INFS 724 Project and Change Management

Amit Deokar, Ph.D.

Chapter 4

Project Integration Management

3

Outline

Strategic planning and project selection What is project integration management? Preliminary scope statements Project management plans Project Execution Monitoring and controlling project work Integrated project control Closing projects

Strategic Planning and Project Selection

5

Strategic Planning and Project Selection The first step in initiating projects is to look at the big

picture or strategic plan of an organization Strategic planning involves determining long-term

objectives, predicting future trends, and projecting the need for new products and services.

Organizations often perform a SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats

As part of strategic planning, organizations should: Identify potential projects. Select which projects to work on. Formalize project initiation by issuing a project

charter.

6

Identifying Potential Projects

Many organizations follow a planning process for selecting IT projects.

It’s crucial to align IT projects with business strategy.

Research shows that: Supporting explicit business objectives is the

number one reason cited for investing in IT projects.

The consistent use of IT standards lowers application development costs by 41 percent per user.

7

Why Firms Invest in Information Technology

8

Information Technology Planning Process

9

Business case – An example

Please refer to the JWD Consulting business case, p. 82

10

Methods for Selecting Projects

There are usually more projects than available time and resources to implement them

It is important to follow a logical process for selecting IT projects to work on

Methods include: focusing on broad needs categorizing projects performing financial analyses using a weighted scoring model (multiple criteria)

11

Focusing on BroadOrganizational Needs It is often difficult to provide strong

justification for many IT projects, but everyone agrees they have a high value

Three important criteria for projects: There is a need for the project There are funds available There’s a strong will to make the project

succeed

12

Categorizing IT Projects

One categorization is whether the project addresses a problem an opportunity a directive

Another categorization is how long it will take (time) to do and when it is needed

Another is the overall priority of the project

13

Financial Analysis of Projects

Financial considerations are often an important consideration in selecting projects

Three primary methods for determining the projected financial value of projects: Net present value (NPV) analysis Return on investment (ROI) Payback analysis

14

Net Present Value Analysis

Net present value (NPV) analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time

Projects with a positive NPV should be considered if financial value is a key criterion

The higher the NPV, the better Internal rate of return (IRR) can by calculated

by setting the NPV to zero

15

NPV Calculations

Determine estimated costs and benefits for the life of the project and the products it produces

Determine the discount rate (check with your organization on what to use)

Calculate the NPV Notes: Some organizations consider the

investment year as year 0, while others start in year 1.

16

Net Present Value Example‘Resources’ page – Templates – Financial Analysis

17

Return on Investment (ROI)

ROI = (total discounted benefits - total discounted costs) / discounted costs

The higher the ROI, the better Many organizations have a required rate of

return or minimum acceptable rate of return on an investment

18

Payback Analysis

The payback period is the amount of time it will take to recoup, in the form of net cash inflows, the net dollars invested in a project

Payback occurs when the cumulative discounted net benefits are greater than zero

Many organizations want IT projects to have a fairly short payback period

19

Charting the Payback Period

Payback period

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

Year 0 Year 1 Year 2 Year 3 Year 4

Year

Cumulative discounted benefits Cumulative discounted costs

20

Weighted Scoring Model

A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria First identify criteria important to the project selection

process Then assign weights (percentages) to each criterion so

they add up to 100% Then assign scores to each criterion for each project Multiply the scores by the weights and get the total

weighted scores The higher the weighted score, the better

21

Sample Weighted Scoring Model for Project Selection‘Resources’ page – Templates – Weighted Decision Matrix

22

Example of Management Criteria

Criteria

Explicit business objectives

Support decision making

Legal/government requirements

Implicit business objectives

Response to competition

Probability of achieving

23

Example of Development Criteria

Criteria

Tech/system requirements

Intro./learning technology

Probability of completion

24

Screening

Identify those factors that are important Establish a minimum level of importance Eliminate those projects that fail on any one

of the minimum standards

25

Screening Example

Expected ROI Qualified project team

leadership Company has expertise

in area

Project completion time

At least 30% Available

Company is either experienced or desires to gain experience

Within 12 months

What is project integration?

27

Project integration is about…

Coordinating all of the other knowledge areas throughout a project’s life cycle

Coordinating people, plans, and work required to complete the project.

Steering the project team towards successful completion

28

Project Integration Management Processes Develop the project charter: Work with stakeholders

to create the document that formally authorizes a project—the charter.

Develop the preliminary project scope statement: Work with stakeholders, especially users of the project’s products, services, or results, to develop the high-level scope requirements and create a preliminary project scope statement.

Develop the project management plan: Coordinate all planning efforts to create a consistent, coherent document—the project management plan.

29

Project Integration Management Processes (cont’d) Direct and manage project execution: Carry out the

project management plan by performing the activities included in it.

Monitor and control the project work: Oversee project work to meet the performance objectives of the project.

Perform integrated change control: Coordinate changes that affect the project’s deliverables and organizational process assets.

Close the project: Finalize all project activities to formally close the project.

30

Project Integration Management Overview

Project charter

32

Project Charters

A project charter is a document that formally: Recognizes the existence of a project Authorizes the project Provides direction on the project’s objectives and

management It is a roadmap that defines key questions or issues

to be addressed by the project as well as the high level project deliverables

Key project stakeholders should sign a project charter to acknowledge agreement on the need and intent of the project

33

Project charter guidelines

There is no hard and fast rules. Brevity and clarity are highly valued. Suggested items include:

Project name Project sponsor (s) Project manager Statement of purpose (e.g., overarching goals, including the

need for the project in business terms) -WHY? Scope (high level product characteristics and requirements) -

WHAT? Approach – How?

Authorized project resources (people, budget) Roles and responsibilities Basic project timeline Project control Risk management

34

Sample Project Charter (p. 86)

Preliminary scope statements

36

Preliminary scope statements

A scope statement is a document used to develop and confirm a common understanding of the project scope.

It is an important tool for preventing scope creep: The tendency for project scope to keep getting

bigger. A good practice is to develop a preliminary or

initial scope statement during project initiation and a more detailed scope statement as the project progresses.

37

Contents of a Preliminary Scope Statement Project objectives Product or service

requirements and characteristics

Project boundaries Deliverables Product acceptance

criteria Project assumptions and

constraints Organizational structure

for the project

Initial list of defined risks Summary of schedule

milestones Rough order of

magnitude cost estimate Configuration

management requirements

Description of approval requirements

Project management plans

39

Project Plan Development

A project plan is a document used to coordinate all project planning documents

Its main purpose is to guide project execution Project plans assist the project manager in

leading the project team and assessing project status

Project performance should be measured against a baseline plan

40

Attributes of Project Plans

Just as projects are unique, so are project plans

Plans should be dynamic and flexible Plans should be updated as changes occur Plans should first and foremost guide project

execution

41

Common Elements of a Project Plan Introduction or overview of the project

Project name, brief description and sponsor Key team members Deliverables Key reference material Glossary

Description of how the project is organized (HR and communication) Organizational charts Project responsibilities

Management and technical processes Management objectives Project controls Risk management (Risk) Project staffing (HR) Technical processes including quality assurance

Work to be done, schedule, and budget information (Scope, Time, and Cost)

42

Sample Outline for a Software Project Management Plan (SPMP)

43

Stakeholder Analysis

A stakeholder analysis documents important (often sensitive) information about stakeholders such as stakeholders’ names and organizations roles on the project unique facts about stakeholders level of influence and interest in the project suggestions for managing relationships

44

Sample Stakeholder Analysis (p. 144)

Project execution

46

Project Plan Execution

Project plan execution involves managing and performing the work described in the project plan

The majority of time and money is usually spent on execution (performing the work)

The application area of the project directly affects project execution because the products of the project are produced during execution

47

What Went Wrong?

Many people have a poor view of plans based on past experiences. Senior managers often require a plan, but then no one follows up on whether the plan was followed.

For example, one project manager said he would meet with each project team leader within two months to review their plans. The project manager created a detailed schedule for these reviews. He cancelled the first meeting due to another business commitment. He rescheduled the next meeting for unexplained personal reasons. Two months later, the project manager had still not met with over half of the project team leaders.

Why should project members feel obligated to follow their own plans when the project manager obviously did not follow his?

48

Important Skills for Project Execution General management skills like leadership,

communication, and political skills Product skills and knowledge (see example of

“What Went Right?” on p. 149) Application area/product vs. technical skills –

What do you think?

49

Project Execution Tools and Techniques Project management methodology: Many

experienced project managers believe the most effective way to improve project management is to follow a methodology that describes not only what to do in managing a project, but how to do it.

Project management information systems: Hundreds of project management software products are available on the market today, and many organizations are moving toward powerful enterprise project management systems that are accessible via the Internet.

Monitoring and Controlling

Project Work

51

Monitoring and Controlling Project Work Monitoring project work includes collecting,

measuring, and disseminating performance information.

Important outputs of monitoring and controlling project work include: Recommended corrective Recommended preventive actions Recommended defect repair

52

Monitoring and Controlling Project Work (cont.) According to PMBOK (2004), monitoring and

controlling is concerned with: Comparing actual project performance against the

project management plan Assessing performance to determine whether any

corrective/preventive measure is needed Analyze, track, and monitor project risks Maintain an accurate and timely information base

regarding project’s product (s) Provide information to support status reporting Monitor implementation of approved changes

Integrated change control

54

Integrated Change Control

Integrated change control involves identifying, evaluating, and managing changes throughout the project life cycle

Three main objectives of change control: Influence the factors that create changes to

ensure they are beneficial Determine that a change has occurred Manage actual changes when and as they

occur

55

Change Control System

A formal, documented process that describes when and how official project documents and work may be changed

Describes who is authorized to make changes and how to make them

Often includes a change control board (CCB), configuration management, and a process for communicating changes

56

Change Control Boards (CCBs)

A formal group of people responsible for approving or rejecting changes on a project

CCBs provide guidelines for preparing change requests, evaluate change requests, and manage the implementation of approved changes

Includes stakeholders from the entire organization

57

Making Timely Changes

Some CCBs only meet occasionally, so it may take too long for changes to occur

Some organizations have policies in place for time-sensitive changes “48-hour policy” allows project team members

to make decisions, then they have 48 hours to reverse the decision pending senior management approval

Delegate changes to the lowest level possible, but keep everyone informed of changes

58

Configuration Management

Ensures that the products and their descriptions are correct and complete

Concentrates on the management of technology by identifying and controlling the functional and physical design characteristics of products

Configuration management specialists identify and document configuration requirements, control changes, record and report changes, and audit the products to verify conformance to requirements

59

Suggestions for Managing Integrated Change Control

View project management as a process of constant communications and negotiations

Plan for change Establish a formal change control system, including a

Change Control Board (CCB) Use good configuration management Define procedures for making timely decisions on

smaller changes Use written and oral performance reports to help

identify and manage change Use project management and other software to help

manage and communicate changes