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Fromthe Chair
The evolution of project management has been remarkable Some believeourprofessioncommencedinEgyptfortheconstructionofthe great Pyramid of Giza, with a clear charter and deadline to deliver before the pharaoh died Fast forward to the 21st century, the introduction of Artificial Intelligence (AI) and digital capability has added a new dimension However, the human element and emotional intelligencerequiredbyProjectManagerscannotbereplacedbyAI
Wecanautomatecertaintasks,suchasscheduling,trackingprogress, an element of risk prediction AI can contribute to expeditious data driven decisions and improving efficiency However, project managementisnotjustabouttasksandprocesses Itisaboutpeople, relationships, communication, leadership, and decision making in complex and uncertain situations These are areas where AI currently fallsshort
The Project Management Profession brings a unique blend of technical knowledge, strategic thinking, and emotional intelligence to the table PMs understand and manage the nuances of team dynamics, stakeholder expectations, and organisational culture They can navigate through ambiguity, make judgement calls, and inspire and motivate their teams These are skills that are that cannot be automated
Whilst AI can be a powerful tool for Project Managers, it's not a threat Rather, an opportunity to augment a PMs capability, free up time from routine mundane tasks, and enable a focus on strategic and people orientedaspectsoftheirrole
The Australian Institute of Project Management (AIPM) is playing a crucial role in this transition by promoting digital literacy, continuous learning and driving diversity We are intentionally focussing on equipping our members and clients with the right skills, mindset and communities to grow and network AIPM is designing courses on digitisation and AI, while also reinforcing the value of human skills in projectmanagement
Agile| Impactful|PurposeDriven| MemberLed
Fromthe CEO
DR.DARIUSDANESH ChiefExecutiveOfficer
The project management landscape is evolving rapidly, presenting complex challenges As the CEO of the Australian Institute of Project Management (AIPM), I have seen how our profession requires greater resilience and adaptability Factors such as technological advancements, globalisation, and a focus on sustainability and social responsibility createbothopportunitiesandchallenges
The swift pace of technological change demands continuous learning and adaptation Traditional project management skills are no longer enough; today’s managers need emotional intelligence, strategicthinking,anddigitalliteracy
Continuous learning and innovation are necessary to navigate complex projects, requiring a proactive approach to anticipate and address future trends and challenges Project managers must be lifelong learners,updatingbothtechnicalandsoftskills
The AIPM supports ongoing education and development through certification programs, workshops, and seminars; ensuring project managers stay current with industry trends and are preparedforfuturechallenges
Resilience in project management is crucial By embracing diversity, fostering education, leveraging technology, and leading strategically, we can achieve sustained success. The AIPM is dedicated to supporting members and partners in building a resilient and innovative project management community, ready to tackle today’s challenges and seizetomorrow’sopportunities.
AIPM
ADVANCING PROJECTS: HARNESSING THE POWER OF SCIENCE, TECHNOLOGY, AND INNOVATION
Project Managers are required to maneuver a dynamic, fast-paced and competitive world demanding cross-functional skill sets The success of projects hinges on the ability to adapt, innovate, and leverage the latest advancements in science and technology Regardless of projects related to advanced engineering, complex healthcare initiatives or multifaceted projects across various sectors are undergoing a significant transformation driven by scientific methods and technological innovations. It is crucial to explore opportunities to harness the power of science, technology, and innovation to advance projects and drive meaningful changes across the globe.
Dr. Binod Aryal Director of the Board
Australian Institute of Project Management (AIPM) SystemsThinkingandComplexityManagement
At the core of successful project management, lies a deep understanding of systems thinking and complex management Effective execution of a project requires teamwork and collaborative endeavours They are complex systemswithinterconnectedcomponents,stakeholders,and variables By applying scientific principles to project management, such as systems thinking, project managers can better comprehend the intricate relationships within projects, identify potential bottlenecks, and optimise workflowsformaximumefficiency
TechnologicalAdvancements
Advanced tools developed through technological advancements serve as a key driver enabling progress and
success in project management From artificial intelligence to blockchain, technological advancements are reshaping project planning, execution and monitoring Artificial Intelligence-powered project management tools automate repetitive tasks, analyse vast amounts of data, and provide real-timeinsightstoprojectmanagers.
Meanwhile, blockchain technology ensures transparency, security, and traceability in project transactions and communications By embracing these technological innovations, project managers can streamline processes, enhancecollaboration,andachievebetterprojectoutcomes AgileMethodologiesandIterativeDevelopment
Innovation is the key enabler of successful projects, and agile methodologies provide the framework for fostering innovation and adaptability Agile approaches like Scrum and Kanban emphasise iterative development, continuous feedback, and flexibility in responding to changing requirements By breaking down projects into smaller, manageable iterations, teams can deliver value to stakeholders more quickly and effectively Moreover, agile methodologies promote a culture of collaboration, empowerment, and experimentation, driving innovation and creativitywithinprojectteams.
ThePowerofDataAnalyticsandPredictiveModelling
Inthetechnologicalworldpoweredbydataanalytics,project managers can access vast amounts of data that inform decision-making and optimise project performance. Advanced analytics and predictive modelling techniques enable project managers to analyse historical data, identify trends, and forecast future outcomes with added accuracy By leveraging data insights, project managers can make informed decisions, mitigate risks, and proactively address projectchallengesbeforetheyescalate BehaviouralScienceandStakeholderEngagement
Technology and data play critical roles in project management; however, the human element and cognitive skills are crucial to analysing various aspects of human engagement Behaviouralscienceprovidesvaluableinsights into human behaviour, communication styles, and decisionmakingprocesses
By understanding the professional motivations and preferences of project team members and stakeholders, project managers can foster trust, and enable productive culture, collaboration, and accountability. Effective stakeholder engagement ensures project objectives align with stakeholder needs and expectations facilitating successfulprojects
EmbracingtheFutureofProjectManagement
The projects are becoming increasingly complex and dynamic;embracingscience,technology,andinnovationwill be essential to the successful delivery of complex projects
Organisations can leverage the power of systems thinking, technological advancements, agile methodologies, datadriven decision-making, and people-centric project management to unlock new levels of efficiency, effectiveness, and innovative methods for project delivery
The future of the project management profession will necessitate the integration of science, technology, and innovation to drive meaningful change, promoting progress and increasing prosperity across various sectors of the economyworldwide
DATA DRIVEN DECISION MAKING AND ITS EFFECTIVENESS ON MEGA PROJECTS
By Abhi Datta
Project Director, Infrastructure, Australia & New Zealand, Turner & Townsend Pty Ltd
Context
Jim Barksdale, the former CEO of Netscape once said, “If we have data, let’s look at data If all we have are opinions, let’s go with mine” Having worked on several major projects, I have witnessed that there were strategic decisions which were being made based on opinions at various stages of the project. There was a requirement to getasinglesourceoftruth,butthiswasnotaneasytaskto achieve as the projects transitioned through various stages and various levels of maturity Changing leadership also added to the complexity of mega projects These anecdotal observations reveal a general problem and the need to understandtheroleof‘data-basedevidence’usedinforming decisions
Inthisarticlewewilllookatabitofhistorytosetthecontext, look at evaluating decision quality and look at some processesandexplorehowtechnologycanbeanenablerto help with decision making on major projects during the executionphase.
Understanding the history of data driven decision making (DDD) is important as then we can understand if this has changedoveryearsandifsomelessonscanbedrawnfrom past Data as a discipline evolved long back with Fredrick Winslow Taylor and the scientific management techniques of the early 1900s with his world-famous work “The
PrinciplesofScientificManagement” Therewasanintentto apply scientific management techniques to data, but it was limited by the technology available at that time There was also an introduction to data visualisation by Willard Brinton (1917) which is a precursor to more modern data analytics anddashboards.Apositivecorrelationhasbeenestablished between business performance and decision-making practice,andsinceaprogramisatemporaryorganisation,a correlation between program performance and decision practices should be expected This is to be read in conjunction with the decision quality framework as discussedlater
Bent Flyvbjerg has also observed that the main challenges of megaprojects are inadequate, unreliable, or misleading information; and conflicts between decision making, policy andplanning
It is to be noted that I have specifically not covered ‘behaviouralbiases’astheyhavebeenwellresearchedand I would highly recommend the international bestseller ‘Thinking, Fast and Slow’ by Daniel Kahneman for readers whowanttoexplorethebehaviouralbiasesfurther
Thus, I have covered this article on a technical basis and stayedawayfromconceptslike‘Strategicmisrepresentation’ which is defined by Bent Flyvbjerg as the tendency to deliberately and systematically distort or misstate information for strategic purposes’ I would strongly encourage readers to go through these concepts to get a comprehensive understanding of decision making on major projects.
What’sworkingandwhatcouldbebetter?
While on large complex capital projects for over 20 years, I have seen that data driven decision making as a concept was very much prevalent in several pockets of the organisations. This in most cases was not integrated to provide insights to a governance forum or a steering committee but existed in specific pockets of the project Thus,itisseenthattheideaofdatadrivendecisionmaking isnotnew,butnewtechnologyhasenabledthehandlingof largedatasetsmucheasier Itisalsoobservedthatthedata or insights that was valued by the program leadership team may not be always valued by the construction manager on site This is well understood as project managers and engineers look at ‘on site’ day to day data for decision making while the steering committee relied on macro level dataforstrategicdecisionmaking
DecisionmakingandDecisionQualityframework
Ifwethinkthroughdecisionsandoutcomes,wewillseethat thesearetwodifferentthingsasthereareuncertaintieswith every choice You could make a good decision and still the
outcomecouldbebad Thisisparticularlyrelevantformajor project performance To illustrate the point, you could see that a major project like Opera House Sydney could have beenabaddecisionwithapooroutcomewhenweconsider the iconic projects cost and schedule overrun The project was 1300% over budget and took 14 years to build. However, the positive outcome considering its iconic nature and tourism boost cannot be denied Similarly, a poor decision may have a good outcome because of excellent executionorjustplainluck
To judge the quality of a decision, there are six distinct elements of a good decision as documented by Carl Spetzler,HannahWinterandJenniferMeyer Theseare:
Alternatives–Theoptionsthatwecanconsider 2 Relevant and reliable information – What we know and theinformationwehave.
Clearvaluesandtrade-offs 4
Soundreasoning 5
Commitmenttoaction 6
When we look at decision making on several projects there seems to be that missing thread of data that connects the information available for decision making. This is where the ‘single source of truth’ seems like an impossible task The decision making in several cases centers around opinions andpoliticaldriversratherthandatadrivendecisionmaking Its also seen that the data available from supply chain can’t alwaysbetaggedasreliableandrelevant.
Thisisparticularlyrelevantfordatawhichissharedwiththe client from the contractor In major projects there seems to beagrowingdivergencebetweena‘commercial’programor Gantt chart which is a ‘real’ program used for executing the project Similar differences in opinion applies to cost forecasts,riskpositionsetc.
The process for good decisions in projects - Integrated ProjectControls(IPC)
Project controls does not guarantee success – but needs to be set up in the right way Often on mega infrastructure projects and programs, controls are established in siloes –for example in planning, cost, risk, change and governance – with a lack of integration between processes This will havesomebenefitontheprojectbutmaynotmeetthetrue potentialofintegratedprojectcontrols(IPC)
With the increased pressure on the infrastructure to deliver projects successfully, it is more important than ever for the industry to make the leap to a full IPC model –systematically bringing together customer requirements, supplier-managementvalues,andstatusinformationfromall
data sources in a compatible form that allows for rational decision making Increased pressure will require integration of controls with the supply chain as currently projects are increasingly competing for a limited pool of suppliers and resources
This can provide data driven insights from integrated data sources to advise on areas for efficiency, recommend management action to protect performance and bring project and market data to compare performance and
propagate learning in the program The most effective decisions can only be made informed by data and through proper integration This increases the importance of data stewardship on projects A focus towards establishing a culture of project controls thus establishing some ‘ways of working’ early as a team can help mitigate some of the behavioral aspects which deter the effectiveness of project controls Currently, project controls is not inherently part of earlyprojectdevelopment
By making project controls and data strategy an inherent partofprojectstrategyandboardroomdiscussions,program teams can signal from day one that transparency over performance is central to effective delivery. Early establishment of systems and normalisation of data-driven information gathering would help to set up a reliable source ofprojectdataandtoinformeffectivedecision-making This can also help in avoiding any biases of personality politics thatcansometimesbeatplayinorganisations–focusingall decisions on hard data and clear, rational argument Achieving this takes rigor and buy-in from the leadership team, but the benefits must not be underestimated The process of getting started with integration can be perceived ascumbersomeandcostintensive
This need not be the case There are three key steps all teamsshouldconsider,whichwillmakeestablishingIPCon a mega infrastructure project clear and simple – delivering confidenceinprogramandprojectperformance
Firstly,investmentinacultureoftransparencyonprojects–with the necessary executive buy-in A lack of transparency comes hand in hand with the sort of siloed approach that
should be avoided if we want to encourage data-driven decision-making at every level Secondly, teams must establish a data strategy to have an integrated project controlssysteminplace.Ifalldatapointsarenotintegrated and thought through, the full benefits of IPC will not be felt. Thirdly, front-end planning is vital - with a focus on critical path activities such as long lead item procurement or awarding early contracts By doing this, the efficiencies on projectscanberealisedandbemoreeffective
Technology
Technology has evolved a lot to provide us the computing power and integrate several software tools through APIs (application programming interface) or otherwise This means that if we are looking at cost, schedule (time), risk, changecontrolandsitedatacomingfromvariousinterfacing toolsyoucouldlookatasoftwarearchitecturetointegrateall those data and get a visualisation platform to provide the resultsandinsightsusingtoolslikePowerBi
So as per the figure above (a generic integration diagram has been used to explain the concept) in a mega project organisationyouwillhave3partstobeintegratedtogether
Part A – Enterprise systems on a project or within a project organisation
Part B - A reliable integration process for technology integration
Part C – Integrated cloud-based service with a data warehouse/datalake
Realising infrastructure’s potential and the urgency required
Challengingperceptionsaroundcostandscheduleoverruns relies on the industry taking proactive steps to change this narrative – both in terms of improving efficiency, and in focusing on the bigger outcomes and benefits that are gainedfromthesemegainfrastructureprojects
To fulfil the potential of global infrastructure to support economic recovery across international markets, and to bringtangiblebenefitstopeopleallovertheworld,weneed a consolidated effort to embed IPC at the beginning of any mega project This may mean to embrace technology, to have a clear data strategy which is used and understood withintheorganisation(ratherthanbeingashelfwareforthe entireorganisationandusedsolelybytheITdepartment)
By adopting an IPC approach with integrated data points, and avoiding a siloed approach and by embracing technology, we can produce actionable insights for projects to generate better outcomes and enable projects to realise long-lasting benefits for the economy, society, and environment As stakeholders and project leaders, we all needtobepartofashiftinmindsetthatisrequiredtomeet thisgoal.Weneedtobeawareofthatsomeoftheproblems faced by global infrastructure projects are often referred to as ‘wicked problems’ where participants have incomplete knowledge, and the problems are interconnected As we have stated, IPC is an integral part of this solution while recognising the constraints that may need to be factored in fromcontractingmodelusedandcompetitiveforces.
“If we have data, let’s look at data. If all we have are opinions, let’s go with mine.”
Jim
Barksdale, the former CEO of Netscape
EDUCATING ON STRATEGIC PLANNING FOR FUTURE PROJECT MANAGERS
A major factor to project success depends on robust acceptance and front-end planning. About finding the correct strategic perspective and planning to control This is the key to Professor Bent Flyvbjerg’s insights from his expertise and study of megaprojects from a recent webinar by the University of Sydney It is in the front end of projects where the rhythm is set for project success; think slow and act fast
By Keziah Sue, Lily Weng, Kartika Puspasar PMLogic
RhythmofSuccessfulProjects
For projects to have a higher chance of success, quality at entry needs to be ensured with adequate preparation and the correct strategic perspective Thinking slow is about shapingthefront-endphaseofprojectstoensuretheproject is executed in the right way For the Empire State Building, that was designing a majority of the skyscraper to be repetitions of the same floor allowing the construction team tobecomeincreasinglyefficientdoingthesamejoboverand over One year was spent on refining the design of the EmpireStateBuilding,comparedtotheoneandhalfyearsit took to build The efficient project implementation was backed up by a well-considered method encapsulating the project’spurposeandgoals
Flyvbjerg’s example with Pixar emphasised eight iterations of the film with feedback every round before the shooting commenced The two-year process of repeating feedback and iteration ensured the expensive production stage was deliveredeffectively Thefront-endplanningreducedtherisk to acceptable levels, avoiding waste of the production budget when real voice actors and advanced computer animationtechnologywouldcomeintoplay
His example with Heathrow Airport Terminal 5 identifies its projectdesignwasbasedonasystematicanalysisofreality to learn from the lessons of previously similar airport projects. The main goal is to find the correct strategic perspective which BAA were successful in doing by taking on full risk responsibility from contractors and incentivising them to commit to timely and high-quality delivery without thefinancialrisktypicaloftheircontracts Thethoroughprestudy and appraisal similar megaprojects aided in defining the strategic framework for Heathrow T5 thus predicting difficulties in on time and budget delivery, and planning for tactical solutions Sydney Opera House was an example of a failed project due to its unorganised front-end planning
Unlike the Empire state building, Sydney Opera House’s project plan did not establish the final design before the construction started due to government pressure to commence immediately, therefore the builders started off building a ‘wrong building’ Lack of value creation in the front-endphasesuchaspositioningtheprojectinitsexternal environmentledtotheOperaHouse’sfailureintime,budget and deliverables it is essential to spend the time and resourcestocreateathoroughplansotheexecutioncanbe
managed smoothly This follows Flyvbjerg’s recommendationtonotoverlookthefrontendofprojects
TheRightStrategicPerspective
As vehicles of change for the organisation, projects need to be delivering the right benefits. The PMLogic 5Ps delivery method aims to help assess the alignment between project activities and the organisation’s strategic objectives, ensuring the connection between projects on the ground andexecutive’sstrategicplan
Purposeisthedriveofaproject.Allprojectsaimtooptimise the achievement of strategic outcomes but understanding the particular “why’ of a project enables planning delivery towardsadefinedandmeasuredsuccess
People emphasises on ensuring adoption, collaboration andengagementbykeypeopleaspeoplearecentralto projectsuccess. Practiceistheapproachorartefactoractivityadoptedto achievesuccessinaproject Platform refers to using suitable tools with a focus on leveraging applications and software for information managementandtransparentcommunication Performancehighlightstheimportanceofthinkingabout the future through the capture, monitoring and reporting of project progress using qualitative and quantitative metrics Performanceisensuringthatstrategicgoalsare achieved at the individual, team, and organisational level
Understanding the 5Ps will add value in consistent and qualityprojectplanning,governanceandmanagement
IronLaw,Psychology&Power
Iron law of Project Management discusses the odds that tend to be against project success. These odds involve the projecthavinglikelychanceofbeingoverbudget,overtime, or under delivering on benefits The root causes of these odds are psychology based or power based Psychology based causes, that include cognitive biases, are not part of ourconsciousthoughtprocess Thisimpliesthatouractions often precede our awareness, leaving us unaware to what wearedoinguntilitisalreadydone.
Common cognitive biases are optimism bias and the sunk cost fallacy which have the potential of increasing the chance of cost overruns and delays Unlike psychologybased causes, power-based causes are conscious thoughts.Theyaredrivenbyourbeliefthattheseactionswill benefit our interests. Power based causes include the culture of strategic misrepresentation This is where we falselyrepresentthetruenatureoftheprojectoutcome,soit looks‘better’thanwhatitreallyis Recognisingtheimpactof
cognitive biases and conscious thought processes and planningtounravelthem,isrelevantforriskunderestimation and forecasting and overall helps project managers have morerealisticexpectations
It is important to be aware that the Iron Law of Project Managementisespeciallyrelevanttomegaprojectslikethe Empire State Building, Heathrow Airport Terminal 5, and Sydney Opera House This is because megaprojects like these are large scale and complex that usually have more than $15 billion AUD of project cost These projects continue to increase in size as the project moves towards completion, leading to higher probability of cost overruns, delays,andbenefitshortfalls Therefore,itisimportanttonot onlyunderstandtherhythmtosuccessfulprojectsbutalsoto acknowledgetheIronLawofProjectManagement
From Plans to People: Human Elements & Biases in Projects
Most of the project failure have this common theme of how the project team tend to make projects look better on paper than they really are It could be something unintentional which caused by cognitive biases within the project team Someoftheexamplesthatarecommonlyobservedisbeing toooptimisticandgroupthink.So,itisimportantforaproject lead to be aware and avoid these cognitive biases and developingtheplanwithhighobjectivity Inresponsetothat, it’s important to have diversity and inclusive project environment which allows project team voicing out their different perspective and concerns Being aware of these things helps project managers make better decisions. Anotherthingtohighlightindealingwithbigprojectsisn'tjust about getting the work done; it's also about understanding thepeopleinvolvedandtheculturetheycomefrom
The project management plays a crucial role in front-end phases of projects in building up value by constantly challenging the project’s viability. One of the key takeaways toasuccessfulprojectistospendthetimeandresourcesto develop a clear and detailed plan before executing the project itself Having a thorough plan as a guideline will allows a smoother execution as everyone in the project team knows exactly what they are doing thus will improve theefficiencyandeffectivenessoftheprocess
JOIN THE RANKS OF THE BEST BY BECOMING A REGISTERED PROJECT MANAGEMENT CORPORATION
The Australian Institute of Project Management (AIPM) is thrilled to introduce its prestigious Corporate Project Management Accreditation Program (RegPMC), designed to meet the dynamic needs of today’s corporate environment
Achieving RegPMC accreditation positions your organisation at the forefront of project management excellence This prestigious certification signifies adherence to the highest standards in governance, methodologies, resource management, quality assurance, risk management, stakeholder engagement, performance metrics,andethicalpractices.
By obtaining RegPMC accreditation, your organisation demonstrates a commitment to delivering superior project outcomes, fostering continuous improvement, and utilising cutting-edgetechnologiesandsustainablepractices Clients and partners can trust that their projects are managed with utmost professionalism, transparency, and efficiency, ensuringmaximumvalueandsuccess
Investing in the Corporate Project Management Accreditation Program means fostering a culture of excellence and achieving superior project outcomes. Empower your team with the tools and knowledge they need to drive success, boost stakeholder satisfaction, and maximisereturnoninvestment
Don’t miss out on this opportunity to transform your organisation’sprojectmanagementcapabilities Registerfor the Corporate Project Management Accreditation Program today and take the first step towards unparalleled professionalgrowthandsuccess!
APPLYING AI TO DELTA HEDGING TRADING RULES
In this article the author discusses his approach for and benefits from using machine learning derived trading rules in the delta hedging without options model The approach uses a Multi-layer Perceptron to fine-tune trading rules applied to the basic BlackScholes pricing model and Hull’s delta hedging algorithm, and is tested on technology shares, physical commodity futures and cryptocurrencies to demonstrate the model’s effectiveness across asset classes This provides a valuable contribution for practitioners, demonstrating how simple but effective trading rules derived via Python’s AI libraries and subsequently implemented as a spreadsheet macro can compete with expensive and administratively complex options-based trading strategies.
By Malcolm Gloyer Director, Malfaelgin Project Management Limited
WithlargetechnologycompaniespouringbillionsofdollarsintocompanieslikeOpenAI,Cohere,AnthropicandMistralit has become difficult to ignore AI Microsoft’s $10bn investment in OpenAI and the billions of dollars raised by San Francisco-basedAnthropicfromGoogleandAmazonhelpedpushspendingonAIgroupstomorethandoubletherecord $11bnsettwoyearsago AreviewofthehistoryofAIsuggeststhatsuccessfulapplicationsofmachinelearningoverlap with the application of specific modelling constraints, therefore applying AI to trading rules within the delta hedging methodologyframeworkislikelytobemoresuccessfulthatapplyingAItotradingrulesunconstrainedbysuchaframework.
Deltahedgingisatradingstrategythataimstoreduce,orhedge,thedirectionalriskassociatedwithpricemovementsin theunderlyingasset Practitionersusedeltahedgingwithoutoptionswhennooptionsareavailabletohedgetheunderlying assetorwhensuchoptionsareavailablebutexpensive(asthepriceoftheseisdependentonimpliedratherthanhistoric volatility, unlike delta hedging). Therefore, options payoff diagrams for delta hedging without options should resemble Black-Scholes[1]optionspayoffdiagramsbutwithalowercostofhedging,loweradministrationcostsandlowerguaranteed upside capture in mean reverting markets within the period of each option This article will investigate whether AI tools, constrainedwithinHull’s[2]deltahedgingalgorithm,canpredictmarketdirectionsufficientlytoincreaseguaranteedupside capture
[1] Black, F and M Scholes “The Valuation of Option Contracts and a Test of Market Efficiency”, Journal of Finance, 27 (May 1972), 399-418 [2] Hull, J C “Options, Futures, and Other Derivatives” 3rd edition Prentice Hall 1997 Pages 312-317
With transparency and explainability key considerations as financial market supervisors manage practitioners’ integration of machine learning, in this article the AI modelling has been restricted to predictive classification of 91-day periods where options were replicated using delta hedging. A multilayer perceptron (MLP) model trained on pre-2011datausingPython’sscikit-learnlibrarycanthenbe applied to a post-2011 test-set with regulator-preferred transparency improvements to option-style payoff diagrams and explainable performance enhancements augmenting theoreticalR2hypothesistesting
DerivingAITradingRulesforDeltaHedging
A delta hedge trading strategy that replicates the performance of an option by buying and selling the underlying asset in proportion to changes in the option’s hedgeratiocanbeusedasanalternativetoexpensiveand operationallycomplexderivatives.Aspreadsheetmodelwith embedded macros replicating Hull’s Black-Scholes based delta hedging technique with a market momentum, trade reversal suppression measure and fixed 6% floor was enhanced using an MLP model which has the capacity to learn non-linear models as a supervised learning algorithm thatlearnsafunctionf(⋅):Rm→R0bytrainingonadataset, where m is the number of dimensions for input and o is the numberofdimensionsforoutput.GivenasetoffeaturesX= x1, x2, , xm and a target y, it can learn a non-linear function approximator for either classification or regression It is different from logistic regression, in that between the input and the output layer, there can be one or more nonlinear layers, called hidden layers MLPClassifier[3] from Python’sscikit-learnlibrarywastrainedusingpre-2011data topredicttheclassificationofeitherbull(10%hedgingfloor) or bear (6% hedging floor) periods based on delta model input variables of underlying asset returns and volatility plus interest rates Research using 10% and 6% hedging floors havebeenfoundtobeeffectiveinbalancingupsidecapture withhedgeeffectivenessasshowninthetablebelowandin the author’s previously published articles (in May and August2023[4]andFebruary2024[5])
Applying AI Trading Rules to Technology Shares Delta Hedging
UsingthismodelwithAppleshares(AAPL),[6]91-dayAAPL options were simulated from 2011 to 2023. In order to assess the model’s success in replicating options, Figure 1 plotsthequarterlyreturnofeachofthe48replicatedoptions for delta hedging using a fixed 6% floor compared to delta hedging using either a 6% or 10% floor depending on whether the AI model predicts a bull or bear market. This plotshouldbesimilartotheoption’spay-offdiagramtaking
account of the lower cost of the hedge (using historic rather thanimpliedvolatility).
Another assessment of the model’s success in replicating options, by plotting the quarterly return of each of the 48 replicated options against unhedged AAPL share price return, delta hedging using a fixed 6% floor and delta hedgingwithanAIderivedfloorasabargraph,isshownin Figure2
Finally, Figure 3 shows comparative cumulative 91-day performance figures for returns of unhedged AAPL shares, delta hedging using a fixed 6% floor, delta hedging with an AIderivedfloorand1-monthUSLIBOR.UsingAmazonand Tesla share prices produced consistent results to Apple sharepriceandareincludedintheresultstablebelow
Warren McCullock and Walter Pitts published “A Logical Calculus of Ideas Immanent in Nervous Activity” in the Bulletin of Mathematical Biophysics, proposing the groundwork for neural networks (machine learning models that mimic the brain, learning to recognise patterns and make predictions via artificial neuron connections).
Alan Turing publishes “Computing Machinery and Intelligence” in Mind proposing the Turing Test, where a human evaluator engages in natural language conversation with a machine and a human, as a way to measure a machine’s ability to engage in human-like conversations.
Marvin Minsky and Dean Edmonds build Stochastic Neural Analog Reinforcement Calculator (SNARC), the first neural network computer, using funding from the Air Force Office of Scientific Research.
The Dartmouth Conference (originated by MaCarthy, Minsky, Rochester and Shannon) is held, marking the birth of AI as a field of study.
1957 Frank Rosenblatt develops the Perceptron at Cornell Aeronautical Laboratory, the first artificial neural network capable of learning.
1965
1967
Joseph Weizenbaum develops ELIZA at MIT, a natural language processing (NLP) program that simulates conversations between humans by teaching computers to understand and use human language with techniques like machine learning.
Allen Newell and Herbert Simon develop the General Problem Solver (GPS) at the RAND corporation as one of the first AI programs to demonstrate human-like reasoning.
1980s Expert Systems gain popularity, with companies using them for financial forecasting and medical diagnoses.
1986
1997
David Rumelhart, Geoffrey Hilton and Ronald Williams publish “Learning Representations by Back-Propagating Errors” in Nature, allowing much deeper neural networks to be trained via artificial neuron connections.
IBM’s Deep Blue defeats chess world champion Garry Kasparov, the first time that a computer had defeated a complex game champion.
2002 iRobot introduces Roomba, the first mass produced domestic robot vacuum cleaner with an AI-powered navigation system.
2011 IBM’s Watson defeats two former Jeopardy! champions.
2012 AI startup DeepMind develops a deep neural network that can recognise cats on YouTube videos.
2014 Facebook develops DeepFace, a facial recognition system that can recognise faces with near-human accuracy.
2015 AlphaGo, developed by DeepMind (acquired by Google in 2014), defeats Go champion Lee Sedol.
2017 AlphaZero, developed by DeepMind, defeats world’s best chess and shogi engines in a series of matches.
2020 OpenAI releases GPT-3, marking a significant breakthrough in NLP.
2021 DeepMind’s AlphaFold2 solves the protein folding problem, paving the way for new drug discoveries and medical breakthroughs.
Applying AI Trading Rules to Commodity Futures Delta Hedging
Using this model with NatGas NYMEX Futures,[7] 91-day NatGasoptionsweresimulatedfrom2011to2023 Inorder toassessthemodel’ssuccessinreplicatingoptions, Figure 4 plots the quarterly return of each of the 49 replicated optionsfordeltahedgingusingafixed6%floorcomparedto delta hedging using either a 6% or 10% floor depending on whether the AI model predicts a bull or bear market This plot should be similar to the option’s pay-off diagram taking accountofthelowercostofthehedge Anotherassessment of the model’s success in replicating options, plotting the quarterly return of each of the 49 replicated options against unhedged NatGas NYMEX Futures return, delta hedging using a fixed 6% floor and delta hedging with an AI derived floor as a bar graph, is shown in Figure 5 Finally, Figure 6 shows comparative cumulative 91-day performance figures
for returns of unhedged NatGas NYMEX Futures, delta hedging using a fixed 6% floor, delta hedging with an AI derived floor and 1-month US LIBOR Using Gold and Copper futures produced consistent results to NatGas NYMEXfuturesandareincludedintheresultstablebelow
Results
The AI derived trading floor will always have a floor at least as high as the static 6% floor in order to increase upside capture at the cost of lower hedge effectiveness (as the AI derivedfloortakeshigherrisktoachievemoreupside,thisis reflectedinhigherhedgingcost).Soagoodpredictorwould have minimal loss of hedge effectiveness (but there will alwaysbesome)formaximumupsidecapture
Conclusion
Simulated delta hedging trading strategies that take a position in cash and an underlying asset proportional to the hedge ratio of a synthetic option provide a cost-effective alternative to strategies that use options to delta hedge portfoliosofequitiesandcommodities.Whencombinedwith machine learning derived trading rules, new possibilities for active management of investment risk and return become apparent Thispresentsanopportunitytoapplyauto-pilotAI trading rules to research risk simulations in similarly constrained environments while co-pilot trading rules can helptraders,treasurers,assetmanagersorinsurersactively manage their hedged exposures As was the case with VaR, AI trading rules may subsequently migrate from the tradingfloorintoriskmanagementdepartments
As delta hedging is based on Black-Scholes, extensions to this model may be included like the volatility smile and fat tails in the underlying asset, but the strategy in turn suffers fromknownBlack-Scholeslimitations,suchasassumingno arbitrage opportunities and that asset returns follow a lognormal pattern, thus ignoring large price swings that are observedmorefrequentlyintherealworld
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ENHANCING PROJECT MANAGEMENT THROUGH SUPPLY CHAIN RESILIENCE PRACTICES
In today’s volatile world, disruptions from natural disasters, pandemics, geopolitical tensions, and cyber-attacks can derail projects, inflate costs, and compromise quality. Adopting resilient supply chain practices allows project managers to safeguard timelines, control budgets, and maintain quality standards. Key strategies include proactive risk assessment, fostering strong supplier relationships, embracing agility, leveraging cutting-edge technologies, and committing to sustainable practices This forward-thinking approach mitigates risks and turns challenges into opportunities for innovation and growth, paving the way for sustainable project success The article underscores the importance of embedding supply chain resilience into project management
By Towfique Rahman [1],Sanjoy Kumar Paul [2]
[1] Griffith Business School, Griffith University, Gold Coast, Queensland, Australia
[2] UTS Business School, University of Technology Sydney, Sydney, Australia
Practices in the contemporary business environment, characterised by volatility, uncertainty, complexity, and ambiguity, the interconnectivity of global supply chains has heightened the susceptibility of projects to a myriad of disruptions From natural disasters and pandemics to geopolitical tensions and cyber-attacks, the ripple effects can be profound, often derailing project timelines, inflating costs, and compromising quality In this context, integrating supplychainresiliencepracticesintoprojectmanagementis not just beneficial but imperative for the sustainability and success of projects This article explores the concept of supply chain resilience, its relevance to project management, and strategies for enhancing project outcomesthroughresilientsupplychainpractices
The nexus between supply chain resilience and project management
Supplychainresiliencereferstotheabilityofasupplychain to anticipate, prepare for, respond to, and recover from unexpected disruptions, thereby maintaining continuity of supply, minimising impacts, and emerging stronger Project management, on the other hand, is the art and science of leading and coordinating resources throughout the life of a project to achieve predefined objectives The intersection of these domains is evident: projects often rely on timely and cost-effective delivery of materials, services, and information, which are contingent upon a resilient supply chain
Disruptions in the supply chain can cause project delays, budget overruns, and failure to meet quality standards, amongotherissues.Conversely,resilientsupplychainscan provide project managers with a competitive advantage, enablingthemtodeliverprojectsontime,withinbudget,and inalignmentwithstakeholderexpectations
The following are some strategies for enhancing project managementthroughsupplychainresiliencepractices.
1 Risk Assessment and Management: By closely aligning supply chain risk assessment with project management, potential disruptions can be anticipated and mitigated effectively Project managers can proactively engage with suppliers, manufacturers, distributors, etc, to develop strategies to diversify supply sources, increase inventory levels, and establish alternative logistic routes, ensuring projectcontinuitydespitesupplychaindisruptions
2 SupplierRelationshipManagement:Buildingcollaborative relationships with suppliers enhances communication and trust, essential elements for both project success and resilient supply chains. Integrating suppliers into project planning processes and sharing information on project needs fosters a proactive approach to risk management, enablingswiftresponsestodisruptions
3 Agility and Flexibility: Agile project management methodologies complement supply chain resilience by enablingadaptiveplanningandstakeholderinvolvement By embracing agility in both project management and supply chain operations, organisations can respond swiftly to disruptions, adjust processes, and allocate resources effectivelytomaintainprojectmomentum.
4 TechnologicalIntegration:Leveragingtechnologysuchas IoT, blockchain, and AI in both project management and supply chain operations enhances visibility, monitoring, and analytics capabilities These digital tools provide real-time data on supply chain operations, enabling proactive risk management and informed decision-making to ensure projectcontinuity
5 Knowledge and Capacity Building: Investing in building knowledge and capacity around supply chain resilience within project teams fosters a proactive approach to managing disruptions. Through training and simulations, teams can better anticipate challenges, innovate solutions, and adapt to changes, thereby enhancing both project and supplychainresilience
6 Sustainability Practices: Incorporating sustainability into supply chain practices promotes ethical sourcing and enhances supply chain resilience. By selecting suppliers and materials that contribute to a sustainable and resilient supply chain, project managers can mitigate risks associated with disruptions while aligning with broader organisationalgoals
7. Diversification of Supply Chain Sources: Diversifying supplychainsourcesreducesrelianceonsinglesuppliersor markets, mitigating the risk of critical bottlenecks Project managers can strategically segment the supply base and establish alternative sources for critical supplies, ensuring continuityinprojectexecutionevenamidstdisruptions
8. Investment in Capacity Building and Flexibility: Building capacity within the supply chain enhances resilience by enablingquickresponsetofluctuationsindemandorsupply disruptions Investment in flexible manufacturing systems and strategic partnerships with logistics providers enables project managers to maintain continuity in project execution despiteunforeseenchallenges.
9 Implementation of Advanced Predictive Analytics: Integrating advanced predictive analytics into project planning and execution processes enables proactive risk management By analysing diverse data sources, these tools forecast potential disruptions, allowing project managers to take pre-emptive action to mitigate risks and ensureprojectsuccess
10 Building a Culture of Resilience and Continuous Improvement: Developing a culture of resilience within organisations encourages proactive risk management and innovation By regularly reviewing supply chain and project management practices, organisations can identify vulnerabilities and implement robust systems to enhance resilienceandensuresustainedprojectsuccess.
11 Enhanced Communication and Information Sharing: Transparent and efficient communication among all stakeholders facilitates quick responses to disruptions Implementing collaborative platforms and digital tools enablesreal-timesharingofdata,ensuringdecision-makers have access to the necessary information to minimise the impactofdisruptionsonprojecttimelinesandbudgets
12 Strategic Stockpiling and Inventory Management: Strategicstockpilingofcriticalcomponentsbalancestherisk of disruptions with inventory costs. By optimising inventory levels and adopting advanced inventory management techniques, project managers maintain greater control over project timelines and budgets, reducing the likelihood of delaysduetosupplychainissues
13 Managing Bottlenecks: Incorporating supply chain resilience into project management strategies involves identifying and addressing bottlenecks to increase overall efficiency and effectiveness By implementing targeted improvements and adopting cutting-edge technologies, project managers improve the flow and capacity of the supply chain, ensuring sustained project success in a dynamicenvironment.
The necessity for integrating supply chain resilience practices into project management cannot be overstated This integration demands a strategic approach that encompasses a spectrum of practices, from risk managementandsupplierengagementtoembracingagility, technological innovation, and sustainable practices. Embedding these resilience practices within the fabric of projectmanagementenablesorganisationstowithstandthe shocks of supply chain disruptions and identify and seize opportunitiesforinnovationandcompetitivedifferentiation
This strategic convergence of supply chain resilience and project management is particularly pertinent in today's dynamic and uncertain business environment It calls for a proactive stance that goes beyond mere risk mitigation to embrace a holistic view of supply chain and project management as interconnected spheres that can benefit frommutualreinforcement Achievingthissynthesisrequires a commitment to cross-functional collaboration and a willingness to invest in developing capabilities and processesthatensureresilience
Critically, this approach challenges organisations to rethink traditionalsupplychainandprojectmanagementparadigms, advocating for a model that is anticipatory rather than reactive, strategic rather than operational, and integrated rather than siloed The ultimate aim is to create a project management discipline that is responsive to the challenges posed by global supply chain complexities and capable of leveraging these challenges as catalysts for growth and innovation
Therefore, the necessity for a more thoughtful and critical engagementwiththeprinciplesofsupplychainresiliencein projectmanagementisclear.Itdemandsastrategicmindset thatappreciatesthecomplexlinkagesbetweensupplychain dynamics and project success In navigating these complexities,organisationsthatadoptaholisticandforwardlooking approach to resilience will be best positioned to achieve sustainable project success in an ever-evolving businesslandscape.
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WHY PMO MATURITY MATTERS: UNLOCKING THE STRATEGIC VALUE OF THE PMO
PMOs are an often-misunderstood function Despite the presence of industry best practice frameworks and standards, we still find that almost every PMO is different Some PMOs are there to report status, some to help with project management capability, and some have responsibility for the delivery of a strategic level function that helps to ensure that projects align with strategic goals. However, regardless of the stated purpose of the PMO, every PMO should be able deliver a service with some level of strategic value. Even the most basic of PMO functions, done well, helps an organisation understand more about how projects are being run. In turn this knowledge should provide insights into the likelihood of delivering benefits and the required returns on investment
By Louise Gardner Managing Director, Pledge Consulting
PMOs are an often-misunderstood function Despite the presence of industry best practice frameworks and standards, we still find that almost every PMO is different Some PMOs are there to report status, some to help with project management capability, and some have responsibilityforthedeliveryofastrategiclevelfunctionthat helps to ensure that projects align with strategic goals. However, regardless of the stated purpose of the PMO, everyPMOshouldbeabledeliveraservicewithsomelevel of strategic value Even the most basic of PMO functions, done well, helps an organisation understand more about how projects are being run In turn this knowledge should provideinsightsintothelikelihoodof deliveringbenefitsand therequiredreturnsoninvestment
The key phrase here is ‘done well’ The problem is many PMOs exist in a landscape where leadership doesn’t know what ‘good’ looks like and some PMOs only exist because ‘we’ve always had one’ or ‘we need someone to do the reporting’ or ‘some consultants said we needed one’. For a PMO to become high performing or ‘mature’, the purpose andfunctionsofthePMOneedtobeclear Ina2007study by Hobbs & Aubry which looked at 500 PMOs, they stated that they:’ considered monitoring and controlling project performance the most important activities within PMOs and believe there is a direct correlation between them and PM maturity.’
The significance of this research cannot be overstated and highlights a critical gap in the perception and utilisation of many PMOs It means, simply put, that PMOs can help get better project performance when they have a remit to collect, analyse and question project data, and use it to monitor performance To bridge this gap, it is essential that businesses reset their understanding of the purpose of the PMOandseektomovebeyondthecommonadministrative or low value activities such as booking meetings and collating second hand data As a minimum every PMO shouldhavethecapabilitytoanalyseandinterrogateproject performance data so that reporting in based on fact, and doesn’tsimplyrestateasecond-handnarrativeposition
The PMO maturity path often involves a transition from providing only administrative activities like organising meetings, providing document management and supporting adherence to process, to becoming more of a strategic partner with a much more data intensive role, and often a seat at the leadership table A mature PMO should effectivelybridgethegapbetweenhigh-levelstrategicvision and ground-level project execution This involves not only having the capability to monitor and control project performance but also the ability to allocate resources and assess risk, culminating in higher levels of transparency aroundprojectoutcomesandaclearpictureofbenefitsand returnoninvestment
The journey towards maturity allows PMOs to develop methods and tools to address these higher-level functions, thereby ensuring that projects are not only delivered within scope, time, and budget but also contribute significantly to the organisation's strategic objectives It is always worth reminding project stakeholders, including leadership teams, that the only reason projects should ever done is to realise thebenefitsstatedinthebusinesscase,nottocreateshiny new things for their own sake Benefits realisation tracking requiresdata,throughthelifecycleoftheprojectorprogram and beyond Who better to support benefits realisation than a team with the experience, capability and tools to collect andanalysethatdata?
Achieving such a level of maturity requires a deliberate and structured approach, involving an organisational commitmenttothedevelopmentofcompetencies,tools,and processes that enhance the PMO's strategic value This evolution begins with establishing a clear charter for the PMO that aligns with organisational goals and provides a framework for its operations The PMO charter should clearly document what the functions of the PMO are and whatoutputsitwillberesponsibleforproviding Thisshould be signed off by leadership and key stakeholders and effectively supports the PMO’s remit to exist and to provide thenecessarygovernanceandoversight.
A PMO with growing maturity necessitates a shift from only focusing on process or reporting, to a broader perspective that includes strategic alignment and value delivery The PMOchartershouldbeupdatedregularlytoreflectthisshift asitmovesalongthematuritycurve.Thismaturitypathway can be relatively long, more than two years in some cases, as organisations slowly come to realise the compounding value of a high performing PMO and make further investmentstoreachthenextstage
The role of leadership in this transformation cannot be overstated. Senior management must champion the PMO's strategic role, providing the necessary support and resourcestoenableitsevolution
A PMO simply cannot succeed without the right level of executive sponsorship This includes investing in training and development to equip PMO staff with the skills needed to operate at a strategic level and fostering a culture that values project management excellence The importance of recognising PMO as a distinct discipline of project management is also a key success factor Having the right people to do the job should be a conscious and informed choice Some organisations recruit junior project managers or administrators into PMO roles, largely due to an assumption that PMOs are just about reporting and therefore are lower or semi-skilled roles that don’t require a dedicated skill set This approach rarely yields strong PMO performance
TechnologyasaCornerstoneforHighPerformingPMO
Technology is a critical component in the development of PMO maturity and can play a pivotal role in supporting higher order functions Advanced and AI enabled project management tools and platforms can facilitate better decision-making, streamline processes, and provide realtimevisibilityintoprojectperformance
Leveraging data analytics and business intelligence can alsoempowerPMOstodeliveractionableinsights,enabling organisations to make informed strategic decisions
Embracing technology as a cornerstone for PMO maturity opens the door to greater efficiency and effectiveness and the integration of cutting-edge PPM tools not only automatesmundanetasksbutalsointroducessophisticated capabilitiesfortracking,analysis,andreporting
These tools can significantly reduce the time spent on administrative activities, freeing up PMO staff to further focus on more strategic initiatives Furthermore, data analytics and business intelligence tools can sift through vast amounts of project data to identify trends, forecast outcomes,andpinpointareasofrisk.Thiscapabilityensures that PMOs can address issues before they escalate, ensuringprojectsarealignedwithstrategicobjectives
With the strategic imperative clearly outlined, and the systems and tools to do the job in place, the next logical step in enhancing PMO maturity involves the establishment of robust project metrics and KPIs that align with strategic objectives Mature PMOs distinguish themselves by their ability to not just collect data, but to analyse and interpret it in a way that informs decision-making This approach enables the organisation to move beyond reactive project managementpracticestoamore
proactivestance,wherepotentialissuesareanticipatedand mitigated before they impact project outcomes It is through this lens that PMOs can demonstrate their value in a tangibleway Theimplementationofarobustframeworkfor measuringprojectperformanceandalignmentwithstrategic goals is not just a hallmark of PMO maturity; it's a critical enabler for ensuring that the organisation's project investments deliver the expected benefits. This approach requires a collaborative effort across the organisation to define meaningful metrics and KPIs, and a commitment from business to refine and adapt these measures as strategicprioritiesevolve
StakeholderCommitmenttoChange
ThejourneytowardsPMOmaturityisnotjustaboutevolving processes or implementing new technologies; it represents a fundamental shift in how organisations perceive and leverage project management to achieve their strategic goals. A mature PMO becomes an important strategic partner that drives project success and, consequently, organisational success This transformation requires a steadfast commitment from all levels of the organisation, from executive sponsorship to the project delivery teams, and a willingness to invest in the development of capabilities, technologies, and frameworks that align with thevisionforamaturePMO.
The ultimate goal of PMO maturity is to create a dynamic, responsive and strategic function that not only supports but actively contributes to the strategic objectives of the business, ensuring that every project undertaken delivers therequiredbenefitandpushestheorganisationforward.
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RE-IMAGINING PROJECT MANAGEMENT THROUGH AN ORGANISATIONAL LENS
Evolution and change are parts of growth and development. Therefore, Project Management as a profession is no different. The term “Project Management” for the purpose of this opinion piece consist of; projects, programs, and portfolio management (P3M or P3M3). A fundamental assumption for this opinion piece is that P3M resides in an organisation and their output and outcomes are an essential parts and parcel of the organisation meeting its overall outcome, objectives or return on investment
AFormulaOneorganisationalgoaliswinningracesonrace days and ultimately winning the championship This is the same for private organisation’s whose goal is achieving return on investment, public bodies including governmental agencies whose goal is to deliver value to its citizens A Formula one organisation conceptualised the ideal of a winning car (development) and an exceptional driver, however,forthiscasewewillfocusonthecaritself
During manufacture (delivery) of the car, we have the tyremaker like Pirelli, engine manufacturer like Rolls Royce and other components required which must be intricately interconnectedorintegratedtohaveacarready to race This process can be assumed to be the concept, assessment, testing and manufacture/delivery life-cycle phaseofaprojectmanagement.
Theracedaybecomestheoperationalelementpostdelivery andduringuse Thoseresponsibleforthetechnicalelement from concept to manufacture are also part of the technical crew on race day with a race lead (P3M or P3M3 Practitioner)toensurefaultsandotherservicesrequiredare availableatdisposalforthepurposeofthecarwinning.The
car finally wins the race which is the outcome desired by the Formula One organisation -return on investment This opinion piece suggests that the reason for this is the effective integration or interconnectedness of the delivery and operations in alignment to achieve its successful outcomeofwinningarace.
LinktoProjectManagement
A Formula One organisation is not dissimilar to any other organisation or public agencies because it has different functional areas or business units like commercial, legal, procurement, finance, compliance, technical functions etc. The challenge for most organisations is how are these functions or business units interconnected to perform activities that align to pre-delivery and those during operation or use phase? Therefore, this opinion piece suggeststhatProjectManagementpractitionersorleaders shouldre-imagineandviewProjectManagementpractices from a whole-of-life perspective as P3M3 or P3M resides inorganisationandunderpinherobjectivesofachievingits desiredoutcomewhichispost-delivery
A collections of thinking techniques which might be useful for this re-imagination of Project Management is ‘Thinking inSystemsoroftenknownasSystemThinking’.
ThinkinginSystemsorSystemThinking
Organisational complex issues are oversimplified to fit assumptions about how projects need to be structured Once broken down into “simple” parts, work can proceed, withapparentprogress.Unfortunately,whentheattemptis made to integrate the parts together near the end of the project, the discovery is made that “the sum of the parts doesnotequalthewhole”(HTrevor,1995)
The essence of systems thinking is to: understand interrelations but not linear cause-effect relations; see processes of changes but not static states; and see to understandcontext
Any problem must be solved starting from the whole; one component cannot be affected separately from other components Systemsthinkingmayappearmorecomplex andmultilevelthananalyticorreductionistthinking,ithelps to detect the order in the complexity and is more accommodating to human understanding of reality ‘‘Systems thinking is a discipline for seeing the structure that underlie complex situations, and for discerning high fromlowleveragechange’’(Senge,2007) Theapplication of these practices should be a topic for future writings or event/seminar.
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