Project Management1
- 1. International Business Solutions Project management -an initial briefing At the end of this chapter you should be able to: Describe the driving forces behind the development of project management Define what is meant by the term 'project management' Identify the characteristics of a project Discuss the relationship between the four project constraints Discuss the importance of the project life cycle Identify the common stakeholders to a project
- 2. Introduction Everyone at some time in their life will be involved in a project of one kind or another. in fact, the reality is that most of us have been involved in many projects for some considerable time, and will face many more in the future. Projects come in all sizes and each project brings with it a differing degree of complexity requiring a specific set of team and management skills that will underpin the project's success.
- 3. Introduction The evolution of projects has increased exponentially to the point where the discipline, methods and tools behind projects (and their management) have reached huge heights of application, sophistication and popularity. What is the drive for this development and interest. Is it due to: advances in technology? increasing influence of market pressures? global competition and the need to remain competitive? the need to deliver products or services that meet certain benchmarks, quality assurance or best practice standards? greater emphasis on business producing cost-effective solutions? the constant cycle of change that business operates within? The reason should be obvious – change must be managed if the project is to succeed.
- 4. Demystifying project management - 1 Modern competition is rapidly becoming focused on three critical issues: the timing of decision making the costs driving the decisions the impact that change will have on these decisions To deal with these pressures, project management has grown in importance and stature as a toll for successfully dealing with time, cost and change -driven decisions.
- 5. Demystifying project management - 2 So what is project management? Let's start with a simple explanation. Think abut any project (big or small) you are involved with and answer the following questions: What type of information do you need to complete the project? What type of decisions will this information produce throughout the project? What actions will these decisions result in? (Answers??) the work required to be completed (let's call these project 'tasks'); who would be doing that work (let's call these project 'resources'); the cost of the work being performed (let's call this project 'costs'); how well the work had to be completed (let's call this project 'specification').
- 6. Project management – a balancing act Resources Tasks
- 7. The tasks – more than just the work required All projects involve delivering something (often referred to as 'outcome', 'asset', 'deliverable' or 'solution') to someone (often referred to as the 'client'). To achieve this 'something', a range of work will need to be first identified and then performed. But (and it is a big but) consider the additional task information you need before you 'go live' on the project given in the next slide.
- 8. Additional task information Will all this work be performed simultaneously or will some follow earlier completed work? How long will each component of work take (commonly referred to as duration)? How accurate will these duration estimates be? What impact will this work duration have on the project's planning, execution, management and completion activities? Will all the required work be correctly identified and scheduled? What risk factors might impact on the start or finish of the scheduled work? Does the completed work comply with the required specification or standard?
- 9. The resources – more than just the workers A considerable amount of resource information is required concerning the work needed to complete the project. Consider the following for starters: Exactly what resources are required? Are these resources available to be assigned to the project tasks? Have these resources got the required skills, authority and power (if people), the right technical features (if materials)? Do any of the human resources need training in particular skills? How much do these resources cost? Are there any substitute resources? Will risk be a factor in assigning and tracking the performance of these resources? What impact will these resources have on the project's planning, execution, management and completion activities?
- 10. What exactly is a project? To some people, projects are a little like a puzzle – too many pieces and not enough clues. A project can be defined in terms of a number of criteria which collectively distinguish it from an everyday activity performed by an individual or organisation. Client or Logical task stakeholders Temporary dependencies Agreed budget Shared available and Initiated and Agreed start committed managed to and finish dates resources succeed Agreed specification An agreed and Discrete organisational measurable objective, resource (and management deliverable or outcome structure)
- 11. Essential project characteristics - 1 Criteria Explanation An agreed and Projects 'create' and 'hand over' a tangible result that addresses a measurable objective, problem or perhaps an opportunity. deliverable or outcome An agreed budget In most projects, the budget is a finite resource. While contingent funding (in case the estimates fall short of true costs) should be available, the greater majority of projects will be constrained by limited funding. Discrete organisational While many organisations operate by habitual practice and follow what resource (and has worked before, the creation and management of a project should management) structure be based on an appropriate organisational structure suited to the particular project. Client or stakeholders All projects are owned by their ultimate client (the party the final deliverable is handed over to) and all the other parties to the project (staff, contractors, professional advisers, management, suppliers). Temporary Projects are not enduring. That is, they do not go on for ever (though many have been known to drift off target and get lost)The very nature of the project (deliverable) dictated that it must end.
- 12. Essential project characteristics - 2 Criteria Explanation Shared, available and Projects require a pool of resources to achieve agreed deliverables. committed resources These could include any of the following: people, materials, equipment, facilities, tools, information, systems, policies, procedures, techniques, finances and knowledge, among others. These resources are often deployed on other projects and/or their normal work duties, which brings another degree of complexity and management to the project. Agreed start and finish Projects (should) have target start and finish dates that define (and dates constrain) the project window. That is, the project has a finite life span. An agreed specification The work performed on a project will not be completed 'on a whim'. It will comply with a standard, a performance measure or a benchmark of some kind that explicitly defines and clarifies the exact nature of the work to be performed. Logical task All the required work will probably not be performed at the same time. dependencies Some work will precede other work, some might occur concurrently, while other work will follow earlier work. Again this sequence must be planned and managed if the project is to succeed. Initiated and managed to Given the potential complexity in managing task and resource succeed decisions, a dedicated set of management and project competencies is required if the project is to succeed.
- 13. What exactly is management? All managers perform four accepted functions given in the table below Function Explanation Planning These activities can include defining goals, designing strategies and developing plans to achieve the goals Organising These activities can include determining what tasks have to be performed, who will do them, what decisions need to be made and who reports to whom Leading These activities can include motivating subordinates, directing others, resoling conflicts, delegating and using the most effective communication channels Controlling These activities can include monitoring all the activities to ensure they are being accomplished as planned while also taking into account any significant deviations that might need correcting
- 14. What then is project management? Bringing two words project and management together, what progress have we made? Project management refers to management of activities that lead to the successful completion and outcomes of a project. The project requires the application of management principles in planning, organising, controlling and leading the resources of the organisation to realise a one-off specific goal. The management process brings together and optimises the necessary resources to complete successfully the project as scheduled (and agreed)
- 15. What then is project management? Management projects differs somewhat from conventional management assignments with the key difference being that a project is a limited concept that is usually more narrowly focused than traditional management goals. Other ways to define project management are: The process of identifying, planning, scheduling and controlling the true requirements of the project and ensuring the agreed trade-offs The management of change Scheduling solutions to problems or opportunities The science of disciplined logic
- 16. True project constraints Common project constraints - 1 Constraint Key points Time Each project will probably have a prescribed window from the initial idea stage through to the completion stage during which all stages and project work must be successfully completed If there is no latitude or freedom in this time window, the project is said to be overdetermined (in this constraint) The amount of time available will determine the project's schedule of work Projects can be completed ahead of time/schedule, on time/schedule or behind time/schedule The amount of time available for the project can have a direct and often immediate effect on the project's other constraints Cost Each project should have a budgeted and approved cost to fund the required work to the required standard during the required time allowed Some projects are underfunded, some excessively funded, while others are adequately financed Remember too that the finance available will impact on the other three project constraint
- 17. True project constraints Common project constraints - 2 Constraint Key points Specification Each project should specify the exact standard of work required for all the work scheduled to be performed The specification should not contain any loose terms, ambiguity or missing requirements The specification should state the standard of the end products whenever possible in quantitative terms, including tolerances, performance finish, reliability and maintainability As with the two earlier constraints, the specification can also impact on time, cost and resource constraints Specifications sometimes change once the project is under way, causing delays and increases in costs Resources Finally, each project requires that an appropriate range of resources be assigned to complete the scheduled work Some human resources might require additional training Resources are often over-allocated, causing scheduling conflicts, delays and cost over-runs
- 18. Fine-tuning the project outcome These four constraints form the parameters of the project. That is, collectively they determine the project's optimal outcome as depicted below, Time Optimal Cost Project Resource outcome Specification
- 19. Constraint interdependences - 1 Nothing happens in a project that isn't related to one or more of these four constraints as shown below, Constraint If increased If decreased Specification Additional finance could be Money could be saved through the required to fund the new features down-graded specification. and/or the resources required. Resource assignments could be Better skilled resources may be changed to allow less skilled required. resources to complete the tasks. More time may be needed to Time may be saved by taking less complete th project. functionality from the project, though in some cases the less skilled resources might add time to the project Time Resources could be reassigned Increased resources will be required to to other projects. compress the work timeline. Scheduled tasks could be More costs will be incurred to fund the delayed. compressed schedule. Costs could increase due to The specification may come under prolonged work activities. review as the project team looks for More time could prove the ways to save time. catalyst in fine-tuning the specification.
- 20. Constraint interdependences - 2 Constraint If increased If decreased Budget Higher skilled resources could One immediate way to save money be deployed. is to shed resources. More resources could be Another way is to downgrade the assigned which could shorten specification. completion times. With less money, the timeline might Additional funding could allow shorten if less work is now required, for the upgrading of the original or it may lengthen if the resources specification. now require additional time to complete all the work with fewer resources. Resources With more resources, more If resources are removed, the time money might be required. required to complete the project will Completion times could be probably increase. shortened. Money might appear to be saved, With the greater number (and though the additional completion diversity) of resources, time may well erode any savings. opportunities might also exist to The agreed specification may not be upgrade the specifications. completed to the same high level with fewer resources available.
- 21. Constraint interdependences - 3 Think back to the beginning of this section. The claim was made that nothing happens in a project that falls outside these four constraints. While some would refute this claim, many others support the notion of interdependent constraints as they create and manage their projects. Failure to identify and 'massage' these constraints accordingly can lead to any of the following problems: Project 'drift', where the project loses direction and commitment. 'scope creep', where the deliverable agreed at the start of the project suddenly changes to another requirement. 'premature termination' resulting in the project (successful or otherwise)being shut down.
- 22. The phases of a project – its life cycle To expand our knowledge of the essentials of project management further, we identify the four stages that signal the project's evolution. Irrespective of what the project is, each project progresses through a series of stages from beginning to end. The 'staged' project evolution is know as the project life cycle. In the following four slides a variety of non-project life cycles is discussed first.
- 23. Industry life cycles The marketing life cycle In a marketing context, products and services follow a set evolution from their initial research and development stage to their later decline and potential disappearance from the market. These stages are identified below. Stage No. Stage Explanation 1 Research and development Marketing research is conducted to uncover customer needs. Products and services are then designed around those needs. 2 Introduction The product or service is released n the market for sale. 3 Growth As sales increase, prices fall, features improve and competition increases. 4 Maturity Sales begin to level out as the market reaches saturation point 5 Deterioration Sales begin to fall as newer products and services erode the sales and customer base. 6 Decline Sales have fallen to the point where the product or service may be withdrawn from the market.
- 24. Industry life cycles The economic life cycle In economic terms, the business cycles, which are changing patterns of economic growth over time, pass through known stages. The table below depicts this cycle as consisting of three stages. Stage No. Stage Explanation 1 Prosperity This stage is characterised by low unemployment, high total income and high purchasing power. There would also be signs of economic growth, optimistic consumers and a stimulated economy. 2 Recession During recession, increased unemployment, falling total income, together with reduced purchasing power, would be evident. Increasing price awareness, increased savings and conservative spending patterns would be apparent. 3 Recovery The recovery stage would see unemployment beginning to drop, consumer confidence returning and previously postponed purchases being now bought.
- 25. Industry life cycles The construction engineering life cycle Naturally construction and engineering projects also pass through project phases, as shown below, Stage No. Stage Explanation 1 Initiation The client and construction company agree on the project's outcome. Risk assessment, feasibility studies and financial modelling will occur. 2 Design Detailed designs and costing are finished. 3 Implementation Construction commences. 4 Handover The deliverable is completed and handed to the client.
- 26. Industry life cycles New product development life cycle Even new product development projects can be investigated through the life cycle analogy, as illustrated below, Stage No. Stage Explanation 1 Idea generation An idea is generated – from a range of sources including the client, research, market conditions or competitive behaviour. 2 Product definition The idea is refined to the point where it can be precisely defined, which will include initial costings and designs. 3 Product engineering Following reviews, the idea is developed into a 'working model' for further testing and evaluation. 4 Pilot start-up Market-based research and sampling will occur to ensure the product or service will be adopted by the market. Pre-production setup will also take place. 5 Manufacture Fullscale manufacturing occurs in readiness for a full market release and sales. 6 Marketing In line with the product launch, fullscale marketing activities commence.
- 27. The project management life cycle There are a number of stages in project management – its life cycle – with each stage integral to the overall success of the project. The obvious question would be: How many stages are there and what are their names? This is an area where few project management authors agree. Some believe that a project evolves through the 12 stages displayed on the next table.
- 28. A 12-stage project management life cycle Stage No. Stage Explanation 1 Definition An idea is generated that forms the basis of the project deliverable. 2 Feasibility The idea is fully researched to identify the costs, benefits, risks and other impacts generated or have to be resolved. 3 Initial specification Tentative specification ('scope of works') is prepared identifying the resources required. 4 Estimation The project costs are determined. 5 Proposal A formal, thoroughly researched and documented proposal is put forward for consideration (sometimes called 'business case'). 6 Planning Work packaged to be performed on the project detailed and scheduled. 7 Design Designs finalised prior to implementation (the production stage). 8 Implementation Work is commenced on the projec.t 9 Installation On some projects, the deliverable may need to be installed in the client's premises. 10 Commissioning The formal stage where deliverable is 'handed over' to client. 11 Run-up Initial full scale operation (testing) of deliverable under normal working conditions. 12 Review A complete project audit from stage 1 to stage 12.
- 29. A 4-stage project management life cycle With so much discrepancy over the number of stages in a project's life cycle, it is proposed to reduce it to only four stages. Why only four? Simple, with four stages all the project work can be captured and more importantly each stage can be managed. This ensures that the project is completed as scheduled. The four stages are summarized on the next slide.
- 30. A 4-stage project management life cycle Concept Schedule Progress Outcome Time As the project evolves, each stage has its own particular characteristics representing a mix of the four project constraints cited earlier: Time Cost Specification Resources
- 31. The four stages to a project in more detail Stage No. Stage Explanation 1 Concept Thin of this as the 'idea' stage where the project is conceived. Preliminary goals are discussed, problems raised, potential benefits identified, alternative approaches researched and provisional costings determined. 2 Schedule Following the decision to proceed (in the concept stage), all the work required by the project is scheduled. Objectives are finalised, resources are assigned, quality is signed off n, final costings are approved, the timing agreed and all other administrative matters are determined. 3 Progress The project has commenced during this stage and the emphasis is moved to tracking actual progress using the schedule developed in the previous stage as the comparison point of reference. All work is monitored, controlled and corrected where necessary with schedules being reviewed, revised and updated as required. 4 Outcome Finally, the project has been completed with the deliverable handed over to the client. Resources are disposed of or reassigned, the project is evaluated, reports are written and presented, and the administration arm of the project is closed.
- 32. The project life-cycle inputs Key concept inputs Key schedule inputs Key progress inputs Key outcome inputs Project selection Project variables Ongoing progress Document client Problem or opportunity reviewed and redefined review and control acceptance trigger Breaking down the Progress, status and Document project Alternative solution project into activities forecast reports outcome discussed Schedule developed, Manage change Conduct project Consistent with revised and baselined requests evaluation and audit organisational Estimating contingency Managing contracts Contract closeout capability factors Dealing with team Team and stakeholder Project benefits Identify critical path issues de-brief identified Source and assign Corrective and/or Communicate lessons Critical success factors resources reinforcement action learned identified Quality measures in Managing escalation Resources reassigned Risks identified place issues Retentions, certificates Expectation agreed Procurement Managing meetings and warranties Project sponsors specifications finalised Controlling and Archiving and recording located Contracts formulated reporting progress Celebrate team's Essential stakeholders Control measures Explicit decision to success confirmed identified commit more time, Decision to close out Explicit decision to Explicit decision to resources and money in commit more time, commit more time, proceeding to next resources and money resources and money in stage in proceeding to the proceeding to next stage ● next stage
- 33. The benefits of using project life cycles The project lifecycle : provides an overriding narrative of the total project; limits and orders the project's progress through clearly defined stages (some might call these decisions gates); provides points of reference against which stakeholders can assess progress; enables an overview of the total project to be maintained and in perspective; allows for all project tasks to be correctly identified and partitioned under the appropriate stage of work; fosters the sequential management of the project schedule through all stages; promotes a sense of urgency throughout the schedule; clearly identifies the stage where different resources will need to be procured; works towards integrating all the project activities along a continuum; provides tangible evidence of the planning process; acts as a guide for all project activity; assists in detailing responsibility among project stakeholders; divides the project into manageable portions.
- 34. The physical output of the project life cycle Benefits aside, each stage of the life cycle also has a number of specific outputs that are unique (in most cases). A preview of these is provided in the Table below. Concept outputs Schedule outputs Progress outputs Outcome outputs Client brief Stage, task and Performance Handover Business case milestone detail – standards Acceptance testing Feasibility study including duration, Inspection and Project audit Risk assessment sequencing and monitoring/testing Completion checklist Scope resources plan Feedback and documentation Revised timelines Purchase orders evaluation Stakeholder (PERT/Gantt) Performance reports Approvals analysis Revised cashflows Change of scope Budget forecasts and budgets requests Procedures and Resource matrix Progress claims policies Baseline project Corrective action Meeting minutes schedule Contracts Approvals Approvals Revised schedules Approvals
- 35. The stakeholders to the project Stakeholders are the parties with a vested interest – positive or negative in the success (or otherwise) of the project. Not every stakeholder must actively support and promote the project's success. While this would be appreciated by other stakeholders, reality and case studies suggest that each project has its mix of champions, workers and protagonists. One of the key roles that the project manager performs is to: Identify all stakeholders Determine their needs and expectations Influence and manage those expectations Project stakeholders on any project are found internal and external to the project and come under different names, e.g. owners, suppliers, etc
- 36. Project stakeholders Key stakeholder Key roles performed Sponsor – initiates the project Determines project's relevance to organisation And supports the team's most senior Champions project from a position of seniority members Acts as an inspirational figurehead Helps to finialise top level goals Works to minimise operational constraints Project steering team – a group of Aligns projects to corporate objectives project sponsors who monitor the status Provides clear strategic direction where required of all active projects Prioritises active projects where conflicts exist Project manager – leads the project Provides and manages the project schedule team and delivers the project goal Motivates, develops and rewards the team Communicates project information Monitors and reviews progress Team member – performs specific Provides technical skill and application actions required in the project Responsible for project task performance Takes directions from project manager Client – person owning the project Provides direction for project manager Influences how outcomes will be achieved May initiate project changes Supplier – delivers the goods and Delivers supplies to the project as required services by the project Compliance with contractual conditions Provision of logistical support
- 37. The stakeholders to the project More than merely identifying each stakeholder, each stakeholder's needs (stated or unstated) and particular interests must be identified prior to the start of the project. This enables information and decisions to be relevant and directed towards the appropriate stakeholder – particularly in times of delays, cost over-runs, variations and other escalating issues.
- 38. The stakeholders to the project You should research the following: Understand each stakeholder – What interests in the project do they have? How involved will they be? What information do they need? How will they make decisions? Understand the environment in which they operate - Who are their allies and enemies? What influence do they have? What are the 'right' channels of communication? What protocols should be observed? How much authority and power do they have? Understand their information needs – Different stakeholders will require different types, amounts and timing of information. Some might want 'progress' information on the project up to a point in time. Others might require 'status' information or forecast completion data.
- 39. The stakeholders to the project You should also research the following: Understand how this information will be presented – That is, what is the preferred communication channel of each stakeholder? Formal project reports (commonly referred to as 'progress', 'status' and 'forecast' reports Project meetings Email In person Newsletters Social gatherings Fax Phone
- 40. Summary The study of project management borrows heavily from a number of associated disciplines, including science, management, engineering, business, human resource management, marketing and finance. Modern-day project management provides the necessary tools, methods, processes, structure and guidelines in creating and managing projects. Managing projects is different from everyday management activities due to the discrete characteristics of projects. Recall that projects are time, budget, specification and resource constrained, involve diverse stakeholders and require a number of connected tasks to be completed. Project management enables a 'measured' trade-off between task and resource decisions to be executed. It provides the framework or life cycle for completing the project goal and objectives as agreed by all stakeholders