Essay: Project management

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  • Project management
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Two key literature are the PMBOK (Project Management Body of Knowledge) theories relevant to the dissertation, known as; The PMBOK Guide (as a process model), as a standard for best practice. PMI (2012). 5th Edition. Secondly, Prince2 the process model, for directing, starting and initiating a project, controlling a stage, managing delivery, closing a project, and planning.
For any company engaged in engineering and construction, procurement ‘is a core administrative function that… organizations must accomplish’ (Thai: 2001, p.329). Acquiring supplies and services from outside sources for procurement, ‘encompasses acquisition, contracting, buying, renting, leasing, and purchasing, to include functions such as requirements determination and all phases of contract administration’ (Thai, 2001, pp. 42-43). The view of procurement’s importance, ‘and strategic planning’ cannot be overstated for companies within engineering and construction (Thai: ibid, p. 331) and ‘often lead the strategic procurement planning process for major initiatives’ (Thai: ibid, p. 334).
The range of topics of concern within the managerial economy are numerous; efficiency, effectiveness, best value, cost, schedule, strategic resourcing, public-private partnerships, politics, transparency, accountability, profiteering, legal rights, ethics, disputes, adjudication, resolution, regulatory compliance, and standards, are among many of the possible topics of organisational and project management concern (Thai: ibid, 337-8).
Project management concerns of time, money and legal compliance also places reliance upon the output of computer hardware and software systems. Checkland and Winter (2006) outline how Soft Systems Methodology (SSM) are approaches which, ‘in use, enables those taking part to learn their way to agreed action which they perceive will ‘improve’ the problem situation… [and the] process of inquiring and learning.’ These concerns are, ‘human situation[s] which someone sees as being problematical, that is to say, a situation worthy of some effort to improve it. The learning is achieved by exploring the situation in a particular way. Since every human situation contains people wishing and/or trying to act purposefully, models of purposeful activity systems, thought relevant to the situation are built’ (Checkland and Winter: 2006, p 1435).
The strategy of SSM is a methodology of Systems Engineering (SE) ‘to meet pre-defined objectives’ (Checkland and Winter, 2006, p, 1436). SSM’s focus on, ‘who was in the role ‘client’ raised questions about such considerations as the reasons why… events, people and ideas was perceived as a distinguishable’ situation’ within the ongoing flux of everyday life; what agendas were at work; what were the client expectations, etc.’ This project management focus was on one of the, ‘problem solver’ …and of what resources were available, on what timescale, which can powerfully affect what kind of intervention is feasible (Checkland and Winter, 2006, p. 1437).
For project management objectives, therefore, it is important that, ‘defining the role of ‘problem owner’ which was the most significant step… was an important move… to create the system needed to meet objectives’ [and establish] ‘models of purposeful activity it might be useful to build in order to use them as a source of questions to ask in the real situation.’ (Checkland and Winter, 2006). Of note, SSM enables the project manager to decide, ‘exactly how to carry out the intervention [with] the SSM practitioner… decid[ing] how to carryout the intervention or inquiry in the situation and to address its perceived content… and the specification project’ Checkland and Winter, 2006, p. 1438).
Such an approach relies upon the fluidity of decision-making required in project management negotiations between clients, project sponsors, and other stakeholders and the, ‘political aspects to the situation which would need to be appreciated more as the work progressed, since multiple agencies would be involved in the project’ (Checkland and Winter, 2006).
This chapter discusses the background of the research and the reason for which the research has been carried out. The chapter discusses the contemporary environment of project management in the Kuwaiti market and the project management tools used in engineering-based organizations. The problem statement of the research and research hypothesis are also discussed in the chapter.
1.1 Background — Project management is a highly important discipline in the engineering sector. The reason for the importance of project management discipline is that engineering-based organizations are required to implement a number of projects during their daily functioning (Chou, 2011). Project management takes on strategic importance in these organizations because strategic management determines the success or failure of these entities (Takey & Carvalho, 2015). Project management is an approach to organizing the activities of engineering based organizations from beginning to end the smooth running of a project (Componation, et al., 2015).
Project management is considered highly important for engineering-based organizations because it involves establishing a business plan for the project. Project management also helps to determine how the project aligns with the strategy defined by management as well as to define a business model (Chou, 2011). The discipline helps to overcome inventory risks prior to the business and the project to be launched (Takey & Carvalho, 2015). The project manager is able to follow the budgeted costs for the project. It often involves carrying a preliminary study of the costs and benefits of the project undertaken by the engineering organization (Chou, 2011). It is during the planning phase of the project that considerations of expected revenue, funding sources, research project risks, operational and financial impacts are reviewed (Takey & Carvalho, 2015). Only if the project management discipline is implemented adequately, the project manager is able to master and control the risks to achieve the desired level of quality (Componation, et al., 2015).
Figure 1 – Project Management in Engineering Based Organizations. Source: Componation, et al. (2015)
A project is a set of activities and finalized actions in order to meet a defined need within a specified time and within the allocated budget. Unlike regular and continuous operations which are repetitive processes the essence of a project is to be innovative and unique (Takey & Carvalho, 2015). Implementation of project management in an organization enables an organization to be adaptable to frequent changes. It also helps the organization to control and plan the process. In particular, implementation of project management enables an organization to remain dynamic and continually balance technical requirements against the cost and time constraints (Chou, 2011).
Figure 2 – Components of Project Management. Source: Takey & Carvaloho (2015)
It must be pointed out that project management is characterized by a beginning and an end. For this reason, project management help towards mobilization of identified resources (human resource, material, equipment, raw materials, informational and financial) during implementation (Takey & Carvalho, 2015). All these elements entail a cost and are therefore subjected to budgeting means. Since project management comprises of sufficiently complex and important issues, the discipline helps towards adopting action for achieving a defined result which is known and measurable (Takey & Carvalho, 2015). The project is limited in time and always has a concept of novelty and change. For this reason, engineering organizations that implement project management tends to perform better than those organizations which do not adopt project management (Guerrero, et al., 2014).
In addition to the objectives mentioned above, the implementation of project management helps the managers of the organization to cover the needs of all different stakeholders. Project management helps an organization to take into accounts the legal, marketing, IT, technical, personnel training, organization, logistics and communication requirements (Guerrero et al., 2014). Program management is used to coordinate, align, reconcile and track and grouped so that projects can retain their strategic contribution (Componation, et al., 2015).
There are some standards of project management, for example PMBOK (Project Management Body of Knowledge), PRINCE2 (Projects in Controlled Environments), the ICB (International Project Management Association Competence Baseline) and the International Standard ISO. A project must be a response to meet specific and measurable goals (Takey & Carvalho, 2015). To achieve this end, the first step is to define the specifications or the technical characteristics necessary for the success of the project (Chou, 2011). Secondly, this project can be broken down into batches or sub-projects or projects in order to obtain subsets whose complexity is more easily controlled and which are linked to the characteristics of the product to achieve in the project (Componation, et al., 2015). The division of a project in manageable subsets is essential to the conduct of the project and, thus, its successful completion and success. Dividing the project also allows for easier its planning (Guerrero, et al., 2014). Driving the project is generally entrusted to a project manager or project coordinator, or a project manager. For this reason, project management occupies a high degree of importance in both engineering-based businesses and engineering consultancy organizations. Adequate implementation of project management tools creates the difference between organizations that perform well and organizations that perform poorly (Componation et al., 2015).
1.2. Overview — Al Ghanim Consulting is a Kuwaiti-based engineering consultancy organization. The organization was established in the year 1992 and has grown at a rapid pace following its creation. The key activities of the organization comprises of engineering and architecture consultancy (Al Ghanim Consulting, 2015). Owing to its team of highly qualified professionals and extensive knowledge of the engineering industry, Al Ghanim Consulting is now recognized throughout the network for its customized approach and cutting-edge solutions. Al Ghanim Consulting is known for its strategic planning for the organization of services, through the planning, acquisition and maintenance of engineering equipment (Al Ghanim Consulting, 2015).
Al Ghanim Consulting and its consultants provide a range of fully integrated services that meet the diverse needs of its clients. Monitoring applied research with credible entities is at the heart of its business to continually improve the effectiveness of new technologies that the company implements. The concepts presented by the consultants in the company are recognized as efficient and economic. The service offered by Al Ghanim Consulting is known for being customer-oriented. The organization have designed and supervised projects of varying scales in Kuwait (Al Ghanim Consulting, 2015).
It is important to have an overview of the activities of Al Ghanim Consulting to evaluate the use of project management tools used by the organization later in the report. Given below is the scope of activities of Al Ghanim Consulting:
Technical consulting in the design phase
Assessment of technical documentation
Evaluation of the project in terms of the subsequent operation
Consulting on selection of engineering
Recommendations on management schemes of engineering systems
Recommendations for the design of initial permits construction of the facility
Technical advice during the preparation of the object for commissioning
Recommendations for the design of the required documents at the time of the acceptance committee implemented object
Support of construction and installation, commissioning works
Organization and carrying out comprehensive tests of engineering systems and equipment facilities
Technical consulting at the stage of acceptance of object in operation
Participation in the working commission on acceptance into operation
Acceptance into operation
Consulting at the stage of their operation
Consulting services on formation of operation
Environmental support
Energy audit
Drawing on the expertise of its consultants, Al Ghanim Consulting often discovers new technologies to better serve the population. Al Ghanim Consulting aims to be a highly effective organization that combines the most modern approaches to management, a high level of skills and competencies (Al Ghanim Consulting, 2015). Its team of engineers is involved in the use of intellectual resources with the highest level of qualifications from different countries. These consultants possess experience in large-scale international engineering projects (Al Ghanim Consulting, 2015).
1.3 Problem Statement — The choice of project management tools is quite a difficult one for a majority of engineering-based organizations and engineering consultancy businesses. There are numerous project management tools which can be used by the organizations to improve the efficiency and effectiveness of project management of engineering consultancy. There is a need to methodically assess the body of current knowledge pertaining to key theories of project management. There is also the need to identify the usefulness of the implementation of project management tool at Al Ghanim Consulting. An investigation into the implementation of project management tools will help to identify areas of improvement, as well as, will lead to the application of the learning of Al Ghanim Consulting to other organizations. Lastly, there is a need to identify best practices of the implementation of project management tools to enhance organizational efficiency.
1.4 Research Questions — There are three research questions which are investigated in this research paper:
Q1: What are the findings of recent researches pertaining to the stakeholder theory, PRINCE2 and PMBOK management theory in contemporary organizations?
Q2: Which project management techniques are adopted at Al Ghanim Consulting to increase the organizational efficiency and to improve the performance of the organization?
Q3: What are the key lessons pertaining to the best practice of project management to maximize organizational efficiency?
1.5 Research Hypotheses — The following are the hypotheses for the research:
H1: The findings of recent researches pertaining to the stakeholder theory, PRINCE2 and PMBOK management theory suggest that these models are highly relevant and useful for the project management needs of the contemporary organizations
H0: The findings of recent researches pertaining to the stakeholder theory, PRINCE2 and PMBOK management theory suggest that these models are neither relevant nor useful for the project management needs of the contemporary organizations
H2: Stakeholder theory, PMBOK and PRINCE2 are project management techniques that are adopted at Al Ghanim Consulting to increase the organizational efficiency and to improve the performance of the organization
H0: Stakeholder theory, PMBOK and PRINCE2 are not adopted at Al Ghanim Consulting
H3: There are generalizable key lessons pertaining to best practice of project management to maximize organizational efficiency
H0: There are no generalizable key lessons pertaining to best practice of project management to maximize organizational efficiency
Chapter 2: Literature Review
Checkland and Winter (2006) outline that project management requires a programme management framework, which would need to be developed, and based upon a process based models, such as PRINCE2 (OGC, 2002). Given that each project is ‘situation specific’ and requires situational specific approaches, it is paramount that group discussions are conducted, in order to understand and anticipate the needs and requirements of a project programme idea, necessary requirements set out in the project proposal document, modelling of relevant activities, outline plans of agreed activities, project deliverables and the associated project and programme management frameworks that a process such as PRINCE2 would detail. This draft process would enable the initiation of a particular project, relevant stakeholders, service delivery, and the appointment of a project manager and a project board. This would involve what Claessens et al (2004) detail as the ‘control of time, in order to, ‘fully mediate the relation between planning behavior and work… job satisfaction, job performance, adequate the second which added workload and as variables’ (Claessens et al: 2004, p. 938).
Herroelen and Leus (2005) follow up the age-old concern of project management, in that, ‘the lack of proper project planning is often cited as one of the main reasons why projects fail to be completed in time and within budget’ (Herroelen and Leus 2005: p. 102). They ‘identify and illuminate several possible misconceptions… in the mindset of practising project managers and that may hamper successful project planning. The misconceptions relate to the role of the critical path, the critical sequence (critical chain), active schedules, and the insertion of buffers in the baseline schedule as a protective mechanism against schedule distortions during project execution’ (Herroelen and Leus: ibid).
‘Despite the availability of a plethora of project management software tools 1-3 and extensive research efforts in the area of resource-constrained project scheduling… it is still often the case that projects do not come in on time and on budget… The three main reasons why projects are successful were identified as user involvement, executive management support, and a clear statement of requirements. Proper planning ranked as number four. This paper supports the argument that the lack of proper planning is a main source of project failure’ (Horroelen and Leus: ibid, p.103).
Horroelen and Leus outline how the ‘critical path versus critical sequence analysis’ and ‘project horizon’ (ibid, p.103) are the key applications of whether project duration (and project start) will be a priority ‘above the optimum.’ Despite extensive research and computational interventions, these ‘may generate project durations which are more than 5% above the optimum on the average (ibid, p. 104) and ‘scheduling under resource constraints and the critical chain’ (ibid, p.105) which lead disrupted schedules, higher costs, missed due dates and deadlines, resource idleness, and frequent rescheduling. ‘In other words: uncertainty lies at the very heart of project management… despite the best efforts of ‘integrated project planning and execution’ (ibid: p.106). In summary, Horoelen and Leus detail that resource interactions lead to a ‘trade-off’ between pre-schedule project duration and stability’ (ibid: p.107).
Raz and Hillson (2005) outline that the best practices in the field, as embodied by these standards and others, are applicable to projects and to other types of activities carried out in organisations. Thus, it seems reasonable that any new standard development should have a general scope rather than being restricted to [specific] projects (Raz and Hillson: 2005, p.64). They go on to outline that the main elements of successful project management are, ‘communication, consultation and collaboration with stakeholders; links to the organisational objectives and strategy; guidance related to the adoption and implementation of a risk management system/function in the organisation; description of the benefits which can be expected from a structured approach to managing risk; and consideration of the human aspects of risk psychology, and of their impact on risk management effectiveness (Raz and Hillson: ibid, p.65).
Finally, the PRAM Guide has introduced a new concept by distinguishing between ‘risk event’ and ‘project risk’, both in the terminology and in how projects should be managed. The definition guide ISO/IEC Guide 73: 2002 Risk Management-Vocabulary-Guidelines for Use in Standards (British Standards Institute, 2002), was intended to create a common language for all risk standards documents, but this has not yet been reflected in currently available standards such as the nine included in this review. As a result, any future standard should unambiguously clarify the definition issue’ (BSI: 20020.
The Project Management body of Knowledge (PMBOK® Guide, Project Management Institute 2009), along with the five project management processes initiating planning executing monitoring and controlling and closing effective of the project management requires knowledge of project’s environment, technology, as well as skills and, industry, and general management interpersonal These interpersonal skills, particularly communication skills and leadership skills, are deemed essential to today’s project manager, in organisations where PMI is conducted (PMForum.org 2010). However, the extensive human and financial resources complexity, and multi-year requirements, mean that project management processes can be used in a industries of a variety of sizes and procedures (PMBOK Guide 2009: p.140-1), to discover which size fits the particular project underway.
This section carries out a comprehensive review of the literature pertaining to the key concepts of this research project. The literature review has taken into account the research work done in the area of stakeholder theory, PMBOK Guide, the process model of project management, Soft Systems Methodology and the reasons for project failures.
2.1 Stakeholder Theory — Stakeholder theory is an important theoretical model of project management. The theory assumes that the success of a project is dependent on the buy-in and contribution of all stakeholders (Davis, 2014). This theory has become one of the cornerstones of successful project management and has gradually emerged as a major theoretical model to understand the project management in various contexts. The definitions of what constitutes a stakeholder vary according to the authors. Stakeholders of a project are defined on a continuum of a broad vision to a narrow vision (Davis, 2014). The broad vision, proposed by Freeman (1984) defines a stakeholder as any individual or group that may affect or be affected by the completion of the project. The stakeholder theory is highly important from the perspective of the management of a project. The reason for the importance of the theory is that stakeholder theory enables the project manager to take into account the needs of various parties from the success of the project. The net outcome is an improved management of the project (Davis, 2014). The expectations of all stakeholders from the project are met under this approach. In addition, the role of different parties towards the attainment of the project objectives is also taken into account. According to Johansen, et

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