Introduction to Project Management
- 1. Chapter 1: Introduction to Project Management
- 2. Learning Objectives Understand the growing need for better project management, especially for information technology projects Explain what a project is, provide examples of information technology projects, list various attributes of projects, and describe the triple constraint of projects Describe project management and discuss key elements of the project management framework, including project stakeholders, the project management knowledge areas, common tools and techniques, and project success 2
- 3. Learning Objectives (continued) Discuss the relationship between project, program, and portfolio management and the contributions they each make to enterprise success Understand the role of the project manager by describing what project managers do, what skills they need, and what the career field is like for information technology project managers Describe the project management profession, including its history, the role of professional organizations like the Project Management Institute, the importance of certification and ethics, and the advancement of project management software 3
- 4. Opening Case Anne Roberts, the new Director of the Project Management Office for a large retail chain, stood in front of 500 people in a large corporate auditorium to explain the company’s new strategies. She was also broadcasting to thousands of other employees, suppliers, and stockholders throughout the world via internet. The company had come a long way in implementing new information systems to improve inventory control, sell products using the web, streamline the sales and distribution processes, and improve customer service. However, the stock price was down, the nation’s economy was weak, and people were anxious to hear about the company’s new strategies. Anne began to address the audience “Good morning. As many of you know, our CEO promoted me to this position as Director of the Project Management Office two years ago. Since then, we have completed many projects, including the 4
- 5. That project enabled us to provide persistent broadband between headquarters and our retail stores, allowing us to make timely decisions and continue our growth strategy. Our customers love that they can return items to any store, allowing, and any sales clerk can look up past sales information. Of course, we’ve had some project failures, too. Some of the new stores we opened are still operating at a loss, and we need to improve our supplier management process. Our challenge is to work even smarter to decide what projects will most benefit the company, how we can continue to leverage the power of information technology to support our business, and how we can exploit our human capital to successfully plan and execute those projects. If we succeed, we’ll continue to be a world-class corporation”. “And if we fail?” someone asked from the audience. 5
- 6. Introduction Many organizations today have a new or renewed interest in project management Computer hardware, software, networks, and the use of interdisciplinary and global work teams have radically changed the work environment The U.S. spends $2.3 trillion on projects every year, or one-quarter of its gross domestic product, and the world as a whole spends nearly $10 trillion of its $40.7 gross product on projects of all kinds 6
- 7. Project Management Statistics Worldwide IT spending totaled more than $1.8 trillion in 2005, a 6 percent increase from 2004, and spending is projected to grow 8 percent in 2006 and 4 percent in 2007 In 2005, the total compensation for the average senior project manager was $99,183 per year in the United States, $94,646 in Australia, and $106,374 in the United Kingdom The number of people earning their Project Management Professional (PMP) certification increased by more than 70 percent from 2004 to 2005, with more than 200,000 PMPs worldwide by the end of August, 2006 7
- 8. Motivation for Studying Information Technology (IT) Project Management IT Projects have a terrible track record, as described in the “What Went Wrong?” section A 1995 Standish Group study (CHAOS) found that only 16.2% of IT projects were successful in meeting scope, time, and cost goals Over 31% of IT projects were canceled before completion, costing over $81 billion in the U.S. alone 8
- 9. Advantages of Using Formal Project Management Better control of financial, physical, and human resources Improved customer relations Shorter development times Lower costs Higher quality and increased reliability Higher profit margins Improved productivity Better internal coordination Higher worker morale (less stress) 9
- 10. What Is a Project? A project is “a temporary endeavor undertaken to create a unique product, service, or result” (PMBOK® Guide, Third Edition, 2004, p. 5) Operations is work done to sustain the business Projects end when their objectives have been reached or the project has been terminated Projects can be large or small and take a short or long time to complete 10
- 11. Examples of IT Projects Organization develops a new help desk software or enhance existing systems to perform many business functions A small software development team adds a new feature to an internal software application for the finance department A college campus upgrades its technology infrastructure to provide wireless Internet access across the whole campus A cross-functional task force in a company decides what Voice-over-Internet-Protocol (VoIP) system to purchase and how it will be implemented 11
- 12. Project Attributes A project: Has a unique purpose Is temporary Is developed using progressive elaboration Requires resources, often from various areas Should have a primary customer or sponsor The project sponsor usually provides the direction and funding for the project Involves uncertainty 12
- 13. Project and Program Managers Project managers work with project sponsors, a project team, and other people involved in a project to meet project goals Program: group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually (PMBOK® Guide, Third Edition, 2004, p. 16) Program managers oversee programs and often act as bosses for project managers 13
- 14. Figure 1-1: The Triple Constraint of Project Management Successful project management means meeting all three goals (scope, time, and cost) – and satisfying the project’s sponsor! 14
- 15. What is Project Management? Project management is “the application of knowledge, skills, tools and techniques to project activities to meet project requirements” (PMBOK® Guide, Third Edition, 2004, p. 8) Project managers strive to meet the triple constraint by balancing project scope, time, and cost goals 15
- 16. Figure 1-2: Project Management Framework 16
- 17. Project Stakeholders Stakeholders are the people involved in or affected by project activities Stakeholders include: The project sponsor The project manager The project team Support staff Customers Users Suppliers Opponents to the project 17
- 18. Nine Project Management Knowledge Areas Knowledge areas describe the key competencies that project managers must develop Four core knowledge areas lead to specific project objectives (scope, time, cost, and quality) Four facilitating knowledge areas are the means through which the project objectives are achieved (human resources, communication, risk, and procurement management One knowledge area (project integration management) affects and is affected by all of the other knowledge areas All knowledge areas are important! 18
- 19. Project Management Tools and Techniques Project management tools and techniques assist project managers and their teams in various aspects of project management Some specific ones include: Project charter, scope statement, and WBS (Work Breakdown Structure or scope) Gantt charts, network diagrams, critical path analysis, and critical chain scheduling (time) Cost estimates and earned value management (cost) 19
- 20. What Went Right? Improved Project Performance • The Standish Group’s CHAOS studies show improvements in IT projects in the past decade Measure 1994 Data 2002 Data Result Successful projects 16% 34% Doubled Failed projects 31% 15% Halved Money wasted on challenged and failed projects $140 B out of $250 B $55 B out of $255 B More than halved 20
- 21. Why the Improvements? "The reasons for the increase in successful projects vary. First, the average cost of a project has been more than cut in half. Better tools have been created to monitor and control progress and better skilled project managers with better management processes are being used. The fact that there are processes is significant in itself.”* *The Standish Group, "CHAOS 2001: A Recipe for Success" (2001). 21
- 22. Project Success There are several ways to define project success The project met scope, time, and cost goals The project satisfied the customer/sponsor The results of the project met its main objective, such as making or saving a certain amount of money, providing a good return on investment, or simply making the sponsors happy 22
- 23. Table 1-2: What Helps Projects Succeed?* 1. Executive support 2. User involvement 3. Experienced project manager 4. Clear business objectives 5. Minimized scope 6. Standard software infrastructure 7. Firm basic requirements 8. Formal methodology 9. Reliable estimates 10. Other criteria, such as small milestones, proper planning, competent staff, and ownership *The Standish Group, “Extreme CHAOS,” (2001). 23
- 24. What the Winners Do • Recent research findings show that companies that excel in project delivery capability: – Use an integrated project management toolbox (use standard/advanced PM tools and lots of templates) – Grow project leaders, emphasizing business and soft skills – Develop a streamlined project delivery process – Measure project health using metrics, like customer satisfaction or return on investment 24
- 25. Program and Project Portfolio Management A program is “a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually” (PMBOK® Guide, Third Edition, 2004, p. 16) A program manager provides leadership and direction for the project managers heading the projects within the program Examples of common programs in the IT field: infrastructure, applications development, and user support 25
- 26. Project Portfolio Management As part of project portfolio management, organizations group and manage projects and programs as a portfolio of investments that contribute to the entire enterprise’s success Portfolio managers help their organizations make wise investment decisions by helping to select and analyze projects from a strategic perspective 26
- 27. Figure 1-3: Project Management Compared to Project Portfolio Management 27
- 28. Suggested Skills for Project Managers Project managers need a wide variety of skills They should: Be comfortable with change Understand the organizations they work in and with Be able to lead teams to accomplish project goals 28
- 29. The Role of the Project Manager Job descriptions vary, but most include responsibilities like planning, scheduling, coordinating, and working with people to achieve project goals Remember that 97% of successful projects were led by experienced project managers, who can often help influence success factors 29
- 30. Suggested Skills for Project Managers The Project Management Body of Knowledge Application area knowledge, standards, and regulations Project environment knowledge General management knowledge and skills Soft skills or human relations skills 30
- 31. Table 1-3: Ten Most Important Skills and Competencies for Project Managers 1. People skills 2. Leadership 3. Listening 4. Integrity, ethical behavior, consistent 5. Strong at building trust 6. Verbal communication 7. Strong at building teams 8. Conflict resolution, conflict management 9. Critical thinking, problem solving 10. Understands, balances priorities 31
- 32. Different Skills Needed in Different Situations Large projects: leadership, relevant prior experience, planning, people skills, verbal communication, and team-building skills are most important High uncertainty projects: risk management, expectation management, leadership, people skills, and planning skills are most important Very novel projects: leadership, people skills, having vision and goals, self-confidence, expectations management, and listening skills are most important 32
- 33. Importance of Leadership Skills Effective project managers provide leadership by example A leader focuses on long-term goals and big- picture objectives while inspiring people to reach those goals A manager deals with the day-to-day details of meeting specific goals Project managers often take on the role of both leader and manager 33
- 34. Ethics in Project Management Ethics, loosely defined, is a set of principles that guide our decision making based on personal values of what is “right” and “wrong” Project managers often face ethical dilemmas In order to earn PMP certification, applicants must agree to PMI’s Code of Ethics and Professional Conduct Several questions on the PMP exam are related to professional responsibility, including ethics 39
- 35. Project Management Software There are hundreds of different products to assist in performing project management Three main categories of tools Low-end tools: handle single or smaller projects well, cost under $200 per user Midrange tools: handle multiple projects and users, cost $200-600 per user, Project 2007 most popular High-end tools: also called enterprise project management software, often licensed on a per-user basis, like VPMi Enterprise Online (www.vcsonline.com); 40
- 36. Chapter Summary A project is a temporary endeavor undertaken to create a unique product, service, or result Project management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements A program is a group of related projects managed in a coordinated way; project portfolio management involves organizing and managing projects and programs as a portfolio of investments Project managers play a key role in helping projects and organizations succeed The project management profession continues to grow and mature 41