Project Management Context (Part 3)

1. Project Management Context(Part 3) Dr.Çağatay ÜNDEĞER Instructor Bilkent University, Computer Engineering Middle East Technical University, Game Technologies & General Manager SimBT Inc. e-mail : cagatay@undeger.com Bilgisayar Mühendisliği Bölümü – Bilkent Üniversitesi – Fall 2009

2. Project Management Context • Project Stakeholders • Introduction • Who are stakeholders? • Organizational Structures • Introduction • Functional Organization Structure • Projectized Organization Structure • Matrix Organization Structure • Project Management Office (PMO) • Standards and Regulations • What is a standard? • What is a regulation? • Life Cycle of a Tender • Introduction • From the view point of Employer & Tenderer • Summary

3. Project Stakeholders • A project is started because of having someone interested in • Outcome of a project, • Which is required to satisfy their organizational needs. • Stakeholders are; • Individuals who cause a project be initiated • Those who are most directly affected by the project’s completion.

4. Project Stakeholders • Actively involved in the project; • Have influence over project and its results.

5. Possible Stakeholders • Customers, • Who require outcome of project, • Sponsors, • Who support project financially, • Project manager, • Project team members, • Project management office, • Other influencers, • Who has influence on project due to their organizational position and power.

6. Project Management Context • Project Stakeholders • Introduction • Who are stakeholders? • Organizational Structures • Introduction • Functional Organization Structure • Projectized Organization Structure • Matrix Organization Structure • Project Management Office (PMO) • Standards and Regulations • What is a standard? • What is a regulation? • Life Cycle of a Tender • Introduction • From the view point of Employer & Tenderer • Summary

7. Organizational Structures • Organizational structures can differ dramatically from one company to another. • Organizations may or may not be project based. • Those that are not project based; • Usually lack management systems necessary for efficient and effective project management.

8. Common Organizational Structures • Functional Organization Stucture • Projectized Organization Stucture • Matrix Organization Stucture

9. Functional Organization Stucture • A traditional hierarchical organization (like a pyramid) with; • Top management at the peak, • Direct workers at the bottom, • And middle managers in between. Chief Executive Project coordination Functional Manager Functional Manager Functional Manager Staff Staff Staff Staff Staff Staff

10. Functional Organization Stucture • Each employee has; • One clearly designated supervisor. • Employees are grouped by their specialization such as; • Accounting, marketing, information systems, and manufacturing.

11. Functional Organization Stucture • People within different functional areas work separately on different parts of the project. • One group takes their part of the project, • Edits it, and • Throws it to the next group. • In IT projects, because of weak coordination between departments, • This structure causes more work for everybody, • Results with a product less than what it could be.

12. Projectized Organization Stucture • At the other extreme. • A structure where people from different functional backgrounds work together through life time of a project. Chief Executive Project coordination Project Manager Project Manager Project Manager Staff Staff Staff Staff Staff Staff

13. Projectized Organization Stucture • Designed specifically to provide necessary resources for the project work. • In IT projects, • Because of weak coordination in project groups, • Experienced personnel, possibly required for multiple projects, are not effectively used among projects.

14. Matrix Organization Stucture • In the middle spectrum. • A structure that typically crosses; • Functional design on one axis and • Some other design characteristic (e.g. project managers) on the other axis. Chief Executive Project coordination Manager of Project Managers Functional Manager Functional Manager Functional Manager Project Manager Staff Staff Staff % % % Staff Staff Staff Project Manager

15. Matrix Organization Stucture • Project staffs are designated to more than one supervisor; • Report to both; • Project managers and • Head of their functional areas.

16. Types of Matrix Stuctures • Weak matrix structures • Strong matrix structures

17. Weak matrix structures • More near to functional organizations. • Project managers; • Have less authority on projects, • Act like as coordinators than as independent managers.

18. Strong matrix structures • More near to Projectized organizations. • Project managers are dedicated to projects with full authority.

19. Strong matrix structures • More difficult to manage a matrix organization.

20. Project Management Office (PMO) • An organizational unit created; • To centralize and coordinate the projects within an organization. • Matrix structures often have a PMO. • Projectized structures almost always have a PMO.

21. Project Management Context • Project Stakeholders • Introduction • Who are stakeholders? • Organizational Structures • Introduction • Functional Organization Structure • Projectized Organization Structure • Matrix Organization Structure • Project Management Office (PMO) • Standards and Regulations • What is a standard? • What is a regulation? • Life Cycle of a Tender • Introduction • From the view point of Employer & Tenderer • Summary

22. Standard • A document approved by a recognized body; • Provides, for common and repeated use, rules, guidelines, or characteristics • For products, processes or services, • With which compliance is not mandatory. • e.g. some software development standards such as; • IEEE Software development stds. • High Level Architecture (HLA) M&S std.

23. Regulation • A document that; • Specifies product, process or service characteristics, including applicable administrative provisions, • With which compliance is mandatory. • e.g. some safety regulations for production of public goods.

24. Project Management Context • Project Stakeholders • Introduction • Who are stakeholders? • Organizational Structures • Introduction • Functional Organization Structure • Projectized Organization Structure • Matrix Organization Structure • Project Management Office (PMO) • Standards and Regulations • What is a standard? • What is a regulation? • Life Cycle of a Tender • Introduction • From the view point of Employer & Tenderer • Summary

25. Life Cycle of A Tender(Definitions) • Tender/Awarding : • A process for purchasing a service or material • Employer/Administration/Client : • Organization or person that requests to purcase a service or material • Tender Document : • A set of documents prepared and issued by the Employer for Tender purpose.

26. Life Cycle of A Tender(Definitions) • Tenderer : • Company submitting a proposal to the Tender • Tender Proposal : • The proposal of the Tenderer to meet the required service or material of the Employer

27. Life Cycle of A Tender(Definitions) • Tender Board/Commitee : • A group of people authorized by Employer • To select the best tender proposal among the submitting ones • According to Employer policies. • Contractor : • Company elected for providing the service and materials specified in the Tender document.

28. Life Cycle of A Tender(Definitions) • Contract : • Written agreement between Employer and Contractor • Setting forth the obligations of the parties thereunder, • Including, but not limited to; • The performance of the work, • The furnishing of labor & materials and the basis of payment.

29. Employer (Stage 1) • The Employer determines his needs. • Prepares a written document for his needs • (Project Definition Document). • Prepares a document for tendering process, • Including conditions and formalities of purchasing • (Conditions of Contract, and Accompanying Documents). • Determines tender closing date. • Prepares a guideline for the Tenderers • (Instructions to Tenderers). • Issues the Tender.

30. Employer (Stage 2) • Employer issues the tender by • Publishing it in the official gazette, and/or • Sending invitation letters: • To eligible companies or • If it is a confidential project, • To eligible companies having some; • Quality Levels (e.g. ISO, CMMI) • Security certificates (e.g. National, NATO).

31. Employer (Stage 3) • Until the tender closing date, the Employer : • May revise tender documents, • May postpone tender closing date, • May answers questions of Tenderers. • Collects proposals until tender closing date and • Pricing envelopes are only opened after this date. • Examines proposals for procedural convenience, and • May request Tenderer for correction of inconvenience. • Tenderers whose proposals do not satisfy procedural requirements are eliminated from the tender.

32. Employer (Stage 4) • Employer starts evaluating valid proposals and assigning points to them: • Technical Evaluation, • Company Qualification, • Administrative Evaluation, • Price Evaluation. • Employer orders companies with respect to their points. • Employer selects: • Either a winner company or • A few winner companies (short list)

33. Employer (Stage 5)CASE 1 : A Winner Company • In Case of a single winner company: • Winner company is announced • Employer; • May bargain price, • May request Best and Final Offer (BAFO), and • Discuss administrative and technical conditions and specifications with the winner. • An agreement is made. • A contract is signed by both parties. • Project is initiated. • In case of disagreement, • Employer may call second eligible company for contracting.

34. Employer (Stage 5)CASE 2 : A Short List • In Case of multiple winner companies: • Employer; • May bargain prices, • May request BAFO, and • Discuss administrative and technical conditions and specifications with each winner • (This could be done in a meeting open to all winners or in seperate meetings with individual winners). • Employer aim at obtaining best with lowest price. • Employer selects the most beneficial winner. • An agreement is made. • A contract is signed by both parties. • Project is initiated.

35. Tenderer (Stage 1) • Obtains Tender documents; • If Emloyer requests a price for applying, pays it. • Starts preparing a proposal: • Examines project requirements and risks; • Prapares a coarse project management plan; • Decides on the architecture (or alternatives); • Builds a work breakdown structure; • Estimates resources (e.g. time, cost) required; • Prepares a schedule if not given by the employer • Prepares a price breakdown structure; • Answers technical matters; • Answers administrative matters; • Prepares; • Official letters, Tender forms, Guatantee letters.

36. Tenderer (Stage 2) • Asks Employer for clarifications of unclear issues. • Revises his proposal. • Attaches; • Hardware and software specification documents, • Company qualification documents: • References, • Certifications (e.g. ISO, CMMI), • Any other related document. • Finalize Tender proposal.

37. Tenderer (Stage 3) • Submits Tender proposal, • Before Tender Closing Date; • Tries to submit it as late as possible; • Gets a verification document from Employer for his submission. • Waits for requests and decisions of Employer. • In case called by Employer, • Holds several meetings for agreement, • May reduce the price, or • Increase/decsrease specifications. • Upon agreement, • Signs a contract with the Employer, and • Project is initiated.

38. Summary EMPLOYER gets support of a consultant TENDERER gets tender documents EMPLOYER prepares tender documents Tender closing date (deadline for proposals) EMPLOYER collects and evaluates proposals EMPLOYER answers questions EMPLOYER gets support of a consultant EMPLOYER publishes tender documents TENDERER prepares tender proposal TENDERER submits tender proposal EMPLOYER may request correction of inconveniences from TENDERERS EMPLOYER may call the second winner EMPLOYER calls a winner for bargain EMPLOYER orders the proposals EMPLOYER & TENDERER prepare contract Project is initiated EMPLOYER & TENDERER signs the contract EMPLOYER annonces winner EMPLOYER makes a decision (continue or cancel) EMPLOYER selects the most benefical proposal EMPLOYER calls elected winners for bargain