Chapter 1 Project Management Concepts

Learning Objectives Definition of a project and its attributes Key constraints within which a project must be managed How a project is “born” Life of a project Steps involved in the PM process Implications of global project management Benefits of project management 3 2 2 2 2 2 2 2 2 2

Real World Example Vignette: Irish Agency Cancels Two SAP AG ERP Projects Oct 05: Irish Health Svc Executive halted two system rollouts Personnel Payroll project: Launched in 95; budget of $10.7m; 3 year schedule By 2005, cost up to $180m; then cancelled Financial Information Systems project Spent $36m; expected to cost a total of $203m Consulting firm in New York was the contractor hired to implement both projects Lots of wasted time, money and effort Proper project management can help prevent these failures 4 3 3 3 3 3 3 3 3 3

Real World Example Vignette: Maine’s Medical Mistake Jan 05, new Medicare claims system was introduced Designed to process $1.5b in annual claims; cost $25m Immediately had problems with rejected claims By end of March, 300,000 claims had been “suspended” By the end of summer, up to nearly 650,000 Patients being turned away; businesses suffering greatly Since implementation, system cost $30m; now claim most of bugs are fixed Problems: Vendor had no Medicaid system experience; used unproven technology; no backup; lack of testing & training Poor PM and communication: “It was clear that we were missing any sort of basic management of this project…” 5 5 5 4 5 4 4 4 4 4

Project, Defined A project is: an endeavor to accomplish a specific objective through a unique set of interrelated tasks and the effective utilization of resources. 6 7 7 5 7 5 5 5 5 5

Attributes of a Project Has a well-defined objective Composed of a series of interdependent tasks Utilizes various resources Has a specific time frame May be a unique or one-time endeavor Has a customer Involves a degree of uncertainty 7 8 8 6 8 6 6 6 6 6

Examples of Projects Planning a wedding Designing and implementing a computer system Hosting a holiday party Designing and producing a brochure Executing an environmental clean-up of a contaminated site Holding a high school reunion Performing a series of surgeries on an accident victim 8 10 10 7 10 7 7 7 7 7

Constraints Scope Cost Schedule Customer satisfaction 9 11 11 8 11 8 8

Unforeseen Circumstances Unforeseen circumstances may jeopardize achievement of the project objective. The challenge facing the project manager is to prevent, anticipate, and/or overcome such circumstances. 10 14 14 9 14 9 9 9 9 9

The Project Life Cycle Projects are “born” when a need is identified by the customer. Project life cycles vary in length, from a few weeks to several years. Not all projects formally go through all four phases of the project life cycle. 11 16 16 10 16 10 10 10 10 10

Project Life Cycle: Phase 1 The first phase involves the identification of a need, problem, or opportunity. The need and requirements are usually written by the customer into a document called a request for proposal (RFP). 12 17 17 11 17 11 11 11 11 11

Project Life Cycle: Phase 2 The second phase is the development of a proposed solution to the need or problem. This phase results in the submission of a proposal. The customer and the winning contractor negotiate and sign a contract (agreement). 13 18 18 12 18 12 12 12 12 12

Project Life Cycle: Phase 3 The third phase is performing the project. Different types of resources are utilized Results in the accomplishment of the project objective Includes: Detailed planning Implementation of the plan 14 19 19 13 19 13 13 13 13 13

Project Life Cycle: Phase 4 The final phase is terminating the project. Perform close-out activities Evaluate performance Invite customer feedback 15 20 20 14 20 14 14 14 14 14

The Project Management Process The project management process means planning the work and then working the plan. 17 21 21 15 21 15 15 15 15 15

The Project Management Process (Cont.) Clearly define the project objective. Divide and subdivide the project. Define the specific activities that need to be performed. Graphically portray the activities in a network diagram. 18 22 22 16 22 16 16 16 16 16

The Project Management Process (Cont.) Make a time estimate. Make a cost estimate. Calculate a project schedule and budget. RESULT: BASELINE PLAN 19 24 24 17 24 17 17 17 17 17

Controlling Projects Establish a baseline plan. Monitor progress. Measure actual progress and compare it to planned progress. Take corrective action if the project is behind schedule, overrunning the budget, or not meeting technical specifications. 20 25 25 18 25 18 18 18 18 18

Global Project Management Globalization adds unique challenges Cultural & language differences Economic considerations Political considerations Workforce availability Technology & Internet help globalization and provide new opportunities Cultural awareness and sensitivity are vital

Benefits of Project Management Satisfied customers Additional business Expansion of career opportunities Satisfaction of being on a winning team Improved knowledge and skills When projects are successful, everybody WINS 21 28 28 19 28 19 19 19 19 19

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