LECTURE 1

Understanding the Importance of Project Management

INTRODUCTION

Approximately $ 2.5 trillion (about 25% of US gross national product) are spent on projects each year in USA alone

Millions of people around the world consider project management the major task in their profession

The rapid expansion of PMP from 93,000 members in 2002 to 230,000 in 2008 and more than 600,000 currently

The purpose of the project management is obtaining better control and use of existing resource (internally)

A lot of authors and business consultants emphasize the importance of project management, such as Tom Peters Reinventing Work: the Project 50:

To win today you must master the art of the project!

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A temporary endeavor undertaken to create a unique product or service (PMI)

A complex, non routine, one-time effort limited by time, budget, resources and performance specifications designed to meet customer needs

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PROJECT DEFINITION

PERFORMANCE/TECHNOLOGY

RESOURCES

OVERVIEW OF PROJECT MANAGEMENT

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UNDERSTANDING PROJECT MANAGEMENT

Project Management definition:

A set of principals, methods, and techniques that

people use to effectively plan and control project work.

The planning, organizing, directing and controlling

company resources for a relatively established short-

term objectives to complete specific goals and

objectives

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UNDERSTANDING PROJECT MANAGEMENT

Successful project management when achieving

project objectives:

Within the allocated time period

Within the budgeted cost

At the desired performance level

With acceptance by the customer

With minimum or mutually agreed upon scope changes

Without disturbing the main work flow of company

Without changing the corporate culture

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Have a specific objective to be completed within certain specifications

Have defined start and end dates

Have funding limits (if applicable)

Consume human and nonhuman resources (i.e., money, people, equipment)

Be multifunctional (cut across several functional lines)

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PROJECT CHARACTERISTICS

Project Management

Project Planning

Definition of work requirements

Definition of quantity and quality of work

Definition of resources needed

Project monitoring

Tracking progress

Comparing actual outcome to predicted outcome

Analyzing impact

Making adjustments 8

The History of Project Management

Ancient Project Management

Military Project Management

Space Exploration

Heavy Construction

Others

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Classroom Activity 1a

In your groups please provide examples of the following:

1. Industries that use Project Management

2. Examples of specific projects in those industries.

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Understanding the Importance of Project Management

Why are project management skills important? Because these skills are key to completing projects:

On time

On budget, and

On target

This section helps you understand what project management is and how it differs from your normal day to day office duties.

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Benefits

Identification of functional responsibilities to ensure all activities are accounted for, regardless of personnel turnover

Minimizing the need for continuous reporting

Identification of time limits for scheduling

Identification of methodology for trade-off analysis

Measurement of accomplishment against plans

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Benefits (contd)

Early identification of problems so that corrective action may follow

Improved estimating capability for future planning

Knowing when objectives cannot be met or will be exceeded

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Obstacles

Project complexity

Customers special requirements and scope changes

Organizational restructuring

Project risks

Changes in technology

Forward planning and pricing

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WHY USE PROJECT MANAGEMENT ?

Classroom Activity 1b

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Why is a Project Management System Necessary?

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Project Management

ResourcesResources

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THE LEGS REPRESENT THE:

Project Manager

Line Manager(s)

Executive Management (i.e... Project Sponsor)

Maturity cannot exist without stability

Maturity in project management is like a three - legged stool

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The Three - Legged Stool

ProjectManager

LineManagement

ManagementSenior

(I.e. Sponsor)

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Effective project management

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ORGANIZATIONAL BEHAVIOR

QUANTITATIVE TOOLS & TECHNIQUES

ORGANIZATIONAL

STRUCTURE

Functional vs Project Work

Functional ProjectType of work Repeated, on-going Unique, no rehearsal. Often

involves change.

Focus Operations, accomplishing effective work.

Completing the project.

Management responsibility Managing people. Managing work.

Budgets On-going operational budgets. Project budgets to fund specific projects.

Consistency and standards Industry standards. May have few standards because work is unique.

Cross-cultural relevance Varies across cultures. More constant across cultures.

Risk On-going work is stable and less risky.

Higher risk because work is unique and unknown.

Visibility May have little visibility if standards are not met.

Obviously noted when project objectives are not met.

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Project Vs. Functional Influences

Project Influence in Decision-Making

Dual Influence

FunctionalOrganization

ProjectOrganization

Re

lati

ve

In

flu

en

ce

Functional Influence

MatrixOrganization

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In Decision-Making

DELEGATION OF AUTHORITY TO

PROJECT MANAGER

EXECUTIVE MEDDLING

LACK OF UNDERSTANDING OF HOW PROJECTMANAGEMENT SHOULD WORK

LACK OF TRAINING IN COMMUNICATIONS / INTERPERSONAL SKILLS

THE TIP-OF-THE-ICEBERG SYNDROME

MANY OF THE PROBLEMS ASSOCIATED WITH PROJECT MANAGEMENT WILLSURFACE MUCH LATER IN THE PROJECT AND RESULT IN MUCH HIGHER COSTS23

Classical Management

Planning

Organizing

Staffing

Controlling

Directing

Which of the above is Usually NOT

performed by the project manager?24

Resources

Capital

Materials

Equipment

Facilities

Personnel

Information/technology

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Top management

Government agencies Consultants

Project manager

Functional managers Client

Project team

Other organization

Subcontractors

The Role of Project Manager

As part of interface management, the project managers role also includes integration management

IntegratedProcessesIntegratedProcesses

Integration Management

Capital

Materials

Equipment

Facilities

Information

Personnel

Capital

Materials

Equipment

Facilities

Information

Personnel

ResourcesResources

InputsInputs

IntegrationManagementIntegration

Management

Products

Services

Profits

Products

Services

Profits

OutputsOutputs

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The Functional Role

The functional manager has the responsibility to define how the task will be done and where the task will be done (i.e., the technical criteria)

The functional manager has the responsibility to provide sufficient resources to accomplish the objective within the projects constraints (i.e., who will get the job done).

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Stakeholders: individuals or organizations that can be favorably or unfavorably impacted by the project

Stakeholders may be included:

Organizational stakeholders

Executive officers

Line managers

Employees

Unions

Product/market stakeholders

Customers

Suppliers

Local committees

Governments

General public

Stakeholders

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Capital market stakeholders

Shareholders

Creditors

Banks

Stakeholders

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Classroom Activity 1c

In a current project of yours, can you clearly identify internal stakeholders and outside stakeholders?

Is your relationship with each of these people or groups clear and functional?

If not, what can you do to better define these relationships?

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How important is Project Management training?

Part-time Project Management - is it good or bad?

Why are you studying it?

Classroom Activity 1d

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Todays Business Trends

Focus on:

high-quality,

speed-to-market and

superior customer satisfaction. can only be accomplished across functional lines of authority.

Traditional job of doing the same tasks every day is disappearing as routine office and factory work become automated.

Traditional career path is changing. People define their careers more by professions (Im a computer program designer) and less by the organization they work for (I work for Microsoft).

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Classroom Activity 1d

List problems you are currently having managing projects.

As we continue through the course, we will identify ways in which you can address these problems.

We will create a master list of all questions to be answered from your individual lists.

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Current & Future Trends in Project Management

Forces for Change:

Global competition, knowledge explosion, innovation, time to market, and shortened product life cycles.

Two Major Outcomes for the 21st Century:

An increase in the scope of project management and system integration.

The focus of projects has shifted from tactical to strategic.

An increasing discipline in the way projects are managed.

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Increasing Scope of Project Management and System Integration

Enterprise Project Management (EPM)

Centralized management of a portfolio of projects to ensure that the allocation of resources to projects is directed and balanced toward the strategic focus of the organization.

Project management office (PMO)

The unit responsible for continued support of standards, processes, and an information system that defines project management for the organization.

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Increasing Discipline in the Way Projects Are Managed

Training

Uniform training extending across team makeup, team culture, outside partners, and organization support allows for standardization in practices and processes related to projects.

Organization Culture

A system of shared beliefs supports organizational flexibility in meeting the challenges of managing projects in globalized competitive environments.

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Increasing Discipline in the Way Projects Are Managed

ProjectManagementDiscipline

OrganizationCulture

MulticulturalProjects

InformationTechnology

RiskManagement

Outsourcing

Training

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Unresolved Issues

How far can virtual project management evolve?

How do we manage projects under high levels of uncertainty?

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Questions?