1. Introduction to Project Management
CH 1
Introduction to Project Management 1

2. Objectives: After completion of this chapter you will be able to;
Define what a project is and is not
Define project management
Understand the history of project management
Understand the skills necessary to lead projects
Understand the organizational structures where projects exist

3. General Background
Organizations are dependent on succesfull execution of projects to survive now more than ever
The profitability of an organization is affected by how succesfull its projects are and how well are managed.
One key reason for the complexity is that IT changes quickly , creating a shortage of the required IT skill sets.

4. Importance of Project Management
Due to the size, complexity, and number of information technology (IT) projects, organizations face ever-increasing challenges
Global U.S. government spending topped $150 billion in 2007
Forrester Research estimates that global IT spending—purchases of computers, software, and services by companies and governments—will drop by 3 percent in 2009, to $1.66 trillion

5. Importance of Project Management
5 billion dollars less spendt in 2008
This is the first time in 7 years that global IT spendings has gone down

6. Importance of Project Management
Forrester Research estimates that about 20 percent of current IT budgets are going into project development
Gartner “In a worst case scenario, our research indicates an IT spending increase of 2.3 percent in 2009, down from our earlier projection of 5.8 percent. Developed economies, especially the United States and western Europe, will be the worst affected, but emerging regions will not be immune. Europe will experience negative growth in 2009; the United States and Japan will be flat.”

7. IT Projects Are Different
Traditionally high turnover rates of IT workers
Level of uniqueness and complexity of each project due to the rapid changes in technology
Software is hard to visualize by the developer let alone the customer
Difficulty in getting accurate customer requirements
Rate of change in requirements
Difficulty in testing all the possible states of software
Constant training needed to keep team members current with the technology

8. IT Projects Are Different

9. Advantages of Using Formal Project Management Practices
Improvement in customer satisfaction
Better cost performance, higher return on investment
Better schedule performance, better allocation of time commitments and better utilization of resources, higher productivity
Increased quality reducing re-work
Increase in delivering required features
Will make everyone happier (stakeholders, team members, management…)

10. History of Project Management
Modern project management began with the Manhattan Project, which the U.S. military led to develop the atomic bomb
In 1917 Henry Gantt developed the Gantt chart as a tool for scheduling work in job shops
In 1958, the Navy developed PERT charts
In the 1970s, the military began using project management software, as did the construction industry
By the 1990s, virtually every industry was using some form of project management

11. History of Project Management
A key tool used to this day is the Gantt Chart
Today’s PMs use Gantt Chartts to communicate project status with sponsors and the rest of the team.

12. Gantt chart example

13. Project Management Definitions: What Is a Project?
A temporary sequence of related activities that must be completed to create a unique product or service
A project has 4 Key Characteristics:
Temporary
Unique
Progressive Elaboration
Single unique purpose

14. What Is a Project?
A project reaches its end when one of the following occurs
The project’s objectives have been achieved
İt has been determined that the project’s objectives will not or cannot be achieved
The need for the project no longer exists and the project is terminated

15. A Project Is Temporary It must have a beginning and an end
A project is done when one of the following occurs:
The project’s objectives have been achieved, as agreed by the sponsor
It has been determined that the project’s objectives will not or cannot be achieved
The need for the project no longer exists, and the project is terminated

16. A Project Is Temporary
Projects which continue but should be cancelled are referred to as “Death March” projects! (projects that never end)

17. Projects Are Unique Never been done before
Must contain a well-defined purpose
Because each project is unique, creates uncertainty and risk

18. Projects Are Progressively Elaborated
Refers to the idea that execution of the project occurs in steps (phases) or small increments, adding features and definition until the final objective is achieved
Concept applies to the scope, time, and cost of the project

19. What Is a Project, continued
Secondary Characteristics to define typical projects:
Each project must have a primary sponsor or champion
Projects usually cut across organizational lines requiring resources from several different sources
They must do something, deliver something of value

20. The more you built something the better and faster you become because of repetition.
Project management is accomplished via the project management process of
Initiating
Planning
Executing
Monitoring and controlling
Closing

21. The bullets above are the work which a project manager performs in order to accomplish the projects objectives

22. A Project Manager Manages Projects by:
Setting clear and achievable objectives
Identifying requirements
Adapting the project to the various concerns of the stakeholders
Balancing the demands of the triple constraint

23. Project Management Definitions
Why is doing projects in IT so Diffucult?
İn repetitive jobs

24. The Triple Constraint
Each project is constrained by a list of customer requested requirements such as
Scope
Time
Cost
This is referred to as the tripple constraint of a project management

25. The Triple Constraint (figure 1-4)

26. Triple Constraint
Every project is constrained by a list of customer-requested requirements (scope), the amount of time available to produce the system in support of the requirements (time), and the limit of money available (cost)
Every project is constrained differently, according to the goals of the system owner (sponsor) and the project team

27. Triple Constraint Juggling Act
Reducing time allowed will increase cost (especially if overtime is required) and may reduce the scope (functions and features) of the system
Reducing costs (cutting the budget) will increase time (delay schedule) and may reduce the scope (functions and features) of the system
Increasing scope (adding features) will certainly increase time and/or cost
Reducing scope may reduce time and cost (and it may also negatively affect quality)

28. The Need for Better Project Management
There is a study of Standish Group called CHAOS.
According to Chaos the results for small, medium and large companies showed the succes of the companies;

29. IT Project Management Success Rates

30. Chaos Report Improvements
Better Project Management
Iterative/Incremental Development Process
Better PM tools and techniques
Emerging Web infrastructure
Better management processes
CMMI and now OPM3 maturity models

31. Project Manager Skills
Soft skills:
Leadership
Team building
Negotiation
Conflict management
Organization for self and others
Communication both oral and written to both technical and non-technical audiences
Change management
Active listening
Technical Skills:
Project Management software
Level of understanding of the technology being used in the project (software, hardware, network, etc.)
Basic knowledge of the business
Cost estimating and budgeting

32. Project Manager Skills
How much technical knowledge is necessary for a project manager to have has been debated at length.
Some say that anyone who is a good project manager should be able to manage any project without any knowledge of the industry. (DİSCUSSION)

33. Six Basic Functions of Successful PM’s
manage project scope – make sure the team works on what is needed for the project and nothing else
manage human resources – the team must work together, this doesn’t just happen it takes a directed effort
manage communications – this occurs at many levels, teammates, customers, managers, vendors, and others
manage schedule – must keep people on schedule delivering work on time
manage quality – need to make sure that all work performed meets with customer expected levels of quality
manage costs – must keep an eye on the budget to make sure all the work can be done and not exceed the allocated budget

34. Reasons for demand decline
The effect of outsourcing
The bursting of the dot-com bubble
The reliance on commercial of-the-shelf (COTS) software

35. Organizational Structures
Functional (traditional)
Organized around one of these characteristics: job function, end product, customer groups, a specific process, or geographic locations
Project
Organized completely around projects and sometimes its mere existence is only for one particular project (the Olympic games for example)
Matrix (Weak, Balanced, Strong)
Combination of traditional and project

36. Organizational Structure Influences on Projects

37. Functional (Traditional) Structure

38. Functional (Traditional) Structure
Benefits:
Individuals can specialize and become very proficient in one area
Communication channels are well established
Good control over resources since they only have one boss
Easier budgeting and cost control because all budgets differentiated by defined department boundaries
Traditional advancement within the functional department

39. Functional (Traditional) Structure
Drawbacks:
Project Manager holds the least amount of authority
Potential underutilization of resources or misallocation of resources
Economies of scale when sharing resources (people and materials) across projects
Individual exposure outside of one’s department limited
Focus not always on the project

40. Project-Based Organizational Structure
The project based organizational structure is organized completely around projects and sometimes it exists only for the duration of one particular project.

41. Project-Based Organizational Structure

42. Project Organizational Structure
Benefits:
One manager has authority and accountability
authority for work assignments and staff salary reviews
communication channels are direct and open
adaptability to changes is increased, decision making power is put in the hands of the project manager who is involved in the process daily
can build up considerable expertise from repetition of similar technologies

43. Project Organizational Structure
Drawbacks:
Potential underutilization of resources or misallocation of resources
Economies of scale when sharing resources (people and materials) across projects
Project myopia, see only the project we are working on
May be a lack of career progression possibilities (Flat structure)
Support for administrative functions more difficult

44. Matrix Organizational Structure
The structure was created as a way to combine the benefits of the functional structure and the benefits of the project structure into the organization
Matrix organizations come in three general forms
Weak
Balance
Strong

45. Matrix Organizational Structure
Each type of matrix represents a different level of project manager authority and a different time commitment for project team members
CEO ----Chief Expert Officer

46. Matrix Organizational Structure
*3 forms: weak, strong, balanced

47. Matrix Organizational Structure
Benefits:
‘Formal’ project accountability and visibility
More dynamic and adaptable to change
Sharing of knowledge across projects is enhanced
Policies and procedures can vary across projects
Less stress about the project ending

48. Matrix Organizational Structure
Drawbacks:
Multiple supervisors with competing priorities
Budget and cost control becomes more difficult
Project Team motivation
who do I listen to…my boss who controls my salary or to the project manager who is giving me work assignments
Policies and procedures can vary across projects

49. Choosing the Correct Structure
Depends on:
The history of the organization
The industry the organization is in
Project characteristics
The tendency of many organizations today is moving toward a matrix structure

50. Chapter Review
1. Projects exist in every part of our lives,personal and work. At work, IT is growing in importance for every organization, and thus IT-based projects are also growing in importance.
2. IT projects are growing in size, complexity,and strategic importance. For these reasons,IT project management has grown more difficult and requires advanced project management skills.

51. 3. IT projects are unique, requiring special tools and techniques
3. IT projects are unique, requiring special tools and techniques. The following categories demonstrate some of the key differences: requirement changes, sources of changes, requirements themselves, resources required, implementation plans, and testing.
4, The key benefits of a structured projectmanagement process are improvement in customer satisfaction, better cost performance, better schedule performance, increased quality, and increased number of delivered features.

52. 5. Project management was devised as a means to speed up the delivery of military projects. The result was a discipline that involves the definition of roles, tools, and processes that, when executed, direct a project to achieve the specified goals. Some of the early key tools created were PERT, WBS, and the Gantt chart.
6. In the 1990s, interest in project management soared because of a convergence of a number of factors: more powerful computers and software, standard practices and processes being defined and adopted, and widespread use of the Internet and global competition.

53. 7. A project is a temporary sequence of related activities that must be completed is defined as having three characteristics: temporary, unique, progressively elaborate.
8. Project management is defined as a process of applying knowledge, tools, and techniques to a project's activities to deliver stated project requirements within agreed-upon scope, time, cost, and quality constraints.

54. 9. Every project is constrained by its scope, time, and cost, referred to as the triple constraint. Project managers must continually balance these three constraints in order to be successful. Some authors add a fourth constraint: quality. If anyone of the constraints changes either intentionally or unintentionally, the project manager must negotiate changes in the others to keep the project on target.
10. The results of a number of studies demonstrate a critical need for better project managers and project management processes.

55. 11. Project management requires a diverse set. of skills
11. Project management requires a diverse set. of skills. This chapter lists many of them under the soft skills category and technical skills category.
12. Organizations use many different types of structures to accomplish their goals: traditional, project based, and matrix structures. Each offers strengths and weaknesses for the execution of successful projects.

56. Glossary
Organization: A system composed of human and physical resources working together to achieve shared goals
Project: A temporary sequence of related activities that must be completed to create a unique product or service.

57. Glossary
project management : The process of applying knowledge, tools, and techniques to a project's activities to deliver stated project requirements within agreed-upon scope, time, cost, and quality constraints
triple constraint: Scope, time, and cost objectives that have to be balanced in order to deliver successful projects

58. Discussion
Discuss the reasons why IT projects differ from projects in other disciplines. What implications does this have for modern IT project managers?
Describe the events that led up to the beginnings of project management in the United States during the 1950s. Also describe some of the early tools used by project managers.

59. Discussion
Describe what happened during the 1970s to spur the growth in project management and compare and contrast this with the events that occurred during the 1990s and that are occurring today.

60. Discussion
In your own words, explain what a project is and describe its key characteristics.
Explain what the term "death march" project means and why such projects should be avoided at all costs. In your opinion, why do you believe organizations continue with such projects?

61. Discussion
This chapter reports some distressing statistics about the success rates of IT projects. Explain why you believe IT projects have such low success rates. What can be done to improve the numbers?
Define the project management triple constraint and explain its significance to project managers.
This chapter mentions quality as a possible fourth constraint of project management. Explain how quality is affected by and affects the other three constraints.

62. Discussion
Explain the skills project managers need to possess in order to have repeated successes in running projects both from a soft skill perspective and technical skill perspective.
How important is it for a project manager running an IT project to have technical skills in the technology being used in the project he or she is running? Explain.
Compare and contrast the tlu'ee principal organizational structures (traditional, project based, and matrix) described in this chapter and explainthe levels of project manager authority that exist in each.

63. Discussion
Describe the difference between formal and informal organizational charts and their significance to project managers.
Based on the project success rates associated with each type of organizational structure, why don't all organizations switch to a project-based structure?
Explain the difference between a weak matrix structure and a strong matrix structure

64. Research Projects
If you have done an internship or a co-op, or if you are currently working for an organization, explain the company's current organizational structure and why it is in place. You will probably need to interview someone from the human resow'ces department as well as someone from the IT department. You could also use the surrounding community to locate an organization and interview someone from its human resources staff to find out what type of organizational shedule it uses and why.

65. Research Projects
Interview someone who is a full-time project manager Find out what this person feels are his or her strengths and weaknesses and compare this list of skills with the list presented in this chapter.

66. Research Projects
Use the web site of the Project Management Institute, as well as other sites to research the creation of the Guide to the PMBOK and how it has evolved over time to its current edition. Explain its significance to the project management profession.

67. Research Projects
Write a short paper describing two projects you have worked on previously either during an internship, in class, or as a full-time employee. Describe one project that went well and why and describe one project that didn't go very well and why. In the summary, explain why you believe ITprojects have a poor success rate.

68. Minicases 1. Background:
Mike, a newly hired IT project manager with many years of experience,works for A-Parts a lnidsize automobile parts manufachu'er located in Kalamazoo, Michigan. The company has experienced major revenue growth over the past couple years and needs to upgrade many of its old software applications. Jeff Smith, the owner and CEO of the privately owned company, has realized that the company needs to do a better job of running projects to cope with the new large upgrade projects, so he hired Mike.

69. Minicases cnt...
A-Parts is organized around job functions (see the following organizational chart). The first major project Mike has been asked to rilll is the new accounting and inventory control software upgrade. The entire suite of accounting software will be replaced, along with the inventory control software used in the warehouse. The two systems will be linked together such that data updates that occur in either system will be recorded in the other system simultaneously. Therefore, it will be extremely important for the two groups to work together to make sure the project is a success.

70. Minicases cont...
Current Situation: The project is 30 days old and is already in some trouble. The two key sponsors, the vice president of accounting and the vice president of manufacturing, can't seem to agree on one application solution. Each wants a solution that fulfills his needs best, and the IT department would need to write custom code to get the applications to share

71. Minicases cont...
28 Part 1
Project Management Overview information. The two sponsors are also not very willing to relinquish their best personnel to work on the project because they fear that these individuals will not be able to fulfill their current work responsibilities. Mike has been trying to create an amiable solution, with both parties giving up something, but so far he's had no luck. Jeff has been reluctant to step in; he prefers they handle it themselves. Part of the problem is that Mike reports to the IT supervisor, who reports to the vice president of accounting, so he is feeling pressured to do things that favor the accounting department over manufacturing. Mike decides that maybe a different organizational structure is necessary to help solve some of the issues.

72. Minicases cont... Discussion:
Describe the current organizational structure for A-Parts and summarize its strength and weaknesses. What suggestions do you have for Mike to improve the situation at A-Parts? Do you feel that a different organizational structure would help the situation? If so which one? Explain.

73. Minicase cont...
Fig page 28