Project Management Eng. Mosab Tabash

Project Management Introduction to Project Management Lecture 01

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Agenda Introduction What is a project? Project characteristics Project types Project failure causes Project success factors Project Management History of project management Project management profession

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Statistics The U.S. spends $2.3 trillion on projects every year, 25% of GDP. The world as a whole spends nearly $10 trillion of its $40.7 trillion gross product on projects of all kinds. More than 16 million people regard PM as their profession. On average, a project manager earns more than $100,000 per year.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Statistics *The Standish Group, “CHAOS 2001: A Recipe for Success” More than half a million new IT application development projects were initiated in USA during 2001, up from 300,000 in 2000.* Famous business authors and consultants are stressing the importance of project management.  Tom Peters writes in his book, Reinventing Work: the Project 50, “To win today you must master the art of the project!”

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Production Systems Production systems:  Mass production  Batch production  Project (non-repetitive) production Project production is used for one-off, non-repetitive items.  No previous learning curve on which to rely  High levels of complex management planning and control may be required. A project is an instrument for achieving one-off changes.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture What is a Project? Examples of projects  Split the atom  Chunnel between England and France  Introduce Windows XP “Projects, rather than repetitive tasks, are now the basis for most value-added in business” -Tom Peters

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture What is a Project? “A project is a temporary endeavor undertaken to create a unique product, service, or result” (PMBOK® Guide 3 rd Edition, p. 5)

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture What is a Project? Elements of Projects  Complex, one-time processes  Limited by: Budget Schedule Resources  Developed to resolve a clear goal or set of goals  Customer-focused

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Programs  are often confused with projects.  are larger and often contain a series of related projects.  last longer and may not have a definite end point.  Example: NASA’s space program as a whole includes a number of smaller programs. Each of these smaller programs contains a series of projects What is a Program

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Characteristics of a project It involves a single, definable purpose, product or result. It usually has defined constraints or targets. It uses skills and talents from multiple professions / organizations. It requires resources, often from various areas. It is unique. It is somewhat unfamiliar. It is a temporary activity. It can be of a long or short term duration.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Characteristics of a project It is part of the process involved in working to achieve a goal. It is part of an interlinked process. It is generally of secondary importance to the organization. It is relatively complex. It should have a primary sponsor and/or customer. It involves uncertainty. Can be large or small task.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Characteristics of a project Project goal should be SMARTE  Specific  Measurable (Evaluation : defined criteria)  Accepted (distributed Information)  Realizable  Temporal (fixed delay)  Ethical

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Process 1.Repeat process or product 2.Several objectives 3.On-going 4.People are homogeneous 5.Systems in place 6.P erformance, cost, & time known 7.Part of the line organization 8.Bastions of established practice 9.Supports status quo Project 1.New process or product 2.One objective 3.One shot – limited life 4.More heterogeneous 5.Systems must be created 6.P erformance, cost & time less certain 7.Outside of line organization 8.Violates established practice 9.Upsets status quo Process & Project Management

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Types Most of the projects were in construction Today projects cover different areas:  IT development  New product  Merger and acquisition  Searching a new drug  Marketing campaign  Web site  …

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Types Defined projectOpen project Project managerDedicated to the project Initiative Project teamResponsibilities and tasks are clear Group of interested people FinanceA sponsorAuto-finance CostCost systemNo clear cost system Phases and activitiesDeterminedNot determined Project managementapplicableNot applicable

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Major Causes of Project Failure Identify 5 key causes of project failure 10’ for completing the Exercise

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Major Causes of Project Failure The project is a solution in search of a problem Only the project team is interested in the result No one is in charge There is no project structure The plan lacks detail

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Wrong project decision process Insufficient budget and/or resources Lack of communication Straying from original goal The project is not tracked against the plan Major Causes of Project Failure

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Major Causes of Project Failure Process? Where is the process?  Because management said so !  Because marketing / sales promised the client !

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Success Factors Identify 5 key project success factors 10’ for completing the Exercise

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Senior Management support Stakeholders are identified Stakeholders expectations are known and met Clear statement of requirements There is a clearly stated purpose and a sound plan Goal and objectives are understood and communicated A constructive goal-oriented culture User involvement Hard-working, focused team Project Success Factors

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Technically competent team Effective (and committed) team Excellent communication Trust Using project management processes Quality management Project Success Factors

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Information Technology Project “view” Software & hardware projects fail at a 65% rate 31% IT projects were cancelled before completion 53% were completed, but were over-budget, over- schedule, and did not meet the original requirements 47% of IT projects delivered but not used, 29% paid for but not delivered; 19% abandoned Average cost overrun is 45%; schedule overrun is 63%; with only 67% of originally contracted features

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture IT Project Success Factors According to the Standish Group’s report “CHAOS 2001: A Recipe for Success,” the following items help IT projects succeed, in order of importance:  Executive support  User involvement  Experienced project manager  Clear business objectives  Minimized scope  Standard software infrastructure  Firm basic requirements  Formal methodology  Reliable estimates

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Organizational Commitment  If the organization has a negative attitude toward IT, it will be difficult for an IT project to succeed  Having a Chief Information Officer (CIO) at a high level in the organization helps IT projects  Involving non-IT people with IT projects also encourages more commitment IT Project Success Factors

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Improving the likelihood of success Socio-technical Approach  Cooperation between developers and users Project Management Approach  Depending more on processes and infrastructure  Resources management  Delivering the outcomes in a professional way as expected  Coping with greater internal and external competition  Improving efficiency and effectiveness Knowledge Management Approach  lessons learned  best practices

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture The 2001 Standish Group Report Showed Decided Improvement in Project Success Time overruns significantly decreased to 163% compared to 222% Cost overruns were down to 145% compared to 189% Required features and functions were up to 67% compared to 61% 78,000 U.S. projects were successful compared to 28,000 28% of IT projects succeeded compared to 16%

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Why the Improvements? "The reasons for the increase in successful projects vary. First, the average cost of a project has been more than cut in half. Better tools have been created to monitor and control progress and better skilled project managers with better management processes are being used. The fact that there are processes is significant in itself.“* *The Standish Group, "CHAOS 2001: A Recipe for Success" (2001)

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Projects and Management Projects require a unique form of management. Project management is being applied across all industry sectors. Project management is, in essence, the general management of organization. Management skills include:  Financial awareness  Marketing appreciation  Technical knowledge  Planning skills  Strategic awareness  Quality management

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Management PMI definition of Project Management: “Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements” PMI*, Project Management Body of Knowledge (PMBOK® Guide), 3 RD Edition, p. 8

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project management is  a method and/or set of techniques  based on the accepted principles of management  used for planning, estimating and controlling work activities according to the project specifications. PM is about achieving time, cost and quality targets, within the context of overall strategic and tactical client requirements, by using project resources. A discipline evolving towards a profession Project Management

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Management Project Management and Other Disciplines Much of the knowledge needed to manage projects is unique to the discipline of project management Project mangers must also have knowledge and experience in  General management  Specific industry

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Management Planning, gathering and managing the resources needed to achieve particular goals and objectives within defined time and budgetary constraints MANAGEMENTRESOURCES QUALITY TIME COST

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Management Quality increase Time increase Cost increase B A

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture The Triple Constraint of PM Choose 2 Good – cheap - Fast What to do? Dynamic equilibrium How long? How does it cost?

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture The Triple Constraint of PM Every project is constrained in different ways by its  Scope: What is the project trying to accomplish?  Time: How long should it take to complete?  Cost: What should it cost? It is the project manager’s duty to balance these three often competing goals For each project, know which parameters are fixed and which ones are variable?

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture The Triple Constraint of PM

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Stakeholders A stakeholder is a person who has a business interest in the outcome of a project, or who is actively involved in a project. Stakeholders take on various roles and responsibilities on projects. Stakeholders may have a positive or negative influence on a project.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Sponsor If the sponsor is outside of the company, such as a customer, the duties listed here may be his responsibility:  Has the financial resources for the project.  Has ultimate responsibility for project success.  Signs on all planning documents and change requests.  Authorizes team to use resources.  Champions and mentors the project manager and team.  Reviews progress and quality. Project Stakeholders

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Customer The customer may be multiple individuals or companies with conflicting requirements and specifications:  Takes delivery of the project output.  Pays for the project output.  Defines needs for the project output. Project Stakeholders

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Manager The individual responsible for managing all aspects of the project. The project manager:  Works with stakeholders to define the project.  Plans, schedules, and budgets project activities with team input.  Works with the team to carry out project plans.  Monitors performance and takes corrective action.  Keeps the sponsor and the stakeholders informed.  Requests and documents scope changes.  Acts as a liaison between the project team and other stakeholders. Project Stakeholders

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project team members Project team members (may include internal and/or external resources) The individuals who work with the project manager to carry out plans and produce the project work results. Project management team The project team members who perform project management activities. Influencers Individuals who are not involved with acquiring or using the project’s product, but have enough power in the organization to influence the project’s outcome. Project Stakeholders

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Working with Stakeholders Stakeholders have different interests, needs, and priorities. They may have different opinions about what the project should be trying to accomplish, or what a successful outcome might be. Therefore, it is important to identify all of the stakeholders as early as possible in the initiation process. Once you have identified the stakeholders, learn what their needs are and get them involved in defining project parameters and success criteria. While it may be difficult to negotiate to a consensus early in the project, it is far less painful and costly than getting to the end of the project only to learn that someone’s needs were not met or were misunderstood. Project Stakeholders

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Selection Criteria Project selection criteria are the standards and measurements an organization uses to select projects. The organization’s strategic goals provide a source for at least one dimension of selection criteria.  Any project selected should be clearly linked to one or more strategic goals. Other selection criteria may be qualitative or quantitative.  Qualitative criteria deal with the project’s fit with the organization’s capabilities.  Quantitative criteria may specify financial targets that the project must meet.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Capital Budgeting Capital budgeting  is a method of quantitative analysis that is frequently used if the project is large or likely to involve the purchase of fixed assets.  In these cases, the organization may use targets such as payback period, discounted cash flow, and net present value (NPV). Payback period  The amount of time it will take to recoup the project investment.  Does not take into account the cost of capital, which is also called hurdle rate. Project Selection Criteria

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Capital Budgeting Discounted cash flow  The value of the investment, discounted to take into account the time value of money.  This technique looks at the present value of an investment by deducting the amount of earnings required to cover the cost of capital from the expected return. Net present value (NPV)  The present value of an investment minus the Initial investment.  A negative NPV signals a poor investment risk. Internal rate of return (IRR)  The discount rate that makes the NPV of the future cash return equal to the initial capital investment.  A favorable IRR should be higher than the hurdle rate. Project Selection Criteria

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Example Comparing Two Projects (NPV and IRR) Project Selection Criteria

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture History of Project Management Historical legacy  Pyramids / Roman aqueducts  Great Wall / Inca/Mayan temples Late 1800’s – Industrialization  conversion from agrarian to industrial organizations  evolving management concepts 1900’s - Large-scale plants and organizations  Taylor’s “Scientific Management”  established basis for work measurement and production scheduling World War I logistics  Henry Gantt (Gantt chart) production scheduling and monitoring

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture History of Project Management 1940’s World War II  Manhattan Project - reinforced importance of critical scheduling  process flow diagrams 1950’s - Scheduling tools  1957 CPM (Critical Path Method) Dupont - scheduling  1958 PERT (Program Evaluation and Review Technique) U.S. Navy Polaris missile program 1960’s - Large scale applications  Massive government contracts (Vietnam, nuclear power plants, NASA Apollo) required computer aided planning and control  IBM first to use PM commercially  1968 combined in a Graphical Evaluation and review Technique

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture History of Project Management Earned Value concept  developed for monitoring schedule and cost 1980’s – Computerization  1988 Association for Project Management (APM) UK produced its Body of Knowledge 1990’s - Standardization  1996 British Standards– BS6079  1997 European International Standard - ISO ’s – Certification  2004 Project Management Institute (PMI) Project Management Body of Knowledge

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Management Framework

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Project Management Knowledge Areas 1. Project integration management 2. Project scope management 3. Project time management 4. Project cost management 5. Project quality management 6. Project human resource management 7. Project communication management 8. Project risk management 9. Project procurement management

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Scope Management Includes the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Time Management Includes the processes required to accomplish timely completion of the project.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Cost Management Includes the processes involved in planning, estimating, budgeting, and controlling costs so that the project can be completed within the approved budget.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Quality Management Includes all the 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.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Human Resource Management Includes the processes that organize and manage the project team.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Communications Management Employs the processes required to ensure timely and appropriate generation, collection, distribution, storage, retrieval, and ultimate disposition of project information.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Risk Management Includes the processes concerned with conducting risk management planning, identification, analysis, responses, and monitoring and control on a project.  Increases the probability and impact of positive events and decreases the probability and impact of events adverse to the project.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Procurement Management Includes the processes to purchase or acquire products, services, or results needed from outside the project team to perform the work.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Integration Management Includes the processes and activities needed to identify, define, combine, unify, and coordinate the various processes and project management activities within the project management process groups.

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture The WBS is on the left, and each task’s start and finish date are shown on the right using a calendar timescale. Early Gantt Charts, first used in 1917, were drawn by hand. Sample Gantt Chart

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Each box is a project task from the WBS. Arrows show dependencies between tasks. The bolded tasks are on the critical path. If any tasks on the critical path take longer than planned, the whole project will slip unless something is done. Network diagrams were first used in 1958 on the Navy Polaris project, before project management software was available. Sample Network Diagram

Dr. Iyad Zoukar ©–SVU–ISE–PM–S09–PM–Lecture Why do we learn project management? It is different from system analysis It will allow you to apply all the knowledge you have learned in, such as programming, data management, and system analysis, into the practices But more – management