Project Management

A Managerial Approach
Project Management
A Managerial Approach

Chapter 1: Projects in
Contemporary Organizations
Projects in Contemporary
Organizations
 The definition of a “project”
 Why project management?
 The project life cycle
 The structure of this text

Chapter 1-1
Projects in Contemporary
Organizations
 Project Management has emerged
because the characteristics of our turn-of-
the-century society demands the
development of new methods of
management
 Many forces have fostered the emergence
and expansion of Project Management
Chapter 1-1
Forces Of Project
Management
 3 Paramount Forces driving Project
Management:
 1. The exponential expansion of human knowledge
 2. The growing demand for a broad range of complex,
sophisticated, customized goods and services
 3. The evolution of worldwide competitive markets for the
production and consumption of goods and services
 All 3 forces combine to mandate the use of
teams to solve problems that used to be
solvable by individuals
Chapter 1-2
Objectives of a Project
 Project Objectives:
 Performance
 Time
 Cost
 Expectations of clients are not an
additional target, but an inherent part of
the project specifications

Chapter 1-3
Objectives of a Project

 Project Objectives:

Chapter 1-4
The Professionalism of
Project Management
 Complexity of problems facing the project manager
 Growth in number of project oriented organizations
 The Project Management Institute (PMI) was established in 1969
 By 1990 it had 7,500 members
 5 years later, over 17,000 members
 And by 1998, it had exploded to over 44,000 members
 This exponential growth is indicative of the rapid growth
in the use of projects
 Also reflects the importance of PMI as a force in the
development of project management as a profession

Chapter 1-5
Project Management
Institute

Chapter 1-6
Recent Changes in
Managing Organizations
 The process of managing organizations has been
impacted by three revolutionary changes
 1. Accelerating replacement of traditional, hierarchical
management by participatory management
 2. Currently witnessing the adoption of the “systems
approach” (sometimes called “systems engineering”)
 3. Organizations establishing projects as the preferred
way to accomplish the many specific changes that
must be made when the organization attempts to alter
its strategy

Chapter 1-7
The Definition of a
“Project”

 Must make a distinction between terms:

 Program - an exceptionally large, long-range
objective that is broken down into a set of projects
 Task - set of activities comprising a project
 Work Packages - division of tasks
 Work Units - division of work packages

 In the broadest sense, a project is a specific,

finite task to be accomplished

Chapter 1-8
Characteristics of a
Project

 Have a purpose
 Have a life cycle
 Interdependencies
 Uniqueness
 Conflict

Chapter 1-9
Why Project Management?
 Companies have experienced:
 Better control
 Better customer relations
 Shorter development times
 Lower costs
 Higher quality and reliability
 Higher profit margins
 Sharper orientation toward results
 Better interdepartmental coordination
 Higher worker morale
Chapter 1-10
Why Project Management?
 Companies have also experienced some
negatives:
 Greater organizational complexity
 Increased likelihood of organizational policy
violations
 Higher costs
 More management difficulties
 Low personnel utilization
Chapter 1-11
The Project Life Cycle

 Stages of a Conventional Project:

 Slow beginning
 Buildup of size
 Peak
 Begin a decline
 Termination

Chapter 1-12
The Project Life Cycle

Chapter 1-13
The Project Life Cycle
 Time distribution of project effort is characterized by
slow-rapid-slow

Chapter 1-14
The Project Life Cycle

 Other projects also exist which do not

follow the conventional project life cycle
 These projects are comprised of subunits
that have little use as a stand alone unit,
yet become useful when put together

Chapter 1-15
The Project Life Cycle
 Unlike the more conventional life cycle, continued inputs of effort at
the end of the project produce significant gains in returns

Chapter 1-16
The Project Life Cycle

 It is essential for the Project Manager to

understand the characteristics of the life
cycle curve for his project

 The distinction between the two life cycles

plays a critical role in the development of
budgets and schedules for the project
Chapter 1-17
The Project Life Cycle

 Risk during project life cycle

 With most projects there is some uncertainty
about the ability to meet project goals
 Uncertainty of outcome is greatest at the
start of a project
 Uncertainty decreases as the project moves
toward completion

Chapter 1-18
Risk During Project Life
Cycle
 Uncertainty decreases as the project moves toward
completion

Chapter 1-19
Summary

 The three primary forces behind project

management are:
 1. The growing demand for complex,
customized goods and services
 2. The exponential expansion of human
knowledge
 3. The global production-consumption
environment

Chapter 1-22
Summary
 The three prime objectives of project
management are:
 1. To meet specified performance
 2. To do it within specified costs
 3. Complete on schedule

 Terminology follows in this order:

program, project, task, work package,
work unit
Chapter 1-23
Summary
 Projects are characterized by a singleness
of purpose, a definite life cycle, complex
interdependencies, some or all unique
elements, and an environment of conflict

 Project management, though not

problem-free, is the best way to
accomplish certain goals
Chapter 1-24
Projects in Contemporary
Organizations
 The definition of a “project”
 Why project management?
 The project life cycle
 The structure of this text

Chapter 1-1
Project

 Must make a distinction between terms:

 Program
 Task
 Work Packages
 Work Units
 In the broadest sense, a project is a specific,
finite task to be accomplished

Chapter 1-8
Characteristics of a
Project

 Have a purpose
 Have a life cycle
 Interdependencies
 Uniqueness
 Conflict

Chapter 1-9
Why Project Management
 Project Objectives:
 Performance
 Time
 Cost
 Expectations of clients are not an
additional target, but an inherent part of
the project specifications

Chapter 1-3
Project Life Cycle
 Time distribution of project effort is characterized by
slow-rapid-slow

Chapter 1-14
Structure
 Initiation: 2-5
 Strategic Management and Project Selection
 The Project Manager
 Managing Conflict and the Art of Negotiation
 The Project in the Organizational Structure
 Planning: 6-9
 Activity and Risk Planning
 Estimating Costs and Risks
 Scheduling
 Resource Allocation
 Execution: 10-13
 Monitoring and Information Systems
 Control
 Auditing
 Termination
Chapter 1-3