The World of Project Management

WHAT IS A PROJECT?

Definition Project a series of jobs usually directed toward some major output and requiring a significant period of time to perform

PMI Definition “A temporary endeavor undertaken to create a unique product or service” Project Management Institute, 2000

Why the emphasis on project management? Many tasks do not fit neatly into business-as-usual. Need to assign responsibility and authority for achievement of organizational goals. Need to succeed and prosper!

Characteristics of Projects Unique Specific Deliverable Specific Due Date

Other Common Characteristics of Projects Multidisciplinary Conflict Complex Part of Programs

1. Lack of Project Manager Authority Why Some Projects Fail……… Five Reasons for Failure 1. Lack of Project Manager Authority “I must be a mushroom. They keep me in the dark, feed me manure, and then they can me.” 2. Lack of team participation “If workers were smart, they’d be managers. Why ask them anything? After all, I’m the boss.” 3. Bad reporting “Reports are just useless paperwork and an irrelevant management requirement. I fill out the form and then forget the form.”

Why Some Projects Fail……… Continued 4. Lack of people skills “I don’t thank people just for doing a good job. Doing a good job is what they get paid for.” 5. Unrealistic goals and schedules “Your mission, should you decide to accept it…if caught or killed, the Secretary will disavow any knowledge…”

Three Reasons for Success …..and Others Succeed Three Reasons for Success 1. Committed teamwork “If anything goes bad, I did it. If anything goes semi-good, then we did it. If anything goes real good, then you did it. That’s all it takes to get people to win football games.” – Paul “Bear” Bryant 2. SMART Goals With Real Consensus “Specific, Measurable, Agreed-Upon, Realistic, and Time-Specific.” 3. Use of project management tools as a means, not an end. “We have 562 pages of charts and graphs and still don’t have a clue!”

Business Failures The construction industry is the largest single employer of the United States work force, it makes a major contribution to the gross national product, and yet suffers one of the highest annual business failure rates in the country. Studies have shown that the number of failures in the construction industry is much higher than it should be. The reason for the high failure rate is not because owners of companies do not have the technical skills required for construction but because owners have not developed adequate business management skills or techniques.---- in particular; communication skills.

Insufficient working capital Most business failures occur within the first three years of operation with the major reason being a lack of planning. Some of the other reasons which lead to business failure are: Insufficient working capital Failure to qualify for loans Excessive growth Borrowing money from relatives and friends Company officers taking a too large of a salary Purchase or lease of expensive vehicles as status symbols Not keeping adequate accounting records Poor project estimating as a result of: a. not knowing the cost of material b. under estimating labor costs c. not understanding overhead or general conditions d. inadequate profit margins Loss of owner or key person Too many projects starting at the same time

PROJECT MANAGEMENT VS. GENERAL MANAGEMENT

Skill Requirements for Effective Project Management Conflict Resolution Creativity and Flexibility Ability to Adjust to Change Good Planning Negotiation win-win versus win-lose

Key Elements of Negotiations Each party in the negotiation must believe they have achieved. In other words, both must feel they are or were successful. Do not forget the other party is a human being and needs to feel the other side cares. Fairness is essential to success. Both you and your opponent must perceive that you were treated fairly. (You will know whether you were fair in your treatment of the other person.) A deal is a deal! You need to honor your side of the agreement and the other side must honor theirs. The essence of negotiations is to do business again. Both parties must win.

Universal Truths The sum and substance or so-called “Universal Truths of Negotiations” are as follows: Everything is negotiable, We negotiate continually, The process is predictable, Information is crucial to success, and Time constraints affect the outcome.

Rules For Negotiating Teams When you are negotiating with two people; Sit where you can watch both. When you have two people on your team; Sit apart so you “speak with two voices.” When you have a large group opposing their small group; Keep your group together for the appearance of power. When they have a large group opposing your small group; Intermingle to diffuse their power.

WHAT IS MANAGED? THE THREE GOALS OF A PROJECT

Performance, Cost, and Time Project Targets

To Put A Man On The Moon The year 1962 “We commit this nation to put a man on the moon and return him safely to this earth by the end of this decade, and to do the other things, not because they are easy but because they are hard.” The triple constraint project has begun.

The Three Constraints Are Time constraint: How long do you have? Budget constraint: How much can you spend? Performance criteria: What results must your project achieve to meet its purpose? Project: Put a man on the moon Time: constraint: By the end of the decade. Performance: Safe return to Earth Budget: Unknown

Old Joke Pick any two! You can have it fast. You can have it cheap. You can have it good. Pick any two!

Ranking the Triple Constraint Try identifying and then ranking the Triple Constraints for the following project.. Project: The Smithsonian National Air and Space Museum, the world’s most popular museum, was a Federal government project accomplished ahead of schedule and under budget. The goal of the project was to build a world-class aviation and space museum for a budget of $30 million and open it on July 4, 1976. 1. Identify the Triple Constraints. Project: Performance criteria: Budget constraint:

Ranking the Triple Constraint Rank the Triple Constraints. Driver: Middle constraint: Weak constraint:

THE LIFE CYCLES OF PROJECTS

The Project Life Cycle

An Alternate Project Life Cycle

Confronting Uncertainty – The Management of Risk

What uncertainties are encountered in project management? Availability of key resources Cost of resources Timing of solutions to technological problems Actions taken by competitors Time required to complete a project Actions taken by clients

Can uncertainty surrounding projects ever be eliminated? No, but it can be managed

SELECTING PROJECTS

Nonnumeric Selection Methods The Sacred Cow The Operating/Competitive Necessity Comparative Benefits

Numeric Selection Methods Financial Assessment Methods payback period discounted cash flow Scoring Methods unweighted 0-1 factor method weighted factor scoring method

Confronting Uncertainty – The Management of Risk

What uncertainties are encountered in project management? Time required to complete a project Availability of key resources Cost of resources Timing of solutions to technological problems Actions taken by competitors Actions taken by clients

Can uncertainty surrounding projects ever be eliminated? No, but it can be managed

THE PROJECT PORTFOLIO PROCESS

The Project Portfolio Process Step 1: Establish a Project Council Step 2: Identify Project Categories and Criteria Step 3: Collect Project Data Step 4: Assess Resource Availability Step 5: Reduce the Project and Criteria Set Step 6: Prioritize the Projects within Categories Step 7: Select the Projects to be Funded and Held in Reserve Step 8: Implement the Process

The Aggregate Project Plan

Figure 1-12 An Example Aggregate Project Plan