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Copyright 2008Introduction to ProjectManagement, Second Edition

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1. Understand the growing need for betterproject, program, and portfolio management

2. Explain what a project is, provide examples ofprojects, list various attributes of projects, and

discuss the triple constraint of projectmanagement3. Describe project management and key

elements of the project managementframework, including project stakeholders,project management knowledge areas,common tools and techniques, and projectsuccess factors


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4. Discuss the relationship between project,program, and portfolio management and theircontribution to enterprise success

5. Describe the project management profession,including suggested skills for project, program,and portfolio managers, the role ofprofessional organizations such as the Project

Management Institute, the importance ofcertification and ethics, and the growth ofproject and portfolio management software

3Introduction to ProjectManagement, Second Edition


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Many organizations today have a new or renewedinterest in project management.

The U.S. spends $2.3 trillion on projects everyyear, orone-quarter of its gross domestic product,

and the world as a whole spends nearly $10 trillionof its $40.7 gross product on projects of all kinds.*

In 2006, the average senior project manager in theU.S. earned over $104,000 per year.**

Project management certification is popularworldwide.

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*PMI, Inc., The PMI Project Management Fact Book, Second Edition, 2001.

**PMI, Inc., Project Management Salary Survey, Fifth Edition, 2007.

Introduction to ProjectManagement, Second Edition


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` A 1995 Standish Group study (The CHAOSReport) found that only 16.2 percent ofinformation technology (IT) application

development projects were successful in meetingscope, time, and cost goals. Over 31 percent ofthe projects were canceled before completion,costing over $81 billion in the U.S. alone.

` A 2004 PricewaterhouseCoopers study of 200companies from 30 different countries found thatover half ofall projects fail.



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` Better control of financial, physical, and humanresources

` Improved customer relations` Shorter development times` Lower costs` Higher quality and increased reliability` Higher profit margins` Improved productivity` Better internal coordination` Higher worker morale



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` A project is a temporary endeavor undertakento create a unique product, service, or result.*

` Operations is work done to sustain the business.

` Projects end when their objectives have beenreached or the project has been terminated.

*Project Management Institute, Inc., A Guide to the Project Management Bodyof Knowledge (PMBOK Guide, Third Edition) (2004), p. 5.



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` A young couple hires a firm to design and build them anew house.

` A college campus upgrades its technologyinfrastructure to provide wireless Internet access.

` A group of musicians starts a company to help childrendevelop their musical talents.

` A pharmaceutical company launches a new drug.

` A television network develops a system to allow

viewers to vote for contestants and provide otherfeedback on programs.

` A government group develops a program to track childimmunizations.



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` A project: Has a unique purpose.

Is temporary.

Is developed using progressive elaboration or in aniterative fashion.

Requires resources, often from various areas.

Should have a primary customer or sponsor.

x The project sponsorusually provides the direction and

funding for the project. Involves uncertainty.



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` Every project is constrained in different ways byits: Scope: What work will be done as part of the project?What unique product, service, or result does the

sponsor expect from the project? Time: How long should it take to complete the project?What is the projects schedule?

Cost: What should it cost to complete the project?What is the projects budget?

` It is the project managers duty to balance thesethree often competing goals.



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` It may be good enough to hit the target, or range,of triple constraint goals, but not the bulls-eye.

` Its important to determine which aspects of the

triple constraint are the most important.` The quadruple constraint includes quality as

well as scope, time, and cost.



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` Project management is the application ofknowledge, skills, tools, and techniques to projectactivities to meet project requirements.*

*Project Management Institute, Inc., AGuide to the Project Management Bodyof Knowledge (PMBOK Guide, Third Edition) (2004), p. 8.



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` Stakeholders are the people involved in oraffected by project activities.

` Stakeholders include:The project sponsor

The project manager The project team Support staff Customers Suppliers Opponents to the project



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` Four core knowledge areas lead to specific projectobjectives.

Project scope managementinvolves defining and managing

all the work required to complete the project successfully. Project time managementincludes estimating how long it will

take to complete the work, developing an acceptable projectschedule, and ensuring timely completion of the project.

Project costmanagementconsists of preparing and managing

the budget for the project. Project qualitymanagementensures that the project will

satisfy the stated or implied needs for which it was undertaken.



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` Four facilitating knowledge areas are the means throughwhich the project objectives are achieved. Project humanresource managementis concerned with

making effective use of the people involved with the project. Project communications managementinvolves generating,

collecting, disseminating, and storing project information. Projectriskmanagementincludes identifying, analyzing,

and responding to risks related to the project. Project procurementmanagementinvolves acquiring or

procuring goods and services for a project from outside the

performing organization.` 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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` Project management tools and techniques assist projectmanagers and their teams in various aspects of projectmanagement.

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Note that a tool or technique is more than just a softwarepackage.

` Specific tools and techniques include:

Project charters, scope statements, and WBS (scope)

Gantt charts, network diagrams, critical path analyses (time)

Net present value, cost estimates, and earned valuemanagement (cost)

See Figure 1-4 for more examples



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` Super tools are those tools that have high useand high potential for improving project success,such as: Software for task scheduling (such as project

management software)

Scope statements Requirements analyses Lessons-learned reports

` Tools already extensively used that have beenfound to improve project importance include: Progress reports Kick-off meetings Gantt charts Change requests



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What Went Right? ImprovedWhat Went Right? ImprovedProject Performance*Project Performance*

The Standish Groups CHAOS studies show improvementsin IT projects in the past decade

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Measure 1994 Data 2006 Data ResultSuccessful Projects 16% 35% More than doubled

Failed Projects 31% 19% Almost halved

Money wasted on

failed and

challenged projects

$140B out of

$250B or 56%

$53B out of

$346B or 15%

Well more than

halved

*Jim Johnson, CHAOS 2006 Research Project, CHAOSActivityNews, vol. 2: issue 1, (2007).



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The reasons for the increase in successfulprojects vary. First, the average cost of a projecthas been more than cut in half. Better tools havebeen created to monitor and control progress andbetter skilled project managers with better

management processes are being used. The factthat there are processes is significant in itself.*

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



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` There are different ways to define projectsuccess: The project met scope, time, and cost goals.

The project satisfied the customer/sponsor.

The project produced the desired results.



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` A program is: a group of related projects managed in a coordinated

way to obtain benefits and control not available frommanaging them individually.*

` A program managerprovides leadership anddirection for the project managers heading theprojects within the program.


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*Project Management Institute, Inc., A Guide tothe ProjectManagementBodyofKnowledge (PMBOK Guide, ThirdEdition) (2004), p. 8.


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` Project portfolio management is an emergingbusiness strategy in which organizations group andmanage projects and programs as a portfolio ofinvestments that contribute to the entire enterprises

success.` Pacific Edge Softwares product manager, Eric

Burke, defines project portfolio management as thecontinuous process of selecting and managing the

optimum set of project initiatives that delivermaximum business value.*

*Eric Burke, Project Portfolio Management, PMI HoustonChapter Meeting (July 10, 2002).



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` Project, program, and portfolio managers needto develop specific skills.

` Certification is available for project managers.

` There are many software tools to assist inproject, program, and portfolio management.



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` Knowledge of the following: All nine project management knowledge areas

The application area, including specific standards and

regulations The project environment

General management

Human relations



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` Leadership andprofessionalism arecrucial.

` Know what your

sponsor expects fromthe project, and learnfrom your mistakes.

` Trust your team, and

delegate decisions.` Know the business.

` Stand up for yourself.


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` Be a team player.

` Dont be overly emotionaland stay organized.

` Work on projects and forpeople you believe in.

` Think outside of the box.

` Some luck is involved inproject management, and

you should always aimhigh.


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` Effective project managers provide leadership byexample.

` A leaderfocuses on long-term goals and big-

picture objectives while inspiring people to reachthose goals.

` A managerdeals with the day-to-day details of

meeting specific goals.` Project managers often take on the role of both

leader and manager.



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` Large projects: leadership, relevant priorexperience, planning, people skills, verbalcommunication, and team-building skills are most

important` High uncertainty projects: risk management,

expectation management, leadership, peopleskills, and planning skills are most important

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



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` Program managers normally have experience asproject managers. They often rely on their pastexperience, strong business knowledge, leadership

capability, and communication skills to manageprograms.

` Portfolio managers must have strong financial andanalytical skills and understand how projects and

programs can contribute to meeting strategic goals.



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A best practice is an optimal way recognized by industry

to achieve a stated goal or objective.* Robert Butricksuggests that organizations need to follow basic principlesof project management, including these two mentionedearlier in this chapter: Make sure your projects are driven by your strategy. Be able to demonstrate

how each project you undertake fits your business strategy, and screen outunwanted projects as soon as possible.

Engage your stakeholders. Ignoring stakeholders often leads to project failure.Be sure to engage stakeholders at all stages of a project, and encourageteamwork and commitment at all times. Use leadership and opencommunications to make things happen.**

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

**Ultimate Business Library, Best Practice: Ideas and Insights from the Worlds Foremost BusinessThinkers, Perseus Publishing (2003).



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` PMI provides certification as a ProjectManagement Professional (PMP).

` A PMP has documented sufficient project

experience, agreed to follow a code of ethics, andpassed the PMP exam.

` The number of people earning PMP certification isincreasing quickly.



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` There are hundreds of different products available today.` Three main categories of tools are the following:

Low-end tools: Handle single or smaller projects well; costunder $200 per user.

Midrange tools: Handle multiple projects and users; cost

$200-600 per user; Microsoft Project is the most popular (thistext includes a trial copy of Project 2007). High-end tools: Also called enterprise project management

software; often licensed on a per-user basis; example is VPMiExpress and Professional (www.vcsonline.com); see frontcover for trial version information.

` Project 2007 includes a standard and an enterpriseversion. See the Guide to Using MicrosoftProject2007inAppendix A for details.



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` A project is a temporary endeavor undertaken to createa unique product, service, or result.

` Project management is the application of knowledge,skills, tools, and techniques to project activities to meetproject requirements.

` A program is a group of related projects managed in acoordinated way to obtain benefits and control notavailable from managing them individually.

` Project portfolio management involves organizing andmanaging projects and programs as a portfolio of

investments that contribute to the entire enterprisessuccess.` The project management profession continues to grow

and mature.

41Introduction to ProjectManagement Second Edition

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