Copyright 2008 Introduction to Project Management, Second Edition 2 1. Understand the growing need for better project, program, and portfolio management

Copyright 2008Introduction to Project Management, Second Edition 2

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

2. Explain what a project is, provide examples of projects, list various attributes of projects, and discuss the triple constraint of project management

3. Describe project management and key elements of the project management framework, including project stakeholders, project management knowledge areas, common tools and techniques, and project success factors

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

5. Describe the project management profession, including suggested skills for project, program, and portfolio managers, the role of professional organizations such as the Project Management Institute, the importance of certification and ethics, and the growth of project and portfolio management software

3Introduction to Project Management, Second Edition

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Many organizations today have a new or renewed interest in project management.◦The U.S. spends $2.3 trillion on projects every

year, or one-quarter of its gross domestic product, and the world as a whole spends nearly $10 trillion of its $40.7 gross product on projects of all kinds.*

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

◦Project management certification is popular worldwide.

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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 Project Management, Second Edition

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A 1995 Standish Group study (“The CHAOS Report”) found that only 16.2 percent of information technology (IT) application development projects were successful in meeting scope, time, and cost goals. Over 31 percent of the projects were canceled before completion, costing over $81 billion in the U.S. alone.

A 2004 PricewaterhouseCoopers study of 200 companies from 30 different countries found that over half of all projects fail.


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Better control of financial, physical, and human resources

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 undertaken to create a unique product, service, or result.”*

Operations is work done to sustain the business.

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

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


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

A college campus upgrades its technology infrastructure to provide wireless Internet access.

A group of musicians starts a company to help children develop 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 other feedback on programs.

A government group develops a program to track child immunizations.


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A project:◦Has a unique purpose.◦ Is temporary.◦ Is developed using progressive elaboration or in an

iterative fashion.◦Requires resources, often from various areas.◦Should have a primary customer or sponsor.

The project sponsor usually provides the direction and funding for the project.

◦ Involves uncertainty.


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Every project is constrained in different ways by its:◦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 project’s schedule?

◦Cost: What should it cost to complete the project? What is the project’s budget?

It is the project manager’s duty to balance these three 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 bull’s-eye.

It’s 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 of knowledge, skills, tools, and techniques to project activities to meet project requirements.”*




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Stakeholders are the people involved in or affected 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 project objectives.◦ Project scope management involves defining and managing

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

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

◦ Project cost management consists of preparing and managing the budget for the project.

◦ Project quality management ensures 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 through which the project objectives are achieved. ◦ Project human resource management is concerned with

making effective use of the people involved with the project.◦ Project communications management involves generating,

collecting, disseminating, and storing project information.◦ Project risk management includes identifying, analyzing,

and responding to risks related to the project.◦ Project procurement management involves 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 project managers and their teams in various aspects of project management.

Note that a tool or technique is more than just a software package.

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 value

management (cost)◦ See Figure 1-4 for more examples




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“Super tools” are those tools that have high use and 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 been found to improve project importance include:◦Progress reports◦Kick-off meetings◦Gantt charts◦Change requests


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What Went Right? Improved What Went Right? Improved Project Performance*Project Performance*

The Standish Group’s CHAOS studies show improvements in IT projects in the past decade

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Measure 1994 Data 2006 Data ResultSuccessful Projects 16% 35% More than doubledFailed Projects 31% 19% Almost halvedMoney 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,” CHAOS Activity News, vol. 2: issue 1, (2007).


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“The reasons for the increase in successful projects vary. First, the average cost of a project has been more than cut in half. Better tools have been created to monitor and control progress and better skilled project managers with better management processes are being used. The fact that 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 project success:◦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 from managing them individually.”*

A program manager provides leadership and direction for the project managers heading the projects within the program.

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Project portfolio management is an emerging business strategy in which organizations group and manage projects and programs as a portfolio of investments that contribute to the entire enterprise’s success.

Pacific Edge Software’s product manager, Eric Burke, defines project portfolio management as “the continuous process of selecting and managing the optimum set of project initiatives that deliver maximum business value.”*

*Eric Burke, “Project Portfolio Management,” PMI Houston Chapter Meeting (July 10, 2002).



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Project, program, and portfolio managers need to develop specific skills.

Certification is available for project managers.

There are many software tools to assist in project, 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 and professionalism are crucial.

Know what your sponsor expects from the project, and learn from your mistakes.

Trust your team, and delegate decisions.

Know the business. Stand up for yourself.

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Be a team player. Don’t be overly emotional

and stay organized. Work on projects and for

people you believe in. Think outside of the box. Some luck is involved in

project management, and you should always aim high.


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Effective project managers provide leadership by example.

A leader focuses on long-term goals and big-picture objectives while inspiring people to reach those goals.

A manager deals 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 prior experience, planning, people skills, verbal communication, and team-building skills are most important

High uncertainty projects: risk management, expectation management, leadership, people skills, and planning skills are most important

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


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Program managers normally have experience as project managers. They often rely on their past experience, strong business knowledge, leadership capability, and communication skills to manage programs.

Portfolio managers must have strong financial and analytical 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 Butrick suggests that organizations need to follow basic principles of project management, including these two mentioned earlier 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 out unwanted 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 encourage teamwork and commitment at all times. Use leadership and open communications 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 World’s Foremost Business Thinkers, Perseus Publishing (2003).


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PMI provides certification as a Project Management Professional (PMP).

A PMP has documented sufficient project experience, agreed to follow a code of ethics, and passed the PMP exam.

The number of people earning PMP certification is increasing 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; cost

under $200 per user.◦ Midrange tools: Handle multiple projects and users; cost

$200-600 per user; Microsoft Project is the most popular (this text 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 VPMi Express and Professional (www.vcsonline.com); see front cover for trial version information.

Project 2007 includes a standard and an enterprise version. See the Guide to Using Microsoft Project 2007 in Appendix A for details.



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

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

A program is a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.

Project portfolio management involves organizing and managing projects and programs as a portfolio of investments that contribute to the entire enterprise’s success.

The project management profession continues to grow and mature.


Documents

Copyright 2008 Introduction to Project Management, Second Edition 2 1. Understand the growing need for better project, program, and portfolio management