chapter 01 - why project management
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project managemenyTRANSCRIPT
Why Project Management?
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Copyright © 2013 Pearson Education
Chapter 1 Learning Objectives After completing this chapter, students will be able to:
Understand why project management is becoming such a powerful and popular practice in business.
Recognize the basic properties of projects, including their definition.
Understand why effective project management is such a challenge.
Differentiate between project management practices and more traditional, process-oriented business functions.
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Chapter 1 Learning Objectives
After completing this chapter, students will be able to:
Understand and explain the project life cycle, its stages, and the activities that typically occur at each stage in the project.
Understand the concept of project “success,” including various definitions of success, as well as the alternative models of success.
Identify the Knowledge areas
Get exposed to PMI, PMI membership, and PMP certification
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Many organizations today have a new or renewed interest in project management (PM) ◦ In 2011, the average annual salary for someone in the PM
profession was $160,409 in Switzerland (the highest-paid country), $139,497 in Australia, $105,000 in the United States, and $23,207 in China (the lowest-paid country), $81,600 in Lebanon (As per many Senior PMs).
◦ CareerBuilder.com found that 44% of U.S. employers listed PM as a skill they looked for in new college graduates, behind only communication and technical skills
◦ The world as a whole spends about one-quarter of its gross domestic product on projects of all kinds
◦ Project management is also a vital skill for personal success
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A project is “a temporary endeavor undertaken
to create a unique product, service, or result”*
Operations is work done to sustain the business
Projects end when their objectives have been
reached, or the project has been terminated
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*Project Management Institute, Inc., A Guide to the Project Management Body of Knowledge (PMBOK® Guide, Fifth Edition) (2012).
Copyright © 2013 Pearson Education
Project Definitions Summarized
A project can be considered any series of activities and tasks that have:
Specific objectives to be completed within certain specifications,
Defined start and end dates,
Funding limits,
Human and nonhuman resources, and
Multifunctional focus.
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A young couple hires a firm to design and build them a new house.
A retail store manager works with employees to display a new clothing line.
A college campus upgrades its technology infrastructure to provide wireless Internet access.
A construction company designs and constructs a new office building for a client.
A school implements new government standards for tracking student achievement.
Split the atom Tunnel under the English Channel Introduce Windows 7 Plan next Olympic games in London
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Examples of Projects
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These historical projects have a story to tell: Project Management did not just appear in the 20th century, it has always been there since the beginning of the civilization thousand of years ago:
History of project management
You can also learn about the history of project management (music only video)
Or hear the author’s perspective by Mark Kozak-Holland
See www.intropm.com for links to all video highlights
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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
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Process vs. Project Work Project
Take place outside the normal, process-oriented world
Unique and separate from routine, process-driven work
Continually evolving
Process
• Ongoing, day-to-day activities to produce goods and services
• Use existing systems, properties, and capabilities
• Typically repetitive
A project is a temporary endeavor undertaken to create a unique product or service.
PMBoK 2008
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Elements of Projects
Complex, one-time processes
Limited by budget, schedule, and resources
Developed to resolve a clear goal or set of goals
Customer-focused
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A project: ◦ Has a unique purpose
◦ Is temporary
◦ Is developed using progressive elaboration or in an
iterative fashion
◦ Requires resources, often from various areas
◦ Should have a primary customer or sponsor
The project sponsor usually provides the direction and
funding for the project
◦ Involves uncertainty
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General Project Characteristics Ad-hoc endeavors with a clear life cycle
Building blocks in the design and execution of organizational strategies
Responsible for the newest and most improved products, services, and organizational processes
Provide a philosophy and strategy for the management of change
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General Project Characteristics Entail crossing functional and organization boundaries
Traditional management functions of planning, organizing, motivating, directing, and controlling apply
Principal outcomes are the satisfaction of customer requirements within technical, cost, and schedule objectives
Terminated upon successful completion of performance objectives
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Process & Project Management (Table 1.1)
Process
1. Repeat process or product
2. Several objectives
3. Ongoing
4. People are homogeneous
5. Systems in place to integrate
efforts
6. Performance, 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 to
integrate efforts
6. Performance, cost & time less
certain
7. Outside of line organization
8. Violates established practice
9. Upsets status quo
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Project Success Rates Software & hardware projects fail at a 65% rate,
Over half of all IT projects become runaways,
Only 30% of technology-based projects and programs are a success.
Only 2.5% of global businesses achieve 100% project success and over 50% of global business projects fail,
Average success of business-critical application development projects is 32%, and
Approximately 42% of the 1,200 Iraq reconstruction projects were eventually terminated due to mismanagement or shoddy construction
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Project Life Cycles Man Hours
Conceptualization Planning Execution Termination
Fig 1.3 Project Life Cycle Stages
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Project Life Cycles
Conceptualization - the development of the initial goal and technical specifications.
Planning – all detailed specifications, schedules, schematics, and plans are developed
Execution – the actual “work” of the project is performed
Termination – project is transferred to the customer, resources reassigned, project is closed out.
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Every project is constrained in different ways. Some
project managers focus on the triple constraint (meeting
scope, time, and cost goals) ◦ Scope: What work will be done as part of the project? What unique
product, service, or result does the customer or sponsor expect
from the project?
◦ Time: How long should it take to complete the project? What is the
project’s schedule?
◦ Cost: What should it cost to complete the project? What is the
project’s budget? What resources are needed?
Other constraints include quality, risk, and resources
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Quadruple Constraint of Project Success
Figure 1-6 01-20
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What is a Project?
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Project management is “the application of
knowledge, skills, tools and techniques to project
activities to meet project requirements.”*
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*Project Management Institute, Inc., A Guide to the Project Management Body of Knowledge (PMBOK® Guide, Fifth Edition) (2012).
Copyright © 2013 Pearson Education
Project Management Maturity Generic Model
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Project Manager Responsibilities
1. Selecting a team
2. Developing project objectives and a plan for
execution
3. Performing risk management activities
4. Cost estimating and budgeting
5. Scheduling
6. Managing resources
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Copyright © 2013 Pearson Education FIGURE 1.12
Overview of the Project Management Institute’s PMBoK Knowledge Areas
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Knowledge area Project management process groups (PMBOK® Guide, Fifth Edition, 2012)
Initiating Planning Executing Monitoring and
Controlling
Closing
Project integration
management
Develop project
charter
Develop project
management plan
Direct and manage project
work
Monitor and control project work; Perform
integrated change control
Close project or phase
Project scope
management Plan scope
management; Collect requirements; Define
scope; Create WBS
Validate scope; Control
scope
Project time
management Plan schedule
management; Define activities; Sequence activities; Estimate activity resources; Estimate activity durations; Develop
schedule
Control schedule
Project cost
management Plan cost management;
Estimate costs;
Determine budget
Control costs
Project quality
management Plan quality
management
Perform quality
assurance
Control quality
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Knowledge area Project management process groups (PMBOK® Guide, Fifth Edition, 2012)
Initiating Planning Executing Monitoring and Controlling
Closing
Project human resource
management
Plan human resource
management
Acquire project team; Develop project team;
Manage project team
Project com-munications
management
Plan communications
management
Manage
communications
Control
communications
Project risk
management Plan risk management; Identify
risks; Perform qualitative risk analysis; Perform quantitative risk analysis; Plan risk
responses
Control risks
Project procurement
management Plan procurement
management Conduct procurements Control procurements Close
procure-
ments
Project stakeholder
management
Identify stake-
holders
Plan stakeholder management Manage stakeholder
engagement
Control stakeholder
engagement
Copyright 2012 Kathy Schwalbe LLC
Project integration management is an overarching function that coordinates the work of all other knowledge areas. It affects and is affected by all of the other knowledge areas.
Project scope management involves working with all appropriate stakeholders to define, gain written agreement for, and manage all the work required to complete the project successfully.
Project time management includes estimating how long it will take to complete the work, developing an acceptable project schedule given cost-effective use of available resources, and ensuring timely completion of the project.
Project cost management consists of preparing and managing the budget for the project.
Project quality management ensures that the project will satisfy the stated or implied needs for which it was undertaken.
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Project human resource management is concerned with making effective use of the people involved with the project.
Project communications management involves generating, collecting, disseminating, and storing project information.
Project risk management includes identifying, analyzing, and responding to risks related to the project.
Project procurement management involves acquiring or procuring goods and services for a project from outside the performing organization.
Project stakeholder management focuses on identifying project stakeholders, understanding their needs and expectations, and engaging them appropriately throughout the project. Note that PMI added stakeholder management as a tenth knowledge area to the PMBOK® Guide, Fifth Edition in 2012.
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What Went Right? Improved Project Performance
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Follow-up studies by the Standish Group showed some improvement in the statistics for IT projects: ◦ The number of successful projects has doubled, from 16
percent in 1994 to 37 percent in 2010
◦ The number of failed projects decreased from 31 percent in 1994 to 21 percent in 2010
“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.”
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There are different ways to define project
success: ◦ The project met scope, time, and cost goals.
◦ The project satisfied the customer/sponsor.
◦ The project produced the desired results.
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Six Success Criteria (for IT Projects)
System quality
Information quality
Use
User satisfaction
Individual impact
Organizational impact
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Understanding Success Criteria
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Table 1.2
Iron Triangle Information System Benefits (Organization) Benefits (Stakeholders)
Cost Maintainability Improved efficiency Satisfied users
Quality Reliability Improved effectiveness Social and environmental
impact Time Validity Increased profits
Information quality Strategic goals Personal development
Use Organization learning Professional learning,
contractors’ profits Reduced waste
Capital suppliers, content
Project team, economic
impact to surrounding
community
What is a Program?
• A program is:
– “a group of related projects managed in a
coordinated way to obtain benefits and control not
available from managing them individually”*
– A program manager provides leadership and
direction for the project managers heading the
projects within the program
*Project Management Institute, Inc., A Guide to the Project Management Body of Knowledge (PMBOK® Guide, Fifth Edition) (2012)
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Project portfolio management is an emerging
business strategy in which organizations group and
manage projects and programs as a portfolio of
investments that contribute to the entire enterprise’s
success.
Pacific Edge Software’s product manager, Eric
Burke, defines project portfolio management as “the
continuous process of selecting and managing the
optimum set of project initiatives that deliver
maximum business value.”
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Project and program management address
questions like: ◦ Are we carrying out projects well?
◦ Are projects on time and budget?
◦ Do project stakeholders know what they should be
doing?
Portfolio management addresses questions like: ◦ Are we working on the right projects?
◦ Are we investing in the right areas?
◦ Do we have the right resources to be competitive?
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Project, program, and portfolio managers need
to develop specific skills
Certification is available for project managers
There are many software tools to assist in
project, program, and portfolio management
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A best practice is “an optimal way recognized by industry to
achieve a stated goal or objective.”* Robert Butrick
suggests that organizations need to follow basic principles
of project management, including these two mentioned
earlier in this chapter: ● Make sure your projects are driven by your strategy. Be able to
demonstrate how each project you undertake fits your business
strategy, and screen out unwanted projects as soon as possible.
● Engage your stakeholders. Ignoring stakeholders often leads to
project failure. Be sure to engage stakeholders at all stages of a
project, and encourage teamwork and commitment at all times. Use
leadership and open communications to make things happen.**
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*Project Management Institute, Inc., Organizational Project Management Maturity Model (OPM3) Knowledge Foundation (2003), p. 13.
**Ultimate Business Library, Best Practice: Ideas and Insights from the World’s Foremost Business Thinkers, Perseus Publishing (2003).
Copyright 2012 Kathy Schwalbe LLC
PMI provides certification as a Project
Management Professional (PMP)
A PMP has documented sufficient project
experience, agreed to follow a code of ethics, and
passed the PMP exam
The number of people earning PMP certification is
increasing quickly
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1,000 1,900 2,800 4,400 6,415 10,086 18,184
27,052 40,343
52,443
76,550
102,047
175,194
221,144
267,367
318,289
361,238
412,503
467,390
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
# P
MPs
Year
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As a student, you can join PMI for a reduced fee
($40 vs. $129 in 2012)
Also consider earning the Certified Associate in
Project Management (CAPM) credential from PMI
or the Project+ certification from CompTIA
See the last section of Appendix C for more
details. If you complete a bachelor’s degree, you
do not need any work experience to earn these
two certifications.
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Ethics — a set of principles that guide our decision
making based on personal values of what is “right”
and “wrong” — is an important part of all
professions
Project managers often face ethical dilemmas.
In order to earn PMP certification, applicants must
agree to the PMP code of ethics and professional
conduct
Several questions on the PMP exam are related to
professional responsibility, including ethics
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There are hundreds of different products available today.
Three main categories of tools are the following: ◦ Low-end tools: Handle single or smaller projects well; cost
under $200 per user. Smart phone apps and/or integration with them also available
◦ Midrange tools: Handle multiple projects and users; cost $200-600 per user; Microsoft Project is the most popular
◦ High-end tools: Also called enterprise project management software; often licensed on a per-user basis
Project 2010 includes a standard and an enterprise version. See Appendix A and B for details on using Project 2010 and AtTask
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A 60-day evaluation copy of Microsoft Project is
available from Microsoft’s Web site at
www.microsoft.com/project, and users of this book can
access a special 60-day trial of MindView Business
software at www.matchware.com/intropm. Note that
both of these tools require downloads and Windows
software.
You can use the link in Appendix B for direct access to
AtTask , a totally web-based tool (no download
required, just a web browser and Internet access).
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Copyright © 2013 Pearson Education
Summary
Understand why project management is becoming such a powerful and popular practice in business today.
Recognize the basic properties of projects, including their definition.
Understand why effective project management is such a challenge.
Differentiate between project management practices and more traditional, process-oriented business functions.
01-54
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Summary
Understand and explain the project life cycles, its stages, and the activities that typically occur at each stage in the project.
Understand the concept of project “success,” including various definitions of success, such as the “triple constraint,” as well as alternative models of success.
Identify the Knowledge areas
Get exposed to PMI, PMI membership, and PMP certification
01-55
Copyright © 2013 Pearson Education 01-56