Relevance of Systems Thinking to a Project and an Organization

Discuss about the Relevance Of Systems Thinking To A Project And An Organisation.

Systems thinking is an analytical approach focusing on how a systems’ constituent parts relate to each other and how systems work over a period of time and in larger systems context (Leveson, 2011). Approach to systems thinking contradicts the traditional analysis which looks at systems by subdividing them according to their separate units. For example, in the field of medicine, efficient treatment of patients is directly related to the diagnosis. Likewise, systems thinking is a problem examining disciplined approach which examines problems deeply, wholly, completely and accurately before taking any action, hence allowing people to gain a holistic view of situations before making any conclusions (Kerzner, 2013). Generally, systems thinking increases the number of available choices for solving problems hence expanding our thinking capacity, therefore, assisting people in problem articulation in different and new ways (Dym, et al., 2005). Systems thinking principles, therefore, enable us to become aware that there are no any best solutions to problems and to the fact that our choices impact other system parts. The objective of this paper is to define systems thinking and classify the tools and techniques related to systems thinking.

General Systems Management

Knowledge about systems engineering management (SEM) helps in assets and resources management, mainly in the service and project context and periodically in a less well-defined activities context (Sharon et al., 2011). Systems engineering management differentiates from the general management of projects through its focus on the engineering and technical project aspects. Consequently, SEM covers development and exploratory research activities in government or commercial operations at the level of enterprise. Coordination of managerial and technical endeavors is required in the implementation of systems engineering. Technical success is impossible in the absence of the managerial aspect. Management provides a collaborative environment, the planning, program controls and the organization structure in order to ensure that the needs of stakeholders are met. SEM thinking showcases that different functions are managed in systems engineering while the rest are managed by the overall project, systems management and systems implementation (Kumar et al., 2008). Systems thinking in-company organizations do not have their own system of accounting but rather relies on the organization of corporate management for that SEM aspect. Companies performing SE do not include the functions of accounting to be part of SEM. Systems engineering managers should be involved actively in managing all activities under the boundary of the SE system, as well as working towards the collaborative arrangements fitting their situation best.

General Systems Management

According to Flood (2010), organizational strategies in order to conduct systems engineering activities are vital to the organizations’ effectiveness. For example, each enterprise is led by a context, scope, and purpose determined by a group of the stakeholders and changed over a time period so as to improve the enterprises’ value to them. Few enterprises provide businesses that are for-profit whereas other enterprises are not-for-profit businesses and usually work for the good of the public. Non-traditional businesses are also run although they are not tightly structured hence lacking a legal structure, for example, like a system of national health care. While the location of some enterprises is based on a single site, some are far-flung world empires. While some enterprises work inside industries like the medical industry which is highly regulated, other enterprises work with minimum oversight from the government and are free to adopt a wide range in business practice. The above-mentioned variations generally give the strategy used to perform systems engineering a shape. The systems engineering strategy is guided by the goals and business culture, resources, forms, and available constraints in order to be in a position of achieving those goals. Lack of a single and coherent systems engineering context, forms and culture common throughout the business depends on how the business approaches systems engineering (Chang & Lee, 2007).

Effective management of engineering risk is important and proactive as opposed to it being reactive, as it seeks to minimize the occurrence probability of an adverse event and the impact magnitude. The process of engineering risk management involves five important aspects or components that may be necessary to have their own headings in planning for project management (Modarres, 2016). According to Van (2009), the components include risk plan, risk identification, risk analysis, risk response strategy development, and risk monitoring and control. Risk plan requires the engineer or project manager to develop and write down a strategy for managing the risk that should include all methods used in the execution of the projects’ plan for risk management. Risk identification involves the examination of project risks to a detail level that allows the evaluator to understand different risks and their threat. Risk analysis allows for a systematic estimation of the risk level for approved and identified risks. Risk response strategy development is incorporated into the management plan for dealing with all risks and is categorized into acceptance, avoidance, control, and transfer. Risk monitoring and control, as well, is incorporated within the plan for risk management, with provisions being kept in place for a systematic tracking and evaluation of the risk response actions’ effectiveness against metrics that are established (Cardona, 2013).

Organisational Structures, Forms, and Culture

According to Reyck et al., (2005) organizational business strategy alignment and its relevance to project portfolios have been playing an important strategic role in the management of systems engineering management portfolios. One in every three implementation strategies fails, as innovative or project activities have not been separated from activities that are routine as wells because the portfolio of the project is not aligned to the organizational strategy. Project deployment of many projects fails as there are hordes of projects that have been selected for available resources that are limited, and still because project priorities change. Research performance and project development are influenced by a good alignment between organizational strategy and individual initiatives (Kaiser, et al., 2015). However, an implementation of portfolio management that is successful is not a hard task since it is comprised of market and technological uncertainties, the negotiation of resources that are always tight in diverse company areas, the adoption and usage of enough classification criteria, prioritization, selection, and project sequencing aimed at aligning the portfolio with the strategy of the organization. Blocking of projects that do not interest the organization and periodic evaluation of portfolio alignment is important for a successful management of project portfolio. Analysis of various portfolio management methods is important in the research and implementation of portfolio alignment.

The business value of using the portfolio management approach is to ensure improved resource allocation, improved work scrutiny, improved authorization process openness, reduced work authorization ambiguity, improved work alignment, improved work balance, changed focus from investment cost, increased collaboration, enhanced communication, and elevated focus on deciding the appropriate time to stop a project (Brady et al., 2005). Several portfolio management implementations begin directly from trying portfolio work identification and prioritization, obviously because it’s clear where there is the greatest value. However, the direct start may bring a group to a disagreement over what is expected to provide the highest value. The value brought to the organization by that work is not necessarily but typically based how the implications of cost and benefit align with the goals, strategy, and objectives of the organization.  Strategy alignment is not an easy task to achieve without prior preparation. According to Jugdev & Müller (2005), corporate strategy is mostly expressed as a heavy statement that describes what the organization is anticipating to achieve through objectives and goals and the plans on how the organization will achieve its objectives and goals. Putting the necessary processes and organization is important. Defining the goals and objectives involves developing a corporate strategy of where to start from, what to expect, and how to achieve the expectations.

Engineering Risk and Risk Management

According to Cooper et al., (2006) the proposed portfolio standard of management is aligned into two process groups, that is, monitoring and control, and alignment. The group of process aligning is comprised of seven processes which are identified, categorization, evaluate, select, prioritization, balancing of portfolio and authorization, while the controlling and monitoring process group consists of periodic portfolio reporting as well as strategic change and review. Strategic implications of selection of portfolios are complicated and are different in various organizations, as they involve the consideration of both internal and external factors to the firm, which includes marketplace and the strengths and weaknesses of the company (Turner, 2008). Strategic alignment is intended to eliminate all non-starters projects that lack conditions on portfolio integration as well as to reduce the projects which are set for consideration in the analysis stage. The evaluation of project phase is for assessing the result expected to impact the portfolio by use of methods whereby every project’s contribution to the objectives of the portfolio is determined. The portfolio selection stage involves a consistent projects comparison to identify competing projects. Portfolio selection techniques include comparative approaches (Q-sort, analytic hierarchy procedure, and pairwise comparison), ad hoc approaches, scoring models, optimization models and portfolio matrices that are mostly used for strategic decision making.

Understanding organizational maturity facilitated the identification of gaps in performance, indicating huge realistic targets of performance, and reasonable path suggestions for improvement. Five organizational levels of maturity have been put into place and identified. However, the identification is not supposed to suggest that every organisation should strive for top-notch performance. The five levels of organisational maturity include foundation, basics, value management, optimization, and core competency, respectively (Tapp et al., 2008). Level 1 organizations are dealing with and viewing projects and managing them in isolation from each other, subject solely on their competition on resources that are shared. Level 2 organizations begin implementing elements of management of project portfolio, although just a minor real opportunity fraction is realised. Level 3 organizations showcase their commitment to standardized, proactive portfolio and project management. Decisions to select products are based on a value-creating principle where each project is evaluated and re-evaluated using a defensible and consistent logic. Level 4 organizations use quantitative measures and analysis to acquire controllable, efficient and predictable portfolio and project management. Level 5 organizations obtain the most possible maximum value from the portfolio management of a project. The organizations are flexible and therefore free their employees in becoming increasingly innovative and creative hence achieving the success of the business.

Portfolio Alignment

Conclusion

In conclusion, systems thinking is important in project management and to organizations at large. Without complicating the aspect of systems thinking, organizations can gain a lot in project management, development, and management of product portfolios, through the development of a simple perspective on reality. The perspective should be able to sharpen an organization’s awareness of a holistic system thinking and of how different areas among those holistic relate to each other. The greatest challenge in systems thinking is when an organization tends to oversimplify complex aspects so that they can fit into evident and binary terms instead of trying to understand how complex the aspect is, at a deeper level. Therefore, as long as organizations hold onto the stereotypes, myths, and perspectives existing about systems thinking and the management of projects, it will be hard for the organizations to view project management in a positive perspective.

References

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