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1-1 Managing Projects: What and Why Chapter 1 Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

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Presentation on theme: "1-1 Managing Projects: What and Why Chapter 1 Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin."— Presentation transcript:

1 1-1 Managing Projects: What and Why Chapter 1 Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2 1-2 When you have mastered the material in this chapter, you should be able to:  Define and differentiate among projects, programs, and portfolios, and provide examples of each.  Describe the reasons for the increasing importance of projects in organizations of all types, sizes, and global locations.  Compare a set of projects based on drivers, sources, customers, degree of uncertainty, expected outcome, organizational reach, scope, degree of complexity, and strategic level. Describe how these differences will affect the way projects are managed.  Evaluate a project based on its strengths and deficiencies related to key project success factors. Describe why each factor was important.  For a given project, develop a list of performance metrics, including those that would be considered part of the triple constraint, as well as a larger set one might find in a balanced-scorecard approach.  Discuss the benefits teams offer to projects and articulate examples of some challenges teams present to project managers.  Describe the stages in the project management process and identify the options available to the project manager in synchronizing them.  Offer arguments supporting the value of systematic approaches for managing projects and describe examples of implementation challenges. Chapter Learning Objectives 1-2

3 1-3 “If it weren’t for all these projects, I could get my work done.” Anonymous Projects, Projects, Projects “If we’re going to stay alive as a company, we need to find a new market segment. I’d like you to head a task force to change our focus. This is big.” Chief marketing officer of a Fortune 500 company “We’ve just been hit with a product recall from the FDA. I want you to fix the problem and get us back in production.” Vice president of supply chain management for a small, privately held medical devices company “The board of directors’ meeting is coming up in January. I’d like you to organize it.” President of a not-for-profit organization that provides mentoring services to at-risk youth 1-3

4 1-4  A project is a unique, temporary endeavor intended to solve a problem, seize an opportunity, or respond to a mandate. (Project Management Institute, 2008)  Some projects create or improve products or services, but others spawn events or produce information.  All types of organizations engage in project activities. What is a project? 1-4

5 1-5  The term program is sometimes used to describe an effort that includes several subprojects.  A project portfolio is the set of projects an organization is undertaking at any given time. Projects within the portfolio compete for resources and attention. Successful organizations continuously review their project portfolio to ensure that, as a whole, they reflect strategic priorities. Programs and Portfolios 1-5

6 1-6 Exhibit 1.1 Projects, Strategic Goals, and Organizational Mission Here, the organization’s project portfolio supports its mission and strategic goals. Here, the organization has not properly aligned its project portfolio with its strategic goals. 1-6

7 1-7 Exhibit 1.2 Project Attributes  There are many types of projects.  We can differentiate them along nine dimensions. 1-7

8 1-8 Exhibit 1.3 Factors Increasing Project Activity Project work is on the rise. As shown here, underlying causes include global competition, shortened product life cycles, and pressures to adopt rapidly evolving technologies. These combined forces make many project more complex because of the need for coordination across systems, function, continents, languages and cultures. 1-8

9 1-9 Exhibit 1.4 Project Success Factors  10 factors are essential to project success.  Think of a recent unsuccessful project. Which of these factors was missing? 1-9

10 1-10 Exhibit 1.4 Project Success Factors (continued) 1-10

11 1-11 Measuring Project Success: The Triple Constraint  The most commonly recognized project metrics are time, cost, and performance.  In combination, they form a set of potentially competing project priorities known as the triple constraint. 1-11

12 1-12 Exhibit 1.6 Triple Constraint Definitions Applied to China’s First Manned Space Shot 1-12

13 1-13  A comprehensive approach to company-wide performance management that can be applied in project management. The scorecard identifies four measurement dimensions: financial, internal business processes, customer, and learning and growth.  When key performance indicators (KPIs) are not balanced, team members may focus on one aspect of performance to the detriment of others. Balanced Scorecard 1-13

14 1-14  Selection  Initiation  Planning  Delivery and control  Closure and handoff to the customer Project Phases 1-14

15 1-15 Exhibit 1.7 Graphical Perspectives on the Five Phases  In the waterfall approach, one phase must be complete before the next one is started.  In the concurrent approach, the phases overlap and greater coordination and communication is required. Each phase may individually take longer, but the project, overall, may require less total time and yield higher quality output. 1-15

16 1-16  Agile Software Development: The process of creating software in a team environment where frequent testing and consultation with stakeholders allows team members to grow a functioning system more effectively.  Boehm’s Spiral Model: An iterative approach to project control that repeats project phases on a small scale as the project moves toward completion.  Extreme Programming: New incarnation of agile software development that includes more structure while retaining the underlying philosophy of adaptability associated with agile development. New Models for Concurrent Development Projects 1-16

17 1-17 Teams in Project Environments “No man will make a great leader who wants to do it all himself, or get all the credit for doing it.” Andrew Carnegie 1-17

18 1-18 Exhibit 1.8 Benefits and Challenges Associated with Project Teams 1-18

19 1-19 What Organizations Can Gain by Managing Projects Systematically?  Project management maturity: A term that describes the level of maturity and sophistication of project management processes in organizations.  Organizations with systematic project management processes are more effective and successful than those lower on the scale of project management maturity. 1-19

20 1-20 19962006 Market share 1%10% Number of homes sold per year 1752,000 Referral-based business 8%36% Cost per square foot$60$30 Net margin per home 2% 6% Box 1.4 Quadrant Homes Applies Process Standardization in a Project Environment Quadrant Homes, a subsidiary of Fortune 500 Weyerhaeuser Corp., began implementing standardized methods for custom home-building projects in 1996. A few examples of the outcomes of this change are as follows: 1-20

21 1-21 Box 1.4 Quadrant Homes Applies Process Standardization in a Project Environment Quadrant has developed a process for managing the opening of custom-home communities as part of a larger-scale, even-flow system. Before adopting its disciplined project management system, Quadrant treated each new community opening as a unique project. The most revered community-center managers were those who could heroically do battle with local jurisdictions and manage crises effectively. Quadrant recognized that although each new community opening was a project, successive openings were very similar projects where standard processes could be used to great advantage. Under Quadrant’s new system, teams follow a 40-task checklist, with columns for responsibility assignment, due dates, and progress. These standard procedures have allowed Quadrant to start and finish community openings more effectively, on-time, and within budget. As one community is built out and another is opened, intact teams move from one project to the next, carrying process knowledge and team relationships with them. These changes represent one aspect of an entire set of processes Quadrant uses to manage the flow of home-building projects in a standardized way. Source: K.A. Brown, T.G. Schmitt, R.J. Schonberger and S. Dennis, “Quadrant Homes Applies Lean Concepts in a Project Environment,” Interfaces 34, no. 6 (2004), pp. 442–50. 1-21

22 1-22  Projects are unique endeavors.  An organization’s entire set of projects is known as a portfolio. Ideally, this portfolio is composed of a set of complementary initiatives that support the organization’s mission and strategic goals.  Project-related work is on the rise. Underlying causes of this growth include global competition, shortened product life cycles, and pressures to adopt rapidly evolving technologies.  The most successful projects are characterized by clear goals, motivated teams, strong customer orientation, adequate support, clear roles and responsibilities, appropriate planning, management of uncertainty, communication, scope management and effective leadership. Managing Projects: What and Why - Chapter Summary 1-22

23 1-23  The triple constraint describes three potentially competing priorities and project success metrics: time, cost, and performance. It has great conceptual value, but can limit a project team’s ability to appreciate a more complete and balanced set of metrics  The best measurement systems offer timely information about an array of key performance indicators that focus people’s attention on a full range of relevant dimensions.  Project management occurs in five phases, which may be managed sequentially or in a more concurrent manner. Concurrent models offer advantages in information flow, improved quality, and time reduction, but are likely to require more coordination.  Most projects are executed in team environments, which present both opportunities and challenges for the project manager Chapter Summary 1-23

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