1 Project Management Framework REM

Project Management Framework

Section Overview and Objectives

Definition of project Project Manager Skill Set

Examples of projects General Management and Interpersonal Skills

Projects versus Operations Program and Portfolio Management

What is Project Management Project Management Office (PMO)

Enterprise Environmental Factors Organizational Influences

The Triple Constraints Organizational Types

Characters of a Project Phase Project Management Process Groups

Who are the Stakeholders Process Group Interactions

Business Cases / Why Do a Project Knowledge Areas

Project Selection Method

Definition of Project

A project is a temporary endeavor undertaken to create a unique product or service.

A temporary endeavor means that every project has a definite beginning and end.

Unique means that the product or service or result is different from other product or service or result.

Progressively elaborated - proceeding in steps

Examples of Projects

Designing a new bridge / highway

Developing a new Drug

Conduct Elections for the State / Country

Managing Marriage

Designing a new Automobile

Building hospital for the community

Project Vs Operation

Project

Temporary

Unique

Closes after attaining the objectives

Prototyping the new Car Model

Operation

Ongoing

Repetitive

Objective is to sustain business

Assembly line production

What is Project Management?

Project Management is the application of knowledge, skills, tools

and techniques to project activities to meet the project requirements

Accomplished through the application and integration of PM

processes Initiating, Planning, Executing, Monitoring and

Controlling and Closing

Establishing clear project objectives and requirements

Balancing the competing demands of scope, time, cost and quality

Manage uncertain events

Enterprise Environmental Factors

Internal an external factors that may influence the projects success

Not tangible items

Examples: Culture

Industry standards

Infrastructure

Market conditions

Political climate

The Triple Constraint

Typical Project Life Cycle

Projects are divided into phases

The project will have at least a beginning, intermediate and endingphase

Number of phases depends on complexity and size of the project.Phase Examples - Analysis, Development

Reviews are conducted at the end of each phase to measureperformance

Phase end reviews allows to decide if the project should continue

The collection of phases is called project life cycle

The project life cycle defines the beginning and end of a project

Fast tracking is running the project phases concurrently. Exampleof phases Analysis, Design etc.

Characteristics of Project Phase

Project Phase are marked by completion of one or more deliverables

Deliverables are reviewed and formally accepted by customer at phase end

Phase end reviews are also called phase exits, stage gatesor kill points

Rolling wave planning summarizes the future phases at high level

Project phases are collectively called project life cycle

Project Phase Relationships

Sequential: a phase can only start once the previous phase has completed.

Overlapping: a phase starts prior to the completion of the previous phase.

Iterative: only one phase is planned out at any given time and the planning for the next phase is carried out as work progresses on the current phase.

Project Stakeholders

Individuals and organizations involved in the project Those who will be directly or indirectly impacted Stakeholders should be identified throughout the project They may have a positive or negative influence on the outcome Stakeholder influence goes down as the project progresses

Key stakeholders include Project Manager Customer / User Performing organization Project team members Project management team Sponsor Influencers PMO

Business Case / Why Do a Project?

Market Demand

Strategic opportunity or business need

Customer request

Technological advance

Legal requirement

Ecological impact

Social Need

Project Selection Method (1 of 5)

Mathematical Approach (Constrained Optimization Methods) Linear Programming Integer Programming Dynamic Programming Multi-objective Programming

Cooperative Approach (Benefit Measurement Methods) Scoring models Peer review Murder Boards (panel that tries to poke holes in your argument) Economic models

Benefit-Cost Analysis Payback period Discounted cash flows Net Present Value Internal Rate of Return (IRR)

Benefit-Cost Analysis Compares the project benefit to the costs to derive a ratio from which a

decision can be made. Ex: if a project generates $125,000 in profits and costs $50,000, the benefit-cost ratio would be 2.5 (also written as 5:2)

Payback period Number of periods to pay back a projects cost. Ex: if a project costs $1 million

and will generate revenue of $100,000 per year, then the payback period would be 10 years.


Discounted cash flows Calculates in todays (discounted) terms what the value of a project would be given cash

inflows and/or outflows over a period of time

Net Present Value (NPV) A formula that calculates the value today of a future cash flow Ex: if you will receive a future cash flow in 3 years of $1,157.62, what would that be worth

today if the interest rate is 5%? PV = FV / (1 + i) n

PV = $1,157.62 / (1 + .05)3

PV = $1,000*Always choose projects with the biggest positive NPV, reject negative NPV

Internal Rate of Return (IRR) The discounted interest rate when NPV equals zero Always choose the project with the highest IRR Assumes that cash flows are reinvested at the IRR value


Example: A project costs $10,000 today and will return $2,500 per year for 5 years. Assume

your required return on investment is 10%. Should you do the project? Benefit-Cost Ratio

(5 x $2,500) / $10,000 = 1.25 or 5:4

Payback Period $10,000 / $2,500 = 4 years

Net Present Value NPV p = Sum of [Future Cash Flows / (1 + i)

n] - $10,000 + [$2,500 / (1.10)1] + [$2,500 / (1.10)2] + [$2,500 / (1.10)3] + [$2,500 / (1.10)4] +

[$2,500 / (1.10)5] = -$523.03

IRR The value of I where NPV equals zero = 7.93%


Terminology: Opportunity Costs: the opportunity given up by choosing another project Sunk Costs: costs spent to date, these costs are already spent Law of Diminishing Returns: adding more resources doesnt proportionately

increase productivity Working Capital: current assets minus current liabilities Depreciation: straight-line (same amount each year), accelerated (ex. Double-

declining balance and sum of years digits) Assumptions: something that is believed to be true or something that is taken

for granted. *Needs to be continually evaluated throughout the project Constraints: a factor that limits the project teams options; any restriction

placed on the project


Project Manager Skill Set

Areas of Expertise

PMBOK GUIDE

KNOWLEDGE

PERFORMANCEPERSONAL SKILL

PROJECT ENVIRONMENT

General Management and Interpersonal Skills

General

Management

Skills

Leadership

Motivating

Negotiating

Communicating

Problem Solving

Influencing

AccountingPurchasing

Organizing

IT

Program & Portfolio Management

Programs

Collection of related projects

Controls are implemented and managed in a coordinated way

Collective benefits are realized

Each project has a project manager

Projects share resources and depends on the outcomes of other projects

Portfolios

Collection of programs and projects

Projects meet a specific business goal or objective

Includes weighing the value of each project against the portfolios strategic objective

Ensures efficient use of resources

PMO Project Management Office

Centralized and coordinated management of projects

Key stakeholder and decision maker

Primary functions of PMO: Manage shared resources

Maintain project management best practices and standards

Policies, procedures, templates, etc.

Coordinated communication

Coaching, mentoring, training, oversight, and monitoring

Governance organization

Organization Influence

Functional

Organization

Weak Matrix

Organisation

Balanced Matrix

Organisation

Strong Matrix

Organisation

Projectized

Organisation

PMs Title Expediter Expediter/

Coordinator

Project Manager Project Manager Project Manager

Decision Making Power Functional

manager

Functional manager

plays a major role,

but PM will make

decisions

PM and the

Functional Manager

will have equal power

Project Manager Project Manager

Resources From within a

Dept.

Project members are

from different

departments

Project members are

from different

departments

Project members are

from different

departments

Project based only

Resource Allocation As needed Only 25% will be

assigned to the

projects

About 50% will be

assigned to the

projects

About 80% will be

assigned to the

projects

About 100% will be

assigned to the

projects

Resources Reports to Functional

manager

Functional manager Two manager (FM

and PM)

Project Manager Project Manager

PM Reports to Functional

manager

Functional manager Functional manager

and his/her senior

manager

Company Senior

manager

Company senior

manager/ higher

authority

After Project Completion Team go back

to their Dept.

(home)

Team go back to their

Dept. (home)


Dept. (home)


Dept. (home)

No home move to

different project or

get laid off

Organization Types Advantages & Disadvantages

Org. Type Advantages Disadvantages

Matrix

Highly visible project objectives Not cost effective because of extra administrative

personnel

Better Project Manager control over

resources

More than ONE boss for project teams

Better coordination More complex to monitor and control

Team members maintain a home Higher potential for conflict and duplication of effort and

functional managers have different priorities

Functional

Team members report to one supervisor and

clearly defined career paths

No career path in Project Management

Easier management specialists People place more emphasis on their functional specialty

to the determent of the project

Projectized

Efficient project organization No Home when project is completed

More effective communication than

functional

Duplication of facilities and job functions

Loyalty to the project Lack of professionalism in disciplines and less efficient use

of resources

Project Management Process Groups


Initiating process group authorizes the project

Planning process group plans the course of action to achieve objectives

Executing process group uses the resources to carry out project tasks

Monitoring process group measures progress to identify variances

Closing process group formalizes product acceptance and closure

Concept of PLAN-DO-CHECK-ACT cycle Determine what processes within the process groups are applicable The Process Groups are not Project Phases The result of one process becomes input to another

Project Management Process Groups Interaction

Initiating

Processes

Planning

Processes

Executing

Processes

Controlling

Processes

PhaseFinishPhase

StartTime

Knowledge Areas Initiation Planning Execution Monitoring & Control Close Out

Integration ManagementDevelop Project Charter Develop Project Management Plan Direct an Manage Project Work

Monitor and Control Project

Perform Integrated Change ControlClose Project or Phase

Scope Management Plan Scope Management

Collect Requirements

Define Scope

Create WBS

Validate Scope

Control Scope

Time Management Plan Schedule Management

Define Activities

Sequence Activities

Estimate Activity Resources

Estimate Activity Durations

Develop Schedule Control Schedule

Cost Management Plan Cost Management

Estimate Costs

Determine Budget Control Costs

Quality Management Plan Quality Management Perform Quality Assurance Control Quality

Human Resource Management

Plan Human Resource Management

Acquire Project Team

Develop Project Team

Manage Project Team

Communication Management Plan Communication Management Manage Communications Control Communications

Risk Management Plan Risk Management

Identify Risks

Perform Qualitative Risk Analysis

Perform Quantitative Risk Analysis

Plan Risk Responses Control Risks

Procurement Management Plan Procurement Management Conduct Procurements Control Procurements Close Procurements

Stakeholder Management Identify Stakeholders Plan Stakeholder Management Manage Stakeholder Engagement Control Stakeholder Engagement


Initiating Process Group

Conduct cost-benefit analysis

Determine and define the business needs and the project scope

Know the project boundaries and constraints

Identify high level risks

Understand the required project organization structure

Estimate budget and resource requirements

Assign a project manager

Obtain the project charter approval

Formally authorize to start a new project or phase

Planning Process Group

Determine how to plan and develop the project management plan Develop the project requirements in detail and agree the final scope Determine the required project activities and their sequencing Develop schedule using estimated resources and costs Agree what quality standards will be met by the project and how Define how project staffing will be done Establish the communication requirements and how it will be fulfilled Identify what can go wrong and the plans to deal with them Document what products or services will be acquired from outside the

project

Gain formal approval and buy-in from everybody involved in the project

Executing Process Group

Execute activities in the project plan

Procure required project resources

Complete work packages

Document lessons learnt

Implement approved changes, corrective and preventive actions

Ensure processes are followed

Hold team building activities and boost morale and efficiency

Manage resource allocation and utilization

Hold progress review meetings and distribute progress reports

Keep everyone focused on the project goals

Monitoring & Control Process Group

Measure project performance using the documented technique in the plan

Identify variances and recommend corrective actions to get back on track

Approve changes, defect repair, corrective and preventive actions

Resolve conflicts and issues

Manages changes to scope, time and cost

Perform impact analysis to approve or reject changes

Obtain formal acceptance of deliverables from the customer

Monitor the status of risks and identify new risks have emerged

Measure team member performance

Closing Process Group

Confirm all project requirements are met

Obtain formal acceptance of product from the customer

Hand over the completed deliverables to the operations team

Compile lessons learnt

Measure customer satisfaction

Archive project data and information for future reference

Release resources

Professional Responsibility

Covers legal, ethical and professional behavior of a PMP

A PMP must follow the Project Management Institute Code of Ethics and

Professional Conduct

The responsibilities includes:-

Doing the right things

Making good choices

Keep learning and getting better

Respecting others culture

Knowledge Areas

Project Integration Management

Project Scope Management

Project Time Management

Project Cost Management

Project Quality Management

Project Human Resource Management

Project Communication Management

Project Risk Management

Project Procurement Management

Project Stakeholder Management

Summary

Definition of project Project Manager Skill Set

Examples of projects General Management and Interpersonal Skills

Projects versus Operations Program and Portfolio Management

What is Project Management Project Management Office (PMO)

Enterprise Environmental Factors Organizational Influences

The Triple Constraints Organizational Types

Characters of a Project Phase Project Management Process Groups

Who are the Stakeholders Process Group Interactions

Business Cases / Why Do a Project Knowledge Areas

Project Selection Method

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