Contemporary organizations attempt to achieve their overarching business objectives by matching those to specific projects. Project is defined as temporary endeavor or undertaking that spans across organizational and functional boundaries, and is executed against intended objectives bearing in mind cost, time, and quality constraints (Badiru, 2019). It is also described as a sequence of unique and interconnected activities aligned by the same purpose and requires being executed according to a single specification (Muller, 2017). Hence, projects should be distinguished from processes as activities that determine how any function operates every single time.
To ensure that projects meet their objectives, it is important to use a set of defined practices. It is realized through the application of knowledge, methodologies, and techniques to project phases and underlying activities and is known as project management (Kerzner, 2018). There are vast explanations of project management objectives, while generally those are aimed to develop and implement project procedures, ensure transparent communication inside project team, and deliver the project that meets expectations (Delisle, 2019). Hence, while project management is procedural, it requires customization depending on the project size, team composition, and specifications.
Project Types
Depending on the industry, requirement specifications, and intended objectives, projects could be classified into various types. For instance, if projects are classified by scope, the following types could be outlined:
- Small projects are short in duration (typically less than 6 months), do not have dedicated resources, narrow in scope, have readily available but limited costs and do not required advanced skills and expertise. Typical examples of small projects are creating the training course for a target group of participants, developing a website, or writing a business plan.
- Large projects are extended in time and could last several years, require more formal approach to planning, control and resource engagement, have higher risks of failure, and require advanced skills and expertise (Kerzner, 2018). Typical examples of large projects are constructing a plant, performing major organizational transformation or business expansion, or designing new technical infrastructure for a chain of organizational entities.
When the project type is classified based on the source of capital, the following types could be described:
- Public projects are financed by the government institutions; those could be represented with major reform performed in public sector such as education and healthcare.
- Private projects are financed by the commercial organizations or private investors, such as opening a new startup venture.
- Mixed projects are financed from both public and private sources. At the present time, many of such projects emerge as a part of smart growth planning strategies and appear in construction sector aimed to combine residential and commercial purposes across large cities such as Dubai (Alexander et al., 2019).
Finally, projects could be classified by specific objectives and manifest in the following types:
- Production projects are aimed to develop or improve existing product or service as determined by organizational objectives. Introducing a new brand or expanding company services to another business segment are the examples of such projects.
- Educational projects are aimed to support learning process in the community. The example of such project is developing, sponsoring and executing partnership strategy with a university to enhance business understanding among future graduates.
- Social projects are aimed to improve human wellbeing and quality of life. The example of such project is developing new corporate social responsibility (CSR) strategy by an organization.
Features of Project Management
Contemporary project management practices require considering essential features that are common in theory while may vary in practice. The first essential feature is risk management, which suggests that there are no projects without risks, and it is important to calculate risks in advance to minimize potential impact. The second feature is resource management, which assumes that allocating resources should be wise and convenient for the project tasks distribution. The third feature is setting dependencies and milestones, which means that project activities have various dependencies and therefore require connecting those appropriately to meet intermediate milestones. The fourth feature is effective time tracking, which means that project management systems should be enabled with tracking tool to enable better planning, time estimation, and precision on working on the tasks. However, these features are not exhaustive, since depending on the scope and type, new requirements might emerge.
Project Life Cycle (PLC) Application
Business and Context Description
Philip Morris International is a large multinational organization that manufacturers and sells tobacco products and reduced-risk smoking products. Its recent initiative was to transform business operations towards a smoke-free future, where adult smokers receive less harm from the tobacco products consumption. Using its own research and development facilities, the company introduced IQOS, an electronic device that works by heating rather than burning a cigarette. In such way, it allows reducing the smell and consume less nicotine compared to the traditional smoking.
While the device was approved by Food and Drug Administration, many consumers still experience concerns in switching from traditional to electronic smoking. Pursuing its commitment of reducing health risks from smoking, Philip Morris International initiates a project that will help to increase sales of IQOS device in UAE, meanwhile reduce the percentage of traditional smokers during 2021-2022.
Description of PLC Stages
To achieve specific goals, projects are broken down into phases further arranged into a logical sequence known as project life cycle (PLC). Primarily, it is required for the better management control and includes initiation, planning, execution, and closure phases. During the initiation phase, it is critical to determine the main project objective. The first phase is considered to be the most important stage of the project since it requires extensive preparation to proceed with the project through feasibility study and data collection. Furthermore, since project initiation also assumes hiring project team, setting up Project Office, and requesting approval, it determines the success of the consequent stages.
During the planning stage, project solution is further detailed to identify the work to be done. For this stage, the important part is project scoping, where tasks and resource requirements along with the appropriate strategy for the execution are identified. Based on the scope, project plan, budget, and work breakdown structure are developed and specific objectives are further formalized. Overall, planning stage assumes that the project is broken down into sequenced and manageable units, the resources per unit are estimated, and the most appropriate way of scheduling unit execution is chosen.
During the execution stage, all tasks associated with providing final project deliverables are completed. It heavily relies on the planning stage, since all operational activities are based on the previously developed documentation, budget, and allocation of resources. The execution stage requires major involvement and expertise of project managers to coordinate teamwork, manage conflicts, reallocate resources to meet budget constraints, and set appropriate schedules (K. C. Laudon & J. P. Laudon, 2020). Finally, at this stage the team has regular meetings and requires to submit progress reports to ensure that the project moves in the right direction, notifying stakeholders on potential variations or adjustments required.
The closure stage assumes that the project is ready and could be delivered to the customer. Furthermore, it requires to communicate completion to other stakeholders and release resources to other projects, including project documentation. However, it should be completed only after the project is evaluated against overarching objectives and main constraints. Finally, a lessons-learned session is conducted to examine pros and cons of the project to ensure that teams can consider project mistakes and make improvements in the next efforts.
PLC Application and Documentation
Initiation
Philip Morris International had an established presence in UAE market, with its main headquarters located in Dubai. However, IQOS was a completely new product which was never branded or sold before, which means that the company should go through the complex conception stage. Considerably, as a starting point it was decided to conduct a feasibility study to decide whether it is reasonable to do the project at all, targeting adult smokers in UAE and company employees. The study was conducted using a combination of surveys and interviews, where participants were asked to share their views on three problems.
It included sharing attitudes to reduced risks from smoking, commenting on the awareness of using electronic tobacco heating devices, and readiness to pay additional money for purchasing a device as an addition to special cigarettes. Overall, it was found that the majority of respondents feel positive about such innovation; hence, it was decided to proceed with the project. The detailed market feasibility report is provided in Appendix A.
Using the feasibility study findings, a business case was developed and sent for the project sponsor’s approval. Specifically, financial projections and return on investments (ROI), tentative goals and deliverables that explain intended market coverage and expected growth in sales for the upcoming years were explained. The risks of market non-acceptance, changes in regulations, and intensified market competitions were listed. The business case was approved, which allowed formulating the main project deliverables. The first is a significantly increased customer awareness about IQOS as a reduced risk product, while the second is guaranteed product availability in all major points of sale across UAE (see detailed business case in Appendix B). Finally, the internal cross-functional team of experts in marketing, sales, product design, and consumer behavior analysis was assembled.
Planning
The first step performed during the planning stage was to develop project charter based on the previous considerations from feasibility study and business case (see Appendix C). The document included expected deliverables for improved consumer awareness about IQOS as a reduced risk product and maximized point-of-sale coverage. SMART objectives were also included to support the need of marketing IQOS as an alternative to traditional cigarettes and completing the project on time, as well as making specific assumptions and constraints related to market specifics.
The next step was to complete stakeholder analysis by comparing their interest and influence as shown in the Table 1. It considers both individuals listed in the project charter as well as stakeholder groups involved in the project externally. As table shows, the project should meet the needs of department heads responsible for distribution and marketing communications given that the majority of team members directly report to one of the mentioned senior managers. Meanwhile, we should also consider the group of adult smokers as target audience for the project. Alternatively, the key players identified are project sponsor who provides financing for the project, a government official who liaison with project team on industry regulation specifics, as well as local management team.
The least important external stakeholder group are non-smokers, while eventually the group might be also interested with technical design of IQOS if those are irregular smokers. Similarly, the employees of company affiliates around the globe might have less awareness about UAE market and could be notified about the project progress through email distributions or corporate newsletters. Meanwhile, it is important to consider project assistance that could be provided by IT department in terms of digital communications, local employees for further feedback collection, and third-party employees who regularly interact with consumers.
Table 1. Stakeholder Analysis.
The next stage of the planning phase was to develop project schedule further summarized in the Gantt chart and Work Breakdown Structure (WBS) (see Appendix D). While it was preliminary summarized in the business case, it is important to explain one consideration related to this specific project. Since the development of sales strategy assumes approaching consumer market in two waves with respect to the need of collecting intermediate feedback data from adult smokers, we assume that execution phase might require further planning. Hence, we assume one month as a unit measure, the project starts on February 1, 2021, and activities will occur after month 11 as tentative.
Execution and Closure
During the execution stage, project team members were divided into smaller functional units responsible for developing communication materials and selecting marketing channels in parallel. At this point, the following key performance indicators were identified and included as updates to the project plan:
- To ensure that marketing campaign covers at least 80% of the adult smokers during the first wave (by January 2022);
- To train and educate 70% of sales agents and distributors on the new features of IQOS by January 2022;
- To obtain the average score of the forthcoming customer satisfaction survey distributed in January 2022 of no less than 4.2 out of 5 points (‘5’ = very satisfied).
The identified KPIs are associated with three critical milestones. The first milestone is to complete customer feedbacks to revise future direction of the project and make additional corrections to the campaign. The second milestone is to analyze feedbacks and prepare new or updated communication mediums for the launch of the second wave of the campaign. Finally, the last milestone is to complete the project while also meet specific objectives and deliverables outlined in project charter.
Finally, the benchmarking process for the project was designed by comparing the effectiveness of two waves of the marketing campaign and associated market research of consumer awareness. Furthermore, the information from distributors and point-of-sales representatives was collected separately to compare if the objective of complete coverage of major points of sales meets its objectives. These reports were used to analyze the effectiveness of the project. Afterwards, each functional unit responsible for marketing, sales and distribution, and market research was asked to complete individual documentation on the main project activities. The individual findings of all units were further discussed during the lessons-learned meeting in a project closure phase. Final reports and financial records were further archived and transmitted to the head office for reconciliation.
Significance of Project Leadership and Agile Approach
Previous analysis has been performed with respect to PLC stages and their application to the project. However, it is also important considering two additional factors that could dramatically influence project success apart from the methodological tools and techniques. The first factor is the leadership persona of project manager, a person responsible for supervising the project from initiation to closure. Past studies fairly admitted that the role of project manager should not be mixed with process manager, since the former is responsible for directing people and managing conflicts in addition to technical skills (Mainga, 2017).
Moreover, it is a responsibility of project manager as a leader to direct the team effort as its members progress through the stages of maturity. Hence, for the hierarchically structured organizations that also depend on government regulations, which is the case of analyzed project, project leadership is well justified because of the need to match human expectations and business needs.
The second factor is using agile approach, which is different from the sequential models of project execution. Specifically, agile methodology emphasizes that end products should be the ones that customer really want, developed through the short work cycles, and a subject for constant revision (Dikert et al., 2016). Furthermore, it is assumed that agile teams do not have a formal leader, which means that continuous collaboration is the key to succeed (Mas et al., 2020). Apparently, this idea was used for the execution stage, where two iterations of marketing campaigns based on the feedback are proposed.
Meanwhile, large multinational companies such as Philip Morris cannot afford the luxury of revising project plan on even a monthly basis given the scope of investments made in R&D and overall hierarchical reporting line. Hence, the agile approach as a framework could not be applied to the project in full, while some elements such as iterative revisions could still be integrated.
Rationale Analysis
Considering the breadth of tools and methodologies existent under the PLC framework, its application for the given project is justified. As a concept, PLC integrates two distinct features that well fit commercial projects executed by the multinational companies. On the one hand, the framework originates from the waterfall model, which is purely sequential and fits the formalization norms required by the large companies to control budget flows and resource allocation (Hetemi et al., 2020).
Alternatively, project life cycle is similar to the product life cycle concept used by companies to describe how brands progress through the market from the launch to market withdrawal (de Melo et al., 2020). The same observation refers to the leadership, where project managers and commercial managers in the large companies are required to possess similar people-oriented competences and skillsets rather than simply control project execution. However, it is likely that PLC principles would be hardly applicable for non-commercial, public projects, where the lack of methodological awareness might bring risks for controlling all three components of the project management triangle.
Review and Critique of PLC Effectiveness
Post-Implementation Project Review
The post-implementation project review is the analytical process of reviewing project success based on connecting the dots between various phases of the project and exploring its overall performance. The post-implementation assumes the robust analysis of documentation, reports, and event analysis and is based on the KPIs, milestones, deliverables, and benchmarking linked to the project objectives. For the current project, the review process findings could be summarized in the following manner:
- The marketing campaign intended to cover 80% of adult smokers during the first wave was successful and resulted into increased consumer awareness about the product at more than 85% by the end of campaign.
- The KPI of training and educating 70% of distributors and sales agents during the first wave was not met, which resulted to coverage of only 73% of major points of sale by the end of campaign
- The average score of the final customer satisfaction survey was 3.6, with a primary complaint of insufficient availability of tobacco sticks in points of sale, primarily in small cities
- Because of insufficient market coverage and non-availability of tobacco sticks, the company did not reach its sales targets
- The percentage of adult smokers who switched to IQOS was estimated at 21.2% which is above the target, while the number of traditional smokers decreased only by 3% in 2 years.
- The project was completed on budget and on time, while the majority of cost expenditures were unexpectedly traced during the first rather than second year
- Internal benchmarking has shown that higher customer satisfaction levels were observed during the first rather than second wave of the marketing campaign. Furthermore, it was shown that there is a high discrepancy in responses collected from distributors and point-of-sale representatives in terms of training and communication.
Overall, it could be concluded that the project succeeded in creating awareness. However, it failed to ensure sufficient market coverage and generate the revenues because of insufficient efforts in educating and training of distributors and sales agents. Finally, there was a lack of follow-up activities required to ensure consistent communication with third parties, as well as poor analysis of the first wave campaign results collected from the first customer survey.
Importance of Reliability and Validity in Project Evaluation
Based on the above, it is worth admitting that data interpretation methods chosen by the project team were reliable but not valid during evaluations performed. While it was fair to select adult smokers and third-party representatives to measure customer satisfaction and market coverage efficiency respectively, the difference in internal benchmarking shows that inappropriate statistical methods for data interpretation were chosen. Similarly, it could be assumed that more milestones were required to track project progress through cost and resource analysis, since the results of the first wave appeared being invalid (Alexander, 2020). Hence, the project could have benefitted from the application of logic models deployed by project manager during the milestone reviews, while those should have been developed during the planning stage of the project. Alternatively, if the deviations are observed during progress review, generic change theories could have been applied for the intervention.
Application of PLC in Large and Small-Scale Projects
The concept of PLC is well-established for the large projects, while its effectiveness is questionable for the small-scale projects. Considering that small projects require less formality and structure, those could still benefit from specific tools and methodologies outlined in PLC framework, while those should be scalable and adaptable. The idea behind is that small projects require less time for initiation and planning, which assumes less focus on processes and ease of application (Khosravi et al., 2020). For instance, small projects might use a lite version of the project charter that excludes too detailed project description, specifications for all roles and responsibilities, high-level deliverables, and supporting information.
Similarly, WBS could be simplified to a graphical organizational chart that does not show dependencies and interrelationships, while deliverables list is used only for the tracking purposes without formal update requirements (Bao et al., 2018). Furthermore, some information from the project schedule such as showing months or hours might be ignored as one does not bring much value for project performance evaluation. Finally, a lessons-learned meeting could be avoided when the team is small, closing the project with a simple memo shared among team members.
Evaluation of PLC for Making Valid Conclusions and Recommendations
PLC helps project managers to draw valid conclusions and recommendations as a methodology that is based on concepts and theories. However, in practice such decisions should also consider human factors, such as team preparedness, past experience of project manager, and communication with stakeholders and customers (Kashyap, n.d.). For instance, if a project manager with an experience of managing large number of small projects is assigned to a large project, PLC will unlikely to help managing mounting responsibilities and elevated requirements.
Alternatively, the wrong approach towards assembling a project team might result in internal conflicts, which could not be regulated with methodology or the appropriate choice of tools. Hence, PLC helps to evaluate only projects that strictly followed methodological choices and requires using alternatives for more complex evaluation of successes and failures. As for alternatives, PLC could be further enhanced with logic models initiated by project managers, which would help to consider both project specifics and human factors
References
Alexander, J., Ackermann, F., & Love, P.E.D. (2019). Taking a holistic exploration of the project life cycle in public-private partnerships. Project Management Journal, 50(6), 673-685. Web.
Alexander, M. (2020). What is project scope? Defining and outlining project success. Web.
Bao, F., Chan, A.P.C., Chen, C., & Darko, A. (2018). Review of public-private partnership literature from a project lifecycle perspective. Journal of Infrastructure Systems, 24(3). Web.
Badiru, A.B. (2019). Project management: Systems, principles, and applications (2nd ed.). Taylor & Francis.
De Melo, J.C.F., Salerno, M.S., Freitas, J.S., Bagno, R.B., & Brasil, V.C. (2020). From open innovation projects to open innovation project management capabilities: A process-based approach. International Journal of Project Management, 38(5), 278-290. Web.
Delisle, J. (2019). Uncovering temporal underpinnings of project management standards. International Journal of Project Management, 37(8), 968-978. Web.
Dikert, K., Paasivaara, M., & Lassenius, C. (2016). Challenges and success factors for large-scale agile transformations: A systematic literature review. The Journal of Systems and Software, 119, 87-108. Web.
Hetemi, E., Jerbrant, A., & Mere, J. O. (2020). Exploring the emergence of lock-in in large-scale projects: A process view. International Journal of Project Management, 38(1), 47-63. Web.
Kashyap, V. (n.d.). Project management system: Definition & features. Web.
Kerzner, H. (2018). Project management best practices: Achieving global excellence. John Wiley & Sons.
Khosravi, P., Rezvani, A., & Ashkanasy, N. M. (2020). Emotional intelligence: A preventive strategy to manage destructive influence of conflict in large scale projects. International Journal of Project Management, 38(1), 36-46. Web.
Laudon, K.C., & Laudon, J.P. (2020). Management information systems: Managing the digital firm (16th ed). Pearson.
Mainga, W. (2017). Examining project learning, project management competencies, and project efficiency in project-based firms (PBFs). International Journal in Managing Projects in Business, 10(3), 454-504. Web.
Mas, A., Mesquida, A.-L., & Pacheco, M. (2020). Supporting the deployment of ISO-based project management processes with agile metrics. Computer Standards & Interfaces, 70, 103405. Web.
Muller, R. (2017). Project governance. Routledge.
Feasibility Report
Realizing the need of further commercialization of reduced risk products and popularization of IQOS brand on the UAE market, a feasibility study was conducted to understand current consumer preferences in the country. The target audience of the study included randomly chosen adult smokers aged between 18 and 30 years in UAE, and all employees working in UAE headquarters. Surveys and interviews were used to collect the data, further interpreted by internal market researchers. The results of the study and essential findings are summarized below.
First, it was found that, generally, respondents feel interested to reduce the effect of smoking on health. However, they would like to receive more information about how actually this works if electronic device is used for tobacco heating, considering that IQOS working principle differs from vaporizers. The highest interest to switch from traditional cigarettes to electronic alternatives was observed among the adult smokers aged between 18 and 25. It is potentially explained with their interest to technology and search for innovations. Second, it was discovered that participants who are interested to switch to IQOS are eager to pay more for the additional cost of device. However, they would like to know how frequently devices are required to be repaired or replaced. Finally, it is notable that older participants tend to demonstrate polar opinions regarding using IQOS and express the risk of using both traditional cigarettes and electronic devices at once if they cannot quit.
Despite the concerns voiced, it is recommended to proceed with the project given the overall positive perception of respondents. However, several concerns should be considered prior to initiation. Specifically, it is required to better educate adult smokers about IQOS features, as well as address the concerns voiced by older group. Finally, it is worth considering initial focus on the younger adult smokers because of the notion of technology interest.
Business Case
Executive Summary
The business case summarizes key ideas related to commercialization of IQOS as an alternative to traditional cigarettes in UAE. The pilot project is expected to be completed by 2023, with further efforts to be done for market monitoring and strategy correction. Overall, the project appears to be feasible while special attention should be made for the risks of product non-acceptance, competition, and new government regulations.
Financial Statement
According to initial estimates provided by market research and external consultants, the project will cost $650,000 USD (technology costs are excluded). The expected returns on investments are $50,000 USD in 2021, $400,000 in 2022, and $900,000 in 2023.
Project Definition
The project is aimed to reduce consumption of traditional cigarettes by adult smokers while increase the purchase and consumption of IQOS electronic devices.
Background
Philip Morris International has recently announced its intention to reduce consumption of traditional cigarettes by promoting IQOS, a less harmful electronic device that brings new smoking experience. UAE has been chosen as one of the pilot markets to test the initiative. A feasibility study was conducted to evaluate whether UAE consumers would like to switch to electronic devices, concluding that it is worth initiating the project.
Goals
The first goal is to ensure that the percentage of adult consumers who smoke IQOS is not less than 20%. The second goal is to reduce the number of traditional smokers by 5% in 2021 and by 10% in 2022. The third goal is to ensure that IQOS sales account for 10% of the market in 2021 and 15% in 2022. The fourth goal is to ensure that the first phase is completed by the end of 2022 on time and on budget.
Deliverables
The key project deliverable is to ensure availability of IQOS devices and special cigarettes across the major points of sale across UAE, including shopping malls, boutiques, and Duty Free Zone. The second deliverable is to increase awareness about IQOS as a reduced risk product among 35% of adult smokers by 2022 and 85% of adult smokers by 2023.
Operational Impacts
Parallel reporting process will be required to compare the difference in consuming traditional cigarettes and IQOS to ensure that market efficiency is not affected.
Scope
During the first year only large cities in UAE will be targeted as a first wave, while smaller regions will be engaged during the second year. Additional training and engagement of distributors, wholesalers and salespersons is required.
Timeline
- To assemble a project team and complete initiation phase: March 2021
- To complete planning phase: April 2021
- To initiate and complete the first wave of execution phase: May 2021 – January 2022
- To initiate and complete the second wave of execution phase: February 2022 – November 2023
- Conduct lessons-learned session and close the project: December 2023.
Risks
Project risks include rejecting product by the market, new government regulations for tobacco consumption, and presence of competitors. The first risk is addressed by dividing execution phase in two waves to conduct intermediate market sensing. The second risk will be managed by regular consultancy with the government on expected changes. The third risk requires conducting regular market research on innovations attempted in tobacco industry.
Project Approach
The project will be executed by internal cross-functional team, while the distribution services will be managed by current service providers.
Project Charter
Gantt Chart and Work Breakdown Structure
The first row represents a number of months starting from the February 1, 2021, while the first column shows shown below in WBS.