Project Management

Chapter 1 : An Overview
Harold Kerzner, Project Management: A Systems Approach To
Planning, Scheduling and Control, Tenth Edition, John Wiley &
Sons Inc., 2009
Chapter 1 Contents
• Understanding Project • Project Champions
Management • The Downside of Project Management
• Project Success • Project-Driven versus Non–Project-
• Project Manager–Line Manager Driven Organizations
Interface • Marketing in the Project-Driven
• Project Manager’s Role Organization
• Functional Manager’s Role • Classification of Projects
• Functional Employee’s Role • Location of the Project Manager
• Executive’s Role • Differing Views of Project
• Working with Executives Management
• The Project Manager as the • Concurrent Engineering: A Project
Planning Agent Management Approach
What is a project?
• A project can be considered to be any series of activities and
tasks that:
• Have a specific objective to be completed within certain
specifications
• Have defined start and end dates
• Have funding limits (if applicable)
• Consume human and nonhuman resources (i.e., money, people,
equipment)
• Are multifunctional (i.e., cut across several functional lines)
Project Management
• Involves five process groups
• Project Initiation/Definition
• Project planning
• Project execution
• Project monitoring and control
• Project closure
Project Management
• Project monitoring and
• Involves five • Project planning control
process groups • Definition of the work • Tracking progress
requirements
• Project initiation • Definition of the • Comparing actual
quality and quantity of outcome to predicted
• Selection of the outcome
best project given work
resource limits • Definition of the • Analyzing variances and
resources needed impacts
• Recognizing the • Making adjustments
benefits of the • Scheduling the
project activities
• Evaluation of the • Project closure
• Preparation of the • Verifying that all of the
documents to various risks
work has been
sanction the • Project execution accomplished
project • Negotiating for the • Contractual closure of
• Assigning of the project team members the contract
project manager • Directing and • Financial closure of the
managing the work charge numbers
• Working with the team • Administrative closure
members to help them of the paperwork.
improve
What Determines Successful Project
Management
• Successful project management means the project objectives
has been achieved
• Within time
• Within cost
• At the desired performance/technology level
• While utilizing the assigned resources effectively and efficiently
• Accepted by the customer
Benefits From Project Management
• Identification of functional responsibilities to ensure that all
activities are accounted for, regardless of personnel turnover.
• Minimize the need for continuous reporting.
• Identification of time limits for scheduling
• Identification of a methodology for trade-off analysis
• Measurement of accomplishment against plans
• Early identification of problems so that corrective action may
follow
• Improved estimating capability for future planning
• Knowing when objectives cannot be met or will be exceeded
Obstacles of Project Management
• Project complexity
• Customer’s special requirements and scope changes
• Organizational restructuring
• Project risks
• Changes in technology
• Forward planning and pricing
Line Managers vs Project Managers
• Vertically – Line managers
• Horizontally – project managers
• Work must flow both ways
• Communicate !
Companies Structures and project Managers
Role
• Vertical management and functional management creates
operational islands
• Project Manager needs to get them to communicate
Overview Definition Of Project
Management
• Project management is the planning, organizing, directing, and
controlling of company resources for a relatively short-term
objective that has been established to complete specific goals
and objectives. Furthermore, project management utilizes the
systems approach to management by having functional
personnel (the vertical hierarchy) assigned to a specific project
(the horizontal hierarchy).
Classical Management Principles
• Planning In Modern Project Management,
• Organizing Staffing is not part of it. Project
managers request for staff.
• Staffing
• Controlling
• Directing
Project Management Constraints (new)
• Three project
management constraints:
• Time
• Cost
• Performance
• Additional (for customer
based projects)
• Customer relations
Project Deliverables
• Measurable and tangible outputs
• Can take such form as:
• Hardware Deliverables – eg: a table, a prototype, or a piece of
equipment.
• Software Deliverables - usually paper products, such as reports,
studies, handouts, or documentation.
• Interim Deliverables: can be either hardware or software deliverables
and progressively evolve as the project proceeds. Eg: a series of
interim reports leading up to the final report.
How Project Managers are selected?
• Influenced by the stakeholders (individuals or organizations
that can be favorably or unfavourably impacted by the project.
• Project managers must interface with these stakeholders
• Many stakeholders can influence or pressure over the direction of the
project.
• Some stakeholders are “active” or “key” stakeholders
• Possess decision-making authority during the execution of the project.
• Each stakeholder can have his or her own set of objectives, and this
could place the project manager in a position of having to balance a
variety of stakeholder interests without creating a conflict-of-interest
situation for the project manager.
Stakeholders Category
• A typical categorization:
• Organizational stakeholders
• Executive officers
• Line managers
• Employees
• Unions
• Product/market stakeholders
• Customers
• Suppliers
• Local committees
• Governments (local, state, and federal)
• General public
• Capital market stakeholders
• Shareholders
• Creditors
• Banks
New Definition of Project Success
Previous Definition New Definition
• Successful project • Successful project management
management means the means the project objectives has
project objectives has been achieved
been achieved • Within time
• Within cost
• Within time
• At the desired performance or
• Within cost specification level
• At the desired performance/ • Accepted by the customer
technology level • With minimum or mutually agreed upon
• While utilizing the assigned scope changes
resources effectively and • Without disturbing the main work flow
efficiently of the organization
• Accepted by the customer • Without changing the corporate culture
 Explanation of 3 points of Project
Success • Very few projects are completed within the original scope of
the project. Scope changes are inevitable and have the
• With minimum or potential to destroy not only the morale on a project, but the
entire project. Scope changes must be minimum and only those
mutually agreed that are required.
upon scope changes
• Without disturbing • Project managers must be willing to manage such that the
company’s main work flow is not altered and cannot divorce
the main work flow their project from the operations of the parent organization.
of the organization Project manager must be willing to manage within the
• Without changing guidelines, policies, procedures, rules, and directives of the
the corporate parent organization.
culture • All corporations have corporate cultures, and even though each
project may be inherently different, the project manager
should not expect his assigned personnel to deviate from
cultural norms. If the company has a cultural standard of
openness and honesty when dealing with customers, then this
cultural value should remain in place for all projects, regardless
of who the customer/user is or how strong the project
manager’s desire for success is.
A Note about Successful PM
• Because a project is a success does not mean that the company
as a whole is successful in its project management.
• Excellence in project management is a continuous stream of
successfully managed projects.
• There must be a strong corporate commitment to project
management, and this commitment must be visible.
 Control of Resources
6 Resources
• Money • When we say
• Project manager does
• Manpower not control any of these that project
resources directly managers
• Equipment control project
• Resources are controlled resources, we
• Facilities by the line managers, really mean that
functional managers, or, they control
• Materials as they are often called, those resources
resources managers. (which are
• Information/technology temporarily
• Project managers loaned to them)
negotiate with line through line
managers for all project managers.
resources.
Evolution of Project Managers
• Project managers • Also with shared accountability, line managers must
used to command now have a good understanding of project
management, which is why more line managers are now
technology. Assigned becoming PMP®s.
functional employees • Project managers now are managing project’s
can take direction deliverables rather than providing technical direction to
from the project the project team.
manager making • Management of the assigned resources is a line
project managers function.
people manager.
• Project managers need to be treated like they are
• Now, project managers managing part of a business and are expected to make
sound business decisions as well as project decisions.
does not command Project managers must understand business principles.
technology but only
have an understanding • In the future, project managers may be expected to
of technology – They become externally certified by PMI® and internally
share accountability certified by their company on the organization’s
business processes.
with line managers.
Line Manager and
Project Manager
Relationship
Another View of Project Management
• The previous examples should indicate that project
management is more behavioural than quantitative.
• Effective project management requires an understanding of:
• Quantitative tools and techniques
• Organizational structures
• Organizational behavior
Project Manager’s Role
• Responsible for coordinating and integrating activities across multiple,
functional lines.
• The integration activities performed by the project manager include:
• to develop a project plan
• to execute the plan • Project manager must convert
• make changes to the plan the inputs (i.e., resources) into
outputs of products, services,
and ultimately profits.
• In order to do this, the project
manager needs
• strong communicative and
interpersonal skills
• become familiar with the
operations of each line
organization
• Have knowledge of the
technology being used.
Project Manager’s Role
• Project manager have increasing responsibility, but lacks authority.
• They even are normally treated as outsiders by the formal
organization. thus they need to “negotiate” for control of company
resources with:
• upper-level management
• functional management
• In the project environment, everything seems to revolve about the
project manager but must exist within the traditional structure of the
organization.
• Project manager must walk the fence between project and traditional
organizations - managing relationships or doing interface management
Interface Role of Project Manager
• Within the project team
• Between the project team and the functional organizations
• Between the project team and senior management
• Between the project team and the customer’s organization,
whether an internal or external organization
What Qualification Must Project Manager
have
• Management skill
• Technical skills.
• Many technical people move to project management
• Psychology
• Human Behavior
• Organizational Behavior
• Interpersonal Relations
• Communications.
More Facts about Project Managers
• There are MBA programs for effective project managers.
• Project managers gets more pay, given fancy titles or promised a more
challenging work.
• lowest turnover rates of any professions in the world are in project
management.
• In a project environment, the project managers get to see their
project through from “birth to death.” Being able to see the fruits of
one’s efforts is highly rewarding.
• The project manager is actually a general manager and gets to know
the total operation of the company.
• Project managers are would be general managers
Functional Manager’s Role
• Define how the task will be done and where the task will be done (i.e., the
technical criteria).
• Provide resources to accomplish the objective within the project’s
constraints (i.e., who will get the job done).
• Responsible for the deliverable:
• Once the project manager identifies the requirements for the project, line
manager will identify the technical criteria.
• Line manager is the recognized technical expert.
• If project manager’s requirements are not good, line manager has the right, by
virtue of his expertise, to take exception and plead his case to a higher authority.
• All resources (including personnel) are controlled by the line manager.
• Project manager can request specific staff, but final appointments is by line
managers
Line Manager’s problems
• Unlimited work requests (especially during competitive bidding)
• Predetermined deadlines
• All requests having a high priority
• Limited number of resources
• Limited availability of resources
• Unscheduled changes in the project plan
• Unpredicted lack of progress
• Unplanned absence of resources
• Unplanned breakdown of resources
• Unplanned loss of resources
• Unplanned turnover of personnel
How must PM work with FM/LM
• FM/LM not normally able to identify to PM in advance exactly
what resources will be available when the project is scheduled
to begin.
• FM should commit to achieving his portion of the objective
within time, cost, and performance.
• All project commitments must be transparent
• FM/LM and PM must share authority and responsibility
Functional Employee’s Role
• Accept responsibility for accomplishing the assigned
deliverables within the project’s constraints
• Complete the work at the earliest possible time
• Periodically inform both the project and line manager of the
project’s status
• Bring problems to the surface quickly for resolution
• Share information with the rest of the project team
Executive’s Role
• In a project environment there are new expectations of and for
the executives, as well as a new interfacing role.
• Executives are expected to interface a project as follows:
• In project planning and objective-setting
• In conflict resolution
• In priority-setting
• As project sponsor
Executive as Project Sponsor Interface
• Project sponsor provide
behind-the-scenes assistance
to project personnel
• Can be senior or middle
management depending on
kind of projects
Project Manager As The Planning Agent
• Major responsibility of the project manager is planning then
once project is executing, resolve conflicts or trade-offs.
• In most cases
• Project manager gives overall or summary definitions of work
• Line managers (the true experts) do the detailed planning.
• PM Make sure that the resources are adequate and scheduled
to satisfy the needs of the project.
Project Manager As The Planning Agent
• As the architect of the project plan, the project manager must
provide:
• Complete task definitions
• Resource requirement definitions (possibly skill levels)
• Major timetable milestones
• Definition of end-item quality and reliability requirements
• The basis for performance measurement
Results of Proper Plan
• Assurance that functional units will understand their total
responsibilities toward achieving project needs.
• Assurance that problems resulting from scheduling and
allocation of critical resources are known beforehand.
• Early identification of problems that may jeopardize successful
project completion so that effective corrective action and
replanning can be taken to prevent or resolve the problems.
Project Manager as a Planning Agent
• Project managers have the right to establish their own policies, procedures,
rules, guidelines, and directives
• Companies with mature project management structures usually have rather
loose company guidelines, so project managers have some degree of
flexibility in how to control their projects.
• However, project managers cannot make any promises to a functional
employee concerning:
• Promotion
• Grade
• Salary
• Bonus
• Overtime
• Responsibility
• Future work assignments
Project Champions
• Employees with new ideas that may generate monetary and nonmonetary rewards for the idea
generator.
• Project champion may become project manager
• Disadvantage :
• Project champions may become so attached to the technical side of the project that they lack administrative
responsibilities.
• Perhaps the project champion might function best as a project engineer rather than the project manager.
• Selection of the “proper” project manager should be based on all facets of the project.
Downside Of Project Management
• Project management job is high paying but time intensive
• May cost the family
• May cost friendships
Project-driven Versus Non–project-driven
Organizations
• At the macro level, organizations are either project- or non–project-driven.
• PMBOK® Guide uses the terms project-based and non–project-based
• Kerzner use the terms project-driven and non–project-driven or Operational-driven
• Project-driven organization
• Eg construction or aerospace
• work is characterized through projects
• Each project are separate cost center having its own profit-and-loss statement.
• Total profit is simply the summation of the profits on all projects.
• Everything centers around the projects.
• Non–project-driven organization
• Eg low-technology manufacturing
• Profit and loss are measured on vertical or functional lines.
• Projects exist merely to support the product lines or functional lines.
• Priority resources are assigned to the revenue-producing functional line activities rather than
the projects.
Why non–project-driven PM is more
difficult?
• Projects may be few and far between.
• Not all projects have the same project management requirements – not
identical.
• Executives don’t have time for projects but refuse to delegate.
• Projects tend to delay because approvals follow vertical chain of
command.
• As a result, project work stays too long in functional departments.
• Project staffing is on a “local” basis – not all part of the organization
understands project management.
• Heavy dependence on subcontractors and outside agencies for PM
expertise.
Bad side of Not having Projects
• Poorly defined responsibility areas within the organization
• Poor communications, both internal and external to the
organization
• Slow implementation
• A lack of a cost-tracking system for implementation
• Poorly defined performance criteria
Tip-of-the-iceberg Syndrome
• most common in non–project-
driven organizations.
• On the surface, we see lack of
authority for the project manager.
• But beneath the surface we see
the causes;
• there is excessive meddling due to
lack of understanding of project
management,
• which, in turn, resulted from an
inability to recognize the need for
proper training.
Product Influence in Decision Making
• PM can be handled on either
a formal or an informal basis.
• Informal project
management most often
appears in non–project-driven
organizations.
• It is doubtful that informal
project management would
work in a project-driven
organization where the
project manager has profit-
and-loss responsibility.
Marketing In The Project-driven
Organization
• Companies need to market to get new projects
• Project-oriented company require highly specialized and disciplined team
efforts among marketing, technical, and operating personnel, plus significant
customer involvement.
• Marketing projects requires the ability to identify, pursue, and capture one-of-
a-kind business opportunities, and is characterized by:
• A systematic effort - project acquisition effort highly integrated with ongoing
programs.
• Custom design - to fit specific requirements of a single-customer community.
• Project life cycle - well-defined beginning and end. Business are generated on a
project-by project basis rather than demand for standard product/service.
• Marketing phase. lead times exist between definition, startup, and completion
phases.
• Risks. - integrate multidisciplinary tasks and project elements within budget and
schedule constraints, manage inventions and technology.
• The technical capability to perform. critical to successful acquisition of new project.
Why Project based are good
• Attractive return on capital investment - Progress payment practices keep
inventories and receivables to a minimum and enable companies to
undertake projects many times larger in value than the assets of the total
company.
• Low financial risk - Once a contract has been secured and is being managed
properly, there are little additional selling expenditure and but there is
predictable market
• Provide an opportunity to develop the company’s technical capabilities and
build an experience base for future business growth.
• Provides attractive growth potential – especially on winning large project
(1) growth with the project via additions and changes;
(2) follow-on work;
(3) spare parts, maintenance, and training; and
(4) being able to compete effectively in the next project phase, such as nurturing a
study program into a development contract and finally a production contract.
Strategies for winning new contract
Classification Of Projects
• The principles of project management can be applied to any type of project and to any
industry but principles can vary from project to project and industry to industry.
• Project-driven industries
• Eg aerospace and large construction
• High value of the projects needs rigorous project management approach.
• Non–project-driven industries
• Projects may be managed more informally than formally, especially if no immediate profit is involved.
• Informal PM is similar to formal PM but minimum paperwork requirements
Where is The Position of PM
• 2 questions:
• What salary should the project
manager earn?
• To whom should the project
manager report?
• Salary: Should be the same level
with people he must negotiate on
a daily basis.
• Reporting: depends on project- or
non–project-driven.
Reporting
• PM can be reporting both high and low in an organization during the
life cycle of the project.
• During the planning phase of the project, the project manager may report
high
• During implementation, he may report low.
• Likewise, the positioning of PM may be dependent on the risk of the
project, the size of the project, or the customer. Finally, it should be
noted that even if the project manager reports low, he should still have
the right to interface with top executives during project planning
although there may be two or more reporting levels between the
project manager and executives.
• At the opposite end of the spectrum, the project manager should have
the right to go directly into the depths of the organization instead of
having to follow the chain of command downward, especially during
planning.
Reporting example
• PM had 2 weeks to plan and price out
a small project.
• Most of the work was to be
accomplished within one section.
• PM was told that all requests for
work had to follow the chain of
command from the executive down
through the section supervisor.
• By the time the request was received
by the section supervisor, 12 of the
14 days were gone.
• Lesson learned : The chain of
command should be used for
approving not planning.
• Chain of command for project
planning result in a great deal of
unproductive time and idle time cost.
Differing Views Of Project Management
• Some view PM as an excellent means to achieving objectives
• Others view it as a threat.
• In project-driven organizations, there are three career paths that lead to executive
management:
• Through project management
• Through project engineering
• Through line management
• In project-driven organizations, project management is a fast-track position
• In non–project-driven organization, it is line management.
• Line managers don’t like project manager because of his promotions and top-level
visibility. Exposure into project management or project engineering is necessary.
Some company require attachment as assistant project manager or project engineer
in order to be promored.
• Executives may dislike project managers because more authority and control must
be delegated.
Important to understand
• Definition of a project
• Definition of the triple constraint
• Definition of successful execution of a project
• Benefits of using project management
• Responsibility of the project manager in dealing with stakeholders and how
stakeholders can affect the outcome of the project
• Responsibility of the project manager in meeting deliverables
• The fact that the project manager is ultimately accountable for the success of the
project
• Responsibilities of the line manager during project management staffing and
execution
• Role of the executive sponsor and champion
• Difference between a project-driven and non–project-driven organization
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