What is more distressing, however, are the reasons the Standish Group gives as to why project managers have such a poor track record, specifically: "Corporate America spends more than $275 billion each year on approximately 200,000 applications software development projects. Many of these projects will fail, but not for lack of money or technology; most will fail for lack of skilled project management" [2]. In my opinion, this failure of project management should be viewed as both a cause for concern as well as an opportunity for management scientists to apply and demonstrate the effectiveness of O.R. tools and methodologies for improving the state of project management practice and understanding.

Many of us who teach management science-related courses wonder why so few students are motivated to learn more about O.R. tools and methodologies. In many business schools, management science has become synonymous with manufacturing or inventory and supply chain management. Such focus automatically reduces the set of interested students — even though many students do recognize the importance of these areas. A course in project management on the other hand relates to all business disciplines and has a much greater appeal to students across the business spectrum. At the University of Washington, the project management course is one of our most popular MBA electives and is now a required course in our Technology Management MBA program.

Interestingly, management scientists may be responsible for some of the failures of project management. Back in the 1950s, management scientists created the critical path method (CPM) and associated methodology PERT. CPM, based on standard network flow algorithms, forms the basis for most of the commonly used PM software available today. Project management is unique in the aspect that these software products are probably more widely sold and implemented than any other management science tool.

Yet, most academics and practitioners who are knowledgeable about project management methodologies know that the information supplied by these software products have serious limitations when applied to real (i.e., stochastic) projects. In some cases, these software products provide information that is biased or simply wrong. But most project managers are unaware of these shortcomings and blissfully use these software products anyway.

We have found that O.R. models can be used to illustrate the trade-offs faced by project managers and to stimulate thinking and discussion on complex issues that are frequently overlooked in many project management textbooks. Most of the O.R. models we use are imbedded in Excel spreadsheets (often using Solver) to demonstrate how project managers should consider trade-offs among schedule, budget, scope/design and quality. Some of the specific areas where we use O.R. models include:

• selecting new projects and managing project portfolios,
  
  
• forming project teams,
  
  
• determining the trade-off between time and resources,
  
  
• measuring the impact of various payment schedules on project cash flows,
  
  
• applying Monte-Carlo simulation to estimate makespan and confidence intervals, and
  
  
• assigning renewable resources to projects.

Project management coursework relates to topics in marketing, finance, accounting and management, as well as previous M.S. courses in statistics and O.R. models. A project management course is also an effective way to address the dichotomy between academics and practitioners that is often discussed [3]. Given the widespread use of project management software and its associated limitations, it is not difficult to find practitioners who are implementing or investigating or advocating newer methodologies.

Project management is frequently taught as a "soft" course with emphasis on human relations and people issues. While these are important aspects of project management, we need to recognize that "business as usual" in teaching project management is simply not working and needs to be revised. Management science has a great deal to offer in this respect; our tools and methodologies can be used to effectively challenge old ways of thinking (e.g., CPM and PERT) and to stimulate new ideas and practice. A project management course that is built on an O.R. foundation is good for both management science as well as project management.



Ted Klastorin is the Burlington Northern/Burlington Resources Professor, Department of Management Science, University of Washington, Seattle.

References

1. www.standishgroup.com.
2. The Standish Group International, Inc. "Chaos: A Recipe for Success,"1999.
3. Larson, Richard, 2005, "Practice Makes Perfect O.R," OR/MS Today, Vol. 32, No. 2, p. 6.

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