Typical Capital Project Management Environment
In any capital project, the project group to be managed will consist
of consultants, contractors, specialists, the staff of the owner
and the project management organization. A typical situation is
shown in Figure 1. Each person or unit in
the group often has two "bosses", the project manager
and his "home" department or firm. This dual reporting
relationship is often referred to as a "matrix" structure
and accounts for much of the complexity of project management on
a large project.
The project manager will be required to direct operational activities
such as design, procurement, and construction. He will state his
requirements for such management support activities as estimating,
scheduling, accounting and forecasting.
In addition, on a larger project, he will require other more specialized
services such as financial accounting, payroll, systems development,
personnel, legal, public relations and property acquisition. Because
they do not normally affect project control decisions, these activities
are usually carried out by independent departments or companies,
not directly under the project manager's supervision. Nevertheless,
if the project manager is to get the quality of information and
service that he needs, he must maintain good relationships with
all such parties.
The project manager will also be required to report to upper management
or the owner on a regular basis. For this he must render a succinct
digest of the available information on progress, forecast, resource
requirements, and actions required.
Figure 1: Project management in a corporate environment
By comparison, top management's interest will tend to focus on
expenditure to date, forecast final cost, and the scheduled commencement
of an operating cash flow.