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Project Management in PracticeFourth Edition
Prepared byScott M. Shafer,
Updated by William E. Matthews and
Thomas G. Roberts, William Paterson University
Copyright 2011 John Wiley & Sons, Inc.
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Mantel, Meredith, Shafer, and Sutton
John Wiley and Sons, Inc.
Why the Emphasis on Project Management?
Copyright 2011 John Wiley & Sons, Inc.
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Many tasks do not fit neatly into business-as-usual
Organizations need to assign responsibility and authority for the achievement of their goals
Characteristics of Projects
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Unique Specific deliverables Specific due date
Other Common Characteristics of Projects
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Multidisciplinary Complex Often involve conflicts Part of programs
Trends in Project Management
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Project management techniques are increasingly used for:
• Achieving strategic, routine, and business goals• Improving project effectiveness• Organizing virtual projects• Handling quasi-projects
Definition of a Project
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“A project is a temporary endeavor undertaken to
create a unique product or service.”
Project Management Institute, 2007
Definition of Project Management
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“The application of knowledge, skills, tools,
and techniques to a broad range of activities in order
to meet the requirements of a particular project.”
Project Management Institute 2007
Scope, Cost, and Time Project Performance Targets
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Abilities Needed For Effective Project Management
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Ability to resolve conflicts Creativity and flexibility Ability to adjust to change Good planning skills Negotiation skills• win-win versus win-lose
The Life Cycle of Projects
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All organisms have a life cycle (i.e., they are born, grow, wane, and die) … and so do projects
Some projects follow an S-shaped curve … they start slowly, develop momentum, and then finish slowly
Other project follow a J-shaped curve … they start slowly , proceed slowly, and then finish rapidly
Nonnumeric Selection Methods
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The “Sacred Cow”- a pet project advocated by a senior executive of the firm.
The operating/competitive necessity
Comparative benefits
The Q-Sort Method
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Numeric Selection Methods
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Financial assessment methods
• payback period• discounted cash flow• future opportunity analysis Scoring methods• unweighted 0-1 factor method• weighted factor scoring method
Payback Period
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InflowsCash Net Annual
Investment Fixed Initial
Discounted Cash Flow
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n
tt
t
k
F
10 )1(
I- (project) NPV
where
I0 = the initial investment
Ft = the net cash flow in period t
k = the required rate of return or hurdle rate
The Weighted Scoring Model
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n
jjiji wsS
1
where
Si = the total score of the ith project
sij = the score of the ith project on the jth criterion
wj = the weight or importance of the jth criterion
Uncertainties Encountered in Project Management.
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Time required to complete a projectAvailability and cost of key resourcesTiming of solutions to technological
problemsMacroeconomic variablesThe whims of clientsActions taken by competitors
Can Uncertainty be Eliminated?
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No … uncertainty cannot be eliminated. However, if managed properly, it can be minimized
Risk Analysis
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Estimate probabilities or distributions associated with key parameters
Construct a mathematical model of the situation and run a simulation ... given various scenarios
Analyze distribution of outcomes generated by model
Risk Analysis with Crystal Ball
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Assumption Cells Distribution Gallery Forecast Cells
Steps in the Project Portfolio Process
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Establish a project council Identify project categories and criteria Collect project data Assess resource availability Reduce the project and criteria set Prioritize the projects within
categories Select the projects to be funded and
those to be held in reserve Implement the process
Categories of Projects
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Derivative projects … those that are only incrementally different from existing offerings
Platform projects … major departures from existing offerings … the next generation
Breakthrough projects … involving a newer technology … possibly a “disruptive” technology
R&D projects … “blue sky” or visionary endeavors
Copyright
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Copyright John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information herein.
