Introduction to Project Management Chapter 1 Contemporary Project Management Kloppenborg © 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Element of Discipline Chapter Vignette The Element of Discipline Deaths climbing Mt. Aconcagua are an extreme example of consequences associated with a lack of discipline Discipline to act on the earlier decision to curtain summit attempts after the agreed-to-turn-around time or in severe weather Avoid pressure to cast aside or shortcut project management practices Practices, like planning, are the pillars of project management discipline

The Element of Discipline Chapter Vignette The Element of Discipline Managing projects at the CIA involved short notice to acquire unspent funds Discipline required needed planning and quick action The top 2 percent of project managers spend twice as much time planning as the other 98 percent Identify those pillars that we will decide to practice with the required levels of discipline

At the end of this chapter… Define a project using characteristics that are common to most projects and describe reasons why more organizations are using project management. Describe major activities and deliverables, at each project life cycle stage. List and define the nine knowledge areas and five process groups of the project management body of knowledge (PMBOK®).

At the end of this chapter… Delineate measures of project success and failure and reasons for both. Identify project roles and distinguish key responsibilities for each.

What is a project? Project – “a temporary endeavor undertaken to create a unique product, service, or result.” PMBOK® Guide A project requires an organized set of work efforts. Projects require a level of detail that is progressively elaborated upon as more information is discovered. Projects are subject to limitations of time and resources such as money and people. Projects have a defined beginning and ending.

What is a project? A project has a unique combination of stakeholders stakeholders – “persons or organizations … that are actively involved in the project, or whose interests may be positively or negatively affected by execution or completion of the project.” PMBOK® Guide

Project Management (PM) PM includes work processes that initiate, plan, execute, and close work Work processes require tradeoffs among the scope, quality, cost, and schedule of the project PM includes administrative tasks for planning, documenting, and controlling work PM includes leadership tasks for visioning, motivating, and promoting work associates. PM knowledge, skills, and methods apply for most projects Project management – “the application of knowledge, skills, tools and techniques to project activities to meet project requirements.” PMBOK® Guide

History of Project Management PM emerged as a formal discipline in the 1950s Techniques for planning and controlling schedules and costs were developed for huge aerospace and construction projects in the 1950s and 1960s Early PM involved determining project schedules based on order of project activities Manufacturing, research and development, government, and construction projects used and refined management techniques

History of Project Management Software companies offered software for planning and controlling project costs and schedules in the 1980s and 1990s Risk management techniques for complex projects have been applied to less complex projects Communication and leadership playa major role in project success Rapid growth and change in information technology and telecommunications fueled use of PM in the 1990s and 2000s

How Can Project Work Be Described? Projects are temporary and unique; operations are more continuous. Project managers need “soft skills” and “hard skills” to be effective. Project managers frequently have more responsibility than authority. Projects go through predictable stages called a life cycle.

Projects Versus Operations Projects are temporary Projects have both routine and unique characteristics Operations consist of the ongoing work needed to ensure that an organization continues to function effectively

Soft Skills and Hard Skills Soft skills include communication and leadership activities. Hard skills include risk analysis, quality control, scheduling, and budgeting work A successful project manager needs both soft and hard skills along with the judgment of when each is more necessary. Training, experience, and mentoring are instrumental in developing necessary skills.

Authority and Responsibility Projects are most effectively managed with one person being assigned accountability Project managers negotiate with functional managers A project manager needs to develop strong communication and leadership skills to persuade subordinates to focus on the project when other work beckons. Functional manager – “someone with management authority over an organizational unit.…the manager of any group that actually makes a product or performs a service.” PMBOK® Guide

Project Life Cycle All projects go through predictable stages called a project life cycle. Life cycle allows for control to assure that the project is proceeding in a satisfactory manner and that the results are likely to serve its customer’s intended purpose Project life cycle – “a collection of generally sequential project phases whose name and number are determined by the control needs of the organization or organizations involved in the project.” PMBOK® Guide

Project Life Cycle Stages Selecting and initiating— a project is proposed, planned at a high level, and key participants commit to it in broad terms Planning—starts after the initial commitment, includes detailed planning, and ends when all stakeholders accept the entire detailed plan. Executing—includes authorizing, executing, monitoring, and controlling work until the customer accepts the project deliverables. Closing and realizing—all activities after customer acceptance to ensure project is completed, lessons are learned, resources are reassigned, contributions are recognized, and benefits are realized.

Project Life Cycle Stages Most companies insist that a project must pass an approval of some kind to move from one stage to the next The project life cycle is highly formalized and very specific Projects are measured at selection, progress reporting, and benefits realization points

Project Life Cycle Stages

Life Cycle for Quality Improvement Projects

Understanding Projects Project Management Institute Project Management Body of Knowledge (PMBOK) Selecting and Prioritizing Projects Project Goals and Constraints Defining Project Success and Failure Using MS Project Types of Projects Scalability of Project Tools

The Project Management Institute The largest professional organization Publishes and regularly updates A Guide to the Project Management Body of Knowledge (PMBOK® Guide) Established a professional certification - Project Management Professional (PMP®) Established a second certification—Certified Associate in Project Management (CAPM)

Project Management Body of Knowledge (PMBOK® Consists of a project life cycle, five process groups, and nine knowledge areas Project management process group – “a logical grouping of the project management inputs, tools and techniques, and outputs.” PMBOK® Guide

PMBOK® Process Groups Initiating—“defines and authorizes a project or a project phase” Planning—“defines and refines objectives and plans actions to achieve objectives” Executing—“directs and manages people and other resources to accomplish project work” Monitoring and controlling—“collects data and checks progress to determine any needed corrective actions” Closing—“formalized acceptance of project outcomes and ending the project”

PMBOK® Knowledge Areas Integration management—“processes and activities needed to define, combine, unify, and coordinate the various processes and project management activities” Scope management—“processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully” Time management—“processes required to manage timely completion of the project” Cost management—“processes involved in estimating, budgeting, and controlling costs so that the project can be completed within the approved budget” Quality management—“processes and activities of the performing organization that determine quality policies, objectives, and responsibilities so that the project will satisfy the needs for which it was undertaken”

PMBOK® Knowledge Areas Human Resources management—“processes that organize, manage, and lead the project team” Communications management—“processes required to ensure timely and appropriate generation, collection, distribution, storage, retrieval, and ultimate disposition of project information” Risk management—“processes of conducting risk management planning, response planning, and monitoring and control … to increase the probability and impact of positive events and decrease the probability and impact of negative events in the project” Procurement management—“processes necessary to purchase or acquire products, services, or results from outside the project team”

Selecting and Prioritizing Projects Identify potential projects All parts of the organization are involved Determine which projects align best with major goals of the firm Ensure overall organizational priorities are understood, communicated, and accepted

Selecting and Prioritizing Projects What value does each potential project bring to the organization? Are the demands of performing each project understood? Are the resources needed to perform the project available? Which projects will best help the organization achieve its goals? Is there enthusiastic support both from the external customers and from one or more internal champions?

Project Goals and Constraints Projects are undertaken to accomplish specific goals Scope and quality measure performance and should result in outputs that satisfy customers Consider scope and quality subject to constraints of time and cost Scope – “the sum of all products, services, and results to be provided as a project.” PMBOK® Guide Quality – “the degree to which a set of inherent characteristics fulfills requirements.” PMBOK® Guide

Project Goals and Constraints Obstacles or challenges may limit the ability to perform Opportunities may allow projects to exceed original expectations. Project Managers (PMs) decide which goals and constraints take precedence

Project Customer Tradeoff Matrix

Defining Project Success and Failure Project success is creating deliverables that include all of the agreed upon features Outputs please the project’s customers. Customers use the outputs effectively as they do their work (meet quality goals) The project should be completed on schedule and on budget (meet time and cost constraints).

Defining Project Success and Failure Successful projects are completed without heroics People who work on the project should learn new skills and/or refine existing skills. Organizational learning should take place and be captured for future projects. Reap business-level benefits such as development of new products, increased market share, increased profitability, decreased cost, etc.

Project Success Meeting Agreements Cost, schedule, and specifications met Customer’ Success Needs met, deliverables used, customer satisfied Performing Organization’s Success Market share, new products, new technology Project Team’s Success Loyalty, development, satisfaction

Why Projects Fail Not enough resources are available for project completion. Not enough time has been given to the project. Project expectations are unclear. Changes in the scope are not understood or agreed upon by all parties involved. Stakeholders disagree regarding expectations for the project. Adequate project planning is not used.

Types of Projects Classifying by industry Classifying by size Classifying by timing of determination of project scope Classifying by application

PMI Communities of Practice Aerospace and Defense Agile Automation Systems Consulting Design-Procurement-Construction Diversity E-Business Financial Services Global Sustainability Government Healthcare Human Resource Information Systems Innovation and New Product Development International Development Learning, Education and Development Manufacturing Marketing and Sales Oil, Gas, Petrochemical Organizational Performance Management Pharmaceutical Program Management Office Quality Retail Risk Management Scheduling Service and Outsourcing Students of PM Troubled Projects Utility Women in PM Projects in different industries often have unique requirements PMI specific interest groups

Large projects often require more detailed planning and control Classifying by Size Large projects often require more detailed planning and control

Classifying by Timing of Project Scope Clarity How early in the project the project manager and team are likely to be able to determine what the project scope will be

Classification by Application All projects require planning and control The art of project management deals with when to use certain techniques, how much detail to use, and how to tailor the techniques to the needs of a specific project.

Scalability of Project Tools All projects require Determination of the wants and needs of the customer(s) Understanding of the amount of work involved Determination of a budget and schedule Decisions about available workers and who will do which tasks Management until the owner accepts the project results Projects are scaled up or down to meet the complexity of the task

Project Roles Project Executive-Level Roles Project Management-Level Roles Project Associate-Level Roles

Project Executive-Level Roles The steering team The top leader (CEO) and his/her direct reports Select, prioritize, and resource projects in accordance with the organization’s strategic planning Ensure that accurate progress is reported and necessary adjustments are made.

Project Executive-Level Roles The chief projects officer Keeper, facilitator, and improver of the project management system Responsible for project standards, methods, training, documentation Project Management Office (PMO) – “an organizational body or entity assigned various responsibilities related to the centralized and coordinated management of those projects within its domain. The responsibilities of the PMO can range from providing project management support functions to actually being responsible for the direct management of a project.” PMBOK® Guide

Project Executive-Level Roles The sponsor Takes an active role in chartering the project and reviewing progress reports Takes a behind-the-scenes role in mentoring and assisting the project manager throughout the project life. Sponsor – “the person or group that provides the financial resources, in cash or in kind, for the project.” PMBOK® Guide

Project Management-Level Roles Project manager Directly accountable for the project results, schedule, and budget The main communicator Responsible for the planning and execution of the project Works on the project from start to finish. The project manager often must get things done through the power of influence since his or her formal power may be limited. Project manager – “the person assigned by the performing organization to achieve the project objectives.” PMBOK® Guide

Project Management-Level Roles Functional manager The department heads—the ongoing managers of the organization Determine how the work of the project is to be accomplished Supervise the work Negotiate with the project manager regarding which workers are assigned to the project

Project Management-Level Roles Facilitator Helps the project manager with the process of running meetings and making decisions Frees the project manager to concentrate on the content of the project The facilitator concentrates on the process. A facilitator helps the PM understand organizational politics and provides suggestions on how to handle situations.

Project Management-Level Roles Senior customer representative Ensures that the needs and wants of constituents in the customer’s organization are identified and prioritized Ensures that project progress and decisions continually support the customer’s desires.

Project Associate-Level Roles Core team member People assigned to a project from start to finish The core team does most of the planning and makes most of the project level decisions. Project management team – “members who are directly involved in project management activities.” PMBOK® Guide

Overview of the Book Project management is integrative, iterative, and collaborative This book has three major parts Organizing and Initiating Projects Planning Projects Performing Projects

Part I - Organizing and Initiating Projects Project management basics (Chapter 1) Project selection and prioritization (Chapter 2) Organizational structure, organizational culture, project life cycle, and project management roles of the parent organization (Chapter 3) Chartering projects (Chapter 4) Project charter – “a document issued by the project initiator or sponsor that formally authorizes the existence of a project, and provides the project manager with the authority to apply organizational resources to project activities.” PMBOK® Guide

Part II – Planning Projects Identify project stakeholders, their wants and needs, and how to prioritize decisions among them (Chapter 5) How to determine the project scope and outline it in the work breakdown structure (WBS) (Chapter 6) Work breakdown structure (WBS) – “a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables. It organizes and defines the total scope of the project.” PMBOK® Guide

Part II – Planning Projects Scheduling projects (Chapter 7) Scheduling resources on projects (Chapter 8) Project budgeting (Chapter 9) Risk planning (Chapter 10) Project Quality (Chapter 11) Project schedule – “the planned dates for performing schedule activities and the planned dates for meeting schedule milestones.” PMBOK® Guide Budget – “the approved estimate for the project or any work breakdown structure component or any schedule activity.”PMBOK® Guide

Part III – Performing Projects Project supply chain management (Chapter 12) Leading and managing project teams (Chapter 13) Monitoring and controlling project work (Chapter 14) Finishing projects and realizing benefits (Chapter 15) Monitor and control project work – “the process of tracking, reviewing, and regulating the progress to meet the performance objectives defined in the project plan”PMBOK® Guide Close project – “the process of finalizing all activities across all of the project process groups to formally close a project or phase.” PMBOK® Guide

Summary A project is an organized set of work efforts undertaken to produce a unique output subject to limitations of time and resources such as money and people Project management includes work processes that initiate, plan, execute, control, and close project work. Tradeoffs must be made between the scope, quality, cost, and schedule All projects, regardless of size, complexity, or application, need to be planned and managed. PMI® is a large professional organization devoted to promoting and standardizing project management understanding and methods

Summary A Guide to the Project Management Body of Knowledge (PMBOK® Guide), is composed of five process groups: initiating, planning, executing, monitoring and controlling, and closing along with nine knowledge areas: cost, time, scope, quality, risk, communications, human resources, procurement, and integration. Successful projects require an understanding of what project success is and what drives it Successful projects require an understanding of project failure and its major causes. Project management requires an understanding of the various executive, managerial, and associate roles in project management

Skyline Chili, Inc. Cincinnati-based restaurant franchise with menu specializing in high-quality chili-related food products Customers value unparalleled hospitality Skyline management wanted to ensure training program aligns with business plan of unparalleled hospitality Required outcome: high-performing, execution-ready, hospitable employees PM in Action Example

Skyline Chili, Inc. Brainstorming and prioritizing identified critical training projects Top priority was to establish a centralized training department with a point contact person Training department was not planned or budgeted As a result of a business case and job analysis a director of training was put in place PM in Action Example

PM in Action Example Skyline Chili, Inc.