Free Custom «System Dynamics Modeling for Project Management» Essay Paper

Projects are a series of activities/tasks that are characterized by having a specific objective to be accomplished within specifications; it is bound by time- start and completion dates, funding limits and finally utilizes various resources to a limit all these is done to satisfy customer needs. It has been noted that in this current complex business environment, projects are deemed to be critical and vital building block for determining success of organizations. Thus almost every organization are involved in projects, for this reason business executives, managers as well as other experts have declared project management as the wave of the future (Cope et al., 2007).Project management refers to as a discipline of planning, organizing and managing resources in order to successfully achieve predetermined goals and objectives of a project. With the realization that projects are key to future existence and survival of organization, it is not enough to initiate projects without proper planning and management. As noted by Haughey, there are a number of things that can go wrong in project management and there is need to prevent them or carefully and intelligently handle them. One notable problem is client involvement, which can lead to disagreement, misunderstanding, personality conflicts and even resistance to adopt the desired change if they are not actively involved in the entire process.System Dynamics Modelling (SDM) is useful in managing and stimulating processes in the project as it involves changing in time and allow for feedback. The model can be used to assess the involvement of the interested stakeholders for instance local communities, the workforce and more so the clients- those who are expected to use the results of the modelLiterature ReviewAs noted by Steve Yager, CEO Artemis International, people have underestimated the planning, time and the struggle put in place to roll and execute a given project. 40% of IT projects are usually cancelled before they are completed, 33% adversely affected by time and cost overruns and averagely, 52.7% will cost 189% of the original financial estimate (Standish Group CHAOS, 2001).The inability of the various stakeholders especially the managers and the local community in the process of project management creates a dilemma (Sterman, 1992), that will definitely hinder successful completion of projects. For instance lack of top management involvement and support which often dooms the project to failure before it starts (KPMG Canada Survey, 1997).It is therefore important to identify individuals who are affected by and/or can affect the successful outcome of a project, for effective stakeholder management, this leads to breaking resistance as well as the issue of not taking part in the project.Two main concepts in project management that involves various stakeholders are user participation and user involvement (Eom, 2005). Indeed it has been established that user involvement is one of critical success factor in successfully implementing projects. Users understand the end-users' side of any project the best, which is important in selection and implementation of the project. They bring knowledge base to a project team that would never have been gotten through traditional approach. User participation refers to the actual behaviors and activities that the potential users or their representatives perform in the project. User participation is believed to provide more accurate and complete definition of user information requirement, knowledge about the organizational units the project intends to support, help reduce unnecessary project failing features, better understanding of the project, help in conflict resolution concerning design issues, give them sense of ownership, reduce chances of resisting change, and greater user commitment to the project and its success (MacKeen and Guimaraes, 1997).User involvement is the user's subjective psychosocial state and to what extend one perceives the project in question it importance and personal relevance. User participation is expected to be a precursor to user involvement because active participants in any project tend to develop and have perception that the project is equally important and relevant. It has been noted that the more users get involved and they will be receptive to change despite the fact that there are a number of contingent factors.In a study carried out by Jiang in 2002, he found out that project performance was significantly associated with project pre-project partnering activities and user support risk. In addition, the extend of user-support risk also was significantly and negatively associated with pre-project partnering, this indicated that building an effective partnering relation between modelers, the managers and with the end users is fundamental in reducing the risk of poor user support, hence success in obtaining the goals and objectives of a project.Initially, formal modeling tools were complex and not accessible to all but those trained analysts, for this reason models were developed by the experts without directly involving managers who are expected to later use the results from the modeling process in disseminating necessary information to other workers and project team. This situation of not involving managers in the process led to creation of a dilemma.Whenever a model was build and looked simple, modelers were blamed for ignoring certain important facts, similarly, if a complex model is built, it is criticized on the basis it is hard and cannot be understood. These issues tend to short circuit the process of learning through which people come to improve understanding of complexity. It is further noted that without knowledge there is no improved understanding, hence the likelihood of successful sustainable organizational change, one of the objectives of any project won't be realized or might be very minimal. All these could have been done away with or minimized had the relevant stakeholders actively took part in developing the model.It is worth to note that if the managers are not in a position to understand the developed model, they will equally be in an awkward position to explain anything tailored at improving the understanding of the project team. Due to lack of disseminating necessary knowledge, the entire process of project implementation will fail.

 

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To solve this problem, there is need to create intensive involvement (collaborative) work environment (Sterman, 1992)where visibility of the work involved in the project and the change which is likely to occur as a result of the project can be analyzed, and discussed by interested and affected parties. This ensures minimal uncertainty and the wherewithal to keep all interests informed and at par. Ownership of risk identification, planning, management and tracking must also be taken, to then be published to the appropriate stakeholders.Similarly, it has been noted that no single set of requirements will completely be satisfied since projects are carried out with a limit of various resources and a variety of benefits. A myriad of challenges have continuously hindered the attainment of preset goals and objectives but still allows for achieving effectiveness, it is especially through proper collaboration while developing the model that will help in creating understanding of these points among the project team.Framework for the successful delivery of management planDevelopment of a management plan framework is vital as it will help in ensuring that necessary control measures are embedded with the project thus one can quickly and easily identify where things went wrong hence taking corrective measures. It also provides an important process for testing and checking the entire project plan, ensuring that it contains all the required activities/tasks, is based on rational postulations and comparatively weighs and handles the hazards intrinsic within the project. Finally, it provides a useful framework for working through the design of the project with the key stakeholders making sure that their knowledge, experience and insights are fully utilized and incorporated.The plan involves the following;Goal- the goal of the program is to ensure that both the managers and those who create models collaborate. The purpose of the program is to ensure that there is involvement of all key stakeholders so that the entire project will be successful. It expected that the managers will acquire the desired knowledge then disseminate the same to other project team members hence making the entire process acceptable thus reduce resistance. The activity to be done in trying to solve the mentioned problem include; carrying out seminars and workshop from which the managers will acquire full knowledge of the developed model.The underlying assumption is that there will be enough financial resources, time allocated will be sufficient, and all the stakeholders will actively be collaborated. To monitor progress towards success is vital. A survey study will be carried out and the collected data will be analyzed, which will help know if the desired goals have been achieved.System Dynamics ApproachThis is a model used in running and imitation of processes which are characterized by the change of time and allow feedback-transmission and receiption. It describes cause-effect dealings with stock, course and feedback rings. The time delays like the unavailability of labor are identified as nonlinear relations, so this approach explains the dynamic formation of industry production projects hence exploring actions of formation before and after the realization of policies. Lately it has been used in construction research and literatures summarizing construction plans as composite and has variuos co-dependent machineries, very dynamic, has several feedback pocedures, engage linear connections and has both quantitative and qualitative statistics. Following a number of researches SD is in fact creating a learning laboratory for imitation of policies through its modeling procedures.System Dynamic modeling ProcessThis is based on reference model and cause-effect relations formulated from a condition under study.This is defined as a graphical or oral explanation of the time progress series of actions or social process of benefits. The organization performance is characterized by personnel motivation, financial and construction productivity scenarios. With the three variables the organization construction can be analyzed. The behavior of the variables mentioned above can be considered as constant on small projects as they do not impact much on the industry. As the complexity increases and behavior of organization change because of the increase in information, rise in indirect costs increase in uncertainty and risk and decreased productivity. These result to a deviation of the real system state from the prospects giving time and cost overruns, extreme rework, misallocation of scheme resources and split of project expenditure structure. During the research to determine the reasons for cost and time overruns the SD model was developed by the help of the following hypotheses:-Formulation of System Dynamics ModelThe complex system in reference mode and dynamic hypotheses has been developed in form system dynamic model. The level of facts dealt with in the system boundary, the model used is big. The important features dealt with assumed and ignored from the model are indicated in the system boundary. Finance distributions iterations and revisions and project scope, Interphase impacts, human resource and professional competence are focused as primary variables while political stability, local influence on project execution and the economical conditions are considered stable during model imitation time.Economic cycles are assumed to continue as in earlier times. The capacity of a company can be built without other limitations of regulation but to a certain level. The development of technology is considered to be constant. Conflicts and dispute resolution due to time and cost over-runs, effect of the forces beyond the direct control of the execution parties and external environment, post execution operations, contract specification and illustrations and governmental incentives for promoting infrastructure are ignored. In the model material and labor costs are included.

The levels of details in the system dynamic model depend on literature review model boundary, gathered information from the actual system and the conducted interview with the company's decision makers. Dynamic relations among factors and brief explanation of the sectors are given as:-Model Behavior, Validation and Sensitive AnalysisTrends of dynamic interactions indicate the behavior of the model. Validation helps in creating the confidence in the reliability and value of models. Structural and behavioral validation experiments were done. Sensitivity analysis was carried out and the slopes of a number of nonlinear relations were compared with a base simulation to determine if the parameters and nonlinear relations were behaviorally sensitive. Similarly the slope of nonlinear relations were changed, from this extensive research it was proved that the model was structurally and behaviorally valid.Formulation of Sustainable PoliciesPolicies should center on solving the troubles of the company and giving it sustainable aggressive benefits. So policies surveyed focused on rising the financial resources of a company and improving the resource stand of a party.Joint Venture (jv) Formation PolicyThis join attribute of one undertaking with complimentary features of another for the reason of engaging in a specific undertakings as one team plan or extended stands. From the research of model sensitivity analysis joint venture formation is the most perfect option among the others for complimenting the needed factors.Establishment of Construction Industry Development Board Policy (Institutions)This is the corporation between the Construction Company, consumers and government to improve the effectiveness and efficiency of the industry. This board is important because as it trains employees in the changing technological environment. The policy is long term solution for the performance enhancement but training is an expense to the company, however, training of construction professionals generate a better data base, better squad and strong group dynamics. Single industries can't finance the CIDB hence the policy needs assistance of governments for its implementation.Management Information System PolicyThis is the mechanisms through which the timely and well-organized information flows from one department to another, in and out of the organization. Delay in information flow hinder decision making which deter the execution of projects.Comparison of PoliciesSimulation of models from base runs to realization of every policy, and their different combination pairs is made to help spot the potentiality of the policies in giving the optimal results for better and sustainable results.Implementation of PoliciesTo use JV as a tool of technology transfer, governments must be committed and avail all the principals for successful JV participation is all about like individual participation. CIDB should be independent and viewed as an industrial research institution getting technical help from agencies like United Nations. Capita for its formation should come from the government while the operating expense from general treaty levy and fees from customers. The body should serve all segments of the construction industry association. Information filtering important to regulate the amount of information flow to each management level depending on the designated decision making duty.Client behavior in project managementClient and system dynamicsWhen the project is being undertaken the customer is the most important part of it. The customers satisfaction is the main aim of the project thus his behavior and reaction to the happenings of the project. The customer continues to monitor the success and any part of the implementation that is not working to plan will mean that the customer reacts. The management will guard against negative responses of the customer and expose the positives through effective monitoring, evaluation, and implementation procedures.The System Dynamics Modeling projects are complex, must have numerous independent components, many feedbacks channels, have nonlinear relationships, and have both hard and soft data. All these mechanism must be effective in the eyes of the customer otherwise the customer may be always cautious and overreact; this means that there will be no hasty moves which might trigger out-of-sequence work. The contractor may attempt to accomplish more tasks together parallel than physical. It also may occur also when information there is little information or the addition of resources. This means that the pressure will be on the project and the schedule will be affected and therefore resulting to client's response.The contractor uses a four model structure to have mutual understanding with the client. This gives the guidelines and methodology involved in the plans. It also give the client a base to lounge complaints when he is not satisfied. The contractor on the other hand uses the methodology to ensure that the plans work effectively towards achieving the set objective. The models include; the project features, a work recycle, project control, and ripple and knock-on effects. The project features focuses on the features of the actual project systems, such as; development processes, decision making, resources to be used, and the management effectiveness on the actual process.The work recycle are canonical structure that assist the main dynamics models. The client needs this to know how the project will work and the actual facts and figures that the contractor will be putting on the ground. Project control will involve implementing the model is done properly; this will involve perfect timing, efficient budgeting, ensuring quality, and working according to the set specifications. The manager must control the feedback loops and close the gaps that may be present between the performance of the project and the targets and aims of the project and they must be specific to the System Dynamics Modeling for project Management.The ripple and knock-on-effects are used by System Dynamics Modeling in relation to policy resistance and the unsurpassed end results. The ripple effects will be effective to ensure that the best intentions of the projects are implemented; while the knock-of-effect cushions the contractor and clients from the secondary impacts of the project being controlled. The impacts of the ripples of the projects are found due to implementing the projects objective but due to the unforeseeable circumstances such as human effects, or concurrence may bring negative effects on the system dynamics modeling project.Since the clients must have assurance of success the management must focus mainly on the original work to do and balance with the work done through the progress and error generation so as to ensure the clients is satisfied with the results. The project features will ensure productivity and the effort applied are perfect so as to ensure there are small error fractions. Any undiscovered work should be dealt with effectively to avoid panic on the side of the contractor and to ensure that the client does not wary.The management must take time to discover reworking schedules so that the project does not suffer negatively. The management should get warned that any impacts of the project will directly translate to the clients whether negative or positive and will result to his behavior. The client must be assured of quality especially on the final product which will be determined by the work flows that brings the difference between rework implemented and the change detected in the system dynamics project.Feedback mechanismWhile controlling the model in system dynamics the projects calls for effective processing of the information obtained. The managers must keep a track of the schedule of time, budget, scope, and quality. One or more performance aspects must be applied in order to eliminate any chances of failure that may lead to disappointment of the client; such aspects include; taking the project behaviors closer to the targets, or taking the targets towards the behavior of the project. The two aspects involve the negative feedback loops. By moving the project behavior closer to the project targets would involve working overtime and more supervision on time, while moving the project targets to the behaviors would involve shifting deadline to ensure all the work is complete.Feedback loops also affect the clients since any shift in decisions affect the main purpose that the construction would be also shifted. Feedback loops must however avoid any negative effects that may affect quality or increase costs to an un-proportional figures. Meeting the deadline must be the aim of every manager if he doesn't want negative behavior on the client. Whenever managers detect a delay of deadline they have three options to execute which include; hiring more workers to the squad, overtime working for the workers present, and effective and fastness working. These contribute to the three forms of feedback loops. Lyneis, & Ford, 2007 p.6 describe it as ""Add People", "Work More", and "Work Faster/Slack Off" feedback loops".The ripple effectsThe ripple effect can be felt in the projects once rush decisions are made. Any decision will have its aftermath effects. In order to move the project to the targets hiring being the options then expectations of diluting quality of work done. This is due to congestion at the site, hiring of inexperienced players, and difficulties in communication at work. It will cause increased errors and low productivity due to the haste works fatigue form the workers, and a workforce that is too huge to manage. This brings panic to the project and in such projects of system dynamics this situation is very dangerous. The behavior of the client will cause the management to be fragile since the clients will view this as failure in the project management.Due to the ripples effects of knock-on will be highly felt. The projects that were successful starts degrading and the phases and phase of work are detrimentally affected. The project design will be shaken and the construction process hugely impacted. The major dynamics involved when ripples occur will be; haste, errors that create more errors, errors that increases the work available, and hopelessness. This is the stage that the client's behavior explodes to panicking and disbelieves. Haste will create unplanned work for the project in that the managers will be aiming to complete tasks parallel other than through proper informed channels. These hasty moves would include adding more resources to an already congested program, and increasing more pressure on the project schedule that will bring about desire sequence.Errors the were never discovers in the start of the project such as those in the designing will be exposed at this stage, while these undiscovered errors will bring in more work so as to fix them. This will require more work and resources that the originally described work. To crown it all the managers will be hopeless to be able to clean up the mistakes which are intertwined and in a real mess.External actionsWith the effects of the feedback loops, ripples, and the knock-on the project there will be a huge outcry in the failure of the project. The system dynamics projects affect all the stakeholders in the project; they include direct and indirect players and those who are the internal player of the project such as subcontractors and suppliers. According to Lyneis, & Ford, (2007) "primary adverse ripple and knock-on feedbacks as typically modeled by system dynamicists are internal to the project (often including suppliers and subcontractors), adverse feedbacks through clients and customers can initiate or amplify internal project dynamics".The behaviors that may be seen will include; clients changing the resources, scope, design, and requirements of the project. The client can also put in force the project control actions and its effect such as the ripple effects and may lead to concluding differently before the project is complete.The contractor will be forced to put in more funds to save the initiatives. This will be in an aim to redeem the image of the contractor and save the project from complete paralysis. The managers have options to change orders, which have contributed to the project negatively and this must be done through avoiding rush decisions. The manager has the options of cutting costs through other means but great caution is necessary to avoid reduced quality of the original work. The trust between the contractor and the client is highly dented in cases of undelivered promises or continuous shift of deadlines. The client will lack confidence on the project and the client will need a constant update on the projects activities whenever they are done to feel secure. This time spent on updating the client will be time wasting leading to slower progress on the already late schedule. This would require a reinforcing loop in order to boost the hopes of the client.The more the extended deadlines the more the client becomes inpatient and thus the trust will be wasted away, further hopes of shifting deadlines will cause the client to complain bitterly on the progress of the project; this will increase more pressure on the schedule and lead to more uncontrollable problems which might be a risk of collapse. The worst comes to worst when the project is litigated. Any white elephant is a waste of the resources of time, money, and manpower invested in it. When the project stops then the client will see it as an exploitation a heist or worse a waste of worth while saving he had taken time to consolidate.