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Project Management

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Project Management ­MGMT627
VU
LESSON 19
PROJECT PLANNING (CONTD.)
Broad Contents
Identifying Strategic Project Variables
19.1
Identifying Strategic Project Variables:
The project manager must continually monitor the external environment in order to develop a
well-structured program that can stand up under pressure (for long-range or strategic projects).
These environmental factors play an integral part in planning. The project manager must be able
to identify and evaluate these strategic variables in terms of the future posture of the
organization with regard to constraints on existing resources.
As we know that in the project environment, strategic project planning is performed at the
horizontal hierarchy level, with final approval by upper-level management. There are three
basic guidelines for strategic project planning:
It is extremely important that upper-level management maintain a close involvement with
project teams, especially during the planning phase.
Successful strategic planning must define the authority, responsibility, and roles of the
strategic planning personnel.
Strategic project planning is a job that should be performed by managers, not for them.
In order to ensure the success of the project, all members of the horizontal team must be aware
of those strategic variables that can influence the success or failure of the project plan. The
analysis begins with the environment, subdivided as internal, external, and competitive, as
shown below:
Internal Environment
Management skills
Resources
Wage and salary levels
Government freeze on jobs
Minority groups
Layoffs
Sales forecasts
External Environment
Legal
Political
Social
Economic
Technological
Competitive Environment
Industry characteristics
Company requirements and goals
Competitive history
Present competitive activity
Competitive planning
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Project Management ­MGMT627
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-- Return on investment
-- Market share
-- Size and variety of product lines
Competitive Resources
It is important to note here that once the environmental variables are defined, the planning
process continues with the following:
Identification of company strengths and weaknesses
Understanding personal values of top management
Identification of opportunities
Definition of product market
Identification of competitive edge
Establishment of goals, objectives, and standards
Identification of resource deployment
At the program level, complete identification of all strategic variables is not easily obtainable.
However, internal, or operating, variables are readily available to program personnel by virtue
of the structure of the organization. The external variables are normally tracked under the
perceptive eyes of top management. This presents a challenge for the organization of the
system. In most cases, those in the horizontal hierarchy of a program are more interested in the
current operational plan than in external factors and tend to become isolated from the
environment after the program begins, losing insight into factors influencing the rapidly
changing external variables in the process. Proper identification of these strategic variables
requires that communication channels be established between top management and the project
office.
It is essential that the top-management support must be available for identification of strategic
planning variables so that effective decision making can occur at the program level. The
participation of top management in this regard has not been easy to implement. Many top-level
officers consider this process a relinquishment of some of their powers and choose to retain
strategic variable identification for the top levels of management.
It is important to note here that the systems approach to management does not attempt to
decrease top management's role in strategic decision-making. The maturity, intellect, and
wisdom of top management cannot be replaced. Ultimately, decision-making will always rest at
the upper levels of management, regardless of the organizational structure.
Therefore, identification and classification of the strategic variables are necessary to establish
relative emphasis, priorities, and selectivity among the alternatives, to anticipate the
unexpected, and to determine the restraints and limitations of the program. Universal
classification systems are nonexistent because of the varied nature of organizations and projects.
However, variables can be roughly categorized as internal and external, as shown in Table 19.1
below.
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Project Management ­MGMT627
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Table 19.1: Strategic Planning Variables in the Tire Industry
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Table of Contents:
  1. INTRODUCTION TO PROJECT MANAGEMENT:Broad Contents, Functions of Management
  2. CONCEPTS, DEFINITIONS AND NATURE OF PROJECTS:Why Projects are initiated?, Project Participants
  3. CONCEPTS OF PROJECT MANAGEMENT:THE PROJECT MANAGEMENT SYSTEM, Managerial Skills
  4. PROJECT MANAGEMENT METHODOLOGIES AND ORGANIZATIONAL STRUCTURES:Systems, Programs, and Projects
  5. PROJECT LIFE CYCLES:Conceptual Phase, Implementation Phase, Engineering Project
  6. THE PROJECT MANAGER:Team Building Skills, Conflict Resolution Skills, Organizing
  7. THE PROJECT MANAGER (CONTD.):Project Champions, Project Authority Breakdown
  8. PROJECT CONCEPTION AND PROJECT FEASIBILITY:Feasibility Analysis
  9. PROJECT FEASIBILITY (CONTD.):Scope of Feasibility Analysis, Project Impacts
  10. PROJECT FEASIBILITY (CONTD.):Operations and Production, Sales and Marketing
  11. PROJECT SELECTION:Modeling, The Operating Necessity, The Competitive Necessity
  12. PROJECT SELECTION (CONTD.):Payback Period, Internal Rate of Return (IRR)
  13. PROJECT PROPOSAL:Preparation for Future Proposal, Proposal Effort
  14. PROJECT PROPOSAL (CONTD.):Background on the Opportunity, Costs, Resources Required
  15. PROJECT PLANNING:Planning of Execution, Operations, Installation and Use
  16. PROJECT PLANNING (CONTD.):Outside Clients, Quality Control Planning
  17. PROJECT PLANNING (CONTD.):Elements of a Project Plan, Potential Problems
  18. PROJECT PLANNING (CONTD.):Sorting Out Project, Project Mission, Categories of Planning
  19. PROJECT PLANNING (CONTD.):Identifying Strategic Project Variables, Competitive Resources
  20. PROJECT PLANNING (CONTD.):Responsibilities of Key Players, Line manager will define
  21. PROJECT PLANNING (CONTD.):The Statement of Work (Sow)
  22. WORK BREAKDOWN STRUCTURE:Characteristics of Work Package
  23. WORK BREAKDOWN STRUCTURE:Why Do Plans Fail?
  24. SCHEDULES AND CHARTS:Master Production Scheduling, Program Plan
  25. TOTAL PROJECT PLANNING:Management Control, Project Fast-Tracking
  26. PROJECT SCOPE MANAGEMENT:Why is Scope Important?, Scope Management Plan
  27. PROJECT SCOPE MANAGEMENT:Project Scope Definition, Scope Change Control
  28. NETWORK SCHEDULING TECHNIQUES:Historical Evolution of Networks, Dummy Activities
  29. NETWORK SCHEDULING TECHNIQUES:Slack Time Calculation, Network Re-planning
  30. NETWORK SCHEDULING TECHNIQUES:Total PERT/CPM Planning, PERT/CPM Problem Areas
  31. PRICING AND ESTIMATION:GLOBAL PRICING STRATEGIES, TYPES OF ESTIMATES
  32. PRICING AND ESTIMATION (CONTD.):LABOR DISTRIBUTIONS, OVERHEAD RATES
  33. PRICING AND ESTIMATION (CONTD.):MATERIALS/SUPPORT COSTS, PRICING OUT THE WORK
  34. QUALITY IN PROJECT MANAGEMENT:Value-Based Perspective, Customer-Driven Quality
  35. QUALITY IN PROJECT MANAGEMENT (CONTD.):Total Quality Management
  36. PRINCIPLES OF TOTAL QUALITY:EMPOWERMENT, COST OF QUALITY
  37. CUSTOMER FOCUSED PROJECT MANAGEMENT:Threshold Attributes
  38. QUALITY IMPROVEMENT TOOLS:Data Tables, Identify the problem, Random method
  39. PROJECT EFFECTIVENESS THROUGH ENHANCED PRODUCTIVITY:Messages of Productivity, Productivity Improvement
  40. COST MANAGEMENT AND CONTROL IN PROJECTS:Project benefits, Understanding Control
  41. COST MANAGEMENT AND CONTROL IN PROJECTS:Variance, Depreciation
  42. PROJECT MANAGEMENT THROUGH LEADERSHIP:The Tasks of Leadership, The Job of a Leader
  43. COMMUNICATION IN THE PROJECT MANAGEMENT:Cost of Correspondence, CHANNEL
  44. PROJECT RISK MANAGEMENT:Components of Risk, Categories of Risk, Risk Planning
  45. PROJECT PROCUREMENT, CONTRACT MANAGEMENT, AND ETHICS IN PROJECT MANAGEMENT:Procurement Cycles