1The World of Project Management

1/The World of Project Management 1-1 Chapter 1 The World of Project Management This chapter introduces the topic of project management. Projects are defined as temporary endeavors undertaken to create a unique product or service. The chapter points out that recent interest in project management is based on a recognition that many organizational tasks do not fit neatly into business-as-usual. The significant differences between project management and general management are overviewed. The chapter points out that the two primary roles of the project manager are managing trade-offs among the three interrelated project objectives and managing risk. The three interrelated objectives of budget, schedule, and specifications are also introduced. In addition, two alternative project life cycles are presented and the importance of understanding this distinction is discussed. Also included in the chapter is a discussion of project selection including both non-numeric and numeric selection methods. Section 1.3 has been added to introduce Agile Project Management (APM).Included in this section are discussions of why APM was developed, the Agile Manifesto and 12 Agile Principles, and an introduction to scrum. The chapter concludes with a discussion of the aggregate project plan and an overview of the organization of the remainder of the text.Cases and Readings

Some cases appropriate to the subject of this chapter are:

Harvard: 9-688-040 Boeing 767: From Concept to Production (A); 9-688-041 (B) 9-888-519 Videotape. This 19 page best-selling case shows how a massive corporation manages the evolution of an enormously complex and risky project from conception to manufacture. The 1- page B case is a supplement update about whether Boeing needs to change the way they manage such projects. The video shows the assembly process of an airplane, compressing 10 weeks of work into ten minutes. Good introductory case to the idea of large-scale projects. An 18 page teaching note is available for this case (9-689-027).Harvard: 9-396-311 BAE Automated System (A): Denver International Airport Baggage- Handling System. This 15-page case describes the difficult, continually-delayed Denver airport project from the viewpoint of one of the contractors. Includes issues of budgeting, scheduling, planning, contracting, and other managerial aspects of this large project. There is also a (B) case, described in Chapter 7: Monitoring and Controlling the Project. A 32 page teaching note is available for this case (5-399-099).Harvard: 9-692-083 BMW: The 7-Series Project (A); 9-695-013 (B). This 20-page best-selling case describes the situation of a manufacturer with a high-quality product trying to select among two processes for producing its new model. The proposed project for initiating a new production process promises to eliminate start-up production problems and improve quality Project Management in Practice, 7e Meredith, Shafer, Mantel, Sutton (Solutions Manual All Chapters, 100% Original Verified, A+ Grade) 1 / 4

1/The World of Project Management 1-2 but may be less flexible for downstream product improvements. A 13 page teaching note is available for this case (5-692-094).Harvard: 9-689-073 Plus Development Corp. (B) (Abridged); 9-693-064 (C). These two cases, normally meant to follow the (A) case (see Chapter 2), describe the need for this corporation to select between alternative methods of product development.The situation is exacerbated by competitors’ aggressive actions in the market and mixed results with current development procedures. A 21 page teaching note is available(5-690-093).

Some readings appropriate to the subject of this chapter are:

J.K. Pinto et al. Lessons for an Accidental Profession (Business Horizons, March-April 1995).This reading describes the common occurrence of someone suddenly being appointed a project manager and finding he or she has been inadequately trained for the task. Based on the authors’ own experiences and interviews with dozens of senior project managers, they distill twelve guidelines for new project managers. The guidelines run the gamut from project initiation, through planning, to execution, to close-out. Some are technical, some are uncommon sense, and many are philosophical, and sometimes political. But they are sage advice, not only for the novice but for the experienced project manager as well.

1.Cooke-Davies (2002). The real success factors on projects (International Journal of Project Management, vol. 20, #3, pp 185-190).This reading uses three questions to question on which factors are critical to project success. The questions are: ‘‘What factors lead to project management success?’’, ‘‘What factors lead to a successful project?’’ and ‘‘What factors lead to consistently successful projects?’’ This paper is based on empirical research from more than 70 large multi-national or national organizations It i identifies 12 factors that are, in one way or another, critical to project success.

2.Thomas, G & Fernández, W. (2008), Success in IT projects: A matter of definition?(International Journal of Project Management, 26, 733-742). This reading investigates how project management success is defined and measured within companies in different industries. The study was done in Australia and provides an international perspective on project success. The authors suggest that when success criteria are formally defined and then measured, IT project outcomes are improved and project resources are better utilized. 2 / 4

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Answers to Review Questions

• What is the primary role of a project manager? How are the primary roles related to one

another?

The primary roles of the project manager are managing the tradeoffs among the three project goals (cost, scope, time) and managing risk. The primary roles are related to one another in that to some extent they can be traded-off for one another. For example, managing risk is about managing uncertainty. One uncertainty is whether the project will be completed on time. One way to manage the uncertainty associated with the project being completed on time is to pad the project due date.

• Contrast a project from a nonproject.

The difference between a project and a nonproject is not always crystal clear. At base, however, projects are unique, have a specific deliverable, and have a specific due date while nonprojects usually do not have all these characteristics.

• Contrast win-lose negotiation, lose-lose negotiation and win-win negotiation and explain

why the latter is so important in project management.

Win-lose negotiation is like a zero-sum game. Anything one side wins is a loss for the other side. In win-win negotiation, the outcome is such that both parties gain something from the interchange.

Win-lose negotiating is dangerous for project managers who will have to deal with the same parties over and over again. The project manager who forces a functional manager to lose will have created a permanent enemy.

• Identify the three goals of a project. What does it mean for a project to be

“overdetermined?”

The three goals of a project are:

• On time,
• On budget, and
• To specification (i.e., including “quality” and “client satisfaction”).

An overdetermined project is one that has a fixed budget, fixed delivery time, and fixed specifications (i.e., all three goals are fixed). In reality, projects must have some flexibility to allow for chance events. In the case of an overdetermined project, there is no allowance for any such events. 3 / 4

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• Contrast the two types of project life cycle and discuss why it is important to know which

type the current project is following.

The traditional project life cycle (the S-shaped curve) is concave to the baseline during the last stages in the project life (i.e., the curve runs parallel to the x-axis). Some projects, however, have a life cycle curve that is convex to the baseline at the end of the project life (i.e. the curve runs parallel to the y-axis). This is known as a J-shaped curve).

The main reason one should understand the difference is that resource allocation for the two types is quite different. (Cf. Chapters 4 and 6.)

• How does the weighted scoring approach avoid the drawbacks of the NPV approach? Can

the two approaches be combined? How? What weights would be appropriate if they were combined?

The weighted scoring model allows the introduction of nonmonetary and even qualitative elements into the selection criteria. It also allows long-run benefits and risks to be considered.

The two approaches can be combined by including NPV as a criterion in the scoring model.Criteria weights are always selected with the approval of the organization’s senior policy makers, but typically the weight on NPV will be quite high if not the highest.

• Why is it suggested that factors with less than 2 percent or 3 percent impact not be

considered in this approach?

Dealing with criteria with such small impact on the final choice uses considerable amount of the decision makers’ time and effort and contributes little to the choice.

• Draw a distinction between a project and a program. Why is the distinction important?

A program is a large generalized effort consisting of a coherent, often integrated set of projects.

The distinction is important because to accomplish a program, it is critical to manage its constituent projects so that they make an optimum contribution to the overall program.This is the basic principal behind the creation of a “project portfolio.”

• Why are R&D projects in a company’s Aggregate Project Plan significantly different in type

from the firm’s Derivative, Breakthrough, and Platform projects?

R&D projects seek to develop new knowledge which hopefully will become the basis for one or more of the other three types of projects: breakthrough, platform, and derivative.

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