Project Management Project Management Adrienne Watt BCCAMPUS VICTORIA, B.C. Project Management by Adrienne Watt is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted. © 2014 Adrienne Watt The CC licence permits you to retain, reuse, copy, redistribute, and revise this book—in whole or in part—for free providing the author is attributed as follows: Project Management by Adrienne Watt is used under a Creative Commons Attribution 4.0 International Licence. If you redistribute all or part of this book, it is recommended the following statement be added to the copyright page so readers can access the original book at no cost: Download for free from the B.C. Open Textbook Collection. Sample APA-style citation: This textbook can be referenced. In APA citation style, it would appear as follows: Watts, A. (2014). Project Management. Victoria, B.C.: BCcampus. Retrieved from https://opentextbc.ca/projectmanagement/. Cover image attribution: Colors and lines… by Shashank Gupta is used under a Creative Commons Attribution 4.0 International Licence. Ebook ISBN: 978-1-77420-013-1 Print ISBN: 978-1-77420-012-4 Visit BCcampus Open Education to learn about open education in British Columbia. This book was produced using Pressbooks.com, and PDF rendering was done by PrinceXML. Contents Accessibility Statement About the Book vi viii Introduction x Preface xi 1. Project Management: Past and Present 2. Project Management Overview 3. The Project Life Cycle (Phases) 1 11 24 4. Framework for Project Management 5. Stakeholder Management 6. Culture and Project Management 7. Project Initiation 8. Overview of Project Planning 9. Scope Planning 10. Project Schedule Planning 11. Resource Planning 12. Budget Planning 13. Procurement Management 14. Quality Planning 15. Communication Planning 16. Risk Management Planning 17. Project Implementation Overview 18. Project Completion 19. Celebrate! 27 42 54 57 73 76 91 105 132 147 158 170 176 187 189 194 Appendix 1: Project Management PowerPoints 195 Appendix 2: Chapter Questions 196 Appendix 3: Chapter Audio Files 204 About the Author 205 Versioning History 206 List of Links by Chapter for Print 208 Accessibility Statement BCcampus Open Education believes that education must be available to everyone; this means supporting the creation of free, open, and accessible educational resources. We are actively committed to increasing the accessibility and usability of the textbooks we produce. Accessibility features of the web version of this resource The web version of Project Management includes the following features: • It as been optimized for people who use screen-reader technology: ◦ all content can be navigated using a keyboard ◦ links, headings, tables use proper markup ◦ all images have text descriptions • It includes an option to increase font size (see tab on top right of screen titled, “Increase Font Size.”) • Audio files are available for each chapter (see Appendix 3: Chapter Audio Files). Other file formats available In addition to the web version, this book is available in a number of file formats including PDF, EPUB (for eReaders), MOBI (for Kindles), and various editable files. Here is a link to where you can download this book in another file format. Look for the Download this book drop-down menu to select the file type you want. This book links to a few external websites. For those using a print copy of this resource, the link text is underlined, and you can find the web addresses for all links in the back matter of the book. Known accessibility issues and areas for improvement The PowerPoint slides available for download from Appendix 1: Project Management PowerPoints have not been checked for accessibility. In addition, external websites linked to from this text may not meet accessibility guidelines. Let us know if you are having problems accessing this book If any of the above accessibility issues are stopping you from accessing the information in this textvi 2nd Edition vii book, please contact us to let us know and we will get it fixed. If you discover any other issues, please let us know of those as well. 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About the Book About the Book Project Management by Adrienne Watt and published by BCcampus Open Education is a remix and adaptation of the following works: • 100 Percent Rule by Pabipedia licensed under © CC BY-SA (Attribution-ShareAlike). • Communication Plans by Inte6160 Wiki licensed under Creative Commons Attribution 3.0 Licence. • Decision Matrix Method and Project Charter by Wikipedia the Free Encyclopedia licensed under CC BY-SA (Attribution-ShareAlike). • Gantt Chart by Wikipedia licensed under CC BY-SA (Attribution-ShareAlike). • How to Build Relationships with Stakeholders by Erin Palmer licensed under CC BY (Attribution). • Planning a Project by OpenLearn Labspace licensed under Creative Commons Attribution 3.0 Licence. • Project Decelerators – Lack of Stakeholder Support by Jose Solera licensed under CC BY (Attribution). • Project Management by Merrie Barron and Andrew Barron licensed under CC BY (Attribution). • Project Management for Instructional Designers by Amado, M., Ashton, K., Ashton, S., Bostwick, J., Clements, G., Drysdale, J., Francis, J., Harrison, B., Nan, V., Nisse, A., Randall, D., Rino, J., Robinson, J., Snyder, A., Wiley, D., & Anonymous licensed under Creative Commons Attribution 3.0 Licence. • Project Management for Skills for All Careers by Project Management Open Resources and TAP-a-PM licensed under Creative Commons Attribution 3.0 Licence. • Project Management from Simple to Complex by Russel Darnall, John Preston, Eastern Michigan University licensed under Creative Commons Attribution 3.0 Licence. • Project Management/PMBOK/Human Resources Management and Development Cooperation Handbook/How do we manage the human resources of programmes and projects?/Manage the Project Team by Wikibooks licensed under CC BY-SA (Attribution-ShareAlike). • Project Management/PMBOK/Scope Management and Development Cooperation Handbook/ Designing and Executing Projects/Detailed Planning or design stage by Wikibooks licensed under © CC BY (Attribution). • Resource Management and Resource Leveling by Wikipedia licensed under CC BY-SA (Attribution-ShareAlike). viii 2nd Edition ix • Work Breakdown Structure by Wikipedia licensed under CC BY-SA (Attribution-ShareAlike). About BCcampus Open Education BCcampus Open Education began in 2012 as the B.C. Open Textbook Project with the goal of making post-secondary education in British Columbia more accessible by reducing student costs through the use of openly licensed textbooks and other OER. BCcampus supports -secondary institutions of British Columbia as they adapt and evolve their teaching and learning practices to enable powerful learning opportunities for the students of B.C. BCcampus Open Education is funded by the British Columbia Ministry of Advanced Education, Skills & Training, and the Hewlett Foundation. Open textbooks are open educational resources (OER) created and shared in ways so that more people have access to them. This is a different model than traditionally copyrighted materials. OER are defined as teaching, learning, and research resources that reside in the public domain or have been released 1 under an intellectual property license that permits their free use and re-purposing by others. Our open textbooks are openly licensed using a © Creative Commons licence, and are offered in various e-book formats free of charge, or as printed books that are available at cost. For more information about open education in British Columbia, please visit the BCcampus Open Education website. If you are an instructor who is using this book for a course, please fill out our Adoption of an Open Textbook form. 1. “Open Educational Resources,” Hewlett Foundation, https://hewlett.org/strategy/open-educational-resources/ (accessed September 27, 2018). Introduction People have been undertaking projects since the earliest days of organized human activity. The hunting parties of our prehistoric ancestors were projects. Large complex projects such as the pyramids and the Great Wall of China were also projects. Even something as simple as creating a dinner is considered a project. We use the term “project” frequently in our daily conversations. This book covers the basics of project management. This includes the process of initiation, planning, execution, control, and closeout that all projects share. x Preface The primary purpose of this text is to provide an open source textbook that covers most project management courses. The material in the textbook was obtained from a variety of sources. All the sources are found in the reference section at the end of each chapter. I expect, with time, the book will grow with more information and more examples. I welcome any feedback that would improve the book. If you would like to add a section to the book, please let me know. xi 1. Project Management: Past and Present Careers Using Project Management Skills Skills learned by your exposure to studying project management can be used in most careers as well as in your daily life. Strong planning skills, good communication, ability to implement a project to deliver the product or service while also monitoring for risks and managing the resources will provide an edge toward your success. Project managers can be seen in many industry sectors including agriculture and natural resources; arts, media, and entertainment; building trades and construction; energy and utilities; engineering and design; fashion and interiors; finance and business; health and human services; hospitality, tourism, and recreation; manufacturing and product development; public and private education services; public services; retail and wholesale trade; transportation; and information technology. Below we explore various careers and some of the ways in which project management knowledge can be leveraged. Business Owners Business owners definitely need to have some project management skills. With all successful businesses, the product or service being delivered to the customer meets their needs in many ways. The product or service is of the quality desired, the costs are aligned with what the consumer expected, and the timeliness of the product or service meets the deadline for the buyer of that item. The pillars of project management are delivering a product/service within schedule, cost, scope, and quality requirements. Business owners need planning, organizing, and scoping skills and the ability to analyze, communicate, budget, staff, equip, implement, and deliver. Understanding the finances, operations, and expenses of the business are among the skills that project managers learn and practice. Some businesses may focus more on accounting, providing financial advice, sales, training, public relations, and actuary or logistician roles. Business owners may own a travel agency or provide hospitality. Business owners could be managing a storefront or a location in their town’s marketplace. Example: Restaurant Owner/Manager Restaurant managers are responsible for the daily operations of a restaurant that prepares and serves meals and beverages to customers. Strong planning skills, especially coordinating with the various departments (kitchen, dining room, banquet operations, food service managers, vendors providing the supplies) ensure that customers are satisfied with their dining experience. Managers’ abilities to recruit and retain employees, and monitor employee performance and training ensure quality with cost containment. Scheduling in many aspects, not only the staff but also the timing of the food service deliveries, is critical in meeting customer expectations. Risk management is essential to ensure food safety and quality. Managers monitor orders in the kitchen to determine where delays may occur, and they work with the chef to prevent these delays. Legal compliance is essential in order for the restaurant to stay open, so restaurant managers direct the clean1 1. Project Management: Past and Present 2 ing of the dining areas and the washing of tableware, kitchen utensils, and equipment. They ensure the safety standards and legality, especially in serving alcohol. Sensitivity and strong communication skills are needed when customers have complaints or employees feel pressured because more customers arrive than predicted. Financial knowledge is needed for the soundness of running the restaurant, especially tracking special projects, events, and costs for the various menu selections. Catering events smoothly can be an outcome of using project plans and the philosophy of project management. The restaurant manager or the executive chef analyzes the recipes to determine food, labour, and overhead costs; determines the portion size and nutritional content of each serving; and assigns prices to various menu items, so that supplies can be ordered and received in time. Planning is the key for successful implementation. Managers or executive chefs need to estimate food needs, place orders with distributors, and schedule the delivery of fresh food and supplies. They also plan for routine services (equipment maintenance, pest control, waste removal) and deliveries, including linen services or the heavy cleaning of dining rooms or kitchen equipment, to occur during slow times or when the dining room is closed. A successful restaurant relies on many skills that the project management profession emphasizes. Outsourcing Services Figure 1.1: Sample status chart, which is typical with the use of a red-yellow-green Many businesses explore outsourcing for certain services. Below is a sample status and project plan that reflects the various tasks needed for a project. A review of finances, the importance of communicating to stakeholders, and the importance of time, cost, schedule, scope, and quality are reflected. Many companies may use these steps in their business. These plans show the need for the entire team to review the various proposals to choose the best plan. Figure 1.1 represents a sample project status report. 3 2nd Edition Example: Construction Managers Construction managers plan, direct, coordinate, and budget a wide variety of residential, commercial, and industrial construction projects including homes, stores, offices, roads, bridges, wastewater treatment plants, schools, and hospitals. Strong scheduling skills are essential for this role. Communication skills are often used in coordinating design and construction processes, teams executing the work, and governance of special trades (carpentry, plumbing, electrical wiring) as well as government representatives for the permit processes. A construction manager may be called a project manager or project engineer. The construction manager ensures that the project is completed on time and within budget while meeting quality specifications and codes and maintaining a safe work environment. These managers create project plans in which they divide all required construction site activities into logical steps, estimating and budgeting the time required to meet established deadlines, usually utilizing sophisticated scheduling and cost-estimating software. Many use software packages such as Microsoft Project® or Procure® or online tools like BaseCamp®. Most construction projects rely on spreadsheets for project management. Procurement skills used in this field include acquiring the bills for material, lumber for the house being built, and more. Construction managers also coordinate labor, determining the needs and overseeing their performance, ensuring that all work is completed on schedule. Values including sustainability, reuse, LEED-certified building, use of green energy, and various energy efficiencies are being incorporated into today’s projects with an eye to the future. Jennifer Russell, spoke about project management and global sustainability” at the 2011 Silicon Valley Project Management Institute (PMI) conference. She informed the attendees of the financial, environmental, and social areas in expanding the vision of project management with the slide in Figure 1.2. These values are part of the PMI’s code of ethics and professionalism. By adhering to this code, project managers include in their decisions the best interests of society, the safety of the public, and enhancement of the environment. 1. Project Management: Past and Present 4 Figure 1.2: In addition to considering the cost, scope, and schedule of a project, a project manager should work to ensure the project is socially responsible, environmentally sound, and economically viable. Creative Services Creative service careers include graphic artists, curators, video editors, gaming managers, multimedia artists, media producers, technical writers, interpreters, and translators. These positions use project management skills, especially in handling the delivery channel and meeting clients’ requirements. Let us look at one example, graphic artists, to understand and identify some of the project management skills that aid in this career. Example: Graphic Artists Graphic artists plan, analyze, and create visual solutions to communication problems. They use many skills found in project management, especially communications. They work to achieve the most effective way to get messages across in print and electronic media. They emphasize their messages using colour, type, illustration, photography, animation, and various print and layout techniques. Results can be seen in magazines, newspapers, journals, corporate reports, and other publications. Other deliverables from graphic artists using project management skills include promotional displays, packaging, and marketing brochures supporting products and services, logos, and signage. In addition to print media, graphic artists create materials for the web, TV, movies, and mobile device apps. Initiation in project management can be seen in developing a new design: determining the needs of the client, the message the design should portray, and its appeal to customers or users. Graphic designers consider cognitive, cultural, physical, and social factors in planning and executing designs for the target 5 2nd Edition audience, very similar to some of the dynamics a project manager considers in communicating with various project stakeholders. Designers may gather relevant information by meeting with clients, creative staff, or art directors; brainstorming with others within their firm or professional association; and performing their own research to ensure that their results have high quality and they can manage risks. Graphic designers may supervise assistants who follow instructions to complete parts of the design process. Therefore scheduling, resource planning, and cost monitoring are pillars of project management seen in this industry. These artists use computer and communications equipment to meet their clients’ needs and business requirements in a timely and cost-efficient manner. Educators “Educator” is a broad term that can describe a career in teaching, maybe being a lecturer, a professor, a tutor, or a home-schooler. Other educators include gurus, mullahs, pastors, rabbis, and priests. Instructors also provide vocational training or teach skills like learning how to drive a car or use a computer. Educators provide motivation to learn a new language or showcase new products and services. Educators use project management skills including planning and communication. Let us look at teachers, since we all have had teachers, and see if we can recognize the project management skills that are demonstrated in this profession. Example: Teachers Some teachers foster the intellectual and social development of children during their formative years; other teachers provide knowledge, career skill sets, and guidance to adults. Project management skills that teachers exhibit include acting as facilitators or coaches and communicating in the classroom and in individual instruction. Project managers plan and evaluate various aspects of a project; teachers plan, evaluate, and assign lessons; implement these plans; and monitor each student’s progress similar to the way a project manager monitors and delivers goods or services. Teachers use their people skills to manage students, parents, and administrators. The soft skills that project managers exercise can be seen in teachers who encourage collaboration in solving problems by having students work in groups to discuss and solve problems as a team. Project managers may work in a variety of fields with a broad assortment of people, similar to teachers who work with students from varied ethnic, racial, and religious backgrounds. These teachers must have awareness and understanding of different cultures. Teachers in some schools may be involved in making decisions regarding the budget, personnel, textbooks, curriculum design, and teaching methods, demonstrating skills that a project manager would possess such as financial management and decision making. Engineers Engineers apply the principles of science and mathematics to develop economical solutions to technical problems. As a project cycles from an idea in the project charter to the implementation and delivery of a product or service, engineers link scientific discoveries to commercial applications that meet societal and consumer needs. Engineers use many project management skills, especially when they must specify functional requirements. They demonstrate attention to quality as they evaluate a design’s overall effectiveness, cost, reli- 1. Project Management: Past and Present 6 ability, and safety similar to the project manager reviewing the criteria for the customer’s acceptance of delivery of the product or service. Estimation skills in project management are used in engineering. Engineers are asked many times to provide an estimate of time and cost required to complete projects. Health Care There are many jobs and careers in health care that use project management skills. Occupations in the field of health care vary widely, such as athletic trainer, dental hygienist, massage therapist, occupational therapist, optometrist, nurse, physician, physician assistant, and X-ray technician. These individuals actively apply risk management in providing health care delivery of service to their clients, ensuring that they do not injure the person they are caring for. Note: There is a section on nursing later in this chapter. Many of you may have had a fall while you were growing up, and needed an X-ray to determine if you had a fracture or merely a sprain. Let us look at this career as an example of a health care professional using project management skills. Example: Radiology Technologists Radiology technologists and technicians perform diagnostic imaging examinations like X-rays, computed tomography (CT), magnetic resonance imaging (MRI), and mammography. They could also be called radiographers, because they produce X-ray films (radiographs) of parts of the human body for use in diagnosing medical problems. Project management skills, especially people skills and strong communication, are demonstrated when they prepare patients for radiologic examinations by explaining the procedure and what position the patient needs to be in, so that the parts of the body can be appropriately radiographed. Risk management is demonstrated when these professionals work to prevent unnecessary exposure to radiation by surrounding the exposed area with radiation protection devices, such as lead shields, or limiting the size of the X-ray beam. To ensure quality results, the health technician monitors the radiograph and sets controls on the X-ray machine to produce radiographs of the appropriate density, detail, and contrast. Safety and regulations concerning the use of radiation to protect themselves, their patients, and their coworkers from unnecessary exposure is tracked in an efficient manner and reported as a control to ensure compliance. Project management skills are also used in preparing work schedules, evaluating equipment for purchase, or managing a radiology department. Some radiological technologists specialize in CT scans; as CT technologists they too use project management skills. CT uses ionizing radiation to produce a substantial number of cross-sectional X-rays of an area of the body. Therefore, it requires the same precautionary measures that are used with X-rays, hence the need for risk management and monitoring for exposure. Teamwork, not only with the patient that the radiological technologist supports and the doctor who ordered the request, but also with other health care providers, relies on strong communication, quality, work done in a timely manner, and wise use of hospital resources. This all boils down to ensuring that the three elements of the project management triangle of cost, schedule, and scope with quality delivered remain the essentials that provide a cornerstone to project management and the skills needed to obtain the objective. 7 2nd Edition Example: Nurses Nurses treat and educate patients and their families and the public about various medical conditions and provide advice and emotional support. Nurses establish a care plan for their patients that include activities like scheduling the administration and discontinuation of medications (e.g., intravenous (IV) lines for fluid, medication, blood, and blood products) and application of therapies and treatments. Communication with the patient, their family, physicians and other health care clinicians may be done in person or via technology. Telehealth allows nurses to provide care and advice through electronic communications media including videoconferencing, the Internet, or telephone. Risk management is very important for a nurse, with some cases having a life or death consequence. Nurses monitor pain management and vital signs and provide status reports to physicians to help in responding to the health care needs of the patient. The nursing field varies. Some nurses work in infection control. They identify, track, and control infectious outbreaks in health care facilities and create programs for outbreak prevention and response to biological terrorism. Others are educators who plan, develop, execute, and evaluate educational programs and curricula for the professional development of students and graduate nurses. Nurses may use project management skills while conducting health care consultations, advising on public policy, researching in the field, or providing sales support of a product or service. Paralegal Attorneys assume the ultimate responsibility for legal work but they often obtain assistance. Paralegals assume this role in law firms and perform many tasks to aid the legal profession. However, they are explicitly prohibited from carrying out duties considered to be the practice of law (e.g., giving legal advice, setting legal fees, presenting court cases). Project management skills such as planning are used in helping lawyers prepare for closings, hearings, trials, and corporate meetings. Communication skills are used in preparing written reports that help attorneys determine how cases should be handled or drafts for actions such as pleading, filing motions, and obtaining affidavits. Monitoring skills aid paralegals who may track files of important case documents, working on risk containment related to filing dates and responses to the court. Procurement skills, which a project manager uses, can also be seen from a paralegal perspective in negotiating terms of hiring expert witnesses as well as other services such as acquiring services from process servers. Financial skills may be used as well, such as assisting in preparing tax returns, establishing trust funds, and planning estates or maintaining financial office records at the law firm. Government, litigation, personal injury, corporate law, criminal law, employee benefits, intellectual property, labour law, bankruptcy, immigration, family law, and real estate are some of the many different law practices where a paralegal professional may use project management skills. Software developer Computer software developers and computer programmers design and develop software. They apply the principles of computer science and mathematics to create, test, and evaluate software applications and systems that make computers come alive. Software is developed in many kinds of projects: computer games, business applications, operating systems, network control systems, and more. Software developers us project management skills to develop the requirements for the software, identify and track the 1. Project Management: Past and Present 8 product development tasks, communicate within the development team and with clients, test cases, and manage quality, the schedule, and resources (staff, equipment, labs, and more). Science Technicians Science technicians use principles and theories of science and mathematics to assist in research and development and help invent and improve products and processes. In their jobs, they are more practically oriented than scientists. Planning skills project managers use can be seen as science technicians set up, operate, and maintain labouratory instruments; monitor experiments; and observe, calculate, and record results. Quality is a factor here as it is in project management; science technicians must ensure that processes are performed correctly, with proper proportions of ingredients, for purity or for strength and durability. There are different fields in which science technicians can apply project management skills. Agricultural and food science technicians test food and other agricultural products and are involved in food, fibre, and animal research, production, and processing. Control and risk management are important here in executing the tests and experiments, for example, to improve the yield and quality of crops, or the resistance of plants and animals to disease, insects, or other hazards. Quality factors are paramount when food science technicians conduct tests on food additives and preservatives to ensure compliance with government regulations regarding colour, texture, and nutrients. Biological technicians work with biologists studying living organisms. Many assist scientists who conduct medical research or who work in pharmaceutical companies to help develop and manufacture medicines. Skills in scheduling, especially in incubation periods for the study of the impact on cells, could impact projects, such as exploring and isolating variables for research in living organisms and infectious agents. Biotechnology technicians apply knowledge and execution skills and techniques gained from basic research, including gene splicing and recombinant DNA, to product development. Project management skills are used in collaboration and communication among team members to record and understand the results and progress toward a cure or product. Other kinds of technicians are chemical technicians who may work in labouratories or factories, using monitoring and control skills in the way they collect and analyze samples. Again, quality assurance is an important factor for most process technicians’ work in manufacturing, testing packaging for design, ensuring integrity of materials, and verifying environmental acceptability. Technicians use a project management skill set to assist in their initiation, planning, and executing tasks, while managing risks with some measure of reporting to determine if their objectives satisfy the constraints of cost, schedule, resource, and quality standards set. History Could the Great Wall of China, the pyramids, or Stonehenge have been built without project management? It is possible to say that the concept of project management has been around since the beginning of history. It has enabled leaders to plan bold and massive projects and manage funding, materials, and labour within a designated time frame. In late 19th century, in the United States, large-scale government projects were the impetus for making important decisions that became the basis for project management methodology such as the transcontinental railroad, which began construction in the 1860s. Suddenly, business leaders found themselves 9 2nd Edition faced with the daunting task of organizing the manual labour of thousands of workers and the processing and assembly of unprecedented quantities of raw material. Figure 1.3: MindView Gantt Chart. Henry Gantt, studied in great detail the order of operations in work and is most famous for developing the Gantt chart in the 1910s. A Gantt chart (Figure 1.3) is a popular type of bar chart that illustrates a project schedule and has become a common technique for representing the phases and activities of a project so they can be understood by a wide audience. Although now a common charting technique, Gantt charts were considered revolutionary at the time they were introduced. Gantt charts were employed on major infrastructure projects in the United States including the Hoover Dam and the interstate highway system and are still accepted today as important tools in project management. By the mid-20th century, projects were managed on an ad hoc basis using mostly Gantt charts and informal techniques and tools. During that time, the Manhattan Project was initiated and its complexity was only possible because of project management methods. The Manhattan Project was the code name given to the Allied effort to develop the first nuclear weapons during World War II. It involved over 30 different project sites in the United States and Canada, and thousands of personnel from the United States, Canada, and the U.K. Born out of a small research program that began in 1939, the Manhattan Project would eventually employ 130,000 people, cost a total of nearly US$2 billion, and result in the creation of multiple production and research sites operated in secret. The project succeeded in developing and detonating three nuclear weapons in 1945. The 1950s marked the beginning of the modern project management era. Two mathematical projectscheduling models were developed. The program evaluation and review technique (PERT) was developed by Booz-Allen and Hamilton as part of the United States Navy’s Polaris missile submarine program. PERT is basically a method for analyzing the tasks involved in completing a project, especially the time needed to complete each task, the dependencies among tasks, and the minimum time needed to complete the total project (Figure 1.4). The critical path method (CPM) was developed in a joint venture by DuPont Corporation and Rem- 1. Project Management: Past and Present 10 ington Rand Corporation for managing plant maintenance projects. The critical path determines the float, or schedule flexibility, for each activity by calculating the earliest start date, earliest finish date, latest start date, and latest finish date for each activity. The critical path is generally the longest full path on the project. Any activity with a float time that equals zero is considered a critical path task. CPM can help you figure out how long your complex project will take to complete and which activities are critical, meaning they have to be done on time or else the whole project will take longer. These mathematical techniques quickly spread into many private enterprises. Figure 1.4: Pert Chart Project management in its present form began to take root a few decades ago. In the early 1960s, industrial and business organizations began to understand the benefits of organizing work around projects. They understood the critical need to communicate and integrate work across multiple departments and professions. Text Attributions This chapter of Project Management is a derivative and remix of the following sources: • Project Management by Merrie Barron and Andrew Barron. © CC BY (Attribution). • Project Management for Skills for All Careers by Project Management Open Resources and TAP-a-PM. © Creative Commons Attribution 3.0 Licence. Media Attributions • Sourcing initiative status report by Maura Irene Jones in Project Management Skills for All Careers © CC BY (Attribution) • Project Management Triange by Jennifer Russell © CC BY (Attribution) • Mindview Gantt Chart by Matchware Inc (MindView) © CC BY-SA (Attribution ShareAlike) • Pert Chart (Colored) by Jeremykemp adapted by Rehua © Public Domain 2. Project Management Overview The starting point in discussing how projects should be properly managed is to first understand what a project is and, just as importantly, what it is not. People have been undertaking projects since the earliest days of organized human activity. The hunting parties of our prehistoric ancestors were projects, for example; they were temporary undertakings directed at the goal of obtaining meat for the community. Large complex projects have also been with us for a long time. The pyramids and the Great Wall of China were in their day of roughly the same dimensions as the Apollo project to send men to the moon. We use the term “project” frequently in our daily conversations. A husband, for example may tell his wife, “My main project for this weekend is to straighten out the garage.” Going hunting, building pyramids, and fixing faucets all share certain features that make them projects. Project Attributes A project has distinctive attributes that distinguish it from ongoing work or business operations. Projects are temporary in nature. They are not an everyday business process and have definitive start dates and end dates. This characteristic is important because a large part of the project effort is dedicated to ensuring that the project is completed at the appointed time. To do this, schedules are created showing when tasks should begin and end. Projects can last minutes, hours, days, weeks, months, or years. Projects exist to bring about a product or service that hasn’t existed before. In this sense, a project is unique. Unique means that this is new; this has never been done before. Maybe it’s been done in a very similar fashion before but never exactly in this way. For example, Ford Motor Company is in the business of designing and assembling cars. Each model that Ford designs and produces can be considered a project. The models differ from each other in their features and are marketed to people with various needs. An SUV serves a different purpose and clientele than a luxury car. The design and marketing of these two models are unique projects. However, the actual assembly of the cars is considered an operation (i.e., a repetitive process that is followed for most makes and models). In contrast with projects, operations are ongoing and repetitive. They involve work that is continuous without an ending date and with the same processes repeated to produce the same results. The purpose of operations is to keep the organization functioning while the purpose of a project is to meet its goals and conclude. Therefore, operations are ongoing while projects are unique and temporary. A project is completed when its goals and objectives are accomplished. It is these goals that drive the project, and all the planning and implementation efforts undertaken to achieve them. Sometimes projects end when it is determined that the goals and objectives cannot be accomplished or when the product or service of the project is no longer needed and the project is cancelled. Definition of a Project There are many written definitions of a project. All of them contain the key elements described above. For those looking for a formal definition of a project, the Project Management Institute (PMI) defines a 11 2. Project Management Overview 12 project as a temporary endeavor undertaken to create a unique product, service, or result. The temporary nature of projects indicates a definite beginning and end. The end is reached when the project’s objectives have been achieved or when the project is terminated because its objectives will not or cannot be met, or when the need for the project no longer exists. Project Characteristics When considering whether or not you have a project on your hands, there are some things to keep in mind. First, is it a project or an ongoing operation? Second, if it is a project, who are the stakeholders? And third, what characteristics distinguish this endeavor as a project? Projects have several characteristics: • Projects are unique. • Projects are temporary in nature and have a definite beginning and ending date. • Projects are completed when the project goals are achieved or it’s determined the project is no longer viable. A successful project is one that meets or exceeds the expectations of the stakeholders. Consider the following scenario: The vice-president (VP) of marketing approaches you with a fabulous idea. (Obviously it must be “fabulous” because he thought of it.) He wants to set up kiosks in local grocery stores as mini-offices. These offices will offer customers the ability to sign up for car and home insurance services as well as make their bill payments. He believes that the exposure in grocery stores will increase awareness of the company’s offerings. He told you that senior management has already cleared the project, and he’ll dedicate as many resources to this as he can. He wants the new kiosks in place in 12 selected stores in a major city by the end of the year. Finally, he has assigned you to head up this project. Your first question should be, “Is it a project?” This may seem elementary, but confusing projects with ongoing operations happens often. Projects are temporary in nature, have definite start and end dates, result in the creation of a unique product or service, and are completed when their goals and objectives have been met and signed off by the stakeholders. Using these criteria, let’s examine the assignment from the VP of marketing to determine if it is a project: • Is it unique? Yes, because the kiosks don’t exist in the local grocery stores. This is a new way of offering the company’s services to its customer base. While the service the company is offering isn’t new, the way it is presenting its services is. • Does the product have a limited timeframe? Yes, the start date of this project is today, and the end date is the end of next year. It is a temporary endeavor. • Is there a way to determine when the project is completed? Yes, the kiosks will be installed and the services will be offered from them. Once all the kiosks are installed and operating, the project will come to a close. • Is there a way to determine stakeholder satisfaction? Yes, the expectations of the stakeholders will be documented in the form of requirements during the planning processes. These requirements will be compared to the finished product to determine if it meets the expecta- 13 2nd Edition tions of the stakeholder. If the answer is yes to all these questions, then we have a project. The Process of Project Management You’ve determined that you have a project. What now? The notes you scribbled down on the back of the napkin at lunch are a start, but not exactly good project management practice. Too often, organizations follow Nike’s advice when it comes to managing projects when they “just do it.” An assignment is made, and the project team members jump directly into the development of the product or service requested. In the end, the delivered product doesn’t meet the expectations of the customer. Unfortunately, many projects follow this poorly constructed path, and that is a primary contributor to a large percentage of projects not meeting their original objectives, as defined by performance, schedule, and budget. In the United States, more than $250 billion is spent each year on information technology (IT) application development in approximately 175,000 projects. The Standish Group (a Boston-based leader in project and value performance research) released the summary version of their 2009 CHAOS Report that tracks project failure rates across a broad range of companies and industries (Figure 2.1). Figure 2.1: Summary of 2009 Standish Group CHAOS report. Jim Johnson, chairman of the Standish Group, has stated that “this year’s results show a marked decrease in project success rates, with 32% of all projects succeeding which are delivered on time, on budget, with required features and functions, 44% were challenged-which are late, over budget, and/or with less than the required features and functions and 24% failed which are cancelled prior to completion or delivered and never used.” When are companies going to stop wasting billions of dollars on failed projects? The vast majority of this waste is completely avoidable: simply get the right business needs (requirements) understood early in the process and ensure that project management techniques are applied and followed, and the project activities are monitored. Applying good project management discipline is the way to help reduce the risks. Having good project 2. Project Management Overview 14 management skills does not completely eliminate problems, risks, or surprises. The value of good project management is that you have standard processes in place to deal with all contingencies. Project management is the application of knowledge, skills, tools, and techniques applied to project activities in order to meet the project requirements. Project management is a process that includes planning, putting the project plan into action, and measuring progress and performance. Managing a project includes identifying your project’s requirements and writing down what everyone needs from the project. What are the objectives for your project? When everyone understands the goal, it’s much easier to keep them all on the right path. Make sure you set goals that everyone agrees on to avoid team conflicts later on. Understanding and addressing the needs of everyone affected by the project means the end result of your project is far more likely to satisfy your stakeholders. Last but not least, as project manager, you will also be balancing the many competing project constraints. On any project, you will have a number of project constraints that are competing for your attention. They are cost, scope, quality, risk, resources, and time. • Cost is the budget approved for the project including all necessary expenses needed to deliver the project. Within organizations, project managers have to balance between not running out of money and not underspending because many projects receive funds or grants that have contract clauses with a “use it or lose it” approach to project funds. Poorly executed budget plans can result in a last-minute rush to spend the allocated funds. For virtually all projects, cost is ultimately a limiting constraint; few projects can go over budget without eventually requiring a corrective action. • Scope is what the project is trying to achieve. It entails all the work involved in delivering the project outcomes and the processes used to produce them. It is the reason and the purpose of the project. • Quality is a combination of the standards and criteria to which the project’s products must be delivered for them to perform effectively. The product must perform to provide the functionality expected, solve the identified problem, and deliver the benefit and value expected. It must also meet other performance requirements, or service levels, such as availability, reliability, and maintainability, and have acceptable finish and polish. Quality on a project is controlled through quality assurance (QA), which is the process of evaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards. • Risk is defined by potential external events that will have a negative impact on your project if they occur. Risk refers to the combination of the probability the event will occur and the impact on the project if the event occurs. If the combination of the probability of the occurrence and the impact on the project is too high, you should identify the potential event as a risk and put a proactive plan in place to manage the risk. • Resources are required to carry out the project tasks. They can be people, equipment, facilities, funding, or anything else capable of definition (usually other than labour) required for the completion of a project activity. • Time is defined as the time to complete the project. Time is often the most frequent project oversight in developing projects. This is reflected in missed deadlines and incomplete deliverables. Proper control of the schedule requires the careful identification of tasks to be performed and accurate estimations of their durations, the sequence in which they are going to be done, and how people and other resources are to be allocated. Any schedule should take 15 2nd Edition into account vacations and holidays. You may have heard of the term “triple constraint,” which traditionally consisted of only time, cost, and scope. These are the primary competing project constraints that you have to be most aware of. The triple constraint is illustrated in the form of a triangle to visualize the project work and see the relationship between the scope/quality, schedule/time, and cost/resource (Figure 2.2). In this triangle, each side represents one of the constraints (or related constraints) wherein any changes to any one side cause a change in the other sides. The best projects have a perfectly balanced triangle. Maintaining this balance is difficult because projects are prone to change. For example, if scope increases, cost and time may increase disproportionately. Alternatively, if the amount of money you have for your project decreases, you may be able to do as much, but your time may increase. Figure 2.2: A schematic of the triple constraint triangle. Your project may have additional constraints that you must face, and as the project manager, you have to balance the needs of these constraints against the needs of the stakeholders and your project goals. For instance, if your sponsor wants to add functionality to the original scope, you will very likely need more money to finish the project, or if they cut the budget, you will have to reduce the quality of your scope, and if you don’t get the appropriate resources to work on your project tasks, you will have to extend your schedule because the resources you have take much longer to finish the work. You get the idea; the constraints are all dependent on each other. Think of all of these constraints as the classic carnival game of Whac-a-mole (Figure 2.3). Each time you try to push one mole back in the hole, another one pops out. The best advice is to rely on your project team to keep these moles in place. 2. Project Management Overview 16 Figure 2.3: Whac-a-mole. Here is an example of a project that cut quality because the project costs were fixed. The P-36 oil platform (Figure 2.4) was the largest footing production platform in the world capable of processing 180,000 barrels of oil per day and 5.2 million cubic metres of gas per day. Located in the Roncador Field, Campos Basin, Brazil, the P-36 was operated by Petrobras. Figure 2.4.: The Petrobras P-36 oil platform sinking. In March 2001, the P-36 was producing around 84,000 barrels of oil and 1.3 million cubic metres of gas per day when it became destabilized by two explosions and subsequently sank in 3,900 feet of water with 1,650 short tons of crude oil remaining on board, killing 11 people. The sinking is attributed to a complete failure in quality assurance, and pressure for increased production led to corners being cut on safety procedures. It is listed as one of the most expensive accidents with a price tag of $515,000,000. The following quotes are from a Petrobras executive, citing the benefits of cutting quality assurance and inspection costs on the project. “Petrobras has established new global benchmarks for the generation of exceptional shareholder wealth through an aggressive and innovative program of cost cutting on its P36 production facility.” “Conventional constraints have been successfully challenged and replaced with new paradigms appropriate to the globalized corporate market place.” “Elimination of these unnecessary straitjackets has empowered the project’s suppliers and contractors to propose highly economical solutions, with the win-win bonus of enhanced profitability margins for themselves.” “The P36 platform shows the shape of things to come in the unregulated global market economy of the 21st century.” 17 2nd Edition The dynamic trade-offs between the project constraint values have been humorously and accurately described in Figure 2.5. Figure 2.5: Good, Quick, Cheap: Choose two. A sign seen at an automotive repair shop. [Image Description] Project Management Expertise In order for you, as the project manager, to manage the competing project constraints and the project as a whole, there are some areas of expertise you should bring to the project team (Figure 2.11). They are knowledge of the application area and the standards and regulations in your industry, understanding of the project environment, general management knowledge and skills, and interpersonal skills. It should be noted that industry expertise is not in a certain field but the expertise to run the project. So while knowledge of the type of industry is important, you will have a project team supporting you in this endeavor. For example, if you are managing a project that is building an oil platform, you would not be expected to have a detailed understanding of the engineering since your team will have mechanical and civil engineers who will provide the appropriate expertise; however, it would definitely help if you understood this type of work. Let’s take a look at each of these areas in more detail. Application knowledge By standards, we mean guidelines or preferred approaches that are not necessarily mandatory. In contrast, when referring to regulations we mean mandatory rules that must be followed, such as governmentimposed requirements through laws. It should go without saying that as a professional, you’re required to follow all applicable laws and rules that apply to your industry, organization, or project. Every industry has standards and regulations. Knowing which ones affect your project before you begin work will not only help the project to unfold smoothly, but will also allow for effective risk analysis. 2. Project Management Overview 18 Figure 2.6: Areas of expertise that a project manager should bring to the project team. Some projects require specific skills in certain application areas. Application areas are made up of categories of projects that have common elements. They can be defined by industry group (pharmaceutical, financial, etc.), department (accounting, marketing, legal, etc.), technology (software development, engineering, etc), or management specialties (procurement, research and development, etc.). These application areas are usually concerned with disciplines, regulations, and the specific needs of the project, the customer, or the industry. For example, most government agencies have specific procurement rules that apply to their projects that wouldn’t be applicable in the construction industry. The pharmaceutical industry is interested in regulations set forth by government regulators, whereas the automotive industry has little or no concern for either of these types of regulations. You need to stay up-to-date regarding your industry so that you can apply your knowledge effectively. Today’s fast-paced advances can leave you behind fairly quickly if you don’t stay abreast of current trends. Having some level of experience in the application area you’re working in will give you an advantage when it comes to project management. While you can call in experts who have the application area knowledge, it doesn’t hurt for you to understand the specific aspects of the application areas of your project. Understanding the Project Environment There are many factors that need to be understood within your project environment (Figure 2.7). At one level, you need to think in terms of the cultural and social environments (i.e., people, demographics, and education). The international and political environment is where you need to understand about different countries’ cultural influences. Then we move to the physical environment; here we think about time zones. Think about different countries and how differently your project will be executed whether it is just in your country or if it involves an international project team that is distributed throughout the world in five different countries. Figure 2.7: The important factors to consider within the project environment. 19 2nd Edition Of all the factors, the physical ones are the easiest to understand, and it is the cultural and international factors that are often misunderstood or ignored. How we deal with clients, customers, or project members from other countries can be critical to the success of the project. For example, the culture of the United States values accomplishments and individualism. Americans tend to be informal and call each other by first names, even if having just met. Europeans tend to be more formal, using surnames instead of first names in a business setting, even if they know each other well. In addition, their communication style is more formal than in the United States, and while they tend to value individualism, they also value history, hierarchy, and loyalty. The Japanese, on the other hand, tend to communicate indirectly and consider themselves part of a group, not as individuals. The Japanese value hard work and success, as most of us do. How a product is received can be very dependent on the international cultural differences. For example, in the 1990s, when many large American and European telecommunications companies were cultivating new markets in Asia, their customer’s cultural differences often produced unexpected situations. Western companies planned their telephone systems to work the same way in Asia as they did in Europe and the United States. But the protocol of conversation was different. Call-waiting, a popular feature in the West, is considered impolite in some parts of Asia. This cultural blunder could have been avoided had the team captured the project environment requirements and involved the customer. It is often the simplest things that can cause trouble since, unsurprisingly, in different countries, people do things differently. One of the most notorious examples of this is also one of the most simple: date formats. What day and month is 2/8/2009? Of course it depends where you come from; in North America it is February 8th while in Europe (and much of the rest of the world) it is 2nd August. Clearly, when schedules and deadlines are being defined it is important that everyone is clear on the format used. The diversity of practices and cultures and its impact on products in general and on software in particular goes well beyond the date issue. You may be managing a project to create a new website for a company that sells products worldwide. There are language and presentation style issues to take into consideration; converting the site into different languages isn’t enough. It is obvious that you need to ensure the translation is correct; however, the presentation layer will have its own set of requirements for different cultures. The left side of a website may be the first focus of attention for a Canadian; the right side would be the initial focus for anyone from the Middle East, as both Arabic and Hebrew are written from right to left. Colors also have different meanings in different cultures. White, which is a sign of purity in North America (e.g., a bride’s wedding dress), and thus would be a favoured background colour in North America, signifies death in Japan (e.g., a burial shroud). Table 2.1 summarizes different meanings of common colours. 2. Project Management Overview 20 Table 2.1: The meaning of colours in various cultures. Colour United States China Japan Egypt France Red Danger, stop Happiness Anger, danger Death Aristocracy Blue Sadness, melancholy Heavens, clouds Villainy Virtue, faith, truth Freedom, peace Green Novice, apprentice Ming dynasty, heavens Future, youth, energy Fertility, strength Criminality Yellow Cowardice Birth, wealth Grace, nobility Happiness, prosperity Temporary White Purity Death, purity Death Joy Naturality Project managers in multicultural projects must appreciate the culture dimensions and try to learn relevant customs, courtesies, and business protocols before taking responsibility for managing an international project. A project manager must take into consideration these various cultural influences and how they may affect the project’s completion, schedule, scope, and cost. Management Knowledge and Skills As the project manager, you have to rely on your project management knowledge and your general management skills. Here, we are thinking of items like your ability to plan the project, execute it properly, and of course control it and bring it to a successful conclusion, along with your ability to guide the project team to achieve project objectives and balance project constraints. There is more to project management than just getting the work done. Inherent in the process of project management are the general management skills that allow the project manager to complete the project with some level of efficiency and control. In some respects, managing a project is similar to running a business: there are risk and rewards, finance and accounting activities, human resource issues, time management, stress management, and a purpose for the project to exist. General management skills are needed in every project. Interpersonal Skills Last but not least you also have to bring the ability into the project to manage personal relationships and deal with personnel issues as they arise. Here were talking about your interpersonal skills as shown in Figure 2.8. Communication Project managers spend 90% of their time communicating. Therefore they must be good communicators, promoting clear, unambiguous exchange of information. As a project manager, it is your job to keep a number of people well informed. It is essential that your project staff know what is expected of them: what they have to do, when they have to do it, and what budget and time constraints and quality specifications they are working toward. If project staff members do not know what their tasks are, or how to accomplish them, then the entire project will grind to a halt. If you do not know what the project staff is 21 2nd Edition (or often is not) doing, then you will be unable to monitor project progress. Finally, if you are uncertain of what the customer expects of you, then the project will not even get off the ground. Project communication can thus be summed up as knowing “who needs what information and when” and making sure they have it. Figure 2.8: Interpersonal skills required of a project manager. All projects require sound communication plans, but not all projects will have the same types of communication or the same methods for distributing the information. For example, will information be distributed via mail or email, is there a shared website, or are face-to-face meetings required? The communication management plan documents how the communication needs of the stakeholders will be met, including the types of information that will be communicated, who will communicate them, and who will receive them; the methods used to communicate; the timing and frequency of communication; the method for updating the plan as the project progresses, including the escalation process; and a glossary of common terms. Influence Project management is about getting things done. Every organization is different in its policies, modes of operations, and underlying culture. There are political alliances, differing motivations, conflicting interests, and power struggles. A project manager must understand all of the unspoken influences at work within an organization. Leadership Leadership is the ability to motivate and inspire individuals to work toward expected results. Leaders inspire vision and rally people around common goals. A good project manager can motivate and inspire the project team to see the vision and value of the project. The project manager as a leader can inspire the project team to find a solution to overcome perceived obstacles to get the work done. Motivation Motivation helps people work more efficiently and produce better results. Motivation is a constant process that the project manager must guide to help the team move toward completion with passion and a profound reason to complete the work. Motivating the team is accomplished by using a variety of team-building techniques and exercises. Team building is simply getting a diverse group of people to work together in the most efficient and effective manner possible. This may involve management events as well as individual actions designed to improve team performance. Recognition and rewards are an important part of team motivations. They are formal ways of recognizing and promoting desirable behaviour and are most effective when carried out by the manage- 2. Project Management Overview 22 ment team and the project manager. Consider individual preferences and cultural differences when using rewards and recognition. Some people don’t like to be recognized in front of a group; others thrive on it. Negotiation Project managers must negotiate for the good of the project. In any project, the project manager, the project sponsor, and the project team will have to negotiate with stakeholders, vendors, and customers to reach a level of agreement acceptable to all parties involved in the negotiation process. Problem Solving Problem solving is the ability to understand the heart of a problem, look for a viable solution, and then make a decision to implement that solution. The starting point for problem solving is problem definition. Problem definition is the ability to understand the cause and effect of the problem; this centres on root-cause analysis. If a project manager treats only the symptoms of a problem rather than its cause, the symptoms will perpetuate and continue through the project life. Even worse, treating a symptom may result in a greater problem. For example, increasing the ampere rating of a fuse in your car because the old one keeps blowing does not solve the problem of an electrical short that could result in a fire. Rootcause analysis looks beyond the immediate symptoms to the cause of the symptoms, which then affords opportunities for solutions. Once the root of a problem has been identified, a decision must be made to effectively address the problem. Solutions can be presented from vendors, the project team, the project manager, or various stakeholders. A viable solution focuses on more than just the problem; it looks at the cause and effect of the solution itself. In addition, a timely decision is needed or the window of opportunity may pass and then a new decision will be needed to address the problem. As in most cases, the worst thing you can do is nothing. All of these interpersonal skills will be used in all areas of project management. Start practicing now because it’s guaranteed that you’ll need these skills on your next project. Image Descriptions Figure 2.5 image description: The sign says, “We can do good, quick, and cheap work. You can have any two but not all three. 1. Good, quick work won’t be cheap. 2. Good, cheap work won’t be quick. 3. Quick, cheap work won’t be good.” [Return to Figure 2.5] Text Attributions • This chapter of Project Management is a derivative of Project Management by Merrie Barron and Andrew Barron. © CC BY (Attribution). • Table 2.1: Adapted from P. Russo and S. Boor, How Fluent is Your Interface? Designing for International Users, Proceedings of the INTERACT ’93 and CHI ’93, Association for Computing Machinery, Inc. (1993). Table from Barron & Barron Project Management for Scientists and Engineers, Source: Project Management for Scientists and Engineers by Merrie Barron; Andrew R. Barron 23 2nd Edition Media Attributions • Chaosreport2009 by Merrie Barron & Andrew R. Barron © CC BY (Attribution) • Triple constraint triangle by John M. Kennedy T © CC BY-SA (Attribution ShareAlike) • Whac a mole by sakura © CC BY (Attribution) • Petrobras sinking by Richard Collinson © CC BY-NC-ND (Attribution NonCommercial NoDerivatives) • Good-quick-cheap by Barron & Barron Project Management for Scientists and Engineers. © CC BY (Attribution) • Areas of expertise by Barron & Barron Project Management for Scientists and Engineers © CC BY (Attribution) • Project environment by Barron & Barron Project Management for Scientists and Engineers, © CC BY (Attribution) • Interpersonal skills by Barron & Barron Project Management for Scientists and Engineers © CC BY (Attribution) 3. The Project Life Cycle (Phases) The project manager and project team have one shared goal: to carry out the work of the project for the purpose of meeting the project’s objectives. Every project has a beginning, a middle period during which activities move the project toward completion, and an ending (either successful or unsuccessful). A standard project typically has the following four major phases (each with its own agenda of tasks and issues): initiation, planning, implementation, and closure. Taken together, these phases represent the path a project takes from the beginning to its end and are generally referred to as the project “life cycle.” Initiation Phase During the first of these phases, the initiation phase, the project objective or need is identified; this can be a business problem or opportunity. An appropriate response to the need is documented in a business case with recommended solution options. A feasibility study is conducted to investigate whether each option addresses the project objective and a final recommended solution is determined. Issues of feasibility (“can we do the project?”) and justification (“should we do the project?”) are addressed. Once the recommended solution is approved, a project is initiated to deliver the approved solution and a project manager is appointed. The major deliverables and the participating work groups are identified, and the project team begins to take shape. Approval is then sought by the project manager to move onto the detailed planning phase. Planning Phase The next phase, the planning phase, is where the project solution is further developed in as much detail as possible and the steps necessary to meet the project’s objective are planned. In this step, the team identifies all of the work to be done. The project’s tasks and resource requirements are identified, along with the strategy for producing them. This is also referred to as “scope management.” A project plan is created outlining the activities, tasks, dependencies, and timeframes. The project manager coordinates the preparation of a project budget by providing cost estimates for the labour, equipment, and materials costs. The budget is used to monitor and control cost expenditures during project implementation. Once the project team has identified the work, prepared the schedule, and estimated the costs, the three fundamental components of the planning process are complete. This is an excellent time to identify and try to deal with anything that might pose a threat to the successful completion of the project. This is called risk management. In risk management, “high-threat” potential problems are identified along with the action that is to be taken on each high-threat potential problem, either to reduce the probability that the problem will occur or to reduce the impact on the project if it does occur. This is also a good time to identify all project stakeholders and establish a communication plan describing the information needed and the delivery method to be used to keep the stakeholders informed. Finally, you will want to document a quality plan, providing quality targets, assurance, and control measures, along with an acceptance plan, listing the criteria to be met to gain customer acceptance. At this point, the project would have been planned in detail and is ready to be executed. 24 25 2nd Edition Implementation (Execution) Phase During the third phase, the implementation phase, the project plan is put into motion and the work of the project is performed. It is important to maintain control and communicate as needed during implementation. Progress is continuously monitored and appropriate adjustments are made and recorded as variances from the original plan. In any project, a project manager spends most of the time in this step. During project implementation, people are carrying out the tasks, and progress information is being reported through regular team meetings. The project manager uses this information to maintain control over the direction of the project by comparing the progress reports with the project plan to measure the performance of the project activities and take corrective action as needed. The first course of action should always be to bring the project back on course (i.e., to return it to the original plan). If that cannot happen, the team should record variations from the original plan and record and publish modifications to the plan. Throughout this step, project sponsors and other key stakeholders should be kept informed of the project’s status according to the agreed-on frequency and format of communication. The plan should be updated and published on a regular basis. Status reports should always emphasize the anticipated end point in terms of cost, schedule, and quality of deliverables. Each project deliverable produced should be reviewed for quality and measured against the acceptance criteria. Once all of the deliverables have been produced and the customer has accepted the final solution, the project is ready for closure. Closing Phase During the final closure, or completion phase, the emphasis is on releasing the final deliverables to the customer, handing over project documentation to the business, terminating supplier contracts, releasing project resources, and communicating the closure of the project to all stakeholders. The last remaining step is to conduct lessons-learned studies to examine what went well and what didn’t. Through this type of analysis, the wisdom of experience is transferred back to the project organization, which will help future project teams. Example: Project Phases on a Large Multinational Project A U.S. construction company won a contract to design and build the first copper mine in northern Argentina. There was no existing infrastructure for either the mining industry or large construction projects in this part of South America. During the initiation phase of the project, the project manager focused on defining and finding a project leadership team with the knowledge, skills, and experience to manage a large complex project in a remote area of the globe. The project team set up three offices. One was in Chile, where large mining construction project infrastructure existed. The other two were in Argentina. One was in Buenos Aries to establish relationships and Argentinian expertise, and the second was in Catamarca—the largest town close to the mine site. With offices in place, the project start-up team began developing procedures for getting work done, acquiring the appropriate permits, and developing relationships with Chilean and Argentine partners. During the planning phase, the project team developed an integrated project schedule that coordinated the activities of the design, procurement, and construction teams. The project controls team also developed a detailed budget that enabled the project team to track project expenditures against the expected 3. The Project Life Cycle (Phases) 26 expenses. The project design team built on the conceptual design and developed detailed drawings for use by the procurement team. The procurement team used the drawings to begin ordering equipment and materials for the construction team; develop labour projections; refine the construction schedule; and set up the construction site. Although planning is a never-ending process on a project, the planning phase focused on developing sufficient details to allow various parts of the project team to coordinate their work and allow the project management team to make priority decisions. The implementation phase represents the work done to meet the requirements of the scope of work and fulfill the charter. During the implementation phase, the project team accomplished the work defined in the plan and made adjustments when the project factors changed. Equipment and materials were delivered to the work site, labour was hired and trained, a construction site was built, and all the construction activities, from the arrival of the first dozer to the installation of the final light switch, were accomplished. The closeout phase included turning over the newly constructed plant to the operations team of the client. A punch list of a few remaining construction items was developed and those items completed. The office in Catamarca was closed, the office in Buenos Aries archived all the project documents, and the Chilean office was already working on the next project. The accounting books were reconciled and closed, final reports written and distributed, and the project manager started on a new project. Text Attributions This chapter of Project Management is a derivative the following texts: • Project Management by Merrie Barron and Andrew Barron. © CC BY (Attribution). • Project Management From Simple to Complex by Russel Darnall, John Preston, Eastern Michigan University. © Creative Commons Attribution 3.0 Licence. 4. Framework for Project Management Many different professions contribute to the theory and practice of project management. Engineers and architects have been managing major projects since pre-history. Since approximately the 1960s, there have been efforts to professionalize the practice of project management as a specialization of its own. There are many active debates around this: Should project management be a profession in the same way as engineering, accounting, and medicine? These have professional associations that certify who is legally allowed to use the job title, and who can legally practice the profession. They also provide a level of assurance of quality and discipline members who behave inappropriately. Another ongoing debate is: How much industry knowledge is required of a seasoned project manager? How easily can a project manager from one industry, say, IT, transition to another industry such as hospitality? There are two major organizations with worldwide impact on the practice of project management: the Project Management Institute (PMI), with world headquarters in the United States, and the International Project Management Association (IPMA), with world headquarters in Switzerland. This textbook takes an approach that is closer to the PMI approach. More details are included in this chapter, along with a section on the project management office. Project Management Institute Overview Five volunteers founded the Project Management Institute (PMI) in 1969. Their initial goal was to establish an organization where members could share their experiences in project management and discuss issues. Today, PMI is a non-profit project management professional association and the most widely recognized organization in terms of promoting project management best practices. PMI was formed to serve the interests of the project management industry. The premise of PMI is that the tools and techniques of project management are common even among the widespread application of projects from the software to the construction industry. PMI first began offering the Project Management Professional (PMP) certification exam in 1984. Although it took a while for people to take notice, now more than 590,000 individuals around the world hold the PMP designation. To help keep project management terms and concepts clear and consistent, PMI introduced the book A Guide to the Project Management Body of Knowledge (PMBOK Guide) in 1987. It was updated it in 1996, 2000, 2004, 2009, and most recently in 2013 as the fifth edition. At present, there are more than one million copies of the PMBOK Guide in circulation. The highly regarded Institute of Electrical and Electronics Engineers (IEEE) has adopted it as their project management standard. In 1999 PMI was accredited as an American National Standards Institute (ANSI) standards developer and also has the distinction of being the first organization to have its certification program attain International Organization for Standardization (ISO) 9001 recognition. In 2008, the organization reported more than 260,000 members in over 171 countries. PMI has its headquarters in Pennsylvania, United States, and also has offices in Washington, DC, and in Canada, Mexico, and China, as well as having regional service centres in Singapore, Brussels (Belgium), and New Delhi (India). Recently, an office was opened in Mumbai (India). Because of the importance of projects, the discipline of project management has evolved into a working body of knowledge known as PMBOK – Project Management Body of Knowledge. The PMI is responsible for developing and promoting PMBOK. PMI also administers a professional certification 27 4. Framework for Project Management 28 program for project managers, the PMP. So if you want to get grounded in project management, PMBOK is the place to start, and if you want to make project management your profession, then you should consider becoming a PMP. So what is PMBOK? PMBOK is the fundamental knowledge you need for managing a project, categorized into 10 knowledge areas: 1. Managing integration: Projects have all types of activities going on and there is a need to keep the “whole” thing moving collectively – integrating all of the dynamics that take place. Managing integration is about developing the project charter, scope statement, and plan to direct, manage, monitor, and control project change. 2. Managing scope: Projects need to have a defined parameter or scope, and this must be broken down and managed through a work breakdown structure or WBS. Managing scope is about planning, definition, WBS creation, verification, and control. 3. Managing time/schedule: Projects have a definite beginning and a definite ending date. Therefore, there is a need to manage the budgeted time according to a project schedule. Managing time/schedule is about definition, sequencing, resource and duration estimating, schedule development, and schedule control. 4. Managing costs: Projects consume resources, and therefore, there is a need to manage the investment with the realization of creating value (i.e., the benefits derived exceed the amount spent). Managing costs is about resource planning, cost estimating, budgeting, and control. 5. Managing quality: Projects involve specific deliverables or work products. These deliverables need to meet project objectives and performance standards. Managing quality is about quality planning, quality assurance, and quality control. 6. Managing human resources: Projects consist of teams and you need to manage project team(s) during the life cycle of the project. Finding the right people, managing their outputs, and keeping them on schedule is a big part of managing a project. Managing human resources is about human resources planning, hiring, and developing and managing a project team. 7. Managing communication: Projects invariably touch lots of people, not just the end users (customers) who benefit directly from the project outcomes. This can include project participants, managers who oversee the project, and external stakeholders who have an interest in the success of the project. Managing communication is about communications planning, information distribution, performance reporting, and stakeholder management. 8. Managing risk: Projects are a discovery-driven process, often uncovering new customer needs and identifying critical issues not previously disclosed. Projects also encounter unexpected events, such as project team members resigning, budgeted resources suddenly changing, the organization becoming unstable, and newer technologies being introduced. There is a real need to properly identify various risks and manage these risks. Managing risk is about risk planning and identification, risk analysis (qualitative and quantitative), risk response (action) planning, and risk monitoring and control. 29 2nd Edition 9. Managing procurement: Projects procure the services of outside vendors and contractors, including the purchase of equipment. There is a need to manage how vendors are selected and managed within the project life cycle. Managing procurement is about acquisition and contracting plans, sellers’ responses and selections, contract administration, and contract closure. 10. Managing stakeholders: Every project impacts people and organizations and is impacted by people and organizations. Identifying these stakeholders early, and as they arise and change throughout the project, is a key success factor. Managing stakeholders is about identifying stakeholders, their interest level, and their potential to influence the project; and managing and controlling the relationships and communications between stakeholders and the project. This is the big framework for managing projects and if you want to be effective in managing projects, then you need to be effective in managing each of the 10 knowledge areas that make up PMBOK (see Figure 4.1) Figure 4.1: PM Star Model suggested by GeekDisplaced Certification in project management is available from the PMI, PRINCE2, ITIL, Critical Chain, and others. Agile project management methodologies (Scrum, extreme programming, Lean Six Sigma, others) also have certifications. Introduction to the Project Management Knowledge Areas As discussed above, projects are divided into components, and a project manager must be knowledgeable in each area. Each of these areas of knowledge will be explored in more depth in subsequent chapters. For now, lets look at them in a little more detail to prepare you for the chapters that follow. 4. Framework for Project Management 30 Project Start-Up and Integration The start-up of a project is similar to the start-up of a new organization. The project leader develops the project infrastructure used to design and execute the project. The project management team must develop alignment among the major stakeholders—those who have a share or interest—on the project during the early phases or definition phases of the project. The project manager will conduct one or more kickoff meetings or alignment sessions to bring the various parties of the project together and begin the project team building required to operate efficiently during the project. During project start-up, the project management team refines the scope of work and develops a preliminary schedule and conceptual budget. The project team builds a plan for executing the project based on the project profile. The plan for developing and tracking the detailed schedule, the procurement plan, and the plan for building the budget and estimating and tracking costs are developed during the start-up. The plans for information technology, communication, and tracking client satisfaction are also all developed during the start-up phase of the project. Flowcharts, diagrams, and responsibility matrices are tools to capture the work processes associated with executing the project plan. The first draft of the project procedures manual captures the historic and intuitional knowledge that team members bring to the project. The development and review of these procedures and work processes contribute to the development of the organizational structure of the project. This is typically an exciting time on a project where all things are possible. The project management team is working many hours developing the initial plan, staffing the project, and building relationships with the client. The project manager sets the tone of the project and sets expectations for each of the project team members. The project start-up phase on complex projects can be chaotic, and until plans are developed, the project manager becomes the source of information and direction. The project manager creates an environment that encourages team members to fully engage in the project and encourages innovative approaches to developing the project plan. Project Scope The project scope is a document that defines the parameters—factors that define a system and determine its behaviour—of the project, what work is done within the boundaries of the project, and the work that is outside the project boundaries. The scope of work (SOW) is typically a written document that defines what work will be accomplished by the end of the project—the deliverables of the project. The project scope defines what will be done, and the project execution plan defines how the work will be accomplished. No template works for all projects. Some projects have a very detailed scope of work, and some have a short summary document. The quality of the scope is measured by the ability of the project manager and project stakeholders to develop and maintain a common understanding of what products or services the project will deliver. The size and detail of the project scope is related to the complexity profile of the project. A more complex project often requires a more detailed and comprehensive scope document. According to the PMI, the scope statement should include the following: • Description of the scope • Product acceptance criteria • Project deliverables • Project exclusions 31 2nd Edition • Project constraints • Project assumptions The scope document is the basis for agreement by all parties. A clear project scope document is also critical to managing change on a project. Since the project scope reflects what work will be accomplished on the project, any change in expectations that is not captured and documented creates the opportunity for confusion. One of the most common trends on projects is the incremental expansion in the project scope. This trend is labeled “scope creep.” Scope creep threatens the success of a project because the small increases in scope require additional resources that were not in the plan. Increasing the scope of the project is a common occurrence, and adjustments are made to the project budget and schedule to account for these changes. Scope creep occurs when these changes are not recognized or not managed. The ability of a project manager to identify potential changes is often related to the quality of the scope documents. Events do occur that require the scope of the project to change. Changes in the marketplace may require change in a product design or the timing of the product delivery. Changes in the client’s management team or the financial health of the client may also result in changes in the project scope. Changes in the project schedule, budget, or product quality will have an effect on the project plan. Generally, the later in the project the change occurs, the greater the increase to the project costs. Establishing a change management system for the project that captures changes to the project scope and assures that these changes are authorized by the appropriate level of management in the client’s organization is the responsibility of the project manager. The project manager also analyzes the cost and schedule impact of these changes and adjusts the project plan to reflect the changes authorized by the client. Changes to the scope can cause costs to increase or decrease. Project Schedule and Time Management The definition of project success often includes completing the project on time. The development and management of a project schedule that will complete the project on time is a primary responsibility of the project manager, and completing the project on time requires the development of a realistic plan and the effective management of the plan. On smaller projects, project managers may lead the development of the project plan and build a schedule to meet that plan. On larger and more complex projects, a project controls team that focuses on both costs and schedule planning and controlling functions will assist the project management team in developing the plan and tracking progress against the plan. To develop the project schedule, the project team does an analysis of the project scope, contract, and other information that helps the team define the project deliverables. Based on this information, the project team develops a milestone schedule. The milestone schedule establishes key dates throughout the life of a project that must be met for the project to finish on time. The key dates are often established to meet contractual obligations or established intervals that will reflect appropriate progress for the project. For less complex projects, a milestone schedule may be sufficient for tracking the progress of the project. For more complex projects, a more detailed schedule is required. To develop a more detailed schedule, the project team first develops a work breakdown structure (WBS)—a description of tasks arranged in layers of detail. Although the project scope is the primary document for developing the WBS, the WBS incorporates all project deliverables and reflects any documents or information that clarifies the project deliverables. From the WBS, a project plan is developed. The project plan lists the activities that are needed to accomplish the work identified in the WBS. The more detailed the WBS, the more activities that are identified to accomplish the work. 4. Framework for Project Management 32 After the project team identifies the activities, the team sequences the activities according to the order in which the activities are to be accomplished. An outcome from the work process is the project logic diagram. The logic diagram represents the logical sequence of the activities needed to complete the project. The next step in the planning process is to develop an estimation of the time it will take to accomplish each activity or the activity duration. Some activities must be done sequentially, and some activities can be done concurrently. The planning process creates a project schedule by scheduling activities in a way that effectively and efficiently uses project resources and completes the project in the shortest time. On larger projects, several paths are created that represent a sequence of activities from the beginning to the end of the project. The longest path to the completion of the project is the critical path. If the critical path takes less time than is allowed by the client to complete the project, the project has a positive total float or project slack. If the client’s project completion date precedes the calculated critical path end date, the project has a negative float. Understanding and managing activities on the critical path is an important project management skill. To successfully manage a project, the project manager must also know how to accelerate a schedule to compensate for unanticipated events that delay critical activities. Compressing—crashing—the schedule is a term used to describe the techniques used to shorten the project schedule. During the life of the project, scheduling conflicts often occur, and the project manager is responsible for reducing these conflicts while maintaining project quality and meeting cost goals. Project Costs The definition of project success often includes completing the project within budget. Developing and controlling a project budget that will accomplish the project objectives is a critical project management skill. Although clients expect the project to be executed efficiently, cost pressures vary on projects. On some projects, the project completion or end date is the largest contributor to the project complexity. The development of a new drug to address a critical health issue, the production of a new product that will generate critical cash flow for a company, and the competitive advantage for a company to be first in the marketplace with a new technology are examples of projects with schedule pressures that override project costs. The accuracy of the project budget is related to the amount of information known by the project team. In the early stages of the project, the amount of information needed to develop a detailed budget is often missing. To address the lack of information, the project team develops different levels of project budget estimates. The conceptual estimate (or “ballpark estimate”) is developed with the least amount of knowledge. The major input into the conceptual estimate is expert knowledge or past experience. A project manager who has executed a similar project in the past can use those costs to estimate the costs of the current project. When more information is known, the project team can develop a rough order of magnitude (ROM) estimate. Additional information such as the approximate square feet of a building, the production capacity of a plant, and the approximate number of hours needed to develop a software program can provide a basis for providing a ROM estimate. After a project design is more complete, a project detailed estimate can be developed. For example, when the project team knows the number of rooms, the type of materials, and the building location of a home, they can provide a detailed estimate. A detailed estimate is not a bid. The cost of the project is tracked relative to the progress of the work and the estimate for accomplishing that work. Based on the cost estimate, the cost of the work performed is compared against the cost 33 2nd Edition budgeted for that work. If the cost is significantly higher or lower, the project team explores reasons for the difference between expected costs and actual costs. Project costs may deviate from the budget because the prices in the marketplace were different from what was expected. For example, the estimated costs for lumber on a housing project may be higher than budgeted …
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