Introduction: Why Project Management? Chapter 1

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Learning Goals Understand why project management is becoming such a powerful and popular practice in business. Recognize the basic properties of projects, including their definition. Understand why effective project management is such a challenge. Differentiate between project management practices and more traditional, process- oriented business functions. Recognize the key motivators that are pushing companies to adopt project management practices.

Learning Goals Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project. Understand the concept of project “success,” including various definitions of success, as well as the alternative models of success. Understand the purpose of project management maturity models and the process of benchmarking in organizations. Identify the relevant maturity stages that organizations go through to become proficient in their use of project management techniques.

Introduction Examples of projects Chunnel between England and France Introduce Windows 7 Passing a college course Olympics These are examples of project management used to; improve operations, respond rapidly to changes, achieve breakthroughs, streamline development, manage the rising challenges A critical component of successful organizations and employees today “Projects, rather than repetitive tasks, are now the basis for most value-added in business” -Tom Peters

What is a Project? Considered to be any series of activities and task that: Are complex, one-time processes Developed to resolve a clear goal or set of goals Consume resources; time, money, people, etc. Constrained by budget, schedule and resources Are customer focused A project is a temporary endeavor undertaken to create a unique product, service, or result. -PMBOK® Guide –Fourth Edition

Project Definitions Summarized A project can be considered any series of activities and tasks that have: Specific objectives to be completed within certain specifications, Defined start and end dates, Funding limits, Human and nonhuman resources, and Multifunctional focus.

General Project Characteristics Ad-hoc endeavors with a clear life cycle. Predetermined timeline Clear beginning and end Building blocks in the design and execution of organizational strategies. Responsible for the newest and most improved products, services, and organizational processes. Provide a philosophy and strategy for the management of change. Project management entails crossing functional and organizational boundaries. Interrelated Tasks Involve People

General Project Characteristics The traditional management functions of planning, organizing, motivation, directing, and control apply to project management. The principal outcomes of a project are the satisfaction of customer requirements within the constraints of technical, cost, and schedule objectives. Projects are terminated upon successful completion of performance objectives. Fixed Budget Unique and Specific Deliverable (Product, Service, or Result)

Process vs. Project Work Ongoing, day-to-day activities to produce goods and services Use existing systems, properties, and capabilities Typically repetitive Project Takes place outside the normal, process- oriented world Unique and separate from routine, process- driven work Continually evolving A project is a temporary endeavor undertaken to create a unique product, service, or result. -PMBOK® Guide

Operational vs. Project Work The purpose of operational tasks is to carry out day- to-day activities and sustain the business while the purpose of a project is to meet specific objectives.

Process Management vs. Project Management (Table 1.1) Process (day-to-day activity) Repeated process or product Several objectives On-going More homogeneous Systems in place Performance, cost, & time known Part of the line organization Bastions of established practice Supports status quo Project (unique activity) New process or product One objective One shot – limited life More heterogeneous Systems must be created Performance, cost & time less certain Outside of line organization Violates established practice Upsets status quo

Why are Projects Important? To help organizations achieve their strategic goals. Due to pressures organizations find themselves facing: Shortened product life cycles. Narrow product launch windows. Increasingly complex and technical products. Emergence of global markets. Economic period marked by low inflation.

What is the Project Manager? The person responsible for meeting the project objectives. Skilled in areas of Leadership Planning Interpersonal skills Communication Conflict negotiation Presentation skills Risk taking Time management Role functions Provide leadership Provide motivation Facilitate the work Maintain focus Maintain commitment Influence the organization Use resources efficiently

Project Manager Key Responsibilities Initiate the Project Develop Project Management Plan Direct and Manage Project Execution Monitor and Control Project Work Perform Integrated Change Control Close Project

Skills Needed by Project Managers Hard Skills Soft Skills Managing technical issues Planning Contracting Budgeting Measuring performance Monitoring project quality Analyzing risks Communicating Negotiating Leadership Problem solving Conflict resolution Team building Political and cultural awareness

Project Manager Exercise Quick Self-Evaluation What are your strengths and weaknesses? Are you a leader or a manager? Are you proactive or reactive?

What is Project Management? “Project management is the process of the application of knowledge, skills, tools, and techniques to project activities to meet project requirements.” - PMBOK® Guide –Fourth Edition) It is accomplished through the application and integration of the project management process of Initiating Planning Executing Monitoring Controlling

The Project Management Process Initiating Planning Controlling Executing Closing

Advantages to Using Project Management Innovative, produces new ideas and new products Geared toward accomplishing a specific goal Provides known dedicated resources Aimed at customer satisfaction Side note: Can be used to find future company leaders: Will show a persons ability to manage both technical and human challenges

Typical Objections to Using Project Management Won’t work on our projects Too time consuming Just busy work Too complicated Rigid/inflexible technique Cost too much Not necessary, we’re doing okay without it

What is a Program? Program is “a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.” -PMBOK® Guide –Fourth Edition Common Objective Program Project 1 Project 2 Project 3

Scope of Project Management Process Management Project Management Program Management Portfolio Management

Collectively, these four phases make up the generic Project Life Cycle Conceptualization - the development of the initial goal and technical specifications. Planning – all detailed specifications, schedules, schematics, and plans are developed. Execution – the actual “work” of the project is performed. Termination – project is transferred to the customer, resources reassigned, project is closed out. Collectively, these four phases make up the generic project life cycle.

The Project Phases Conceptualization Termination

Conceptualization Task Select Project Define Scope Develop Project Relationship Perform Needs Analysis Define Requirements Create Project Charter Analyze Benefit-to-Cost Ratio Determine Net Present Value and Internal Rate of Return Get Project Approval

Planning Task Develop Specifications Design Reviews Write Standard of Work (SOW) Build a Schedule Develop Work Breakdown Structure (WBS) Allocate Resources Build the Team Configure the Budget Plan for Procurement Assess Change Control Process

Execution Task Update Requirements Manage Change Control Delegate the Work Manage the Team Monitor the Project Complete Tasks Analyze Variances Report Status

Termination Task Deliver Product Document Lessons Learned Make Payments Verify Customer Satisfaction Celebrate Recognize and Reward Team Members

Project Life Cycle A project life cycle is “a collection of generally sequential and sometimes overlapping project phases whose name and number are determined by the management and control needs of the organization.” -PMBOK® Guide –Fourth Edition

Fig 1.3 Project Life Cycle Stages Man Hours Conceptualization Planning Execution Termination Fig 1.3 Project Life Cycle Stages

Project Life Cycles and Their Effects Client Interest Resources Conceptualization Planning Execution Termination Uncertainty Creativity Project Stake $

Triple Constraint of Project Success Client Acceptance Quadruple ------------------ Budget Managing project constraints involves a constantly changing balance. Schedule Performance Success

Remember: 94.35% of all statistics are fabricated Project Success Rates Remember: 94.35% of all statistics are fabricated Software & hardware projects fail at a 65% rate Over half of all IT projects become runaways Up to 75% of all software projects are cancelled Only 2.5% of global businesses achieve 100% project success Average success of business-critical application development projects is 35% We should not overestimate the benefits to be gained from project management while underestimating the commitment required to make it work.

Class Exercise List four factors that contribute to the success or failure of a project. Succeed Fail

Possible Answers Succeed Fail Sound project management processes Projects tied to the organization’s strategic and business goals Senior management commitment and support Detailed requirements Skilled and appropriately aligned team members Clearly defined roles and responsibilities Realistic schedule Lack of project requirements Lack of defined or clear and concise requirements Lack of senior management sponsorship and commitment Inadequate project planning Absences of user involvement through out the project Lack of business ownership Succeed Fail

Project Critical Success Factors Clear understanding of the goals and objectives Clear understanding of the customer requirements Involvement of clients and management Realistic estimates and schedules Day-to-day control of the project Effective communication

Four Dimensions of Project Success Project Completion Time Importance 1 Project Efficiency 4 Preparing for The Future 2 Impact on Customer 3 Business Success Most Least Short term Long term

Developing Project Management Maturity Allows organizations to benchmark the best practices of successful project management firms Shows a relative assessment of an organizations project management development Project management maturity models (rubric style) see Table 1.3 page 21 Center for business practices Kerzner’s project management maturity model ESI International’s project framework SEI’s capability maturity model integration Rubric – categorizes the specific level of performance expected for several levels of quality.

Project Management Maturity Generic Model

Spider Web Diagram a useful way to display multivariate observations the length of each ray is made proportional to the size of that variable a.k.a a Radar Chart can be easily created in MS Excel

Project Elements and Text Organization FIGURE 1.11  Organization of Textbook

Chapter 1Review and Discussion What are some of the principle reasons why project management has become such a popular business tool in recent years? What do you see as being the primary challenges to introducing a project management philosophy to most organizations? That is, why is it difficult to shift to a project-based approach in many companies? What are the advantages and disadvantages to using project management? What are the key characteristics all projects possess? Describe the basic elements of the project life cycle. Why is an understanding of the life cycle relevant for our understanding of projects? Think of a successful project and an unsuccessful project with which you are familiar. What would you say distinguishes the two, both in terms of the process used to develop them and their outcomes?

Chapter 1Review and Discussion Consider the Expedition Everest case: What are the elements in Disney’s approach to developing their theme rides that you find particularly impressive? How can a firm like Disney balance the need for efficiency and smooth development of projects with the desire to be innovative and creative? Based on this case, what principles appear to guide their development process? Consider the six criteria for successful IT projects. Why is IT project success often so difficult to assess? Make a case for some set of factors being more important than others. As organizations seek to become better at managing projects, they often engage in benchmarking with other companies in similar industries. Discuss the concept of benchmarking. What are its goals? How does benchmarking work? Explain the concept of a project management maturity model. What purpose does it serve? Compare and contrast the four project management maturity models shown in Table 1.3.