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Project Manager : Project Manager June July 2012
12 Project Manager thought leaders Is the triple constraint a true indicator of whether a project is successful? Two researchers propose a more comprehensive test of project performance. A new test of project success John Smyrk worked in various branches of engineering before he returned to full-time study at Monash University where he gained an Honours degree in econometrics and a Masters in operations research. After eight years as an academic, he founded Sigma Management Science, but retained his links with academia through part-time teaching appointments at a number of business schools. Dr Ofer Zwikael is an associate professor and a deputy head of school at the Australian National University. He is the author of two books and more than 90 scholarly peer-reviewed papers that have appeared in a variety of academic journals and conference proceedings, including the British Journal of Management. IF YOU WANT TO CAUSE MISCHIEF AT A GATHERING of project managers, just ask them to answer this question: Which of the following projects was successful? • The Sydney Opera House • The Sydney Cross City Tunnel • The BER (Building the Education Revolution) program Inevitably, heated discussion breaks out: PM1: The Opera House was a disaster! Over time and over budget. PM2: But what about the tourists? PM1: The Cross City Tunnel meets the conditions of the (dreaded) iron triangle – therefore it was an outstanding success. PM2: No it wasn’t – the operators went broke. PM1: The Federal Government’s BER program was a great success – basically on time and within budget. PM2: You can’t say that – there was no agreed success criteria. The outside world views this sort of scenario with bemusement. We have all been asked at one time or another, “Do you mean to say that the project management discipline doesn’t know how to judge success?”, to which we can only respond (with acute embarrassment): “Oh we have many tests of success – it’s just that they are all in conflict with each other ”. There may be a framework for judging project success that we believe resolves most of these issues. A new approach Although there is an emerging view that benefits must be taken into account when judging project performance, there is considerable uncertainty about how this is to be done. Consequently, there is a tendency to revert to the (infamous) ‘iron triangle’ whereby a project is judged successful if all outputs are delivered fit-for-purpose, on time and within budget. Our research has found that success must be judged at three layers – not just one. To explain this theory, it is necessary to review the interests of three important stakeholders in a project and the roles played by two critical baseline documents. Key players three players tend to dominate decision-making at various phases of a project: ThE FUNDER the Funder invests money in order to generate specific target outcomes. a target outcome is a desired measurable end-effect, such as ‘ reduced traffic congestion in the cbd’. target outcomes are defined (together with many other key parameters of the venture) in a business case, which the Funder approves to initiate the work involved. ThE OwNER Funders normally preside over such large portfolios of projects that they need to appoint an owner who will look after their interests while each is under way. In appointing an owner, the Funder holds him/her accountable for realising the business case and target outcomes. ThE pROJECT mANAgER a Project Manager is appointed to deliver the project’s outputs, in accordance with certain conditions and constraints laid down in a Project Plan (which is based on the business case). the owner holds the Project Manager accountable for achieving the Project Plan and delivering the project’s outputs. the business case and the Project Plan are called ‘baseline’ documents because they establish a foundation for the way the exercise is to be conducted. although intimately related, there are critical differences between the two. For example, target outcomes are defined in the business case while a detailed work breakdown structure appears in the Project Plan. JOhN smYRK DR OFER zwIKAEL
Project Manager April May 2012
Project Manager Aug Sept 2012