P r o j e c t M a n a g e m e n t :
B a s i c , S e c o n d E d i t i o n
Instructor’s Edition
Australia • Canada • Mexico • Singapore
Spain •
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United Kingdom • United StatesProject Management: Basic, Second Edition
VP and GM of Courseware: Michael Springer
Series Product Managers: Caryl Bahner-Guhin and Adam A. Wilcox
Developmental Editor: Brandon Heffernan
Copyeditor: Catherine Oliver
Series Designer: Adam A. Wilcox
Cover Designer: Steve Deschene
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Course Technology reserves the right to revise this publication and make changes from time to time in its content without notice.
ISBN 0-619-28562-1
Printed in the United States of America 1 2 3 4 5 PM 06 05 04 03
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C o n t e n t s
Introduction iii
Topic A: About the manual... iv
Topic B: Setting student expectations ... viii
Topic C: Classroom setup...xii
Topic D: Support... xiii
Fundamentals of project management
1-1
Topic A: Projects ... 1-2 Topic B: The project management process... 1-6 Unit summary: Fundamentals of project management... 1-11
Characteristics of a project
2-1
Topic A: The project environment... 2-2 Topic B: The project manager ... 2-15 Topic C: The project team ... 2-27 Unit summary: Characteristics of a project... 2-38
Project initiation and scope planning
3-1
Topic A: Project initiation ... 3-2 Topic B: Scope planning ... 3-10 Unit summary: Project initiation and scope planning ... 3-17
Scope definition, verification, and change control
4-1
Topic A: Scope definition... 4-2 Topic B: Scope verification ... 4-15 Topic C: Scope change control... 4-18 Unit summary: Scope definition, verification, and change control... 4-23
Time management
5-1
Topic A: Activity definition and sequencing... 5-2 Topic B: Activity duration... 5-15 Unit summary: Time management ... 5-23
Schedule development and control
6-1
Topic A: Schedule development ... 6-2 Topic B: Schedule control ... 6-16 Unit summary: Schedule development and control... 6-21
Resource identification and cost approximating
7-1
Topic A: Resource identification ... 7-2 Topic B: Cost approximating... 7-9 Unit summary: Resource identification and cost approximating ... 7-19
Budgeting and cost control
8-1
Topic A: Cost budgeting... 8-2 Topic B: Cost control... 8-10 Unit summary: Budgeting and cost control... 8-18
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Course summary
S-1
Topic A: Course summary... S-2 Topic B: Continued learning after class ... S-5
Glossary G-1
Index I-1
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P r o j e c t M a n a g e m e n t :
B a s i c , S e c o n d E d i t i o n
Introduction
After reading this introduction, you will know
how to:
A
Use Course Technology ILT manuals in
general.
B
Use prerequisites, a target student
description, course objectives, and a skills
inventory to properly set students’
expectations for the course.
C
Set up a classroom to teach this course.
D
Get support for setting up and teaching this
course.
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Topic A: About the manual
Course Technology ILT philosophy
Our goal at Course Technology is to make you, the instructor, as successful as possible. To that end, our manuals facilitate students’ learning by providing structured interaction with the subject itself. While we provide text to help you explain difficult concepts, the activities are the focus of our courses. Leading the students through these activities will teach the concepts effectively.
We believe strongly in the instructor-led classroom. For many students, having a thinking, feeling instructor in front of them will always be the most comfortable way to learn. Because the students’ focus should be on you, our manuals are designed and written to facilitate your interaction with the students, and not to call attention to manuals themselves.
We believe in the basic approach of setting expectations, then teaching, and providing summary and review afterwards. For this reason, lessons begin with objectives and end with summaries. We also provide overall course objectives and a course summary to provide both an introduction to and closure on the entire course.
Our goal is your success. We encourage your feedback in helping us to continually improve our manuals to meet your needs.
Manual components
The manuals contain these major components: • Table of contents • Introduction • Units • Course summary • Glossary • Index
Each element is described below.
Table of contents
The table of contents acts as a learning roadmap for you and the students.
Introduction
The introduction contains information about our training philosophy and our manual components, features, and conventions. It contains target student, prerequisite, objective, and setup information for the specific course. Finally, the introduction contains support information.
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Units
Units are the largest structural component of the actual course content. A unit begins with a title page that lists objectives for each major subdivision, or topic, within the unit. Within each topic, conceptual and explanatory information alternates with activities. Units conclude with a summary comprising one paragraph for each topic, and review questions that give students an opportunity to practice the skills they’ve learned. The conceptual information takes the form of text paragraphs, exhibits, lists, and tables. The activities contain various types of questions, answers, activities, graphics, and other information. Throughout a unit, instructor notes are found in the left margin.
Each unit title page lists an estimated time for completion, but you have a great deal of control over how long it will actually take to get through the material. Many of the activities have questions or scenarios designed to stimulate discussion. You can adjust the amount of time a unit takes by deciding how many students you ask to respond and how long you allow a discussion to continue.
Course summary
This section provides a text summary of the entire course. It is useful for providing closure at the end of the course. The course summary also indicates the next course in this series, if there is one, and lists additional resources students might find useful as they continue to learn about the subject.
Glossary
The glossary provides definitions for all of the key terms used in this course.
Index
The index enables you and the students to quickly find information about a particular topic or concept in the course.
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Manual conventions
We’ve tried to keep the number of elements and the types of formatting to a minimum in the manuals. We think this aids in clarity and makes the manuals more classically elegant looking. But there are some conventions and icons you should know about.
Instructor note/icon
Convention Description
Italic text In conceptual text, indicates a new term or feature.
Bold text In unit summaries, indicates a key term or concept.
Instructor notes. In the left margin, provide tips, hints, and warnings for
the instructor.
Warning icon. Warnings prepare instructors for potential classroom
management problems.
Tip icon. Tips give extra information the instructor can share with students. Setup icon. Setup notes provide a realistic business context for
instructors to share with students, or indicate additional setup steps required for the current activity.
Projector icon. Projector notes indicate that there is a PowerPoint slide for the adjacent content.
Activities
The activities are the most important parts of our manuals. They are usually divided into two columns, with questions or concepts on the left and answers and explanations on the right. To the left, instructor notes provide tips, warnings, setups, and other information for the instructor only. Here’s a sample:
Do it!
A-1: Steps for brainstorming
Exercises
1 Sequence the steps for brainstorming. Begin generating ideas
Select the purpose Organize for the session Ask questions and clarify ideas
Review the rules
Select the purpose Organize for the session Review the rules Begin generating ideas Ask questions and clarify ideas
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PowerPoint presentations
Each unit in this course has an accompanying PowerPoint presentation. These slide shows are designed to support your classroom instruction while providing students with a visual focus. Each presentation begins with a list of unit objectives and ends with a unit summary slide. We strongly recommend that you run these presentations from the instructor’s station as you teach this course. A copy of PowerPoint Viewer is included, so it is not necessary to have PowerPoint installed on your computer.
The Course ILT PowerPoint add-in
The CD also contains a PowerPoint add-in that enables you to do two things: • Create slide notes for the class.
• Display a control panel that you can use to control Flash movies that are embedded within the presentations.
Here’s how to load the add-in:
1 Copy the Course_ILT.ppa file to a convenient location on your hard drive. 2 Start PowerPoint.
3 Choose Tools, Macro, Security to open the Security dialog box. On the Security Level tab, select Medium (if necessary), and click OK.
4 Choose Tools, Add-ins to open the Add-ins dialog box.
5 Click New. Navigate to the folder containing the Course_ILT.ppa file, select it, and click OK. A message will appear, warning you that macros can contain viruses.
6 Click Enable Macros. The Course_ILT add-in should now appear in the Available Add-Ins list (in the Add-ins dialog box). The “x” in front of it indicates that the add-in is loaded.
7 Click Close to close the Add-ins dialog box.
The top of the PowerPoint window will now contain a new toolbar with a single button, labeled “Create SlideNotes.” You can click this button to generate both text (.txt) and Excel (.xls) slide-notes files. These notes files will appear in the folder containing the presentation.
When you run a presentation and come to a slide containing a Flash movie, you will see a small control panel in the lower-left corner of the screen. Use the control panel to stop and rewind the movie or to play it again.
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Topic B: Setting student expectations
Properly setting students’ expectations is essential to your success. This topic will help you do that by providing:
• Prerequisites for this course
• A description of the target student at whom the course is aimed • A list of the objectives for the course
• A skills assessment for the course
Target student
The typical students for this course will be managers, supervisors, or team leaders who need to learn basic project-management techniques, including managing time and costs.
Course objectives
You should share these overall course objectives with your students at the beginning of the day. This will give students an idea about what to expect, and it will help you identify students who might be misplaced. Students are considered misplaced when they lack the prerequisite knowledge or when they already know most of the subject matter to be covered.
After completing this course, students will know how to:
• Identify the features and attributes of a project; and identify the steps and variables of the project management process.
• Identify the effects of the environment, various socioeconomic and
organizational issues, and organizational structure on a project; and identify the critical functions, necessary skills, responsibilities, and challenges of a project manager.
• Identify the components of project scope; gain project authorization; use common project selection methods; write an end-deliverable description and a project charter; determine the actions integral to scope planning; write a scope statement; follow a scope management plan; and prevent scope creep.
• Identify the process and benefits of scope definition and verification; develop the work breakdown structure (WBS) and the work package; identify the types of information that stakeholders need in order to verify the project scope; identify actions involved in controlling changes; and identify the role of a scope change control system.
• Identify the components of time management; identify the purpose of activity definition and sequencing; recognize different diagramming techniques; identify the factors affecting activity duration; and identify techniques for estimating activity duration.
• Describe schedule development; use mathematical analysis techniques for schedule development; identify the purpose of schedule control; and describe the importance of schedule adherence.
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• Identify the necessary project resources by using a WBS and other tools; identify resource types and assign resources; make cost approximations; assess the effect of risk and activity duration on cost estimates; and apply cost estimating
techniques.
• Use capital budgeting and depreciation methods for project budgeting; control project costs; calculate cost and schedule variance; and compute a project’s estimate at completion (EAC) and variance at completion (VAC).
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Skills inventory
Use the following form to gauge students’ skill levels entering the class (students have copies in the introductions of their student manuals). For each skill listed, have students rate their familiarity from 1 to 5, with five being the most familiar. Emphasize that this is not a test. Rather, it is intended to provide students with an idea of where they’re starting from at the beginning of class. If a student is wholly unfamiliar with all the skills, he or she might not be ready for the class. A student who seems to understand all of the skills, on the other hand, might need to move on to the next course in the series.
Skill 1 2 3 4 5
Identifying the features and attributes of a project Identifying the steps and variables of the project management process
Identifying the effects of the environment
Recognizing various socioeconomic and organizational issues
Identifying an organization’s structure
Identifying the critical functions, necessary skills, responsibilities, and challenges of a project manager Choosing a project team
Identifying the components of project scope Gaining project authorization
Applying common project selection methods Writing an end-deliverable description Writing a project charter
Determining the actions integral to scope planning Writing a scope statement
Following a scope management plan Preventing scope creep
Identifying the process of scope definition and verification Developing the work breakdown structure (WBS)
Developing the work package
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Skill 1 2 3 4 5
Identifying the types of information that stakeholders need to verify the project scope
Identifying how a project’s scope is typically verified Identifying actions involved in controlling changes Identifying the role of a scope change control system Identifying the components of time management Identifying the purpose of activity definition and sequencing
Recognizing different diagramming techniques Identifying the factors affecting activity duration, and identifying techniques for estimating activity duration Describing schedule development
Applying mathematical analysis techniques for schedule development
Identifying the purpose of schedule control Identifying the importance of schedule adherence Identifying the necessary project resources by using a WBS and other tools
Identifying resource types Assigning resources
Making cost approximations
Assessing the effect of risk and activity duration on cost estimates
Applying cost estimating techniques
Applying capital budgeting and depreciation methods for project budgeting
Controlling project costs
Calculating cost and schedule variance
Calculating a project’s estimate at completion (EAC) and variance at completion (VAC)
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Topic C: Classroom setup
In addition to a manual, each student should be provided with a pad and pens or pencils for jotting down notes or questions. Students should have a comfortable place to sit and ample table space to spread out their materials.
Computer requirements
If you wish to use the PowerPoint presentation, you’ll need the following: • A Pentium-class or better computer
• A keyboard and a mouse • Windows 98, NT, 2000, or XP
• A minimum of 32MB of RAM, depending on your operating system • A CD-ROM drive
• An SVGA monitor
• An overhead monitor projector
• PowerPoint 2000 or later, or PowerPoint Viewer
Classroom requirements
• A white board or flip chart and markers • Printouts of WBS.doc
First-time setup instructions
The first time you teach this course, you’ll need to download the PowerPoint presentations for the course to your computer. Here’s how:
1 Download the PowerPoint presentations for the course to your computer. a Connect to www.courseilt.com/instructor_tools.html.
b Click the link for Project Management to display a page of course listings, and then click the link for Project Management: Basic, Second Edition. c Click the link for downloading the PowerPoint files, and follow the
instructions that appear on your screen.
2 Download the data for the course to your computer. a Connect to www.courseilt.com/instructor_tools.html.
b Click the link for Project Management to display a page of course listings, and then click the link for Project Management: Basic, Second Edition. c Click the link for downloading the data disk files, and follow the instructions
that appear on your screen.
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Topic D: Support
Your success is our primary concern. If you need help setting up this class or teaching a particular unit, topic, or activity, please don’t hesitate to get in touch with us. Please have the name of the course available when you call, and be as specific as possible about the kind of help you need.
Phone support
You can call for support 24 hours a day at (888) 672-7500. If you do not connect to a live operator, you can leave a message, and we pledge to return your call within 24 hours (except on Saturday and Sunday).
Web-based support
The Course ILT Web site provides several instructor’s tools for each course, including course outlines and answers to frequently asked questions. To download these files, go to www.courseilt.com/instructor_tools.html. For additional Course ILT resources, including our online catalog and contact information, go to http://www.course.com/ilt.
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U n i t 1
Fundamentals of project management
Unit time: 30 minutes
Complete this unit, and you’ll know how to:
A
Identify the features and characteristics of a
project, and identify the difference between
product management and project
management.
B
Identify the steps and variables of the
project management process, and identify
some common pitfalls to avoid.
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Topic A: Projects
Explanation In a competitive business environment, companies need to develop products and services that can help them thrive and grow. Whether your product is a proprietary tool that speeds production or a service offered to clients, its development must account for several factors, including the resources available to develop it and the needs of those who will use it.
A project is a temporary sequence of tasks with a well-defined beginning and end that produces a unique product or service. A project should have clearly defined objectives and goals.
Characteristics of a project
Projects have several characteristics:
• Projects are unique in both their process and their product. Projects are not routine. A project’s end product or service is different from existing products or services in a market or environment.
• Projects are purposeful. Projects have a well-defined set of end results and follow an organized process to meet a goal. Projects can be divided into small tasks to achieve the overall project goal.
• Projects have a life cycle. Projects start with an idea and progress through planning and execution until they are completed. A project is temporary. It has a life cycle—a definite beginning and a definite end.
• Projects have interdependencies. Project activities typically occur in a defined and deliberate sequence. Issues both inside and outside the project environment can influence the activity sequence.
Typically, a team assigned to a project will spend time, money, and other resources allocated specifically for the project. Projects run under time and cost constraints, but project managers and teams must overcome them to meet the project’s goals, which are based on quality standards. Examples of projects include moving to a new office location, writing a book, developing a new product or service, and implementing a new payroll system.
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Do it!
A-1: Identifying the characteristics of a project
Questions and answers
Facilitate a group discussion of all of these questions.
1 How are projects unique?
Answers may vary. Projects produce products or services that are new to a market or environment.
2 Projects are temporary. True or false?
True. A project, by definition, has a defined beginning and end. 3 What is a project?
Answers may vary. A project is a temporary sequence of tasks with a well-defined beginning and end that produces a unique product or service.
4 The work you do as a regular part of your job can be considered a project. True or false?
False. Projects are not the routine actions and tasks that you undertake in your job. A project is a temporary sequence of tasks intended to produce a unique product or service.
5 Describe a project that you’ve worked on or plan to work on. Answers will vary.
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Project management
Explanation A project is initiated when an individual or group recognizes a problem or opportunity and decides to take action. The action results in some kind of deliverable—either a product, which might be a political campaign or a new automobile, or a unique service. After an idea is developed, time and effort must be invested to develop the concept into a deliverable. Initiating a project begins the project’s life cycle.
Project management involves using specific knowledge, processes, tools, and methods to make sure a project meets or exceeds stakeholders’ requirements. A stakeholder can be anyone interested or invested in the project, anyone who can influence the project, or anyone who is affected by the project.
The goal of project management is to achieve predetermined objectives for the scope, quality, time, and cost of a project. Project management also involves striving for participant satisfaction. For project management to be successful, it requires a group of individuals dedicated to achieving the project goal. In striving for participant
satisfaction, project managers must address the needs of team members and stakeholders.
Most of the knowledge and skills that a project manager needs are unique to the project management process. For example, general managers do not ordinarily need to
complete a critical path analysis or diagram network functions. However, some aspects of general management and project management overlap, such as planning, staffing, setting expectations, and organizing people and information.
Projects and programs
It’s important to understand the differences between a project and a program. These two terms are often used interchangeably. Although these terms are related, they do not mean the same thing. A program is a logical group of related projects. Frequently, companies manage projects together to gain benefits that are not available if the projects are managed separately. Companies also manage projects simultaneously because they use similar processes that will benefit from simultaneous management.
For example, a marketing department might have a program to launch the company’s latest product. The program might consist of individual projects for achieving different objectives, such as planning the marketing campaign and launching the product at the national trade show. Additional projects within this program might be the launch of the product to distributors and the launch of new distribution channels for the product.
Product management and project management
Although the result of a project can be a product, project management and product management are not the same. The goal of product management is to manage a
product’s life cycle from start to finish. This might involve the design of a physical product, plus its packaging, instructions, warranties, branding, and market positioning. The goal of project management is to meet the project’s objectives on time and within budget by using a distinct set of processes.
In any project that creates a product as its result, both product management and project management are needed. For example, a product manager might be responsible for a new product from its inception through manufacturing to the end of its life cycle, which might take years and is sometimes indefinite. As a project manager, you might be responsible for taking the new product from its inception to manufacturing. That phase of the product’s development is a project—it has a definite beginning and end.
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Typically, in larger organizations, product manager and project manager are two different roles. The people fulfilling these two roles work closely together during the project phase of the product life cycle. When the project is complete, the project manager’s involvement ends.
Project-driven organizations
If an organization is project-driven rather than product-driven, it fosters an environment in which all work is completed using projects. All efforts center around various projects, and the organization’s overall profit depends on the profits of all projects.
Do it!
A-2:
Understanding product and project management
Multiple-choice questions
1 Which statements are true of project management?
A It tries to achieve objectives for project scope, quality, time, and cost. B It improves an existing product or service.
C It requires input from all managers and departments within an organization.
D It uses knowledge, processes, tools, and methods to meet or exceed project requirements.
E It involves striving for participant satisfaction.
2 Which statement correctly identifies both a project and a program? A A project is a temporary sequence of tasks; a program is a permanent
sequence of tasks.
B A project is a permanent sequence of tasks; a program is a logical group of related projects.
C A project is a set of related programs grouped logically; a program is a temporary sequence of tasks.
D A project is a temporary sequence of tasks; a program is a group of logically related projects.
3 Identify the main difference between project management and product management.
A Project management works with ideas and thought processes, whereas product management focuses on specific material products.
B Product management manages the entire product life cycle, whereas project management manages a distinct part of the life cycle.
C Product management focuses on product development, whereas project management is theoretical and generates ideas.
D Project management focuses on management, whereas product management incorporates hands-on product control.
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Topic B: The project management process
Explanation The overall process for managing projects can be divided into related sub-processes or process groups. Managing these groups can enable you to finish projects on time, within budget, with reduced risk, and with reasonably predictable results. To begin with a concept and end with a successful result, use the five process groups shown in Exhibit 1-1.
Exhibit 1-1: Project management process groups
1 Initiating — This process group is the formal recognition that a new project exists. In this process, you typically set project goals, objectives, and major milestones.
2 Planning — This process group includes defining resources and developing a schedule and budget for achieving project objectives. This process group is typically the most detailed aspect of the project management process. When done correctly, planning has the greatest impact on the success of the project. The critical nature of this process has led to a common project management phrase: “plan to plan.”
3 Executing — This process group involves coordinating personnel and resources to achieve the project goal.
4 Controlling — This process group includes completing project activities, measuring progress toward project objectives, and taking corrective action when necessary to bring the project back within the stated goals and objectives. A phrase often used to describe this process group is “work the plan.”
5 Closing — This process group includes processes for ensuring acceptance of the final product, bringing the project to an orderly conclusion, and reviewing lessons learned from the project.
The overall project management process provides the necessary structure, focus, and organization to complete any project. The initiating process group provides a foundation for the rest of the project, and the closing process group brings the project to an end. The steps within these two process groups are not continuous throughout a project. Instead, they are independent at the beginning and end of the project management process.
The planning, executing, and controlling process groups are interdependent and cyclical throughout the entire project. For example, moving your office to a new location involves planning. In contrast, hiring movers to box all the office equipment, supplies, and furniture and move it to a new location involves execution. Re-planning a move during an unforeseen schedule delay involves use of the controlling process group.
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Variables in the project management process groups
For a project to be successful, several variables must be addressed as part of the five project management process groups. These variables include scope, time, quality, communication, and management issues related to risk, cost, budget, human resources, contracts and procurement, and integration.
The separate processes for these issues are linked to the five process groups within the overall project management process. For example, to manage a project’s scope, you need to use initiation processes, which are part of the initiating process group. Scope management also involves scope definition processes, which are part of the planning process group. To understand the overall project management process, you need to understand how the processes from each group interact.
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Do it!
B-1: Identifying process groups
Multiple-choice questions
1 What is involved in the initiating phase of project management? A Initiation involves the allocation of resources to a project. B Initiation involves the recruitment of potential team members.
C Initiation involves formally recognizing that a new project exists. D Initiation involves suggesting a project to senior management.
2 Which three process groups are interdependent and cyclical throughout the project management process?
A Planning, controlling, and closing B Initiating, executing, and closing C Controlling, executing, and closing
D Planning, executing, and controlling
3 What should a project manager do if there’s a major delay in the controlling phase?
A Try to stick to the original schedule.
B Go back to the planning and execution processes. C Cancel the project.
D Go back to the initiation process.
4 What is the benefit of using the processes within the five project management process groups?
A A project manager can expect complete success, satisfied team members, and the praise of his or her manager.
B A project manager can expect to achieve reasonable success and meet several of the goals outlined for the project.
C A project manager can expect nothing less than the achievement of all the goals established at the inception of a project.
D A project manager can expect to complete work on time, within budget, and at an acceptable quality level.
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Common pitfalls when managing a project
Explanation When you’re managing projects, there are many pitfalls to avoid, including the following:
• Choosing the wrong project manager, which can lead to project failure — A
project manager must be able to drive the project forward and motivate team members. A project manager must also have the skills necessary to balance all aspects of the project.
• Selecting inappropriate team members — A project manager must be able to
select the right personnel according to their skills and competencies and the needs of the project.
• Inadequately defining tasks, which can result in confusion and poor-quality output — Before a project begins, a system for planning and control should be set up to balance cost, schedule, risk, and quality.
• Unclear project expectations, which can lead to inappropriate or incomplete results — Stakeholders must understand and communicate expectations before the project starts.
• Unavailability of resources, which can lead to an incomplete project — Before a project is begun, all resources should be arranged.
• Lack of support from senior management, which can cause project failure —
Senior management must agree with the project goal and take action to support it when necessary.
Benefits of good project management
Guarding against pitfalls and managing projects well can result in a high probability of success. When projects are managed effectively, the following situations can be avoided:
• The new product or service fails to meet quality standards and stakeholder expectations.
• The project is completed late or exceeds the budget.
• Team members are dissatisfied with how the project was managed and are reluctant to participate in future projects.
• The project is terminated before completion.
To manage projects effectively, use the processes in the five project management process groups. These processes will help you and your team complete work on time and within budget at an acceptable level of quality.
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Do it!
B-2:
Avoiding
pitfalls
Exercises
1 Which of the following issues are typical pitfalls that can lead to project failure? A Employee turnover
B Lack of support from senior management C Insufficient employee breaks
D Inappropriate selection of project manager
On the whiteboard, list the pitfalls that students suggest; then ask other students to suggest ways of avoiding them.
2 Based on your work experience, name some other pitfalls of the project management process.
Answers may vary.
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Unit summary: Fundamentals of project
management
Topic A In this topic, you learned about the characteristics of a project. You also learned about
the difference between productmanagement and project management. You learned that the goal of product management is to manage the product life cycle from start to finish, whereas the goal of project management is to meet the needs and expectations of a customer by using a distinct group of processes.
Topic B In this topic, you learned about the process groups of the project management
process: initiating, planning, executing, controlling, and closing. Then, you learned about the variables of the five project management process groups. Finally, you learned about some of the common pitfalls to avoid when managing a project.
Review questions
1 What is a project?
A project is a temporary sequence of tasks with a distinct beginning and end that is undertaken to create a unique product or service.
2 List the four attributes that characterize a project. • Projects are unique.
• Projects have a purpose. • Projects have a life cycle. • Projects have interdependencies.
3 Which of the following phrases is an expression that describes the controlling phase?
A “Manage every aspect.” B “Document the processes.” C “Complete the project.”
D “Work the plan.”
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4 Which project management process group typically has the greatest impact on the success of a project? A Executing B Planning C Initiating D Controlling 5 What’s a program?
A A group of resources used on multiple projects B A list of tasks needed to complete a project C The shortest sequence of independent tasks
D A logical group of related projects
6 Which project issues are typically governed by individual processes? A Team building
B Communication
C Contracts and procurement D Training
E Integration F Functionality
G Risk
7 What must a project manager do to manage a project effectively?
A A project manager must control the flow of information in and out of the project. B A project manager must communicate with every level of management.
C A project manager must balance all aspects of the project.
D A project manager must add and remove team members throughout the life of the project.
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U n i t 2
Characteristics of a project
Unit time: 60 minutes
Complete this unit, and you’ll know how to:
A
Identify characteristics of a project’s
internal and external environments, the
influence stakeholders have on a project,
and different organizational structures.
B
Identify the critical functions, necessary
skills, responsibilities, and challenges of a
project manager.
C
Staff a project team, create a skills
inventory, and identify the benefits of team
building and of establishing a project
office.
PREVIEW
Topic A: The project environment
Explanation Every project is made up of three fundamental components:• The project environment • The project manager • The project team
A healthy project environment is vital to successful project management. Several environmental and socioeconomic issues can affect a project, and these issues must be managed. Organizational structure can also have a major impact on a project’s success.
Internal environment
A project manager must create a positive internal environment for a project. The internal environment can influence the attitudes of the project’s team members and enhance or diminish their desire to achieve the project goal. For a project to succeed, team members must be dedicated, invested, and committed. A positive internal environment should include:
• A corporate culture that acknowledges and appreciates the efforts of team members
• Good working relationships among team members • Open lines of communication
• An environment of trust • A willingness to take risks
• Recognition for effort and achievement
External environment
The project’s external environment is also critical because it can influence the project’s internal climate. For example, suppose there’s a political conflict among managers in an organization. The managers’ attitudes can affect the attitudes of their direct reports, and some of them might be part of your team. The external environment encompasses all components outside the project, including:
• The parent organization, whose policies and procedures can influence a project • The political environment, which can affect a project if government policies
change
• The current business climate, which can decrease the effectiveness of a project’s output
• The geographical setting, which can delay a project if an environmental issue arises
• Social commitments, which can influence a project due to responsibilities such as reduced environmental risks
Knowledge of these and other issues in the external environment can help you anticipate and plan for changes and events that can affect your project.
PREVIEW
Do it!
A-1:
Understanding
internal and external environments
Exercises
Ask for one positive and one negative scenario, and facilitate a brief discussion.
1 Discuss the following statement.
“A project’s internal environment influences a team member’s attitude and the desire to achieve the project goal.”
2 Sue and her project team met for 15 minutes to discuss a problem. During the meeting, the team brainstormed multiple solutions and reached a consensus. Which aspects of the project environment do you think contributed to the team’s positive internal culture?
A Recognition for effort and achievement
B Good working relationships among team members C A willingness to take risks
D Open communication
3 Why is it important to be aware of issues in the external environment? A It helps you stay ahead of rival projects within the company. B It helps you and your team stay abreast of the competition.
C It helps you understand the reaction of external parties toward your project.
D It helps you plan for events that can affect your project.
PREVIEW
Project stakeholders
Explanation Another factor that can influence a project is its stakeholders. A project stakeholder can be an individual, group, or organization involved in a project or with interests that influence the project. Stakeholders can be either formal or informal. Formal
stakeholders have a direct interest or investment in a project; informal stakeholders are those who might be affected by a project’s result.
During the initiation and planning phases of a project, you and your team should identify both types of stakeholders and their expectations. This will help you manage their expectations and minimize conflicts over project deliverables. Formal stakeholders in a project typically include:
• The project manager, who is ultimately responsible for the success or failure of a project
• The project team members, who are directly responsible for completing project tasks
• The parent organization, which provides project personnel and resources • The customer that requests the end product or service
Stakeholder influence
Stakeholders have varying levels of influence on a project.
• Some stakeholders have specific requirements they want the project to meet, and their stake in the project is significant.
• Less critical stakeholders might also have specific requirements for the project, and it’s up to the project team to decide if their requirements can be fulfilled. • Some stakeholders need to feel involved and might want to provide input and
feedback throughout the project.
The project team should modulate the effort invested to meet the stakeholders’ needs based on the stakeholders’ levels of influence.
PREVIEW
Do it!
A-2:
Identifying
stakeholders’ influence on a project
Exercises
1 In the following scenario, Mr. Jones (project manager) is talking to his project team.
Mr. Jones: Okay, here’s the situation. George Elliott called this morning and requested additional market research.
Ms. Evans: Again? He just asked for more research last week. Is this going to keep happening?
Mr. Jones: It looks that way. But he’s the customer and we have to meet his expectations if we want future jobs with him.
Ms. Evans: Right, but we need to draw the line somewhere. Otherwise, we will jeopardize the schedule that we’ve already agreed upon.
Mr. Jones: I discussed that with him, and he agreed to authorize budget and schedule changes to accommodate any additional requests.
In the above scenario, who is the key stakeholder? George Elliott
What is Mr. Jones trying to communicate to his team members?
The importance of adjusting the team’s efforts to accommodate the needs of a stakeholder 2 At what stages should you and your team identify your stakeholders and their
expectations?
A During the planning and execution phases
B During the initiation and planning phases C During the controlling and closing phases D During the execution and controlling phases
Keep the discussion
relatively short. 3 Discuss the following statement:
“The public can be considered a key stakeholder in a project.”
PREVIEW
Socioeconomic issues
Explanation In addition to addressing stakeholder concerns, you must monitor and manage various socioeconomic issues that can affect your project. The following socioeconomic issues are often relevant to a project:
• Government standards and regulations — When planning your project,
determine the standards and regulations that can influence project deliverables. • International issues — As organizations span international boundaries,
international issues might be pertinent to your project.
• Social and cultural influences — Make sure your project does not pose a threat to social concerns or violate cultural norms.
Suppose that your project involves going into a small community to build a dam. You would need to consider how the project could affect the lives of those in the community. Cultural influences are important if you manage a project at a new geographic location, especially a different country or continent. What might be acceptable in one culture can be considered rude or insensitive in another.
Other factors, such as wages, working conditions, and management styles, depend on the culture and are often government regulated. Your project plan must take these factors into consideration and incorporate provisions related to special cultural needs.
Organizational issues
A project’s parent organization can also affect how you manage a project. In particular, you should be aware of the following organizational issues:
• Values, beliefs, and expectations — A project team can either adopt or reject the organization’s values, beliefs, and expectations. Their attitude toward these issues directly affects the project environment.
For example, suppose that a parent organization expects employees to work from 8:00 A.M. to 5:00 P.M. If a project requires long work hours and work over the weekends, the project manager might decide to give team members an
occasional day as a holiday to make up for the additional work hours. This situation can create conflict with functional managers and can be seen as special treatment for project team members.
• Structure — The structure of the parent organization can dictate resource availability as well as your authority as a project manager. For example, if the parent organization is organized to facilitate project management, you can exercise more authority than if the parent organization has a functional structure. • Project philosophy — A project-based organization rewards different actions
than does a non-project-based organization. For example, a project-based organization rewards its teams based on team rather than individual achievement to promote teamwork. This kind of organization might also reward teams for meeting targets despite constraints.
When you are aware of the issues that can affect a project environment, you can prepare for those issues as you plan. This preparation can help you avoid conflicts that can derail a project and help ensure that the project stakeholders benefit from the project’s success.
PREVIEW
Do it!
A-3:
Identifying
socioeconomic and organizational issues
Exercises
Ask student volunteers to discuss any other socioeconomic issues they think can affect the project management process.
Ask students to cite some examples.
1 Identify the socioeconomic issues that can affect the project management process. A Government standards and regulations and the financial status of your
competitors
B Government standards and regulations and social and cultural influences C International issues and domestic business statistics
D Social and cultural influences and the state of your local economy 2 List some organizational issues that can affect a project’s parent organization.
Answers might include:
• Values, beliefs, and expectations
• Structure
• Project philosophy
PREVIEW
Organizational structures
Explanation The term organizational structure refers to the parameters within which you and your project team operate. Before you choose a structure, consider these factors:
• The nature of the project
• The characteristics of different organizational structures • The structure that best fits with the parent organization
• Whether the quality of the project deliverables can be improved by team effort • How team synergy can benefit the project
• The requirement for full-time commitment of resources • The number of project constraints
You can help determine the organizational structure for your project. For example, for a large and complex project, you might ask for a full-time team dedicated to the project. However, with small or simpler projects, the structure is more likely to be determined by the existing organizational structure.
Generally, you can determine the appropriate organizational structure for a project by following these steps:
1 Define the project’s objectives.
2 Determine the key tasks for each objective.
3 For each task, establish the functional departments within the parent organization.
4 Identify the personnel who will work on the project, and identify the customers’ needs and expectations.
5 Define any special characteristics associated with the project, such as the need for a specific technology.
6 Analyze the pros and cons of the functional, project, and matrix structures, and choose the one that best suits the project.
Functional project organizational structure
One option when creating a project team is to keep it within a functional division of the organization. Usually, a project is assigned to the functional department that can add the maximum resources, provide the maximum support in implementing the project, or ensure the project’s success.
Advantages
Advantages of using a functional project organizational structure include the following: • Experts from functional departments can assist when necessary.
• The functional departments define a path of professional growth and advancement for the project team members.
• The functional department offers high flexibility to use personnel from the department.
• Individuals within a functional department are likely to share knowledge and expertise freely, enhancing creativity and problem solving within the project team.
PREVIEW
Disadvantages
Some disadvantages of using a functional project organizational structure include the following:
• Sometimes no team member is given complete responsibility for the project, and a lack of clear accountability can increase the probability of failure.
• The project is not the central focus because the functional department’s focus might differ from the project focus. The lack of focus on a project can lead to slow response to stakeholders’ needs, as well as other problems.
• Project team members tend to be less motivated because the project is often their second focus after their functional duties.
• The team is more likely to ignore project issues that are external to its functional department.
Do it!
A-4: Discussing the functional organizational structure
Exercises
1 Project team members are not sufficiently motivated and focused on the project. No one in the team has ultimate responsibility for the project. Which type of organizational structure is most likely to lead to this situation?
A Pure project organizational structure B Adaptive organizational structure C Dynamic organizational structure
D Functional organizational structure
Divide students into two groups according to their responses, and initiate a discussion.
Keep the discussion brief.
2 In your opinion, is a functional organizational structure advantageous to projects? Why or why not?
PREVIEW
Project organizational structure
Explanation A project organizational structure forms when the project is detached from the rest of the parent organization and functions as a self-contained unit. Depending on the parent organization, you and the project team might have total autonomy or might use some of the same administrative and financial resources as the parent organization.
Advantages
Advantages of using a project organizational structure include the following:
• Communication between dedicated team members is more efficient and effective than communication between partially dedicated team members working in different departments.
• Team members report only to the project manager instead of reporting to both the project and functional managers.
• The project manager has complete authority over the project. • A project team can develop a strong sense of commitment.
• Decision making is more efficient because it does not need to involve the entire organization.
Disadvantages
Some disadvantages of using a project organizational structure include the following: • Pure project teams tend to conform inconsistently to policies and procedures
because, unlike the parent organization, pure project teams do not follow a process that tests and reinforces procedures.
• Rivalry or competition between team members and the parent organization can result in an unhealthy work atmosphere that impedes project success.
• Uncertainty about team members’ futures after project completion can adversely affect their work. This uncertainty arises primarily when a project nears
completion and the team members are not assigned to another project. • When several projects run simultaneously, a duplication of effort can result.
Resources can be used more effectively if teams share them across projects.
PREVIEW
Do it!
A-5: Discussing the project organizational structure
Exercises
1 A project organizational structure forms when a project is separate from the parent organization, functioning as a self-contained unit. True or false?
True
2 What is an advantage of using a project organizational structure? A Team members conform to policies and procedures consistently. B Duplication of effort is avoided.
C Team members report directly to the project manager.
D Experts from functional departments can be used when needed.
3 What is the defining characteristic of a pure project organizational structure? A A project is closely grouped with other projects within the parent
organization.
B A project is grouped with one or two similar projects.
C A project is prioritized because of its expected contribution to the parent organization.
D A project is separate from the parent organization.
PREVIEW
Matrix organizational structure
Explanation The matrix organizational structure merges the functional and project organizational structures to combine their advantages and overcome their disadvantages. Because organizations differ in many ways, no two organizations use the same matrix design. One of the greatest benefits of using a matrix structure is that responsibility is shared between project and functional managers. Both maintain a degree of authority, responsibility, and accountability to the project.
In a matrix organization, the project manager controls the project team’s activities and schedules, but the functional managers control assignment of team members to projects and the use of technology and other requirements.
Weak and strong matrix organization
A strong matrix is similar to a project organizational structure. However, unlike a project organization, in which a project is a stand-alone entity, a strong matrix organization does not separate the project from the parent organization. In a strong matrix, the project manager has a high level of authority over resources assigned to the project.
A weak matrix is similar to a functional organizational structure. When a project uses a weak matrix form, the project manager might be the only full-time team member, and the functional departments might only supply services to the project. For example, if a project is to create a database, the functional department that handles administrative systems might be required to develop the database. In a weak matrix, the functional manager retains authority over resources.
Advantages
Advantages of using the matrix structure for a project include the following: • The project manager has access to the resources within each functional
department, enabling the sharing of key resources. This reduces duplication of effort and minimizes costs.
• Team members still have their functional “home” after the project is complete, reducing anxiety and stabilizing motivation levels.
• Matrix organizations are flexible and can respond rapidly to change, conflict resolution, and project needs.
• Policies and procedures can be developed independently for a project. However, because representatives from administrative units of the parent organization are involved, these policies are consistent with those of the parent organization. • When several projects run simultaneously, company-wide resources can be
shared.
• Authority and responsibility for achieving the overall project goal are shared. • It’s easier to develop a good balance between time, cost, and personnel.
PREVIEW
Disadvantages
Disadvantages of using the matrix structure for a project include the following: • Project team members have two supervisors: the project manager and the
functional manager. This structure might result in confusion, split loyalties, division of authority, and possible project failure.
• There is a high possibility of role ambiguity for managers and team members. • Project managers might be accountable for project success but lack the authority
necessary to achieve success.
• Sharing team members across multiple projects and a functional area can result in low levels of commitment and focus. A lack of commitment and focus can cause projects to take longer and cost more than planned.
• The volume of information and workflow can lead to confusion and complicate communication.
• Conflicts can arise if a functional manager’s goals differ from the overall project goals.
PREVIEW
Do it!
A-6:
Identifying
types
of organizational structure
Exercises
1 In a strong matrix organizational structure, who has authority over resources?
A Project manager B Portfolio manager C Functional manager D Hiring manager
2 Match the following organizational structures with their descriptions: functional, project, and matrix.
Projects are assigned to the department that is best suited to them.
Functional Projects are separated from the parent organization to
function as self-contained units.
Project
Responsibility for projects is shared between the project and functional managers.
Matrix
3 Why is it important to understand organizational structures even if the structure is identified for you?
A Understanding the organizational structure will allow you to present your project in the best possible way.
B Identifying the details of the organizational structure will allow you to assign tasks efficiently.
C Understanding the organizational structure will allow you to maximize the available resources.
D Knowing the advantages and disadvantages of the organizational structure can help you plan more effectively.
4 Select a primary reason for maintaining a good working relationship with functional managers in a weak matrix structure.
A In a weak matrix structure, functional managers are members of the project team.
B In a weak matrix structure, functional managers interact closely with the senior managers.
C In a weak matrix structure, functional managers frequently control manpower and materials.
D In a weak matrix structure, functional managers have veto power over all final project decisions.
PREVIEW
Topic B: The project manager
Explanation As a project manager, you need to take charge of a project. In this role, you perform four basic functions:
1 Planning the project, which includes developing the scope statement 2 Organizing resources
3 Overseeing the execution of the project plan
4 Controlling project variables until project completion
Project managers should have the ability to focus on task accomplishment and should understand business management principles. Project managers also should be versatile, be able to communicate well, and understand the critical issues related to their projects.
Critical functions
Your primary responsibility as a project manager is to plan the project. If you complete all the planning steps effectively, the project should run smoothly. When planning a project, include the following:
• A statement of project objectives, deliverables, expectations, and constraints • A list of the resources needed to complete the project
• A definition of all the tasks needed to achieve the project goal • A timetable with milestones
• A definition of quality standards for the product or service
The project manager and the functional manager
Functional managers are responsible for resource allocation, utilization, and
performance within specialized departments as well as for direct technical supervision. Project managers are process facilitators who are responsible for ensuring that projects achieve specific goals.
The relationship between the functional manager and the project manager depends on the organizational structure. In a weak matrix structure, a functional manager frequently handles manpower and materials. Therefore, it’s important to maintain good working relationships. The best relationship between functional and project managers is one with minimal conflicts, where both parties work toward achieving the organization’s goals. In this scenario, the matrix structure is balanced.
Senior management’s effect on a project
Senior management involvement in a project is often necessary and usually takes the form of a steering committee or a “sponsor” role. The main functions of a steering committee are to make major project decisions, approve scope changes, and give input about corporate objectives that affect the project, such as overall corporate technology strategies.
A senior manager often performs the role of a sponsor for large, complex, or highly visible projects. The sponsor provides you with guidance and support, often in the form of resolving resource conflicts with functional managers, appearing before the steering committee as a project advocate, approving the budget and plan, and reviewing status reports.
PREVIEW
Do it!
B-1:
Identifying
relationships between managers
Exercises
1 In the following scenario, Mr. Jones (project manager) and Mr. Richter (functional manager) are having a conversation.
Mr. Jones: Is Avery making progress on the proposal?
Mr. Richter: Well, he finished the first phase a day behind schedule, but I talked to him about it and he assured me that he’d complete the next phase on time.
Mr. Jones: Any delay could affect other departments, so keep me updated on this situation.
Mr. Richter: Okay. I’ll also make sure that he has all the support he needs. What can you infer about the following:
• The relationship between the functional manager and project manager • The organizational structure
The functional manager and project manager are cooperating and working toward achieving the project goals.
It is a balanced matrix organizational structure.
2 Match the following management levels to their responsibilities: senior manager, functional manager, project manager.
Controls specialized areas, technical supervision, and manpower and material
Functional manager
Defines tasks to attain goals and facilitate processes Project manager Makes major project decisions, approves scope
changes, and reviews status reports
Senior manager
PREVIEW
Project management skills
Explanation Successful project managers possess skills in these areas: • Administration • Leadership • Communication • Stress management • Team building • Conflict resolution • Technology management • Planning • Decision making • Resource allocation Administration
Administrative skills, such as staffing, budgeting, and scheduling, are important for project managers to have. Understanding administrative tasks makes planning and managing projects easier.
Leadership
A project manager can directly influence the project team and the parent organization. Even if a project manager does not have formal authority, he or she must be able to lead a team within the existing organizational structure.
Communication
Good communication and information sharing skills are critical for project managers. A project manager is usually the primary point for information dissemination. The project manager must be able to relate to the project team, stakeholders, and external vendors. Good communication skills enable you to be sensitive to the needs of team members. Communication and leadership skills can help you persuade team members to cooperate, regardless of personal feelings or conflicts.
Stress management
Project management can be demanding and stressful, so stress management skills are essential. A project manager needs to learn techniques for handling and reducing personal stress, as well as the stress of team members.
Team building
Frequently, project managers are assigned the responsibility of building project teams. To build effective teams, you must provide an inviting culture and a climate conducive to teamwork.
Conflict resolution
During any project, conflicts can arise. You should understand the difference between constructive and destructive conflict, and be prepared to help resolve a destructive conflict. You also need problem-solving skills to distinguish between the causes and symptoms of a problem. Distinguishing causes from symptoms will help you resolve problems at the source.
PREVIEW
Technology management
Although you don’t necessarily have to be a technical expert, you need to have a general understanding of technology and the business environment. This will help you evaluate technical concepts and understand how your decisions can affect the entire project.
Planning
Project managers must have good planning skills. The project plan defines how to run a project and bring it to completion. The ability to plan is a critical skill—planning continues throughout a project’s life cycle.
Decision making
Good decision-making skills are essential for all project managers. You will frequently make decisio