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What is Project Management? and Why is it important?

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1 What is Project Management? and Why is it important?

2 The History of Project Management 27 th Century BC 2 nd Century AD15 th Century AD 1 st Century AD 12 th Century AD

3 Modern Project Management

4 What is a Project? A project is a “temporary endeavor undertaken to create a unique product, service, or result” (PMI, 2008) The uniqueness of outcomes distinguishes projects from ongoing operations, which often have different goals (e.g. balancing of workloads, repetitive focus, short cycle times, etc.) – Projects end. Operations are ongoing and repeat. Examples of projects: – Construction – Introducing a new product line – Designing and implementing a new ad campaign

5 What is Project Management? A discipline that has developed since the WWII era, generalizing the techniques common to all or most projects, providing a common framework for selecting, planning, executing, controlling, and finishing projects The Project Management Institute (PMI, est. 1969) formalizes the techniques of this discipline within the Project Management Body of Knowledge (PMBOK) Main goal of PM, balance the trade-offs among: – Scope (i.e., what is delivered) – Budget – Time

6 Quote from a Spring 2012 OPIM 3801 student PMBOK is more of a naming convention than anything Learning about project management is an example of how creating a standardized terminology can enhance communication and allow professionals to share techniques and advice on common issues.

7 Recognized as the leading professional organization for Project Management Dedicated to helping advance the science of Project Management, PM education and creating better Project Managers Regional Chapters provide support and networking community (e.g. Southern New England Chapter) Multiple Certifications PMP, PgMP, PMI-RMP, PMI-SP, CAPM Project Management Institute

8 Certified Associate Project Manager Requirements – High School Diploma or Associates Degree – 1500 hours of work experience OR – 23 contact hours of formal education (this class) – Exam CAPM Certification

9 The Bad News 150 questions 135 questions scored, 15 unscored 3 hours ~ $300 exam fee The Good News Valid for 5 years Recognized credential Looks good on resume CAPM Exam

10 PMP Exam Project Management Professional Requirements – A four-year degree (bachelor’s or the global equivalent) – At least three years of project management experience – 4,500 hours leading and directing projects – 35 hours of project management education Maintenance – 60 PDUs per three-year cycle

11 Designed to: – Understand the basics of the PMBOK and – How Project Management affects businesses – Help prepare you for the CAPM exam – Introduction to MS Project More studying needed to pass the CAPM exam, but this class will get you most of the way there This Course

12 The PMBOK Five Process Groups Initiating Planning Executing Monitoring & Controlling Closing

13 The PMBOK Nine Knowledge Areas Integration Scope Time Cost Quality Communications Human Resources Risk Procurement

14 Knowledge Areas Project Management Process Groups InitiatingPlanningExecutingMonitoring & Controlling Closing Integration Develop Project Charter Develop Project Management Plan Direct & Manage Project Execution Monitor & Control Project Work Perform Integrated Change Control Close Project or Phase Scope Collect Requirements Define Scope Create WBS Verify Scope Control Scope Time Define Activities Sequence Activities Estimate Activity Resources Estimate Activity Durations Develop Schedule Control Schedule Cost Estimate Cost Determine Budget Control Costs Quality Plan QualityPerform Quality Assurance Perform Quality Control HR Develop HR PlanAcquire Project Team Develop Project Team Manage Project Team Communications Identify Communications Plan CommunicationsDistribute Information Manage Stakeholder Expectations Report Performance Risk Plan Risk Management Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses Monitor & Control Risks Procurement Plan ProcurementsConduct Procurements Administer ProcurementsClose Procurements

15 “Do I need ‘formal’ PM?” vs. “Can I benefit from incorporating PM concepts?” PM has a formal framework for managing a project, and usually the application of the full PMBOK structure is overkill. Mulcahy defines a typical large project: – Lasts more than a year – Involves 200 people from several countries – Has never been done in this organization – Has a budget over $1,000,000 In that case much of the PMBOK framework will likely be indispensable. But a project may be too small to benefit from formal PM treatment if: – It lasts less than three months – It involves less than 20 people

16 In between these extreme cases, some of the tools may be essential, while others are not that useful, would slow things down too much, or are too costly. Still, incorporation of the basic PM concepts can be useful in any one-time activity. – I typically identify the “critical path activities” whenever I cook dinner. – Discussions of scope and time management concepts enter into any research “project” I work on. – Wedding Planning, etc. “Do I need ‘formal’ PM?” vs. “Can I benefit from incorporating PM concepts?”

17 My own experience on a well-managed, “small” project: Slot Auctions for the FAA FAA develops “program” to reduce delays based on air-traffic management Studies indicate that NYC area airports are the major cause of congestion in the U. S. Rights to take-off or land at these airports (i.e., slots) are defined legally and granted to airlines, but are mismanaged. For over 20 years economists, computer scientists, and operations researchers had recommended a package auction to align the economic incentives of airlines. – The algorithms and rules have only recently caught up

18 FAA hires PowerAuctions, LLC to develop the auction and software: – Package auction for slots has never been done – Tight deadlines: software demo for FAA, 1 month prior to seminar bidder seminar for airlines, 1 month prior to auction auction on date released well in advance – Budget well-defined, almost exclusively labor costs – Four main interrelated tasks Develop bidder interface for bid submission Determine winners and payments via CPLEX (my job) Secure transfer of funds, internationally, with backup server Provide legal documentation, auction rules, glossary, etc. Slot Auctions for the FAA

19 This project was “small” – 20 or so people involved – Budget around $1M – 6 month timeline Human organization was typical of “small” PM – Control centralized around two project co-managers, not part of client organization – Three parallel software development teams – Heads of all three teams, w/ project managers developed documentation and rules – Single “quality control manager” played a catch-all role, encompassing assignments of several people under a very large project Slot Auctions for the FAA

20 What went right, from a PM point-of-view: Scope of project well-defined by FAA and project managers – auction design: sealed-bid, core pricing – small auction to be repeated if successful – software capabilities well-defined Work breakdown and time management – assignment of jobs to teams, coordination – adequate time allotted for data-structure planning upfront, and software testing at the end and throughout Historian and change management roles handled by quality control manager – Documentation kept of why specification decisions were made – Specifications changed / were specified in finer detail late in the project, and all teams had to have a coordinated response Slot Auctions for the FAA

21 What went wrong: Politics! NY and NJ senators sided with ATA (Bloomberg and a few other sided with the FAA) GAO said auction violated a “no new fees” law Federal court ruled that the auction be postponed until approved by an act of Congress Congress wouldn’t touch this issue amidst financial crisis, bailout, etc. Slot Auctions for the FAA

22 Why the project was still a success: The software worked and was on-time Airlines had the ability to publicly question the auction system itself and its rules, but could not challenge the legitimacy of the rule-making or software design Every design question that arose was documented – system can be resurrected, even w/o original teammates – changes to rules could be implemented modularly and quickly – closing involved a month-long “moth-balling” From a technical standpoint we could hold the auction tomorrow if desired. Lessons learned and software developed in such a way that the next project will be a breeze, even with a new project team. Slot Auctions for the FAA

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24 Famous Examples of PM (or lack thereof) What other examples do you know of good and bad project management?

25 The Apollo Space Program: In terms of numbers of dollars or of men, NASA has not been our largest national undertaking, but in terms of complexity, rate of growth, and technological sophistication it has been unique.... It may turn out that [the space program's] most valuable spin-off of all will be human rather than technological: better knowledge of how to plan, coordinate, and monitor the multitudinous and varied activities of the organizations required to accomplish great social undertakings. --Science Nov. 1968

26 Project Management had been formalized by Booz Allen and others, developing (among other things) the critical-path method of time management in the development of missile defense systems. Military industrial-complex management and their program management techniques were then brought into the Apollo program in order to meet Kennedy’s 1961 declaration that by the end of the decade we would send and return a man safely from the moon. The Apollo Space Program:

27 Scope and Deadline were precisely defined by Kennedy (man safely to and from the moon, before the end of the decade) so only the budget was in question. Eventually, – over $20 Billion was spent (or approximately $145 billion in 2008 dollars) – using over 500 primary contractors – creating over a million vehicle components – in a program of about 18 missions (each its own project.) At its peak, the Apollo program employed 400,000 people and required the support of over 20,000 industrial firms and universities. The coordination of these resources is considered one of the great successes of project management. Success: 6 trips to the moon, the first before deadline. One of the biggest triumphs for PM. Amazingly, estimates show that the program was not more than 12% over the 1966 projected budget. The Apollo Space Program:

28 The Big Dig Where the Apollo Program is often hailed as one of PM’s greatest triumphs, the Big Dig is quintessential textbook example of Project Mismanagement. The plan was to alleviate congestion in Boston by moving the Central Artery into a tunnel, in conjunction with a number of smaller but substantial road construction projects. Cost estimates when initiated: $2.8 Billion No clear deadline set for completion

29 The Big Dig Construction of some form continued for 16 years. Lack of oversight, poor management of material usage and specifications, and fraud led to numerous leaks requiring additional mitigation and correction projects. Collapsing tunnel pieces even caused one death. Final costs were estimated at $20 billion 2008 Boston Globe report: traffic actually got worse!

30 What about PM in the private sector? PMI notes growth of membership as evidence of private sector adoption 7,500 members in ,000 members in ,000 members in 2007 Naturally, businesses take only what is needed, and modify the rules to suit their own business needs. Some principles are used on a widespread basis, however.


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