Executive. Project Project Project Manager Manager Manager

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1 586 Workbook Exercises What Is a Project? The fo ll owing exercises are presented here: Exercise 1. 1: Organizational Structure Exercise 1.2: Project Management Office Exercise 1.1: Organizational Structure The objecti ves for Exercise 1.1 are as fo ll ows: Descri be the three major types of organizational structures. Descri be the authority level of project managers in each o rganization. Describe the three types of matrix organizations. Background Different organizational structures create different challenges and potential for conflict. This exercise examines three types of organizational structures and their impact on a project manager's ability to execute a project. Three major types of organizational structures exist: projectized, functional, and matrix. Each type of structure influences the project manager's authority, resource commitments, and the administrative support available for projects. A project manager might have more or less power depending on how the organization is structured. Projectized organizations Projectized organizations rea lize that organiz ing around project management promotes focus on their primary objective-deliveri ng projects to fulfi ll the corporation's goals. Project managers in rhese types of organizations are granted high levels of authori ty o r even complete authority over their projects. Projectized structures us ually provide administrative support to project managers. Personnel assigned to a project are usually committed on a full-time basis; there is very little dotted-li ne reporting. The following ill ustration depicts an organization chan for a projectized organization. Project Project Project Manager Manager Manager Team Member Team Member ~Member Team Member

2 What Is a Project? 587 Functional organizations Functional o rganizations are organized around particular functions, such as sales, marketing, or accounting. Functional o rganizations undertake projects, but the projects might be confined to a particular functional area. If projects cross functional boundaries, project managers face real challenges find ing and keeping resources and executive support. Most people believe a project manager has little or no authority in a fun c tional organization. The following illustration depicts a fu nctional organization chart. Sales Accounting Information Technologies ~. ~. Sta ffm e m be r Matrix organizations Matrix o rganizations use components of both functional and projectized organizations. Three types of matrixed organizations exist: weak matrix, balanced matrix, and strong matrix, with strong matrix organizations being the closest to projectized organizations. The authority level of the project manager also varies according to how weak or strong the matrix organization is. The fo llowing ill ustration depicts a balanced matrix organization. Sales Accounting Information Technologies rs.;ffmember rs.;ffmember --swfmember Project Manager When you are assigned a new project, remember to analyze the organization Structure in which you are working. This knowledge will assist you in acquiring resources and understanding the cha llenges you might face. In this exercise, you will test your knowledge abo ut organizational structures as you he lp the Sensational Advertisement Productions company. Scenario You are a project management consultant for Terrific Project Management Partners (TPMP) working with Pam Rosenbaum of Sensational Advertisement Productions (SAP). Pam is the

3 588 Workbook Exercises account manager for a telecommunications client's important new product: a cell phone that integrates the latest video functions right into the phone. The new service wi ll be priced competitively with cell phone se rvices that don't include video. The account has a project manager fo r each of the sales campaigns: Michael Harl and for print, Judy Arakawa for TV, and Joseph Marumbo for telemarketing. Each of these project managers works one-on-one with marketing managers within the telecommunications company. Their telecommunications counterparts provide direction and approval for the project work. Pam acts as the project manager for the account, coordinating the campaigns and tracking the schedule and budget. As a PMP well versed in the nine project management Knowledge Areas (scope, time, cost, quality, human resource, communications, risk, integration, and procurement management), you know th at Pam faces some real challenges because of the way SAP, the telecommunications cl ient, and the project are organized. Testing Your Knowledge of Organizational Structures Consider the telecommunication project's organization and Pam's challenges as a program manager as you answer the following questions: 1. What are the three major types of organizational structures? 2. What are the three types of matrixed organizations? 3. What do the three types of matrixed organizations correspond to? 4. Pam works for the vice president of account management, who in turn works for the CEO. The other vice presidents head departments such as sales, operations, media, and direct mai l. What type of an organization is this? 5. What is Pam's authority level in this organization? 6. If Pam worked directly for the CEO, what type of organizational structure would she be working in? Exercise 1.2: Project Management Office The objecti ves for Exercise 1.2 are as fo ll ows: Descri be the continuum of project management offices. Understand some of the activities or deliverables of a project management office. Descri be the difference between the project manager's objectives and the project management office's objecti ves. Background A project management office (a lso known as a PMO) helps its organization manage and centralize its projects and programs, focusing o n aligning the projects with the strategic objectives of the organization. In some o rganizations, the PMO might be also known as a program management office, a program office, or a project office. Because project managers need to balance the competing needs of their stakeholders while focusing on the project objectives, project

4 What Is a Project? 589 management offices need to balance thei r organization's strategic needs while helping the project managers attain their specific project goals. The project manager should have speci fic authority to assign project resources and manage the scope, schedule, cost, and quality of their project. The PMO might manage overall organizational project directives. There is a continuum of PMOs within organizations. The first and simplest PMO is at the lowest end of the continuum. It exists to simply assist project managers by providing a central repository for and information about the organization's tools, templates, policies, standards, and methodologies of project management. This would probably not be a large PMO; it gives project managers a place to get help using the common project practices within the organization. Further up the continuum, another type of PMO provides training, assistance, and mentoring. This kind of PMO might also manage and have authority over the entire project management system. In that case, the PMO provides the tools, processes, methodology, and resources that project managers use for their projects. At the highest level of the continuum, PMOs have a great deal of authority and responsibility, including directing project managers and measuring their projects against organizational objectives. This PMO provides project managers and is responsible for the results of the project. In an o rganizational structure, this type of office might report directly to a high-level executive or have a high-level executive managing the PMO. A PMO with a great deal of authority might help select which projects are initiated, prioritize approved projects and direct resources to the highest-priority projects, help with project planning and execution, and kill projects that no longer meet organizational business objectives. In such an o rganization, the PMO would have to create processes for project selection and devise measurements that indicate when a project should be canceled. Many organizations do not have a project management office, yet they have many projects. In such organizations, you will often see projects being run using a variety of methodologies and scheduling tools. There is little (if any) prioritization among projects. Other organizations have one person who supports a PMO while also carrying out other duties. This kind of project management office usually has very little authority and a great deal of difficulty establi shing common standards and processes among projects. More organizations today are trying to establish robust PMOs that not only manage the project management system at the organizational level but also direct the reporting, prioritization, and balancing of projects for the organization. Still, many organizations do not see va lue in a PMO because it is usually an overhead department. However, without a PMO, an organization will have a difficult time repo rting on projects o n an overall enterprise level. The consistency and integrity of the data (if it is collected at all ) might be suspect. Without a PMO, it is doubtful any organization could do true enterprise reporting on its projects. No matter what kind of PMO an organization has, it's important that the role of the PMO is clearly defined and upper management sponsors and su pports its activities. This list includes some of the activities or deliverables a PMO might provide: A central repository for the templates, standards, processes, tools, methodologies, and policies for the organization. Try entering project management office in your browser search engine. You will find some examples of organizations that provide project management templates and processes online. Training options, training, mento ring, and/or project managers fo r projects.

5 590 Workbook Exercises Project selection and prioritization processes, oversight, and high-level management of shared resources o n approved projects. Status reports on project schedules, budgets, interdependencies, and variances. The PMO lays out the communication expectations for all projects. A central repository fo r lessons learned, overall organization project risks, and archived project information to help improve current and future project management. In this exercise, you'll consider the kind of PMO that could help the Sensational Adve r ~ tisemenr Productions company as it introduces the project management discipline to the organization. Scenario Your consulting firm introduced project management processes to the advertis ing firm Sensational Advertisement Productions (SAP). SAP has more than 100 projects, many of which are complex with large budgets. The project managers at SAP are learning how to use the project management methodology to guide their projects. You rece ntl y met Randy Bobier. Everyone at SAP calls him "the PMO," although no o ne else works in the office. Randy created a PMO website with some project management templates he found on the Internet. The website also incl udes a copy of a SAP project manager's process handbook, which was written two years ago when the company hired a consultant to help organize the PMO. Randy says he let the project managers know that the tem plates and handbook are on the website. (Some project managers already admitted to you that they don't particularly li ke the tem plates and don't use them. ) He also lets you know several of SAP's project managers meet about o nce a month to discuss common problems and issues. You try to set up several meetings with him to get more information about the PMO, but in addition to his PMO responsibilities, Randy is currently running three projects. He lets you know that one of his projects is very high priority and he doesn't have a lot of time to talk about the PMO. Testing Your Knowledge of PMOs Think about SAP's implementation of a PMO as you answer the following questions: 1. Descri be where you think SAP's PMO is on the continuum of PMOs. Why? 2. What is Randy focused on as a project manager? What he would be focused on as the PMO in the SAP organization? 3. If SAP's PMO were at the highest level on the PMO continuum, what might its PMO look like? 4. What would you recommend that SAP do with its PMO? 5. What would be the best kind of PMO for any organization to have?