Introduction
There are many definitions of project management, when using the word “project” today, users most often do not have a clear idea of the models, methods, tools and technologies of project management. It is believed that the project is a very simple way to prepare and implement ideas and plans, as long as there is money. But as soon as the money appears, unprofessionalism leads to significant delays in project time and cost overruns. As a result, the project becomes unprofitable even if the idea is super profitable.
The Meaning of the Project Management
It is important to understand that project management is first and foremost a professional activity with its own specific features and goals, and supported by scientific knowledge and tools. Application of project management methodology enables to clearly define goals and project results, give them quantitative characteristics, time, cost and quality parameters of the project, create a clear project plan, identify, assess risks and prevent possible negative consequences during project implementation (Bodea & Torres-Lima & Cuevas, 2020). To date, project management methodology has proven its right to be one of the most effective ways of successful project implementation. Project management is a synthetic discipline that combines both specialized and professional knowledge (Bodea & Torres-Lima & Cuevas, 2020). Special knowledge reflects the peculiarities of the field of activity to which the projects belong. However, project management became a truly independent discipline due to the knowledge gained from the study of general patterns inherent in projects in all areas of activity. Modern project management methods have their roots in the 1950s.
It is important to point out that several effective theories have already been developed for project management. One of them is Weber’s theory, mainly focused on the bureaucratic area of project management. The essence of this alternative is to take into account and control all financial and scientific components of the project, thus avoiding complications of such projects. Another alternative can be called the administrative theory, which includes management by specialties. In other words, this theory uses imperative methods of influencing each of the elements of the project, combining them into a single mechanism. It is noteworthy that the example below used exactly this theory, but there were a large number of errors.
Issues of National Health Service’ Project
On the example of the IT project of the National Health Service it is necessary to analyze the need for professional project management and the consequences to which a negligent attitude can lead. The essence of this case study is that the idea of optimizing the medical system through the introduction of computers and electronic databases was extremely promising, but ended up failing. The main problem was that the project was expensive and extremely costly, but it should be noted that this final problem consists of several mistakes and is cumulative. The fact that ineffective and incompetent management of the IT project was the basis of the fiasco, because the cost of all the expenses turned out to be almost half as much as originally indicated (NHS IT system one of ‘worst fiascos ever’, say MPs, 2013). From this follows the first error, namely unsuccessful or unprofessional calculations of costs, values and additional costs. This is at variance with the theory of project management, since one of the principles of this theory is the realization of a limited amount of resources, in this case, financial. Consequently, a weak point is the accounting activity and the evaluation of opportunities.
The second problem is the multiplicity of contracts, which means that there is a large number of them and they are not coordinated with each other. The situation is aggravated by the absence of conditions safeguarding a potential project. This means additional agreements on costs, contingencies, and resource control. The theory of project management notes that the characteristics of any project is the inevitability of conflicts and the potential for failure, which must be agreed in advance. As can be seen from the case, this work was not done, so the initiators did not even have the opportunity to cancel or close the project without major losses for the economy and investors.
The next, and most important problem of this project is the neglect of certain costs and potential expenses, for example, as a result of contracting with Lorenzo or Fujitsu (NHS IT system one of ‘worst fiascos ever’, say MPs, 2013). It indicates complete incompetence and unprofessionalism of responsible persons, whose mistakes led to incorrect calculations, and the high cost of the project or individual contracts was not noticed in time. According to the theory of project management, internal and external interrelationships of operations, tasks and resources, require coordination during project implementation. However, the activities of management and separate areas of the project, such as legal and accounting, were fragmented. All of the above problems combined to cause the collapse of the medical system optimization, which turned out to be not only a failure, but also caused a huge loss.
Critical Analysis
Project management methodology is completely different from the purely technical methodology that is often associated with most projects. In real life, there are many aspects of a project that lie outside the boundaries of technical areas and that need to be organized with the utmost care and attention (Piraquive et al., 2020). That is, in order to achieve project objectives with optimal use of resources and maximum satisfaction of project participants, such non-technical aspects of projects must be well managed, and this largely depends on the competence of project managers and project management teams.
In a competitive market environment, IT project should be treated as an independent investment project, that is, as a way to invest funds in qualitative improvement of company management. IT project in an organization should be considered as part of a large system, because the changes caused by the implementation of an IT project affect all business processes of the company, as well as its organizational structure (Piraquive et al., 2020). In the implementation of any IT project, the objectives should be fixed and considered several times in all possible aspects, also highlighting all the characteristics of each sub-objective. This is explained by the fact that the sequential implementation of each of the objectives should be paired with an analysis of their implementation. This is one of the most important features of such orders.
In addition, a measurable goal is necessary to avoid subjectivity in assessing whether the project is fully implemented or not, and if implemented, to what extent. If treat an IT project as an investment project, this position itself implies a profit from the project after a certain period of time (Silva et al., 2019). Therefore, at the very beginning of the project, it is necessary to use a well-known method of determining the effectiveness. This implies the allocation of some well-known indicators, and the construction of appropriate models, discounting cash flows for the periods of calculation (Fernez-Walch, 2018). Allocation of these parameters and their evaluation in a specific IT-project is certainly an obligatory and difficult task that requires a separate consideration. The peculiarity of IT projects is the fact that their effectiveness is not always expressed in money (Fernez-Walch, 2018). Time as a parameter of project efficiency also has the right to exist. For example, a reduction in time to perform some operation as a result of an IT project is a very good effect. The problem is how to define the goals of the project to highlight the time parameter as an efficiency.
Based on the above theory, in order to solve the problems of the medical system optimization project, several steps had to be taken. First, the planning stage should be much deeper, anticipating all possible developments of circumstances. In order to increase the efficiency of planning, it is necessary to hire specialists in this field. In the area of contracts and cost and resource control, the Six Sigma system would be a simple, yet very effective solution.
Project Manager’s Report
The essence of project management methodology is that the responsibility for project execution and achievement of project results lies with a specific individual or a limited group of individuals. An information system by itself does not increase the profitability of an enterprise. It can only increase efficiency and speed up data processing. What improves profitability is management’s ability to make effective decisions based on that information. The customer is the main stakeholder of an IT project. In an organization where this factor is absent, the project is doomed to failure and a professional project manager will never undertake such a project.
It is necessary to understand exactly what role the project manager plays in the entire system. First of all, it is a responsible person who has a number of professional qualities, among which can be distinguished leadership and the ability to select personnel. Such actions do not have complete freedom, but are focused on the criteria, which are predominantly set before the project by the customer. This all explains the necessity of appointing a handler in the shortest possible time, and at the beginning of the project. The project manager is usually appointed by the client. The art of managing and coordinating human resources in a project is accomplished by the manager by applying administrative and behavioral knowledge to achieve certain project goals in content, cost, time, quality, and satisfaction of project participants (Silva et al., 2019). The project manager is a key figure in the project team. All the professional skills of such a person, including charisma and the ability to work with conflicts, predetermine how each task will be carried out and the overall success of the whole project.
It is necessary to analyze the varieties of manager’s reports and the peculiarity of each of them. A project status report is necessary precisely to communicate the status of the project. It should be detailed enough to allow one to assess the “health” of the project, but not too detailed, so that the readers of this report do not fall asleep over it from a lot of unnecessary details. A risk register, or, in a more compact form, Project Risk Overview is another vital report that will be needed for design (Clegg, Skyttermoen, and Vaagaasar, 2020). The Risk Register contains the results of risk identification, risk analysis data, and response plans for the most significant risks. The Project Risk Overview can be included in the Project Status Report as one of the key metrics. For example, you can specify the total number of still existing risks and classify them by the degree of negative impact on the project. This will give the recipient of the report a clear picture of the overall risk status of the project.
Finally, the third type of register of urgent issues. This tells one how to handle incoming risks, as well as with contingencies and issues that need to be dealt with urgently. For example, there may be a risk of a key employee leaving the team. After he has moved on to another job, the manager has to address the urgent issue of replacing him. In this case, management has to make a choice between hiring a new employee or reinforcing the team with another project, and then it is possible to plan its next steps (Clegg, Skyttermoen, and Vaagaasar, 2020). The register of urgent issues should show what actions are actively being taken on each of these issues, as well as the priorities of these issues in terms of the scale of impact on the project. Priorities can range from “minor” to “critical” and serve as a guide to what needs to be done first and what needs to be done second to keep the project within the given limits.
To maximize the effectiveness of the manager’s reports, it is recommended to use a work structure that stands out as a matrix structure. The fact is that such an approach combines both functionality, which is responsible for speed and coherence, and design, which is responsible for ideology and implementation. Three varieties of project matrix structure can be distinguished: weak matrix, when the project coordinator is responsible for coordination of project works, but has limited power over resources; balanced matrix, when the project manager coordinates all works and shares responsibility for achieving the goal with heads of functional departments; rigid matrix, when the project manager has maximum power, but also has full responsibility for achieving project goals.
The most important part of project management, which the project manager influences, is dealing with risk. Risks are caused by the uncertainties that exist in each project. Risks can be known – those that are identified, assessed, for which it is possible to plan. Unknown risks – those that are not identified and cannot be predicted (Silva et al., 2019). Although specific risks and their conditions are not identified, project managers know, based on past experience, that most risks are foreseeable. Implementing projects with a high degree of uncertainty in such elements as goals and technologies to achieve them, many companies pay attention to the development and application of corporate risk management methods. These methods take into account both the specifics of projects and corporate management methods.
Project managers must have many leadership qualities in order to improve team effectiveness. This matters in any field of work. It is necessary to analyze those qualities of project managers that require close attention. Few decisions are as important as hiring decisions. The need to get the job right for each person is obvious, but it is a daunting task. Next, the ability to avoid hostility among stakeholders is a prerequisite for success. The project manager must convince all stakeholders that the decisions made and priorities set are correct, and prove that the achievements are in line with the goals set. In practice, persuasion requires lengthy negotiations and not always simple compromises.
The Importance of the Project Manager’s Report
Finally, it is necessary to understand why management reporting and activity is important for project implementation. Despite the fact that any large project has many areas and responsible persons, it is the manager who is able to have the most complete information about what is happening. Awareness and control of all activities conducted on an order, a manager, guided by his own experience, in time to see any potential changes in the plans (Silva et al., 2019). Timely reporting by such a specialist makes it possible to avoid major and dangerous risks, as well as in advance, in a safe period of time, warns of innovations in the plans.
If one considers this factor in terms of theories, namely administrative and Weber, the importance of the manager’s report becomes more obvious. The fact is that, for example, if the administrative theory is taken as a basis, which was used in the example discussed above, such a report contributes to the control and timely introduction of changes in each area. As a result, this would not lead to negative consequences of improper management. In Weber’s theory, such a report would have helped to prevent or prevent unnecessary financial costs even earlier. This is precisely the specialization of this theory, which would have been almost as effective as the Six Sigma system.
In other words, such activities increase the chances of successful and successful implementation of the project. The basic idea of project management – concentration of responsibility for the whole project on a particular person – the project manager – is important and effective for the management culture in general. The sooner the top management realizes the necessity and advantages of this idea and project management methodology in their activities, the sooner the effect from its application will appear, consequently, the competitiveness of enterprises in the market will increase. On the example of IT project on optimization of medical system, it can be seen that timely and professional reporting on the activities associated with the project contributes to the elimination or control of risks (Silva et al., 2019). The absence of such an element as management can ensure failure, which will affect both the contractor’s performance and the position of each party, who will incur huge losses.
The point of describing the risks of implementing IT projects is to identify these risks in advance and carry out a set of preventive measures, rather than obtain intractable problems during project implementation. The main activities aimed at avoiding these risk situations in IT projects are:
- Mandatory documentation of project goals, as well as all changes in project documentation that occur during project implementation.
- Increasing the motivation of rank-and-file employees by means of financial incentives.
- Attracting third-party qualified specialists.
- Training team members and top management in project management methodology.
Reference List
Bodea, C. N., Torres-Lima, P., and Cuevas, R. (Ed.). (2020). Research on Project, Programme and Portfolio Management. Integrating Sustainability into Project Management. New York: Springer International Publishing.
Clegg, S. R., Skyttermoen, T., and Vaagaasar, A. L. (2020). Project Management: A Value Creation Approach. Thousand Oaks: SAGE Publications.
Fernez-Walch, S. (2018). The Multiple Facets of Innovation Project Management. New Jersey: Wiley.
NHS IT system one of ‘worst fiascos ever’, say MPs (2013).
Piraquive, F. N. D., Diez-Silva, M., Monsalve. N. A. M., and Uribe, R. I. P. (Ed). (2020). Handbook of Research on Project Management Strategies and Tools for Organizational Success. Hershey: IGI Global.
Silva, A. M., Ribeiro, F., Jamil, G. L., and Lopes, S. M. (Ed.). (2019). Handbook of Research on Emerging Technologies for Effective Project Management. Hershey: IGI Global.