Revision for Project Management

CHAPTER 1: Modern project management

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

Characteristic  Established objective

 Defined life span with beginning and an end

 Involvement of several departments and professionals

 Typically doing something that has never been done before

 Specific time, cost and performance requirement

Program Series of coordinated, related, multiple projects that continue over extended time intended to achieve a goal

Project life cycle

 Defining stage – specification are defined; objectives are established; teams are formed

 Planning stage – level of effort increases and plans are developed to determine the details of the project

 Executing stage – Major portion of project work takes place both physically and mentally. Time, cost and specification measures are used for control.

 Delivering stage – delivering project to customer and redeploying project resources which may include customer training and transferring documents.

Importance  Compression of project life cycle – speed is a competitive advantage

 Global competition – market demands cheaper and better services or products. Besides, emergence of quality movement across the world with ISO9000 certification.

 Knowledge explosion – increased complexity of project to include latest advances

 Corporate downsizing – flatter and leaner organizations with outsourcing

 Increased customer focus – increased competition on customer satisfaction

 Rapid development of third world and closed economies – explosion of demand for all manner of consumer goods and infrastructure development

 Small projects with big problems – velocity of change required organizational climate in which hundreds of projects are implemented concurrently

Integration with strategic plan

 Development of mission, objectives and organization strategies depend on external and internal environmental factors. The outcome of analysis of all these environmental factors is a set of strategies designed to best meet the needs of customers.

 External environmental factors – political, social, economic and technological

 Internal environmental factors – strengths / weakness of management, facilities, core competencies and financial condition

Integration within process of managing actual project

 Good project manager balance attention to both the technical and socio cultural dimension of project management.

 Technical side – formal, disciplined, pure logic part of the process that relies on formal information system available and effect of project changes are documented / traceable.

 Socio cultural side – centres on creating a temporary social system within a larger organizational environment that combines the talents of divergent set of professionals working to complete the project. It also involves managing the interface between the project and external environment.

CHAPTER 2: Organization strategy and project selection

management

 Provides theme and focus of future direction of the organization

 Supports consistency of action at every level of the organization

 Position the organization to meet the needs and requirements of its customers for long term

 Decide the survival of an organization Activities of

strategic management process

 Review and define organization mission – identify the scope of organization in terms of its product or service and provides focus for decision making when shared by organizational managers or employees

 Long range goals and objective – translate mission into specific, measurable, assignable, realistic, time related terms. Objectives answer in detail where a firm is headed and when it is going to get there

 Analyze and formulate strategies to reach objectives – determine and evaluate alternative that support the organization’s objectives and select the best alternative. SWOT (strength, weakness, opportunities and threat) analysis is used to evaluate past and current position.

 Implement strategies through project – answers how strategies will be realized (require allocation of resources, formal organization that complement / supports strategy / project, planning / control system and motivation to project contributors)

Problem  Implementation gap – objective and strategies are made independently at different levels by functional groups within the organization hierarchy causes manifold problems

 Organization politics – criteria and process for selecting project are ill-defined and not aligned with the mission of the firm. “Sacred crow” is a project that a powerful, high-ranking official is advocating.

 Resource conflicts and multitasking – competition among project managers can be contentious and seek to have the best for their projects. Multitasking adds to delays and costs and changing priorities exacerbate the multitasking problems.

Portfolio management system

 Classification of project – compliance (must do), operational (needed to support current operations to improve efficiency of delivery system) and strategic (directly support organization’s long run mission)

 Senior management must provide guidance in establishing selection criteria that strongly align with the current organization strategies and annually decide how they wish to balance the available organizational resources among different types of projects

 Assessing project portfolio – bread & butter (evolutionary improvements to current products and services), pearls (revolutionary commercial advances using proven technical advances), oysters (technological breakthrough with high commercial payoff) and white elephant (project that at one time showed promise but are no longer viable)

CHAPTER 3: Organization structure and culture

Problems Projects are unique, one-time efforts with distinct beginning and ending

Projects are multi-disciplinary in nature because they require variety of specialist Weak

matrix

Similar to functional organization with formally designated project manager who acts as staff assistant. The project manager has indirect authority but functional manger decide most of them.

Balanced matrix

Classic matrix where project manager define what needs to be done while functional manger decide how it will be accomplished.

Strong matrix

Project manger controls most aspects of the project including scope trade off and assignment of functional personnel. The functional manager is only consulted on a need basis.

Structure factor (7)

Size of project, strategic importance, novelty / need for innovation, need for integration, environmental complexity, budget / time constraints and stability of resource requirement

Culture System of shared norms, beliefs, values and assumptions which binds people together to create shared meanings. It provides sense of identity, helps legitimize the management system, reinforces standards of behaviour and create social order.

Culture essence (10)

Member identity (identify with organization), team emphasis, management focus (effect of outcomes), unit integration (interdependent), control (obedience), risk tolerance (aggressive, innovative), reward criteria, conflict tolerance (open), means vs end orientation and open system focus (responds to changes in the external environment)

Identify culture

Study the physical characteristic of an organization

Read about the organization from annual reports, mission statement and press releases Observe how people interact within the organization

Interpret stories and folklore surrounding the organization

Pros and cons of different structure

Structure Pros Cons

Functional organization

 No change in basic functional structure  Flexibility in the use of staff

 In-depth expertise can be brought  Easy post-project transition

 Lack of focus because of own core routine  Poor integration across functional units  Slow to complete

 Lack of ownership and motivation Project team  Simple and operate independently

 Fast to complete because no other obligations  Cohesive and high level of motivation

 Cross functional integration and specialist from different areas work closely together

 Expensive and duplication of efforts

 Internal strife and divisiveness of project team and parent organization

 Limited technological expertise, self-contained team and we-they syndrome

 Difficult post-project transition because of prolonged absence

Matrix  Efficient because resources can be shared across multiple projects to reduce duplication

 Strong project focus by having formally designated project manager

 Easier post-project transition because they have homeport to return once completed

 Flexible utilization of resources and expertise within the firm

 Dysfunctional conflict because tension between functional and project managers. Worthy discussion can degenerate into heated arguments that engender animosity

 Infighting because competition for scarce resources

 Stressful because each participant have at least two bosses

 Slow because decision making can get bogged down as agreements

Network organization

 Cost reductions because firm can secure competitive prices for contracted services

 High level of expertise and technology

 Flexible because firm is no longer bounded by their own resources with talents of others

 Small company can go global with foreign partners

 Coordination breakdowns because mutual adjustment is required

 Loss of control because there is no direct authority over

 Conflict because they do not share the same values, priorities and culture. Trust is essential to project success.

CHAPTER 4: Defining the project

scope

 Project objective – define overall objective to meet customer’s need

 Deliverables – expected outputs over the life of project

 Milestones – significant event in a project that occurs at a point in time

 Technical requirements – ensure proper performance

 Limits and exclusions – prevent false expectations

 Reviews with customer – completion of scope checklists for consensus Project

priorities

 Constrain – fixed original parameter

 Enhance – taking opportunities to reduce costs, shorten schedule or improve performance

 Accept – tolerable not to meet original parameter Deliverable  Expected output over the life of the project

WBS  All the elements of the project in a hierarchical framework and establishes their relationship to the project end item

Create work breakdown structure (WBS)

 Successively subdivided work of project into smaller work elements

 Work package are short-duration tasks that have a definite start and stop point, consume resources and represent cost

 Define work (what), identifies time to complete (how long), time-phased budget (cost), resources needed (how much), identifies person responsible (who) and monitoring points for measuring progress

Organization breakdown structure (OBS)

 Provide a framework to summarize organization unit work performance, identify organization units responsible for work packages and cost control accounts

 Control can be checked from outcomes (vertically on deliverables) and responsibility (horizontally by organization responsibility)

Coding WBS for system

 Allow reports to be consolidated at any level in the structure

 Creative combination of letters and numbers to minimize the length of WBS codes Process

breakdown structure (PBS)

 Process oriented projects in which final outcome is a product of a series of steps / phases

 Deliverable needed to exit a phase and begin a new one

 Quality checkpoints to ensure that deliverables are complete and accurate

 Sign offs by those responsible to indicate that the project can move to the next phase Responsibility

matrix (RM)

 Summarize the tasks to be accomplished and who is responsible for what on a project

CHAPTER 5: Estimating project times and costs

 Schedule work and determine how long or how much

 Determine if it is worth doing and how well the project is progressing

 Develop cash flow needs and time phased budges (establish project baseline) Factors  Planning horizon – more accurate for nearer events

 Project duration – longer duration has higher uncertainty

 Skills and experience of people

 Project structure – dedicated project team has better speed and concentrated focus

 Padding estimates

 Organization culture

 Other factors such as equipment downtime, national holidays and legal limits Guidelines  Responsibility should be assigned to the person most familiar with the task

 Use several people to estimate to eliminate extreme estimate errors

 Based on normal conditions, efficient methods and normal level of resources

 Specific time units should be selected and consistent

 Each task is independent of other task

 No contingencies allowance in work package estimates

 Add risk assessment to estimate to avoid surprises to stake holders Macro

approaches

 For strategic decision making, high uncertainty, small project and unstable scope

 Consensus method – Uses a pooled experience of senior managers for meeting

 Ratio method – Estimate total cost by scaling factor from a single cost

 Apportion method – Used when projects are almost similar to past projects

 Function point method – use major parameters such as number of inputs, outputs

 Learning curve – pattern of improvement phenomenon used to predict reduction in time to perform repeated task

Micro approaches

 For fixed-price contract, important cost / time, and customer want details

 Template method – Costs from similar past projects with adjustment in differences

 Parametric procedures for specific tasks – detailed ratio method for each item

 Detailed estimates for work package – Have 3 estimates (low, average and high) as a basis for assessing risk and determining contingency fund

Types of cost  Direct cost – chargeable to a specific work package that represent real cash outflows

 Direct overhead cost – resources that are being used in project such as salary and rental

 General and administrative overhead cost – Indirect cost that carried throughout Importance of

contingency

 Hidden interaction costs in estimates such as coordination and adjustment

 Normal conditions do not apply and things may go wrong such as design flaws

 Changes in project scope and plans as one gets further into the project

 Contingency funds and time buffer to offset uncertainty

 Changing baseline schedule and budget due to events such as labour strike, political upheaval, insurmountable technical barriers and skyrocketing material costs

Phase estimating over project life cycle

Phase Need Specification Design Produce Deliver

1 Macro

2 Detailed Macro

3 Detailed Macro

4 Detailed Macro

CHAPTER 6: Developing a project plan

Project network  Tool for planning, scheduling and monitoring project progress

 Failure to integrate with WBS due to different groups of people involved or WBS is poorly constructed and not output oriented

Approaches  Activity-on-node (AON) or Activity-on-arrow (AOA)

 Basic rules: Network flows from left to right, activity cannot begin until all preceding connected activities have been completed, arrows on networks indicate precedence / flow, each activity with unique identification number, activity identification number be larger than precedence activity, no looping, no conditional statements and using common start / end nodes

Computation process

 Forward pass – earliest times

 Backward pass – latest times

 Total slack – amount of time an activity can be delayed and yet not delay the project

 Critical path – network path that has the least slack in common. It is important because it impacts the completion time.

Extended network techniques

 Laddering – segmenting a larger activity to gives the appearance of steps on a ladder on network. It is too restrictive that all immediate preceding activities must be 100% complete.

 Lag – minimum amount of time a dependent activity must be delayed to begin or end. It avoid delays, reduce network detail, and can be used to constrain start or finish of an activity

 Finish to start relationship – typical generic network style but there can be delayed even when the preceding activity is complete

 Start to start relationship – alternative segmenting activities in which a project can begin without the 100% completion of precedence activity

Activity  Element of the project that requires time

Critical path  Longest path through the network and the project will be delayed by the same amount of time if an activity on this path is delayed. Critical path has the least slack.

Slack  Amount of time an activity can be delayed and yet not delay the project

Lag  Minimum amount of time a dependent activity must be delayed to begin or end Hammock

activity

 To identify the use of fixed resources or costs over a segment of the project Pros and cons of different method

Method Pros Cons

AON  No dummy activities are used

 Events are not used

 Easy to draw if dependencies are not intense

 Easily understood by first-level manager

 CPM approaches uses deterministic times to construct networks

 Path tracing by activity is difficult

 Network drawing and understanding are difficult when dependencies are numerous

AOA  Path tracing is simplified by activity numbering scheme

 Easier to draw for intense dependencies

 Key events can be easily flagged

 Use of dummy activities increases data requirements

 Emphasis on events can detract from activities

CHAPTER 10: Leadership; being an effective project manager

reciprocity

 One good deed deserves another and likewise, one bad deed deserves another. Similarly maxim, “Quid pro quo”.

Network of stakeholder

 Project team – manage and complete project work. They may want to do a good job, but are concerned with other obligations and how their involvement on project will contribute to their personal goals and aspirations

 Project manager – compete with each other for resources and support of top

 Administrative support – provide valuable support services. They impose constraints and requirements on project such as documentation of expenditure

 Functional manager – responsible for assigning project personnel, resolving technical dilemmas and overseeing the completion of significant segment of project work.

 Top management – approve funding of project and establishes priorities within organization. They define success and adjudicate rewards for accomplishments.

 Project sponsor – champion the project and use their influence to gain approval of project

 Subcontractors – may do all the actual work and schedule slips can affect the work of core project team.

 Government agencies – place constraints on project work such as permit and codes  Other organization – may directly or indirectly affect the project such as supply

 Customer – define the scope of project and ultimate project success rests in their satisfaction. They concerned with getting a good deal and naturally breeds tension with the project team.

Traded organizational currencies

 Task related currencies – resources, assistance, cooperation and information  Position related currencies – advancement, recognition, visibility and network  Inspiration related currencies – vision, excellence and ethical correctness

 Relationship related currencies – acceptance, personal support and understanding  Personal related currencies – challenges, ownership and gratitude

Managing by wandering around (MBWA)

 `Mangers spend the majority of their time outside the offices. Through face-to-face interactions, project manager is able to stay in touch with what is really going on in the project and build cooperative relationships essential to project success. They are able to intervene to resolve conflicts and prevent stalemates from occurring.

Leading by example

 Highly visible, interactive management style is not only essential to building and sustaining cooperative relationships but also their own behaviour. It symbolizes how other people should work on the project. These aspects are priorities, urgency, problem solving, cooperation, standards of performance and ethics.

Contradictory nature of work

 See the big picture while getting your hands dirty  Encourage individuals but stress the team

 Hands-off and hands-on  Flexible but firm

 Team versus organizational loyalties Core traits of

successful project manager

 System thinker – take a holistic rather than reductionist approach by managing interactions

 Personal integrity – establish a firm sense of who you are, what you stand for and how you should behave to provide the buoyancy to endure ups and downs of project life cycle

 Proactive – Take action before it is needed to prevent small concern from escalating into major problems

 High tolerance of stress – require physical exercise, healthy diet and supportive home front to endure the rigors

 General business perspective – have general grasp of business fundamentals and how different functional disciplines interact to contribute to a successful business

 Good communicator – able to communicate with a wide variety of individuals  Effective time management – budget time wisely and adjust their priorities quickly  Skilful politician – deal effectively with people and win their support and endorsement  Optimist – display a can-do attitude. Greatest strength lies in sense of humour and playful.