Project Management Concepts
CHAPTER 1
Project Management Concepts
LEARNING OBJECTIVES
This chapter presents an overview of project management concepts. Based on this chapter, the students should understand:
• the definition of a project and its attributes
• the key constraints within which a project must be managed
• how a project is “born”
• the life of a project
• the steps involved in the project management process
• the benefits of project management
TEACHING STRATEGIES
1.Let the students know that this course isn’t only for project managers. It is also for anyone involved in working on a project.
2.Stress to them that what makes projects successful are the people involved. In order for this class to be successful they must actively be involved.
3.Encourage all students to participate by asking them to identify projects they have been involved in during their life.
4.For each project ask them what the objective was, what the constraints were, what the schedule was, and what resources were used.
5.Ask them if they can identify any project managers in the real world. If they get stuck, give them some hints like to think about sports or music.
6. Ask your students to discuss something they did during the past summer or winter break, such as take a vacation, go to a concert, or watch a play.
- Ask them how those activities relate to project management.
8. The web exercises in this chapter are very important. They involve the investigation of the Project Management Institute’s web site. Inform the class that since it was founded in 1969, the Project Management Institute (PMI) has grown to nearly 25,000 members worldwide, and it has a mission to reach 100,000 members by the year 2002. Pennsylvania-based PMI is, by far, the leading nonprofit professional association in the area of project management. It establishes standards, sponsors seminars, develops educational programs, has a professional certification program, and publishes Project Management Journal and PM Network. It has an excellent Web site for project management. They can have some fun with this site.
LECTURE OUTLINE
1. Real-World Examples
- Vignette: Project Management for Better Health
• Pat Ryan, CIO for the Interior Health Authority (IHA) in British
Columbia, uses project management to implement major IT projects.
• IHA formed five years ago to manage and deliver insured health
services to ten provinces and three Canadian territories.
• Ryan has two goals:
- 1st goal—to integrate over 100 independent financial applications into one system (Business Systems Implementation—BSI)
a.BSI project- estimated cost Can$3.2 million
b.Will save IHA Can$4.3 million annually
- 2nd goal—to consolidate and standardize electronic health records (Clinical Systems Implementation—CSI)
• CSI project- estimated cost Can$20 million
• Ryan established executive support for both objectives.
• Created project teams for both projects
• BSI project took 14 months—completed on time and under budget
• CSI project is being implemented by phases geographically. So far,
about 70% of IHA’s physicians already use CSI system.
• Results of both projects: cost savings and higher user satisfaction
- Vignette: Making Movies
• Masaffar Ali, well-known Indian filmmaker, was in the process of
making “Zooni” in January 1989.
• Ali was forced to stop work on his dream when violence broke out
where he was filming.
• 14 years later, the region has become more peaceful—Ali can finish his
movie.
• With project management in mind, how should Ali go about reaching
his goal?
• A large scale project needs: to stay on schedule, and stay within
budget.
• Advice from Debbie Brubaker, producer of Sundance film
“Dopamine,” —management team needs a “script breakdown”
• “Script breakdown:” tasks and factors that help determine schedule
and budget (examples: number of filming locations, stunts, special
effects etc.)
• Open communication between assistant director and production
manager is essential.
• Ali intends to finish his film within a year. Using effective project
management principles, he should be able to do so.
These are great short stories that can get the class discussion moving forward. Each of these projects (successful or a failure) should have included serious planning, scheduling, organization, teamwork, communications, and leadership—all of which will be discussed in detail in this course.
2. Attributes of a Project
A project is an endeavor to accomplish a specific objective through a unique set of interrelated tasks and the effective utilization of resources. The following attributes help define a project:
A.A project has a well-defined objective—an expected result or product. The objective of a project is usually defined in terms of scope, schedule, and cost. Furthermore, it is expected that the work scope will be accomplished in a quality manner and to the customer’s satisfaction.
B.A project is carried out through a series of interdependent tasks in a certain sequence in order to achieve the project objective.
C.A project utilizes various resources to carry out the tasks.
D.A project has a specific time frame -a start time and a date by which the objective must be accomplished.
E.A project may be unique or one-time such as developing a new product.
F.A project has a customer that provides the funds necessary to accomplish the project. In a business setting, the customer can be internal or external to your organization.
G.Finally, a project involves a degree of uncertainty based on certain assumptions and estimates the project budget, schedule, and work scope.
3. Examples of Projects
Get your students to list as many examples of real projects as they can. For each one listed discuss some of the attributes listed above. Some examples are:
A. Planning a wedding
B. Designing and implementing a computer system
C. Hosting a holiday party
D. Designing and producing a brochure
E. Executing an environmental clean-up of a contaminated site
F.Holding a high school reunion
G.Performing a series of surgeries on an accident victim
4. Constraints
The successful accomplishment of the project objective is usually constrained by four factors: scope, cost, schedule, and customer satisfaction.
A.The scope of a project—also known as the project scope or the work scope—is all the work that must be done in order to satisfy the customer that the deliverables (the tangible product or items to be provided) meet the requirements or acceptance criteria agreed upon at the onset of the project.
B.The cost of a project is the amount the customer has agreed to pay for acceptable project deliverables. The project cost is based on a budget that includes an estimate of the costs associated with the various resources that will be used to accomplish the project.
C.The schedule for a project is the timetable that specifies when each activity should start and finish. The project objective usually states the time by which the project scope must be completed in terms of a specific date agreed upon by the customer and the individual or organization performing the work.
D.The objective of any project is to complete the scope within budget by a certain time to the customer’s satisfaction. To help assure the achievement of this objective, it is important to develop a plan before the start of the project; this plan should include all the work tasks, associated costs, and estimates of the time necessary to complete them.
5. Unforeseen Circumstances
Once a project is started, unforeseen circumstances may occur that jeopardize the achievement of the project objective with respect to scope, cost, or schedule.
A.The challenge to the project manager is to prevent, anticipate, and/or overcome such circumstances in order to complete the project scope on schedule, within budget, and to the customer’s satisfaction.
B.Good planning and communication are essential to prevent problems from occurring and to minimize their impact.
C. Ultimately, the responsibility of the project manager is to make sure the customer is satisfied. This goes beyond just completing the project scope within budget and on schedule. It requires ongoing communication with the customer.
6. The Project Life Cycle
Projects are “born” when a need is identified by the customer. As the project moves through its life cycle, different organizations, individuals, and resources play dominant roles. Project life cycles vary in length from a few weeks to several years, depending on the content, complexity, and magnitude of the project. Not all projects formally go through all four phases of the project life cycle.
A.The first phase of the project life cycle involves the identification of a need, problem, or opportunity and can result in the customer’s requesting to address the identified need or solve the problem.
1.The need and requirements are usually written up by the customer in a document called a request for proposal(RFP).
2. Through the RFP, the customer asks individuals or internal or external contractors to submit proposals on how they might solve the problem, along with the associated cost and schedule.
B.The second phase of the project life cycle is the development of a proposed solution to the need or problem.
1.This phase results in the submission of a proposal to the customer by one or more individuals or organizations (contractors).
2.After the customer evaluates the submissions and selects the winning proposal, the customer and the winning contractor negotiate and sign a contract (agreement).
3.In many situations, a request for proposal may not involve soliciting competitive proposals from external contractors. A company’s own internal project team may develop a proposal in response to a management-defined need or request.
C.The third phase, referred to as performing the project, involves doing the detailed planning for the project and then implementing that plan to accomplish the project objective.
1.During the course of performing the project, different types of resources will be utilized.
2.This phase results in the accomplishment of the project objective.
D.The final phase of the project life cycle is terminating the project.
1.When a project is completed, certain close-out activities need to be performed, such as confirming that all deliverables have been provided to and accepted by the customer, that all payments have been collected, and that all invoices have been paid.
2.An important task during this phase is evaluating performance of the project in order to learn what could be improved if a similar project were to be carried out in the future.
3.This phase should include obtaining feedback from the customer.
Discuss Figure 1.2 and the effort and time involved in each phase.
7. The Project Management Process
The project management process means planning the work and then working the plan. A baseline plan must beestablished that provides a roadmap for how the project scope will be accomplished on time and within budget. This planning effort includes the following steps:
A.Clearly define the project objective.
B.Divide and subdivide the project scope into major “pieces,” or work packages. A work breakdown structure usually identifies the organization or individual responsible for each work package. Display and briefly discuss Figure 1.3.
C.Define the specific activities that need to be performedfor each work package in order to accomplish the project objective.
D.Graphically portray the activities in a network diagram. Display and discuss briefly Figure 1.4.
E.Make a time estimatefor how long it will take to complete each activity. It is also necessary to determine which types of resources and how many of each resource are needed for each activity.
F.Make a cost estimate for each activity. The cost is based on the types and quantities of resources required for each activity.
G.Calculate a project schedule and budget to determine whether the project can be completed within the required time, with the allotted funds, and with the available resources. If not, adjustments must be made to the project scope, activity time estimates, or resource assignments. Display and briefly discuss Figures 1.5 and 1.6.
Planning determines what needs to be done, who will do it, how long it will take, and how much it will cost. Taking the time to develop a well-thought-out plan is critical to the successful accomplishment of any project.
8. Controlling Projects
Once a baseline plan has been established, it must be implemented. This involves performing the work according to the plan and controlling the work so that the project scope is achieved within the budget and schedule, to the customer’s satisfaction.
A.Once the project starts, it is necessary to monitor progress to ensure that everything is going according to plan. At this stage, the project management process involves measuring actual progress and comparing it to planned progress.
B.If, at any time during the project, comparison of actual progress to planned progress reveals that the project is behind schedule, overrunning the budget, or not meeting the technical specifications, corrective action must be taken to get the project back on track.
C.Before a decision is made to implement corrective action, it may be necessary to evaluate several alternatives.
D.The key to effective project control is measuring actual progress and comparing it to planned progress on a timely and regular basis and taking corrective action immediately, if necessary.
9. Benefits of Project Management
A.The ultimate benefit of implementing project management techniques is having a satisfied customer.
B.Completing the full project scope in a quality manner, on time, and within budget provides a great feeling of satisfaction.
C.It could lead to additional business.
D.Successful projects can expand your career opportunities.
E.You feel the satisfaction of being on a winning team.
F.Through the project you expand your knowledge, enhance your skills, and prepare for more complicated projects.
G. When projects are successful, everybody wins!
QUESTIONS
1.Define project.
A project is an endeavor to accomplish a specific objective through a unique set of interrelated tasks and the effective utilization of resources.
2.Define the term project objective and give some examples.
A project has a well-defined objective—an expected result or product. The objective of a project is usually defined in terms of scope, schedule, and cost. Furthermore, it is expected that the work scope will be accomplished in a quality manner and to the customer’s satisfaction.
An example would be to produce 5000 two page, marketing brochures by July 1 for a cost of $15,000.
3.List some examples of resources that are used on a project.
People, equipment, money, materials, etc.
4.What role does a customer have during the project life cycle?
The customer is the entity that provides the funds necessary to accomplish the project. They should be involved throughout the life cycle.
5.What aspects of a project might involve some degree of uncertainty? Why?
Many aspects can have some degree of uncertainty, such as the schedule or the budget. An unexpected snowstorm may delay a highway construction project and increased lumber rates may increase the cost of building a new home.
6.Define scope, schedule, cost, and customer satisfaction. Why are these considered to be constraints?
The scope of a project is all the work that must be done in order to satisfy the customer that the deliverables meet the requirements or acceptance criteria agreed upon at the onset of the project.
The cost of a project is the amount the customer has agreed to pay for acceptable project deliverables. The project cost is based on a budget that includes an estimate of the costs associated with the various resources that will be used to accomplish the project.
The schedule for a project is the timetable that specifies when each activity should start and finish. The project objective usually states the time by which the project scope must be completed in terms of a specific date agreed upon by the customer and the individual or organization performing the work.
Customer Satisfaction is the level to which the customer is pleased with the end result of the project.
The objective of any project is to complete the scope within budget by a certain time to the customer’s satisfaction. Any of these four factors can put limitations on the final product.
7.Why is it important to satisfy the customer?
The customer is the one who is paying for the project. Unsatisfied customers have been known to withhold payments, never call you again for repeat business, and spread the word of their dissatisfaction. On the other hand, a satisfied customer will do the opposite of those things.
8.List and describe the main phases of the project life cycle.
The first phase of the project life cycle involves the identification of a need, problem, or opportunity and can result in the customer’s requesting to address the identified need or solve the problem.
The second phase of the project life cycle is the development of a proposed solution to the need or problem.
The third phase, referred to as performing the project, involves doing the detailed planning for the project and then implementing that plan to accomplish the project objective.
The final phase of the project life cycle is terminating the project.
9.List and describe the steps required to develop a baseline plan.
A. Clearly define the project objective.
B. Divide and subdivide the project scope into major “pieces,” or work packages.
C. Define the specific activities that need to be performedfor each work package in order to accomplish the project objective.
D. Graphically portray the activities in a network diagram.
E. Make a time estimatefor how long it will take to complete each activity. It is also necessary to determine which types of resources and how many of each resource are needed for each activity.
F. Make a cost estimate for each activity. The cost is based on the types and quantities of resources required for each activity.
G. Calculate a project schedule and budget to determine whether the project can be completed within the required time, with the allotted funds, and with the available resources. If not, adjustments must be made to the project scope, activity time estimates, or resource assignments.