PROJECT
MANAGEMENT
The Managerial Process
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,Part 1: Managing the context
Chapter 1: Modern Project Management
1.1 An overview of PM
Project management provides people with a powerful set of tools that improves their ability to
plan, implement and manage activities to accomplish specific objectives.
o But it’s more than just a set of tools; it is a results-oriented management style that places a
premium on building collaborative relationships among a diverse cast of characters.
Not only is project management critical to most careers, the skill set is transferable across most
businesses and professions.
o At its core, project management fundamentals are universal.
1.2 What is a project?
Definition of a project: A project is a complex, non-routine, one-time effort limited by time,
budget, resources, and performance specifications that are designed to meet ‘customer’ needs.
o “A project is a temporary endeavor undertaken to create a unique product, service or result”
Like most organizational efforts, the major goal of a project is to satisfy a customer need. Beyond
this similarity, the characteristics of a project help differentiate it from other endeavors of the
organization. The major characteristics of a project are:
1. Has an established objective, doing something that has never been done before
In contrast to repetitive (daily) operations
2. Has a defined life span with a beginning and an end
In contrast to the ongoing duties and responsibilities of traditional jobs
3. Requires across-organizational participation
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, Several departments and professionals need to work together
4. Has specific time, cost and performance requirements
Projects are usually evaluated according to accomplishment, cost and time spent
These triple constraints impose a higher degree of accountability than you typically find
in most jobs
1.2.1 What a project is not
Projects should not be confused with everyday work. Ordinary daily work typically requires doing
the same or similar work over and over, while a project is done only once and is in no single way
related to daily routine or other repetitive operations.
1.2.2 Program versus Project
In practice the terms project and program are often confused with each other.
Definition of a program: a program is a series of multiple, coordinated and related projects that
continue over an extended time and are intended to achieve a common goal.
Example:
o Project: completion of a required course in project management
o Program: completion of all courses required for a business major or master’s
Each project within a program has a project manager; the major differences lie in scale and time
span.
Program management is the process of managing a group of ongoing, interdependent, related
projects in a coordinated way to achieve strategic objectives.
1.2.3 The Project Life Cycle (PLC)
Another way of illustrating the unique nature of project work is in terms of the project life cycle. It
recognizes that projects have a limited life span and that there are predictable changes in level of
effort and focus over the life of the project. The project life cycle typically passes through 4
sequential stages: defining, planning, executing and closure. In practice some project groups use the
project life cycle to depict the timing of major tasks over the life of a project.
For example, the design team might plan a major commitment of resources in the defining
stage, while the quality team would expect their major effort to increase in the latter stages of
the project life cycle.
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,1.2.4 The challenges of project management: the project manager
At first glance, project managers perform the same functions as other managers: they plan,
schedule, motivate and control.
Unlike functional managers…
who take over existing operations, project managers create a project team and organization
where none existed before.
project managers generally possess only rudimentary technical knowledge to make decisions.
What makes them unique is that…
They manage temporary, nonrepetitive activities and frequently act independently of the
formal organization
o They marshal resources for the project
o They are linked directly to the customer interface
o They provide direction, coordination and integration to the project team (which is often
made up of part-time participants loyal to their functional departments)
o They are responsible for performance and success of the project.
They must orchestrate the completion of the project by inducing the right people, at the right
time, to address the right issues and make the right decisions.
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,1.3 The importance of project management
Project management is no longer a special-need management. It is rapidly becoming a standard way
of doing business. The future promises an increase in the importance and the role of projects in
contributing to the strategic decisions of organizations.
1.3.1 Factors leading to the increased use of project management
Compression of the product life cycle
o One of the most significant driving forces behind the demand for PM = shortening of the
PLC
o Project teams need to shorten the time-to-market (T2M), because new products these days
have shorter life cycles so their T2M also needs to be short.
o Speed becomes a competitive advantage; more and more organizations are relying on cross
functional project teams to get new products and services to the market as quickly as
possible
Knowledge explosion
o The growth in new knowledge has increased the complexity of projects because projects
encompass the latest advances
o Product complexity has increased the need to integrate divergent technologies. PM has
emerged as an important discipline for achieving this task
The rise of the triple bottom line (Planet, People, Profit)
o The threat of global warming has brought sustainable business practices (=must) to the
forefront. Businesses can no longer simply focus on maximizing profit to the detriment of
the environment and society.
o Efforts to reduce carbon imprint and utilize renewable resources are realized through
effective PM.
Corporate downsizing
Increased customer focus
o Increased competition has placed a premium on customer satisfaction.
o Customers no longer simply settle for generic products and services. They want customized
products and services that cater to their specific needs
o This mandate requires a much closer working relationship between the provider and the
receiver. PM is critical both to development of customized products and services and to
sustaining lucrative relationships with customers.
Small projects represent big problems
o The velocity of change required to remain competitive or simply keep up has created an
organizational climate in which hundreds of projects are implemented concurrently
o Sharing and prioritizing resources across a portfolio of projects is a major challenge for
senior management
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, o Many firms have no idea of the problems involved with inefficient management of small
projects.
Small projects are perceived as having little impact on the bottom line because they do
not demand large amounts of scarce resources and/or money
Because so many small projects are going on concurrently and because the perception
of inefficiency impact is small, measuring inefficiency is usually nonexistent
Many small projects soon add up to large sums of money
There are a variety of environmental forces interacting in today’s business world that contribute to
the increased demand for good project management.
Project management appears to be ideally suited for a business environment requiring
accountability, flexibility, innovation, speed and continuous improvement.
Managing portfolios by senior management is difficult, prioritizing of project often missing, and
measuring inefficiencies is absent.
1.4 Benefits of an Integrative Approach to Project Management
Competing in a global market influenced by rapid change, innovation and T2M means organizations
manage more and more projects. Some means for coordinating and managing projects in this
changing environment is needed. Centralization of project management processes and practices is
the solution.
Fragmented project management systems result to problems:
Doesn’t tie together the overall strategies of the firm
Fails to prioritize projects by the importance of their contribution to the firm
Are not integrated throughout the PLC
Doesn’t match project planning & control with the organizational culture to make appropriate
adjustments in support of project endeavors
The integration (and centralization) of PM provides senior management with:
An overview of all PM activities
A big picture of how organizational resources are being used
An assessment of the risk their portfolio of projects represents
A rough metric for measuring the improvement of managing projects relative to others in the
industry
Linkages of senior management with actual project execution management
Full insight of all components of the organization is crucial for aligning internal business resources
with the requirements of the changing environment. Governance enables management to have
greater flexibility and better control of all projects managements activities.
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, A visual representation of integrated management of projects:
Alignment of projects with organizational strategy
o Since projects are the MO for implementing strategy, strategic alignment of projects is of
major importance to conserving and effective use of organization resources
o Selection, management and implementation of projects often fail to support the overall
strategic plan of the organization.
o It happens that these strategic plans are written by one group of managers, the projects get
selected by another group and eventually they are implemented by also another group of
managers.
o To achieve an effective usage of the organization’s resources and to implement an overall
strategy decently, strategic alignment of projects is of major importance.
o The selection criteria need to ensure that each project is prioritized and contributes to
strategic goals. Ensuring alignment requires a selection process that is systematic, open,
consistent and balanced
o All the projects selected become part of a project portfolio that balances the total risk for
the organization
o Management of the project portfolio ensures that only the most valuable projects are
approved and managed across the entire organization
Centralization enables portfolio management. Major functions of portfolio management are:
o Oversee project selection
o Monitor aggregate resource levels and skills
o Encourage the use of best practices
o Balance projects in the portfolio in order to represent a risk level appropriate to the organization
o Improve communication among all stakeholders
o Create a total organization perspective that goes beyond SILO thinking
o Improve overall management of projects over time
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,1.5 Project management today: a socio-technical approach
The technical and sociocultural dimensions of the PM process
Managing a project is a multidimensional process:
The technical ‘science’ dimension of the management process;
Which consists of the formal, disciplined, purely logical parts of the process.
This includes planning, scheduling, and controlling projects
The sociocultural ‘art’ dimension:
involves the much messier, often contradictory and paradoxical world of implementation.
it centers on creating a temporary social system within a larger organizational environment that
combines the talents of a divergent set of professionals working to complete the project
= “a temporary social system with a divergent set of people must be created”
Project managers must shape a project culture
o that stimulates teamwork and high levels of personal motivation as well as;
o a capacity to quickly identify and resolve problems that threatens project work
It also involves managing the interface between the project and external environment
A manager must be a master of both
1.6 Other key terms
Project Management Institute (1969): offers services to project management profession such
as (industry) standards, research, education, networking, advice, publications, etc.
Project Management Professional (PMP): certified since 1984 (ISO 17024), for experts only.
Other certification: Certified Associate in PM or CAPM for graduates.
Body of knowledge: guidelines and best practices (PMBOK Guide 5e 2013)
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,Chapter 2: Organization strategy and project selection
=>Alignment of projects and strategy
Every significant project should have a clear link to the organization’s strategy, since the
organization’s strategy is implemented through these projects.
Strategy is fundamentally deciding how the organization will compete
o Organizations use projects to convert strategy into new products, services and processes
needed for success
o Aligning projects with the strategic goals of the organization is crucial for business success
The larger and more diverse an organization, the more difficult it is to create and maintain a
strong link between the strategic plan and projects
o The result is poor utilization of the organization’s resources- people, money, equipment and
core competencies
o Conversely, organizations that have a coherent link of projects to strategy have more
cooperation across the organization, perform better on projects and have fewer projects
To ensure this link and alignment, integration assumes the existence of a strategic plan and a process
for prioritizing projects by their contribution to the plan.
2.1 Why project managers need to understand the strategic management
process
Project management historically has been preoccupied solely with the planning and execution of
projects. Strategy was considered to be under the purview of senior management. Now there are 2
crucial reasons why project managers need to understand their organization’s mission and strategy:
Project managers must be able to respond to changes in the organization’s mission & strategy
o Make appropriate decisions about future projects
o Make appropriate adjustments to current projects
Project managers should understand their organization’s strategy
o So they can effectively align their projects with the overall mission
o To advocate their projects and demonstrate the contribution of the project to the senior
management
2.2 Problems of not linking projects with strategy
Project managers not understanding the role of projects in accomplishing strategy lead to several
mistakes that lead to a waste of resources (time, effort and money):
Focusing on problems or solutions with low strategic priority
Focusing on an immediate customer, rather than on the whole market place and value chain
Overemphasizing technology that results in projects that do not fit the strategy or customer
need
Trying to solve solving customer issues with a product or service rather than focusing on the 20%
with 80% of the value (Pareto’s law)
Engaging in a never-ending search for perfection only the project team really cares about
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, 2.3 The strategic management process: an overview
Strategic Management requires every project to be clearly linked to the strategy.
SM provides the theme and focus of the future direction of the organization
The 2 major dimensions of SM are responding to changes in the external environment
(environmental scanning) and allocating scarce resources of the firm to improve its competitive
position (internal responses to new programs)
o External environment analysis:
▪ Constant scanning => survival in a dynamic competitive environment
▪ Looking for threats
▪ Searching for opportunities
▪ Responding to changes
o Internal environment analysis
▪ Respond to new internal action programs aimed at enhancing the competitive position
of the firm
▪ Enhance the competitive position by effectively allocating resources
▪ Provide theme and focus to a firm’s future direction
SM requires strong links among the organization’s mission, goals, objectives, strategy and
implementation (on the long term).
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