Monitoring mechanisms in new product development with risk-averse project manager

It is necessary for one senior executive (she) to monitor her project manager (he) who conducts early research stage followed by a later development stage in new product development. In this paper, we analyze two monitoring mechanisms: (1) the idea information-based monitoring (IM) mechanism wherein the senior executive engages one supervisor to monitor the project manager’s idea information; (2) the effort-based monitoring (EM) mechanism wherein the senior executive engages another supervisor to monitor the project manager’s effort. Within the framework of uncertainty theory, we first present two classes of bilevel uncertain principal-agent monitoring models, and then derive their respective optimal incentive contracts. We find that the senior executive should set the incentive term as high as possible to motivate each supervisor to monitor the project manager’s idea information and effort no matter how much the design idea value is. We also find that EM mechanism can always dominate IM mechanism when the monitoring costs are equal. Moreover, comparing with a no monitoring scenario, we identify two values of monitoring: the value of monitoring idea information and the value of monitoring effort. Our results show that adopting IM and EM mechanisms can improve the senior executive’s profits obtained in the no monitoring scenario when the revenue uncertainty is sufficiently low. The results also indicate that the value of monitoring idea information decreases as the risk aversion level of the project manager improves, while the value of monitoring effort shows the opposite feature.     

Impacts of uncertain project duration and asymmetric risk sensitivity information in project management

This paper investigates the impacts of uncertain project duration and asymmetric risk sensitivity information on the structure of incentive contract and profits in project management where a risk‐neutral project manager (she) engages a risk‐averse contractor (he) to complete a project. The project manager offers a duration‐based incentive contract to the contractor to ensure that he invests his effort to shorten the project duration and reports his risk sensitivity information truthfully. Within the framework of principal‐agent theory, we first develop a duration‐based incentive contract model, and then derive the optimal contract mechanism by solving its equivalent optimal control problem with Pontryagin maximum principle. We show that if the contractor is highly risk averse and the project duration is highly volatile, the project manager should lower the penalty term to motivate the contractor to make duration‐reduction efforts. Moreover, comparing with the symmetric information scenario, we find that the project manager distorts the penalty term for all contractor's risk types (but the lowest) downward. Our results show that the project manager is more willing to acquire the contractor's risk sensitivity information under the uncertain project duration. The results also suggest that from the project manager's perspective, it is beneficial to have better information about the contractor's risk sensitivity by using a numerical analysis.     

The impact of decision criteria on deadline-based incentive contracts in project management

This paper investigates the impact of decision criteria on incentives in a project management setting, where a project manager operates a project consisting of two tasks performed sequentially by two different subcontractors. The completion time is characterized as an uncertain variable, which depends on the subcontractor’s unobservable effort of each task. Within the framework of uncertainty theory, four classes of uncertain principal agent models are presented under the expected value criterion and the critical value criterion. According to the structural characteristics, each model can be decomposed into two equivalent sub-models, which can be solved to obtain the optimal deadline-based incentive contracts via a two-step optimization method. Further, the interconnections among these contracts are discussed. It’s demonstrated that the optimal deadline-based incentive contract depends on the confidence level of the party (either the project manager or the subcontractor) who adopts the critical value criterion. Meanwhile, the more conservative the subcontractor is, the higher the incentive coefficients will be. And the more conservative the project manager is, the lower the incentive coefficients will be. Finally, given some special confidence levels, it’s interesting to find that the four models can be equivalent.     

An examination of the decision styles of project managers: Evidence of significant diversity

It has been suggested that the manner in which a project manager makes decisions can significantly influence his or her effectiveness and ultimately the design of systems under his or her direction. Arguments for a structured, systematic approach, as well as arguments for a more well-rounded, ‘whole-brained’ approach have been made. However, it is perhaps more important to examine what project managers actually are. We surveyed a group of over 200 project managers from across the United States, attempting to measure their decision making styles, especially as they relate to project management activity. The survey not only identifies a person’s propensity towards a particular style of decision making, but also his or her propensity towards brain dominance, an idea or action orientation, and a preferred management level of decision making. The results of this study indicate that though each project manager is unique, as a group project managers are well-rounded and tend to solve problems utilizing a ‘whole-brained’ approach.     

THE RULES OF PROJECT MANAGEMENT

You can't control people. It's never too early to plan. Project management and control must be built in, not added on. These are just a few of the 18 rules one project manager (a father) passes along in a letter to a new project manager (his daughter) so that she can better prepare, plan, and manage her organization's software projects.     

High-Water Marks and Hedge Fund Management Contracts with Partial Information

This paper extends the Goetzmann et al. (J Financ 58:1685–1717, 2003) model to the case of partial information, where the expected return of a hedge fund is not observable but known to be either high or low. The fund manager can dynamically update his belief about the true value of the expected return based on the realization of the net asset value of the hedge fund. Our main purpose is to study the impact of the uncertainty of the expected return on the pricing of the fund manager’s various fees and the investor’s claim. The results show that partial information has significant impact on the values of the fees and the claim. Specifically, a non-updating fund manager always underestimate the values, and more often than not, the amount underestimated is very significant. The closer the net asset value gets to the high-water mark or the larger the uncertainty of the expected return is, the bigger the amount underestimated will become.     

基于委托-代理模型的施工过程成本博弈

施工项目管理者的成本控制目标是,通过激励契约达到成本控制要求,提高成本控制效率.但是管理者运用激励机制控制单位产品成本具有片面性,没有考虑工人为了提高成本控制效率需要付出一定的精力和时间,从而影响其收益以及降低生产成本的积极性,因此,管理者和工人会围绕产品成本降低产生的收益分配形成动态成本博弈.对此,提出建设项目背景下基于单位时间的委托代理模型.通过分析发现:工人努力程度与激励系数呈非线性正相关;在一定范围内,工人的收益会随着努力程度的提高先增加并达到峰值后再减少;在工人努力程度达到最优时,管理者的收益会随激励系数的提高而增加并达到峰值.通过设置合理的激励系数能使管理者和工人的收益达到最优.最后以钢筋制作搭接工序为例,分析模型的可行性.     

Comparison of estimation methods of cost and duration in IT projects

Producing accurate and reliable project cost estimations at an early stage of a project’s life cycle remains a substantial challenge in the information technology field. This research benchmarks the performance of various approaches to estimating IT project effort and duration. Empirical data were gathered from various “real-world” organizations including several prominent Israeli high-tech companies as well as from the International Software Benchmarking Standards Group (ISBSG) IT project database. The study contrasts two types of models that have been employed to estimate project duration and effort separately: linear regression estimation models and models deriving from a more novel approach based on artificial neural networks (ANNs).     

Guest Editorial Software Management: We Must Find a Way

SOFTWARE management is a term which inspires many different reactions from the broad range of practitioners in the field of data processing. The term has many dimensions ranging from the first and second line manager of a software development activity who plies his trade with little to fall back on other than his prior experience, and native skills and intuition. Contrast this with a senior executive who, because of lack of understanding of software management, is frustrated in trying to determine if his company can produce a software program on schedule and within budget. The data processing landscape is littered with examples of major software developments which faltered and then expired. That this situation should exist, after almost a quarter-century of experience with implementing these systems, is one of the enigmas of the rapidly expanding data processing industry.     

A Lack of Insight: An Experimental Analysis of R&D Managers’ Decision Making in Innovation Portfolio Management

This study analyses the decision to exploit an innovation project and investigates differences in individuals’ evaluations of project attributes in the context of innovation project portfolio management. A conjoint field experiment was used to collect data on exploitation decisions made by 126 research and development (R&D) managers to test how managers evaluate specific project attributes in the context of innovation project portfolio management. I analyse the relative power and popularity of profitability, strategy, uncertainty and social dimensions of the portfolio while R&D managers exploit an innovation project. Moreover, using social judgement theory, I analyse actual exploitation processes (i.e., the innovation attributes an R&D manager considers while he or she is making an exploitation decision) and self‐reported decision‐making attributes (i.e., managers’ self‐reported data). The data underline that R&D managers value specific project attributes more and others less, and therefore find disparities in innovation project portfolio decision making. Based on this study's results, decision makers are better able to reflect and understand the influence of specific project attributes. Therefore, they should investigate established decision‐making processes which can help them to improve portfolio performance.     

基于项目管理者“偷懒”情况的损失承担博弈模型研究

在信息对称的项目股东和管理者组成的项目管理体系中,基于管理者"偷懒"造成损失的情况,确定最优的损失承担机制,以实现项目收益和成员收益最大化的目标.运用数学模型和博弈理论,探讨了4种不同项目内部损失和外部损失的分配方式,通过制定合理的内、外部损失分配系数,得出只有在整体损失由两者共同承担的条件下,才能同时实现项目全局最优和成员最优的结论.所得结论不但在理论上具有一定的创新性,而且在实践中具有较大的应用价值.     

A practical approach to specification technology selection

Over the past decade numerous methodologies were introduced to guide and ease the project manager's burden over the entire life cycle of system/software development. Additionally, various software tools were developed to support specific methodologies. In fact, the collection of methodologies and support tools grew so rapidly that a project manager was left with a confusing array of choices. Some method was needed for comparing project requirements against the methodology capabilities in order to find the best fit. The Air Force awarded a contract to Boeing Aerospace Company to address the problem. The stated objective of the Specification Technology Guidelines contract was to organize existing information on requirements and design technologies into a Guidebook that could be used by USAF technical managers in selecting appropriate methodologies for future projects. We will describe an approach that integrates such concepts as project significance level, software categorization, and life-cycle requirements, and implements them by means of a table-driven procedure that could easily be computerized. Using this approach, the technical manager measures project significance and requirements against the functions available in various methodologies; selects candidate methodologies best fitting a project; and, finally, assigns a score to the candidates in order to make a final methodology selection.     

Of crazy numbers and release criteria

The author discusses the use of release criteria to decide when a project has a shippable product. He considers his experiences when working as a project manager for a small middleware applications group     

Integrated capacity and marketing incentive contracting for capital-intensive service systems

Capacity investment and capacity allocation have always been critical management decisions, especially in the presence of agency issue for capital-intensive and congestion-prone service organizations. Prior research has often modeled only one aspect of the issue, such as proposing internal pricing scheme for capacity allocation ignoring demand uncertainty and the influence of the manager, optimizing capacity alone ignoring the agency issue, or incentive contract design ignoring capacity limit and service delay. We show that simply employing a traditional incentive contract (which often ignores service delays) for the manager responsible for promoting a center's services will provide incorrect incentives and lead to a more congested and less profitable system. When firms focus on optimizing operational capacity alone, ignoring the impact of managers on service demand, they are able to maintain the optimal utilization and service quality by balancing capacity and delay costs. However, they forgo profit-increasing opportunities, as they ignore the impact of the optimal incentive contract and do not motivate the managers enough to boost demand. To tackle the management challenges faced by modern service centers, we take an integrated capacity-contracting approach by incorporating operational delays and capacity decisions within the incentive contract design. Embedding a queuing model in a general incentive contracting framework, we present a novel approach to deriving the optimal compensation contract and operational capacity for a service center. We illustrate in numerical examples that a Pareto improvement can be achieved with our integrated contracting approach because every party, from the firm to the manager, to customers, to equipment and software vendors, benefits.     

The Process Enactment Tool Framework—Transformation of software process models to prepare enactment

Rich development process models contain information about structures for project organization and also for concrete outcomes of a project. However, rich processes are hard to implement. They often contain hundreds of pages of documentation. Development teams tend to be skeptical about rich processes in fear of additional effort, risking the benefits of rich tool support for enactment. Process enactment is a challenging task. There is no common methodology to quickly “implement” a development process in a tool or a set of tools. Often specialized tools are used to provide assistance during the project and it is the project manager’s task to consolidate the information with the rest of the team.The Process Enactment Tool Framework (PET) is a software tool that supports the transformation of a given formal development process into a format that project tools can work with. PET is an instrument to import processes based on a metamodel and provide exports for a specific project environment. PET takes an input software development process model and transforms it into an intermediate format that serves as the basis for a second transformation step into data formats of tools such as office suites or comprehensive ALM platforms. In this paper we present the tool framework and show how metamodel-based processes can be transformed into an environment that is ready to use for a project team. We show how PET is applied for the German V-Modell XT and for SPEM-based processes to generate, e.g., process templates for the Team Foundation Server or work product document templates.     

New head to boost Orga's health

In a bid to strengthen its health and ID operations, German smart card manufacturer Orga Kartensysteme has continued to restructure the division. The company's latest move is the appointment of a new executive to head up the business unit. Frank Büttner, a former senior marketing manager for the unit, will be responsible for strategic development and operational management and will hope to build on the deals that have been secured in recent times.     

A semantic social network-based expert recommender system

This research work presents a framework to build a hybrid expert recommendation system that integrates the characteristics of content-based recommendation algorithms into a social network-based collaborative filtering system. The proposed method aims at improving the accuracy of recommendation prediction by considering the social aspect of experts’ behaviors. For this purpose, content-based profiles of experts are first constructed by crawling online resources. A semantic kernel is built by using the background knowledge derived from Wikipedia repository. The semantic kernel is employed to enrich the experts’ profiles. Experts’ social communities are detected by applying the social network analysis and using factors such as experience, background, knowledge level, and personal preferences. By this way, hidden social relationships can be discovered among individuals. Identifying communities is used for determining a particular member’s value according to the general pattern behavior of the community that the individual belongs to. Representative members of a community are then identified using the eigenvector centrality measure. Finally, a recommendation is made to relate an information item, for which a user is seeking an expert, to the representatives of the most relevant community. Such a semantic social network-based expert recommendation system can provide benefits to both experts and users if one looks at the recommendation from two perspectives. From the user’s perspective, she/he is provided with a group of experts who can help the user with her/his information needs. From the expert’s perspective she/he has been assigned to work on relevant information items that fall under her/his expertise and interests.     

Development of a rapid prototyping design advice system

This paper describes the initial development of a computer based Rapid Prototyping Design Advice System. The system is intended to assist the designer or project manager, particularly those in small and medium sized companies, in planning the prototyping stage of product development. It provides the user with an efficient and user friendly development aid which uses information obtained from the user and Computer Aided Design data to recommend suitable rapid prototyping solutions.     

Idea generation and material consolidation: tool use and intermediate artefacts in journalistic writing

We report an in-depth, longitudinal study of a freelance music journalist writing a feature article. Our analysis attends to the participant’s activities from initiation to completion, and the ways in which she established structure using tools and artefacts to support cognitive effort. We observed five work stages: establishing an initial idea; preparing for an interview; interviewing; planning the article; and writing. Each resulted in the production of a working document embodying ideas and commitments which provided a key resource for the next stage. Stages began with phases of idea generation during which ideas were spontaneously triggered through intense engagement with information resources. They finished with phases of material consolidation when intermediate artifacts were configured to facilitate generation during the next stage. We examine these in detail and use our findings to motivate a discussion of working document overview representations and specific requirements related to idea generation and material consolidation.     

An uncertain price discrimination model in labor market

This paper investigates an uncertain price discrimination problem in labor market, in which the employee’s capability is his/her private information and characterized as an uncertain variable. To maximize the employer’s welfare, an uncertain price discrimination model in labor market is established. Moreover, a crisp equivalent form of the model is given, and the analytic solution is therefore obtained by employing variational method. This optimal solution shows that both the productivity and the wage are increasing with respect to the employee’s capability.