Management of development projects: how to meet corporate business goals?

Two contradictory elements affect development projects in the modern era. New advanced development projects require huge resources and long schedules. On the other hand, the resources available for development projects are decreasing, and intensive competition between companies results in increased required performance and new products which must be developed with short schedules. Development projects have a significant effect on a company's business goals, and therefore attract the attention of corporate managers. A significant part of managers' time is devoted to the control of development projects. Support tools are therefore developed and used to assist managers in controlling their projects. This paper describes a control tool to help managers make decisions on development projects. The tool described is based on Microsoft's 'Project' software package, and was developed in-house. The package performs real-time calculations and simultaneously presents several control parameters. These parameters provide a comprehensive picture of project status. The major benefits of the control tools described are: (1) The 'Project' package provides the ability to work with small and combined work packages. It allows attention to be focused on small programs as well as on entire programs. (2) It complies fully with modern decentralised computer systems consisting of a central computer, local computerised networks, parallel PCs and work stations. It provides an interactive quick response ability to follow changes in project status, which result from design changes or progress updates. The control system was implemented by RAFAEL's Missiles Division two years ago, and impressive results in terms of project efficiency were achieved. These achievements play a major role in meeting the Division's business goals. The control tools described are general and can fit a large variety of projects and companies.     

Risk management, project success, and technological uncertainty

In times of increased competition and globalization, project success becomes even more critical to business performance, and yet many projects still suffer delays, overruns, and even failure. Ironically, however, risk management tools and techniques, which have been developed to improve project success, are used too little, and many still wonder how helpful they are. In this paper we present the results of an empirical study devoted to this question. Based on data collected on over 100 projects performed in Israel in a variety of industries, we examine the extent of usage of some risk management practices, such as risk identification, probabilistic risk analysis, planning for uncertainty and trade-off analysis, the difference in application across different types of projects, and their impact on various project success dimensions. Our findings suggest that risk management practices are still not widely used. Only a limited number of projects in our study have used any kind of risk management practices and many have only used some, but not all the available tools. When used, risk management practices seem to be working, and appear to be related to project success. We also found that risk management practices were more applicable to higher risk projects. The impact of risk management is mainly on better meeting time and budget goals and less on product performance and specification. In this case, we also found some differences according levels of technological uncertainty. Our conclusion is that risk management is still at its infancy and that at this time, more awareness to the application, training, tool development, and research on risk management is needed.     

Fuzzy Present Value Analysis Model For Evaluating Information System Projects

In this article, the economic evaluation of information system projects using present value is analyzed based on triangular fuzzy numbers. Information system projects usually have numerous uncertainties and several conditions of risk that make their economic evaluation a challenging task. Each year, several information system projects are cancelled before completion as a result of budget overruns at a cost of several billions of dollars to industry. Although engineering economic analysis offers tools and techniques for evaluating risky projects, the tools are not enough to place information system projects on a safe budget/selection track. There is a need for an integrative economic analysis model that will account for the uncertainties in estimating project costs, benefits, and useful lives of uncertain and risky projects. In this study, we propose an approximate method of computing project present value using the concept of fuzzy modeling with special reference to information system projects. This proposed model has the potential of enhancing the project selection process by capturing a better economic picture of the project alternatives. The proposed methodology can also be used for other real-life projects with high degree of uncertainty and risk.     

Subjective Performance Assessment of Innovation Projects*

Performance assessment of innovation projects is a central issue in innovation management research. Using existing literature, a model is developed to assess the performance of new product and new service development projects. In this model, project performance is defined as a combination of a formatively indicated operational performance construct and a reflectively indicated product performance construct. The validity of this model is tested based on a sample of 219 innovation projects assessed by innovation managers. Using only the innovation managers' responses, it is, however, not possible to distinguish between operational and product performance. The impact of common method bias and informant bias is subsequently assessed using a subsample of 128 of these 219 innovation projects that are assessed by the innovation manager and the project leader. These latter results show that operational and product performance are two distinct constructs. In addition, the multitrait–multimethod analyses show that especially the more abstract items of performance, such as the perceptions of quality, captured knowledge, competitive advantage, gained reputation, and customer satisfaction, suffer from random error and informant bias. Project leaders appear to be better informed to assess operational performance, while innovation managers are better in assessing product performance. The paper concludes with a qualitative comparison of several alternative performance models: the project performance model as derived from the literature, a similar (misspecified) reflective performance model, two stand‐alone models in which operational and product performance are assessed separately, and a mixed model that uses a combination of innovation managers' and project managers' data. Based on this comparison, it is advised to use either the stand‐alone models for operational performance and product performance or the mixed model whereby the project leader assesses operational performance and the innovation manager the product performance of an innovation project.     

New Product Development: Impact of Project Characteristics and Development Practices on Performance

Concurrent product development process and integrated product development teams have emerged as the two dominant new product development (NPD) “best practices” in the literature. Yet empirical evidence of their impact on product development success remains inconclusive. This paper draws upon organizational information processing theory (OIPT) to explore how these two dominant NPD best practices and two key aspects of NPD project characteristics (i.e., project uncertainty and project complexity) directly and jointly affect the NPD performance. Contrary to the “best practice” literature, the analysis, based on 266 NPD projects from three industries (i.e., automotive, electronics, and machinery) across nine countries (i.e., Austria, Finland, Germany, Italy, Japan, Korea, Spain, Sweden, and the United States), found no evidence of any direct impact of process concurrency or team integration on overall NPD performance. Instead, there is evidence of negative impact of the interaction between project uncertainty and concurrent NPD process and positive impact of the interaction between project complexity and team integration on overall NPD performance. Moreover, the study found no evidence of any direct negative impact of project uncertainty or complexity on overall NPD performance as suggested in the literature, but found evidence of a direct positive relationship between project complexity and overall NPD performance. The practical implications of these results are significant. First, neither process concurrency nor team integration should be embraced universally as best practice. Second, process concurrency should be avoided in projects with high uncertainty (i.e., when working with unfamiliar product, market, or technology). Finally, team integration should be encouraged for complex product development projects. For a simple product a loosely integrated team or a more centralized decision process may work well. However, as project complexity increases, team integration becomes essential for improved product development. There is no one‐size‐fits‐all solution for managing NPD projects. The choice of a product development practice should be determined by the project characteristics.     

生物制药项目价值评估方法研究

本文研究通过比较传统的净现值法、风险调整的净现值法以及实物期权法,研究在生物制药业项目开发阶段的价值评估的方法,说明风险调整的净现值法以及实物期权法是较好的研究生物制药项目价值评估的方法。     

Organizational structuring and project team structuring in integrated product development project

For a superior project result, integrated product development (IPD) project need to have stage-specific management approaches where the front-end structuring supports and strengthens the management of the project and the team during the execution stages. In the current study we focus on relationships on the organizational level variable during the front-end stage of the project, organizational structuring, with a project execution level variable, project team structuring to study the impact on product design glitches and project performance in the concurrent project environment. We hypothesize that managing the overall product development projects with integrated organizational structuring at the front stage and project team structuring during the development and project implementation stages can lead to reduced product glitches which can enhance the overall IPD project performance. We test our hypothetical model using data collected from the US automotive industry. Our data supports all the three proposed hypotheses. Discussion and implication of the empirical results, limitations of the current study, and recommendations for future studies are also provided.     

The influence of project novelty on the new product development process

In this paper we review the range of formal tools and techniques available to support the new product development process, and examine the use and usefulness of these by means of a survey of 50 projects in 25 firms. For each firm, we compare routine and novel development projects, and identify the influence of project novelty on the frequency of use and perceived usefulness of a range of different tools and methods. In terms of usefulness, focus groups, partnering customers and lead users and prototyping are all considered to be more effective for high novelty projects, and segmentation least useful. Cross-functional development teams are commonplace for all types of project, but are significantly more effective for the high novelty cases. In addition, many tools rated as useful are not commonly used, and conversely some tools in common use are considered to be of limited use.     

Person–project fit and R&D performance: a case study of Industrial Technology Research Institute of Taiwan

This study examined the relation between the research and development (R&D) performance and the fit between a researcher's cognitive type and the task demand of the project that was implied in Wang, Wu & Horng's (1999) study. Three hundred and eighteen research projects completed by 205 project leaders in the 3 years were classified into Unsworth's four creativity types along two dimensions: (1) whether the research addressed an open- or closed-ended problem and (2) whether the project was assigned or actively sought by the researcher. Each researcher's personal traits were assessed using Myers–Briggs Type Indicator (MBTI) and Kirton's Adaptor–Innovator Scale (KAI). Results show that researchers with a conforming, feeling, or judging-type cognition performed better with assigned projects for solving closed problems. Those with an originality and intuitive-type cognition performed better on self-initiated projects for solving open-ended problems. Researchers with sensing-type cognition performed better with assigned projects for solving open-ended questions. Thus, a careful match between a researcher's cognitive type and the task demand of project is important for R&D management.     

Organizing for Product Development Projects

How should companies organize to support the development of new products? Erik Larson and David Gobeli assessed the relative effectiveness of five different project management structures by comparing the performance of 540 development projects in terms of cost, schedule and technical performance. The findings contradict Peters and Waterman's popular conclusion that project teams are superior to matrix structures for developing new products and services. Both the balanced matrix and project matrix compared favorably with project teams in terms of cost, schedule and technical performance. Furthermore, the project matrix received a stronger recommendation from managers than the project team. Little support was found for either the functional or functional matrix approach to project management.     

Steady state and portfolio concept in R & D management

This paper describes a new approach for closing the gap between the tools for strategic goal management and operational management in Pharmaceutical R&D. The strategic level may concern with expectation of sales, rising from new products and with total R & D budget. The operational level concerns with project selection, project and multiproject management problems, solution of project related technical problems, determination of the size of the various functions and the functional management. This new method combines the R & D project portfolio management with a steady state concept allowing the attainment of a constant number of projects under development and a continuous full use of the capacity available.     

Systematic Design Methods and the Creative Performance of New Product Teams: Do They Contradict or Complement Each Other?

Can organizations exert control and provide structure for NPD activities while at the same time encouraging and managing creative performance? Any new product development (NPD) project requires some level of creative effort. In new product development, creative performance is of preeminent importance. Most NPD projects are executed with the NPD team as the organizational nucleus. As a result, managing creativity in NPD thus implies managing the creativity of NPD teams. Besides having to manage creative performance, companies are generally also concerned with improving the efficiency and effectiveness of the NPD process. Modern NPD projects therefore have the need for an approach that can be planned, optimized, and verified. As a consequence, systematic design methods have become widely used in NPD. In this article conceptual model is developed of the effect of modern design methodology on the creative performance of NPD teams. First, it is argued that the effect of systematic design methodology on NPD team creativity is mediated by the communication patterns of the NPD team. It is then proposed that four principles underlie modern design methodology: hierarchical decomposition, systematic variation, satisficing, and discursiveness. These principles affect NPD communication by, respectively, influencing the establishment of subgroups, the frequency of communication, the level of agreement or disagreement in the team, and the level of centralization of communication. Next, arguments are presented of how each of these four communicational characteristics shapes the creative performance of NPD teams. This second part of the conceptual model is tested empirically. This is done by studying the communication patterns in 44 NPD teams, employing social network analysis tools. These patterns of communication are then related to team‐level creative performance through a set of regression analyses. The main conclusion of the article is that the design principles work together and need to be considered as an integrated whole: the creative performance of NPD teams can only effectively be managed by using and aligning all four of them.     

Clarity of manager roles and performance of R&D multidisciplinary projects in matrix structures

The matrix structure recommends itself as a convenient framework for implementing cross-disciplinary projects. However, this structure tends to generate conflict between project and disciplinary managements. In excess, conflict can reduce performance. The aim of the work described in this paper was to see whether conflict could be controlled by better definition of the respective roles of project and functional managers.
The study was carried out in a large laboratory in Brazil. A group of project managers, responsible for 58 cross-disciplinary projects, quantified their perceptions of the strength of their responsibilities for ten management activities, via a specially devised questionnaire. A Clarity about Responsibilities Index (CRI) was constructed to represent the fraction of these activities each respondent felt responsible for. Project performance was measured according to four criteria, technical, cost, schedule and client satisfaction.
The results show that better technical performance was associated with higher role clarity; no significant association was found with the other performance measures. The author discusses the reasons for these results, the validity of the measures used and the generality of the conclusions.     

Definition of innovation projects in small firms: A Spanish study

Small and medium‐sized enterprises (SMEs) are the main holders of the European economy and innovation projects are essential tools for SMEs to ensure their growth. A high percentage of innovation projects implemented by SMEs lacks planning and initial management, which causes the appearance of important problems for the SMEs survival. The authors have confirmed with a field study of 72 Spanish small firms that a lot of these problems arise from an incomplete project definition, so it is necessary to help SMEs to have a specific methodology that is appropriate to their own characteristics and projects. The statistical analysis shows how the project management knowledge helps to a better project definition, contributing to the project alignment with the company strategy. Also, it reveals other problems related to the project definition as planning, budget, market and financing. Of this analysis, it concludes that the definition phase supports the other phases and is essential in order to achieve project success. This paper presents an ‘integration model of factors’ that helps SMEs in the management of the definition phase of their innovation projects. This model relates the various areas of analysis needed to ensure their integration at the project definition. The relationships between the different model areas have been defined, showing the way to integrate the technical, economic and strategic outlooks of project objectives management in the definition phase of the project. This model has been implemented in 21 new innovation project definitions. The users' valuation has been very positive with a 90.4% of success and all of the model users are interested in implementing the model again in next projects. The main advantages highlighted were user‐friendliness, intuitive model and easy application.     

工程项目交易方式研究综述

工程项目是国家实现固定资产投资的载体,也是实现产品结构和产业结构调整的重要途径,而工程项目交易方式对工程项目目标的实现有着重要意义.文章从工程项目交易方式对项目绩效的影响、工程项目交易方式选择的影响因素及工程项目交易方式选择方法3个方面,对工程项目交易方式国内外的研究现状进行了归纳和分析,为工程项目交易方式的进一步研究提供借鉴与指导.     

Innovation Management Practices Compared: The Example of Project‐Based Firms*

The importance of project‐based firms is increasing, as they fulfill the growing demands for complex integrated systems and knowledge‐intensive services. While project‐based firms are generally strong in innovating their clients' systems and processes, they seem to be less successful in innovating their own products or services. The reasons behind this are the focus of this paper. The characteristics of project‐based firms are investigated, how these affect management practices for innovation projects, and the influence of these practices on project performance. Using survey data of 203 Dutch firms in the construction, engineering, information technology, and related industries, differences in characteristics between project‐based and nonproject‐based firms are identified. Project‐based firms are distinguished from nonproject‐based firms on the basis of organizational configuration, the complexity of the operational process, and the project management capabilities of the firm. Project‐based firms also differ with regard to their level of collaboration and their innovation strategy, but not in the level of autonomy. A comparison of 135 innovation projects in 96 of the firms shows that project‐based firms do not manage their innovation projects different from other firms. However, the effects of specific management practices on project performance are different, particularly the effects of planning, multidisciplinary teams and heavyweight project leaders. Differences in firm characteristics provide an explanation for the findings. The implication for the innovation management literature is that “best” practices for innovation management are firm dependent.     

Empowering project scope decisions: introducing R&D content graphs

There have been several studies confirming the strategic and operational importance of choosing a proper project scope. There is a lack of empirically tested managerial tools to assist in this matter, and studies with longitudinally analysed R&D projects with respect to content are scarce. This article discusses the management of advanced engineering in the automotive industry. The study presents a structured approach where individual project leaders together with top management could prepare project material, discuss, visualize, and evaluate the content around a common tool. This tool, i.e. the R&D content graphs, facilitates project content selection, both during the start‐up and during the execution phase of the project. The studied project has been studied for nearly two years using an abductive case‐based research design. Since the project has been longitudinally studied, it has also been possible to test the graphs' predicting capabilities. The graphs are based on a visualization of the project content along five identified dimensions. The results reveal that the tools bring structure to project scope discussions, have some predictive value, and can also function as a vertical as well as a horizontal communication tool.     

Managing uncertain,complex product development in high‐tech firms: in search of controlled flexibility

This paper investigates ways of managing complexity and uncertainty in R&D simultaneously. Previous research on the subject indicates that these dimensions require different approaches, but these studies tend to provide suggestions either on managing complexity in stable industries or on handling uncertainty in less complex projects. In this paper, the two dimensions are studied simultaneously in three commercial product development projects at a firm that may be viewed as an extreme case of complexity and with multiple dimensions of uncertainty. The paper illustrates that a critical issue in this kind of high‐tech development is the search for and development of approaches that integrate and balance needs for formal organizational control with high levels of project flexibility. Four key elements of such integrated approaches are identified: hybrid formal systems, structured interaction in public arenas, transparent visual communication tools, and a system of participative reflection.     

Stakeholder analysis for R&D project management

R&D projects affect the interests of different stakeholders in different ways. Understanding the stakeholders and analysing their interests helps in the better management of R&D projects. In this paper we discuss a methodology to systematically analyse the stakeholders of R&D projects. This methodology includes Freeman's (1984) three levels of analysis: rational, process and transactional. Based on these three levels, the stakeholder management capability of an R&D project is determined. The final stage is based on Mitchell et al . (1997) approach to analysing the dynamics of stakeholders. This methodology is illustrated using a New Zealand case relating to a road pricing R&D project.     

工程造价改革助力中国海油中下游建设项目投资管控提升

随着工程造价市场化改革的不断深入,为更好发挥市场在资源配置中的决定性作用,近期住房和城乡建设部提出了我国工程造价改革方案,中国海洋石油集团公司积极响应.文章介绍了我国工程造价管理模式和计价模式的现状和中国海油中下游工程建设项目工程计价标准体系、工程造价定额体系和工程造价信息体系的建设现状,并从工程造价改革的主要任务改进...