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Chapter 6
Project Management
Chapter 6Chapter 6
PROJECT MANAGEMENTPROJECT MANAGEMENT
McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.
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Chapter 6
Project Management
LEARNING OBJECTIVES
• Explain the difference between service projects and repetitive service processes.
• Identify the challenges associated with managing projects.
• Describe the activities involved in planning projects.
• Introduce tools that are used to schedule projects.
• Present the tools used to monitor project progress.
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Chapter 6
Project Management
DEFINITION OF PROJECT MANAGEMENT
The planning, scheduling, and controlling of project tasks to meet project objectives, including accomplishing the project’s goal on the defined schedule using the appropriate level of resources.
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Chapter 6
Project Management
MODELS FOR EVALUATING POTENTIAL PROJECTS
• Cost/Benefit Analysis• Net Present Value• Payback Period• Internal Rate of Return• Return on Investment
• Scoring or Ranking Models
• Management Science Models
• Portfolio Management Approach
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Chapter 6
Project Management
Exhibit 6.1PROJECT SCREENING MATRIX
Criterion
WeightStrategic Fit 2 2 3 5 5 1Leverages core competencies 2 5 2 3 2 4Technology advance 3 2 2 5 4 1Improve customer retention 2 5 3 4 2 2Internal leadership availability 1 2 5 5 2 325% contribution 3 1 2 4 5 2TOTAL 35 33 56 47 26
Pro
ject
4 Pro
ject
5Criterion Pro
ject
1 Pro
ject
2 Pro
ject
3
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Chapter 6
Project Management
PROJECT LIFE CYCLE
• Defining the Project’s Goals
• Developing the Detailed Project Plan
• Scheduling the Project
• Launching the Implementing the Project Plan
• Monitoring and Controlling the Project
• Closing out and Evaluating the Project
Six Key Phases
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Chapter 6
Project Management
CRITICAL PROJECT SUCCESS FACTORS
1. Task-Related Variables
2. People-Related Variables
3. Leadership Variables
4. Organizational Variables
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Chapter 6
Project Management
DEVELOPING THE DETAILED PROJECT PLAN
1. Work Breakdown Structure (WBS)
2. Task Responsibility
3. Cost Estimates
4. Uncertainty in Project Estimates
5. Precedence Relationships
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Chapter 6
Project Management
Exhibit 6.2WORK BREAKDOWN STRUCTURE (GRAPHICAL FORM)
Subactivity
Subactivity
Subactivity
Subactivity
Subactivity
Subactivity
Subactivity
Subactivity
Project
Activity ActivityActivity
Subactivity
Subactivity
Subactivity
Work Package
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Chapter 6
Project Management
Exhibit 6.3WORK BREAKDOWN STRUCTURE (TABLE OR OUTLINE FORM)
Project
Activity
Subactivity Level 1
Subactivity Level 2
Subactivity Level 2
Subactivity Level 1
Activity
Subactivity Level 1
Subactivity Level 2
Subactivity Level 2
Work Package
Work Package
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Chapter 6
Project Management
Exhibit 6.5PRECEDENCE TABLE
ActivityActivity Description
Time (days)
Immediate Predecessor
A Remove furniture and draperies
1 none
B Launder draperies
1 A
C Sand walls and woodwork
3 A
D Paint walls and woodwork
4 C
E Install carpet 2 DF Rehang
draperies1 D
G Re-arrange furniture
1 B,E
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Chapter 6
Project Management
Exhibit 6.6NETWORK DIAGRAM FOR RESTAURANT RENOVATION
start
end
A(1)
E(2)
B(1)
D(4)
C(3)
F(1)
G(1)
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Chapter 6
Project Management
LAUNCHING AND IMPLEMENTING THE PROJECT PLAN
1. Teamwork
a. Forming
b. Storming
c. Norming
d. Performing
e. Adjourning
2. Task Work
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Chapter 6
Project Management
MONITORING AND CONTROLLING THE PROJECT
1. MONITORING TIME
2. MONITORING COSTS
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Chapter 6
Project Management
Exhibit 6.7GANTT CHART
Time
Act
ivit
ies
A
B
C
D
E
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Chapter 6
Project Management
KEY TERMS
• Crash Costs• Critical Path• Fast-Tracking• Gantt Chart• Milestones• Network Diagram• Normal Costs• Project Management• Project• Slack Time• Work Breakdown Structure (WBS)
