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Managing Complex Projects in Multi-Project Environments. Eindhoven University of Technology MASTER Managing project complexity developing tools for practice through design science research Swinkels, E. Award date: 2016 Link to publication Disclaimer This document contains a student thesis (bachelor's or master's), as authored by a student at Eindhoven University of Technology. Student theses are made available in the TU/e repository upon obtaining the required degree. The grade received is not published on the document as presented in the repository. The required complexity or quality of research of student theses may vary by program, and the required minimum study period may vary in duration. General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain Eindhoven, August 2016 Managing Project Complexity: Developing tools for practice through design science research. By Erwin Swinkels Bachelor Mechanical Engineering (2012) Student identity number: 0761980 In partial fulfilment of the requirements for the degree of Master of Science In Innovation Management Supervisors: Dr. ir. B. Walrave, TU/e, ITEM Dr. A.A. Alblas, TU/e, ITEM Ing. A. Haverkort, Company X TUE. School of Industrial Engineering Series Master Thesis Innovation Management Subject headings: systems theory, complexity theory, uncertainty, ambiguity, project management, complexity management, project development, project performance, case study, design science research, theory building ii Abstract Within the field of project management, researchers have continuously searched for improved methods to successfully deliver challenging projects. As projects have become larger and more elaborate, planning for the many potential uncertainties within a project has become increasingly more difficult. By considering the relationships between risk, uncertainty and complexity, a set of project management tools are proposed that provide a more comprehensive understanding of the particular challenges of complex projects. Complex projects face two major challenges. First of all, complexity induces unpredictable behavior in the project. When parts of the project are uncertain, the overall uncertainty of the project multiplies as different parts of the project interact. Secondly, complexity limits the ability of stakeholders to foresee and manage the project. While project managers and team members utilize tools such as project plans, schedules, work packages and task descriptions to break down the project into more easily understandable parts, it is likely that at some point particular interactions between parts of the project are ignored or simply not noticed. A project can become so large that it is effectively impossible for a single project member to understand all the detailed interactions between the many parts of the project. The combined challenge of project complexity is thus that the project itself is less predictable; and that it is more difficult for stakeholders to understand the project in its entirety in order to manage the project correctly. Project complexity can be managed by either removing the sources of complexity or by reducing their impact. However, the first response should be the active selection of complex projects. A second response to manage the inherent project complexity is to consider the project staffing. Project complexity stems from the collective behavior of the project system. It is therefore useful to consider the effects of different project management approaches on the project system as a whole. The initial phases of a project are typically dedicated to the exploration of the project scope and the development of an appropriate project structure. Effectively, the project complexity is inherently designed into the project as a result of the project’s definition. Due to the sensitivity of the project system to its initial conditions, the most effective method to manipulate the project complexity is to consciously design the project such that the initial project complexity is in line with the desired project complexity. iii Preface Having spent the last year working on this master thesis project, it feels good to write this chapter and finally finish up both my report and my masters study. To spare both you from reading more text, and me from writing it, I figured I’d try to get to the point quickly. In hindsight the scope of the thesis might have been a bit ambitious, but it was a great joy and challenge to dive down the rabbit hole that is the study of complexity. I spent a considerable time studying various streams of literature, which over time certainly took its toll on me. The continuous support of my supervisors, friends and family was always a great source of both motivation and inspiration, and as such it appears more than appropriate to take a moment to thank the many people that helped me. Since the first meetings I had with my first supervisor, dr. Bob Walrave, I was given freedom were desired and support were needed to conduct my master thesis project. I feel lucky for the many discussion sessions we had together with my company supervisor, Andre Haverkort, which always resulted in new insights and were a great source of motivation. Additionally I would like to thank Madis Talmar for his involvement and help in the early phases of my project, and for introducing me to Andre in the first place. I would also like to thank dr. Alex Albas, my second supervisor, whose insights and critics were always a valuable source of feedback on my work. I would furthermore like to thank my parents, my brother and my friends for their continuous support; but also primarily their often much needed distractions to keep me sane. Finally, I would like to thank my cats for not deleting my working during the many times they walked over my keyboard while I was working. Erwin Swinkels Eindhoven, August 2016 iv Management summary Within the field of project management, researchers have continuously searched for improved methods to successfully deliver challenging projects. As projects have become larger and more elaborate, planning for the many potential uncertainties within a project has become increasingly more difficult. By considering the relationships between risk, uncertainty and complexity the project team may be able to expose the fundamental causes of potential problems earlier in the project lifecycle. Complex projects face high levels of both uncertainty and ambiguity. Complexity management considers how the different parts of a project interact and how these interactions should be managed such that the project can embrace the opportunities resulting from the complexity while limiting the risks. Complex projects face two major challenges; 1. Project Complexity induces unpredictable behavior in the project. The more complex a project is, the more connections exist between the different elements. When one element is uncertain, it is likely that the connected elements will also become more uncertain. As more elements interact, the behavior of the project becomes less and less predictable. 2. Project Complexity induces ambiguity (a lack of clarity) which limits the ability of stakeholders to foresee and manage the project. While project managers and team members utilize tools such as project schedules, work packages and task descriptions to break down the project into more easily understandable parts, it is likely that at some point particular interactions between parts of the project are ignored or simply not noticed. A project can become so large that it is effectively impossible for a single project member to understand all the detailed interactions between the many parts of the project. The combined challenge of project complexity is thus that the project itself is less predictable; and that it is more difficult for stakeholders to understand the project in its entirety in order to manage the project correctly. Managing project complexity requires more than a single strategy. The initial phases of a project are typically dedicated to the exploration of the project scope and the development of an appropriate project structure. A project’s complexity results from the project composition, as such, the project complexity is inherently designed into the project as a result of the project’s definition. The most effective method to manipulate the project complexity is to consciously design the project such that the initial project complexity is in line with the desired project complexity. While simply put, the project complexity can be managed by either removing the sources of complexity or by reducing their impact, several strategies may be considered; 1. The active selection of complex projects. By estimating a project’s complexity before taking on a particular project, the fit between the project and the organization can be considered. When a mismatch occurs, the organization should deliberately decide to either proactively change the project’s composition, kill the project or to continue as planned while consciously accepting the inherent risk of the project. 2. The selection of appropriately skilled project staff. When a project is particularly
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