Systems Thinking and its Influence on Project Management

This report provides a comprehensive exploration of systems thinking in project, program, and portfolio management. It begins by defining systems thinking and its importance in enhancing organizational maturity, improving business processes, and facilitating effective communication. The report then delves into the significance of systems thinking, contrasting it with traditional project management approaches and highlighting its role in addressing dynamic challenges. It discusses tools and techniques like risk management, value engineering, and systems engineering, while also examining how systems thinking influences organizational structures, business cultures, and portfolio alignment. The report further explores the impact of systems thinking on business value models, providing a holistic understanding of its applications and benefits in various project management contexts. The report concludes with a comparative analysis of different project management approaches, emphasizing the flexibility and efficiency offered by systems thinking.

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SYSTEMS THINKING
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Systems thinking
Introduction
Systems thinking is a discipline in management that is specifically concerned with the
inherent comprehension and examination of connections between components that comprises
a particular process. According to Weinberg (2011), systems thinking is an important concept
in project management, quality and portfolio management, improving business processes and
ensuring organisational maturity. Besides, Gharajedaghi (2011) defines systems thinking as
the inherent ability to develop reliable insinuations about particular actions by establishing a
progressively deep understanding of the fundamental structures. Through system thinking,
innovative conception of facts can be stimulated opening up new possibilities, help in the
identification and management of various risks and enhance communication. Moreover, the
research by Leveson (2011) clearly stipulates that system thinking can effectively facilitate
faster response to diverse changes during project execution as it can significantly improve
organisational leadership skills by raising awareness of various project objectives.
Therefore, this research gives coherent exploration of relevant literatures on the
concepts of systems thinking and how such relates to project, program and portfolio
management. The research further identifies different tools of systems thinking, and will
include the management of risks, value and systems engineering. Correspondingly, assorted
forms of systems thinking that are important in project and portfolio management are
discussed, and include, organizational forms, models, system engineering, and value and risk
management. An explanation of the systems thinking approaches and a comparisons with the
traditional methods is also given.
Significance of systems thinking to a project and an organisation

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According to Flood (2010), the application of systems thinking in project
managements is becoming more paramount in most organisations. The research by
Gharajedaghi (2011) point at the inherent need for increased transparency and comprehensive
understanding of how diverse elements of systems thinking influences project management
among other organizational facets. The underlying principles applicable here include the
ability to develop quality thinking when solving various problems, increased candidness and
identification of defective solutions.
According to Weinberg (2011), some of the traditional approaches to project
management majorly revolves around defusing complex elements of a project through
accurate planning and establishing more control over the associated processes. However,
such traditional approaches have limited influence on project management given that there
are numerous arising issues that may occasionally necessitate critical thinking. Given the
dynamic environments in which modern organizations operates in, project management is
increasingly becoming a hard task. As such, by the research by Leveson (2011) perceive
systems thinking as the most viable solution to the present and future challenges that relates
to project management.
To understand the significance of systems thinking, we must first understand the
problem-solving processes in the context of project management. In their research, Best and
Holmes (2010) further explains that problem-solving in an organization involve the precise
identification of challenges that may interfere with the status quo. These challenges must be
identified and properly understood by the decision-makers.
Once the problems have been identified, systems thinking will enable an organization
to adopt a holistic approach to problem solving. Such approaches include the determination
of various opinions and techniques of thinking and how the status quo affects project
implementation (Flood, 2010). Such holistic approaches include the identification of facts

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and related events, examining the subtle aspects of the identified challenges and developing
instructive and characteristic reactions to the complex project dynamics (Kerzner, 2013).
Another importance of systems thinking is that it enables an organization to clearly
appreciate the cause-and-effect processes that are related to a particular phenomenon. This
facilitates the establishment of network of interactions during project implementation based
on an understanding of how problems can be connected to become complex organizational
issues. According to by Leveson (2011) feedback loops are used in understanding variables
that can influence project execution and interactions between such variables. The
recapitulating patterns identified in the feedback loop can be used in the documentation of
possible reasons for the complex problems.
According to Leveson (2011), systems thinking is also instrumental in planning
scenarios and modelling actions that simplifies the incorporation of diverse viewpoints. Such
an approach to systems thinking majorly assumes that an organization relishes in relevant
project information which can be used to solve arising challenges. Correspondingly, the
research by Mingers and White (2010) clearly stipulates that systems thinking in project
management can be used in the determination of specified behaviours and team approaches to
project implementation.
According to Nguyen et al. (2011), such approaches to systems thinking necessitates a
higher level of adaptation to possible modifications to the present circumstances. For
example, adapting to new technological innovations and increased level of knowledge
sharing as some of the social processes that must be considered. As such, Best and Holmes
(2010) further point that the project team must be more open and agile in the management of
related activities. Besides, an organizational culture should be based on constant
transformations in various aspects of the organisation that my limit the ability of the project
team to adapt.

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The table below indicates alternative approaches and comparisons towards project
management.
Approaches Traditional
approach
Agile approach Systems thinking
approachComparisons
Project solving and
goals
Gives a
comprehensive
delineation of project
objectives based on
the SMART model
Such definition of
project objectives is
based on the strict
examination of the
diverse project
requirements
Gives a general
explanation of
concepts and possible
outcome of the
project
The primary
objective of the
project team is to
avail various project
values to the clients
Assumes an all-inclusive
or holistic approach to
solving related problems
Gives a comprehensive
definition of a project
based on varied
perceptions
Gives a clear
representation of project
objectives among other
phases of a project
Project
management cycle
Assumes a linear
cycle in project
management that
include clear
explanation of
various phases the
project
Project planning is
strictly based on
Assumes an iterative
project management
cycle that stresses on
the delivery of
functional elements
Explains how
organizations can
adapt to changing
situations
Assumes a non-linear
cycle in project
management that is
majorly based on a cause-
effect relationship in
complex project setting
Enables the examination
of collaboration between

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exhaustive
timeframes which
forms the basis of
project management
Offers a close
interaction with
project beneficiaries
such as clients
Project executions
processes are
significantly
simplified
various project elements
Facilitates the
development of potential
substitute project
scenarios
Offers the project team
an opportunity to adapt
and manage changes in a
dynamic project
environment
Organisational
aspects
A Work Breakdown
Structure defines the
organisational
structure
Project is highly
formalized
Majorly focuses on
establishing a
balance especially
between fundamental
project limitations
such as cost and
quality constraints
Simplified
organizations
structures
Majorly focuses on
organizational
flexibility, efficiency
and adaptability
Organizational
structures moderately
formalized
Flexible, efficient and
functional organizational
structure
Facilitates the
development and
adaptability to dynamic
or complex project
settings
A highly competent
project team

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Project team The project team
comprise of a narrow
group of specialists
The project team
depicts high level of
competency and
experience
Integrative
(democratic) style of
leadership is depicted
The management
style is majorly task-
oriented
The project teams are
self-disciplined and
organized
The team comprises
of a competent group
of professionals
Higher level of
cooperation
especially in decision
making
Increased
communication
especially among the
project team
members
Incorporating project
clients in the creation
of final value
The leadership and
management styles
stresses on
cooperation and
directing other team
members.
The project team
comprise of a various
interdisciplinary groups
Project challenges are
holistically examined
The primary assumption
is that the identified
project problem is more
complex than earlier
anticipated
The deciphering of the
identified project
problems based on the
stipulated cause-and-
effect relations in a
complex project situation
Encourages the sharing of
thoughts on project
implementation
Stresses on the
application of creative
thinking to solve the
identified problems
The style of leadership
common here is

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democratic that
encourages project team
members to freely
participate in the process.
Therefore, from the above comparisons, it is clear that systems thinking can
complement other approaches to project management.
Tools and techniques of systems thinking
According to Davis et al. (2014), systems thinking tools are instrumental in
facilitating the generation and organization of situations during project management. Some of
the tools and techniques that comprise systems thinking include risk management, value and
systems engineering. According to Senge (2014), systems engineering refers to the processes
of designing and managing dynamic systems in the life cycle of a project. It include the
ability to accurately test and evaluate, design and implement complex projects.
Specifically, in this context, systems engineering deals with various project-related
processes and aim at reducing the possible need for re-planning and optimization of the
identified risk margin (Conti, 2010). Correspondingly, risk management refers to the
processes involved in the assessment and elimination project risks. It includes increasing
performances to ensure an iterative management of perceived project risks. According to
Underwood and Waterson (2014), systems engineering also enable organizations to liaise and
co-ordinate with pertinent bodies and other facets of project implementation. The figure
below shows a functional systems engineering process.

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Process input
 Processing client need/project objectives
 Assessing various project constraints and
technology base
 Developing a program decision
requirement template
 Specifying project standards and
missions
Analysis of the project requirements
 Analyse project missions
 Precisely identify project requirements
 Clear definition of projected performance
design
 Identify various constraints
Systems analysis and
control
Functional analysis
 Definition of functional interfaces
 Allocating performances among
other limiting necessities
 Decomposing functions
Synthesis
 Project transformations
 Defining alternative
systems
 Identifying ideal process
solutions
Process output
 Draw project baselines and other
specifications
 Design a project decision database

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How systems thinking influences organisational structures, forms and business cultures
According to Barile and Saviano (2011), systems thinking introduces a new insight on
organisational structures, forms and business cultures. This is because it encourages a
comprehensive and different look at organizational problems, and encourages the project
team to freely interact and share important information. Systems thinking is also important in
addressing various organizational challenges such as fragmentation and inadequate sharing of
information among various departments (Caldwell, 2012). Specifically, systems thinking
introduces a culture of cohesiveness and increased ability to handle complex systems based
on a unique and all-inclusive learning process.
How systems thinking influences Portfolio alignment and portfolio management process
cycle
Essentially, portfolio management focuses on the introduction of relevant change
initiatives to a management system. As such, systems thinking facilitates the coordination and
alignment of strategic business planning and corporate governance among other important
functions to attain effective alignment of organizational portfolio (Caldwell, 2012).
This ensure the creation of structures that can coordinate project activities and
successfully deliver strategic project objectives. In essence, portfolio management as a form
of systems thinking stresses on the prioritization of such processes that can result in the best
possible outcome. This will enable an organization to avoid duplicating projects and initiating
initiatives that can help in attaining the stipulate organizational objectives.
How systems thinking influences business value model

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According to Conti (2010) business value model is an important form of systems
thinking that can help an organization to better understand its problems that should be solved.
This model assess such values that can drive customer satisfaction and possible limitations
that can affect a business’ desire to establish relevant solutions. By establishing a business
value model, an organization can be able to create a shared ideas and align the project team
members to attain organizational objectives (Kerzner, 2013).
How systems thinking influences organisational maturity
Every company is pursuing absolute maturity in project management and
implementation. Thus, systems thinking are seen as important factor in the successful
implementation of organizational objectives. According to Barile and Saviano (2011),
maturity in organizational setup aim at attaining near perfect development of organizational
abilities.
Case study of Costco
The company established that weak supply chain systems was a significant barrier to
its market performances. The barrier meant that Costco would not adequately meet the
growing demand of its organic food products among its customer bases. As such, they
introduced a systems thinking model that focused on acquiring more organic food suppliers.
This increased their capital prowess and improved their relationship with the customers.
Thus, the company is guaranteed of organic food supplies and a positive return on its
investments and increased value to customers.
Conclusions
Indeed, systems thinking is a very powerful problem solving tool and technique
especially in complex project situations (Caldwell, 2012). Notably, the research has clearly
specified different literature, theories and how systems thinking can be applied in project
management. Through system project, the research ascertains that an organization solve

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challenges related to project execution through a comprehensive perspective that
acknowledges various systems and components constantly interacting during a particular
process. Notably, systems thinking the management of an organization can significantly
improve given the amplified level of information provided. This is because systems thinking
encourages organizational management to approach issues through first assessing the
perceived impacts and consequences of their resolutions.
Such analyses will further help an organization to use systems thinking to generate
alternative solutions to diverse issues arising in project and portfolio management (Kerzner,
2013). Furthermore, systems thinking encourages the formulation of optimal decisions and
solutions that can benefit an organization in its entirety. Thus, the importance of systems
thinking in project and portfolio management cannot be ignored whatsoever. The case study
of Costco depicts a classic application systems thinking to increase organizational
competence and customer value.

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References
Barile, S. and Saviano, M. (2011) ‘Foundations of systems thinking: the structure-system
paradigm”
Best, A. and Holmes, B. (2010) ‘Systems thinking, knowledge and action: towards better
models and methods,’ Evidence & Policy: A Journal of Research, Debate and Practice, 6(2),
pp.145-159.
Caldwell, R. (2012) ‘Systems thinking, organizational change and agency: A practice theory
critique of Senge's Learning Organization,’ Journal of Change Management, 12(2), pp.145-
164.
Conti, T. (2010) ‘Systems thinking in quality management,’ The TQM Journal, 22(4),
pp.352-368.
Davis, M.C., Challenger, R., Jayewardene, D.N. and Clegg, C.W. (2014) ‘Advancing socio-
technical systems thinking: A call for bravery,’ Applied ergonomics, 45(2), pp.171-180.
Flood, R.L. (2010) ‘The relationship of ‘systems thinking’to action research,’ Systemic
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