Project Management CTC-ITC 310 Fall 2018 Howard Rosenthal

Project Management CTC-ITC 310

Fall 2018Howard Rosenthal

Notice� This course is based on and includes material from the text:

A User’s Manual To the PMBOK GuideAuthors: Cynthia Stackpole SnyderPublisher: WileyISBN: 978-1-118-43107-8, Copyright 2013

� It also utilizes general information and figures from the PMBOK: A Guide to the Project Management Body of Knowledge (PMBOK 5TH Edition) Publisher: Project Management InstituteISBN: 978-1-935589-67-9, Copyright 2013 and

A Guide to the Project Management Body of Knowledge (PMBOK 6TH Edition) Publisher: Project Management InstituteISBN: 978-1-628251-84-5, Copyright 2017

� The course also includes and intersperses some materials, most often diagrams, provided by Mr. Wysocki’s PowerPoint slides, at the website:www.wiley.com/go/epm7eAnd the bookEffective Project Management - Traditional, Agile, Extreme 7TH EditionAuthors: Robert K. WysockiPublisher: WileyISBN: 978-1-118-72916-8, Copyright 2014

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http://www.wiley.com/go/epm7e

Lesson Goals

� Define a project� Understand what business value means� Identify project constraints� Understand the scope triangle� Describe different ways of classifying projects� Present different organizations for execution of

projects� Compare internal projects vs. product development� Compare government and non-government projects

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What Is A Project? (1)� A project is a temporary and finite group of related tasks

undertaken to create a unique product, service or result� Every project is limited – it has a beginning and an end

� Projects can end if:� Objectives have been met� The project’s objectives cannot be met� Funding dries up� The project is no longer needed� Some legal reason (i.e. it is violating a patent)

� It has one or more purposes� Deliver a unique product that can be a component of another item,

enhancement to an existing product, or a new product� Deliver a unique capability to perform a service – i.e. a function that

may support production� Deliver a unique result such as an outcome or document – i.e. a

research project� A combination of one or more of the above

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What Is A Project? (2)� A successful completion of a project results in the delivery of

the expected business value that validated doing the project.� It is possible to deliver projects that meet all the specifications

and yet deliver no business value� Every project will have the following processes that may be

executed in different ways dependent on the size, complexity, stability of the requirements, etc.:� Initiate� Plan� Execute� Monitor and Control� Close

� The above five processes align with the 5 process groups that we will be learning this semester

� Sometimes projects are divided into subprojects � Allows better management of cost and schedule

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What Is A Project? (3)

� Examples of projects include but are not limited to:� Develop a new pharmaceutical� Expand a tour guiding service� Merge two organizations� Upgrade the IT infrastructure� Modifying a business practice� Constructing a building

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What Is Business Value?� Business value refers to the benefits that a specific

project provides to it stakeholders� These benefits may be tangible:

� Monetary assets� Stockholder equity� Utility� Market share� Improved efficiency� Regulatory compliance

� These benefits may be intangible:� Goodwill� Brand recognition� Public benefit� Future positioning

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Why Are Projects Started� Create a new product� Fix or improve a product, process or service� Satisfy a stakeholder need or requirement� Meet a legal or regulatory requirement� Implement a business change

9PMBOK (6) Fig. 1-2

Examples Of Project Creation

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PMBOK V6 Table 1-1

Project Planning and Management Concepts� Progressive Elaboration is a key factor mechanism in

project planning� Progressive elaboration is the process of starting out with a

top-level plan and adding more details as more information becomes available� Works for both plans and requirements

� Larger projects may last for several years or longer and there will be many changes over that time

� Project Management Standards as defined in the Project Management Book of Knowledge are a framework for project management

� Tailoring is used to create processes within the framework that are appropriate for the project� Smaller projects with five people will not have the same level

of recruitment planning as a project with a thousand persons

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Projects, Programs and Portfolios

� Program� A program is a collection of coordinated projects that have a common

benefit or outcome� Sometimes we see project and program manager used interchangeably

� Portfolio -An organization’s entire collection of projects and programs� The projects may all originate from the same business unit—for

example, information technology. � The projects may all be new product development projects. � The projects may all be research and development projects. � The projects may all be infrastructure maintenance projects from the

same business unit. � The projects may all be process improvement projects from the same

business unit. � The projects may all be staffed from the same human resource pool. � The projects may request financial support from the same budget.

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Portfolio, Program and Project Management Interfaces

14PMBOK (6) Fig. 1-3

Comparing Portfolios, Programs and Projects

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PMBOK V6 Table 1-2

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The Enterprise Environment (1)� When you are a project manager you will be helped and/or constrained by the

company you work for and the type of project you are working on� Both internal and external factors exist� Internal factors include:

� Organizational culture, structure and processes� Geographic distribution of facilities and resources� Company infrastructure – computers, networks, management software systems,

financial systems, support personnel, knowledge base� Resource availability – including financial, physical, etc.� Employee capabilities – expertise and competence� Stakeholder risk tolerance� Political climate in the company

� External factors include:� Marketplace conditions� Government or industry standards� Legal conditions� Political climate in the nation and the world� Changing social standards/social standards in different companies� Other physical environment factors

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The Enterprise Environment (2)� Organizations may have substantial assets including processes and

procedures, and the corporate knowledge base� Processes and procedures are often company specific

� Project management templates for structuring, cost control, etc.� Tailoring guidelines� Specific policies that exceed the governing laws and regulations� Change control procedures� Financial controls� Risk management requirements� Defect management procedures and processes� Work authorization processes� Procurement policies (i.e. dual source requirements, etc.)

� Historical corporate databases provide important sources of data for future projects� Lessons learns� Historical databases for estimation purposes� Issue and defect databases� Correction procedures

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Project Constraints - Some Basic Definitions (1)� Scope is a statement that defines the boundaries of the project.

� It tells not only what will be done, but also what will not be done. � Scope may also be referred to as a document of understanding, a

scoping statement, a project initiation document, or a project request form.

� It is critical that the scope be correct. � Quality has two flavors:

� Product quality is the quality of the deliverable from the project. � As used here “product” includes tangible artifacts like hardware and

software as well as business processes. � Process quality is the quality of the project management process

itself. � The focus is on how well the project management process works and

how it can be improved. � Continuous quality improvement and process quality management are

the tools used to measure process quality.

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Project Constraints - Some Basic Definitions (2)� Cost is the dollar value of doing the project

� It is another variable that defines the project. � It is best thought of as the budget that has been established for the

project. � Particularly important for projects that create deliverables that are

sold either commercially or to a single external customer that sponsors the project. � Sometimes the procuring agent and the end customer are in different

organizations� Cost is a major consideration throughout the project management

life cycle. � The first consideration occurs at an early and informal stage in the life of

a project where the project sponsor can simply offer a figure about equal to what he or she had in mind for the project

� The project manager prepares a proposal for the projected work. � That proposal includes an estimate (perhaps even a quote) of the total

cost of the project. � A preliminary estimate allows the client or sponsor to base his or her

go/no-go decision on better information.

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Project Constraints - Some Basic Definitions (3)

� Time specifies the length of time or the deadline date within which the project must be completed. � Time is an interesting resource in that it can’t be inventoried

and is consumed whether you use it or not. � The objective for the project manager is to use the future time

allotted to the project in the most effective and productive ways possible.

� Future time (time that has not yet occurred) can be a resource to be traded within a project or across projects.

� Once a project has begun, the prime resource available to the project manager to keep the project on schedule or get it back on schedule is time.

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Project Constraints - Some Basic Definitions (4)

� Resources are assets such as people, equipment, physical facilities, or inventory that have:� Limited availabilities� Can be scheduled or can be leased from an outside party � They are central to the scheduling of project activities

and the orderly completion of the project. � For systems development projects, people are the major

resource.

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The Classic Iron Triangle

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• Scope, Cost and Time are fixed in the project baseline

• Cannot change one of these without affecting the others

• A project manager should not accept mandated changes to one side of the triangle without changes to the other sides

The Scope Triangle

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Scope and Quality

Tim

e Cost

Resource Availability

ØThe Scope Triangle is a system in balance.

Ø The lengths of the three sides exactly bound scope and quality.

Ø Change in the variables will cause the system to be out of balance.

The Scope Diamond Adds Quality Considerations

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EXPECTATIONSand

BUSINESS VALUE

It Is Possible To Prioritize The Scope Triangle To Meet Highest Priority Goals

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In the above example time to market has the highest priority, and the cost of getting there, even with reduced scope, is of lesser importance

Applying The Scope Triangle – Problem Resolution

� How are resources managed on a project?� The sponsor/client controls scope, quality, and delivery dates – and only they

can agree to changes� The client and senior management own time, budget, and resources. � The project team owns how time, budget, and resources are used.

� The project manager controls resource utilization and work schedules� Within the policies and practices of the enterprise, any of these may be moved

within the project to resolve problems that have arisen. � In solving a problem, the project manager should try to find a solution within the

constraints of how the time, budget, and resources are used. � Project managers do not need to go outside of their sphere of control.

� The project manager must appeal to the various resource managers for problem resolution. � The resource manager owns who gets assigned to a project as well as any

changes to that assignment that may arise.� In some projectized organizations (discussed later) project managers have

full control of their resources� The last appeal in the chain has upper management negotiating with the client

or sponsor for additional resources, time or reduction in scope� If changes are required that impact any of the key constraints a Project Impact

Statement is produced

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Classifying Projects (1)Projects may be classified by various characteristics� Requirements – (well-understood, low volatility, high

volatility, poorly defined)� Risk —Establish levels of risk (high, medium, and low) � Business value —Establish levels (high, med, and low)� Length —Establish several categories (such as 3 months, 3

to 6 months, 6 to 12 months, and so on)� Complexity —Establish categories (high, med, and low)� Technology used —Establish several categories (well-

established, used occasionally, used rarely, never used)� Number of departments affected —Establish some

categories (such as one, a few, several, and all)� Cost – establish ranges (< $1M, $1M to $10M, $10M to

$100M, etc.)

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Classifying Projects (2)� Projects may be classified by application

� Installing software� Recruiting and hiring� Setting up a hardware system in a field office� Soliciting, evaluating, and selecting vendors� Updating a corporate procedure� Developing application systems� Developing a weapons system� Developing an integrated management system� Note: Higher levels of development are typically more risky

� Projects are also classified by contract type� Fixed price, cost plus a calculated fee, incentive-based, etc.

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Projects Can Be Divided Into Classes

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CLASS DURATION RISK COMPLEXITY TECHNOLOGY LIKELIHOOD OF PROBLEMS

Type A > 18 months High High Breakthrough Certain

Type B 9-18 months Medium Medium Current Likely

Type C 3-9 months Low Low Best of Breed Unlikely

Type D < 3 months Very Low Very Low Practical Few

Note: This is just one sample of how projects may be classified

The Contemporary Project Environment (1)� High Speed

� The faster products and services get to market, the greater will be the resulting value to the business.

� Current competitors are watching and responding to unmet opportunities, and new competition is waiting and watching to seize upon any opportunity that might give them a foothold or expansion in the market.� The window of opportunity is narrowing and constantly moving� Taking too long to roll out a new or revamped product can result in a missed

business opportunity.� This need to be fast translates into a need for the project management

approach to not waste time—to rid itself, as much as possible, of spending time on non-value added work.

� Project managers must know how and when to introduce multiple release strategies and compress project schedules to help meet these requirements. � The project management approach must support these aggressive schedules. � You simply cannot afford to burden your project management processes with a lot

of overhead activities that do not add value to the final deliverables or that may compromise your effectiveness in the markets you serve.

� Effective project management is not the product of a rigid or fixed set of steps and processes to be followed on every project.

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The Contemporary Project Environment (2)� High Change

� Clients are often making up their minds or changing their minds about what they want. � The environment is more the cause of high change than is any

ignorance on the part of the client. � The business world is dynamic and doesn’t stand still just because

you are managing a project. � The best-fit project management approach must recognize

the realities of frequent change, accommodate it, and embrace it. � The extent to which change is expected will affect the choice of a

best-fit Project Management Life Cycle (PMLC) model. � For experienced project managers as well as “wannabe”

project managers, the road to breakthrough performance is paved with uncertainty and with the need to be courageous, creative, and flexible. � If you simply rely on a routine application of someone else’s

methodology, you are sure to fall short of the mark.

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The Contemporary Project Environment (3)

� Lower Cost� With the reduction in management layers the

professional staff needs to find ways to work smarter, not harder.

� Project management includes a number of tools and techniques that help the professional manage increased workloads.

� Staffs need to have more room to do their work in the most productive ways possible.

� As technology advances and acceptance of these ideas grows, we have seen the thinning of the layers of middle management. � Hierarchical structures are being replaced by organizations

that have a greater dependence on projects and project teams, resulting in more demands on project managers.

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The Contemporary Project Environment (4)

� Increasing Complexity� All of the simple problems have been solved.

� Those that remain are getting more complex with each passing day. � They are getting more critical to the enterprise. They must be solved.

� More Uncertainty� With increasing levels of complexity comes increasing levels

of uncertainty. � Adapting project management approaches to handle

uncertainty means that the approaches must not only accommodate change, but also embrace it and become more effective as a result of it.

� Change is what will lead the team and the client to a state of certainty with respect to a viable solution to its complex problems.

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Functional, Projectized and Matrix Organizations

� There are three different ways that companies organize for project management� Functional – All responsibility for projects lies with the functional manager� Matrix – Resources supplied by a functional organizational to the project –

comes in three flavors including weak, balanced and strong� Projectized – The project manager controls all resources for the duration of the

project� Different organizations have different advantages and disadvantages, as

described in subsequent pages� There are always trade-offs

� Personnel management and individual growth� Lower overheads in streamlined organizations

� Notes on following charts� While discussions are directed at projects, but are adaptable to programs that

include multiple projects� Where you see a CEO, in larger companies that can refer to any executive

including a director, vice-president or even president of a sector

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Functional Organization

� Functional Organization � The hierarchy where each employee has one clear superior. � Staff members are grouped by their specialty such as

production, marketing, engineering, accounting etc. � Functional organization undertake projects but the scope of

project is usually limited to boundaries of the function. � The communication during inter-department project is

through the department heads. � Functional manager controls the project budget.� Employees and their careers are better looked after since the

budgets are controlled by the functional organization

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Functional Management Structure

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22 ©2013 Project Management Institute. A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition

2 - ORGANIZATIONAL INFLUENCES AND PROJECT LIFE CYCLE

Table 2-1. Influence of Organizational Structures on Projects

Project Manager's Authority

ResourceAvailability

Who manages the project budget

Project Manager's Role

Project ManagementAdministrative Staff

ProjectCharacteristics

OrganizationStructure

FunctionalWeak Matrix Balanced Matrix Strong Matrix

Matrix

Projectized

Little or None

Little or None

Part-time Part-time Part-time Full-time Full-time

Part-time Part-time Full-time Full-time Full-time

FunctionalManager

FunctionalManager Mixed

ProjectManager

ProjectManager

Low

Low

Low to Moderate

Low to Moderate

Moderateto High

Moderateto High

High toAlmost Total

High toAlmost Total

The classic functional organization, shown in Figure 2-1, is a hierarchy where each employee has one clear superior. Staff members are grouped by specialty, such as production, marketing, engineering, and accounting at the top level. Specialties may be further subdivided into focused functional units, such as mechanical and electrical engineering. Each department in a functional organization will do its project work independently of other departments.

FunctionalManager

ChiefExecutive

ProjectCoordination

(Gray boxes represent staff engaged in project activities)

Staff

Staff Staff

Staff

Staff

FunctionalManager

FunctionalManager

Staff

StaffStaff

Staff

Figure 2-1. Functional Organization

Licensed To: Howard Rosenthal PMI MemberID: 2552551This copy is a PMI Member benefit, not for distribution, sale, or reproduction.

PMBOK Fig. 2-1

Matrix Organization

� There are three types of Matrix Organizations � Weak Matrix Organization:

� Maintains many characteristics of functional organization. � Project manager's role is of coordinator or expeditor than that of a

manager.� Project manager won’t control any resources, budget or schedule

� All support staff including contracts and business managers belong to the functional organization

� Balanced Matrix Organization:� Recognizes the need of project manager. � Project manager does not have full authority over project and project

funding.� Strong Matrix Organization:

� Has many characteristics of projectized organization. � Project manager's have considerable authority and full time project

administrative staff.

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Weak Matrix Management Structure

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23©2013 Project Management Institute. A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition

2


Matrix organizations, as shown in Figures 2-2 through 2-4, reflect a blend of functional and projectized characteristics. Matrix organizations can be classified as weak, balanced, or strong depending on the relative level of power and influence between functional and project managers. Weak matrix organizations maintain many of the characteristics of a functional organization, and the role of the project manager is more of a coordinator or expediter. A project expediter works as staff assistant and communications coordinator. The expediter cannot personally make or enforce decisions. Project coordinators have power to make some decisions, have some authority, and report to a higher-level manager. Strong matrix organizations have many of the characteristics of the projectized organization, and have full-time project managers with considerable authority and full-time project administrative staff. While the balanced matrix organization recognizes the need for a project manager, it does not provide the project manager with the full authority over the project and project funding. Table 2-1 provides additional details of the various matrix organizational structures.

FunctionalManager

ChiefExecutive

ProjectCoordination(Gray boxes represent staff engaged in project activities)

Staff

Staff Staff

StaffStaff

FunctionalManager

FunctionalManager

Staff

Staff

Staff

Staff

Figure 2-2. Weak Matrix Organization


PMBOK Fig. 2-2

Balanced Matrix Management Structure

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Functional Manager

Staff Staff

StaffStaff

Staff

ChiefExecutive

Functional Manager

Functional Manager


Project Manager

Staff

Staff Staff

Figure 2-3. Balanced Matrix Organization

ChiefExecutive

Functional Manager

Functional Manager

Functional Manager

Manager of Project Managers

Staff

Staff

Staff Staff

Project Manager

Project Manager

Project Manager

Staff

Staff

Staff

Staff

Staff

Staff

Project Coordination(Gray boxes represent staff engaged in project activities)

Figure 2-4. Strong Matrix Organization


PMBOK Fig. 2-3

Strong Matrix Management Structure

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Functional Manager

Staff Staff

StaffStaff

Staff

ChiefExecutive

Functional Manager

Functional Manager


Project Manager

Staff

Staff Staff

Figure 2-3. Balanced Matrix Organization

ChiefExecutive

Functional Manager

Functional Manager

Functional Manager


Staff

Staff

Staff Staff

Project Manager

Project Manager

Project Manager

Staff

Staff

Staff

Staff

Staff

Staff

Project Coordination(Gray boxes represent staff engaged in project activities)

Figure 2-4. Strong Matrix Organization


PMBOK Fig. 2-4

Projectized Organization

� Projectized Organization � Project team members are often collocated and often

report to a project manager or provide support service to various groups.

� Project managers have a great deal of independence and authority.

� Project manager has complete authority, controls the project budget and has a full time administrative staff.

� Issues exist with what happens to the staff at the end of the project� Where do they get their next assignment from?� Who takes care of their professional growth?

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Projectized Organization Structure

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25©2013 Project Management Institute. A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition

2


At the opposite end of the spectrum to the functional organization is the projectized organization, shown in Figure 2-5. In a projectized organization, team members are often colocated. Most of the organization’s resources are involved in project work, and project managers have a great deal of independence and authority. Virtual collaboration techniques are often used to accomplish the benefits of colocated teams. Projectized organizations often have organizational units called departments, but they can either report directly to the project manager or provide support services to the various projects.

ProjectManager

ChiefExecutive

ProjectCoordination


ProjectManager

ProjectManager

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Figure 2-5. Projectized Organization

Many organizations involve all these structures at various levels, often referred to as a composite organization, as shown in Figure 2-6. For example, even a fundamentally functional organization may create a special project team to handle a critical project. Such a team may have many of the characteristics of a project team in a projectized organization. The team may include full-time staff from different functional departments, may develop its own set of operating procedures, and may even operate outside of the standard, formalized reporting structure during the project. Also, an organization may manage most of its projects in a strong matrix, but allow small projects to be managed by functional departments.


PMBOK Fig. 2-5

Composite Organization

� Composite Organization � Functional organization may create a special project

team to handle a critical project. � Team may include full time staff from different

functional departments.� Team is loaned on a long-term basis to the project� Project manager may report to someone higher in the chain

dependent on the size of the program, or may even be a vice-president

� May develop its own set of operating procedures� Maintains many characteristics of projectized

organization.

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Composite Organization Structure

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ChiefExecutive

Functional Manager

Functional Manager

Functional Manager


Staff

Staff

Staff Staff

Project Manager

Project Manager

Project Manager

Staff

Staff

Staff

Staff

Staff

Staff

Project A CoordinationProject B Coordination


Figure 2-6. Composite Organization

Many organizational structures include strategic, middle management, and operational levels. The project manager may interact with all three levels depending on factors such as:

s� Strategic importance of the project,

s� Capacity of stakeholders to exert influence on the project,

s� Degree of project management maturity,

s� Project management systems, and

s� Organizational communications.

This interaction determines project characteristics such as:

s� Project manager’s level of authority,

s� Resource availability and management,

s� Entity controlling the project budget,

s� Project manager’s role, and

s� Project team composition.


PMBOK Fig. 2-6

Comparison Of Organizational Structures

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Table 2-1. Influence of Organizational Structures on Projects

Project Manager's Authority

ResourceAvailability

Who manages the project budget

Project Manager's Role

Project ManagementAdministrative Staff

ProjectCharacteristics

OrganizationStructure

FunctionalWeak Matrix Balanced Matrix Strong Matrix

Matrix

Projectized

Little or None

Little or None

Part-time Part-time Part-time Full-time Full-time

Part-time Part-time Full-time Full-time Full-time

FunctionalManager

FunctionalManager Mixed

ProjectManager

ProjectManager

Low

Low

Low to Moderate

Low to Moderate

Moderateto High

Moderateto High

High toAlmost Total

High toAlmost Total

The classic functional organization, shown in Figure 2-1, is a hierarchy where each employee has one clear superior. Staff members are grouped by specialty, such as production, marketing, engineering, and accounting at the top level. Specialties may be further subdivided into focused functional units, such as mechanical and electrical engineering. Each department in a functional organization will do its project work independently of other departments.

FunctionalManager

ChiefExecutive

ProjectCoordination


Staff

Staff Staff

Staff

Staff

FunctionalManager

FunctionalManager

Staff

StaffStaff

Staff

Figure 2-1. Functional Organization


PMBOK Table. 2-1

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Internal Projects Versus External Product Development

� There are differences in how internal and external projects are judged, even though they may be managed in a similar way� Internal projects evaluate return on investment (ROI)

� If we change a process or add a capability such as upgrading the infrastructure does it increase the revenue that will accrue over the life of the project deliverables

� External projects look at profitability and return on sales (ROS) as well as investment� ROS is a firm's operating profit margin. This measure provides

insight into how much profit is being produced per dollar of sales� It is a ratio used to evaluate a company's operational efficiency� Stock prices look at the profitability of the company� The company wants to increase it profits each year� If a project is for an external customer the investment includes the

proposal preparation costs

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Government Contracts Are Very Different From Commercial Contracts� There are many thousands of pages of Federal Acquisition Regulations (FARs) associated

with an acquisition

� Interaction with the government is tightly controlled� In the commercial world taking a customer to dinner may be expected, in the government

world it can be a felony – we even collected for coffee and donuts provided

� Proposals are long and arduous� During proposals (and for a period before their release) customer interaction is formal and

controlled and any questions you ask are made part of the record and are shared with all competitors

� Changing scope and requirements can be difficult, even if the initial contract had unclear requirements

� Profitability may be limited by law� On large projects geographic distribution of the work, which is expensive, is mandatory

to maintain political support� The F-35 is built in 45 different states

� A United States supercollider was cancelled after contract award – it was going Texas but this angered the losing states

� Budgets change

� Bad press during development can be fatal� The Hubble Space Telescope, as an example, was nearly scrapped after launch due to a lens

problem

� Cost is usually a major factor� Hard to deny a low bidder without extremely clear reasons

� The wrong contract type may be selected for the type of work (discussed in Chapter 3)

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Summary

� Successful projects have a defined beginning and end� Projects are constrained by the Iron Triangle of Cost, time

and Scope� Different projects, classified in a variety of different ways,

combine different processes to reach their goals� Flexibility is an important attribute of the successful

project manager� Organizations have different structures dependent on their

characteristics and goals� Government projects have additional distinct

characteristics

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Documents

Project Management CTC-ITC 310 Fall 2018 Howard Rosenthal