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Importance Of Project Mangement
Factors leading to the increased use of project
management:
Compression of the product life cycle
Knowledge explosion
Global Competition (planet, people, profit)
Corporate downsizing
Increased customer focus
Small projects represent big problems
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Compression of the Product Life Cycle
Significant forces behind Demand for Projectmanagementis the shortening of product life cycle.
World wide flows of information reduces the
competitive advantage of new products--- due tobeing easily imitated or copied.
Computer Aided Designs (CAD) and CAM
E.g., in high tech industriesPLC is averaging 1.5 to 3yearssome 30 years ago PLC of 10 to 15 years wasnot uncommon.
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Compression Of The Product Life Cycle
Keeping in view the shorter PLC
it is imperative to keep constant chain of new products in thepipeline.
Place the product in the market before competitor.
Common rule of thumb in High tech product development isthat a 6 months delay can cause 33% loss in product revenueshare.
Time to market new products is indispensable
Due to the velocity with which technology is changing.
Speed is also becoming a competitive advantage
to get new products and services to the market as quickly as
possible.
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Global Competition
Transformation from national to global economy has ledto dramatic technological changes or innovations.
Which created tremendous pressure on quality
improvement and cost containment.
Open market demands not only cheaper products butalso better products and services
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Global Competition
Demand for better as well as low cost products :
led the businesses to get ISO 9000 certifications---a requirementfor doing business.
ISO 9000 certification is family of international standards forquality management and assurance .
These standards cover design, procurement, quality assurance and
delivery process.
Increased pressure to reduce costs has forced businessorganization to migrate their manufacturing plants to less
costly areas.
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Knowledge Explosion
Growth and advancement in New Knowledge Increased the complexity of projects due to latest
advances.
E.g., building a road 30 years ago was somewhat simple
process.
Today, the complexity in each area has
increased Including materials, specifications, codes, aesthetic,
equipment and required specialists.
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Knowledge Explosion
Basic project work has become more complexrequiring greater degree of coordination.
Existing products and services have also becometechnologically complex:
In todays digital world, you will hardly find aproduct that does not contain at least one micro-chip.
project complexity has increased the need to integratedivergent technologies.
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Corporate Downsizing
Focus in the past on growth and big is better--- organizations
began to realize that big is also more costly.
In the last decade or so, businesses have restructured
their organizational life or structure.
For the survival of firms, downsizing or rightsizing ifyou are still employed, and sticking to core
competencies have become necessary.
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Corporate Downsizing
Now, middle management has just become a skeleton of the
past.
Due to the fact that change is constant, Project management
has replaced the middle management as a way of ensuring thatthings get done.
You will rarely or hardly find any major project performed
totally in house.
Companies outsource significant segments of project and
project managers have to manage not only their own people
but also their counterparts in different organizations.
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Increased customer focus Increased competition has placed a premium on
customer satisfaction.
Customer no longer simply settle for generic productsand services.
They want customized products and services thatcater to their specific needs.
This mandate requires a much closer workingrelationship between provider and receiver.
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Increased customer focus
Account executives and sales reps are assuming moreof Project manager role as they work with theirorganization to satisfy the unique needs and requestsof clients.
This change has also prompted the development ofcustomized products and services.
Project management is critical both to development ofcustomized products and services and to sustainlucrative relationship with customers.
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Rapid development of third world
and Closed Economies. The collapse of the soviet empire and gradual
opening of Asian communist countries have created
an expansion in built-up demand within these societies for
all manner of consumer goods and infrastructuredevelopment.
Western firms are scrambling to introduce their
products and services to these new markets
Many firms are using project management techniquesto establish distribution channels and foreign bases ofoperations.
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Rapid development of third world
and Closed Economies. Like wise, these historical changes have created a tremendous
market for core project work in the areas of heavy constructionand telecommunications as these countries strive to revitalizetheir inefficient industries and decrepit infrastructures.
To reduce some of the risk and maximize individual talents,more and more firms are entering into joint ventures withindigenous firms to complete large and small scale foreign
projects.
These foreign ventures have placed a premium on the adaptivecapacity of project management personnel to work in foreigncultures with vastly different values, work habits andorientations.
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Small projects represent big
problems
The velocity of change required to remaincompetitive or simply keep up has created anorganizational climate in which hundreds of projects
are implemented concurrently.
This climate has created a multi project environmentand plethora of new problems.
Sharing and prioritizing resources across a portfolioof projects is a major challenge for seniormanagement.
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Small Projects Represent Big Problems
Those who manage small projects often face a variety ofproblems than do managers of single mega projects.
Frequently, the organizational culture does not support smallprojects and control system are non existent.
Thousands of product and service companies are faced withmultiple projects continuously in process.
Many firms have no idea of the problems involved withinefficient management of small projects.
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Small Projects Represent Big Problems
Small projects typically carry the same or more risk as do largeprojects.
Small projects are perceived as having little impact on the
bottom line because they not demand large amounts of scarceresources.
Because so many small projects are going concurrently andbecause the perception of inefficiency impact is small,
measuring inefficiency is usually non-existent. Unfortunatelymany small projects soon add up to large sums of money.
Many customers and millions of dollars are lost each year onsmall projects in product and service organization.
