History of Project Management: Post 1950s Farrokh Alemi, Ph.D. Lee Baliton Chris Smith This is a lecture on history of project management in the course on Project Management. This lecture was organized by Professor Farrokh Alemi, Lee Baliton and Chris Smith. This presentation is being narrated by Chris Smith.

Previous Section Pre-1950s In a previous presentation, we reviewed the major events that led to emergence of modern project management. In that presentation we focused on the years before 1950s. We now focus on years since 1950s.

Modern Project Management 1950 and Beyond New techniques and innovations Cost estimating Cost management Engineering economics Hans J. Lang - Lang Factor, a cost estimating technique Lang Factor - ratio of the entire cost of implementing a process Estimate installation costs for factories, plants, and equipments At the same time as the Project Evaluation Review Technique and the Critical Path method emerged, new techniques and innovations were developing in the technology for project cost estimating,

Modern Project Management 1950 and Beyond New techniques and innovations Cost estimating Cost management Engineering economics Hans J. Lang - Lang Factor, a cost estimating technique Lang Factor - ratio of the entire cost of implementing a process Estimate installation costs for factories, plants, and equipments cost management,

Modern Project Management 1950 and Beyond New techniques and innovations Cost estimating Cost management Engineering economics Hans J. Lang - Lang Factor, a cost estimating technique Lang Factor - ratio of the entire cost of implementing a process Estimate installation costs for factories, plants, and equipments and engineering economics.

Modern Project Management 1950 and Beyond New techniques and innovations Cost estimating Cost management Engineering economics Hans J. Lang - Lang Factor, a cost estimating technique Lang Factor - ratio of the entire cost of implementing a process Estimate installation costs for factories, plants, and equipments Hans Lang was the innovator behind the Lang Factor, popularized in the early 1950s, which is a cost estimating technique often used in industrial engineering and specifically in the refining and petrochemical industries.

Modern Project Management 1950 and Beyond New techniques and innovations Cost estimating Cost management Engineering economics Hans J. Lang - Lang Factor, a cost estimating technique Lang Factor - ratio of the entire cost of implementing a process Estimate installation costs for factories, plants, and equipments The Lang Factor is the ratio of the entire cost of implementing a process in a factory or plant, relative to the total manufacturing process.

Modern Project Management 1950 and Beyond New techniques and innovations Cost estimating Cost management Engineering economics Hans J. Lang - Lang Factor, a cost estimating technique Lang Factor - ratio of the entire cost of implementing a process Estimate installation costs for factories, plants, and equipments Hans Lang originally introduced this technique as a way of estimating installation costs for factories, plants, and equipments but the process has been used in many other settings as well.

Modern Project Management 1950 and Beyond Project Portfolio Management Harry Markowitz Focus on highest return Another project management technique developed in the early 1950’s is called the portfolio project management.

Modern Project Management 1950 and Beyond Project Portfolio Management Harry Markowitz Focus on highest return The field of portfolio project management, where a number of projects are analyzed simultaneously, owes its origins to a seminal paper written in 1952, in which Harry Markowitz laid down the basis for the Modern Portfolio Theory for stocks and investments.

Modern Project Management 1950 and Beyond Project Portfolio Management Harry Markowitz Focus on highest return Markowitz’s work focused on mix of investments generating the highest return for a given level of risk.

Modern Project Management 1950 and Beyond F. Warren McFarlan Information technology project selection Risk-based F. Warren McFarlan Later, in 1981, Warren McFarlan provided the basis for the modern field of project portfolio management for Information technology projects by employing a risk-based approach to the selection and management of IT projects. The idea seemed simple but ground breaking. Examine the risk of each project and the interdependencies among the projects and you can select a portfolio of projects which will minimize risk and maximize return.

Modern Project Management 1950 and Beyond F. Warren McFarlan Information technology project selection Risk-based F. Warren McFarlan Completing the project right .vs. Doing the right project What made it ground breaking was that it allowed project managers to not only complete projects efficiently but also to decide if they are focusing on the right projects.

Modern Project Management 1950 and Beyond Refined costing estimating techniques. “Guthrie Factors” - module estimating technique American Association of Cost Engineers Total Cost Management Other innovators in cost engineering refined or augmented existing industrial engineering costing estimating techniques. From AACE International’s “Total Cost Management Framework” published 2006.

Modern Project Management 1950 and Beyond Refined costing estimating techniques “Guthrie Factors” - module estimating technique American Association of Cost Engineers Total Cost Management Kenneth Guthrie developed the “Guthrie Factors”, a module estimating technique that is still widely used in today’s business. From AACE International’s “Total Cost Management Framework” published 2006.

Modern Project Management 1950 and Beyond Refined costing estimating techniques “Guthrie Factors” - module estimating technique American Association of Cost Engineers Total Cost Management Engineers, practitioners and innovators of cost engineering formed the American Association of Cost Engineers in 1956 to promote the planning and management of cost and schedules. The organization is now called the Association for the Advancement of Cost Engineering. From AACE International’s “Total Cost Management Framework” published 2006.

Modern Project Management 1950 and Beyond Refined costing estimating techniques “Guthrie Factors” - module estimating technique American Association of Cost Engineers Total Cost Management The organization is now called the Association for the Advancement of Cost Engineering. From AACE International’s “Total Cost Management Framework” published 2006.

Modern Project Management 1950 and Beyond Refined costing estimating techniques “Guthrie Factors” - module estimating technique American Association of Cost Engineers Total Cost Management The American Association of Cost Engineer’s Total Cost Management is a systematic approach to managing cost throughout the life cycle of any enterprise, program, facility, project, product or service. From AACE International’s “Total Cost Management Framework” published 2006.

Modern Project Management 1950 and Beyond Soon thereafter, these new project management techniques spread to different types of businesses. Five forward thinking project management specialists formed the Project Management Institute (PMI) in 1969. Their main purpose was “to provide a means for project managers to associate, share information and discuss common problems.” From the Project Management Institute – www.pmi.org

Modern Project Management 1950 and Beyond Five Founders of PMI J. Gordon Davis, PhD E. A. “Ned” Engman Susan Gallagher The Five Founders of PMI are Gordon Davis, “Ned” Engman, Susan Gallagher, Eric Jenett, and James Snyder. Eric Jenett James R. Snyder From the Project Management Institute – www.pmi.org

Modern Project Management 1950 and Beyond Five Founders of PMI J. Gordon Davis, PhD E. A. “Ned” Engman Susan Gallagher Susan Gallagher was one of the first women to take a leadership position in project management Eric Jenett James R. Snyder From the Project Management Institute – www.pmi.org

Modern Project Management 1950 and Beyond PM industry Modern tools Define project management Wide spread application The Project Management Institute was formed to provide a basis for the project management industry, From the Project Management Institute – www.pmi.org

Modern Project Management 1950 and Beyond PM industry Modern tools Define project management Wide spread application to present a modern standardized set of project management tools and techniques to the business professional. From the Project Management Institute – www.pmi.org

Modern Project Management 1950 and Beyond PM industry Modern tools Define project management Wide spread application Project Management Institute defined project management broadly as “the application of knowledge, skills, tools and techniques to a broad range of activities in order to meet the requirements of a particular project.” From the Project Management Institute – www.pmi.org

Modern Project Management 1950 and Beyond PM industry Modern tools Define project management Wide spread application Project Management Institute has helped the expansion of project management into various industries. From the Project Management Institute – www.pmi.org

Modern Project Management 1950 and Beyond Rapid developments IT industry Globalization Within scope, schedule and cost constraints It is no longer for just construction projects. Many project mangers work in implementing information technology projects. With globalization of business, demand for project management solutions has spread to organizations worldwide.

Modern Project Management 1950 and Beyond Rapid developments IT industry Globalization Within scope, schedule and cost constraints Project management seems to have something that business everywhere want. It can help organizations complete projects within the specified scope, schedule and cost constraints. Nothing can be more reassuring to business than a set of tools that can help get where it wants to go in time and under budget.

Modern Project Management 1950 and Beyond Rapid developments IT industry Globalization Within scope, schedule and cost constraints In 1987, the PMI developed the PMBOK Guide or fully known as “A Guide to the Project Management Book of Knowledge” which contains the standardized, generally accepted techniques and processes in the project management profession. It brought together various contributions into one central place and standardized its use. Helped transform the field

Modern Project Management 1950 and Beyond Rapid developments IT industry Globalization Within scope, schedule and cost constraints How is your project management coming along? In 1987, the PMI developed the PMBOK Guide or fully known as “A Guide to the Project Management Book of Knowledge” which contains the standardized, generally accepted techniques and processes in the project management profession. It brought together various contributions into one central place and standardized its use. Helped transform the field

Today Standardized techniques and processes Management technique Project management has evolved to today’s standardized techniques and processes.

Today Standardized techniques and processes Management technique It is now more than a set of mathematical tools but also a method of management.

Evolution of Project Management Individual efforts Widespread acceptance If you thinking through the history of project management, you will notice some themes. Project management has evolved from individual efforts to industry wide acceptance.

Evolution of Project Management Individual efforts New methods of charting data Widespread acceptance In the process, it has built on new method of visualizing and charting data.

Evolution of Project Management Individual efforts Widespread acceptance New methods of charting data Optimization techniques It has also built, on progress in methods of optimization of schedules.

Evolution of Project Management Individual efforts Widespread acceptance New methods of charting data Optimization techniques With widespread acceptance has come new ways of using project management. It has evolved from being a set of tools and techniques to a new method of management. To some of the old time users of project management, today’s project management may seem foreign. New method of management

Evolution of Project Management Individual efforts Widespread acceptance New methods of charting data Optimization techniques A project manager may no longer use either the progress made in visualizing or the progress made in optimizing schedules. The project manager may just use the ideas and principles of project management to initiate, plan, execute, monitor and close a project. In this sense, project management has evolved into a way of thinking and talking, well beyond its early scientific technique oriented start. New method of management

Project Management is not what it used to be Take Home Lesson Project Management is not what it used to be The take home lesson is simple. Project management is not what it used to be.