Project Management Lecture1

8/12/2019 Project Management Lecture1

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PROJECT MANAGEMENT

Asisstant Prof. Dr. Ufuk Kula

ufukkula @gmail.com


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GENERAL INFORMATION

Grading

Homework (4-5) 20%

Project 20%

Midterm 25%

Final 35%

Attendance +5pts (Added to the overall grade)

Reference Books

ANSI/PMI 99-001-2004, A Guide to Project Management Body of Knowledge(PMBOK Guide), Third Edition, Project Management Institute Global Standard.

Meredith, Jack R., Mantel, Samuel J., Project Management- A managerialapproach, Fifth Edition, John Wiley&Sons, Inc., 2003.

Kerzner, Harold, Project Management A systems approach to planning,

scheduling and controlling, Ninth Edition, John Wiley&Sons, Inc., 2006.

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COURSE CONTENTS

1. Introduction to Project Management

2. Project Management Processes

3. Project Integration Management

4. Project Scope Management

5. Project Time Management

6. Project Cost Management

7. Project Risk Management

8. Project Quality Management

9. Project Human Resources Management

10. Project Communications Management

11. Project Procurement Management

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Lecture 1

Introduction to Project Management

What is a project?

What is project management?

Understanding the project environment

Project life cycle

Projectstakeholders and project organization

Project selection

Project management processes and knowledge areas

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Definition of a Project

A project is a temporary endeavor undertaken to

create a unique a product, service or result

(deliverable).

History:

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MilitaryProjects

ConstructionProjects

Automobileand Jet

Manufacturerers

SoftwareProjects


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Definition of a Project Temporary every project has a definite beginning

and a definite end.

Uniqueproducts, service or results

a product: a quantifiable item

a service: a capability to perform a service A result: outcomes or documents

Progressive Elaboration: Developing in steps andcontinuing by increments

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Projects create;


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Why Project Management?

The basic purpose of project management is toaccomplish specific goals

The reason for organizing the task as a project is

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To focus the responsibility and authority for the attainment

of goals on an individual or small group

Lead by the Project Manager (PM)


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Why Project Management

Project Manager (PM) never has the sufficientauthority that matches his/her responsibilty

Organizing a task as a project allows PM to beresponsive to

1. The client and the environment

2. Identify and correct problems early3. Make timely decisions about conflicting project

goals

4. Does not allow suboptimization

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Three Project Objectives

All projects have the same general objectives:

1. Performance (Scope)

2. Time

3. Cost

Remark.A project should not be thought only interms of the outcome (scope)

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Projects vs. Operational Work

Organizational work can be categorized as

Operational work

Projects

The common characteristics of operational workand projects are:

Performed by people Constrained by limited resources

Planned, executed, and controlled

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(temporary and unique)

(ongoing and repetative)


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Examples of Projects

Developing a new product or service

Effecting a change in structure or staffing of an organization

Designing a new transportation vehicle

Developing a new information system

Constructing a building

Running a campaign for political office

Implementing a new business procedure or process

Responding to a contract

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Common Characteristics

of Projects Purpose A project is a one-time activity with a well-defined set of

desired end results

Life Cycle

Projects born, mature, and terminated, i.e. die. ( Just likehumans they resist the death!)

Interdependences

Projects interact with the parent organizations ongoing

operations Uniqueness

Every project has some degree of customization

Conflict

Projects compete for resources and personnel

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Projects and Strategic Management

Projects are a means of organizing activities that cannot be

addressed within the organizations normal operational limits

Projects are typically authorizedas a result of one or

more of the following strategic considerations;

A market demand

An organizational need

A customer request

A technological advance

A legal requirement

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A business strategy defines the path toaccomplish long term company goals

Since strategic plans usually developed at theexecutive levels, some projects are not in linewith the company strategy

When a project is offered ask yourself thequestion:

Does the project serve the long-term companygoals?

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A common challange for companies are How to tie their prjects more closely to the goals

and the strategy How to handle growing number of projects How to make projects more successful

Last two points are aboutproject management

maturity A structered process calledproject portfolio

selection processis used to directly tie projectsto organizations goals and strategy

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What is Project Management?

Project management is the application ofknowledge, skills, tools and techniques toproject activities in order to meet projectrequirements.

Project management is accomplished through the applicationand integration of project management processes.

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What is Project Management? (contd.)

Managing a project includes;

Identifying requirements

Establishing clear and achievable objectives

Balancing the competing demands for quality, scope,

time and cost (project management tradeoffs) Adapting the specifications, plans

Balancing the different expectations of the various

stakeholders.

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Project Management Tradeoffs

Triple constraints of a

project

Scope

Time

SP C

T

Fig. 1.1: Project targets- performance, cost, time

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The Technical and Socio-cultural Dimensions of

Project Management

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Project Environment

The project should be considered in its environmental contexts;

Cultural and social environment

economic, demographic, educational, ethnic, religious aspects of

human characteristics affects/affected by the project

International and political environment

applicable international, national, regional laws, customs regulations,

time-zone differences, national and regional holidays, etc.

Physical environment

local ecology and physical geography

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Project Life Cycle

Projects can be divided into phases to provide bettermanagement control.

Collectively these phases are known as the project life cycle.

Fig. 1.2: Resource level accross the project life cycle

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Project Stakeholders

Project stakeholders are individuals and organizations,

that are actively involved in the project or,

whose interests may be affected as a result of project.

Fig. 1.4. The relationship between project stakeholders and the project

Customers

Organization

Suppliers

Society Environmental

groups

etc.

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Organizational influences

Project will be influenced by the organization that initiated it;

Maturity of the organization with respect to the projectmanagement system

Culture and style

Organizational structure

Project Management Office (PMO)

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Project Selection

Project selection is the process of evaluating projects,

and then choosing to implement one (or sometimes

more), so that the objectives of the parent organizationwill be achieved.

Managers often use decision-aiding models.

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Project Selection (contd.)

Alignment of Projects with Organization Strategy

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Project Selection (contd.)

What are firmssobjectives

Whether the required competence exists in the organization

How profitable the offering is likely to be

How risky the project is

If there is a potential partner to help with the project

If the right resourcesare available at right times

If the project is a good technological/knowledge fitwith the

organization.

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Project Selection Models

2 Basic Types of Models:

1. Numeric

Profit/Profitability,

Scoring

2. Nonnumeric

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Numeric Models: Profit/Profitability

Payback period- initial fixed investment is divided by theestimated annual cash inflows from the project

Average Rate of Return - the ratio of average annual

profit to the average investment in the project

Discounted Cash Flow - Net Present Value Method

Internal Rate of Return - Finds rate of return that equatespresent value of inflows and outflows

Profitability IndexBenefit cost ratio: Net Present Value ofall future expected cash flows divided by initial cash investment

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Numeric Models: Scoring

Unweighted 0-1 Factor Model factors are rated either 0 or 1

Unweighted Factor Scoring Model factors are rated on ascale (eg.1-5)

Weighted Factor Scoring Model numeric weights are addedto the factors, factors are not assumed to be equal importance

Constrained Weighted Factor Scoring Model criteria isadded to the model as constraints which represent project characteristics

that must be present/absent for the project to be acceptable.

Goal Programming with Multiple Objectives avariation of the general linear programming method

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Nonnumeric Models

Sacred Cow- project is suggested by a senior and powerfulofficial in the organization

Operating Necessity- the project is required to keep thesystem running

Competitive Necessity - project is necessary to sustain acompetitive position

Product Line Extension- projects are judged on how they

fit with current product line, fill a gap, strengthen a weak link, orextend the line in a new desirable way.

Comparative Benefit Model- several projects areconsidered and the one with the most benefit to the firm is selected

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Documents

Project Management Lecture1