CHAPTER ONE

Modern Project
Management

McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All
rights reserved.
 What
What is
is aa Project?
Project?
• Project Defined
– A complex, non-routine, one-time effort limited by
time, budget, resources, and performance
specifications designed to meet customer needs.
– A project is a unique, temporary, planned endeavor
undertaken to create a defined deliverable to meet
the requirements of stakeholders within a limited
timescale and with limited resources (budget)

1–2
 Characteristics
Characteristics of
of aa Project
Project
• Major Characteristics of a Project
– Has an established objective.
– Has a defined life span with a beginning and an end.
– Requires across-the-organizational participation.
– Involves doing something never been done before.
– Has specific time, cost, and performance
requirements.
Nature of Projects
– Vary in size, degree of complexities, duration for
execution, level of risk and depth of IT use-age

1–3
 Project
Project Hierarchy
Hierarchy
• Projects can either be at low or high levels
• Each of these levels consists of different
hierarchies
• The different smaller projects that forms part of
a bigger project are called sub-projects
• Each of these sub-projects are expected to be
managed in a coordinated way to achieve the
overall goal of the bigger project.

1–4
 The
The Three
Three dimensional
dimensional goal
goal
Every project has a three dimensional goal in
addition to its successes or most unlikely failures.
•Delivering correct project deliverables, as agreed with
client (other stakeholders).
•Not exceeding the approved budget.
•Delivering on time, as specified in the approved schedule
Definition of successes however relate to respective
projects and its deliverables.

1–5
 Three
Three dimensional
dimensional goal
goal cont…
cont…
Every project’s three-dimensional goal can only
be achieved, when certain carefully defined
processes are in place. The Project Management
Institute prescribes 5 process groups:

•Initiation process constitute (1-2)%

1–6
 Programs
Programs versus
versus Projects
Projects
• Program Defined
– A series/group of coordinated, related, multiple
projects that continue over an extended time and are
intended to achieve a strategic goal to produce
business benefits.
– A higher-level group of projects targeted
at a common goal.
– Example:
• Project: completion of a required course
in project management.
• Program: completion of all courses required
for a business major.

1–7
 Project-,
Project-, Program-
Program- and
and Portfolio
Portfolio
management
management

• Project Management
Application of knowledge, skills, tools and techniques to
project activities, to meet project requirements.
• Program Management
Group of related projects managed in a coordinated way to
obtain business benefits and control which will otherwise
not be achieved when they are managed individually.
• Portfolio Management
Collection of projects and programs, grouped together to
facilitate effective management to meet strategic
objectives.
1–8
 What
What is
is project
project Management
Management
• Application of knowledge, skills, tools and
techniques to project activities to meet project
requirements.
• Accomplished through the application and
integration of project management processes:
Initiating
Planning
Executing
Monitoring and controlling
Closing End
1–9
 Project
Project Management
Management vs
vs other
other forms
forms of
of
Management
Management
• Project management differs from other areas of
management, i.e. Operations-, Public-, Administrative-
and Office management, but make use of principles of
general management like:

• Planning – The preliminary processes

1–10
 PM
PM vs
vs other
other forms
forms of
of management
management cont…
cont…
• Shared characteristics:
- Performed by people
- Constrained by limited resources
- Planned, executed and controlled.

Projects and operations differ primarily in that

1–11
 PM
PM vs
vs other
other forms
forms of
of management
management cont…
cont…
• Project management however is unique in that:
- It is strict with project Initiation and Closure
- It has a well defined starting and ending date
- It focuses on schedules, budget and quality of
deliverables.
- Identifies and deals with any complexity while
also providing for flexible alternatives.

1–12
 Comparison
Comparison of
of Routine
Routine Work
Work with
with Projects
Projects
Routine, Repetitive Work Projects
Taking class notes Writing a term paper
Daily entering sales receipts into Setting up a sales kiosk for a
the accounting ledger professional accounting meeting
Responding to a supply-chain Developing a supply-chain
request information system
Practicing scales on the piano Writing a new piano piece
Routine manufacture of an Apple Designing an iPod that is
iPod approximately 2 X 4 inches,
interfaces with PC, and
stores 10,000 songs
Attaching tags on a manufactured Wire-tag projects for GE and
product Wal-Mart

TABLE 1.1

1–13
Effective
Effective and
and Efficient
Efficient Project
Project Management
Management
Effective and efficient project management is
achieved under the following conditions:
-A disciplined Project team.
-A committed, exemplary Project manager.
-The use of powerful, effective tools, softwares,
etc

1–14
 Stakeholders
Stakeholders
• A stakeholder is any person or group that:
- Forms part of the project team
- Has a vested or perceived interest in the project
- May affect the project (positively or negatively)
- May be affected by the project (positively or
negatively)

1–15
Project
Project Life
Life Cycle
Cycle

FIGURE 1.1

1–16
 The
The Challenge
Challenge of
of Project
Project Management
Management
• The Project Manager
– Manages temporary, non-repetitive activities and
frequently acts independently of the formal
organization.
• Marshals resources for the project.
• Is linked directly to the customer interface.
• Provides direction, coordination, and integration
to the project team.
• Is responsible for performance and success of the
project.
– Must introduce the right people at the right time to
address the right issues and make the right decisions.

1–17
 The
The Importance
Importance of
of Project
Project Management
Management
• Factors leading to the increased use
of project management:
– Compression of the product life cycle
– Knowledge explosion
– Triple bottom line (planet, people, profit)
– Corporate downsizing
– Increased customer focus
– Small projects represent big problems

1–18
 Benefits
Benefits of
of an
an Integrative
Integrative Approach
Approach
to
to Project
Project Management
Management
• Integration (or centralization) of project
management provides senior management with:
– An overview of all project management activities
– A big picture of how organizational resources are used
– A risk assessment of their portfolio of projects
– A rough metric of the firm’s improvement in managing
projects relative to others in the industry
– Linkages of senior management with actual project
execution management

1–19
 Integrated
Integrated Project
Project Management
Management Systems
Systems
• Problems resulting from the use of piecemeal
project management systems:
– Do not tie together the overall strategies of the firm.
– Fail to prioritize selection of projects by their
importance of their contribution to the firm.
– Are not integrated throughout the project life cycle.
– Do not match project planning and controls with
organizational culture to make appropriate
adjustments in support of project endeavors.

1–20
Integrated
Integrated Management
Management of
of Projects
Projects

FIGURE 1.2

1–21
 Major
Major Functions
Functions of
of Portfolio
Portfolio Management
Management
• Oversee project selection.
• Monitor aggregate resource levels and skills.
• Encourage use of best practices.
• Balance projects in the portfolio in order to represent
a risk level appropriate to the organization.
• Improve communication among all stakeholders.
• Create a total organization perspective that goes
beyond silo thinking.
• Improve overall management of projects over time.

1–22
 The
TheTechnical
Technical
and
andSociocultural
Sociocultural
Dimensions
Dimensions
of
ofthe
theProject
Project
Management
Management
Process
Process

FIGURE 1.3

1–23
An
An Overview
Overview of
of Project
Project Management
Management 5e.
5e.

1–24
 Key
Key Terms
Terms

ISO 9000
Program
Project
Project life cycle
Project Management Professional (PMP)
Sociotechnical perspective

1–25