=Paper=
{{Paper
|id=Vol-2565/paper2
|storemode=property
|title=Managing Infrastructure Projects Driving by Global Trends
|pdfUrl=https://ceur-ws.org/Vol-2565/paper2.pdf
|volume=Vol-2565
|authors=Nataliya Bushuyeva,Igor Achkasov,Victoria Bushuyeva,Boris Kozyr,Çetin Elmas
|dblpUrl=https://dblp.org/rec/conf/itpm/BushuyevaABKE20
}}
==Managing Infrastructure Projects Driving by Global Trends==
https://ceur-ws.org/Vol-2565/paper2.pdf
Managing Infrastructure Projects Driving by Global
Trends
Nataliya Bushuyeva 1[0000-0002-4969-7879], Igor Achkasov 2[0000-0002-7049-0530],
Victoria Bushuieva 3[0000-0001-7298-4369], Boris Kozyr 4[0000-0001-5340-5165],
Çetin Elmas 5[0000-0001-9472-2327]
1-4Kyiv National University of Construction and Architecture, Kyiv, Ukraine
5 Gazi University Electrical Electronics Engineering Department, Turkey
natbush@ukr.net, cetinelmas@hotmail.com
Abstract. The development of project management systems, programs and
project portfolios depends on the global trends in the environment. Significant
changes in the environment from "rational economics" to "behavioural
economics" require further research on the effectiveness of the application of
existing methodologies, knowledge systems and competencies of project
managers. The foundation for changing the environment lies in changing the
decision-making paradigm in management from the rational to the irrational
paradigm. The article examines current approaches to the formation of a
"behavioural economy", and specific features in terms of decision-making
processes in project management and the anomalies that affect these processes.
The substantive model of diagnostics of application of models and methods of
project management in “behavioural economy” is presented. Digitalization and
strong penetration of competence approach in the development of IT
infrastructure projects have a critical influence on development project,
program and portfolio management methodology. The patterns of project
managers' behaviour in infrastructure product creation and project management
are investigated. Such patterns have allowed the authors to identify bottlenecks
in the application of modern project management methodologies in global
trends.
Keywords: global trends, behavioural economics, digitalization, infrastructure
project, information technology, competence, behaviour pattern, project
manager.
1 Introduction
The global development of the leading countries of the world is accelerated by the
active introduction of innovative information and communication technologies, the
increasing global power of computing systems, their openness and the speed of data
transmission. At the same time, the global trends of digitalization economies,
development of artificial intelligent systems at different levels of society, application
of knowledge bases, processing of large volumes of data, information security
systems based on blockchain technologies, application of a competent approach in
Copyright © 2020 for this paper by its authors. Use permitted under Creative Commons License
Attribution 4.0 International (CC BY 4.0)
2020 ITPM Workshop.
educational establishments and educational standards, cloud and fog computing and
innovations remain. The answer to these trends and challenges has been the transition
of many projects and programs to management using the Agile methodology. This
methodology is a key driver of accelerating innovation through accelerated product
development. On a global scale, this means a squeeze on innovation lifecycles and the
expectation of the latest "faster - more powerful - cheaper" formula products.
The next set of trends is related to the changing paradigm of decision-making and
the transition from a rational economy to a behavioural economy. The basic tenet of a
"rational economy" is that a person makes a choice based on a possible optimal result.
That is, when choosing projects, the manager will make his or her choice impartially,
acquiring only the best of what we can afford, based on rational expectations [1]. In
the transition to a "behavioural economy", irrational decisions are increasingly being
made. These trends affect all processes of personal development, organizations and
businesses, the economies of countries and the global economy. They form
contradictions in the processes of convergence (approximation) of knowledge systems
and decision-making. Research on the development of such systems requires the use
of flexible approaches to the analysis of management processes, projects and
programs. The emergence of a global trend of transition to a new "behavioural
economy" to change the "rational economy" significantly changes the tooling of
information systems, patterns of behaviour of managers in the application of modern
development methodologies based on projects, programs and project portfolios. These
trends affect the development of societies, public administration systems and the
management of the development of the real economy. The emergence of a global
trend of transition to a new "behavioural economy" to change the "rational economy"
significantly changes the patterns of behaviour of infrastructure project managers
when applying modern methodologies and management framework. At the same
time, the global trend of digitalization of economies, use of knowledge bases and
innovations remain. These trends affect the development of societies, public
administration systems and the management of the development of the real economy.
The basic tenet of a "rational economy" is that a person makes a choice based on a
possible optimal result. That is, when choosing infrastructure projects, the manager
will make his or her choice impartially, acquiring only the best of what we can afford,
based on rational expectations.
Another postulate of behavioural economics is conditional optimization, which
means that choices come with limited budget, implementation time, and alternatives.
"In competitive markets where prices can rise and fall freely, these fluctuations occur
so that supply is equal to demand," Thaler wrote in his book, The New Behavioral
Economy [2]. The founder of behavioural economics is Daniel Kahneman, winner of
the 2002 Nobel Prize for "incorporating psychological research data into economic
science, especially those related to human judgment and decision making in an
uncertain situation" [3]. Kahneman has proven that, most often, people's actions are at
odds with predictions of the theory of preparation and decision-making.
Digitization of economies and active use of accumulated knowledge is one of the
key drivers for accelerating global development.
Today, there are three main tools in the behavioural economy.
Heuristics - People often make decisions based on creative, unconscious thinking,
which is not always logically correct.
Frame - people use a semantic framework to understand and act in one way or
another.
Market inefficiency, market decision, making mistakes that lead to various market
anomalies, including mispricing, inefficient allocation of resources.
The problem addressed in this article is related to the analysis of changes in the
knowledge systems and behaviour patterns of project managers in the managing
infrastructure projects following global trends.
The purpose of this article is to review the application of modern infrastructure
project management methodologies according to global trends in the transition to the
behavioural economy.
2 Theoretical Studies
Today, it is becoming clear that the transition to a "behavioural economy" is highly
dependent on the competencies of project managers, teams and organizations. Modern
organizations face an urgent task: to develop the competence of specialists to the full
extent, which is extremely important for making the right management decisions and
conducting reliable expertise in the course of infrastructure project implementation
[4, 5]. However, it should be remembered that for every employee who develops his
career in the organization, such development is, on the one hand, a motivating factor,
on the other - a threat to an organization that has not formed mechanisms for retaining
such employees. At the same time, each employee is expected to learn how to manage
and develop their competencies.
Previously, infrastructure projects competency management was seen as a
desirable component of an organization's management system, but nowadays it has
become imperative. The development of a competency approach is related to the
application of the idea of exploring the “field of competence” of the infrastructure
project managers and organization [6, 7]. Under the field of competencies, we will
understand the area of competence in the areas of project management activities in
product creation. To implement the idea of the field of competence, it is necessary to
develop an appropriate management system based on the following principles:
- competences should be delineated (principle of independence of components of
an effective model);
- the management system should include all the competencies of the field related to
the organization's activities (principle of completeness);
- employee competencies should clearly define, periodically review and take into
account the current challenges of the organization (the principle of realism);
- all field competencies should be detailed to the desired level (differentiation
principle);
- key competence indicators must be developed for all competencies in the field to
assess the competence of employees (the principle of dimensions).
Research into the field of project management competency and product
development has shown slight variations in the competencies of project management
staff and Agile IT product developers.
Diagnosis of project-oriented organizations and businesses in terms of identifying
organizational anomalies for the rational application of "behavioural economics"
principles is the first stage of work to create an effective corporate project and
program management system [8]. The purpose of organizational diagnostics is to
identify the main problems, their interconnections, and to propose appropriate
methods of making the necessary decisions for successful development in the new
management paradigm. Methods of diagnostics of organizational anomalies are
directed on the determination of incompleteness/redundancy of organizational
structures and methodology of business organization, their non-compliance with the
requirements of business processes of the enterprise, inconsistency with strategic goal
setting and achievement, identification of organizational and methodological gaps and
conflicts [9]. In practice, the implementation of organizational development projects
for diagnostics, as a rule, uses the following methods:
- analysis of product life cycles, production technologies, operations management
processes, business development and implementation;
- analysis of the organizational structure and management mistakes;
- work with organizational syndromes at the levels of applied methodologies and
their implementation in models of projects, programs and portfolios;
- self-assessment of representatives of the organization by the method of 360o;
- diagnostic interviews;
- graphing problems, challenges and solutions.
Project managers working in industries with high communicative ability may lose
interest and motivation over time, resulting in decreased personal efficiency and
productivity. High communicative ability is a strong stress factor, especially if a
person's work is associated with a highly competitive environment and high client
expectations. In these circumstances, the study of the symptoms of emotional burnout,
cognitive dissonance and their prevention becomes especially relevant for the project
manager.
3 Driving IT Infrastructure Projects by Global Trends
Today, the "rational economy" model, which applies methods of optimization of
utility functions (values), ceases to work. This is due to the transition of many
organizations to the behavioural economy. Increasingly, heuristic, often emotionally
coloured, methods of judging and making managerial decisions are far from ideal and
often lead to mistakes. Managers often make incorrect judgments because of
misconceptions about the odds, ignoring the presence or absence of necessary
information, a priori probability, or overestimating unlikely events. Essentially,
behavioural economics is an interdisciplinary industry at the intersection of
psychology and economics. Thaler P. [2] was one of the first to notice gaps in the
standard economic model and began to rely on the work of psychologists to explain
them somehow.
Consider some of the anomalies with the emotional intelligence of behavioural
economics:
1. The effect of ownership;
2. An imaginary account;
3. The default selection;
4. Non-acceptance of losses.
Let's look at some cassis of how behavioral economics work in today's
organizations. Mistakes and illusions of Entrepreneurs describe in [1].
In Ukraine, the probability of survival of small businesses over the next five years
is 10%. However, many, starting their own business, think that these statistics do not
apply to them. The analysis showed that Ukrainian entrepreneurs believe in business
development: average estimates of the chances of success of any enterprise like yours
are 20%, which is almost double the existing ratio of small business success.
Explaining how behavioural economics is used in politics, the proposed Pension
Retirement Program does not give rise to immediate government spending, as nothing
changes at the moment; an increase in contributions are tied to a pay raise, which
translates into a much more enjoyable addition to the budget. What is also important
here is that pension increases should be made automatically unless the pensioner
submits a waiver application. The automatic variant of such payment is perceived by
the person as normal, and writing of the statement of refusal requires effort, not
everyone is ready to make.
4 Abnormal Emotional Stakeholder Behavior when
Implementing IT Infrastructure Projects
Under the behaviour pattern of the project manager [10], we will understand the
model of application of behavioural competencies in management processes. The
model of competency groups in the format "Leadership-Intellect-Emotions" is
proposed.
From "behavioural economy" the processes of creation and development of
organizations will mark two groups of anomalies:
− congenital acquired at the time of the creation of the organization and its
management system;
− acquired during the life cycle (creation, development and ageing).
In terms of the organization's activity, there are three types of organizational
anomalies [11, 12, 15].
Anomalies in organizational construction (structural pathologies):
The dominance of structure over function (creation of new units to solve problems
instead of constructive use of existing assets);
Isolation of units;
− incompatibility of the person with the function (more often it concerns the
managers and occurs when the actions of the manager contradict the
organizational order);
− bureaucracy (excessive number of procedures).
Anomalies in the construction of organizations cover the entire structure of the
enterprise - from the governing body to subordinate units. The result is a breach of
links between departments, the centre and departments, slowing down the
implementation of decisions, failure in the functioning of the organization system as a
whole.
Anomalies of this type are typically typical of large infrastructure projects are
matched by maturity and competence. Large Soviet-style organizations were
characterized by bureaucracy and the dominance of structure over function.
Incompatibility of personality with function is a special kind of pathology that can
occur in any organization. Here the decisive role is played by the personality - the
manager or the employee.
In the detection of pathologies of this type in the practice of project management is
applied structural analysis, which is based on the identification of the structure as a
relatively stable set of relations, recognition of the methodological primacy of
relations over the elements in the system, a partial distraction from the development
of objects [13, 16]. The basic concept of structural analysis is a structural element
(object) - an element that performs one of the elementary functions associated with
the simulated object, process or phenomenon.
The structural analysis involves exploring the system with its graphical model
representation, which begins with a general overview and then details, acquiring a
hierarchical structure with an increasing number of levels. This approach is
characterized by:
− partitioning at the level of abstraction with the limitation of the number of
elements at each level;
− the limited context that includes only the essential details for each level;
− use of strict formal rules of record;
− consistent approaching the result.
The purpose of structural analysis is to transform the general vague knowledge of
the original subject domain into accurate models that describe the various subsystems
of the simulated organization.
When modelling systems in general, and in particular, for structural analysis,
different models are used that reflect:
− the functions that the system must perform;
− processes that ensure the implementation of these functions;
− data required for the performance of functions and the relationship between
these data;
− organizational structures that ensure the performance of functions;
− material and information flow that arise during the performance of functions.
A model is a collection of objects and relationships between them that adequately
describes only some of the properties of the simulated system. The model is just one
of many possible interpretations of the system. This interpretation should suit the user
in this situation, at this point.
The model is generally characterized by four properties:
− reduced scale (size) of the model, more precisely, its complexity, the degree
of which is always less than that of the original. Simplification is deliberately
introduced when building a model;
− maintaining key relationships between different parts;
− performance of the model, i.e. the ability to work in principle;
Adequacy of the model to the true properties of the original (degree of certainty).
It is also important to emphasize that any model reflects the views of a particular
group of designers. Each model has its own goals and objectives, and therefore the
object of business, which is a complex organism, as a rule, is described by a certain
set of models, collectively forming a common model of a given business system.
Anomalies in management functions and decision-making system (functional
anomalies):
− pendulum system of preparation and decision-making (measures and
countermeasures);
− duplication of organizational order (orders that repeat mandatory norms, etc.);
− ignoring the organizational order (violation of accepted norms);
− the gap between the decision and the execution of tasks (a complication of
implementation of the decision by unaccounted factors or impossibility of its
implementation);
− stagnation (inability to change, inability to affect them);
− suppression of development by over-functioning;
− demotivating leadership style (overcoming negative evaluation of employees'
actions, lack of incentives);
− inversion (the result of managerial influence is opposite to the goal).
The emergence of anomalies in management decisions is facilitated not only by the
wrong decisions of the governing bodies but also by the formed anomalies in the
organization building. These anomalies also lead to disruption of the workflow,
causing recessions in the organization.
An example is the so-called pendulum solutions. This pathology arises from the
lack of a clear decision-making system and plan, and as a result, the result of some
actions is neutralized by others. Sometimes it manifests itself in its purest form: a
counter-measure is introduced, and the decision is reversed. For example, the creation
of a competence centre for managing development programs and its subsequent
cancellation, justifying the importance of introducing new technology and returning to
the old method of production, etc. The situational approach, the lack of an action
program, can be very dangerous because the result of the organization's activities in
this the case is reduced to zero. The company is not developing and is losing
competitiveness.
Anomalies in organizational relationships are more likely to occur in the
background of managerial mistakes. For example, the emergence of a non-subjective
management style is facilitated by a demotivating leadership style. Naturally, in the
absence of incentives, employees become less active and do not want to come up with
new ideas.
A typical example of pathologies in organizational relationships is the scattering of
goals. Each organization has a primary goal, but its achievement is only possible by
dividing the overall goal into smaller goals and objectives. As a result of constant
crushing, the set of sub-goals will not fully meet the strategic goal of the organization,
and the result will be a partial fulfilment of the goal or its failure. Among the reasons
are mainly subjective factors: inaccurate transmission of information, features of
perception, and personal goals of employees. Sub-goals become the main goals of
units that no longer seek to accomplish a common task and do not take into account
the goals of other units.
This phenomenon is typical for all organizations but is most pronounced in large
firms with many divisions and companies with low staff motivation. Because of this
anomaly, you can evaluate the degree of controllability of an organization: the higher
the dispersion of goals, the lower the manageability [14, 17, 18].
Appling the competency model IPMA ICB 4.0 [3] to determine the key
competencies for project product creation and its outcome (Table 1 - Table 2).
Table 1. Strategic competencies for project product creation
Strategic competences Degree of impact on goal achievement
1. Strategy High
2. Guides, Structures and Processes High
3. Regulations, standards and rules Average
4. Power and Interest High
5. Culture and values Average
Having assessed the “Strategic Competencies” of Development IT for the system
of Transparency Budget of Ukraine [1] where the implementation of the results has
been carried out. Assessment of competences on a 10 point scale, which is shown in
Fig. 1. Eleven experts were involved in the modelling process.
Strategy
8
6
4
Guides, Structures
Culture and values
2 and Processes
0
Regulations,
Power and
standards and
Interest
rules
Fig. 1. Results of modelling by the group "Strategic Competencies"
The results of modelling by competency groups have identified the weaknesses in the
preparation of project managers who need to improve competencies to ensure the
success of projects of the Ukrainian Ministry of Finance [1]. From the results of the
simulation, we distinguish one competence "Regulations, standards and rules" where
the project manager does not have sufficient competence concerning the requirements
for this competency.
Table 2. Behavioural competencies for project product creation
N Behavioural competencies Degree of impact on goal
achievement
1 Self-reflection and self-management Low
2 Personal integrity and reliability Average
3 Personal communication High
4 Relation and engagement Average
5 Transformational leadership High
6 Teamwork High
7 Conflicts and Crises Average
8 Resourcefulness Low
9 Negotiation High
10 Result Orientation Average
The behavioural competencies of product creation and the result are specific to the
stakeholder involved in product design and output. From the results of the simulation,
we distinguish three competencies "Self-reflection and self-management", "Relation
and engagement", and "Resourcefulness" where the project manager does not have
sufficient competence concerning the requirements for this competency.
Self-reflection and self-
management
10 Personal integrity and
Result Orientation 8 reliability
6
Negotiation
4 Personal
communication
2
0
Relation and
Resourcefulness
engagement
Transformational
Conflicts and Crises
leadership
Teamwork
Fig. 2. Results of modelling by the group "Behavioral competencies"
The intersection of the competency of project managers and project management
competencies is based on behavioural competencies.
Conclusions
As a result of the study, the principles of behavioural economics were identified and
analyzed, and the application of these principles to the development of infrastructure
project and programs management systems.
Understanding global trends in the development of infrastructure projects
significantly changes the behavior pattern of managers. This is especially true for self-
management, resourcefulness, and stakeholder relation and engagement.
The anomalies in management decisions are facilitated not only by the wrong
decisions of the governing bodies but also by the formed anomalies in the
organization. These anomalies lead to disruption of the workflow, causing recessions
in the implementation of infrastructure projects.
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