Copyright Kathy Schwalbe/ Course Technology Chapter 1: Introduction to Project Management

Copyright Kathy Schwalbe/ Course Technology Recent Facts About Project Management* The Project Management Institute (PMI) estimates that 4.5 million people in the U.S. (3.3% of the workforce) and over 12 million people in the rest of the world regard project management as their profession of choice The U.S. spends over $2.3 trillion on projects every year, or one quarter of the nation’s gross domestic product *The PMI Project Management Fact Book, Second Edition, PMI, 2001

Copyright Kathy Schwalbe/ Course Technology Certification Updates The number of PMPs continues to grow, and PMI is creating new certifications CompTIA purchased the Gartner Institute IT PM exams and launched the IT Project+ exam in April 2001 See Appendix B for details Number of PMPs

Copyright Kathy Schwalbe/ Course Technology Caveat The text for this class emphasizes using project management (PM) on information technology (IT) projects The general concepts of PM are the same in all application areas We’ll also use non-IT examples to illustrate how PM works in different contexts

Copyright Kathy Schwalbe/ Course Technology A 1995 Standish Group study (CHAOS) found that only 16.2% of IT projects were “successful” and over 31% were canceled before completion, costing over $81 B in the U.S. alone. Time overruns were 222%, cost overruns were 189%, and only 61% of features were provided The latest CHAOS Study (2001 data) showed improvements in all areas but still… Only 28% of IT projects succeeded Motivation for Studying Information Technology (IT) Project Management

Copyright Kathy Schwalbe/ Course Technology The Need for IT Projects Keeps Increasing In 1998, corporate America issued 200,000 new-start application development projects In 2000, there were 300,000 In 2001, the estimate is over 500,000 *The Standish Group, "CHAOS 2001: A Recipe for Success," 2001

Copyright Kathy Schwalbe/ Course Technology What Is a Project? A project is a temporary endeavor undertaken to accomplish a unique purpose Attributes of projects –unique purpose –temporary –require resources, often from various areas –should have a primary sponsor and/or customer –involve uncertainty

Copyright Kathy Schwalbe/ Course Technology Samples of IT Projects Northwest Airlines developed a new reservation system called ResNet (see chapters 11-16) Many organizations upgrade hardware, software, and networks via projects (see chapter 5 opening and closing case) Organizations develop new software or enhance existing systems to perform many business functions (see examples throughout the text) Note: “IT projects” refers to projects involving hardware, software, and networks

Copyright Kathy Schwalbe/ Course Technology Samples of Non-IT Projects Constructing a new building Developing a new product Performing a major research study Planning/holding a major event like a wedding, family reunion, etc. Your examples? Note: Try to think of projects that involve several people with different backgrounds

Copyright Kathy Schwalbe/ Course Technology Projects I’ve Worked On Writing this book and other books! Writing web-based courses Starting a new academic program Purchasing a risk management system for an oil company Starting a new internal consulting group Managing a beta test for new software The National Aerospace Plane Project The High Reliability Fighter Project The Local Online Network System Project etc., etc., etc.

Copyright Kathy Schwalbe/ Course Technology The Triple Constraint Every project is constrained in different ways by its –Scope goals: What is the project trying to accomplish? –Time goals: How long should it take to complete? –Cost goals: What should it cost? It is the project manager’s duty to balance these three often competing goals while also pleasing project stakeholders, especially the sponsor/customer

Copyright Kathy Schwalbe/ Course Technology Figure 1-1. The Triple Constraint of Project Management

Copyright Kathy Schwalbe/ Course Technology Exercise on the Triple Constraint Pair up and instructor assign roles “Player” describe in your own words what the triple constraint really means, then give an example of it on a real project you’re familiar with “Coach” listen and ask questions, then be ready to share what your partner said Was the project “successful?” Why or why not? How did you define success?

Copyright Kathy Schwalbe/ Course Technology The 2001 Standish Group Report Showed Decided Improvement in IT Project Success Rates From the 1995 Study Time overruns significantly decreased to 63% compared to 222% Cost overruns were down to 45% 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%

Copyright Kathy Schwalbe/ Course Technology 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)

Copyright Kathy Schwalbe/ Course Technology “What the Winners Do” Recent research findings show that companies that excel in project delivery capability: –Build an integrated project management toolbox (use standard/advanced PM tools, lots of templates) –Grow competent project leaders, emphasizing business and soft skills –Develop streamlined, consistent project delivery processes –Install a sound but comprehensive set of project performance metrics Dragan Milosevic, Portland State University, “Delivering Projects: What the Winners Do,” PMI Conference Proceedings, November 2001

Copyright Kathy Schwalbe/ Course Technology Advantages of Using Formal Project Management Better control of financial, physical, and human resources Improved customer relations Shorter development times Lower costs Higher quality and increased reliability Higher profit margins Improved productivity Better internal coordination Higher worker morale

Copyright Kathy Schwalbe/ Course Technology What is Project Management? Project management is “the application of knowledge, skills, tools, and techniques to project activities in order to meet project requirements” (PMI*, Project Management Body of Knowledge (PMBOK Guide), 2000, p. 6) *The Project Management Institute (PMI) is an international professional society. Their web site is

Copyright Kathy Schwalbe/ Course Technology Figure 1-2. Project Management Framework

Copyright Kathy Schwalbe/ Course Technology Project Stakeholders Stakeholders are the people involved in or affected by project activities Stakeholders include –the project sponsor and project team –support staff –customers –users –suppliers –opponents to the project

Copyright Kathy Schwalbe/ Course Technology Project Management Knowledge Areas Knowledge areas describe the key competencies that project managers must develop –4 core knowledge areas lead to specific project objectives (scope, time, cost, and quality) –4 facilitating knowledge areas are the means through which the project objectives are achieved (human resources, communication, risk, and procurement management –1 knowledge area (project integration management) affects and is affected by all of the other knowledge areas

Copyright Kathy Schwalbe/ Course Technology Project Management Tools and Techniques Project management tools and techniques assist project managers and their teams in various aspects of project management Some specific ones include –Project Charter and WBS (scope) –Gantt charts, network diagrams, critical path analysis, critical chain scheduling (time) –Cost estimates and earned value management (cost)

Copyright Kathy Schwalbe/ Course Technology Sample WBS for Intranet Project in Chart Form

Copyright Kathy Schwalbe/ Course Technology Figure 1-4. Sample Gantt Chart The WBS is on the left, and each task’s start and finish date are shown on the right using a calendar timescale.

Copyright Kathy Schwalbe/ Course Technology Figure 1-5. Sample Network Diagram 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.

Copyright Kathy Schwalbe/ Course Technology Sample Earned Value Chart

Copyright Kathy Schwalbe/ Course Technology BUT… PMs Can’t Neglect Business and Leadership Skills In addition to using appropriate PM tools and techniques, PMs must use –Business skills: financial analysis, problem- solving, decision-making –Leadership skills: negotiation, team-building –Communication skills: listening, speaking, writing, presenting

Copyright Kathy Schwalbe/ Course Technology How Project Management (PM) Relates to Other Disciplines Much of the knowledge needed to manage projects is unique to PM However, project managers must also have knowledge and experience in –general management –the application area of the project Project managers must focus on meeting specific project objectives

Copyright Kathy Schwalbe/ Course Technology Figure 1-3. Project Management and Other Disciplines

Copyright Kathy Schwalbe/ Course Technology 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

Copyright Kathy Schwalbe/ Course Technology The Project Management Profession A 1996 Fortune article called project management the “number one career choice” Professional societies like the Project Management Institute (PMI) have grown tremendously Average salaries for project managers are over $81,000 A recent monster.com search for “project manager” (Dec. 2001) listed over 116 jobs for PMs in Minneapolis alone

Copyright Kathy Schwalbe/ Course Technology Project Management Knowledge Continues to Grow and Mature PMI launched their Center for PM Knowledge and Wisdom in December 2001 PMI hosted their first research conference in June 2000 in Paris, France, second one in July 2002 The PMBOK Guide – 2000 Edition is an ANSI standard, and PMI’s certification department earned ISO 9000 certification Hundreds of new books, articles, and presentations related to project management have been written in recent years

Copyright Kathy Schwalbe/ Course Technology Project Management Certification PMI provides certification as a Project Management Professional (PMP). As a student, you can join PMI at a greatly reduced rate A PMP has documented sufficient project experience, agreed to follow a code of ethics, and passed the PMP exam PMI and other organizations are offering new certification programs (see Appendix B) If you’re interested in getting PMP certification, sign up for it now and pay attention in this class!

Copyright Kathy Schwalbe/ Course Technology Project Management Software By 2001, there were hundreds of different products to assist in performing project management Three main categories of tools: –Low-end tools: Handle single or smaller projects well, cost under $200 per user –Midrange tools: Handle multiple projects and users, cost $ per user, Project 2000 most popular –High-end tools: Also called enterprise project management software, often licensed on a per-user basis

Copyright Kathy Schwalbe/ Course Technology Don’t Overemphasize Using PM Software You can’t use PM software well if you don’t understand fundamental PM concepts “A fool with a tool is still just a fool.”

Copyright Kathy Schwalbe/ Course Technology You Can Apply Project Management to Many Areas Project management applies to work as well as personal projects Project management applies to many different disciplines (IT, engineering, construction, finance, sports, event planning, etc.) Project management skills can help in everyday life, especially in properly scoping projects and dealing with different stakeholders