1. Chapter 1: An Introduction to Project, Program, and Portfolio Management

2. Learning Objectives
Understand the growing need for better project, program, and portfolio management
Explain what a project is, provide examples of projects, list various attributes of projects, and discuss the triple constraint of project management
Describe project management and key elements of the project management framework, including project stakeholders, project management knowledge areas, common tools and techniques, and project success factors
Introduction to Project Management, Second Edition

3. Learning Objectives (continued)
Discuss the relationship between project, program, and portfolio management and their contribution to enterprise success
Describe the project management profession, including suggested skills for project, program, and portfolio managers, the role of professional organizations such as the Project Management Institute, the importance of certification and ethics, and the growth of project and portfolio management software
Introduction to Project Management, Second Edition

4. 1. Introduction
Many organizations today have a new or renewed interest in project management.
The U.S. spends $2.3 trillion on projects every year, or one-quarter of its gross domestic product, and the world as a whole spends nearly $10 trillion of its $40.7 gross product on projects of all kinds.*
In 2006, the average senior project manager in the U.S. earned over $104,000 per year.**
Project management certification is popular worldwide.
*PMI, Inc., The PMI Project Management Fact Book, Second Edition, 2001.
**PMI, Inc., Project Management Salary Survey, Fifth Edition, 2007.
Introduction to Project Management, Second Edition

5. What Went Wrong?
A 1995 Standish Group study (“The CHAOS Report”) found that only 16.2 percent of information technology (IT) application development projects were successful in meeting scope, time, and cost goals. Over 31 percent of the projects were canceled before completion, costing over $81 billion in the U.S. alone.
A 2004 PricewaterhouseCoopers study of 200 companies from 30 different countries found that over half of all projects fail.
Introduction to Project Management, Second Edition

6. Advantages of Using Formal Project Management
Better control of financial, physical, and human resources
Improved customer relations
Shorter development times
Lower costs
Higher quality and increased reliability
Higher profit margins
Improved productivity
Better internal coordination
Higher worker morale
Introduction to Project Management, Second Edition

7. 2. What Is a Project?
A project is “a temporary endeavor undertaken to create a unique product, service, or result.”*
Operations is work done to sustain the business.
Projects end when their objectives have been reached or the project has been terminated.
*Project Management Institute, Inc., A Guide to the Project Management Body of Knowledge (PMBOK® Guide, Third Edition) (2004), p. 5.
Introduction to Project Management, Second Edition

8. Examples of Projects
A young couple hires a firm to design and build them a new house.
A college campus upgrades its technology infrastructure to provide wireless Internet access.
A group of musicians starts a company to help children develop their musical talents.
A pharmaceutical company launches a new drug.
A television network develops a system to allow viewers to vote for contestants and provide other feedback on programs.
A government group develops a program to track child immunizations.
Introduction to Project Management, Second Edition

9. Project Attributes A project: Has a unique purpose. Is temporary.
Is developed using progressive elaboration or in an iterative fashion.
Requires resources, often from various areas.
Should have a primary customer or sponsor.
The project sponsor usually provides the direction and funding for the project.
Involves uncertainty.
Introduction to Project Management, Second Edition

10. The Triple Constraint
Every project is constrained in different ways by its:
Scope: What work will be done as part of the project? What unique product, service, or result does the sponsor expect from the project?
Time: How long should it take to complete the project? What is the project’s schedule?
Cost: What should it cost to complete the project? What is the project’s budget?
It is the project manager’s duty to balance these three often competing goals.
Introduction to Project Management, Second Edition

11. Figure 1-2. The Triple Constraint of Project Management
Introduction to Project Management, Second Edition

12. More on the Triple Constraint
It may be good enough to hit the target, or range, of triple constraint goals, but not the bull’s-eye.
It’s important to determine which aspects of the triple constraint are the most important.
The “quadruple constraint” includes quality as well as scope, time, and cost.
Introduction to Project Management, Second Edition

13. 3. What is Project Management?
Project management is “the application of knowledge, skills, tools, and techniques to project activities to meet project requirements.”*
*Project Management Institute, Inc., A Guide to the Project Management Body of Knowledge (PMBOK® Guide, Third Edition) (2004), p. 8.
Introduction to Project Management, Second Edition

14. Figure 1-3. Project Management Framework
Introduction to Project Management, Second Edition

15. Project Stakeholders
Stakeholders are the people involved in or affected by project activities.
Stakeholders include:
The project sponsor
The project manager
The project team
Support staff
Customers
Suppliers
Opponents to the project
Introduction to Project Management, Second Edition

16. Project Management Knowledge Areas
Four core knowledge areas lead to specific project objectives.
Project scope management involves defining and managing all the work required to complete the project successfully.
Project time management includes estimating how long it will take to complete the work, developing an acceptable project schedule, and ensuring timely completion of the project.
Project cost management consists of preparing and managing the budget for the project.
Project quality management ensures that the project will satisfy the stated or implied needs for which it was undertaken.
Introduction to Project Management, Second Edition

17. Project Management Knowledge Areas (continued)
Four facilitating knowledge areas are the means through which the project objectives are achieved.
Project human resource management is concerned with making effective use of the people involved with the project.
Project communications management involves generating, collecting, disseminating, and storing project information.
Project risk management includes identifying, analyzing, and responding to risks related to the project.
Project procurement management involves acquiring or procuring goods and services for a project from outside the performing organization.
One knowledge area (project integration management) affects and is affected by all of the other knowledge areas.
All knowledge areas are important!
Introduction to Project Management, Second Edition

18. Project Management Tools and Techniques
Project management tools and techniques assist project managers and their teams in various aspects of project management.
Note that a tool or technique is more than just a software package.
Specific tools and techniques include:
Project charters, scope statements, and WBS (scope)
Gantt charts, network diagrams, critical path analyses (time)
Net present value, cost estimates, and earned value management (cost)
See Figure 1-4 for more examples
Introduction to Project Management, Second Edition

19. Figure 1-4. Common Project Management Tools and Techniques by Knowledge Areas
Introduction to Project Management, Second Edition

20. Figure 1-4. Common Project Management Tools and Techniques by Knowledge Areas (continued)
Introduction to Project Management, Second Edition

21. Super Tools
“Super tools” are those tools that have high use and high potential for improving project success, such as:
Software for task scheduling (such as project management software)
Scope statements
Requirements analyses
Lessons-learned reports
Tools already extensively used that have been found to improve project importance include:
Progress reports
Kick-off meetings
Gantt charts
Change requests
Introduction to Project Management, Second Edition

22. What Went Right? Improved Project Performance*
The Standish Group’s CHAOS studies show improvements in IT projects in the past decade
Measure
1994 Data
2006 Data
Result
Successful Projects
16%
35%
More than doubled
Failed Projects
31%
19%
Almost halved
Money wasted on failed and challenged projects
$140B out of $250B or 56%
$53B out of $346B or 15%
Well more than halved
*Jim Johnson, “CHAOS 2006 Research Project,” CHAOS Activity News, vol. 2: issue 1, (2007).
Introduction to Project Management, Second Edition

23. Why the Improvements?
“The reasons for the increase in successful projects vary. First, the average cost of a project has been more than cut in half. Better tools have been created to monitor and control progress and better skilled project managers with better management processes are being used. The fact that there are processes is significant in itself.”*
*The Standish Group, “CHAOS 2001: A Recipe for Success” (2001).
Introduction to Project Management, Second Edition

24. Project Success There are different ways to define project success:
The project met scope, time, and cost goals.
The project satisfied the customer/sponsor.
The project produced the desired results.
Introduction to Project Management, Second Edition

25. 4. What is a Program? A program is:
“a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.”*
A program manager provides leadership and direction for the project managers heading the projects within the program.
*Project Management Institute, Inc., A Guide to the Project Management Body of Knowledge (PMBOK® Guide, Third Edition) (2004), p. 8.
Introduction to Project Management, Second Edition

26. Project Portfolio Management
Project portfolio management is an emerging business strategy in which organizations group and manage projects and programs as a portfolio of investments that contribute to the entire enterprise’s success.
Pacific Edge Software’s product manager, Eric Burke, defines project portfolio management as “the continuous process of selecting and managing the optimum set of project initiatives that deliver maximum business value.”*
*Eric Burke, “Project Portfolio Management,” PMI Houston Chapter Meeting (July 10, 2002).
Introduction to Project Management, Second Edition

27. Figure 1-6. Project Management Compared to Project Portfolio Management
Introduction to Project Management, Second Edition

28. 5. The Project Management Profession
Project, program, and portfolio managers need to develop specific skills.
Certification is available for project managers.
There are many software tools to assist in project, program, and portfolio management.
Introduction to Project Management, Second Edition

29. Suggested Skills for Project Managers
Knowledge of the following:
All nine project management knowledge areas
The application area, including specific standards and regulations
The project environment
General management
Human relations
Introduction to Project Management, Second Edition

30. Media Snapshot – Good Project Management Skills from The Apprentice
Leadership and professionalism are crucial.
Know what your sponsor expects from the project, and learn from your mistakes.
Trust your team, and delegate decisions.
Know the business.
Stand up for yourself.
Be a team player.
Don’t be overly emotional and stay organized.
Work on projects and for people you believe in.
Think outside of the box.
Some luck is involved in project management, and you should always aim high.
Introduction to Project Management, Second Edition

31. Figure 1-7. Most Significant Characteristics of Effective and Ineffective Project Managers
Introduction to Project Management, Second Edition

32. Importance of Leadership Skills
Effective project managers provide leadership by example.
A leader focuses on long-term goals and big- picture objectives while inspiring people to reach those goals.
A manager deals with the day-to-day details of meeting specific goals.
Project managers often take on the role of both leader and manager.
Introduction to Project Management, Second Edition

33. FIGURE 1-8. Ten Most Important Skills and Competencies for Project Managers*
Introduction to Project Management, Second Edition

34. Different Skills Needed in Different Situations
Large projects: leadership, relevant prior experience, planning, people skills, verbal communication, and team-building skills are most important
High uncertainty projects: risk management, expectation management, leadership, people skills, and planning skills are most important
Very novel projects: leadership, people skills, having vision and goals, self-confidence, expectations management, and listening skills are most important
Introduction to Project Management, Second Edition

35. Additional Skills for Program and Portfolio Managers
Program managers normally have experience as project managers. They often rely on their past experience, strong business knowledge, leadership capability, and communication skills to manage programs.
Portfolio managers must have strong financial and analytical skills and understand how projects and programs can contribute to meeting strategic goals.
Introduction to Project Management, Second Edition

36. Best Practice
A best practice is “an optimal way recognized by industry to achieve a stated goal or objective.”* Robert Butrick suggests that organizations need to follow basic principles of project management, including these two mentioned earlier in this chapter:
● Make sure your projects are driven by your strategy. Be able to demonstrate how each project you undertake fits your business strategy, and screen out unwanted projects as soon as possible.
● Engage your stakeholders. Ignoring stakeholders often leads to project failure. Be sure to engage stakeholders at all stages of a project, and encourage teamwork and commitment at all times. Use leadership and open communications to make things happen.**
*Project Management Institute, Inc., Organizational Project Management Maturity Model (OPM3) Knowledge Foundation (2003), p. 13.
**Ultimate Business Library, Best Practice: Ideas and Insights from the World’s Foremost Business Thinkers, Perseus Publishing (2003).
Introduction to Project Management, Second Edition

37. Project Management Certification
PMI provides certification as a Project Management Professional (PMP).
A PMP has documented sufficient project experience, agreed to follow a code of ethics, and passed the PMP exam.
The number of people earning PMP certification is increasing quickly.
Introduction to Project Management, Second Edition

38. Figure 1-9. Growth in PMP Certification, 1993-2006
Introduction to Project Management, Second Edition

39. Project Management Software
There are hundreds of different products available today.
Three main categories of tools are the following:
Low-end tools: Handle single or smaller projects well; cost under $200 per user.
Midrange tools: Handle multiple projects and users; cost $ per user; Microsoft Project is the most popular (this text includes a trial copy of Project 2007).
High-end tools: Also called enterprise project management software; often licensed on a per-user basis; example is VPMi Express and Professional ( see front cover for trial version information.
Project 2007 includes a standard and an enterprise version. See the Guide to Using Microsoft Project 2007 in Appendix A for details.
Introduction to Project Management, Second Edition

40. Figure 1-10. Sample Screen from the Microsoft Enterprise Project Management Solution
Introduction to Project Management, Second Edition

41. Chapter Summary
A project is a temporary endeavor undertaken to create a unique product, service, or result.
Project management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements.
A program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.
Project portfolio management involves organizing and managing projects and programs as a portfolio of investments that contribute to the entire enterprise’s success.
The project management profession continues to grow and mature.
Introduction to Project Management, Second Edition