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2 REASONS OF IMPLEMENTATION
By the time the works on the Project Management System began, multiple reasons indicating a need to create this kind of system had been identified and characterized. The most
important issues Project Management System had to address can be divided into three key
areas: managing investment projects, supporting investment decision-making processes and
facilitating the access to project information for the stakeholders.
2.1 Project management
In terms of project management, the main objective was to facilitate work done by Project
Managers (PMs) during a projects’ lifetime. Instead of contracting PMs from outside of
the company, KGHM tends to entrust the task of project managing to its own employees,
who are specialist in the given field. Müller & Turner (2007) claim that managers from
local teams who are involved in the wider lifecycle of a project tend to be more successful.
Moreover, singularity of the business conducted by the KGHM in the region supports
this approach, as there is a deficiency of professional PMs experienced in underground
mining. On the other hand, it can be observed, that local PMs, especially these beginning their work with projects, might be under-skilled in the sense of scheduling, accounting and reporting, as well as lacking the general comprehension of investment processes.
From a financial point of view, cost incurred on software licensing related to carrying
out all project activities was disproportionate to the amount of work done. For example,
30% of SAP ERP licenses possessed by the company were used solely for the purpose of
managing projects. Both these negative issues were planned to be resolved by integrating
already existing systems into one platform that reduces licensing cost and simplifies all
management activities including the access to accounting, purchases and contract management. For this reason, the system was perceived by the management as an useful tool to
enhance bottom-up planning, that can translate into increased accuracy of scope, budget
and time required to deliver project’s products as well as shortening the period of transition
to project implementation phase.
2.2 Planning and reporting
Apart from facilitating project management, the system was meant to positively impact
budgeting and reporting abilities of the company and in this way to improve decisionmaking process. Reduction of time needed to prepare customized reports based on real
time information was one of the main objectives when introducing the system. At that time
reporting was based primarily on the information gathered by PMs and send to local planning departments, that merged these reports into full information about divisional investments. This basic approach was highly sensitive to human errors, lack of data integrity and
complexity of tools needed in cross-checking the reports reaching the Central Division. IT
tools utilized at that time were incapable of producing real time information and establishing communication with accounting systems like SAP ERP. The Project Management System had been planned as a means to enforce a single, company-wide model of planning and
managing investments. Although the investment policies established around the company
were followed, they left too much space for individual tool choice and data inconsistency.
The growing number of investment tasks required quick introduction of company-wide
standard in documentation and reporting. Moreover, a new project management methodology had not been fully developed yet, as it closely followed the introduction of the Project
Management System.
2.3 Communication
The third issue that had to be addressed, was the difficulty in accessing project information by projects stakeholders and poor communication within the projects. An IT solution
2 REASONS OF IMPLEMENTATION
By the time the works on the Project Management System began, multiple reasons indicating a need to create this kind of system had been identified and characterized. The most
important issues Project Management System had to address can be divided into three key
areas: managing investment projects, supporting investment decision-making processes and
facilitating the access to project information for the stakeholders.
2.1 Project management
In terms of project management, the main objective was to facilitate work done by Project
Managers (PMs) during a projects’ lifetime. Instead of contracting PMs from outside of
the company, KGHM tends to entrust the task of project managing to its own employees,
who are specialist in the given field. Müller & Turner (2007) claim that managers from
local teams who are involved in the wider lifecycle of a project tend to be more successful.
Moreover, singularity of the business conducted by the KGHM in the region supports
this approach, as there is a deficiency of professional PMs experienced in underground
mining. On the other hand, it can be observed, that local PMs, especially these beginning their work with projects, might be under-skilled in the sense of scheduling, accounting and reporting, as well as lacking the general comprehension of investment processes.
From a financial point of view, cost incurred on software licensing related to carrying
out all project activities was disproportionate to the amount of work done. For example,
30% of SAP ERP licenses possessed by the company were used solely for the purpose of
managing projects. Both these negative issues were planned to be resolved by integrating
already existing systems into one platform that reduces licensing cost and simplifies all
management activities including the access to accounting, purchases and contract management. For this reason, the system was perceived by the management as an useful tool to
enhance bottom-up planning, that can translate into increased accuracy of scope, budget
and time required to deliver project’s products as well as shortening the period of transition
to project implementation phase.
2.2 Planning and reporting
Apart from facilitating project management, the system was meant to positively impact
budgeting and reporting abilities of the company and in this way to improve decisionmaking process. Reduction of time needed to prepare customized reports based on real
time information was one of the main objectives when introducing the system. At that time
reporting was based primarily on the information gathered by PMs and send to local planning departments, that merged these reports into full information about divisional investments. This basic approach was highly sensitive to human errors, lack of data integrity and
complexity of tools needed in cross-checking the reports reaching the Central Division. IT
tools utilized at that time were incapable of producing real time information and establishing communication with accounting systems like SAP ERP. The Project Management System had been planned as a means to enforce a single, company-wide model of planning and
managing investments. Although the investment policies established around the company
were followed, they left too much space for individual tool choice and data inconsistency.
The growing number of investment tasks required quick introduction of company-wide
standard in documentation and reporting. Moreover, a new project management methodology had not been fully developed yet, as it closely followed the introduction of the Project
Management System.
2.3 Communication
The third issue that had to be addressed, was the difficulty in accessing project information by projects stakeholders and poor communication within the projects. An IT solution