Discuss about the Application And Tools In The Management Of The Organization.
Systems thinking is a problem-solving tools and techniques that is based on system design and analysis which helps to find ideal solutions to complex issues and assists to avoid unintentional consequences (Sherrer, 2010). There are several tools that helps to analyze and provide various information and understanding when applied in project of any organization. These tools include: Brain storming tool, dynamic thinking tools, computer-based tools and structural thinking tools.
This paper includes application and relevance of several tools in the management of the organization by using various ideas and theories like general systems management, portfolio alignment, risk management system etc.
It is a vital concept that helps to develop organization and manage projects on the basis of several function that are involved in an organization. It also reflects positive outcomes from any project that is managed with the help of system thinking tools. There are several subsystems of the general systems management that includes: matrix of the subsystem, goals, project orientation, transformation, permanence (Kerzner, 2013).
It is very crucial to manage risks of ever project managing risks basically consists of two important factors that involves risk assessment and strategy of risk mitigation. Risk management and risk engineering are two important aspects that can regulate function issues and errors within the organization. According to AS/NZS 15288 Systems engineering – Systems life cycle processes these two aspects can reduce possible risks and functional issues that occurs during the project within an organization. Hence the two methods i.e. system development and system engineering incorporate various security aspects in order to engineer risks and risk management.
It is a process in which a checklist is used in order to find risk factors and the probability of occurrence of these risk factors that has negative impact on the project. Many organizations develop a checklist of the risks from their past experiences that has damaged their project. It helps project mangers to identify the risks and to create plans to projects in a way that these risks can be avoided (Kerzner, 2013). The experts in the organization, past experiences of team member of project and experience of that project in the company are the valuable resources that helps to identify potential risks of the articular project. Risks can also be identified on the basis of the category that includes: technical, schedule, weather, political, financial, client etc.
After the process of identifying risks, these risks are evaluated by project managers or project team in terms of its probability of occurrence and possible loss it might cause. The critical risks that have high impact and needs mitigation can be narrowed down on the basis of its high negative impact on the project. These critical risks need high attention from project management team while preparing risk management plan or risk mitigation plan.
After the process of identification and evaluation of risk, risk mitigation is the next step of risk management plan. In this step risk mitigation plan is developed by the project team which is a plan to avoid or decrease the negative consequences of the unpredicted event. Risks can be mitigated by: risk avoidance; sharing risk; reduction of risks and risk transfer. These techniques are an effective tool to reduce specific risks and its profile of the project. This mitigation plan of risk includes several approach of risk mitigations for each recognized risk actions and events that the team will take in order to avoid or eliminate it (Peters, 2014).
It is vital for any management system to maintain and regulate appropriate structure and culture in an organization to gain success and revenues. There is a systematic hierarchy in the organization in which there is a top-level management who generally makes decisions and pass it to the subordinates via managers. The structure of the organization can have impact on many factors like purpose, employee performance, culture, task complexity, size and external environment. The type and quality of the services and product of the organization helps management system to choose appropriate structure of the organization. The operational function of the company also determines its culture, norms and structure (Kerzner, 2013).
Project alignment associated with the business strategy of organization is the most important task of project portfolio management. It is important to align all the on-going projects of organization with the overall strategy of business. Alignment of project leads to have positive influence on the performance of project portfolio management (Systems Engineering Guide, 2010). The two independent mechanisms portfolio steering and portfolio establishment impacts project alignment. It is one of the most popular and rapidly increasing management practice which is mostly followed by modern business organization. Most of the organization follows traditional notion and don’t follow this process. therefor there is an increasing significance of implementation of strategic portfolio alignment in project management. Portfolio alignment uses technique called ‘Road mapping’ to align planned business plans to operations in an organization.
Business valuation is often done to measure the value of the owner’s interest or business in an organization. Therefor e a business evaluation can be defines as the process that examines several economic factors using predetermined formulas of a business. It is generally done by the third-party accountants by using various methods to determine the value of any business. Each of the process defines value in monetary terms.
Projects of the company are most important thing of the viable organization, whereas project managers are the essential for the success of business project and company. Therefore, project manager should learn to order that the value of business is properly understood and defined. When the project managers are involved in executing any projects then, they must follow these steps in order to provide better business value: to understand vision of project; to be clear about its value; convert the business value and vision to the team of project; to effectively deliver value of business, foster team environment and lastly measure the value after the completion of project (Kerzner, 2013).
When project managers focus on delivering value while delivery projects then their discipline becomes more valuable to the organization, these companies becomes more vibrant as they are providing enhanced value to their consumers and will continue to believe that the project management is a most important factor of growing bottom line of the organization. When they focus on customer, the most important part of the project management is to deliver business value.
Project portfolio management process is the continuous process of managing and selection best set of initiatives that are project oriented that provides maximum return on investment or business value. It is a decision-making process that is dynamic and allows management to gain consensus on the finest utilization of resources to concentrate n projects that are strategically aligned and achievable with their objectives and goals.
Project portfolio management cycle involves four basic step that involves: inventory; analyze; align and manage. Inventory phase involves identification of strategic objective, determining all organizational and projects resources, data, budgets, priorities and project attributes; categorizing projects, determining gating process and lastly mapping business projects to strategic goals (Guide to the Systems Engineering Body of Knowledge (SEBoK), 2017). Analyze stage involves: establishing metrics, summarizing project cost, schedule, budget, data and resources. Similarly align phase includes eliminating redundancies, prioritizing, risk mitigation, prioritize, alternative model project portfolios and aligning projects with strategic goals and resources. Lastly it involves managing phase which incudes cancel, delay and reschedule of projects, cancel projects, revise project budgeting schedules, initiating new projects and launch portfolio changes and portfolio process.
Every organization must be concerned about understanding the present level of maturity. Without enough maturity, functions, processes, decisions cannot be performed vigorously. Organizational maturity is an evaluation of capability and readiness of an organization which is expressed through its processes, technologies, people and constant measurement practices in the place (Kerzner, 2013).
The main reason behind the disaster of BP Deepwater Horizon Oil Spill and Offshore Drilling was the inadequacy in risk evaluation process and poor decision taken related to the well design which as only taken at the last phase. Another reason was the cement slurry that was designed in the absence of supervisors or engineers to close the bottom of the well. The evaluation of seal was not done properly as it was evaluated by personnel without proper trainings and experience. There was flaw process of securing the well i.e. drilling mud from wellbore was removed unnecessarily which could have prevented the formed hydrocarbons to enter inside the well. So, if the mud was present inside it the blowout could have been prevented (Guide to the Systems Engineering Body of Knowledge (SEBoK), 2017).
The initial warnings about the blowout was ignored and there was a lack of effective response after the blowout began. So, the lack of poor management system regulatory and technical system resulted in such disaster. If there was a proper risk management system that involves risk identification, analysis and risk mitigation, occurrence of this could have been prevented. That is why it is very vital to create appropriate risk management plan to successfully execute any business project (Fahrenkrog, Haeck, Abrams, & Whelbourn, 2003). There should be continuous risk evaluation of any process that is undertaken in a project. There should be well trained workers and effective and efficient management system to look over the project.
Projects can only be properly regulated if there is a proper evaluation of project on regular interval. For the successful project systematic procedures and processes should be followed properly. There should be proper and coordinated communication among the people who are associated with the project.
Another reason for the incident was that BP did not considered system thinking. There was high engineering risk which created this dreadful situation. the inappropriate designed cement slurry and removal of mud from well shows that there was an engineering risk which was not evaluated ( National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, 2011). Engineering risk assessment is very critical in the project as even a small flaw in the design could affect the whole project leading to failure of project or occurrence of risk events.
In this incident it was found that there was inadequate engineering risk assessment and evaluation of risks by experts or supervisors. The Company did not use any system thinking approach and tools and techniques of it during this project. They did not even consider to create risk management plan for risk mitigation and to identify possible risks that could hamper the project a din this case caused huge disaster. Therefore, the system thinking can provide support to determine the relationship within the several components ( National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, 2011).
It is significant to apply system thinking to undertake any project of an organization to give full attention to the feedback obtained and make right decision by analyzing the interrelationship between several components.
Therefore, on the basis of above argument, it is evident that was lack of proper management system, ineffective regulatory and technical system that led to this huge industrial disaster. It is responsibility of project managers to plan project after evaluating, analyzing every possible risk and after implementation of plan there should be effective strategies to successfully execute it. Engineers should make sure that there is no defect in the design. Therefore, it can be said that system support helps to make right plan and decision for the project. The tools of system thinking which could have helped BP is Behavior Over Time Diagrams. It could have helped it by identifying the relation between the several variables over aa period of time. Similarly, Double Q Diagram of brainstorming tools would have helped them by providing both sides of the problems in a visible and balanced manner. This also provides qualitative and quantitative information which helps by making easier to look at whole system and the impact of one system into another. Hence utilization of these system could have prevented the disaster.
Conclusion:
From the above discussion it is evident that there are several systems thinking tools that can be applied in a project to analyze relation between several components of the project of the organization. As the main aim of any business organization to achieve success it is important for the team member to analyze, evaluate various aspects of the project and to make appropriate strategies to successfully execute it by using several theories discussed above. It is also crucial of every organization to have effective and efficient management system, regulatory system, technical system that works in a way to regulate risks event and successfully execute projects. If these systems are not effective then it can lead to occurrence of disasters as we can see in case of BP Deepwater Horizon Oil Spill and offshore drilling case. Hence it is important for any project to have proper risk management system, portfolio alignment, project management system etc. which helps organization to achieve its goals and objectives.
References:
Fahrenkrog, S., Haeck, W., Abrams, F., & Whelbourn, D. (2003). PMI’s organizational project management maturity model. Retrieved from Project Management Institute: https://www.pmi.org/learning/library/pmi-organizational-maturity-model-7666
Guide to the Systems Engineering Body of Knowledge (SEBoK). (2017, November 2017). Retrieved from Sebokwiki.org: https://www.sebokwiki.org/wiki/Guide_to_the_Systems_Engineering_Body_of_Knowledge_(SEBoK)
Johnston, K. (n.d.). General Systems Theory & Organizational Structure. Retrieved from Chron.com: https://smallbusiness.chron.com/general-systems-theory-organizational-structure-34677.html
Kaisera, M., Arbib, F., & Ahlemann, F. (2014). Successful project portfolio management beyond project selection techniques: Understanding the role of structural alignment. International Journal of Project Management, 33, 126-139. https://doi.org/10.1016/j.ijproman.2014.03.002.
Kerzner, H. (2013). Project Management t : a systems approach to planning, scheduling, and conrolling. John Wiley & Sons.
Management Process. (n.d.). Retrieved from PressBook: https://pm4id.org/chapter/11-2-risk-management-process/
McDonald, K. (2016, April 26). What Is Business Value and How Do You Measure It? Retrieved from Techwell insights: https://www.techwell.com/techwell-insights/2013/04/what-business-value-and-how-do-you-measure-it
Mel, C., Pels, J., & Polese, F. (2010). A Brief Review of Systems Theories and Their Managerial. Retrieved from Service Science: https://pubsonline.informs.org/doi/pdf/10.1287/serv.2.1_2.126
National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. (2011). Retrieved from Macondo: https://www.wellintegrity.net/documents/ccr_macondo_disaster.pdf
Peters, J. (2014). Project Portfolio Alignment & Strategic Objectives. Retrieved from Subjectmatters: https://pmi-la.org/document-repository/2014-presentation-slides/pmi-la-speaker-slide/23-project-portfolio-alignment-and-strategic-objectives-with-reading-notes-la-pmi-20140814/file
Systems Engineering Guide. (2010). Retrieved from Mitre: https://www.mitre.org/publications/systems-engineering-guide/acquisition-systems-engineering/risk-management/risk-identification
Viana, J., & Maria, C. (2016). Enhancing Organizational Project Management. Universidade Federal de Pernambuco, 26(2), 313-329 .
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