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The awareness of nature of projects

Paulo Yazigi Sabbag, PMP, Assistant director, Executive Education, Getulio Vargas Foundation,
Brazil
Introduction
For project managers, the PMbok Guide Project Management body of knowledge (1996) represents a complete and
consistent approach to cope with whatever project in whatever application field, from the ones that involve construction,
systems or product/services development and implementation, through the performing of strategic initiatives.
Is this methodology universal, so whatever company in whatever country could adopt it? Is it adoption the same in
whatever project, from the complex and challenging ones to the simple and almost repetitive ones? The PMbok Guide was
built as a merge of diffuse best practices, mainly in USA. But have all the proposed issues the same importance for
whatever project and environment?
Ibbs and Kwak (1997) study on project management maturity suggested that engineering/construction firms scored
highest in the following PMbok areas: scope, time, communications, risk and procurement, while high-tech manufacturing
firms scored highest in cost, quality and procurement and information technology firms scored highest in human resources
and communications.
I assume that different applications of that methodology could result not only in different emphasis, but even different
effectiveness according with project nature and characteristics. A lack of risk management could damage some of
objectives: time, cost or quality. A lack of either planning or tracking progress could postpone time goals. A lack of
communication or people management could cause conflicts with unpredictable results. Imperfect organizational design
so as decision issues could cause the same. This assumption could be supported by Couillard findings (Couillard, 1995).
Therefore, the recognition of the real nature of the project could allow a suitable application of both managerial
instruments and methods. In this way, we can also match cross-cultural differences. Above all, this understanding allow us
to develop strategies that convert the project management into a more successful one. Some examples will be provided.
To do this, this work intends to develop a project classification model in addition to PMbok Guide. In order to understand
the real nature of a project, we can figure some project drivers and, by measuring them, we could emphasize or develop
more sophisticated managerial tools and techniques.
Classifying projects can be very useful and do not damage the PMbok Guide universality. Quite the opposite, it can make
this approach more consistent, since it respects projects differences. I believe that fostering appropriateness will enhance
PMbok practices.

How to classify projects?


According with PMbok (1996, 4) definition, projects are temporary endeavors undertaken to create unique product or
services. Setting in this way, a project distinguishes from a repetitive task in an organization. We can point out some
aspects in this definition:
Temporary: projects are objectives-directed and their rigidity or strictness challenge its management
Endeavors: projects involve complexity and chances of failure, thus uncertainty; it demands a dose of
entrepreneurship to deal with challenges
Uniqueness: projects admit innovation, thus unknown; it demands tailor-made or project-specific approach, nontested outcomes
In such case, how far is the project from the routine activities, more demanding will be the management. That is, the
building blocks to an attempt to classify projects are provided precisely by this definition. Insightful studies by Shenhar

and Laufer (1995) and Shenhar (1996) offer a three-dimension model based on technological uncertainty, complexity and
pace (time frame). In their opinion, these three drivers of the project nature compose the dimension of project risk in a
contingent approach.
However, if uncertainty could mean inability to predict future outcomes, as these authors pointed, it derives not only
from lack of technological domain but also from: managerial mastery, scale of change and from the changing
environment.
I prefer to address all these issues to the project uniqueness, which includes:
Lack of technology
Lack of management competence
Scale of change
Government acts, political, economic or labor issues
Climate, force majeure
Competitors efforts
Competition between projects
The pace dimension is related to the most urgent or win-or-win projects, when any delay could mean failure. But there
is a balance between projects objectives: time, cost (which include expected benefits) and quality (which includes
performance). Above all, they are interrelated. Williams (1995) mention that in the very beginning of a project, only
schedule matters; during ongoing implementation, tracking costs prevails, but after the start-up only the performance goal
is remembered. What about when time, cost and quality have the same importance? Very strict objectives as well as scarce
resources are more difficult to accomplish, or in other words, more uncertainty was concerned with that project.
Extending Shenhar et al factor, I prefer to name the rigidity of goals as project strictness, which includes in brief:
Almost unfeasible schedule, budget or specifications
Win-or-win projects
Inflexible needs of stakeholders
Scarce resources: money, people, machinery
The last dimension, complexity, could arise from systemic projects, which shows multiples (variety) and interconnected
activities. Biezus et al (1986) defines complexity as the overlapping zone between the main execution factors in a project:
conception (design), procurement and execution, as shown in Exhibit 1. More overlapping means more need for
communication, planning, control and for coordination.
In a systemic approach, the activities are interdependent, so as the performers, thus the performing system and
organizational structure. If there are in addition many different stakeholders, with opposite needs and expectations, the
uncertainty related to a successful management could be increased. If we have many different sites to execute the project,
showing different cultures, more uncertainty could be added.
Thus, we can say that complexity derives from:
A multidisciplinary project
Opposition between stakeholders interests
A great amount of activities (complex scope)
A lot of dependencies between activities
A great amount of performers
A fast track implementation strategy (overlapped tasks)
A complex and non-focused organization
A geographical spread execution
A cross-cultural project.
[Insert exhibit 1 here]
Shenhar et al address that the effect of the three dimensions rests on the amount of risks and contingencies. I prefer to
name it uncertainty, which comprises the unknown, the unpredictable, the risky and the messy. In other words, uncertainty

contents quantifiable risks and many other components which claims for a contingent approach. This assumption, though
common, is not adopted by Raftery (1994) who uses risk and uncertainty as interchangeable terms, whose only difference
is a matter of degree of personal knowledge about future events. Thus, in favor of the most comprehensive term, I will
address it to uncertainty.

The uncertainty cube


If we move farther out uniqueness, goal strictness or complexity dimensions, the uncertainty involved in the project
increases. These three drivers compose a three-dimensional model in which we can build uncertainty cubes, as shown in
exhibit 2 below. Each axis could be split into three levels: high, medium and low.
[Insert exhibit 2 here]
Different projects could display different cubes. For instance, a road construction project so as a typical building
construction project usually shows high goals strictness, but low complexity or uniqueness. There are not: technology
domain, numerous performers, and geographical, environmental and political problems. The main source of uncertainty
could arouse from tight budget, schedule or quality requirements.
A common R & D project, as a new software development, in opposition, could show higher uniqueness and complexity,
but could involve lower goal strictness. If they have enough resources, enough time and budget to apply, the uncertainty
arouse from innovation, lack of technology, the unknown and unpredictable and multidisciplinary tasks.
The third example could be the execution of a Y2K project, a corporate merger project as well as SAP system
implementation. All of them usually show the higher dimensions of the cube. The uniqueness is obvious: never done
before, environment-driven, a big managerial and technological challenge. The complexity is related to different
performers, cross-cultural issues, fast track implementation strategy, and complex organizational design. The strictness, in
the case of SAP, depends on the adoption of big bang approach; in Y2K case, it depends on a late beginning of the
execution.
The uncertainty cube could be used as a framework provided to understand the real nature of each project we face.
Comparing the above examples, we can distinguish some of the project needs in terms of strategies, managerial
implications or emphasis. For business graduate students, this model allows us to develop awareness on the differences
between project management and administration, in general.

ERP implementation case


In the case of SAP implementation in a Brazilian company, we can build a bigger uncertainty cube: they decided to
implement full software processes, in a big bang way, presumably as a way to overcome people resistance to changes.
There will be a lot of changes in actual processes, mainly in the performance indicators, finance and human resource
management issues, because of related laws. The Information Technology skills must be fostered, because some of the
processes have not already been computarized and linked. There are some inconsistencies in business information.
Beyond computer skills, they need to improve their management, promoting changes in decision issues.
But the planning process of such a challenging project was done in a traditional way: an adequate WBS Work
Breakdown Structure, a detailed CPM network, and a good responsibility assignment matrix. Risk management hasnt
already been started, though they pursue technical excellence as well as business vision. Could uncertainty be mitigated in
that way?
Studying the uncertainty cube, we can propose or justify different mitigation strategies. For instance, for each axis, it is
possible to:
Goal axis:
Provide time to a careful implementation, putting aside the big bang strategy
Phase the implementation by modules, since the connectiveness could be ensured. It could enlarge complexity, as a
tradeoff, however

Allocate supplementary resources, ready to face some unpredictable tasks


Simplify the software content, adopting ASAP Accelerated SAP version

Uniqueness axis:
Adopt a more standardized version (pre-tested), ASAP, for instance
Create temporary redundancy on both old and new systems, but causing the same tradeoff related to complexity
Contract an experienced consultant in this kind of project, but with a tradeoff concerning complexity and goal
strictness
Complexity axis, which seems the most difficult driver to reduce in such a sophisticated system:
Develop effective and efficient decision support and stakeholders communication processes
Simplify the functions, the transactions or systems processes
Develop the temporary ad hoc team, in order to improve communication, proactiveness and co-operation
Improve IT skills by training, in order to reduce cultural resistance, promote on-the-job training and coaching
Adopting some of these strategies, we could shrink the cube, perhaps to a low both strictness and uniqueness but high
complexity (sees exhibit 3 below), in a more successful management, but what else could we do?
[Insert exhibit 3 here]
Even when mitigation strategies do not work, the project manager could use this classification model as a way to
emphasize or develop managerial tools. In this case, the coordination process is expected to be a central process, so as
people change management, risk management and project scope management could assume great relevance. Because of
the shared execution, contract management could be very important. Project time, cost and quality management remains
important as usual, but mainly as a way to optimize and facilitate the others processes. We can infer that in this context,
more than precaution, a workaround and a good situational/contingent approach could be helpful.

Corporate merger project case


Another case of a big cube is a company merger between two multinationals, which operate in Latin America. Since the
fusion was disclosed, several regional task forces were formed, in order to evaluate assets, competencies, capacities,
portfolios and market relations. Therefore, the resulting organization could not be well established in advance.
There is a common sense that the merge could discharge a great amount of professionals, but the new board decided to do
this in two or three different moments, in the next two years. Multiculturallity must prevail, since there are French and
German shareholders, but Latin American stakeholders, as well. They hope that products portfolio could be increasingly
modified, at a low pace, but logistics must be quickly improved. Besides the desire of to do an appropriate merge, the
capital markets must note precocious operational synergy and good results. The name of the game is: reaching maturity in
a fast pace.
Lets see how mitigation strategies to the uncertainty cube could be proposed to:
Goal axis:
In order to achieve quick results, both organizations must operate in their best way, almost independently, until the
merge could percolate through all concerned countries and plants, following the old business plans
In order to prevent losses in some markets, temporary policies (pricing, marketing and logistics) could be developed
to concurrent products
Special care must be developed to the significant customers, in order to keep a long-term relationship
Uniqueness axis:
Contract experts in merges, as a way to support the new board
Improve knowledge on mergers, by studying cases in training programs and by promoting benchmarking studies
Complexity axis:
Preserve brand redundancy, while searching for complementarity

Maintain redundant operational structures as long as possible


Perform changes by multiple projects
Build teamwork, first in the ad hoc task forces
Develop ways to disseminate information and knowledge, avoiding gossips and power struggles
Develop cross-culture awareness, while stressing strategic vision
Develop cooperative arrangements between stakeholders, as suggested by Lord (1993)

When adopted some of these strategies, the resulting uncertainty cube could show: low strictness but high complexity and
remaining uniqueness, as shown on exhibit 4. How could they cope successfully this project?
[Insert exhibit 4 here]
Project risk, human resource as well as communication management assumes strategic relevance. By managing risks they
could cope with the remaining uncertainty. By people management they could not only assess people to the new functions
but also strive with attitudes, knowledge sharing and multicultural issues. Dealing with a new composition of stakeholders
is a big challenge and could be promoted by a sharp communication management. On the other project processes, it could
be highlighted both project scope and integration management which enable the control of changes and the consolidation
of procedures, policies and structures in order to align all of their key business elements.

Implications and conclusion


Clearly, the real nature of a project derives from a composition between three drivers: goal strictness, uniqueness and
complexity. Their mix defines the project needs, in terms of management, more than it does magnitude or application
field. Graphically, we can display it in a three-dimensional model of the uncertainty cube. When assessing the uncertainty
cube for educational purposes we could use it as a way to compare projects and to decide over processes, management
tools and people skills and competencies. In professional purpose, the uncertainty cube could be used to develop
mitigation strategies and management priorities, in order to achieve a suitable adaptation of attitudes, tools and policies
towards projects. In other words, this model could improve project responsiveness to uncertainty.
By this approach, it can promote a project-specific use of the PMbok Guide, perhaps with better efficiency and
effectiveness, across all applications. More than look for fit methodologies to projects, we can also develop flexibility of
their use.
Future researches are needed in order to: (i) develop measure indicators of each uncertainty driver, (ii) test its universality
between different kinds of projects and (iii) assess mitigation strategies for each driver.

References
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implantao de empreendimentos. Brazil, revista RAE - EAESP/FGV, 26, Abr/Jun: 13-28.
Couillard, Jean (1995). The role of project risk in determining project management approach. USA, Project Management
Journal, December : 3-15.
Ibbs, C. William and Kwak, Young-Hoon (1997). The benefits of project management: financial and organizational
rewards to corporations. Upper Darby , PA, Project Management Institute.
Lord, Alexander (1993). Implementing strategy through project management. UK, Long Range Planning, 26, 1: 76-85.
Project Management Institute, Standards Committee (1996). A guide to Project Management body of knowledge (PMbok
Guide). Upper Darby, PA.
Raftery, John (1994). Risk analysis in Project Management. UK, E & FN Spon.

Shenhar, Aaron J. (1996). Project Management theory: the road to better practice. USA, Project Management Institute
1996 Annual Seminar/symposium proceedings.
Shenhar, Aaron J. and Laufer, Alexander (1995). Integrating Product and Project Management: a new synergistic
approach. USA, Engineering Management Journal, 7, 3, September : 11-15.
Williams, Terry (1995). A classified bibliography of recent research relating to project risk management. UK, European
Journal of Operational Research, 85, August: 18-38.