Ilhan Or - Bogaziçi University 1. 1 Project Management

Modern Project Management

• What is a Project– A project is a complex, nonroutine one time effort

limited by time, budget, resource and performance specifications designed to meet customer needs.

– A project is a temporary endeavor undertaken to create a unique product or service.

• Project work is not limited to private sector.– It is also a vehicle for solving social problems.

• Some Successful Projects Hidden in Headlines– $200 Million TITANIC breaks box-office record;– Mars Lunar landing produces first pictures;– Chunnel celebrates five millionth customer.

Ilhan Or - Bogaziçi University 1. 2 Project Management

Modern Project Management

• Major Characteristics of Projects– An Established Objective;

– A Defined Lifespan with a beginning and an end;

– Involvement of Several Departments & Professionals (usually);

– Doing something that has Never Been Done Before (typically) ;

– Specific Time, Cost and Performance Requirements.

Ilhan Or - Bogaziçi University 1. 3 Project Management

Modern Project ManagementComparison of Routine Work with Projects

Routine, Repetitive Work

Taking class notes

Daily entering sales receipts into the accounting ledger

Responding to a supply-chain request

Practicing scales on the piano

Routine manufacture of an Apple iPod

Attaching tags on a manufactured product

Projects

Writing a term paper

Setting up a sales kiosk for a professional accounting meeting

Developing a supply-chain information system

Writing a new piano piece

Designing an iPod that is 2 X 4 inches, interfaces with PC, and stores 10,000 songs

Wire-tag projects for GE and Wal-Mart

Ilhan Or - Bogaziçi University 1. 4 Project Management

Modern Project ManagementThe Project Life Cycle

• The starting of a point is the moment the go ahead is given.

• Project life cycle passes sequentially through 4 stages:

– Definition Stage: Specifications / Objectives / Teams / Responsibilities;

– Planning Stage: Plans / Schedules / Quality Level / Budget;

– Execution Stage: Physical & Mental Effort / Actual Product Produced / Controls / Revisions;

– Delivery Stage: Delivery to Customer / Redeployment.

Ilhan Or - Bogaziçi University 1. 5 Project Management

Modern Project ManagementThe Project Life Cycle

Project Life Cycle

Definition Planning Execution Delivery

Lev

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f E

ffor

t

Time1. Goals2. Specifications3. Tasks4. Responsibilities5. Teams

1. Schedules2. Budgets3. Resources4. Risks5. Staffing

1. Status Reports2. Control & Monitoring3. Changes4. Forecasts5. Documentation

1. Train Customer2. Transfer Documents3. Release resources4. Reassign staff5. Lessons learned

Ilhan Or - Bogaziçi University 1. 6 Project Management

Modern Project ManagementThe Project Life Cycle

Ilhan Or - Bogaziçi University 1. 7 Project Management

Modern Project Management

• Project Management– Project Management is the application of Knowledge,

Skills, Tools and Techniques to project activities in order to meet project requirements.

• The work typically involves– Competing demands for: Scope,time, cost, risk, quality;– Stakeholders with differing needs and expectations;– Identified, and often progressive, requirements.

• Major Roles on a Project– Customer / Owner / Sponsor;– Project Manager / Functional Manager;– Team Members / Stakeholders

Ilhan Or - Bogaziçi University 1. 8 Project Management

Modern Project ManagementProject Management Body of Knowledge

Generally Accepted Project Management

Knowledge and Practice

Application Area Knowledge and

Practice

General Management

Knowledge and Practice

Ilhan Or - Bogaziçi University 1. 9 Project Management

Modern Project ManagementThe Project Manager

• Project Managers perform the same functions as other managers.

– They plan, schedule, motivate and control.

• They manage temporary, nonrepetitive activities and often act independently of the formal organization.

– They are unique in that sense.

• They are expected to marshal resources to complete a project on time, on budget and within specifications.

• They are the direct link to customer • They manage the interface between customer expectations and what

is feasible and reasonable.

• They must identify and learn from similarities between projects.

Ilhan Or - Bogaziçi University 1. 10 Project Management

• Project Management Process has 2 dimensions.– The Technical Side

Formal, Disciplined, Pure Logic parts of the process; Relies on the Formal Information System available.

* Scope, WBS, Schedules, Resource allocation; Budget, Reports

– The Socio-Cultural SideProject Managers have to,

* Incite teamwork, motivation & capacity to identify/resolve problems; * Sustain political support of top management; * Assuage and shape expectations of customers; * Negotiate with their counterparts; * Monitor subcontractors.

Modern Project ManagementThe Project Manager

Ilhan Or - Bogaziçi University 1. 11 Project Management

Modern Project Management

• Why do Organizations Use Project Management– Improved Communication among Project Participants;– Increased Understanding of the Project and its Purpose;– Ability to Define and Control Project Scope;– Ability to Identify, Monitor and Track Milestones;– Improved Project Risk Management;– Accurate Projection of Resource Requirements;– Capability and Mechanisms to Measure Performance;– Identification & Communication of Problem Areas;– Clarification - Alignment with Organizational Goals;– Prioritization of Functional and Project Activities.

Ilhan Or - Bogaziçi University 1. 12 Project Management

Modern Project Management

• The Importance of Project Management– Compression of the Product Life Cycle: Ease in

imitation, rapid advances in technology, are reducing the life cycles of most products. Speed in reaching the market is becoming a competitive advantage.

– Global Competition: Tremendous pressures on quality improvement and cost containment. PM, with its triple focus on time, cost and performance, is proving to be an efficient, flexible way to get things done.

– Knowledge Explosion: Project complexity has increased the need to integrate divergent technologies.

Ilhan Or - Bogaziçi University 1. 13 Project Management

Modern Project Management

• The Importance of Project Management– Corporate Downsizing: In today’s flatter and leaner

organizations, PM is replacing middle management as a way of ensuring that things get done.

– Increased Customer Focus: Customers want customized products and services that cater to their specific needs.

– Rapid Development of Third World Economies: Establishment of distribution channels & operation bases are best accomplished through PM techniques.

• There is also a big market for core project work (construction, transportation, health, telecommunications).

Ilhan Or - Bogaziçi University 1. 14 Project Management

Modern Project Management

• The Evolution of Project Management Systems– Phase 1 - Ad Hoc Use: An individual department

initiating the use of one or more of the basic PM tools;

– Phase 2 - Formal Application: Various inadequacies & needs are recognized as barriers to project success.

– Phase 3 - Project Driven Organizations: With a long run outlook, the top management playing a significant role in setting strategy, in developing a balanced portfolio of project, and in setting project priorities.

• It is usually not practical to leapfrog to the last phase. Movement through these phases can be incremental

Ilhan Or - Bogaziçi University 1. 15 Project Management

Modern Project Management

• Small Projects Represent Big Problems– In many organizations hundreds of projects are being

implemented concurrently.

– But since small projects are perceived as having little impact on the bottom line, measuring their inefficiency is usually nonexistent.

– Unfortunately, many small projects soon add up to large amounts of tied up resources.

– So, a process to screen, evaluate and prioritize small projects becomes very much necessary.

Ilhan Or - Bogaziçi University 1. 16 Project Management

Modern Project Management

• An Integrative ApproachThere is a need for an integrated PM process that focuses all project effort toward the strategic plan and facilitates the mastery of both PM tools/techniques and the interpersonal skills needed to orchestrate successful project completion.

– Piecemeal priority systems fail to prioritize project selection to resources and to projects that contribute most to the strategic plan;

– Piecemeal tools and techniques fail to be integrated throughout the project life cycle;

– Piecemeal approaches fail to balance the application of project planning/control tools & methods with appropriate adjustments in the organization’s culture;

Ilhan Or - Bogaziçi University 1. 17 Project Management

• In a well managed organization, development of a mission, objectives and strategies, depending on external & internal environmental factors, are key management concerns.

– External environmental factors can be classified as political, social, economic, and technological;

– Internal environmental factors are strengths & weaknesses such as management, facilities, core competencies, and financial condition.

– These factors signal opportunities or threats in setting the direction for the organization. The outcome of their analysis is a set of strategies designed to best meet the needs of the customers.

• Strategies are implemented through projects. The key is selecting those projects that make largest & most balanced contribution to objectives and strategies of the organization.

Modern Project ManagementIntegration of Projects with the Strategic Plan

Ilhan Or - Bogaziçi University 1. 18 Project Management

Modern Project ManagementOverview