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1St unit An Introduction to Project Management

Project management in the modern sense began in the early 1960s, although it has its rootsmuch further back in the latter years of the 19th century. The need for project managementwas driven by businesses that realised the benefits of organising work around projects and the

critical need to communicate and co-ordinate work across departments and professions. Oneof the first major uses of project management as we know it today was to manage the UnitedStates space programme. The government, military and corporate world have now adoptedthis practice. Here is the main definition of what project management is:

1. Project management is no small task.2. Project management has a definite beginning and end. It is not a continuous process.3. Project management uses various tools to measure accomplishments and track project

tasks. These include Work Breakdown Structures, Gantt charts and PERT charts.4. Projects frequently need resources on an ad-hoc basis as opposed to organisations that

have only dedicated full-time positions.5. Project management reduces risk and increases the chance of success.

Project management is often summarised in a triangle. The three most important factors aretime, cost and scope, commonly called the triple constraint. These form the vertices withquality as a central theme.

More recently, this has given way to a project management diamond, with time, cost, scopeand quality the four vertices and customer expectations as a central theme. No two customers'expectations are the same so you must ask what their expectations are.

5. Project Monitoring & Control: Ensuring that a project stays on track and takingcorrective action to ensure it does.

6. Project Closure: Formal acceptance of the deliverables and disbanding of all theelements that were required to run the project.

1. Projects must be delivered on time.2. Projects must be within cost.3. Projects must be within scope.

4. Projects must meet customer quality requirements

A project goes through six phases during its life:

1. Project Definition: Defining the goals, objectives and critical

success factors for the project.2. Project Initiation: Everything that is needed to set-up the projectbefore work can start.

3. Project Planning: Detailed plans of how the work will be carriedout including time, cost and resource estimates.

4. Project Execution: Doing the work to deliver the product,service or desired outcome.


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The role of the project manager is one of great responsibility. It is the project manager's jobto direct, supervise and control the project from beginning to end. Project managers shouldnot carryout project work, managing the project is enough? Here are some of the activitiesthat must be undertaken:

1. The project manager must define the project, reduce it to a set of manageable tasks,obtain appropriate resources and build a team to perform the work.

2. The project manager must set the final goal for the project and motivate his/her teamto complete the project on time.

3. The project manager must inform all stakeholders of progress on a regular basis.4. The project manager must assess and monitor risks to the project and mitigate them.5. No project ever goes exactly as planned, so project managers must learn to adapt to

and manage change.

A project manager must have a range of skills including:

Leadership People management (customers, suppliers, functional managers and project team) Effective Communication (verbal and written) Influencing Negotiation Conflict Management Planning Contract management

"Project managers bear ultimate responsibility for making things happen. Traditionally, theyhave carried out this role as mere implementers. To do their jobs they needed to have basicadministrative and technical competencies. Today they play a far broader role. In addition tothe traditional skills, they need to have business skills, customer relations skills, and politicalskills. Psychologically, they must be results-oriented self-starters with a high tolerance forambiguity, because little is clear-cut in today's tumultuous business environment.Shortcomings in any of these areas can lead to project failure." - J. Davidson Frame

Many things can go wrong in project management. These things are often called barriers.Here are some possible barriers:

1. Poor communication 5. Union strikes

2. Disagreement 6. Personality conflicts3. Misunderstandings 7. Poor management4. Bad weather 8. Poorly defined goals and objectives.

A good project management discipline will not eliminate all risks, issues andsurprises, but will provide standard processes and procedures to deal with them andhelp prevent the following:

1. Projects finishing late, exceeding budget or not meeting customer expectations.2. Inconsistency between the processes and procedures used by projects managers,

leading to some being favoured more than others.

3. Successful projects, despite a lack of planning, achieved through high stress levels,goodwill and significant amounts of overtime.

Estimating Problem solving Creative thinking Time Management


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4. Project management seen as not adding value and as a waste of time and money.5. Unforeseen internal and/or external events impacting the project.

Project management is about creating an environment and conditions in which a defined goalor objective can be achieved in a controlled manner by a team of people.

What is Project Management?

Project management is the science (and art) of organizing the components of a project, whether theproject is development of a new product, the launch of a new service, a marketing campaign, or awedding. A project isn't something that's part of normal business operations. It's typically created

once, it's temporary, and it's specific. As one expert notes, "It has a beginning and an end." A projectconsumes resources (whether people, cash, materials, or time), and it has funding limits.

Project Management Basics

No matter what the type of project, project management typically follows the

same pattern:

1. Definition 4. Control2. Planning 5. Closure3. Execution

Defining the Project

In this stage the project manager defines what the project is and what the users hope toachieve by undertaking the project. This phase also includes a list of project deliverables, theoutcome of a specific set of activities. The project manager works with the business sponsoror manager who wants to have the project implemented and other stakeholders -- those whohave a vested interest in the outcome of the project.

Planning the Project

Define all project activities. In this stage, the project manager lists all activities or tasks, howthe tasks are related, how long each task will take, and how each tasks is tied to a specificdeadline. This phase also allows the project manager to define relationships between tasks, sothat, for example, if one task is x number of days late, the project tasks related to it will alsoreflect a comparable delay. Likewise, the project manager can set milestones, dates by whichimportant aspects of the project need to be met.

Define requirements for completing the project. In this stage, the project manager identifieshow many people (often referred to as "resources") and how much expense ("cost") isinvolved in the project, as well as any other requirements that are necessary for completingthe project. The project manager will also need to manage assumptions and risks related tothe project. The project manager will also want to identify project constraints. Constraintstypically relate to schedule, resources, budget, and scope. A change in one constraint will

typically affect the other constraints. For example, a budget constraint may affect the numberof people who can work on the project, thereby imposing a resource constraint. Likewise, if


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additional features are added as part of project scope, that could affect scheduling, resources,and budget.

Executing the Project

Build the project team. In this phase, the project manager knows how many resources andhow much budget he or she has to work with for the project. The project manager thenassigns those resources and allocates budget to various tasks in the project. Now the work ofthe project begins.

Controlling the Project

The project manager is in charge of updating the project plans to reflect actual time elapsedfor each task. By keeping up with the details of progress, the project manager is able tounderstand how well the project is progressing overall. A product such as Microsoft Project

facilitates the administrative aspects of project management.

Closure of the Project

In this stage, the project manager and business owner pull together the project team and thosewho have an interest in the outcome of the project (stakeholders) to analyze the final outcomeof the project.

Time, Money, Scope

Frequently, people refer to project management as having three components: time, money,and scope. Reducing or increasing any one of the three will probably have an impact on theother two. If a company reduces the amount of time it can spend on a project, that will affectthe scope (what can be included in the project) as well as the cost (since additional people orresources may be required to meet the abbreviated schedule).

Project Portfolio Management

Recent trends in project management include project portfolio management (PPM). PPM is amove by organizations to get control over numerous projects by evaluating how well each

project aligns with strategic goals and quantifying its value. An organization will typically be

working on multiple projects, each resulting in potentially differing amounts of return orvalue. The company or agency may decide to eliminate those projects with a lower return inorder to dedicate greater resources to the remaining projects or in order to preserve the

projects with the highest return or value.

The Project Management Life Cycle"The project life cycle

"The project life cycle consists of four phases as shown in Figure 1."As there are four phases within the project life cycle, there are four main chapters in this

book. Each of these chapters describes a particular project life cycle phase in detail, byproviding the activities and tasks required to complete the phase in its entirety. In Chapter 2


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you will learn how to initiate projects by developing a business case, undertaking a feasibilitystudy, establishing the terms of reference, appointing the team and setting up a project office."Every step required to build a comprehensive suite of project plans is provided in Chapter 3.This includes the activities required to create a project plan, resource plan, financial plan,quality plan, risk plan, acceptance plan, communications plan and procurement plan. The

entire tender process is also defined, allowing you to create a suite of tender documentation tohelp you select a preferred supplier and create a supplier contract.

"Finally in Chapter 5, you will be shown how to formally close a project by creating aproject closure report and undertaking a post implementation review. So sit back, relax anddiscover the vital steps needed to manage a project through the four critical phases of the

project life cycle: initiation, planning, execution and closure."

Project Initiation

"The first phase of a project is the initiation phase. During this phase a businessproblem or opportunity is identified and a business case providing various solution options isdefined. Next, a feasibility study is conducted to investigate whether each option addressesthe business problem and a final recommended solution is then put forward. Once therecommended solution is approved, a project is initiated to deliver the approved solution.Terms of reference are completed outlining the objectives, scope and structure of the new

project and a project manager is appointed. The project manager begins recruiting a projectteam and establishes a project office environment. Approval is then sought to move into the

detailed planning phase." 5"Within the initiation phase, the business problem or opportunity is identified, asolution is defined, a project is formed and a project team is appointed to build and deliverthe solution to the customer.Figure 1.3 shows the activities undertaken during the initiation phase:

Figure 2: Project initiation activities

"Develop a business case: The trigger to initiating a project is identifying a businessproblem or opportunity to be addressed. A business case is created to define the problem or

The four phases of the project life

cycle3

"The most complex phase inthe project life cycle (projectexecution) is made simple in Chapter4 with a step by step guide to thenine critical management processes:time management, cost management,quality management, changemanagement, risk management, issuemanagement, procurementmanagement, acceptancemanagement and communicationsmanagement.


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opportunity in detail and identify a preferred solution for implementation. The business caseincludes: A detailed description of the problem or opportunity; A list of the alternative solutions available; An analysis of the business benefits, costs, risks and issues;

A description of the preferred solution; A summarized plan for implementation."An identified project sponsor then approves the business case and the required funding isallocated to proceed with a feasibility study."Undertake a feasibility study: At any stage during or after the creation of a business case,a formal feasibility study may be commissioned. The purpose of a feasibility study is toassess the likelihood of each alternative solution option achieving the benefits outlined in the

business case. The feasibility study will also investigate whether the forecast costs arereasonable, the solution is achievable, the risks are acceptable and the identified issues areavoidable."Establish the terms of reference: After the business case and feasibility study have been

approved, a new project is formed. At this point, terms of reference are created. The terms ofreference define the vision, objectives, scope and deliverables for the new project. They alsodescribe the organization structure; and activities, resources and funding required undertakingthe project. Any risks, issues, planning assumptions and constraints are also identified."Appoint the project team: The project team are now ready to be appointed. Although a

project manager may be appointed at any stage during the life of the project, the manager willideally be appointed prior to recruiting the project team. The project manager creates adetailed job description for each role in the project team, and recruits people into each role

based on their relevant skills and experience"Set up a project office: The project office is the physical environment within which theteam is based.Although it is usual to have one central project office, it is possible to have a virtual projectoffice with project team members located around the world. A project office environmentshould include: Equipment, such as office furniture, computer equipment, stationery and materials; Communications infrastructure, such as telephones, computer network, e mail, Internetaccess, files storage, database storage and backup facilities; Documentation, such as a project methodology, standards, processes, forms and registers; Tools, such as accounting, project planning and risk modelling software."Perform a phase review: At the end of the initiation phase, perform a phase review. This is

basically a checkpoint to ensure that the project has achieved its objectives as planned."

Project Planning

"Once the scope of the project has been defined in the terms of reference, the project entersthe planning phase. This involves creating a: Project plan outlining the activities, tasks, dependencies and timeframes; Resource plan listing the labour, equipment and materials required; Financial plan identifying the labour, equipment and materials costs; Quality plan providing quality targets, assurance and control measures; Risk plan highlighting potential risks and actions to be taken to mitigate those risks; Acceptance plan listing the criteria to be met to gain customer acceptance; Communications plan describing the information needed to inform stakeholders;

Procurement plan identifying products to be sourced from external suppliers.


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"At this point the project will have been planned in some detail and is ready to he executed."7

"By now, the project costs and benefits have been documented, the objectives and scope havebeen defined, the project team has been appointed and a formal project office environmentestablished. It is now time to undertake detailed planning to ensure that the activities

performed during the execution phase of the project are properly sequenced, resourced,executed and controlled. The activities shown inFigure 3 are undertaken.

Figure 3: Project planning activities

"Create a project plan: The first step in the project planning phase is to document theproject plan. A 'work breakdown structure' (WBS) is identified which includes a hierarchicalset of phases, activities and tasks to be undertaken to complete the project. After the WBS has

been agreed, an assessment of the level of effort required to undertake each activity and taskis made. The activities and tasks are then sequenced, resources are allocated and a detailed

project schedule is formed. This project plan is the key tool used by the project manager toassess the progress of the project throughout the project life cycle."Create a resource plan: Immediately after the project plan is formed, the level of resourcerequired undertaking each of the activities and tasks listed within the project plan will need to

be allocated.Although generic resource may have already been allocated in the project plan, a detailed

resource plan is required to identify the: Type of resource required, such as labour, equipment and materials; Quantity of each type of resource required; Roles, responsibilities and skill sets of all human resource required; Specifications of all equipment resource required; Items and quantities of material resource required."A schedule is assembled for each type of resource so that the project manager can review theresource allocation at each stage in the project."Create a financial plan: A financial plan is created to identify the total quantity of moneyrequired to undertake each phase in the project (in other words, the budget). The total cost oflabour, equipment and materials is calculated and an expense schedule is defined which

enables the project manager to measure the forecast spend versus the actual spend throughoutthe project. Detailed financial planning is an extremely important activity within the project,as the customer will expect the final solution to have been delivered within the allocated

budget."Create a quality plan: Meeting the quality expectations of the customer can be achallenging task. To ensure that the quality expectations are clearly defined and canreasonably be achieved, a quality plan is documented. The quality plan: Defines the term 'quality' for the project. Lists clear and unambiguous quality targets for each deliverable. Each quality target

provides a set of criteria and standards to be achieved to meet the expectations of thecustomer. Provides a plan of activities to assure the customer that the quality targets will be met (inother words, a quality assurance plan).


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Identifies the techniques used to control the actual quality level of each deliverable as it isbuilt (in other words, a quality control plan)."Not only is it important to review the quality of the deliverables produced by the project, itis also important to review the quality of the management processes that produced them. Aquality plan will summarize each of the management processes undertaken during the project,

including time, cost, quality, change, risk, issue, procurement, and acceptance andcommunications management."Create a risk plan: The next step is to document all foreseeable project risks within a risk

plan. This plan also identifies the actions required to prevent each risk from occurring, aswell as reduce the impact of the risk should it eventuate. Developing a clear risk plan is animportant activity within the planning phase, as it is necessary to mitigate all critical projectrisks prior to entering the execution phase of the project."Create an acceptance plan: To deliver the project successfully, you will need to gain fullacceptance from the customer that the deliverables produced by the project meet or exceedrequirements. An acceptance plan is created to help achieve this, by clarifying the completioncriteria for each deliverable and providing a schedule of acceptance reviews. These reviews

provide the customer with the opportunity to assess each deliverable and provide formalacceptance that it meets the requirements as originally stated."Create a communications plan: Prior to the execution phase, it is also necessary toidentify how each of the stakeholders will be kept informed of the progress of the project.The communications plan identifies the types of information to be distributed to stakeholders,the methods of distributing the information, the frequency of distribution, and responsibilitiesof each person in the project team for distributing the information."Create a procurement plan: The last planning activity within the planning phase is toidentify the elements of the project to be acquired from external suppliers. The procurement

plan provides a detailed description of the products (that is, goods and services) to beacquired from suppliers, the justification for acquiring each product externally as opposed tofrom within the business, and the schedule for product delivery. It also describes the processfor the selection of a preferred supplier (the tender process), and the ordering and delivery ofthe products (the procurement process)."Contract the suppliers: Although external suppliers may be appointed at any stage of the

project, it is usual to appoint suppliers after the project plans have been documented but priorto the execution phase of the project. Only at this point will the project manager have a clearidea of the role of suppliers and the expectations for their delivery. A formal tender process isundertaken to identify a short list of capable suppliers and select a preferred supplier toinitiate contractual discussions with. The tender process involves creating a statement ofwork, a request for information and request for proposal document to obtain sufficient

information from each potential supplier and select the preferred supplier.Once a preferred supplier has been chosen, a contract is agreed between the project team andthe supplier for the delivery of the requisite products."Perform a phase review: At the end of the planning phase, a phase review is performed.This is a checkpoint to ensure that the project has achieved its objectives as planned."

Project Execution

In much of the literature, and in training programs, project management is all about projectplanning while project execution gets short shrift. This is not the case in Jason's book. AsJason explains:"This phase involves implementing the plans created during the project planning phase.

While each plan is being executed, a series of management processes are undertaken tomonitor and control the deliverables being output by the project. This includes identifying


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change, risks and issues, reviewing deliverable quality and measuring each deliverableproduced against the acceptance criteria. Once all of the deliverables have been produced andthe customer has accepted the final solution, the project is ready for closure. The activities ofthis phase are shown in Figure.

In a 'waterfall' fashion, where each activity is completed in sequence until the finaldeliverable is produced, or in an 'iterative' fashion, where iterations of each deliverable areconstructed until the deliverable meets the requirements of the customer.Regardless of the method used to construct each deliverable, careful monitoring and control

processes should be employed to ensure that the quality of the final deliverable meets theacceptance criteria set by the customer."Monitor and control: While the project team are physically producing each deliverable,the project manager implements a series of management processes to monitor and control the

activities being undertaken by the project team. An overview of each management processfollows."Time Management: Time management is the process of recording and controlling timespent by staff on the project. As time is a scarce resource within projects, each team membershould record time spent undertaking project activities on a timesheet form. This will enablethe project manager to control the amount of time spent undertaking each activity within the

project. A timesheet register is also completed, providing a summary of the time spent on theproject in total so that the project plan can always be kept fully up to date."Cost management: Cost management is the process by which costs/expenses incurred onthe project are formally identified, approved and paid. Expense forms are completed for eachset of related project expenses such as labour, equipment and materials costs. Expense forms

are approved by the project manager and recorded within an expense register for auditingpurposes.

Project management execution

activities"The execution phase is typically

the longest phase of the project in termsof duration. It is the phase within whichthe deliverables are physicallyconstructed and presented to the customerfor acceptance.

To ensure that the customer'srequirements are met, the projectmanager monitors and controls theactivities, resources and expenditure

required to build each deliverable. Anumber of management processes asshown are undertaken to ensure that the

project proceeds as planned."Build the deliverables: This phaseinvolves physically constructing eachdeliverable for acceptance by thecustomer. The activities undertaken toconstruct each deliverable will varydepending on the type of project being

undertaken. Activities may be undertaken


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"Quality management: Quality is defined as the extent to which the final deliverableconforms to the customer requirements. Quality management is the process by which qualityis assured and controlled for the project, using quality assurance and quality controltechniques. Quality reviews are undertaken frequently and the results recorded on a qualityreview form.

"Change management: Change management is the process by which changes to the projectscope, deliverables, timescales or resources are formally requested, evaluated and approved

prior to implementation. A core aspect of the project manager's role is to manage changewithin the project. This is achieved by understanding the business and system driversrequiring the change, identifying the costs and benefits of adopting the change, andformulating a structured plan for implementing the change. To formally request a change tothe project, a change form is completed. The status of all active change forms should herecorded within a change register."Risk management: Risk management is the process by which risks to the project areformally identified, quantified and managed. A project risk may be identified at any stage ofthe project by completing a risk form and recording the relevant risk details within the risk

register."Issue management: Issue management is the method by which issues currently affectingthe ability of the project to produce the required deliverable are formally managed. After anissue form has been completed and the details logged in the issue register, each issue isevaluated by the project manager andA set of actions undertaken to resolve the issue identified."Procurement management: Procurement management is the process of sourcing productsfrom an external supplier. Purchase orders are used to purchase products from suppliers, anda procurement register is maintained to track each purchase request through to its completion."Acceptance management: Acceptance management is the process of gaining customeracceptance for deliverables produced by the project. Acceptance forms are used to enable

project staff to request acceptance for a deliverable, once complete. Each acceptance formidentifies the acceptance criteria, review methods and results of the acceptance reviewsundertaken."Communications management: Communications management is the process by whichformal communications messages are identified, created, reviewed and communicated withina project. The most common method of communicating the status of the project is via a

project status report. Each communications message released is captured in acommunications register."Perform a phase review: At the end of the execution phase, a phase review is performed.This is a checkpoint to ensure that the project has achieved its objectives as planned."

Project Closure

"Project closure involves releasing the final deliverables to the customer, handing overproject documentation to the business, terminating supplier contracts, releasing projectresources and communicating the closure of the project to all stakeholders. The lastremaining step is to undertake a post implementation review to quantify the level of projectsuccess and identify any lessons learnt for future projects."11"Following the acceptance of all project deliverables by the customer, the project will havemet its objectives and be ready for closure. Project closure is the last phase in the project lifecycle, and must be conducted formally so that the business benefits delivered by the project


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are fully realized by the customer. The activities outlined in Figure 5 are undertaken.

Figure 5: Project closure activities"Perform project closure: Project closure, or 'close out', essentially involves winding up the

project.This includes: Determining whether all of the project completion criteria have been met; Identifying any outstanding project activities, risks or issues; Handing over all project deliverables and documentation to the customer; Cancelling supplier contracts and releasing project resources to the business; Communicating the closure of the project to all stakeholders and interested parties."A project closure report is documented and submitted to the customer and/or project sponsorfor approval. The project manager is responsible for undertaking each of the activities

identified in the project closure report, and the project is closed only when all the activitieslisted in the project closure report have been completed."Review project completion: The final activity within a project is the review of its success

by an independent party. Success is determined by how well it performed against the definedobjectives and conformed to the management processes outlined in the planning phase. Todetermine how well it performed, the following types of questions are answered: Did it result in the benefits defined in the business case? Did it achieve the objectives outlined in the terms of reference? Did it operate within the scope of the terms of reference? 0 Did the deliverables meet thecriteria defined in the quality plan? Was it delivered within the schedule outlined in the project plan? Was it delivered within the budget outlined in the financial plan?"To determine how well the project conformed, an assessment is made of the level ofconformity to the management processes outlined in the quality plan. These results, as well asa list of the key achievements and lessons learnt, are documented within a post-implementation review and presented to the customer and/or project sponsor for approval."

ORGANIZATION STRATEGY

Organizational strategy is concerned with envisioning a future

for your family business, creating value in the eyes of yourcustomers, and building and sustaining a strong position in themarketplace.

"As a result of the current market conditions, continued success formany family businesses will be determined by how they can adapt to change - and to be ableto do it quickly," according to family business expert Don Schwerzler.

Schwerzler has been studying and advising family business entrepreneurs for more than 40years and he is the founder of the Family Business Institute headquartered in Atlanta GA.


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As we work with our family business clients, assessing their organizational strategy is animportant part of our succession management strategy - we consider organizational strategyin terms of four key components, each with critical elements.

Organizational Strategy - Vision, Mission, Competitive Advantage

The first critical strategy element is Vision, Mission and Competitive Advantage, whichdescribe the business a company is in, it's current and long term market objectives and themanner in which it differentiates itself from the competition.

Focused Purposeo Clearly defining short-term purposeo Ensuring mission is realistico Serving the best interests of all stakeholderso Defining a point of differentiation

Future Perspectiveo Clearly defining long-term outlooko Appealing to the long-term interests of the company's stakeholderso Providing a foundation for decision-making

Strategic Advantageo Competitive advantage is a key driver to forming an organizational strategyo Competitive advantage is clearly understood by all stakeholderso Employees clearly understand how their role supports the company's

organizational strategy

Organizational Strategy - External Assessment

A second key strategy element is External Assessment, which reflects an organization'sapproach to gathering and analyzing essential market data. Included in this data aredeveloping competitive profiles, studying macro and micro economic information,identifying industry opportunities and threats, and understanding what it takes to besuccessful in a given market.

Customer Profileo Clearly defining reasons why customers buy products or serviceso Clearly defining benefits that customers seeko Clearly defining reasons why customers would not buy products or services

o Assessing customer bargaining powero Knowing customer preferred choice of distribution channel

Industry and Competitive Analysis Is Essential Component of Organizational Strategyo Identifying primary competitorso Identifying potential and indirect competitorso Clearly defining strengths, weaknesses and strategies of competitorso Assessing the threat of substitute products or services or new entrants into the

marketplaceo Understanding what it takes to be successful in a given marketo Comparing customer growth rate with industry standardso Ongoing market evaluation process

Environmental Assessmento Defining and clarifying regulatory requirements


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o Assessing vulnerability to adverse business cycleso Summarizing opportunities and threats due to:

Economic conditions New technology Demographic structure Legal or political events The natural environment Socio-cultural norms

Key Success Factors Are Identified With a Critical Thinking Processo Implementing a critical thinking processo Clearly measuring competitive intensityo Clearly defining product or service demand within your marketo Clearly defining drivers to success within your industryo Consistently monitoring key influences within your industry

Organizational Strategy - Internal Assessment

Internal Assessment is the key strategy element that reflects the company's ability toobjectively evaluate its own strengths and weaknesses. This would include evaluating thecompany's management processes and how effectively it utilizes a "value chain" analysisapproach. (Value Chain components are Research & Development, Production, Marketing,Sales and Customer Service)

Financeo Adequate funding of key initiativeso Utilizing a comprehensive pricing model

o Consistently performing within a range of financial goalso Having a targeted long-range financial plano Employing a "Cost / Benefit" approach to resource allocationo Financial plan allowing for economic or environmental disruptiono Financial plan allows for flexibilityo Employing the "If / Then" model when forming organizational strategy

Research and Developmento Fully integrating all appropriate departments with R&Do Maintaining a creative and innovative processo Ensuring R&D has all required resources to successfully fulfil its function

Productiono Fully integrating all departments to support productiono Strategic partners consistently fulfil production commitmentso Production process is cost-effectiveo Production process is flexible, fast and responsive

Marketingo Coordinating all departments to support marketingo Having a clearly defined marketing plano Branding plays a critical roleo Utilizing a marketing system or database to track customer and market

informationo

Employing an effective product / service management processo "Competitive advantage" is a key driver for all marketing decisions


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o Employees take pride in the ability to promote products and serviceso Monitoring the ROI of all marketing campaigns

Sales / Distributiono Consistently achieving sales goalso Ensuring that sales teams / channels possess required skills to achieve plano Ensuring that sales teams / channels are provided with the necessary

information to achieve their goalso Employing a well-defined sales management processo Coordinating all departments to support our sales processo Tracking sales activity from lead generation through close

Does Your Organizational Strategy Emphasize Customer Service?o Clearly defining customer service standardso Meeting or exceeding customer expectationso Measuring customer satisfactiono Managers and employees share a high commitment to achieving customer

loyaltyo Maintaining a customer relationship management system that provides criticalservice information to make the best decision

o Maintaining a high rate of repeat business, customer loyalty and referrals

Organizational Strategy - Objectives, Initiatives and Goals

Objectives, Initiatives and Goals are the final element of organizational strategy and illustratea company's ability to articulate what it wants to accomplish, how it will do it, and when itwill be achieved. Included in this process are defining direction, aligning financial and humanresources, instilling accountability and determining critical measurements.

Organization Strategy Needs Vital Directiono Identifying key strategic objectiveso Prioritizing action items by their importance to strategic intento Ensuring objectives are quantifiable and measurableo Those responsible for implementation participate in the strategic planning

processo Plans must specify how each area will contribute to achieving strategic plan

Resource Alignmento Allocating sufficient resources to achieve strategic intento Clearly defining resources necessary for each objectiveo Evaluating individual or group capacity prior to assigning workload

Organization Accountabilitieso Ensuring that employees understand how their roles and responsibilities relate

to strategic objectiveso Holding individuals accountable for their worko Employee goals reflect accountabilities and timelinesso Employing an internal system to routinely review the status of key objectiveso Measuring key financial indicatorso Utilizing a uniform format to measure and report performance.


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ORGANIZATIONAL STRUCTURE

Organizational structure depends on the product to be developed. Wheelwright and Clarkdefine a continuum of organizational structures between two extremes, functionalorganizations and project organizations. Functional organizations are organized according totechnological disciplines. Senior functional managers are responsible for allocating resources.The responsibility for the total product is not allocated to a single person. Coordinationoccurs through rules and procedures, detailed specifications, shared traditions amongengineers and meetings (ad hoc and structured). Products that need a high level of specializedknowledge require a functionally organized structure.

A light-weighted matrix organization remains functional and the level of specialization iscomparable to that found in the functional mode. What is different is the addition of a productmanager who coordinates the product creation activities through liaison representatives fromeach function. Their main tasks are: to collect information, to solve conflicts and to facilitate

achievement of overall project objectives. Their status and influence are less as compared tofunctional managers, because they have no direct access to working-level people.

A heavy-weighted matrix organization exists of a matrix with dominant the project structureand underlying the functional departments. The product manager has a broader responsibility.Manufacturing, marketing and concept development are included. The status and influence ofthe product manager, who is usually a senior, is the same or higher as compared to thefunctional manager. Compared to functional managers, because they have no direct access toworking-level people.

A project organization exists of product oriented flows: project and teams. The project

members leave their functional department and devote all their time to the project. They sharethe same location. The professionals are less specialized and have broader tasks, skills andresponsibilities. The functional manager is responsible for the personnel development and themore detailed technology research in the functional groups.

Companies can be classified to their organizational structures. Another variable company canbe classified to be the nature of the projects undertaken. We characterize projects by thenumber of employees needed to perform the tasks, or workload, and the number of tasks thatare fundamentally different in nature. An example of the latter aspect is PCB developmentand structural design.

Another way to classify organization structure is by one of the following four categories:

I. The product to be developed is comprehensible for one person. One person is likely to haveall the knowledge needed to develop Manufacturing and Assembly. The developmentdepartment in companies that undertake these kinds of projects are usually very small. If acompany consists of more than one department, it is usually structured as a functionalorganization.

II. The product to be developed has a fairly low complexity, but total work is high. Thesekinds of products are likely to be developed within one functional department. A researchdepartment may also be an example of a department in which type II projects are undertaken.Are more departments involved, and then the light weighted matrix structure is preferable.


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Employees are involved on a full-time basis. Tasks may be performed concurrently. Thesequence can be determined using the Design Structure Matrix.

III. The product to be developed consists of a lot of different elements, such as software,PCB, power supply and mechanical structure. The product is however in the engineering

phase, i.e. it is clear what needs to be done to get the product into production. Variousdisciplines perform their own tasks. These tasks have mostly a low workload. Employeescannot work full-time on one project. This creates a complex situation that may be comparedto a job shop situation in production logistics. Though the comparison betweenmanufacturing and product development is not accepted by all product developmentmanagers, it may yield good results. Studying each step in the Product Development Processand fluctuations in workloads reveals ways to reduce variation and eliminate bottlenecks. It isnecessary to view the Product Development Process as a process and not as a list of projects.Three important findings regarding this are:

1. Projects get done faster if the organization takes on fewer at a time.

2. Investments to relieve bottlenecks yield disproportionately large time-to-market benefits.3. Eliminating unnecessary variation in workloads and work processes eliminates distractions

and delays, thereby freeing up the organization to focus on the creative parts of the task.

Creating cross-functional concurrent engineering teams is the right way to develop products.However, the pitfall is too many projects at the same time, so that key people fromengineering, marketing and manufacturing work at five or more projects at once. This resultsin congestion. Striving to work at 100% of the product development capacity lengthens

product development lead times enormously. A more realistic percentage is 80%. Attentionmust be focused on bottlenecks, these days most commonly found at the softwaredevelopment side of the project.

IV. The product is complex. Total work is high. Employees can thus participate on a full-timebasis. A project organization is the most appropriate organizational structure for these kindsof products.

Organizational Culture

What is Culture?

Basically, organizational culture is the personality of the organization. Culture is comprised of theassumptions, values, norms and tangible signs (artefacts) of organization members and their

behaviours. Members of an organization soon come to sense the particular culture of an organization.Culture is one of those terms that are difficult to express distinctly, but everyone knows it when theysense it. For example, the culture of a large, for-profit corporation is quite different than that of ahospital which is quite different than that of a university. You can tell the culture of an organization

by looking at the arrangement of furniture, what they brag about, what members wear, etc. -- similarto what you can use to get a feeling about someone's personality.

Corporate culture can be looked at as a system. Inputs include feedback from, e.g., society,professions, laws, stories, heroes, values on competition or service, etc. The process is basedon our assumptions, values and norms, e.g., our values on money, time, facilities, space and

people. Outputs or effects of our culture are, e.g., organizational behaviours, technologies,strategies, image, products, services, appearance, etc.


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The concept of culture is particularly important when attempting to manage organization-wide change. Practitioners are coming to realize that, despite the best-laid plans,organizational change must include not only changing structures and processes, but alsochanging the corporate culture as well.

There's been a great deal of literature generated over the past decade about the concept oforganizational culture -- particularly in regard to learning how to change organizationalculture. Organizational change efforts are rumoured to fail the vast majority of the time.Usually, this failure is credited to lack of understanding about the strong role of culture andthe role it plays in organizations. That's one of the reasons that many strategic planners now

place as much emphasis on identifying strategic values as they do mission and vision.

Some Types of Culture

There are different types of culture just like there are different types of personality. Researcher JeffreySonnenfeld identified the following four types of cultures.

Academy Culture

Employees are highly skilled and tend to stay in the organization, while working their way up theranks. The organization provides a stable environment in which employees can development andexercises their skills. Examples are universities, hospitals, large corporations, etc.

Baseball Team Culture

Employees are "free agents" who have highly prized skills. They are in high demand and can rathereasily get jobs elsewhere. This type of culture exists in fast-paced, high-risk organizations, such asinvestment banking, advertising, etc.

Club Culture

The most important requirement for employees in this culture is to fit into the group. Usuallyemployees start at the bottom and stay with the organization. The organization promotes from withinand highly values seniority. Examples are the military, some law firms, etc.

Fortress Culture

Employees don't know if they'll be laid off or not. These organizations often undergo massivereorganization. There are many opportunities for those with timely, specialized skills. Examples aresavings and loans, large car companies, etc.

Stakeholder Management

Stakeholder management is the process of managing the expectation of anyone that has aninterest in a project or will be effected by its deliverables or outputs.

Helpful Suggestions for Managing Difficult Clients

Every consultant has had to deal with a difficult client. The nice thing about being aconsultant - you just need to get through the project and you will be able to move on - youdon't necessarily have to work with that client ever again. But really, that's not what youwant, is it? Ideally you develop a strong working relationship with a client so that whenanother project comes up, the client thinks of you first. You become a partner with the client,not just a one-time deal.


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Stake Your Project Claim

After recent conversations with a friend about waffling company policies on projects, myhead was whirling. I wondered how you manage a project without the stakeholders' approvalor buy-in. In my friend's company, the sales representatives sometimes create quotes based in

large part on what the customers want, and not always on what their products can do. Thenext step in the process is a layer of approval from several colleagues, and in many cases, thesales representative in question has to go back to the customer and renegotiate. You canimagine how the customer feels.

Stakeholder Commitment: Why Is It Important?

If that carrot-at-the-end-of-the-stick tactic seems useless to get commitment from yourstakeholders, try these how-to's shared by experts. Commitment is important in anyrelationship. It is the value that galvanises diverse entities so that all can work together

unilaterally and seamlessly. Without it, there is no bond and no common purpose. Romantic,family or even business-wise, commitment is the force that drives the relationship forward,toward a mutually desirable goal that usually points to growth and/or profitability.

How to Sell Function, Feature and Benefit to Stakeholders

Top executives and stakeholders are often "sold" certain projects from within theorganisation. This normally happens, where a sales team first handles a project and then laterassigns it to a project manager who "inherits" it. The concept here is that the selling to thestakeholders actually continues once the project manager takes over. Because of this reality,the project manager must to some extent use sales skills and continue to build (and even

sometimes repair!) the relationships with the stakeholders.

Building Relationships in Project Management

Building relationships is just as important within the project team as it is outside. Goodrelationships can be the difference between outstanding success and dismal failure becauseit's all about getting people to like and trust you so that they will deliver what you need themto deliver at the right time in the right way. We have talked previously about managingstakeholders, finding out about and managing their needs and expectations, however this ismuch easier if you have developed good relationships with stakeholders in the first place.

Project Management: Stakeholder Risk Management

Is it really true that on time, on budget, and fulfilling all requirements means project success?Whose requirements are we really trying to meet anyway? And who decides if the originaldue date can be changed when the scope grows? In this article we'll address the peopleswirling around your project, stakeholders. You'll find some useful tips and other resourcesfor optimising stakeholder involvement in your project.

Avoiding the "Dark Twisty Turn-filled Tunnel Syndrome"

Many a well conceived project ends up in the scrap heap because of inadequate expectationsetting, or sponsors and key stakeholders that become disinterested or impatient with projects


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that don't produce deliverables quickly enough. These projects, after creating an initial buzz,appear to enter "a dark twisty tunnel" where the light from the tunnel entrance is no longerseen, the tunnel exit is nowhere in sight, and inadequate milestones exist to indicate forward

progress. Avoiding this trap is no trivial matter, as it is more than just defining milestones foryour project.

Persuasion and Perception

Every year, between forty and seventy percent of all corporations and public sector bodiesattempt to make strategic change. Overwhelmingly, formal projects are the preferredstructure used to organise such effort, regardless of whether the underlying goals are definedin terms of business process re-engineering (BPR), technology upgrades, mergers andacquisitions, due diligence or similar concepts.

What is Stakeholder Management?

Running a successful project requires a high degree of stakeholder management. So who arestakeholders? A stakeholder is anyone who has an interest in your project or will be affected

by its deliverables or output. It is important to understand the values and issues thatstakeholders have in order to address them and keep everyone on board for the duration of the

project.

Creating and Sustaining a PM CultureIn the rush to implement project management, some organizations are implementing large-scale training programs, hiring project management consultants, and setting up projectoffices. Still, they are not seeing the results they had expected. The reason is simple-they

have not created the environment necessary for project management to grow and flourish.What is a project environment and how can you create one? It's not easy, but it can be done.Here's how.Most organizations are vertical bureaucracies. Project management cuts across this verticalstructure, placing authority and accountability for project results in the hands of a projectmanager. This can be a painful process! Just try wresting power away from functionalmanagers. Obviously, shifting power from a vertical hierarchy to a cross-functional,temporary organization takes a little foresight and preparation nothing less than anorganizational culture change.In the project management context, this entails establishing a whole set of new behaviours,starting at the top. In a project culture, functional managers provide resources to project

teams. The project managers themselves must be empowered, via a written project charter, tomake decisions, secure resources, and deal directly with the customer. Management mustcreate a project management methodology that defines the project life cycle and process,right down to what is required, when it is required, and how it is done. A complete set ofinstructions, forms, templates, and tools is necessary to ensure consistent, repeatable

performance across the organization. A training program, tailored to the new methodology, isnecessary to teach and reinforce use of the methodology. Outside consultants may be requiredto diagnose and correct existing problems while future project managers are in training. And,most importantly, senior management must require consistent application of the methodologyand reward successful project behaviours.

Guidance on Creating a Project Culture in Your Organization


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In Creating a Climate and Culture for Sustainable Organizational Change (OrganizationalDynamics,Spring 1996), Schneider, Brief, and Guzzo list six steps to implementing total organizationalchange.It is useful guidance to those who are involved in creating a project management culture.

1. Ensure the organization is prepared to handle a major organizational change. If theorganization's management is not trusted, any attempt to change will be treated withscepticism. If you have ever heard the following statements where you work, you are facingan uphill battle: This is just the flavour of the day; this too shall pass; this will last abouta year then we'll be into something else; this is just likeTQM- here today, gone tomorrow. These statements reflect distrust in the organization'sleadership.Change will be difficult in this organization. Ask the following questions beforeimplementing widespread change:a) Is employee morale high?

b) Does the leadership have a history of successfully implementing major changes?

c) Is management known for tackling tough decisions and doing the right thing? If theanswer to these questions is yes, change will be embraced.If the answer is no, management must be consistent and plan for resistance. Constancy of

purpose will overcome scepticism in the long run.

2. Is the proposed change consistent with the existing organizational culture? If decisionmaking is centralized, if the organization is a traditional vertical hierarchy, if communicationis primarily up the chain, and if conflict is escalated rather than resolved locally, the changewill require significantly more time, effort, and attention. If, on the other hand, theorganization has already spent a lot of time and effort establishing a team-based culture, thechange will be accepted much more readily.3. Plan the change in as much detail as possible. This is where creation and deployment ofa project man - agreement methodology, and establishment of a project management office,come into play. Specify why the change is necessary-what is threatening the currentorganization and why the proposed change will defeat the threat. Spend time and moneydeveloping the methodology, processes, and policies. Make it clear to people that they willreceive training, will be expected to implement the new practices, and will be rewarded fordoing so. Communicate, communicate, and communicate. Going half way with this step willlead to disaster.4. Ensure that the reward system is structured to motivate employees to focus on

implementing the project management methodology. People are smart. They figure out

what the organization rewards andthat's what they do. Management must reward goodproject behaviour and discourage ad-hoc approaches.For example, if the new project methodology requires risk plans, and management never asksto see a risk plan or even asks about the top risks and associated response strategies, peoplewill stop addressing risk. They will return to their old ways, with predictable results. Thisimplies that senior management knows what a valid assumption is in the methodology-notalways. This can be cured with a one day PM for Executives course.5. Allocate resources to maintain the new system. As with any system, maintenance of a

project man - agreement system is part of the total system life cycle cost. Sometime duringthe change to a project culture, a project office should be set up to help implement the changeand to actually carry out many project duties. The scope of the project office can vary

between informal groups of passionate individuals to a collocated, permanent organization.Either way, the project office is responsible for updating the methodology, providing expert


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help to project teams, tracking and reporting project status, even man - aging projects for themore formalized project office. This takes resources-and it's not really optional if you wantthe change to last.6. Monitor the progress and effectiveness of the change to the organization. Adjust asnecessary. This step is fundamental project management practice. Performance must be

monitored and variance eliminated to bring about lasting change. Periodically check to makesure the change is taking effect, that you are getting the desired behaviours and projectresults. If so, pat yourself on the back for a job well done. If not, check to see where theresistance is or lack of support exists and take action to get back on track.Project management will improve cost, schedule, and technical performance. It will lead tosatisfied customers. But it does fail in some organizations due to the lack of a projectmanagement culture.When we speak of changing the culture, we are talking about changing the set of shared

beliefs, values, and expectations that exist within the organization. A change as basic as thismust be undertaken methodically. Follow the six-step plan described here to dramaticallyimprove your chances of success.

2nd unit: Project Planning

Project planning:

Project planning is a discipline for stating how to complete a project within a certaintimeframe, usually with defined stages, and with designated resources. One view of project

planning divides the activity into:

Setting objectives (these should be measurable)

Identifying deliverables Planning the schedule Making supporting plans

Supporting plans may include those related to: human resources, communication methods,and risk management.

Computer hardware and software project planning within an enterprise is often done using aproject planning guide that describes the process that the enterprise feels has been successfulin the past.

Project planning is part of project management, which relates to the use of schedules such asGantt charts to plan and subsequently report progress within the project environment.

Initially, the project scope is defined and the appropriate methods for completing the projectare determined. Following this step, the durations for the various tasks necessary to completethe work are listed and grouped into a work breakdown structure. The logical dependencies

between tasks are defined using an activity network diagram that enables identification of thecritical path. Float or slack time in the schedule can be calculated using project managementsoftware. Then the necessary resources can be estimated and costs for each activity can beallocated to each resource, giving the total project cost. At this stage, the project plan may beoptimized to achieve the appropriate balance between resource usage and project duration to

comply with the project objectives. Once established and agreed, the plan becomes what isknown as the baseline. Progress will be measured against the baseline throughout the life of


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the project. Analyzing progress compared to the baseline is known as earned valuemanagement.

The inputs of the project planning phase include Project Charter and the Concept Proposal.The outputs of the Project Planning phase include the Project Requirements, the Project

Schedule, and the Project Management Plan.Steps for project planning

Step 1: Create a Project Plan

Firstly, you need to create a comprehensive Project Plan, which is critical to the success ofthe project. The Project Plan identifies the Work Breakdown Structure (WBS) of the phases,

activities and tasks to be undertaken. It defines the sequencing, duration and dependencies ofeach task, as well as the generic resources and financial expenditure required to completeyour project.Step 2: Create a Resource Plan

Following the creation of a Project Plan, a detailed assessment of the resources required toundertake the project should be made. The required labour, equipment and materials should

be listed and the amount of each resource quantified. Finally, the resource consumptionshould be scheduled to provide the Project Manager with a complete view of the total amountof resource needed for each stage of the project.Step 3: Create a Financial Plan

The Financial Plan describes the total quantity of financial resources required during eachstage of the project. The total cost of each item of labour, equipment and materials iscalculated, as well as the total cost of undertaking each activity within the Project Plan.Step 4: Create a Quality Plan

To ensure that the project deliverables meet customer requirements, a Quality Plan isdeveloped. This plan explicitly lists the quality targets to be achieved, and a suite of QualityAssurance and Quality Control activities are scheduled to ensure that the required level ofquality is achieved throughout the project.Step 5: Create a Risk Plan

Managing Project Risk is a critical process within the Project Lifecycle. To mitigate riskeffectively, all foreseeable project risks are identified and rated in terms of their likelihood of

occurrence and potential impact on the project. The risks are prioritized and a set of actionsidentified to reduce the likelihood of each risk and its impact on the project should it occur.

10 Steps to Planning a Project

Did you know that one of the most commoncauses of project delay, overspend andcustomer dissatisfaction is the lack of

properproject planning?The Project Planning phase is one of themost critical phases within a project. Withinthis phase, the people, resources, finances,suppliers and tasks must be correctlyscheduled, in order for the Project Managerto be able to monitor and control the projectdelivery effectively. To help you to plan

projects better than before, weve describedhere the 10 steps to planning a project.If you want to plan projects quickly andefficiently, then take the following 10 steps:A description of each step follows:


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Step 6: Create an Acceptance Plan

The key to customer satisfaction is in gaining approval from the customer that thedeliverables meet the quality criteria stated in the Quality Plan. To ensure that customeracceptance is sought for each deliverable produced by the project, an Acceptance Plan iscreated. The Acceptance Plan provides a schedule of Acceptance Reviews which are

undertaken to gain customer acceptance for the completion of each deliverable within theproject.Step 7: Create a Communications Plan

A Communications Plan is a document which describes the information to be provided toproject stakeholders to keep them informed of the progress of the project. Each stakeholder islisted and their requirements for information clearly identified. A schedule of communicationevents and activities are laid out to ensure that the right information is communicated to theright people at the right time.

Step 8: Create a Procurement PlanProjects often need to acquire procurement items (such

as products, services and specific results) from external suppliers. The Procurement Plandescribes which items will be sourced from external suppliers and the timeframes andmethods for delivery.

Step 9: Contract the Suppliers

With a clear view of the procurement items to be acquired, the project team will set out toselect and contract one or a small number of preferred suppliers to the project.Step 10: Perform Phase Review

With a detailed understanding of the activities, resources, finances and supplier relationshipsrequired to undertake the project, the team is ready to enter the Execution phase. A PhaseReview is undertaken to ensure that all of the required Planning activities have been

completed and to provide formal approval to proceed to the Project Execution phase. Thereyou have it. By completing these 10 steps, you will create a comprehensive suite of ProjectPlans which enable you to properly control people, resources, finances, suppliers and tasksthroughout the entire Project Lifecycle.

Introduction to the WBS

A Work Breakdown Structure is a results-oriented family tree that captures all the work of aproject in an organized way. It is often portrayed graphically as a hierarchical tree; however,it can also be a tabular list of "element" categories and tasks or the indented task list that

appears in your Gantt chart schedule. As a very simple example, Figure 1 shows a WBS for ahypothetical banquet.


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Large, complex projects are organized and comprehended by breaking them intoprogressively smaller pieces until they are a collection of defined "work packages" that mayinclude a number of tasks. A $1,000,000,000 project is simply a lot of $50,000 projects

joined together. The Work Breakdown Structure (WBS) is used to provide the framework fororganizing and managing the work.

In planning a project, it is normal to find oneself momentarily overwhelmed and confused,when one begins to grasp the details and scope of even a modest size project. This results

from one person trying to understand the details of work that will be performed by a numberof people over a period of time. The way to get beyond being overwhelmed and confused isto break the project into pieces, organize the pieces in a logical way using a WBS, and thenget help from the rest of your project team.

The psychologists say our brains can normally comprehend around 7-9 itemssimultaneously. A project with thousands or even dozens of tasks goes way over our abilityto grasp all at once. The solution is to divide and conquer. The WBS helps break thousandsof tasks into chunks that we can understand and assimilate. Preparing and understanding aWBS for your project is a big step towards managing and mastering its inherent complexity.

The WBS is commonly used at the beginning of a project for defining project scope,organizing Gantt schedules and estimating costs. It lives on, throughout the project, in the

project schedule and often is the main path for reporting project costs. On larger projects, theWBS may be used throughout the project to identify and track work packages, to organizedata for Earned Value Management (EVM) reporting, for tracking deliverables, etc.

History of the WBS

The WBS was initially developed by the U.S. defence establishment, and it is described inMilitary Standard (MIL-STD) 881B (25 Mar 93) as follows: "A work breakdown structure is

a product-oriented family tree composed of hardware, software, services, data and


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facilities .... [It] displays and defines the product(s) to be developed and/or produced andrelates the elements of work to be accomplished to each other and to the end product(s)."

It requires some mental discipline to develop a product-oriented or deliverable-orientedgrouping of project elements adding up to comprise the entire project scope. Intuitively, we

tend to start out with a task-oriented approach. This is OK for very small projects whereextensive project management controls will not be used. The task-oriented approach is easyto understand, because we can easily think of projects as collection of tasks. A task-orientedWBS can be developed by beginning with a simple "to-do" list and then clustering the itemsin a logical way. The logical theme could be project phases, functional areas, or major end-

products.

If your organization will be collecting historical data to form a cost database, you should tryto select a standard approach consistent with the organizations long term data collectionneeds.

A sample WBS is shown in the figure below:

WBS Format for System Development Projects

Additional level 2 elements not shown here might include development environment support,

logistics and training, and installation and start-up. This next link will take you to a skeletonsample WBS for a software and hardware system development project, and you can alsodownload a zipped version of the corresponding MS-Project 2002 (.mpp) file.

A WBS for a large project will have multiple levels of detail, and the lowest WBS elementwill be linked to functional area cost accounts that are made up of individual work packages.Whether you need three levels or seven, work packages should add up through each WBSlevel to form the project total.

Product or Process Oriented?

The WBS was initially defined as a product oriented family tree, however subsequentdefinitions have introduced more flexibility -- so a WBS can also be deliverable or process


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oriented. Your WBS can be built on nouns or verbs. If the results of your project areprimarily verbs, then a verb based or process based WBS may make more sense. If yourWBS is to be product or deliverable oriented, then you can start by thinking of the WBS as a

parts list for the ultimate end-items of your project. This link will give a simple illustration ofa product or process based WBS orientation. These differences are not shown to tell you

what the right way for your project are, but just to familiarize you with the distinctions, soyou can think about them and choose what's best for your project.

WBS Numbering

WBS elements are usually numbered, and the numbering system may be arranged any wayyou choose. The conventional numbering system is shown in the figure. The shaded boxshown in the above slide could be numbered 1.2.2.3, which would tell you it was in thesecond box in level 2, the second box in level 3, and the third box in level 4.

WBS Dictionary

If a WBS is extensive and if the category content is not obvious to the project team members,it may be useful to write a WBS dictionary. The WBS dictionary describes what is in eachWBS element, and it may also say what is not in an element, if that is unclear. Here is asample of a WBS dictionary description:

WBS Element 1.5.4.5. - Systems Integration Test Equipment Planning - This element includesthe effort to identify requirements and specify types and quantities of test equipment needed

to support the System Integration and Test process. It does not include the design or

procurement of such equipment, which is covered in Element 1.5.4.6.

Mapping WBS for Cost Management

In a product-oriented WBS, functional categories of work may form "cost accounts" within aWBS element. Cost account managers are responsible for a functional areas contribution to aWBS element. Cost accounts from several departments or functions may combine into oneWBS element.

Internal department planning for a cost account will be made up of individual work packages.A work package will typically have its own budget and schedule. Work packages should besmall enough to be executed by individuals or small groups in a single department, and they

should be of relatively short schedule duration. A small project might define a maximumwork package size as two weeks of effort. Larger projects will assemble larger work

packages that can be appropriately managed and controlled.

The project manager will have to decide to what degree employment of various details ofWBS implementation will benefit the efficient management of the project. On a very small

project, a formal WBS may serve no useful purpose, but it can become valuable if projectsize or complexity start to increase.

As an organizations project management environment matures, or as larger size andcomplexity are encountered, application of the WBS concept can evolve from an ad hoc listof tasks, to time-phased activity lists, task lists clustered by project deliverables and services,or an end-product focused WBS fed by cost accounts and work packages.


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If you are using MS-Project or a similar project management software application, you may

encounter the WBS as a vertical list with indents to show structure. This will be compatiblewith the Gantt View data entry screens. While some software packages provide a separateWBS view, you could prepare your WBS in the vertical format using a word processor, andthen cut and paste your WBS into your project management software package.

Program and Contract WBSs

A top-level WBS for a large program is sometimes called a Program WBS (PWBS) orProgram Summary WBS (PSWBS). If a project involves several organizational participantsor contractors, guidance for one contractor can be provided in a Contract WBS (CWBS). The

project manager may provide a high-level CWBS for each developer, perhaps to level 2 orlevel 3. The developer will then fill in the details of lower WBS levels to reflect the work to

be accomplished and the data flow in that organization.

Organizational Standards

Your organization may want to decide on a standard WBS format or group of formats, usethese across all projects, and communicate definitions widely so everyone will be speakingthe same language. This can save re-learning project lessons and can lay the groundwork forsuccessful data gathering to aid future cost estimates.

WBS Implementation

When you set up a project WBS, think about how you will be using it later in the project. Tryto consider how you will organize the WBS, schedule format, manager assignments, andcharge numbers, in your early project planning. These days, the WBS in smaller projectsends up automatically being the indent structure in your Gantt schedule, so pay attention tothose indents, and make sure that is the WBS you want for rolling up costs in your project,especially if you will be using EVM. It will be helpful if you can map the charge numbers,managers, and task groups to each other. This will help you track costs and progress for eachmanager. If your project schedule will on MS-Project, you may want to insert "text" columnsinto your schedule (Gantt View) for project charge numbers and manager names.


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If your project charge numbers cannot be linked to groups of tasks assigned to specificmanagers, you will have no way to provide performance measurement feedback to managers.

Some project management environments have definite conventions for grouping items in aWBS. The best method is to have a WBS that works for your particular project environment.

The WBS should be designed with consideration for its eventual uses. Your WBS designshould try to achieve certain goals:

Be compatible with how the work will be done and how costs and schedules will bemanaged,

Give visibility to important or risky work efforts, Allow mapping of requirements, plans, testing, and deliverables, Foster clear ownership by managers and task leaders, Provide data for performance measurement and historical databases, and Make sense to the workers and accountants.

There are usually many ways to design a WBS for a particular project, and there aresometimes as many views as people in the process. Experience teaches that everyone takes aslightly different slice of the apple, so make sure WBS arguments seeking metaphysicalcertainty are quickly brought to closure. Simple practicality combined with enlightened trialand error usually is the best approach.

3rd unit: Project ExecutionInitiating the Project

Welcome to information technology (IT) project management. IT project management is

different from managing any other project you may have worked on in the past. In the worldof information technology, weve got attacks on all fronts: ever changing business needs,hardware compatibility, software glitches, security holes, and network bandwidth, not tomention careers, attitudes, and office politics.

Dont be scared off! This is also the most challenging and exciting place to be in a company.What you do here will affect entire organizations, and have an impact on profits, and can

boost your career, confidence, and life to the next level.

IT project management can be as exciting as a white water rafting excursion or as painful as aroot canal; the decision is yours. What makes the difference between excitement and a sore

jaw? Many things: leadership, know-how, motivation, and, among other things, a clear visionof what each project will produce, what it will cost, and when it will end.

This first chapter will help you build a strong foundation for managing successful IT projects.Like anything else in the world, adequate planning, determination, and vision are required forsuccess. Ready to start this journey? Lets go!

Gathering Project Information

Everybody talks about project management, but what is it exactly? In some organizations,any task or duty is considered a project that requires someone to manage it. Puh-leeze!

Project management is the ability to administer a series of chronological tasks resulting in adesired goal. Some tasks cant be completed until others are finished, while other tasks can be


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done in parallel. Some tasks require the skill of a single individual; other jobs in the projectrequire that everyone chip in and lighten the load.

A project, technically, is a temporary endeavour to create a unique product or service.Projects are an undertaking outside of the normal operations of an entity. For example, you

might roll out a new application, install new monitors, create a new portion of a web site, orestablish a new call centre for application support. In some organizations, such as onescomprised of application developers or consultants, or IT integration companies, everythingthey do is a project because they complete projects for other organizations. Consider acompany that creates custom applications for other organizations. Their operation is anongoing series of projects. The organization that completes the project work is called the

performing organization.

IT project management is the ability to balance the love and implementation of technologywhile leading and inspiring your team members. Of course, the goal of project management isnot technology for technologys sake, but rather a movement toward things like improved

customer service, enhanced product quality, and increased profitability. As you can see inFigure 1-1, project management is a high-wire balancing act.

Establishing the Project Requirements

Before the actual project work can begin, the project manager must establish the projectrequirements with the project stakeholders. Stakeholders are any individuals, groups, orcommunities that have a vested interest in the outcome of the project. On some projects, thestakeholders may be just one department. On others, when projects may affect everydepartment, the stakeholders may be throughout the entire organization. Identifyingstakeholders is important because their input to the project requirements early in the projectinitiation can ensure the projects success.

Of course, on most projects there will be key stakeholders who influence the projectsoutcome: department managers, customers, directors, end users, and other folks who havedirect power over the project work. With the input of these key stakeholders, specificallytheir requirements for the project, constraints on the project, and time and cost objectives forthe project, the project manager will be able to gather the project requirements to begin

building a project plan to create the project deliverables.

Clarity is paramount. When the decision has been handed down that your company will be

implementing some new technology, and youll be leading the way, you need a clear,thorough understanding of the projects purpose. Ambiguous projects are a waste of time,talent, and money. Before the project begins, you need to know what exact results signal the

projects end. A project truly begins when you know exactly what the project will produce.

A project manager must balance the team and the technology.


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Once the project is defined, you need a clearly stated start and end date. The role of a projectmanager is not permanent but temporary. You, the project manager, are responsible forseeing the goal, developing the steps to get there, and then leading the way for your team tofollow.

How will you know what the end result of the project is to be? Ask! Who do you ask? Peoplelike the project sponsor can answer these kinds of questions. More about that later! You musthave a clear vision of the end result, or the project will drone on and on forever and youllnever finish. Too often IT projects can roll into project after project stemming from anoriginal, indecisive, half-baked wish list. Whether you are a full-time employee within anorganization or a contract-based project manager, you must have a clear understanding ofwhat the end results of the project will be.

Imagine your favourite archaeologist manoeuvring through a labyrinth of pitfalls, poisondarts, and teetering bridges to retrieve a golden statue. In the movies, theres always somefool who charges past the hero straight for the booty and gets promptly beheaded. Dont be

that guy. Before you can rush off toward the goal of any given project, youve got to create aclear, concise path to get there.

To create this path, youll have to interview the decision makers, the users the change willaffect, and any principals involved in the development of the technology. These are thestakeholdersthe people who will use the project deliverables on a daily basis or willmanage the people who will use the project deliverables. You must have a clear vision ofwhat the project takes to create it or youre doomed. Often projects start from a wish list andevolve into a catalog of complaints about the current technology. One of your jobs in theearly stages of the project will be to discern valid input from useless gripes.

As you begin your project, consider these questions:

Does the Project Have an Exact Result?

Projects that are as indecisive as a six-year-old at an ice cream stand rarely are successful. Asa project manager, you must ensure the project has a definable, obtainable end result. At thecreation of the project, every project manager, project sponsor (the initiator of the project),and team member should know and recognize the end result of the project. Beware of

projects that begin without a clearly defined objective.

While you should be looking for exact requirements that a project is to include, you must alsolook for requirements that are excluded from a project (for example, a project that requires allmail servers to be upgraded in the operating system, but not the physical hardware). As the

project takes form, the requirements to be excluded will become obvious based onmanagement, the time allotted for the projects completion, and the given budget.

Is There Industry or Government Sanctions to Consider?

Within your industry there may be governmental or self-regulating sanctions you will have totake into account for your project. For example, in a banking environment there areregulations dealing with the security of the technology, the backup and recovery procedures,

and the fault tolerance for the hardware implemented. Government regulations vary by


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industry, and if your company is a government contractor, there are additional considerationsfor the project deliverables.

Within your industry there may be standards and regulations. Regulations are must-havesthat are required by law. Of course, pharmaceuticals, utility companies, and food packaging

companies have regulations that dictate their practices. If companies break regulations, finesand l

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