Projects and Systems Theory

Projects and Systems theory “The most pervasive intellectual tradition to project management is without doubt the systems approach” Table of contents PART I – THEORY3 1. Systems theory3 1. 1. Systems definition3 1. 2. The characteristics of systems theory3 1. 3. The manifestations of systems theory3 1. 4. Systems theory principles4 2. Systems approach to project management4 2. 1. The key terms4 2. 2. System approach to project management5 PART II – PRACTICAL APPLICATION6 1. Project systems description6 . 1. Project systems description6 1. 2. Time management system7 1. 3. Cost management system7 2. The interdependences among the project systems8 2. 1. The interdependences among scope, time and cost management systems8 2. 2. The interdependences among time, cost and quality management systems8 3. Management tools9 3. 1. Project management estimating software9 3. 2. Using historical relevant project documents9 4. The external environment9 4. 1. Government policies9 4. 2. Financial crisis9

PART III – REFLECTION10 References11 PART I – THEORY 1. Systems theory 2. 1. Systems definition Systems now are everywhere in our life, from the solar system to home entertainment systems, from water treatment to national security systems (Auyang 2004). The concept of ‘system’ serves to identify those manifestations of natural phenomena (Laszlo and Krippner 1998), so that it is very important to clarify the systems definition. There were some definitions which were given by many scholars in their study.

According to Laszlo and Krippner (1998), ‘system’ is “a complex of interacting components together with the relationships among them that permit the identification of a boundary-maintaining entity or process”. Auyang (2004) also had a similar definition in his study, ‘system’ was considered as an entire consisting of independent elements with complexity. Another definition came from Hamilton (1997). He defined a system as a whole which includes so many parts interrelated together and connected with the external environments. 2. 2.

The characteristics of systems theory Hamilton (1997) and Laszlo and Krippner (1998) pointed out some characteristics of system theory: * The whole is more than the sum of the parts and determines the nature of the parts (Hamilton 1997) * Each part is affected by at least one other part in the system, and has an effect on the functioning of the whole (Laszlo and Krippner 1998), so the part are dynamically interrelated and interdependent (Hamilton 1997) * The part cannot be understood without considering the whole (Hamilton 1997) 2. . The manifestations of systems theory In his study, Hamilton also mentioned four sections that using systems theory as a fundamental concept: * The philosophy – the way of thinking * The management – the design and operations of organisations as systems * Analysis – the techniques of problem solving * The idea of systematic thinking, such as logical, thorough and regular 2. . Systems theory principles According to Hamilton (1997), the systems theory had several principles shown as below: * The whole is primary, the parts are secondary * Connecting the interrelated parts together within one is the condition of integration * The parts so constitute an unified whole that no part an be affected without affecting all other parts * Parts play the important role in the purpose for which the whole exists * The characteristic and function of the part is derived from its position in the whole and its behaviour is regulated by the whole-to-part relationship * The whole is any system or complex or configuration of energy which, no matter how complex, behaves like a single piece * Everything should start at the beginning point with the whole and then involving the parts and their relationship 2.

Systems approach to project management 3. 5. The key terms 3. 6. 1. Elements The smallest parts of the whole system, the relatively fixed parts of the situation (system), at the finest level of analysis that we want to reach. All systems also have inputs, processor, outputs and management (Hamilton 1997). Input is something put into a system to achieve the results, such as human resources, material, money (Hamilton 1997). Output is the result which is produced by a system from a specific input (intended and unintended) (Hamilton 1997).

For instance, an electrical utility takes on input from the environment in form of raw material, such as coal, oil, water power; and provides output in form of electricity (Yuvienco 2008). The transformation to convert a system’s inputs to the outputs is called “process”. People influence the conversion process through management with standards, feedback and initiator or functions for planning, organizing, directing and controlling (Hamilton 1997) 3. 6. 2. Sub-system

Sub-system is the part of system, is the group of elements and provides a picture of the structure of the system (Hamilton 1997). Each sub-system affects the other sub-system and the system as a whole (Vyas 2010). 3. 6. 3. Boundary A boundary could be thought of as an imaginary line which determines what is inside and what is outside of a system (Tamas 1987), and which components should be treated as the parts of system (Hamilton 1997). 3. 6. 4. Feedback Feedback is the reaction of the environment to the output (Vyas 2010).

The information about the outcome of a process is fed back to the beginning to control it (Hamilton 1997) 3. 6. 5. Environment Environment is everything outside the system’s boundary. It surrounds and has the interrelationship with the system (both affecting and being affected by the system) (Yuvienco 2008). For example, the nature environment includes air, water, etc. People can drink water, breathe air to survive, and affect the environment back by polluted or refreshed the air, water, etc. 3. 6.

System approach to project management Project in simple term is very close to system, both of them have groups of interrelated and independent parts working together to achieve the objectives. Project also has its elements, there are several basic elements apply for all projects: project manager, sponsors, customers, providers, all kinds of resource, time available, communication, processes etc. However the way these elements interact with each other will make each project become unique, same as a system (Deshpande 2011).

At the beginning of the project, raw material, capital, human resources, technology or information are inputted. After undergoing a transformation process with employee’s work activities, management activities, technology and operations methods, outputs are produced in form of products, services, financial results, information, or human results (Vyas 2010). The project has not only many parts but also have different states. Each part of the system influences the whole system in its own way, and that is why when one element is changed, there are always side effects.

It is necessary to understand how each element fits in the whole and how it will impact if it is changed, and this job is called “risk management” (Deshpande 2011). Therefore, the more system is understood, the better project will be managed. PART II – PRACTICAL APPLICATION 1. Project systems description 2. 1. Project systems description This project was in construction section in early 2012. The objective was to upgrade a six-storey-apartment to a nine-storey-apartment; the ninth storey would be used for opening coffee shop, and the rest for renting.

The building’s location was near West Lake in Hanoi – the capital of Vietnam (in the north of Vietnam). The client wanted it would be done within 1 year with good quality and mini cost (as much as possible). During conducting, there were several systems to help the project always being on the right track * Scope management system * Time management system * Cost management system * Quality management system * Human resource management system * Procurement management system * Risk management system 2. 2. Time management system The time management system consists of 6 subsystems: 2. 3. 1. Defining activities process

By inputting work breakdown structure, project scope statement, the previous project with that six-storey-apartment, the process’s results were some outputs: activity, milestone lists and the work breakdown structure updates 2. 3. 2. Sequence activities process Using activity and milestone lists which were produced in defining activities process as the inputs, the outputs of this process would be the activity updates and project schedule network diagrams. In these diagrams, the project’s activities were set in a logical order, depending on the relationship and the dependencies among them. . 3. 3. Estimating activity resources process In this process, activity lists and resources calendars were used to create activity resources requirements. After finishing this process, the time management team had the resources requirements for each task of work breakdown structure. 2. 3. 4. Estimating activity durations process Based on the activity lists, resources requirements and resources calendar, the basic activity duration estimates were created 2. 3. 5. Schedule developing process The previous process’s outputs, basic activity duration estimates, were the inputs of this process.

Project schedule was produced by putting the work breakdown structure, activity lists, resources calendar, and basic activity duration estimates into Microsoft Project software or G8 and processing. The result was about 8 months and 2 weeks. 2. 3. 6. Schedule controlling process * Inputs: Project schedule and project management plan * Outputs: Work performance measurements, change requests project management plan updates 2. 3. Cost management system The cost management system has 3 subsystems: 2. 4. 7. Cost estimating process

The inputs consisted of work breakdown structure, historical projects relevant (project document for the six-storey-apartment), resources planning. After using project management estimating software (G8) with bottom-up method, the completed approximate cost estimates for each individual activity were made as the outputs. 2. 4. 8. Budget determining process In this process, cost management team used the cost estimates for each individual activity as inputs. By using synthesis method, they got the project funding requirements, which were derived from the cost baseline. This result was about 4. billion VND (approximately $200,000 AUD) 2. 4. 9. Cost controlling process * Inputs: Project management plan and project funding requirements. * Outputs: Work performance measurements, budget forecasts, and change requests. 2. The interdependences among the project systems 3. 4. The interdependences among scope, time and cost management systems The scope is very important; it affects every element in the whole project system, not only time and cost management system. Nevertheless, time and cost are the clearest expression if there are any changes in the scope anagement system (normally the time and cost will be risen). For example, at the beginning of the project, the client did want the coffee shop at the top storey; he wanted only all 3 stories for renting. Then when he wanted to change, we need more time to re-design (because the structure of coffee shop and apartment for renting are very different) and certainly the cost also increased. 3. 5. The interdependences among time, cost and quality management systems Time, cost and quality systems have significant interdependent relationships. When one of them changes, it will affect the others, and vice versa.

For instance in this project, when we wanted to increase the quality of 2 stories for renting (the seventh and eighth), then definitely the cost and time rose. And when we reduced the time for not exceed the maximum amount of time required in the scope statement (1 year), the cost also went up. The mission of project manager was to balance as much as possible among time, cost and quality systems. 3. Management tools 4. 6. Project management estimating software During the project management process, “G8” was used to help the time and cost management teams do their work easier.

G8 is a project management estimating software which was developed by Vietnamese IT engineers and based on Microsoft Excel. This software is very popular in Vietnam, and the price is not expensive. G8 can be used for making project schedule (same as Microsoft Project), cost estimation, budget determination, etc. Because of multi-purpose (can use for both time and cost management), G8 can easy to link the figures between time and cost management tasks, and then help the manager control the project easier 4. . Using historical relevant project documents The documents of the previous project (six-storey-apartment) are very useful for this project. Thank to these documents, we knew very well about the geological survey, the structure of the building, etc. Therefore, a lot of time and money was saved, and project management team’s job was easier a little bit. 4. The external environment 5. 8. Government policies The building is located near West Lake, so the panoramic views of the whole area is very important.

In the past, the government approved to build the six-storey-apartment, and it did not mean that the construction permit for this ninth-storey-apartment can be gotten easily. 3 more stories might block the view of the other building behind or around. The management team had to concentrate this issue when they wanted to get the approval. Therefore, more time and cost was added for this task. 5. 9. Financial crisis Vietnam was partly affected by the financial crisis, the clearest manifestation is the freeze real estate and construction industry was having trouble.

The government was trying to limit the construction project at that time. The job for project management team was to make an excellent plan to prove that this project was feasibility. Within this condition, more time, cost, quality, effort were needed. PART III – REFLECTION Firstly, systems theory provides a new way, new method for project managers to deal with the problems as the whole not isolated individual part. Moreover, the systems theory helps the managers always in the right direction, to make efforts to achieve the whole project’s final objectives, not concentrate too much to each particular element or sub-system.

When conducting a project, systems theory also provides the panoramic views for projects manager in the whole project system, so that the project will be done in an oriented way, minimise the cost, risk, and save a lot of time. For example, when some problems came up in the project, the project managers did not deal with the problems by putting those in an individual system, and considered the problems with all the systems and their interactions together. In this way, the solutions of problems would be very effectively and the problems can be solved completely.

Secondly, systems theory provides an excellent viewpoint to the project managers when they think about the human resources management issues. Because the systems theory teaches the managers how to solve the problems with their team through paying much more attention to the interaction relationships among the team members, not the individual person. Therefore, the coordination between the team members and working efficiency will be improved. References Auyang, Sunny Y. Concepts of system in engineering. Cambridge, Massachusetts, U. S, October 28, 2004. Deshpande, Girish. Can we apply Systems Theory to Project Management.

November 24, 2011. Hamilton, Albert. Management by Projects – Achieving Success in a Changing World. London: Thomas Telford, 1997. Laszlo, Alexander, and Stanley Krippner. “Systems Theories: Their Origins, Foundations, and Development. ” In Systems Theories and A Priori Aspects of Perception, by J. S. Jordan, Chap 3, pages 47-74. Amsterdam: Elsevier Science, 1998. Tamas, Andy. System Theory in Community Development. San Francisco, January 1987. Vyas, Ishan. Systems Approach to Management. Karnataka, September 13, 2010. Yuvienco, Joel. General Systems Theory and Systems Analysis. Manila, November 21, 2008.

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