior and not two as is the case in the matrix. Dual Reporting (i.e. to both a project and functional manager) may cause stress for the employee, especially when both managers do not get along and issue diverging or conflicting orders. The Strong Project Matrix - Disadvantages

41. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 41 In the matrix environment, there is a potential for conflict between project managers and functional managers due to diverging agendas, possibly unclear patterns of authority and accountability and so forth, and this may occasionally engender a personal animosity which will be detrimental for the project. The Strong Project Matrix - Disadvantages

42. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 42 Unhealthy competition over the sharing of project inputs, equip- ment, human resources and faci- lities etc. may arise in the matrix environment between project managers who each are endeavou- ring to acquire the best available inputs for their respective projects from the functional areas. Consequently, there is the possi- bility that underhand „deals“ may be made between project and func- tional managers. The Strong Project Matrix - Disadvantages

43. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 43 Failure to understand the key principles and roles in the matrix organizational environment Distrust in organizational forms which are not based on Fayol‘s „unity of command“ Apprehensions of functional managers over the apparent superority of the project goals over those of the functional entity Senior management shortcomings in terms of clearly delineating in writing the formal and reciprocal roles of all the key managers involved in the project Problems With Matrix Organizations

44. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 44 Lacking understanding by the project team to understand the role and responsibilities of the functional professionals and their managers Incompetent project and functional managers / project managers who manage less and coordinate more / decision referall by project managers to senior management Inadequate stakeholder management Lack of trust, integrity, loyalty and committment by project team members Problems With Matrix Organizations

45. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 45 Visible and Sustained Commitment by Top Management Supportive Organizational Culture Tackling Resistance to Change Effective Project Prioritization System Commitment by Functional Managers and Employees Delineation of Roles and Responsibilities Decision-Making Conflicts between Project and Functional Areas Empowerment Communication, Cooperation and Coordination Professional Project Managers System of Rewards and Incentives Meeting Training Needs (e.g. in Teamwork, Interpersonal Skills, Conflict Resolution) Learning from Experience Institutional and Infrastructural Framework (e.g. PMO) Issues of Concern in the Project Matrix

46. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 46 Case Study of a Project Matrix Organization Adtranz, Sweden Students are required to read the Case Study working paper Exploring the Multi-Project Matrix: Process Dynamics of a Projectified Organization by Mats Engwall & Anna Sjoegren Kaellqvist (2001)

47. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 47 The (Pure) Project-Based Organization

48. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 48 About the Project-Based Organization In a project-based organization, most of the work performed is project work and this is reflected in the organization‘s structure which is not based on the functional paradigm but changes acccording to the projects which the organization has in its portfolio. Project-based organizations are often found in the defence and construction industries, in the movie industry, in some NGOs and in some outsourced industries.

49. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 49 Project Manager Project Manager Project Manager Project Manager Project Manager Project Manager Staff The Project-Based Organization Staff Project Coordination

50. Assistant Professor Dr. Aurangzeb Zulfiqar Khan Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan 50 Corporation X Marketing Human Resources Finance and Administration Legal Project Manager (Project A) Project Manager (Project B) EngineeringManufacturingProcurement Engineering Subcontractors (X, Y, Z) ManufacturingProcurement Structure of a Project-Based Organization Other Projects