Introduction
Nowadays, decentralized operations and projects are a reality in industrial and business environments. One-of-a-kind and make-to-order companies have been concentrating on their core businesses, which have increased the number of parties involved in the product delivery process. This trend toward resources dispersed across several geographical locations or organizations creates new challenges and constraints in project management, in addition to increasing the demands for better project management (Hameri, Høimyr, & Kilde, 1998).
Projects that are geographically and/or organizationally distributed display some inherited special characteristics that make them particularly challenging to plan, manage, and execute. New project management approaches are constantly appearing in these geographically and/or organizationally distributed environments. The CoDisCo project is aimed at finding the best of these project management practices. The results of the project, the descriptions of these best practices, are intended to serve as inspiration to those that are interested in improving the management of distributed projects.
The following sections will provide a more detailed description of the CoDisCo project and its results.
The CoDisCo project
CoDisCo, an acronym for the title Connecting Distributed Competencies, is a distributed research project aimed at identifying and describing best practices, both managerial and tool-related, in connecting distributed competencies in such a way that the end-product is delivered on time, with the right quality, with reliable documentation, and within the planned budget frame.
The CoDisCo project has benchmarked, developed and implemented methods and tools for managing distributed design processes involving, in addition to project management, product data management and Internet based solutions.
CoDisCo is a joint Nordic project with world-leading companies as participants. The consortium of the project consists of IGP/NSP (N), Aker Finnyards (FIN), Logimatic AS (DK), Hönnun og Rá∂gjöf (IS), Kockums Computer Systems (SWE), Helsinki Institute of Physics-HIP (FIN), CERN European Laboratory for Particle Physics (CH) and SINTEF Industrial Management (N).
The CoDisCo project is financed by the Nordic Industrial Fund and by the respective contributions of the participants, with a duration of two years (September 1998–September 2000).
The CoDisCo project has the following main goals:
• Benchmarking best practices of distributed design processes and project management.
• Establishing managerial guidelines and documenting the configuration management processes needed to manage distributed projects, with special emphasis on the specification of the user requirements for distributed product data management.
• Testing of the Internet and WWW based applications in industrial pilot projects to fulfill communication and information sharing needs in distributed projects.
• Industrial follow-up to redefine the processes and to document the feedback from companies, together with the dissemination of the project result to other Nordic companies.
Benchmarking of Project Management Processes
One of the work packages of the CoDisCo project is concerned with a benchmarking study of a number of distributed projects in order to identify best practices in project management processes. This work package commenced in the fall of 1998 and will run till the middle of the year 2000.
Exhibit 1. The Benchmarking Wheel
Introduction to the Benchmarking Concept and Process
The following operational definition of benchmarking can briefly enlighten the concept: “Benchmarking is the process of continuously measuring and comparing one's business processes against comparable processes in leading organizations to obtain information that will help the organization identify and implement improvements” (Andersen & Pettersen, 1995). In other words, benchmarking is about learning from others in order to improve the results of one's own company. However, in this case, the purpose is to identify overall best practices in managing distributed projects.
There exist a number of different benchmarking models, most of which are quite similar in approach. The Benchmarking Wheel has been selected as the benchmarking model to be used in CoDisCo, see Exhibit 1 (Andersen, 1995). This exhibit describes the five phases to be performed in a standard benchmarking study.
Benchmarking Applied to Project Management Processes
The following sections provide an overview of the benchmarking study of distributed project management processes carried out in the CoDisCo project.
The First Phase: Planning
Four project management areas or processes that determine much of the project's performance and success are project time management, project cost management, project risk management and project quality management. Since these areas also require a strong degree of coordination among involved project participants and across geographic locations, they are even more important in distributed projects than in uni-locational or uni-organizational projects and therefore were the processes benchmarked in CoDisCo.
The Second Phase: Searching for Benchmarking Partners
The identification of relevant and suitable benchmarking partners was carried out through the connections of the consortium and general literature search. In this way, best practice projects and companies have been identified. Six companies in different countries in Europe and in USA with distributed projects have been involved. Three or four benchmarking partners were involved for each project management process that was benchmarked. This number gives a good balance between cost and quality of the information.
The Third Phase:Observing
The purpose of the observation phase was to study and understand the practices of the benchmarking partners when performing the five project management processes. For this purpose, a benchmarking methodology based on the benchmarking wheel has been developed. The methodology consists of methods for data acquisition and analysis techniques that have also been adapted to each of the four selected processes. Following the guidelines from the benchmarking methodology, face-to-face interviews were performed as the main method to collect the information. A questionnaire including qualitative questions was designed for this purpose. The benchmarking partners received an advance a copy of this questionnaire together with relevant information regarding benchmarking.
The Fourth Phase: Analyzing
The analysis of the collected information to identify gaps in performance among the projects, in addition to the practices that contribute to the gaps, was executed and good practices were identified. These practices are described further on in this article.
The Fifth Phase: Adapting
The benchmarking study's output is a benchmarking report that describes the identified good practices. The report will feed the other work packages in the CoDisCo project with the purpose of improving the general management of distributed projects. This report will be available for selling in August 2000.
Identified Good Practice
It would be pretentious to claim that the good practices identified through the benchmarking of six companies are the best practices. Therefore it has been decided to say “good practice” instead for “best practice.” The following sections provide an overview of good practices identified through the benchmarking study of distributed project management processes carried out in the CoDisCo project.
General Good Practice Regarding Project Management
Communication and Project Team Building
The first, and maybe the most obvious, challenge when working distributed, is the stretched communication lines. The Internet software solutions offered today would help to shorten these lines. Co-workers can really be co-workers even with thousands of miles separating them. There is no doubt that technology can help us meet the first challenge, but then again, we find some new challenges. Challenge number two is to create a team out of separated individuals or small groups. Team processes are essential to optimize project management in general. So then, how do we facilitate team processes within such a team—a “tele-team”?
A team consists of a number of human beings, and human beings have a basic need for communication in order to function in a group. Hence the group will not work properly if the communication is poor. Furthermore, optimum communication relies heavily on social relations between the individual team members. In addition, the team building becomes more difficult when the members are distributed. Small misunderstandings in the exchange of information can appear and make it even more difficult. Running workshops and spending some days together periodically contributes positively to teambuilding.
If the project were distributed within the organization (several locations), the same structure and common training in all the departments would provide a common environment for project participants, which in turn facilitates the communication.
Repositories of Data
Many processes within project management are based on historical information and experience. The way of keeping and the availability of the information needed to manage the project are crucial for the success of the project and other future projects. A good way of keeping that valuable historical information regarding project management is in structured, user-friendly databases. The risk of loosing the information contained in the minds of people is in this way minimized. Special attention is paid to updating data after a validity check when the project is concluded, and to the degree of detail.
Retrieving vs. Sending Information
The information needed to manage a project when working distributed should be available in a common place (server, web). In order to get the information, one has to retrieve it, in this way minimizing the traffic of information. On the other hand, strong self-discipline and good information about where, when and how the information can be retrieved, is needed to achieve good results.
Supposing vs. Asking in Project Planning / Trust vs. Control in Project Follow-Up
The distribution of the project and involvement of parts in different countries or organizations give rise to different business processes in the different organizations or in the same organization in different countries, and different cultures and languages when different countries are involved.
Special considerations due to that fact are taken when planning the project by keeping a dubious attitude, that is to say, by asking as much as possible instead of assuming. When controlling the project, special considerations are taken in form of more precautions (further investigation, onsite control).
Educational Approach
A good educational approach about project management seems to be a combination of courses about both project management techniques and tools in order to get general knowledge, together with experience-based learning to get the specific knowledge about the projects that every company carries out. Furthermore, using the same educational approach for all the partners involved in the project gives a common base to all the members, which in turn improves the communication.
Good Practice Regarding Project Time Management
Good practice identified within time management seems to have special characteristics compared with the time management in nondistributed projects.
Schedule Planning
Since the scheduling process is strongly based on historical information and experience, the best way of keeping that historical information is in databases as explained in the previous section.
During the activity definition process, in addition to the use of work breakdown structures, every partner involved in the project makes an abstract of their roles so that the project manager can detect deviations or misunderstandings.
Schedule Control
When working distributed, the flow of information does not happen so often and easily as when working face to face. Therefore, a very active use of the progress meetings is crucial for the success of distributed projects. It is in these meetings the exchange of information and communication regarding schedule control take place and milestones are checked. During the meetings, physical or virtual, it is very important to be open and not keep back problems. It is important to remember that in a distributed project there can be no communication around the coffee machine.
The reporting of the progress in a distributed environment is proactive. This means that all the members know what to report, how and when, without being previously asked. The activities are reported twice, when started and when finished, so that the project manager may have a better picture of progress of the project.
IT Tools and Educational Approach
From the benchmarking study, it can be said that standard office applications and project management programs are used for the scheduling, while e-mail, shared areas and information management applications are used to distribute schedules and all the related information. The degree of standardization in the IT tools is a relevant question for a smooth running of the project, and it should be as high as possible. Even if the IT tools used are different in the different locations, at least the interface should be the same.
Following a project until the end seems to be a good practice to enhance experience-based learning about time management, in addition to courses about both scheduling techniques and tools.
Good Practice Regarding Project Cost Management
Good practice identified within cost management seems to have special characteristics compared with the cost management in nondistributed projects.
Project Budgeting
The cost management process is based on historical information and experience. Databases are used to keep that important information in the way mentioned previously in this document. Updating the information after checking the validity is decisive here.
A common way to handle a lack of resources is by outsourcing. It is interesting to highlight the advantage that the fact of working distributed can give in this respect. Working distributed across several organizations and countries facilitates to find the right human resources and to make the most of this chance has been seen as a good practice.
Regarding documentation of the cost estimating process, this is thoroughly documented describing all assumptions made during the process. The documents follow guidelines to ensure correct and complete documentation and are used in future projects.
Specific good practice in small organizations with small projects:
• The company manager and the project manager are the responsible ones for resource planning.
• The project manager carries out the cost estimation and is the responsible person for the budgeting process.
Specific good practice in large organizations with medium projects:
• The head of each department or the project manager is in charge of resource planning.
• The budgeting department carries the cost estimation or it is done in each department while the responsible person for the budgeting process are the project initiators or the economical department.
Specific good practice in large organizations with large projects:
• The head of each department is in charge of resource planning.
• The budgeting department carries out the cost estimation and the responsible person for the budgeting process is the project manager with the assistance of the budgeting department or the project team.
Cost Control
The responsible person for the cost control is the project manager. The costs are reported and followed up to ensure adherence to the budget. Monthly performance reports are used but the frequency of the reporting is adjustable and can vary for a project to another, for example, it increases at the end of the project. The performance report has fixed format and is as thin as possible.
IT Tools and Educational Approach
In cost management, standard office programs and project management software are used, while e-mail, shared areas and information management applications for distributing cost related information are the IT tools used in cost management.
On-job-training aimed at knowing what is being estimated seems to be a good practice to enhance experience-based learning about cost management, in addition to courses about both estimating techniques and tools.
Good Practice Regarding Project Quality Management
Good practices identified within quality management in distributed projects do not differ from good practices in general quality management. The same principles and basis rules are applied, in order to optimize quality management processes in distributed projects as well as “ordinary” projects. The challenge, however, is closely connected to communication and facilitating team processes. How does the project manager manage to control quality management processes in a distributed environment?
Extensive Communication
Extensive use of communication and distribution of information is a key aspect of quality management in distributed projects. All relevant information is available for all team members at all times. However, uncritical distribution of information is not doing any good. Hence, the use of guidelines for regulating this communication and storing of information.
Facilitating Teamwork
Teamwork is essential for quality management. A good practice is therefore to facilitate teamwork and make the team members socialize at an early stage of the project. Knowing each other (both socially and professionally) makes it easier to communicate and carry out the different processes in the best possible way. Thus, regular project meetings and social events in conjunction to these meetings are essential for quality and project success.
Quality Focus
In order to optimize quality management, the focus has to be put on individual skills and on process rather than end product. In a distributed environment, solely end product control will not be economical or practical. Thus, much effort should be put in educating and following up each individual, and giving each individual the responsibility for the quality of his or her process. These are the same principles as in Total Quality Management (TQM), but it is of essential importance that the Quality Management is carried out in this way in distributed projects.
Conclusions
After the benchmarking study carried out in the CoDisCo project and in the light of the achieved results, it can be said that benchmarking seems to be a good tool to find good practices also in project management.
In order to corroborate the results presented in this paper, more benchmarking studies about the same topic should be carried out. After having benchmarked only six companies, it is not possible to claim to have found the best practice. It is the wish of the authors that the results presented herein might provide a source of ideas to improve project management of distributed projects.
