Link to thesis - Concept - NTNU

uncertainty. External flexibility can be a response to contextual uncertainty, but all combinations of internaland external flexibility versus internal and contextual uncertainty can be found.Project flexibility was divided into flexibility in the decision process and the product. Flexibility in thedecision process is based on an approach where decisions and commitments in the projects are madesequentially over episodes. The use of decision gate models provides a successive commitment to a project,as shown by Eskerod & Östergren [14]. Flexibility in the product means that the design of the final product(what the project shall produce) has taken into consideration possible future changes in use or requirements.4.2 Perspectives of analysisProject flexibility is seen from the perspective of different stakeholders, in different project phases andrelated to efficiency and effectiveness.The flexibility for one project stakeholder can be another's risk. According to McElroy & Mills [15], projectstakeholders are persons or groups of people who have a vested interest in the success of a project and theenvironment within which the project operates. In a study of large engineering projects, Olander & Landin[16] found that it is important for a project management team to identify stakeholders that can affect aproject, and then manage their differing demands throughout the project stages. Stakeholders may beorganisations or individuals.Project flexibility can be studied from both efficiency and effectiveness perspectives. A case in favour offlexibility emphasise the possibility to increase a project’s effectiveness. Effectiveness is primarilyaddressed by external flexibility. Project scope is adjusted to utilise benefit opportunities. Regardingefficiency, such adjustment of project scope typically causes change costs. The net effect come form abalance between the values of benefit opportunities and incurred change cost.4.3 Project flexibility driversIn this context, drivers are factors that create needs or pressure on projects to be flexible. Uncertainty is thekey driver for project flexibility, and arguable the only one. The other drivers mentioned below are in factonly highlights of selected types of uncertainty. In this paper uncertainty is defined as a gap between theamount of information needed to make a decision the amount of information available (based on Galbraith[17]). In order to manage this information gap, flexibility is primarily a way of reducing the amount ofinformation needed. Other project management approaches may focus on increasing the available amount ofinformation.The longer duration a project has, the more likely it is that some pre-requisites are not longer valid. Longduration is likely to result in more or less suppressed need for scope changes. Both cost and demandestimates are more uncertain the longer the time perspective is. What is “long” duration is highly dependingof the type of project. Experiences from previous projects of the same type provide indications of for howlong prerequisites are likely to stay stable enough.Flexible projects can contribute to conflict solutions. However, conflicts that arise during the preparation orexecution of a project have also created a need for projects to be flexible, as a response to conflicts. Projectflexibility can also be an issue of conflict. Stakeholders who benefit from the initial decisions are less likelyto favour a continued flexible decision process. Flexible decision processes are likely to be valued by thosewho do not prefer an initial decision. In this way, availability of flexibility options and redundant resourcescan serve as an invitation to adjustments.4.4 Project flexibility enablersThis paper refers to ‘enablers’ as factors that contribute to making it possible for projects to be flexible.Sager [18] presents redundancy as an enabler for flexibility. According to Landau [19], redundancy iscreated by repetition, duplication and overlap. Galbraith [17] points out that slack resources constitute anadditional cost to an organisation. In a project perspective, redundancy can be applied for flexibility in boththe product and decision process. Flexibility in the product may be achieved by over-specification of futurefunctionality. A flexible decision process calls for redundant recourses and time to perform analyses ofalternative project concepts. The rationality behind the use of redundancy is that this use of resources is costeffective compared to later major changes.