Project organisation

In this type of organisation, the project management needs of all divisions of the company are served by a centralized separate division of skilled manager. The project organisation structure is illustrated in Figure.

Figure: Project Organisation Structure

Characteristics

• It is the responsibility of a central group to plan, control, manage, and report the progress of all projects in the organisation.
• Project managers have a lot of authority and independence.
• Team members can be placed together in a proper order.

Advantages

• The entire organisation follows a formal project management system.
• Having    a    common    understanding     and    application     of    project management  practices  helps  completion  of  project  on  time,  within budget and within project scope and hence increases efficiency.
• Every project across the organisation follows a standard for planning, controlling and reporting. This aids communication and provides efficiency.

• Costs can be reduced by using common tools to manage all projects.
• Centralized availability of data from all projects makes it easier to analyse and apply it to future projects, improving accuracy of estimation and practice.
• All the projects of an organisation can be managed as a whole. Senior management can set priorities across projects and allocate resources using enterprise portfolio management.

Disadvantages

• The centralised project managers and practices may tend to become self-serving rather than been considerate to the needs of project office and people.
• Since processes become excessive, the cost of managing projects under a centralised organisational structure is comparatively higher than other structures.
• Scarcity of qualified technical leaders. Project managers may not have the necessary technical background for a project.
• Since project managers are located in a separate project office, they may seem unresponsive to the needs of people who request their time and skill.