Objectives as tool for project management
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This report is a qualitative research effort which strives to investigate the use of objectives as a tool for management in investment projects within private industry, represented by the Gjøa development project in the Norwegian oil and gas industry. Through qualitative research interviews and empirical findings, the factual use of objectives as tool for management within the Gjøa project is evaluated. The research task is a case study of the Gjøa development project, and compares relevant theories with empirical findings especially regarding the Gjøa project, and the operating company Statoil in general. The presented theories are basically developed by the Concept program at NTNU.The purpose of formulation of objectives is primarily to clarify the direction of what the project wants to achieve. By defining correct and well-formulated objectives, the performance can be improved. Yet, it is a premise that the project organization is capable to transform extensive procedures into functional objectives, and further into factual results. Inappropriate objectives or poor correspondence between formulation and action will not contribute towards achievement of the intended effect of the project.The use of objectives as a managing tool in regards to the Gjøa development is mainly limited to the execution phase. Further, formulation of objectives has not been used as a part of the decision basis of the concept selection, because the Capital Value Process, which is Statoil’s stepwise decision process for investment projects, is requirement-driven instead of objective-driven. It secures an appropriate strategy of the Gjøa project, but it does not secure that the level of ambition is sufficiently high.The factual use of objectives as a tool for management is primitive compared with the intention of required procedures. Basically, this is caused by too extensive procedures and a lack of simplicity. The use of objectives beyond the execution phase is of formal character.The Capital Value Process is a rational procedure, which normally ensures investment projects to become successful. However, the use of objectives as a part of the decision basis is insufficient, and the absence of an overall clarification of the essential issues of projects has the potential to create inappropriate concept selection, and the result can be project failure. The problem will increase as the complexity of the project increases.Statoil considers implementing two potential workshops in order to increase the probability of achieving project success. This report recommends implementing the Setting Business Priorities Value Improving Practices in order to clarify the underlying logic of projects and to improve the use of objectives as a tool for management. By actively using the SBP VIP, the project organization as a whole will better understand the role of the project related to its surroundings. This model is strongly corresponding with the theories presented in this assignment.In addition, the Asset Optimization Workshop can be appropriate as an independent and external third party evaluation. The CVP has seemingly excellent routines regarding these issues, but it is usually valuable for projects to be evaluated from another point of view.