Procurement in Project Implementation

Tutkimus keskittyy hankintatoimen kehittämiseen osana laitosprojektien toteutusta. Työ pohjautuu empiiriseltä taustaltaan Pöyry Oyj:n projektiliiketoimintaan ja työn tarkastelunäkökulmaksi onvalittu projektihallinnosta vastaavan yrityksen näkökulma. Tutkimus on hyvin käytännönläheinen ¿ se lähtee hankinnan ja sen seurannan ongelmista ja pyrkii tarjoamaan niihin uudenlaisia ratkaisuja. Pohjimmiltaan tutkimus kuuluu teollisuustalouden piiriin, vaikka tietojärjestelmätieteellä on vahva tukirooli. Työn tavoitteet ja tulokset liittyvät teollisuustaloudelle ominaisesti yrityksen toiminnan kehittämiseen, käytetyt välineet ja ratkaisut puolestaan hyödyntävät tietojärjestelmätieteen antamia mahdollisuuksia. Tutkimuksessa on käytetty konstruktiivista tutkimusotetta, jonka mukaisesti on luotu innovatiivisia konstruktioita ratkaisemaan aitoja reaalimaailman ongelmia ja tätä kautta tuotettu kontribuutioita teollisuustaloudelle. Tavoitteena oli järjestää hankintatoimi ja sen seuranta suurissa laitosprojekteissa tehokkaammin. Tätä varten uudistettiin ensin projektihallinnon ja hankintatoimen toimintaohjeet vastaamaan paremmin nykyajan vaatimuksia. Toimintaohjeiden perusteella ryhdyttiin toteuttamaan hankintaohjelmistoa, joka pystyisi kattamaan kaikki toimintaohjeissa kuvatut piirteet. Lopulta hankintaohjelmisto toi mukanaan uusia piirteitä projektihallintoon ja hankintatoimeen ja nämä sisällytettiin toimintaohjeisiin. Tähän kehitystyöhön ryhdyttiin, jotta laitosprojektien projektihallinto ja hankintatoimi toimisivat paremmin, eli pienemmin kustannuksin tuottaen projekteissa tarvittavat tulokset nopeammin, tarkemmin ja laadukkaammin. Tutkimuksella on kolmenlaisia tuloksia: hankintatoimen parannetut metodit, hankintaohjelmiston pohjana olevat toiminta- ja laskentamallit sekä implementaationa hankintasovellus. Uudistetut projekti- ja hankintaohjeet kuvaavat hankintatoiminnan parannettuja metodeja. Hankintaohjelmistoasuunnitellessa ja kehitettäessä tehdyt kuvaukset sisältävät uusia malleja niin hankintaprosessille kuin hankinnan seuraamiseksi suurissa laitosprojekteissa. Itse ohjelmisto on tuloksena implementaatio, joka perustuu parannettuihin hankintametodeihin ja uusiin toiminta- ja laskentamalleihin. Uudistetut projekti- ja hankintaohjeet ovat olleet käytössä Pöyry Oyj:ssä vuodesta 1991. Vuosien varrella nämä toimintaohjeet ovat auttaneet ja tukeneet satojen laitosprojektientoteutusta ja ylläpitäneet Pöyry Oyj:n kilpailukykyä kansainvälisenä projektitalona. Hankintasovellus puolestaan on ollut käytössä useissa projekteissa ja sen on havaittu pienentävän hankintatoimen suoria työkustannuksia laitosprojekteissa. Sovelluksen katsotaan myös tuovan epäsuoria kustannussäästöjä parempien hankintapäätösten muodossa, mutta näiden säästöjen suuruutta ei pystytä luotettavasti arvioimaan.

Project Success through Effective Decisions: Case Studies on Project Goal Setting, Success Evaluation and Managerial Decision Making

The objective of the thesis is to structure and model the factors that contribute to and can be used in evaluating project success. The purpose of this thesis is to enhance the understanding of three research topics. The goal setting process, success evaluation and decision-making process are studied in the context of a project, business unitand its business environment. To achieve the objective three research questionsare posed. These are 1) how to set measurable project goals, 2) how to evaluateproject success and 3) how to affect project success with managerial decisions.The main theoretical contribution comes from deriving a synthesis of these research topics which have mostly been discussed apart from each other in prior research. The research strategy of the study has features from at least the constructive, nomothetical, and decision-oriented research approaches. This strategy guides the theoretical and empirical part of the study. Relevant concepts and a framework are composed on the basis of the prior research contributions within the problem area. A literature review is used to derive constructs of factors withinthe framework. They are related to project goal setting, success evaluation, and decision making. On the basis of this, the case study method is applied to complement the framework. The empirical data includes one product development program, three construction projects, as well as one organization development, hardware/software, and marketing project in their contexts. In two of the case studiesthe analytic hierarchy process is used to formulate a hierarchical model that returns a numerical evaluation of the degree of project success. It has its origin in the solution idea which in turn has its foundation in the notion of projectsuccess. The achieved results are condensed in the form of a process model thatintegrates project goal setting, success evaluation and decision making. The process of project goal setting is analysed as a part of an open system that includes a project, the business unit and its competitive environment. Four main constructs of factors are suggested. First, the project characteristics and requirements are clarified. The second and the third construct comprise the components of client/market segment attractiveness and sources of competitive advantage. Together they determine the competitive position of a business unit. Fourth, the relevant goals and the situation of a business unit are clarified to stress their contribution to the project goals. Empirical evidence is gained on the exploitation of increased knowledge and on the reaction to changes in the business environment during a project to ensure project success. The relevance of a successful project to a company or a business unit tends to increase the higher the reference level of project goals is set. However, normal performance or sometimes performance below this normal level is intentionally accepted. Success measures make project success quantifiable. There are result-oriented, process-oriented and resource-oriented success measures. The study also links result measurements to enablers that portray the key processes. The success measures can be classified into success domains determining the areas on which success is assessed. Empiricalevidence is gained on six success domains: strategy, project implementation, product, stakeholder relationships, learning situation and company functions. However, some project goals, like safety, can be assessed using success measures that belong to two success domains. For example a safety index is used for assessing occupational safety during a project, which is related to project implementation. Product safety requirements, in turn, are connected to the product characteristics and thus to the product-related success domain. Strategic success measures can be used to weave the project phases together. Empirical evidence on their static nature is gained. In order-oriented projects the project phases are oftencontractually divided into different suppliers or contractors. A project from the supplier's perspective can represent only a part of the ¿whole project¿ viewed from the client's perspective. Therefore static success measures are mostly used within the contractually agreed project scope and duration. Proof is also acquired on the dynamic use of operational success measures. They help to focus on the key issues during each project phase. Furthermore, it is shown that the original success domains and success measures, their weights and target values can change dynamically. New success measures can replace the old ones to correspond better with the emphasis of the particular project phase. This adjustment concentrates on the key decision milestones. As a conclusion, the study suggests a combination of static and dynamic success measures. Their linkage to an incentive system can make the project management proactive, enable fast feedback and enhancethe motivation of the personnel. It is argued that the sequence of effective decisions is closely linked to the dynamic control of project success. According to the used definition, effective decisions aim at adequate decision quality and decision implementation. The findings support that project managers construct and use a chain of key decision milestones to evaluate and affect success during aproject. These milestones can be seen as a part of the business processes. Different managers prioritise the key decision milestones to a varying degree. Divergent managerial perspectives, power, responsibilities and involvement during a project offer some explanation for this. Finally, the study introduces the use ofHard Gate and Soft Gate decision milestones. The managers may use the former milestones to provide decision support on result measurements and ad hoc critical conditions. In the latter milestones they may make intermediate success evaluation also on the basis of other types of success measures, like process and resource measures.

Factors of customer project profitability in an engineering industrial enterprise

The purpose of the study is to find factors affecting projects' profitability in project business. The issue is approached from customer profitability and project management point of view. The study has been made for a big Finnish company acting in a global market place. The research method is quantitative. Research hypotheses are based on the literature. The used database is originated from the company's ERP- (enterprise resource planning) and project financial follow-up —system. The findings of the study supported the hypotheses weakly. Obviously profitability fluctuated depending on a customer and a project manager. The reasons could not be justified with the variables used in the research.

Management of Nitrogen Oxides Reduction Project in a Cement Plant

The main aim of this study was to develop the project management framework model which would serve as the new model to follow for upcoming projects at the Lappeenranta cement plant. The other goal was to execute the SNCR (selective non catalytic reduction) project successfully so that the nitrogen oxides emissions are below the stated emission limit when the new emission limit comes into effect beginning in July, 2008. Nitrogen oxides, project management aspects, SNCR and the invested system are explained in the theory part. In the practical part of the study, the SNCR project in the Lappeenranta cement plant was executed and the findings were documented. In order to reach the aim of this study, a framework of project management was made. The framework is based on the executed SNCR project, previous projects in the cement plant and on the available literature relating to the subject matter. The developed project turned out to be successful.

The Present State and Future Prospects of a Manpower Pool as Part of Project Business

This research focused on operation of a manpower pool within a service business unit in Company X and aimed to identify how the operation should be improved in order to get most out of it concerning the future prospects of the service business unit. This was done by analyzing the current state of the manpower pool related operations in means of project business, project management and business models. The objective was to deepen the understanding and to highlight possible areas of improvement. The research was conducted as a qualitative single-case study utilizing also an action research method; the research approach was a combination of conceptual, action-oriented and constructive approaches. The primary data was collected with executing a comprehensive literature review and semi-structured theme interviews. The main results described how the manpower pool operates as part of the service business unit in project business by participating in different types of delivery projects; process flows for the project types were mapped. Project management was analyzed especially from the resource management point of view, and an Excel-based skills analysis model was constructed for this purpose. Utilization of operational business models was also studied to define strategic direction for development activities. The results were benchmarked against two competitors in order to specify lessons to be learnt from their use of operational business models.

Project Resource Management in R&D Public Sector Organization

In R&D organizations multiple projects are executed concurrently. Problems arises in managing shared resources since they are needed by multiple projects simultaneously. The objective of this thesis was to study how the project and resource management could be developed in a public sector R&D organization. The qualitative research was carried out in the Magnetic Measurements section at CERN where the section measures magnets for particle accelerators and builds state of the art measurement devices for various needs. Hence, the R&D and measurement projects are very time consuming and very complex. Based on the previous research and the requirements from the organization the best alter- native for resource management was to build a project management information system. A centralized database was constructed and on top of it was built an application for interacting and visualizing the project data. The application allows handling project data, which works as a basis for resource planning before and during the projects are executed. It is one way to standardize the work-flow of projects, which strengthens the project process. Additionally, it was noted that the inner customer’s database, the measurement system and the new application needed to be integrated. Further integration ensures that the project data is received efficiently from customers and available not only within the application but also during the concrete work. The research results introduced a new integrated application, which centralizes the project information flow with better visibility.

Definition of an it project portfolio management methodology for a pharmaceutical company

Con la creciente popularidad de las soluciones de IT como factor clave para aumentar la competitividad y la creación de valor para las empresas, la necesidad de invertir en proyectos de IT se incrementa considerablemente. La limitación de los recursos como un obstáculo para invertir ha obligado a las empresas a buscar metodologías para seleccionar y priorizar proyectos, asegurándose de que las decisiones que se toman son aquellas que van alineadas con las estrategias corporativas para asegurar la creación de valor y la maximización de los beneficios. Esta tesis proporciona los fundamentos para la implementación del Portafolio de dirección de Proyectos de IT (IT PPM) como una metodología eficaz para la gestión de proyectos basados en IT, y una herramienta para proporcionar criterios claros para los directores ejecutivos para la toma de decisiones. El documento proporciona la información acerca de cómo implementar el IT PPM en siete pasos, el análisis de los procesos y las funciones necesarias para su ejecución exitosa. Además, proporciona diferentes métodos y criterios para la selección y priorización de proyectos. Después de la parte teórica donde se describe el IT PPM, la tesis aporta un análisis del estudio de caso de una empresa farmacéutica. La empresa ya cuenta con un departamento de gestión de proyectos, pero se encontró la necesidad de implementar el IT PPM debido a su amplia cobertura de procesos End-to-End en Proyectos de IT, y la manera de asegurar la maximización de los beneficios. Con la investigación teórica y el análisis del estudio de caso, la tesis concluye con una definición práctica de un modelo aproximado IT PPM como una recomendación para su implementación en el Departamento de Gestión de Proyectos.

Commercial management in project-based organisations

The term commercial management has been used for some time, similarly the job title commercial manager. However, as of yet, little emphasis has been placed on defining. This paper presents the findings from a two-year research initiative that has compared and contrasted the role of commercial managers from a range of organisations and across industry sectors, as a first step in developing a body of knowledge for commercial. It is argued that there are compelling arguments for considering commercial management, not solely as atask undertaken by commercial managers, but as a discipline in itself: a discipline that, arguably, bridges traditional project management and organisational theories. While the study has established differences in approach and application both between and within industry sectors, it has established sufficient similarity and synergy in practice to identify a specific role of commercial management in project-based organisations. These similarities encompass contract management and dispute resolution; the divergences include a greater involvement in financial and value management in construction and in bid management in defence/aerospace.

Project portfolio management: an analysis from the insurance industry IT area

This paper aims to bring more information related to the critical question "how IT areas of insurance companies are defining and delivering their strategic initiatives Portfolios?" and make conclusions based on the collected data. To reach these interpretations, it is composed of a theoretical investigation on the theme, a strategy delineation for the research methodology and a conclusion presentation based on the findings. In this last part, this study concluded that explored organization does not applied a sufficient number of best practices answering the critical question as "the company is not mature on this subject".

Competence Monitoring in Project Teams by using Web based portfolio management systems

This paper reports a learning experience related to the acquisition of project management competences. Students from three different universities and backgrounds, cooperate in a common project that drives the learning-teaching process. Previous related works on this initiative have already evaluated the goodness of this multidisciplinary, project-based learning approach in the context of a new educative paradigm. Yet the innovative experience has allowed the authors to define a rubric in order to measure specific competences in project management. The study shows the rubric’s main aspects as well as competence acquisition evaluation alternatives, based in the metrics defined. Key indicators and specific reports obtained from data base fields in the web tool will support this work. As a result, new competences can be assessed, such ones like teamwork, problem solving, communication and leadership. Final goal is to provide an overall competence map to the students at the same time they improve their skills.

Marco de trabajo para adaptar las metodologías ágiles e implantarlas a nivel organizacional

Contexto: La adopción y adaptación de las metodologías ágiles ha sido objeto de estudio en la comunidad y diversas aproximaciones han sido propuestas como solución al problema. La mayoría de las organizaciones comienzan introduciendo prácticas ágiles de manera progresiva, las cuales, junto a las buenas prácticas ya existentes, conforman una nueva metodología ágil adaptada. El problema más importante con el que se enfrentan las organizaciones al adaptar una metodología ágil, son las necesidades específicas del contexto de cada proyecto, porque a pesar de haber definido la adaptación de la metodología en base a las buenas prácticas y procesos existentes en la organización, las condiciones particulares del proyecto y del equipo que lo va a desarrollar, exigen adaptaciones específicas. Otro aspecto importante a resolver es el poder implantar esta adopción y adaptación en toda la organización. Las metodologías ágiles no incluyen actividades que asistan a las organizaciones a solucionar este problema, porque su esfuerzo lo centran en el equipo y el proyecto. Objetivo: El objetivo principal de este trabajo de investigación consiste en “definir un marco de trabajo de adaptación de metodologías ágiles orientado a contextos que permita su implantación en toda la organización a través de ciclos de mejora basados en la reutilización de experiencias adquiridas”. Este marco de trabajo permitirá organizar, gestionar y validar la adaptación de las metodologías ágiles, desplegando en toda la organización las experiencias adquiridas, incorporando pequeñas mejoras en el proceso, y facilitando su reutilización. Todo esto, con el apoyo de la alta dirección. Método: Este trabajo se inició con una investigación exploratoria acompañada de una revisión sistemática para conocer el estado del arte del objeto de estudio, detectando las principales carencias y necesidades de resolución, a partir de las cuales, se delimitó el alcance del problema. Posteriormente, se definieron las hipótesis de investigación y se planteó una solución al problema a través de la definición del marco de trabajo, cuyos resultados fueron evaluados y validados a través de la realización de un caso de estudio. Finalmente, se obtuvieron las conclusiones y se establecieron las líneas futuras de investigación. Resolución: El marco de trabajo presenta una alternativa de adaptación de las metodologías ágiles orientada a contextos, y facilita su implantación en toda la organización. El marco de trabajo idéntica los contextos en los que se desarrollan los proyectos y analiza la causa de los problemas que afectan a la consecución de los objetivos de negocio en cada contexto. Posteriormente, identifica las acciones de adaptación requeridas para reducir o eliminar estas causas y las incorpora en la definición de la metodología ágil, creando de esta manera, una metodología adaptada para cada contexto manteniendo un nivel de agilidad aceptable. Cuando se inicia un nuevo proyecto, se identifica su contexto y se aplica la metodología ágil adaptada definida para dicho contexto. Al final de cada iteración, se analizan las medidas obtenidas y se las compara con la media aplicando una técnica para la evaluación de la consecución de los objetivos. En base a esta comparativa, y a la experiencia adquirida por el equipo, se realizan ajustes en las acciones de adaptación para intentar conseguir una mejora en la siguiente iteración. Una vez finalizado el proyecto, se conoce el impacto de los resultados conseguidos y se puede determinar si se ha alcanzado una mejora en el contexto del proyecto. De ser así, la metodología adaptada es almacenada en un repositorio de experiencias para poder ser reutilizada por otros equipos de desarrollo de la organización. Resultados: El trabajo de investigación fue evaluado y validado satisfactoriamente a través de su experimentación en un caso de estudio, aprobando las hipótesis establecidas. Los aportes y principales resultados de esta investigación son: Definición de un marco de trabajo integral de adaptación de metodologías ágiles, con capacidad de facilitar su implantación en toda la organización. Procedimiento para identificar contextos o escenarios de adaptación. Procedimiento para definir unidades de adaptación a partir de los inhibidores de los objetivos de negocio de la organización. Técnica para analizar la consecución de objetivos en propuestas de mejora de procesos. Conclusiones: Son tres las ventajas principales que han quedado evidenciadas durante la realización del trabajo de investigación: El marco de trabajo proporciona un mecanismo capaz de optimizar el rendimiento de la metodología ágil adaptada al orientar el proceso a las necesidades específicas del contexto del proyecto. El marco de trabajo permite conservar el conocimiento empírico adquirido por el equipo de desarrollo al registrarlo como experiencia adquirida para la organización. El marco de trabajo optimiza y reduce los tiempos del proceso de implantación de la metodología ágil adaptada en otros equipos de la organización. ABSTRACT Context: The adoption and tailoring of agile methods has been studied in the community and various approaches have been proposed as a solution. Most organizations start introducing agile practices gradually, which ones, together with existing good practices, make a new agile method tailored. When an organization starts to adapt an agile method, the context-specific needs of each project are the main trouble, because even though the agile method tailored has been defined based on best practices and processes in the organization, the specific conditions of the project and its team, require specific adaptations. Another important aspect to be solved is to implement this adoption and adaptation throughout all the organization. Agile methods do not include specific activities for helping organizations to solve this problem, because their effort is focused on the team and the project. Objective: The main objective of this research is to “define a tailoring framework for agile methods oriented to contexts that allows its deployment throughout all the organization using improvement cycles based on the reuse of lessons learned”. This framework will allow organize, manage and validate the tailoring of agile methods, adding small improvements in the process, and facilitating reuse. All this, with the support of senior management. Method: This work began with an exploratory investigation accompanied by a systematic review to determine the state of the art about the object of study, after major gaps and needs resolution were identified, and the scope of the problem was delimited. Subsequently, the research hypotheses were defined and the framework was developed for solving the research problem. The results were evaluated and validated through a case study. Finally, conclusions were drawn and future research were established. Resolution The framework presents an alternative for tailoring agile methodologies and facilitates its implementation throughout all the organization. The framework identifies the contexts or scenarios in which software development projects are developed and analyses the causes of the problems affecting the achievement of business goals in each context. Then the adaptation actions required to reduce or eliminate these causes are defined and incorporated into the definition of agile method. Thus, a method tailored for each context is created. When a new project is started, the context in which it will be developed is identified and the tailored agile method to that context is applied. At the end of each iteration of the project, the measurements obtained are analysed and compared with the historical average of context to analyse the improvement in business goals. Based on this comparison, and the experience gained by the project team, adjustments are made in adaptation actions to try to achieve an improvement in the next iteration. Once the project is completed, the impact of the achieved results are known and it can determine if it has reached an improvement in the context of the project. If so, the tailored agile method is stored in a repository of experiences to be reused by other development teams in the organization. Results The goal of this research was successfully evaluated and validated through experimentation in a case study, so the research hypotheses were approved. The contributions and main results of this research are: A framework for tailoring agile methods, that allows its deployment throughout all the organization. A procedure for identifying adaptation scenarios or contexts. A procedure for defining adaptation units from inhibitors of the business goals of the organization. A technique for analysing the achievement of goals in process improvement proposals. Conclusions: There are three main advantages that have been highlighted during the research: The framework provides a mechanism to optimize the performance of agile methods because it guides the process based on the specific needs of the project context. The framework preserves the empirical knowledge acquired by the development team because it registers this empirical knowledge as experience for the organization. The framework streamlines and shortens the process of deploying the tailored agile method to other teams in your organization.

Project risk management:a combined analytic hierarchy process and decision tree approach

Time, cost and quality achievements on large-scale construction projects are uncertain because of technological constraints, involvement of many stakeholders, long durations, large capital requirements and improper scope definitions. Projects that are exposed to such an uncertain environment can effectively be managed with the application of risk management throughout the project life cycle. Risk is by nature subjective. However, managing risk subjectively poses the danger of non-achievement of project goals. Moreover, risk analysis of the overall project also poses the danger of developing inappropriate responses. This article demonstrates a quantitative approach to construction risk management through an analytic hierarchy process (AHP) and decision tree analysis. The entire project is classified to form a few work packages. With the involvement of project stakeholders, risky work packages are identified. As all the risk factors are identified, their effects are quantified by determining probability (using AHP) and severity (guess estimate). Various alternative responses are generated, listing the cost implications of mitigating the quantified risks. The expected monetary values are derived for each alternative in a decision tree framework and subsequent probability analysis helps to make the right decision in managing risks. In this article, the entire methodology is explained by using a case application of a cross-country petroleum pipeline project in India. The case study demonstrates the project management effectiveness of using AHP and DTA.

Integrated approach to healthcare quality management:a case study

Purpose - The purpose of the paper is to develop an integrated quality management model, which identifies problems, suggests solutions, develops a framework for implementation and helps evaluate performance of health care services dynamically. Design/methodology/approach - This paper uses logical framework analysis (LFA), a matrix approach to project planning for managing quality. This has been applied to three acute healthcare services (Operating room utilization, Accident and emergency, and Intensive care) in order to demonstrate its effectiveness. Findings - The paper finds that LFA is an effective method of quality management of hospital-based healthcare services. Research limitations/implications - This paper shows LFA application in three service processes in one hospital. However, ideally this is required to be tested in several hospitals and other services as well. Practical implications - In the paper the proposed model can be practised in hospital-based healthcare services for improving performance. Originality/value - The paper shows that quality improvement in healthcare services is a complex and multi-dimensional task. Although various quality management tools are routinely deployed for identifying quality issues in health care delivery and corrective measures are taken for superior performance, there is an absence of an integrated approach, which can identify and analyze issues, provide solutions to resolve those issues, develop a project management framework (planning, monitoring, and evaluating) to implement those solutions in order to improve process performance. This study introduces an integrated and uniform quality management tool. It integrates operations with organizational strategies. © Emerald Group Publishing Limited.

Project risk management using multiple criteria decision-making technique and decision tree analysis:a case study of Indian oil refinery

This study proposes an integrated analytical framework for effective management of project risks using combined multiple criteria decision-making technique and decision tree analysis. First, a conceptual risk management model was developed through thorough literature review. The model was then applied through action research on a petroleum oil refinery construction project in the Central part of India in order to demonstrate its effectiveness. Oil refinery construction projects are risky because of technical complexity, resource unavailability, involvement of many stakeholders and strict environmental requirements. Although project risk management has been researched extensively, practical and easily adoptable framework is missing. In the proposed framework, risks are identified using cause and effect diagram, analysed using the analytic hierarchy process and responses are developed using the risk map. Additionally, decision tree analysis allows modelling various options for risk response development and optimises selection of risk mitigating strategy. The proposed risk management framework could be easily adopted and applied in any project and integrated with other project management knowledge areas.