Chapter One Introduction to Project Management Chapter Objectives

Chapter One Introduction to Project Management

Chapter Objectives 1. Understand the Importance of Projects and Project Management. 2. Define Projects and discuss project constraints 3. Define Project Management and its Importance for doing business nowadays. 4. Introduce Project Management Knowledge Areas. 5. Introduce Project Life Cycle. 6. Understand the Importance of Project management Integration. 1– 2

Week 1: Modern Project Management What is a Project? • Project Defined – A complex, nonroutine, one-time effort limited by time, budget, resources, and performance specifications designed to meet customer needs. – A project is a temporary endeavor undertaken to accomplish a unique purpose. – “An activity with a fixed start and end point, managed with finite resources, involving change and often achieved by the collective effort of the team of people” – “A project is a sequence of unique, complex, and connected activities. Having one goal or purpose that must be completed by a specific time, within budget, and according to specification” (Artto, 2002) 1– 3

Attributes of Projects Major Characteristics of a Project (Attributes) 1. Importance: The most crucial attribute of a project is that it must be important enough in the eyes of senior management to justify setting up a special organizational unit outside the routine structure of the organization. 2. Uniqueness: has an established objective (unique purpose). Involves doing something never been done before. 3. Defined Life Cycle: Has a defined life span with a beginning and an end (temporary). 4. Performance: A project is usually a one-time activity with a well-defined set of desired end results. 5. Has specific time, cost, and performance requirements. 1– 4

Attributes of Projects Major Characteristics of a Project (Attributes) 6. 7. Interdependencies: Projects often interact with other projects being carried out simultaneously by their parent organization. Require across-the-organizational participation (require resources from different areas). Conflict: Projects compete with functional departments and other projects for resources and personnel. • Conflicts between customers and the project team over requirements. • Conflicts within the project team over approach and process. • Conflicts between the project manager and his/her management over cost and schedule. • Conflicts between project managers and other managers on who controls the resources that the project manager needs. 8. 9. should have a primary sponsor and/or customer involve uncertainty 1– 5

Comparison of Routine Work with Projects Routine, Repetitive Work Projects Taking class notes Writing a term paper Daily entering sales receipts into the accounting ledger Setting up a sales kiosk for a professional accounting meeting Responding to a supply-chain request Developing a supply-chain information system Practicing scales on the piano Writing a new piano piece Routine manufacture of an Apple i. Pod Designing an i. Pod that is approximately 2 X 4 inches, interfaces with PC, and stores 10, 000 songs Attaching tags on a manufactured product Wire-tag projects for GE and Wal-Mart 1– 6

Three Major Constraints • Every project is constrained in different ways by its – Scope goals: What is the project trying to accomplish? – Time goals: How long should it take to complete? – Cost goals: What should it cost? • It is the project manager’s duty to balance these three often competing goals 1– 7

Three Major Constraints 1– 8

Programs versus Projects • Program Defined – A series of coordinated, related, multiple projects that continue over an extended time and are intended to achieve a goal. – A higher level group of projects targeted at a common goal. – Program: “A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. ”* – Process – a series of steps needed to perform a routine activity (e. g. purchasing). A project may contain many processes. *PMI, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) 1– 9

Programs versus Projects 1– 10

What is Project Management? • Project management is “the application of knowledge, skills, tools, and techniques to project activities in order to meet project requirements” (PMI*, Project Management Body of Knowledge (PMBOK Guide), 2000, p. 6) *The Project Management Institute (PMI) is an international professional society. Their web site is www. pmi. org. 1– 11

Project Management Framework 1– 12

Project Stakeholders • Stakeholders are the people involved in or affected by project activities • Stakeholders include – Project sponsor – Project manager – Project team – Support staff – Customers – Users – Suppliers – Opponents to the project 1– 13

9 Project Management Knowledge Areas • Knowledge areas describe the key competencies that project managers must develop – 4 core knowledge areas lead to specific project objectives (scope, time, cost, and quality) – 4 facilitating knowledge areas are the means through which the project objectives are achieved (human resources, communication, risk, and procurement management – 1 knowledge area (project integration management) affects and is affected by all of the other knowledge areas 1– 14

Project Management Tools and Techniques • Project management tools and techniques assist project managers and their teams in various aspects of project management • Some specific ones include –Project Charter and WBS (scope) –Gantt charts, network diagrams, critical path analysis, critical chain scheduling (time) –Cost estimates and earned value management (cost) 1– 15

Project Portfolio Management • Many organizations support an emerging business strategy of project portfolio management: – Organizations group and manage projects as a portfolio of investments that contribute to the entire enterprise’s success. 1– 16

Major Functions of Portfolio Management • Oversee project selection. • Monitor aggregate resource levels and skills. • Encourage use of best practices. • Balance projects in the portfolio in order to represent a risk level appropriate to the organization. • Improve communication among all stakeholders. • Create a total organization perspective that goes beyond silo thinking. • Improve overall management of projects over time. 1– 17

Project Life Cycle FIGURE 1. 1 1– 18

: Iterative & Overlapping LE V E L O F A C T I V I T Y Executing Process PROJECT START Planning Process Initiating Process Closing Process Controlling Process TI ME PHASES OF THE PROJECT LIFE CYCLE PROJECT FINISH Proprietary - PMI Pittsburgh

Knowledge Areas and Life Cycle FIGURE 1. 1 1– 20

The Challenge of Project Management The Project Manager • Job descriptions vary, but most include responsibilities such as planning, scheduling, coordinating, and working with people to achieve project goals. • Manages temporary, non-repetitive activities and frequently acts independently of the formal organization. • Marshals resources for the project. • Is linked directly to the customer interface. • Provides direction, coordination, and integration to the project team. • Is responsible for performance and success of the project. • Must induce the right people at the right time to address the right issues and make the right decisions. 1– 21

Fifteen Project Management Job Functions* 1. Define scope of project. 2. Identify stakeholders, decision -makers, and escalation procedures. 3. Develop detailed task list (work breakdown structures). 4. Estimate time requirements. 5. Develop initial project management flow chart. 6. Identify required resources and budget. 7. Evaluate project requirements. 8. Identify and evaluate risks. 9. Prepare contingency plan. 10. Identify interdependencies. 11. Identify and track critical milestones. 12. Participate in project phase review. 13. Secure needed resources. 14. Manage the change control process. 15. Report project status. 1– 22

Suggested Skills for Project Managers • Project managers need a wide variety of skills. • They should: – Be comfortable with change. – Understand the organizations they work in and with. – Lead teams to accomplish project goals. • Project managers need both “hard” and “soft” skills. – Hard skills include product knowledge and knowing how to use various project management tools and techniques. – Soft skills include being able to work with various types of people. 1– 23

Suggested Skills for Project Managers • Communication skills: Listens, persuades. • Organizational skills: Plans, sets goals, analyzes. • Team-building skills: Shows empathy, motivates, promotes esprit de corps. • Leadership skills: Sets examples, provides vision (big picture), delegates, positive, energetic. • Coping skills: Flexible, creative, patient, persistent. • Technology skills: Experience, project knowledge. 1– 24

The Importance of Project Management • Factors leading to the increased use of project management: – Compression of the product life cycle – Knowledge explosion – Triple bottom line (planet, people, profit) – Corporate downsizing – Increased customer focus – Small projects represent big problems 1– 25

More Advantages of Project Management* • Bosses, customers, and other stakeholders do not like surprises • Good project management (PM) provides assurance and reduces risk • PM provides the tools and environment to plan, monitor, track, and manage schedules, resources, costs, and quality • PM provides a history or metrics base for future planning as well as good documentation • Project members learn and grow by working in a cross-functional team environment *Knutson, Joan, PM Network, December 1997, p. 13 1– 26

Benefits of an Integrative Approach to Project Management • Integration (or centralization) of project management provides senior management with: – An overview of all project management activities – A big picture of how organizational resources are used – A risk assessment of their portfolio of projects – A rough metric of the firm’s improvement in managing projects relative to others in the industry – Linkages of senior management with actual project execution management 1– 27

Integrated Project Management Systems • Problems resulting from the use of piecemeal project management systems: – Do not tie together the overall strategies of the firm. – Fail to prioritize selection of projects by their importance of their contribution to the firm. – Are not integrated throughout the project life cycle. – Do not match project planning and controls with organizational culture to make appropriate adjustments in support of project endeavors. 1– 28

Integrated Management of Projects FIGURE 1. 2 1– 29

Project Management Office (PMO) • A PMO is an organizational group responsible for coordinating the project management function throughout an organization. • Possible goals include: – Collect, organize, and integrate project data for the entire organization. – Develop and maintain templates for project documents. – Develop or coordinate training in various project management topics. – Develop and provide a formal career path for project managers. – Provide project management consulting services. – Provide a structure to house project managers while they are acting in those roles or are between projects. 1– 30

The Technical and Sociocultural Dimensions of the Project Management Process FIGURE 1. 3 1– 31

An Overview of Project Management 5 e. 1– 32