Schwalbe-01Intro

Chapter 1:Chapter 1:Introduction to Project ManagementIntroduction to Project Management

Information Technology Project Information Technology Project Management,Management,Fifth EditionFifth Edition

Information Technology Project Management, Fifth Edition, Copyright 2007

Introduction

Many organizations today have a new or renewed interest in project management

Computer hardware, software, networks, and the use of interdisciplinary and global work teams have radically changed the work environment

The U.S. spends $2.3 trillion on projects every year, or one-quarter of its gross domestic product, and the world as a whole spends nearly $10 trillion of its $40.7 gross product on projects of all kinds

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Project Management StatisticsWorldwide IT spending totaled more than $1.8 trillion in

2005, a 6 percent increase from 2004, and spending is projected to grow 8 percent in 2006 and 4 percent in 2007

In 2005, the total compensation for the average senior project manager was $99,183 per year in the United States, $94,646 in Australia, and $106,374 in the United Kingdom

The number of people earning their Project Management Professional (PMP) certification increased by more than 70 percent from 2004 to 2005, with more than 200,000 PMPs worldwide by the end of August, 2006

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Motivation for Studying IT Project ManagementIT Projects have a terrible track record

A 1995 Standish Group study (CHAOS) found that Average cost of an IT application development

project was >$2.3 billion for a large company, >$1.3 billion for a medium company and > $434,000 for a small company

Only 16.2% of IT projects were successful in meeting scope, time, and cost goals

Over 31% of IT projects were canceled before completion, costing over $81 billion in the U.S. alone


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Advantages of Using Formal Project ManagementBetter control of financial, physical, and human resourcesImproved customer relationsShorter development timesLower costsHigher quality and increased reliabilityHigher profit marginsImproved productivityBetter internal coordinationHigher worker morale (less stress)

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Project Management Institute (PMI)PMI was founded in 1969 by five individuals who wanted to

network, share process information and discuss common project problems. It is now the leading membership association for the project management profession with more than 260,000 members in over 171 countries.PMI is actively engaged in advocacy for the profession, setting

professional standards, conducting research and providing access to a wealth of information and resources.

PMI also promotes career and professional development and offers certification, networking and community involvement opportunities.

PMIs Project Management Professional (PMP®) credential is the most widely recognized and the only global certification in the profession.


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Project Management CertificationPMI provides certification as a Project Management

Professional (PMP)A PMP has documented sufficient project experience, has

agreed to follow a code of ethics, and has passed the PMP exam

The number of people earning PMP certification is increasing quickly

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Growth in PMP Certification1993-2006

8 Information Technology Project Management, Fifth Edition, Copyright 2007


Ethics in Project ManagementEthics, loosely defined, is a set of principles that guide

our decision making based on personal values of what is “right” and “wrong”

Project managers often face ethical dilemmas

In order to earn PMP certification, applicants must agree to PMI’s Code of Ethics and Professional Conduct

Several questions on the PMP exam are related to professional responsibility, including ethics

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PMBOK ®Twenty years ago, PMI volunteers sat down to distill the

project management body of knowledge. This eventually became the PMBOK® Guide, now considered one of the most essential tools in the profession and is the de facto global standard for the industry.

More than a million copies of the PMBOK® Guide-2000 Edition are in useUpdates occur on a four-year cycle to ensure PMI's commitment to

continually improve and revise the information contained in this essential reference manual.


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What Is a Project?A project is “a temporary endeavor undertaken to

create a unique product, service, or result” (PMBOK® Guide, Third Edition, 2004, p. 5)

Operations is work done to sustain the business

Projects end when their objectives have been reached or the project has been terminated

Projects can be large or small and take a short or long time to complete

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Examples of IT ProjectsA help desk or technical worker replaces ten laptops for

a small departmentA small software development team adds a new feature

to an internal software application for the finance department

A college campus upgrades its technology infrastructure to provide wireless Internet access across the whole campus

A cross-functional task force in a company decides what Voice-over-Internet-Protocol (VoIP) system to purchase and how it will be implemented

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Top Ten Technology Projects in 2006VoIPOutsourcingData networkingCustomer

relationship management

CollaborationSupply chain

management

Desktop upgradesApplication

performance management

Business analyticsCompliance tracking

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Green ITUnified communicationsBusiness process modelingVirtualization 2.0 Social software

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Top Ten Technology Projects in 2008 (Gartner)


Media Snapshot: Where IT Matters

In 2006, Baseline Magazine published “Where I.T. Matters: How 10 Technologies Transformed 10 Industries” as a retort to Nicholas Carr’s ideas (author of “IT Doesn’t Matter”) that IT doesn’t provide companies with a competitive advantageVoIP has transformed the telecommunications industry

and broadband Internet accessGlobal Positioning Systems and Business Intelligence

has changed the farming industryDigital supply chain has changed the entertainment

industry’s distribution system

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Project AttributesA project:

Has a unique purposeIs temporaryIs developed using progressive elaboration

Specifications of the project are initially broad and then refined and more detailed as the project progresses

Requires resources, often from various areasShould have a primary customer or sponsor

The project sponsor usually provides the direction and funding for the project

Involves uncertaintyUnclear objectives, difficult to estimate time to complete and

cost, dependence on external factors

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Project and Program Managers

Project managers work with project sponsors, a project team, and other people involved in a project to meet project goals

Program: group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually (PMBOK® Guide, Third Edition, 2004, p. 16)

Program managers oversee programs and often act as bosses for project managers

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The Triple Constraint of Project Management

Successful project management means meeting all three goals (scope, time, and cost) – and satisfying the project’s sponsor!

However, quality is the quadruple constraint

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What is Project Management?

Project management is “the application of knowledge, skills, tools and techniques to project activities to meet project requirements” (PMBOK® Guide, Third Edition, 2004, p. 8)

Project managers strive to meet the triple constraint by balancing project scope, time, and cost goals

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Project Management Framework

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Project StakeholdersStakeholders are the people involved in or affected by

project activitiesStakeholders include:

The project sponsorThe project managerThe project teamSupport staffCustomersUsersSuppliersAnd yes - opponents to the project!

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Nine Project Management Knowledge AreasKnowledge areas describe the key competencies

that project managers must developFour core knowledge areas lead to specific project

objectives (scope, time, cost, and quality)Four facilitating knowledge areas are the means through

which the project objectives are achieved (human resources, communication, risk, and procurement management

One knowledge area (project integration management) affects and is affected by all of the other knowledge areas

All knowledge areas are important!

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PM Tools and Techniques Project management tools and techniques assist project managers

and their teams in various aspects of project management

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Super Tools“Super tools” are those tools that have high use and high

potential for improving project success, such as:Software for task scheduling (such as project management

software)Scope statementsRequirements analysesLessons-learned reports

Tools already extensively used that have been found to improve project importance include:Progress reportsKick-off meetingsGantt chartsChange requests

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What Went Right? Improved Project Performance

The Standish Group’s 2001 CHAOS studies show improvements in IT projects in the past decade

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Measure 1994 Data 2001 Data 2003 data

Successful projects 16% 28% 34%

Pct projects cancelled 31% 23% 18%

Average Time Overruns

222% 63% 82%

Average Cost Overruns

185% 45% 43%

Delivery of required features

61% 67% 52%


Why the Improvements? "The reasons for the increase in successful projects vary.

First, the average cost of a project has been more than cut in half. Better tools have been created to monitor and control progress and better skilled project managers with better management processes are being used. The fact that there are processes is significant in itself.”*

*The Standish Group, "CHAOS 2001: A Recipe for Success" (2001).

Despite these improvements, the 2004 survey showed that IT project success rates had fallen from 34% in 2002 to 29% in 2004 and failures had increased from 15% to 18%. There is still room for improvement.

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Project SuccessThere are several ways to define project

successThe project met scope, time, and cost goalsThe project satisfied the customer/sponsor even if

the scope, time and/or costs goals were not metThe results of the project met its main objective,

such as making or saving a certain amount of money, providing a good return on investment, or simply making the sponsors happy.

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What Helps Projects Succeed?*

1. Executive support

2. User involvement

3. Experienced project manager

4. Clear business objectives

5. Minimized scope

6. Standard software infrastructure

7. Firm basic requirements

8. Formal methodology

9. Reliable estimates

10. Other criteria, such as small milestones, proper planning, competent staff, and ownership

*The Standish Group, “Extreme CHAOS,” (2001).

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What the Winners Do

• Recent research findings show that companies that excel in project delivery capability:– Use an integrated project management toolbox (use

standard/advanced PM tools and lots of templates)– Grow project leaders, emphasizing business and soft

skills– Develop a streamlined project delivery process– Measure project health using metrics, like customer

satisfaction or return on investment

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Program and Project Portfolio Management

A program is “a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually” (PMBOK® Guide, Third Edition, 2004, p. 16)

A program manager provides leadership and direction for the project managers heading the projects within the program

Examples of common programs in the IT field: infrastructure- wireless Internet access, upgrading h/w & s/w,

developing corporate standards for IT applications development – updating an ERP system, purchasing a

new off-the-shelf billing system, adding new feature to CRM system user support – daily operational support, upgrade e-mail system,

develop technical training for users

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Project Portfolio Management

As part of project portfolio management, organizations group and manage projects and programs as a portfolio of investments that contribute to the entire enterprise’s success

Portfolio managers help their organizations make wise investment decisions by helping to select and analyze projects from a strategic perspective

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Project Management Compared to Project Portfolio Management

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Best PracticeA best practice is “an optimal way recognized by

industry to achieve a stated goal or objective”*Rosabeth Moss Kanter, Prof at HBS, says that

visionary leaders know “the best practice secret: Stretching to learn from the best of the best in any sector can make a big vision more likely to succeed”.

She also emphasizes the need to have measurable standards for best practices

*Project Management Institute, Inc., Organizational Project Management Maturity Model(OPM3) Knowledge Foundation (2003), p. 13.

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Best PracticeRobert Butrick, author of The Project Workout,

suggests that organizations need to follow basic principles of project management, including these two mentioned earlier in this chapterMake sure your projects are driven by your

strategy; be able to demonstrate how each project you undertake fits your business strategy, and screen out unwanted projects as soon as possible

Engage your stakeholders; ignoring stakeholders often leads to project failureBe sure to engage stakeholders at all stages of a project, and

encourage teamwork and commitment at all times

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Sample Project Portfolio Approach

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Project Portfolio Management Screen Showing Project Health

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Provides an integrated picture of the project portfolios across the enterprise


Suggested Skills for Project Managers

Project managers need a wide variety of skills

They should:

Be comfortable with change

Understand the social, political and physical environments of the organizations they work in and with

Be able to lead teams to accomplish project goals

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The Role of the Project Manager

Job descriptions vary, but most include responsibilities like planning, scheduling, coordinating, and working with people to achieve project goals

Remember that 97% of successful projects were led by experienced project managers, who can often help influence success factors

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Suggested Skills for Project Managers

The Project Management Body of KnowledgeApplication area knowledge, standards, and

regulationsProject environment knowledgeGeneral management knowledge and skillsSoft skills or human relations skills

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Ten Most Important Skills and Competencies for Project Managers

1. People skills2. Leadership3. Listening4. Integrity, ethical behavior, consistent5. Strong at building trust6. Verbal communication7. Strong at building teams8. Conflict resolution, conflict management9. Critical thinking, problem solving10. Understands, balances priorities

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Different Skills Needed in Different SituationsLarge projects: leadership, relevant prior experience,

planning, people skills, verbal communication, and team-building skills are most important

High uncertainty projects: risk management, expectation management, leadership, people skills, and planning skills are most important

Very novel projects: leadership, people skills, having vision and goals, self-confidence, expectations management, and listening skills are most important

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Importance of Leadership SkillsEffective project managers provide leadership by example

A leader focuses on long-term goals and big-picture objectives while inspiring people to reach those goals

A manager deals with the day-to-day details of meeting specific goals

Project managers often take on the role of both leader and manager

“Managers do things right, leaders do the right thing”

“Leaders determine the vision, managers achieve the vision”

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IT Project Managers

SKILL PERCENTAGE OF RESPONDENTS

Project/program management 60%Business process management 55%Business analysis 53%Application development 52%Database management 49%Security 42%Enterprise architect 41%Strategist/internal consultant 40%

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In a 2006 survey by CIO.com, IT executives ranked project/program management the skills that would be the most in demand in the next two to five years


The Project Management Profession

The profession of project management is growing at a very rapid pace

It is helpful to understand the history of the field, the role of professional societies like the Project Management Institute, and the growth in project management software

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History of Project ManagementSome people argue that building the Egyptian pyramids was

a project, as was building the Great Wall of ChinaMost people consider the Manhattan Project to be the first

project to use “modern” project management This three-year, $2 billion (in 1946 dollars)project had a separate project manager (General Leslie Groves) and a technical manager (Dr. Robert Oppenheimer) The military realized that scientists andother technical specialists often did not havethe desire or the necessary skills to manage large projects Dr. Oppenheimer was asked repeatedly for an organization chart of

the teams working on the project and their responsibilities. Eventually he threw a piece of paper at his director and said “Here’s your damn organization chart.”

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History of Project ManagementIn 1917, Henry Gantt developed the famous Gantt chart as a

tool for scheduling work in factories A Gantt chart is a standard format for displaying project schedule

information by listing projects activities and their corresponding start and finish dates in a calendar format

The military was the key industry behind the development of several project management techniques.

Members of the US navy Polaris missile/submarine project first used network diagrams in 1958. These diagrams helped model the relationships among project tasks, which allowed them to create schedules that were more realistic.

Determining the relationships among tasks helps in finding the critical path of the network. This tells the manager the earliest completion date of the project.

In the 1990s, many companies created project management offices (PMO) to help them handle the increasing number and complexity of projects throughout an organization

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Gantt Chart in MS Project

47 Information Technology Project Management, Fifth Edition, Copyright 2007


Network Diagram in MS Project

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Project Management SoftwareThere are hundreds of different products to assist in

performing project managementThree main categories of tools

Low-end tools: handle single or smaller projects well, cost under $200 per user

Midrange tools: handle multiple projects and users, cost $200-600 per user, Project 2007 most popular

High-end tools: also called enterprise project management software, often licensed on a per-user basis, like VPMi Enterprise Online (www.vcsonline.com)

See the Project Management Center Web site (www.infogoal.com/pmc) or Top Ten Reviews (project-management-software-review.toptenreviews.com) for links to many companies that provide project management software

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Schwalbe-01Intro

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