Information Technology Project

Management – Fifth Edition

By Jack T. Marchewka
Northern Illinois University

4-1 Copyright 2015 John Wiley & Sons, Inc.

 Project Planning: The Project
Infrastructure
Chapter 4

4-2 Copyright 2015 John Wiley & Sons, Inc.

Learning Objectives
 Describe the planning phase of the project life cycle
(PLC)
 Define the project’s infrastructure.
 Describe project governance and its role.
 Understand the roles of the project manager and how
the project team is selected.
 Understand how a project acquires both internal and
external resources.
 Understand and describe the project environment.
 Describe three general categories for procurement-
type contracts.
 Develop a project charter and understand its
relationship to the project plan.
4-3 Copyright 2015 John Wiley & Sons, Inc.
Introduction
 The Project Planning Phase Attempts to Answer the
Following Questions:
 What work needs to be done?
 Who will do the work?
 What resources will be needed to do the work?
 When will they do the work?
 How long will it take?
 How much will it cost?
 Does the time, money, and resources invested support the
project’s MOV?

4-4 Copyright 2015 John Wiley & Sons, Inc.

Introduction (continued)
 Project’s have…
 An Infrastructure
 A Governance structure
 Required Resources (must be obtained)
 A Project Charter

4-5 Copyright 2015 John Wiley & Sons, Inc.

Figure 4.1 – The Project Infrastructure

4-6 Copyright 2015 John Wiley & Sons, Inc.

Project Governance
 Should flow from organizational governance
 Provides a framework to ensure that a project aligns with
a chosen business strategy while ensuring that the time,
money, and resources provide real value to the
organization.
 Projects governance must define:
 Structure
 Authorization
 Oversight and Accountability
 Decision Making
 Resources

4-7 Copyright 2015 John Wiley & Sons, Inc.

Figure 4.2 Project Governance

4-8 Copyright 2015 John Wiley & Sons, Inc.

The Project Team
 The Roles of the Project Manager
 Managerial role
 Leadership role
 Attributes of a successful project manager
 ability to communicate with people
 ability to deal with people
 ability to create and sustain relationships
 ability to organize
 The Project Team
 Technology Skills
 Business/organization knowledge
 Interpersonal skills

4-9 Copyright 2015 John Wiley & Sons, Inc.

 The Formal Organization

 Formal groupings & specializations

 Published Lines of
 Authority
 Responsibilities
 Reporting Relationships
 Communication
 Decision-Making

4-10 Copyright 2015 John Wiley & Sons, Inc.

Figure 4.3 – The Organization and Project
Resources

4-11 Copyright 2015 John Wiley & Sons, Inc.

 The Functional Organization

 Advantages  Disadvantages
 Increased Flexibility  Determining Authority
 Breadth & Depth of & Responsibility
Knowledge &  Poor Response Time
Experience  Poor Integration
 Less Duplication

4-12 Copyright 2015 John Wiley & Sons, Inc.

 The Project-Based Organization

 Advantages  Disadvantages
 Clear Authority &  Project Isolation
Responsibility  Duplication of Effort
 Improved  “Projectitis”
Communication
 High Level of
Integration

4-13 Copyright 2015 John Wiley & Sons, Inc.

 The Matrix Organization

 Advantages  Disadvantages
 High Level of  Higher potential for
Integration conflict
 Improved  Team members may
Communication wonder “Who’s my
boss?”
 Increased Project Focus
 Poorer Response Time

4-14 Copyright 2015 John Wiley & Sons, Inc.

Table 2-1: Organizational Structure Influences on
Projects
Project Organizational Structure Type
Characteristics
Functional Matrix Project
Weak Matrix Balanced Strong
Matrix Matrix
Project manager’s Little or none Limited Low to Moderate High to
authority Moderate to high almost total
Percent of Virtually none 0-25% 15-60% 50-95% 85-100%
performing
organization’s
personnel assigned
full-time to project
work
Who controls the Functional Functional Mixed Project Project
project budget manager manager manager manager
Project manager’s Part-time Part-time Full-time Full-time Full-time
role
Common title for Project Project Project Project Project
project manager’s Coordinator/ Coordinator/ Manager/ Manager/ Manager/
role Project Leader Project Project Program Program
Leader Officer Manager Manager
Project management Part-time Part-time Part-time Full-time Full-time
administrative staff
PMBOK Guide, 2000, 19, and PMBOK Guide 2004, 28.
Information Technology Project Management,
15 Fifth Edition, Copyright 2007
Procuring External Project Resources
 Project resources can be internal or externally acquired.
 The decision depends on
 The project scope
 Availability of the products and services in the marketplace
 Cost
 Quality
 Terms and Conditions
 Experience and skills of the project team
 Similar to a “make” or “buy” decision
 Business process outsourcing, including offshoring, is one
option for acquiring external resources

4-16 Copyright 2015 John Wiley & Sons, Inc.

Figure 4.4 – The Project Outsourcing Model

4-17 Copyright 2015 John Wiley & Sons, Inc.

Procurement Planning
 Begins by determining which project needs can be
fulfilled internally or externally by the project team
 Focuses on not only what can best be filled internally
or externally, but
 How
 When
 How Many
 And Where these products or services will be acquired
 A Request for Proposal (RFP) may be developed and
used to solicit bids, quotes, or proposals for services or
goods from prospective sellers.
4-18 Copyright 2015 John Wiley & Sons, Inc.
Contracts Between Sellers and Buyers

 Once a seller is selected, the buyer may enter into

contract negotiations so that a mutual agreement can
be reached
 A contract is a document signed by the buyer and
seller that defines the terms and conditions of the
buyer-seller relationship. IT serves as a legally
binding agreement that obligates seller to provide
specific products, services, or even results, while
obligating the buyer to provide specific monetary or
other consideration.

4-19 Copyright 2015 John Wiley & Sons, Inc.

General Categories of Procurement-type
Contracts

 Fixed-Price or Lump-Sum Contracts

 A total or fixed price is negotiated or set as the final
price for a product or service
 May include incentives for meeting certain
performance objectives or penalties if those
objectives are not met

4-20 Copyright 2015 John Wiley & Sons, Inc.

Categories for Procurement-Type Contracts
 Cost-Reimbursable Contracts
 Payment or reimbursement is made to the seller to cover the
seller’s actual direct costs (i.e., labor, materials, etc.) and
indirect costs (i.e., admin. salaries, rent, utilities, etc.)
 May include incentives for meeting certain objectives or
penalties if those objectives are not met
 Types
 Cost-Plus- Fee (CPF) or Cost-Plus-Percentage (CPPC)
 Cost-Plus-Fixed-Fee (CPFF)
 Cost-Plus-Incentive-Fee (CPIF)

4-21 Copyright 2015 John Wiley & Sons, Inc.

Types of Cost-Reimbursable Contracts
 Cost-Plus-Fee (CPF) or Cost-Plus-Percentage Cost (CPPC)
 The seller is paid for the costs incurred in performing the work as well as
a fee based upon an agreed on percentage of the costs
 Cost-Plus-Fixed-Fee (CPFF)
 The seller is reimbursed for the total direct and indirect costs of doing the
work, but receives a fixed amount that does not change unless the projec
t’s scope changes
 Cost-Plus-Incentive-Fee (CPIF)
 The seller is reimbursed for the costs incurred in doing the work and
receives a predetermined fee plus an incentive bonus for meeting certain
objectives

4-22 Copyright 2015 John Wiley & Sons, Inc.

Categories for Procurement-Type Contracts
 Time and Materials (T&M) Contracts
 A hybrid of cost-reimbursable and fixed-price contracts
 The buyer pays the seller for both the time and materials
required to complete the work
 Resembles a cost-reimbursable contract because it is open-ended and
full cost of project is not predetermined
 But can resemble a fixed-price contract if unit rates are set

4-23 Copyright 2015 John Wiley & Sons, Inc.

The Project Environment
 A place to call home
 Technology
 Office supplies
 Culture
 What is expected from each team member?
 What role will each team member play?
 How will conflicts be resolved?

4-24 Copyright 2015 John Wiley & Sons, Inc.

The Project Charter
 Serves as an agreement and as a communication tool for
all of the project stakeholders
 Documents the project’s MOV
 Defines the project’s infrastructure
 Summarizes the details of the project plan
 Defines the project’s governance structure
 Shows explicit commitment to the project

 See Figure 4-5 (next slide) for the typical areas of a

project charter

4-25 Copyright 2015 John Wiley & Sons, Inc.

What is a Project Charter?
 An informal contract between the project team and the
sponsor
 A contract
 is an agreement entered into freely by two or more parties.
 cannot arbitrarily be changed
 offers something of value for each party
 is a living document that can evolve with changing conditions if
both parties agree and receive something of value for making
the change
What is a Project Charter?
 Signing a charter represents the transition from the project
initiating stage into the project planning stage
Why is a Project Charter used?

 The four major purposes for a charter are to:

1. authorize the project manager to proceed
2. help the project team and sponsor develop a
common understanding
3. help the project team and sponsor commit
4. quickly screen out obviously poor projects
 1. Authorize the project manager to
proceed
 The project charter authorizes the commitment of
resources to a project
 The project charter gives the project and the project
manager official status within the parent organization.

Project
Projectcharter
charter––“authorizes
“authorizesthe
theproject
project…
…and
andprovides
providesthetheproject
project
manager
managerthe
theauthority
authorityto
toapply
applyresources
resourcesto
toproject
projectactivities.”
activities.”
PMBOK®
PMBOK®Guide
Guide
 2. Common understanding
 Benefits associated with the common understanding
include:
 Teamwork develops.
 Agreement, trust, communication, and commitment between
the sponsor, project manager, and project team develop
 The project team does not worry if management will accept a
decision.
 The sponsor is less likely to unilaterally change the original
agreement.
 What is a preliminary scope statement?
 An elaboration on the charter
 For small projects, the preliminary scope statement may
be part of the project charter
 For large projects, the scope statement and project charter
are distinct documents

Project
Projectscope
scopestatement
statement––“a
“adefinition
definitionof
ofthe
theproject
project……documents
documents
the
thecharacteristics
characteristicsand
andboundaries
boundariesofofthe
theproject
projectand
andits
itsassociated
associated
products
productsand
andservices,
services,as
aswell
wellas
asmethods
methodsof ofacceptance
acceptanceandandscope
scope
control.”
control.”PMBOK®
PMBOK®GuideGuide
Figure 4.5 A Project Charter Template

4-32 Copyright 2015 John Wiley & Sons, Inc.

Table 3-5. Sample Project Charter
Table 3-5. Sample Project Charter
(continued)