CHAPTER 3

PROJECT AND INNOVATION

MANAGEMENT

Objectives:
1. Explain the definition of project management, the cycle and its approaches
2. Identify the innovation management and its purposes
3. Meaning of Project Management

A project is an organized endeavor to accomplish a specified non-repetitive task. The project

management is the application of knowledge, skills, tools, and techniques to project activities to
meet the project requirements.

Project Life Cycle

A project passes through a life cycle that depends on the size and complexity of the project.
Generally, a project passes through the following phases:

1. The Concept Phase: In this stage the organization thinks whether a project is needed or not.
The organization is requested to propose a plan to perform a project for a customer.

2. Project Initiation: Initiation is the second phase of the project lifecycle. This is where the
project's value and feasibility are measured. Project managers typically use two evaluation tools
to decide whether or not to pursue a project:

a. Business Case Document: This document justifies the need for the project, and it includes
an estimate of potential financial benefits.
b. Feasibility Study: This is an evaluation of the project’s goals, timeline and costs to
determine if the project should be executed. It balances the requirements of the project
With Available resources.
3. Project Planning: Once the project receives the green light, it needs a solid plan to guide
the team, as well as keep them on time and on budget. A well-written project plan gives
guidance for obtaining resources, acquiring financing and procuring required materials. The
project plan gives the team direction for producing quality outputs, handling risk, creating
acceptance, communicating benefits to stakeholders and managing suppliers. The project
plan also prepares teams for the obstacles they might encounter over the course of the
project, and helps them understand the cost, scope and timeframe of the project.

4. Project Execution: This Is the phase that is most commonly associated with project
management. Execution is all about building deliverables that satisfy the customer. Team
leaders make this happen by allocating resources and keeping team members focused on their
assigned tasks.
Execution relies heavily on the planning phase. The work and efforts of the team during the
execution phase are derived from the project plan.

5. Project Monitoring and Control: Monitoring and control are sometimes combined with
execution because they often occur at the same time. As teams execute their project plan,
they must constantly monitor their own progress. To guarantee delivery of what was
promised, teams must monitor tasks to prevent scope creep, calculate key performance
indicators and track variations from allotted cost and time. This constant vigilance helps keep
the project moving ahead smoothly.

6. Project Closure: Teams close a project when they deliver the finished project to the
customer, communicating completion to stakeholders and releasing resources to other
projects. This vital step in the project lifecycle allows the team to evaluate and document the
project and move on the next one, using previous project mistakes
And successes to build stronger processes and more successful teams. Although Project
management may seem overwhelming at times, breaking it down into these five distinct
cycles can help your team manage even the most complex projects And use time and
resources more wisely.

Project management knowledge draws on ten areas:

1. Integration
2. Scope
3. Time
4. Cost
5. Quality
6. Procurement
7. Human resources
8. Communications
9. Risk management
10. Stakeholder management

All management is concerned with these, of course. But project management brings a unique
focus shaped by the goals, resources and schedule of each project. The value of that focus is
proved by the rapid, worldwide growth of project management:

 As a recognized and strategic organizational competence

 As a subject for training and education
 As a career path
 Approaches

There are a number of approaches to organizing and completing project activities, including:
phased, lean, iterative, and incremental There are also several extensions to project planning,
for example based on outcomes (product-based) or activities (process-based). A 2017 study
suggested that the success of any project depends on how well four key aspects are aligned
with the contextual dynamics affecting the project, these are referred to as the four
P’s:

Plan: The planning and forecasting activities.

Process, the overall approach to all activities and Project governance.
People, and the dynamics of how they collaborate and communicate.
Power, Projects are which describes all lines of authority, decision-makers, organization,
policies for implementation and the likes.
Regardless of the methodology employed, careful consideration must be given to the overall
project objectives, timeline, and cost, as well as the roles and responsibilities of all
participants and stakeholders.

Phased Approach
The phased (or staged) approach breaks down and manages the work through a series of
distinct steps to be completed, and is often referred to as “traditional or “waterfall”. Although
it can vary, it typically consists of five process areas, four phases plus control: Typical
development phases of an engineering project:

1. Initiation
2. Planning and design
3. Construction

4. Monitoring and controlling

5. Completion or closing
Many industries use variations of these project stages and it is not uncommon for the stages
to be renamed in order to better suit the organization. For example, when working on a brick-
and-mortar design and construction, projects will typically progress through stages like pre-
planning, conceptual design, schematic design, design development, construction drawings
(or contract documents), and construction administration. While the phased approach works
well for small, well-defined projects, it often results in challenge or failure on larger projects,
or those that are more complex or have more ambiguities, issues and risk.

Project planning generally consists of:

Determining the project management methodology to follow (e. g. whether the plan will be
defined wholly up front, iteratively, or in rolling waves); Developing the scope statement;
Selecting the planning team; Identifying deliverables and creating the product and work
breakdown Structures; Identifying the activities needed to complete those deliverables and
networking the activities in their logical sequence;
 Estimating the resource requirements for the activities;
 Estimating time and cost for activities;
 Developing the schedule;
 Developing the budget;
 Risk planning:
 Developing quality assurance measures;
 Gaining formal approval to begin work.
Additional processes, such as planning for communications and for scope management,
identifying roles and responsibilities, determining what to purchase for the project and
holding a kick-off meeting are also generally advisable. For new product development
projects, conceptual design of the operation of the final product may be performed concurrent
with the project planning activities, and may help to inform the planning team when
identifying deliverables and planning activities.

Project Documentation

Documenting everything within a project is key to being successful. In order to maintain

budget, scope, effectiveness and pace a project must have physical documents pertaining to
each specific task. With correct documentation, it is easy to see whether or not a project’s
requirement has been met. To go along with that, documentation provides information
regarding what has already been completed for that project. Documentation throughout a
project provides a paper trail for anyone who needs to go back and reference the work in the
past. In most cases, documentation is the most successful way to monitor and control the
specific phases of a project. With the correct documentation, a project’s success can be
tracked and observed the project goes on. If performed correctly documentation can be the
backbone to a project’s success.

Monitoring and Controlling

Monitoring and controlling consists of those processes performed to observe project

execution so that potential problems can be identified in a timely manner and corrective
action can be taken, when necessary, to control the execution of the project. The key benefit
is that project performance is observed and measured regularly to identify variances from the
project management plan.

Monitoring and controlling includes:

 Measuring the ongoing project activities (where we are’);

 Monitoring the project variables (cost, effort, scope, etc.) against the project
management plan and the project performance baseline (where we should be);
 Identifying corrective actions to address issues and risks properly (How can we get on
track again);
 Influencing the factors that could circumvent integrated change control so only
approved changes are implemented.
In multi-phase projects, the monitoring and control process also provides feedback between
project phases, in order to implement corrective or preventive actions to bring the project into
compliance with the project management plan.

Project maintenance is an ongoing process, and it includes:

 Continuing support of end-users

 Correction of errors
 Updates to the product over time

Monitoring and Controlling Cycle

In this stage, auditors should pay attention to how effectively and quickly user problems are
resolved. When changes are introduced to the project, the viability of the project has to be
reassessed. It is important not to lose sight of the initial goals and targets of the projects.
When the changes accumulate, the forecasted result may not justify the original proposed
investment in the project. Successful project management identifies these components, and
tracks and monitors progress so as to stay within time and budget frames already outlined at
the commencement of the project.

Closing

Closing process includes the formal acceptance of the project and the ending thereof.
Administrative activities include the archiving of the files and documenting lessons learned.

This phase consists of.

• Contract closure: Complete and settle each contract (including the resolution of any Open
items) and close each contract applicable to the project or project Phase.
• Project close: Finalize all Activities across all of the process groups to formally close the
project or a project phase

Also included in this phase is the Post Implementation Review. This is a vital phase of the
project for the project team to learn from experiences and apply to future projects. Normally
a Post Implementation Review consists of looking at things that went well and analyzing
things that went badly on the project to come up with lessons learned.

Innovation Management

Innovation management programs for different companies will vary significantly. For
instance, an emerging business is likely to be focusing on one main product, unlike a mature
organization that is looking to fortify its position in the market or find new, disruptive
innovations. Rapidly growing firms could be looking for ways to extend their core
businesses. Deciding between developing new innovations for the future and revitalizing
their existing offerings can be tricky.

Function and Intention of Innovation Management

In a turbulent and rapidly changing economy, organizations must prep themselves to

innovate on a continuing basis or else their survival is seriously threatened. Innovation
management helps deal with the challenges that stem from the innovation process. Broadly,
the benefits of managing innovation include the following:
 Improves efficiency
 Guarantees long-term success
 Increases market success
 Decreases costs.
 Reduces processing time
 Initiates the innovation process:
 Reduces risk of becoming obsolete due to competitors
 Improves chances of survival due to better solutions spawned from newer
Technologies

Classifications in Innovation Management

Innovation management is typically designed for these four types:

1. Process Innovation: A process innovation is the implementation of a new or

significantly improved production or delivery method. This includes significant changes
in techniques, equipment and/or software. (OECD, 2005) Unlike incremental or
continuous innovations that will most likely generate little value, process innovations are
 typically expected to bring game-changing shifts. Delivery, production, and support
services are needed for process innovation. Examples of process innovation would be
reducing the cost per service provided or the time taken and increasing the number of
products or services provided within a specific time. Henry Ford’s assembly line
innovation is a groundbreaking example.

2. Product Innovation: A product innovation is the introduction of a good or service that is

new or significantly improved with respect to its characteristics or intended uses. This
includes significant improvements in technical specifications, components, and materials,
Incorporated software, user-friendliness or other functional characteristics. (OECD,
2005) Finding new products, adding new features or new uses of a product are examples
of product innovation. Apple’s iPhone, wrinkle-resistant fabrics, Amazon’s Kindle,
mountain bike suspensions, extreme-action cameras such as GoPro, wearable computers,
and dual-clutch transmissions are easily recognizable examples.
3. Marketing Innovation: A marketing innovation is the implementation of a new
marketing method involving significant changes in product design or packaging, product
placement, product promotion or pricing. (OECD, 2005) Research shows that it is a
consequence of competitiveness; to increase sales, it will address customer needs better,
open new markets, and find new ways for positioning. In sustaining innovations,
incumbents win. In disruptive innovations, new entrants win. Check out L’Oreal’s
Makeup Genius app, IKEA’s Catalogue app and SBI’s YONO app.

4. Organizational Innovation: Organizational innovation means the implementation of a

new organizational Method in the undertaking’s business practices, workplace
organization or external relations. (Official Journal of the EU) The organizational
changes could be implementing new ways to create public value and could result from
letting go fundamental assumptions and finding consistent predictors of success.

Phases of an Innovation Management Process

The innovation management process has become an important part of the operations of many
businesses, as the recognition of the importance of initiatives towards innovation has become
much more common. That said, while many companies do attempt to have a solid approach
to creativity and innovation, too few actually focus on it as a single function. Instead, they
seem to hold many separate activities in isolation, such as brainstorming sessions, pilot
projects and campaigns, and vague communication with the market, and simply keep fingers
crossed that it will come together in the end. While this has worked for some in the past, it is
far from the ideal way of performing this important task. Instead, the best way to accomplish
this is to have a set innovation activity which integrates the activity into the regular cycle of
your business. The list below shows the phases in innovation management process, which
will help your organization to put it all together as one process.

1. Setting the goals for The process: Innovation always begins with a goal in mind. It is
many times based on finding the solution to a problem. Once you have this goal, it should
be discussed among everyone in the problem-solving team. This team may consist of you
and another person, a group of people, or may even be all of your organization’s
employees. It may involve others such as your customers (who can provide suggestions
and feedback based on their own experience with your product or service) or other
stakeholders in the business. When you establish the team for this process, make sure that
you have someone representing all the parts of the process from start to the end.
2. Cooperation: The innovation team should work together so that instead of trying to
come up with an idea separately, they can bounce ideas off one another and create a
collaborative solution. This can include the use of online tools, attendance of events such
as trade shows that can be inspiring and informative, or simply consist of brainstorming
sessions. You might consider having a trained business coach facilitating the discussions.
There are many online tools available for real-time document sharing that might help
teams that are geographically separated to still have intense cooperation.

3. Combination of ideas: Once the ideas are in, choose the best ones and then consider
whether they can be combined to create an even greater idea. Often, strong ideas will be
complementary to one another and will join well to create an even better result. As you
know, the whole result can be bigger than its individual parts. And for this combination
to work well, you need representatives of all parties involved in the process, because they
for sure have ideas that people from other departments could not come up with. Business
coaches may be useful here for making sure that all the angles of innovative aspect are
covered.

4. Evaluation of Innovation: This is an important and yet all too frequently overlooked
aspect of the innovation management process. When the best ideas have been combined,
fine-tuned, and polished, it is time to subject them to evaluation based on peer reviews.
This helps to ensure that any ideas that have a promising veneer but that are poorly
thought out will be identified before resources, funding and time have been poured into
them. It also helps to select the ideas with the greatest potential from among several that
appear equally capable of being successful. It is cheap to change your innovation at this
stage compared to later stages. Each step you take forward will cost you more….
5. Testing the ideas: Once the ideas with the greatest potential have been identified, they
can be tested so that they can be better developed. One of the most common means of
testing a product or service idea is to create a prototype or test group. This allows the
team, as well as customers and investors to have a better look at how the product will
function and what changes can be made to it so that it will be even further improved.
Make sure that the product or service not only raises interest but is able to generate orders
also. If people say that they are interested in it, then ask them if they give you the order
right away.

6. Execution of Innovation implementation: The ideas that survive the testing process can
be further developed and altered until they are ready to be executed as a part of the
business offerings. The execution of implementation is a step that is unique to your
business and, unless your new product causes you to have to drastically alter the typical
way that your go to-market strategy functions, then this part of the innovation
management process should be relatively commonplace in your organization. It should be
easier for you to move from testing to execution if you were able to generate orders
already in testing phase.

7. Assessment of Innovation life-cycle: After the execution of an idea, its implementation

needs to be carefully monitored and assessed in terms of a number of milestones that
should be set. Should a milestone not be reached, then changes will need to be made or
the idea will need to be shut down. Remember to keep always customer in your mind also
in execution phase and design your measuring systems so that they measure added value
for the customer (you get what you measure and customers weight you based on that!).