Research On Small Project Management Management Essay
Over the last few decades, knowledge has been gathered and improved, advancements have been made at an extraordinary rate, market competition has increased and clients are more educated and demanding. Change is affecting all and has pushed companies and persons into a new found world of speed, cooperation and looking for ways for improvement. In such an environment, opportunities occur so quickly that many times firms realize when they have passed. Developments in various areas of life (global, technical, economical, and social) have happened so rapidly in the last 10 years that a more turbulent business environment has been produced as a result. From a global change point of view, the two main examples of change in regulator and government roles that have resulted in a new competitive climate are World Trade Organization proceeding with the General Agreement on Tariffs and Trade and European Economic Community coming together. The barriers between trades are falling while transactions across countries are increasing.
The changes and new ideas within I.T is the prime reason of the change within the world. The change in I.T came from the speedy development in hardware, software, networks, workstations, robotics and smart chips. I.T has delivered to us the internet, which has impacted the world hugely. Businesses in nearly every industry are looking for ways of reinventing themselves as an e-business. They are doing this by looking at ways to change their cost structures, the flow of information between enterprises, and even completely new ways of designing, manufacturing, selling, delivering and servicing their products.
Competition has not only increased but changed as the numbers of companies merging have risen with the barriers traditional held, fading. This has in turn created some huge players certain industries, and smaller players are taking advantage of the smaller areas in the market (Grayson 1992). At present, competition is at an international level and one superior performer has the ability to raise the competition limit world-wide.
In the last ten years, the world has seen a power shift and the previous thought that all customers are the same which has been a result of mass production and marketing has come to an end. Before there was no choice but now that there are choices as customers have easier access to information. The media, newspapers and information online have given the customers enough information to compare services, quality and prices world-wide. These developments in technology have created a considerable increase in customer awareness which in turn has heightened customer expectations when looking at the quality of products and services. Quality is already built into customer perception of value, and these expectations are expected to rise daily globally. Harrington and Harrington (Bose 2002) state that: "With intense competition in industry today, simply meeting or beating past performance will not result in the level of improvement necessary to remain competitive."
Organizations, in today’s world, deal with vertical integration, mergers, new technologies, diagnosis related groups, stockless or just-in-time distribution, captivated contracts, preferred provider organizations, total quality management (TQM), continuous improvement, business reengineering, and so on. In order to survive the next 10 years, organizations must re-think their structures, processes, products and markets.
They need to re-establish themselves to be customer focused, quicker to market, original, agile, flexible and be adaptable to handle quick change. This can be accomplished by constantly learning from others, benchmarking their product/service against the world’s best, establishing a knowledge management (KM) infrastructure to capitalize on and transfer best practices, adopting the new best practice and innovating to become word class (Camp 1998). This type of learning and copying or adapting from other companies’ best practices is both legal and ethical and virtually compulsory to gain future success.
1.2. Problem Statement
The growing trend towards smaller projects within the engineering and construction industry has many implications for project management. Organizations executing predominately small projects typically handle more numbers of estimates, procurements, and subcontracts. Tailoring large project practices to manage smaller projects is often less effective. Research seeking solutions to better project management for small projects has progressed in the past decade (Codling 1991).However; there is a lack of both a widely accepted definition and proven management practices for small projects.
In addition, the industry lacks a method to evaluate project performance and the implementation of project management practices for small projects. There has also been little research done to evaluate small project programs using empirical data with comparisons made to larger capital projects. Analysis of similarities and differences between small and large projects performance and characteristics will be beneficial to practitioners as well as contribute to the body of knowledge within the engineering and construction industry. The problem statement of this research is as follows:
A need exists to identify and develop a common definition for small projects based on empirical data. There also exists a need to develop a method to evaluate project performance and the implementation of project management practices for small projects.
1.3. Research Questions
The main objective of this research is to evaluate the impact and value of suggested project management practices on small project performance. In fulfilling this objective, related research questions are listed as follows:
1. Review existing research on small project management.
2. Provide a consensus definition of a small project for use in this research.
3. Provide project norms, i.e., statistical summaries, for project performance and practice use metrics from the data collected for this research.
4. Provide guidance to project practitioners for improved small project management.
1.4. Research Scope
This study focuses on capital projects completed within the past two years which fit the definition of a small project. Small projects, defined for this research, should have at least one or more of the following characteristics:
Total installed cost is between $100K and $5M
Any duration of 14 months or less
Any number of site work-hours up to 100,000
The project does not require full-time project management resources or a significant percentage of company resources
Any level of complexity
Any type of project including maintenance and expense projects. (CII, 2006)
Data from this research is collected using the CII Benchmarking & Metrics online system (BMM 2004). Participants are required to have sufficient knowledge of the benchmarking system by either completing CII Benchmarking Associates Training or an equivalent training conducted internally by trained company Benchmarking Associates. The data are collected through the questionnaire developed during this research investigation. Analysis is limited by the contents of the questionnaire, which contains leading performance indicators such as cost, schedule, change orders, and safety. Questionnaire data regarding the implementation of project management practices on small projects are also collected.
CHAPTER 2 LITERATURE REVIEW
2.1 Benchmarking History and Purpose
Benchmarking began in the early 1980’s when a company called Xerox developed a program to establish the performance targets for all their performed tasks so that they could have better quality products (Camp 1989). They called this the “benchmarking” of their company. Today all companies prefer to benchmark their performance so that they can compare themselves to other companies to see how well they are performing against them. Benchmarking therefore is the process that compares one’s performance against the performance of the best in that given industry.
Every business, regardless of whether it deals with construction, production or customer service requires to self-evaluate to determine if there are any deficiencies in their company. This then leads onto the first step in improving what is lacking. Benchmarking now is carried out in most companies and most projects to help identify their performance against to the best in their industry. It helps to recognise best practices, which when adopted, result in better project performance. At present, benchmarking is extensively used in the construction of industrial projects.
In recent years, an increasing number of companies are focusing on sharing knowledge and improvement in their workplaces in order to stay ahead of competition in their particular industries. Change has become a fundamental part of organizations which has to be eagerly accepted and applied. Opportunities come and go quickly and companies have to have the ability to respond by making correct decisions on time. There has been progress in the technology field and companies are trying to use up to date technology to reach economies of scale. There is a development and lean towards business re-engineering and quality management which leads companies restricting so that their quality can be improved (Ammons 1999). Businesses have become global which has led to an increase in competition both locally and internationally. Also clients have gained more education and demand. Because of this, every company is determined to gain a competitive advantage by exceeding in their levels of performance and service. To achieve this, many companies are relying on benchmarking as it is considered an effective marketing tool. It has become vital for businesses to develop best practice through benchmarking for their organizations (Bose 2002). Small and larger businesses are using benchmarking techniques to deal with the competitive pressures in today’s business world (BBC 1994).
Before proceeding to discuss the role of benchmarking in improving the performance of an organization, the paper will first discuss what is actually benchmarking and how it brings continuous improvement in the organization. It will discuss the steps and processes used to effectively benchmark a competitor who uses best practices. Then the paper will discuss the role of benchmarking in bringing about continuous improvement in the context of specific industries where the case of an organization is discussed.
2.1.1 What is benchmarking?
Benchmarking can be looked at as a method where an organization identifies its problems in its work practices and compares it with companies whose practices are deemed to be best (Camp 1998). The organization then understands these practices and attempts to adapt them in their working to enable them to attain competitive advantage. In order for best practices to be adopted, the business processes need to be similar of both organizations. Benchmarking is a ground breaking concept which gained momentum in the 1990s in particular for the industrial sector. It began when Xerox Corporation started to lose its business to Japanese competitors. Xerox scrutinized their competitive practices so that Xerox could adopt the same. Therefore when benchmarking, similar operations are analyzed so that the company can operate on competitive grounds (Codling 1991). The primary principle behind benchmarking is to meet the increase of demands and needs of customers by improving company products and services. At first benchmarking was mainly used in the manufacturing field but later on it spread to the business and management field. Now this concept is applied to nearly every field and operation from finance to growing crops on an agriculture land (Cheng 1999).
The figure below shows how benchmarking works in any organization to being internal and external changes.
Fig 2.1 Benchmarking Methodology
• Industry leaders
• Top performers with
• Top performers
regardless of industry
• Aggressive innovators
• Top performers
• Top facilities
Source: Yasin, M.M and Zimmerer, T. W. (1995), The role of benchmarking in achieving continuous service quality, International Journal of Contemporary Hospitality Management, 7(4), 27-32.
2.2 Importance as a tool for continuous performance improvement
Benchmarking is basically a tool of strategic management where the organization first analyses it’s various aspects and then compares with other selected organizations which excel over the same business processes. Following this, a plan is developed by the company to adopt those successful practices to carry out the business processes so the business achieves efficiency and superior performance. Since benchmarking is an ongoing process of comparing practices of one organization to another, it is often used for continuous improvement of practices. The objective to adopt these practices in order to become a competitive and global market leader is kept in mind throughout the benchmarking process. This results in quality and service improvement since better processes are used to deliver them (Elmuti 1998). The best organization is decided and then it is established as a standard to which other organizations (both in the same and outside the industry) compare their practices. One misunderstanding relating to benchmarking is that organizations can only be compared within their own sectors as comparing outside means that the business processes used will be different. To argue this point, there are some business processes that are common to all industries and these can be benchmarked by establishing the standards in the different industries (Fisher 1996).
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