Project Management A Managerial Approach Chapter 1 Projects in Contemporary Organizations

Projects in Contemporary Organizations Project Management has emerged because the characteristics of our turn-of-the-century society demands the development of new methods of management Many forces have fostered the emergence and expansion of Project Management

Forces Of Project Management 3 Paramount Forces driving Project Management: 1. The exponential expansion of human knowledge 2. The growing demand for a broad range of complex, sophisticated, customized goods and services 3. The evolution of worldwide competitive markets for the production and consumption of goods and services All 3 forces combine to mandate the use of teams to solve problems that used to be solvable by individuals

Objectives of a Project 3 Project Objectives: Performance Time Cost Expectations of clients are not an additional target, but an inherent part of the project specifications

Objectives of a Project 3 Project Objectives:

The Professionalism of Project Management Complexity of problems facing the project manager Growth in number of project oriented organizations The Project Management Institute (PMI) was established in 1969 By 1990 it had 7,500 members 5 years later, over 17,000 members And by 1998, it had exploded to over 44,000 members This exponential growth is indicative of the rapid growth in the use of projects Also reflects the importance of PMI as a force in the development of project management as a profession

Project Management Institute

Recent Changes in Managing Organizations The process of managing organizations has been impacted by three revolutionary changes 1. Accelerating replacement of traditional, hierarchical management by participatory management 2. Currently witnessing the adoption of the “systems approach” (sometimes called “systems engineering”) 3. Organizations establishing projects as the preferred way to accomplish the many specific changes that must be made when the organization attempts to alter its strategy

The Definition of a “Project” Must make a distinction between terms: Program - an exceptionally large, long-range objective that is broken down into a set of projects Task - set of activities comprising a project Work Packages - division of tasks Work Units - division of work packages In the broadest sense, a project is a specific, finite task to be accomplished

Characteristics of a Project Have a purpose Have a life cycle Interdependencies Uniqueness Conflict

Why Project Management? Companies have experienced: Better control Better customer relations Shorter development times Lower costs Higher quality and reliability Higher profit margins Sharper orientation toward results Better interdepartmental coordination Higher worker morale

Why Project Management? Companies have also experienced some negatives: Greater organizational complexity Increased likelihood of organizational policy violations Higher costs More management difficulties Low personnel utilization

The Project Life Cycle Stages of a Conventional Project: Slow beginning Buildup of size Peak Begin a decline Termination

The Project Life Cycle Chapter 1-13

The Project Life Cycle Time distribution of project effort is characterized by slow-rapid-slow

The Project Life Cycle Other projects also exist which do not follow the conventional project life cycle These projects are comprised of subunits that have little use as a stand alone unit, yet become useful when put together

The Project Life Cycle Unlike the more conventional life cycle, continued inputs of effort at the end of the project produce significant gains in returns

The Project Life Cycle It is essential for the Project Manager to understand the characteristics of the life cycle curve for his project The distinction between the two life cycles plays a critical role in the development of budgets and schedules for the project

The Project Life Cycle Risk during project life cycle With most projects there is some uncertainty about the ability to meet project goals Uncertainty of outcome is greatest at the start of a project Uncertainty decreases as the project moves toward completion

Risk During Project Life Cycle Uncertainty decreases as the project moves toward completion

Textbook Structure Structure of the text follows the life cycle of projects Text divided into 3 main sections: Part I - Project Initiation Part II - Project Implementation Part III - Project Termination

Summary The Project Management Institute (PMI) was founded in 1969 to foster the growth and professionalism of project management Project management is now being recognized as a valuable “career path” in many organizations, as well as a way to gain valuable experience within the organization

Summary The three primary forces behind project management are: 1. The growing demand for complex, customized goods and services 2. The exponential expansion of human knowledge 3. The global production-consumption environment

Summary The three prime objectives of project management are: 1. To meet specified performance 2. To do it within specified costs 3. Complete on schedule Terminology follows in this order: program, project, task, work package, work unit

Summary Projects are characterized by a singleness of purpose, a definite life cycle, complex interdependencies, some or all unique elements, and an environment of conflict Project management, though not problem-free, is the best way to accomplish certain goals

Summary Projects often start slow, build up speed while using considerable resources, and then slow down as completion nears This text is organized along the project life cycle concept: Project Initiation (Chapters 2-6) Project Implementation (Chapters 7-11) Project Termination (Chapters 12-13)

Projects in Contemporary Organizations Questions?

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