Project Management Concepts, Methods, and Techniques

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1 Project Management Concepts, Methods, and Techniques Claude H. Maley Uffi\ CRC Press Taylor & Francis Croup Boca Raton London New York CRC Press is an imprint of the Taylor & Francis Croup, an Informa business INTERNATIONAL AN AUERBACH BOOK an informa business

2 Contents Preface Claude H. Maley xxiii xxvii Chapter 1 Introduction to Project Management Chapter Overview Projects and the Business Environment Key Project Management Concepts Terminology Characteristics of Projects Projects in the Business Environment Strategic and Tactical Projects Projects and Programs The Life Cycle What Is a Life Cycle? The Product Life Cycle The Project Development Life Cycle Characteristics of Project Phases Project Governance Overview The Project Board The Sponsor Strategies for Effective Governance in Projects Business Drivers and Business Needs Establishing the Business Needs and Initial Scope The Business Case Achieving Business Alignment The Project Proposal and t Proposed Solution The MOST Model Project Stakeholders 20

3 vi Contents 1.6 The Triple Constraint Definition Extended Issues to the Triple Constraint Business Benefit Scope Risk Cost Time Quality The Project Manager's Role and Responsibilities The Project Manager Project Manager Job Description Project Managers Palette of Skills Organization and Management Technical (Subject Matter Expertise) People and Communication Administration Project Organizations Organizational Needs Organizational Challenges Factors in Designing a Project Structure Corporate Organizational Structure Factors to Consider Types of Project Organizations Functional Organization Project Based (Projectized) Matrix Organization PMI Body of Knowledge PMI: Nine Knowledge Areas PMI: Process Groups Mapping Processes to Knowledge Areas 44 Chapter 2 Project Initiation Chapter Overview Project Origination Origins of Projects 47

4 Contents vii Enabling Documents The Business Case Project Selection Projects and Project Portfolio Management Aligning the Project to the Organizational Strategy Selection and Prioritization of Projects Quantitative and Qualitative Methods Present Value Net Present Value Benefit-Cost Ratio (BCR) Internal Rate of Return (IRR) Payback Period Return on Investment (ROI) Project Initiation Approval to Proceed Decision on Project Launch: The Project Charter Project Initiation Phase Kick-Off Meeting Project Governance after Launch The Project Steering Committee Decision-Makers Key Internal Stakeholders Stakeholders Stakeholder Management Stakeholder Analysis Identify Project Stakeholders Identify Stakeholders' Interests Assess Stakeholders for Importance and Influence Outline Assumptions and Risks Define Stakeholder Participation Stakeholder Communication Plan Pragmatism with Stakeholders. ( Project Requirements." Scope Management Specification of Scope Management of Scope Changes Verification of Scope 84

5 viii Contents Specification of Scope Key Documents Needs Assessment Functional Requirements Solution Design Impact on the Project Scope Assumptions and Constraints Management of Scope Changes Verification of Scope Role of the Project Manager Project Manager Formal Assignment Organizational Structures Project Core Team Allocation Engaging the Organization 94 Chapter 3 Project Planning Chapter Overview Synopsis and Approach Challenges to Project Planning The Project Planning Environment Establishing the Project Core Team The Key Planning Steps Finalizing the Project Scope Statement Finalizing the Project Objectives Work Breakdown Structure Estimation Precedence Analysis Scope Development Product Scope Development Finalizing Needs Analysis Developing Requirements Ill Finalizing the Design Ill Project Scope Development f Managing Unknowns in the Project Scope Missing Data Unqualified Statements Language Issues 114

6 Contents ix Resolving and Answering Unknowns Constituents of the Project Scope., The Work Breakdown Structure WBS Levels Team Dynamics in WBS Seeking Granularity of Work Packages Techniques for Building the WBS Different Representations of the WBS Graphical : Tabular Numbering Systems Case Study: Develop the Project s WBS Estimating Underlying Principles Understanding Estimating Inaccuracy Incorporating Assumptions and Risks Differentiating between Estimating and Costing Assessment of Resources That Drive Duration and Cost Selecting the Work Packages to Be Estimated Time Units for Duration Estimation Identifying Resource Profiles Human Resources Material Resources Equipment Resources Understanding the Nature of the Work to Be Estimated Linear Productivity Variable Productivity v Estimating Techniques Analogy Parametric Subject Matter Experts Vendor Bids 142

7 x Contents Grass-Root PERT Probabilistic Additional Estimation Allowances Escalation Contingency Indirect Costs to Consider Precedence Analysis Determining the Sequence of Work Packages The Activity-on-Arrow Network The Activity-on-Node Network Case Study Case Study Introduction Case Study Scope of Work Case Study Major Deliverables Case Study Key Information and Data Sub-Project LZB-Sales Specifics Chapter 4 Project Scheduling Chapter Overview Scheduling Overview Activity Networks Determining the Sequence of Work Packages Building the Precedence Chart of Activities The Activity-on-Node Network Types of Activity Relationships Finish-to-Start Relationships Start-to-Start Relationships Finish-to-Finish Relationships The Use of Start-to-Finish Relationships Hammock Relationships! Lags and Leads Lags Leads 167

8 Contents xi Forward and Backward Passes Forward Pass Backward Pass Calculating Float (Slack) Total Float Free Float Implication of Float Determining the Critical Path Optimization of the Activity Network Building the Activity Network Exercise Building the Gantt Chart Establishing the Project Calendar Meeting the Schedule Constraints Activity-Driven Schedule Resource-Driven Schedule Trade-Off Analysis Crashing Fast-Tracking Drafting the Milestone Schedule Building the Gantt Chart Exercise Building the Cost Estimate Establishing the Project Cost and Funding The Cumulate Cost Curve Resource Management Resource Planning Techniques Resource-Loading Table and Histogram Resource Leveling Resource Allocation Resource Provider Commitments Roles and Responsibilities RACI Chart Project Communication Plan Establishing the Stakeholder, Communication Map...~ Determining Information Contents Selecting the Appropriate Communication Media 194

9 xii Contents Drafting the Communication Plan Determining the Types of Meetings and Their Agendas Meeting Types Meeting Planning Framework Meeting Agendas Consolidating the Project Plan Assembling the Project Plan Establishing the Baseline Baseline Approval 201 Chapter 5 Risk Management Chapter Overview Risk Management Synopsis The Risk Management Environment Uncertainty and Unknowns Assumptions Factors That Govern Control and Lack of Control of Risk Events Internal Risk Events External Risk Events Exercise Influences on Your Current Project Terminology Risk Event Uncertainty Threats and Opportunities Probability Impact Vulnerability and Potential Risks Vulnerability Risks Establishing Confidence Criteria Scoring Vulnerability Establishing Confidence Tertilp for the Project Determining Confidence Levels Example Vulnerability/ Confidence Potential Risks 211

10 Contents xiii 5.5 The Risk Management Process Risk Management Planning Risk Identification, Techniques to Identify Risks Checklist Brainstorming Nominal Group Technique Analogy Technique Delphi Technique Exercise Risk Identification Risk Assessment/Analysis Potential Risks Using the Potential Risk Assessment Form Special Consideration in Risk Assessment/Analysis Narrative Risk Assessment/ Analysis Qualitative Risk Assessment/ Analysis Quantitative Risk Assessment/ Analysis Expected Monetary Value (EMV) Decision Trees Exercise Risk Analysis Risk Ranking/Prioritizing Ranking by Paired Analysis Risk Response Planning Risk Response Planning for Threats Risk Response Planning for Opportunities Risk Reserves Risk Monitoring and Control Early Warning Mechanism Risk Tracking and Status Risk Evaluation Risk Documentation Documentation Process Glossary of Terms 241

11 xiv Contents Chapter 6 Procurement Management Chapter Overview Project Procurement Management Synopsis Procurement Roles and Responsibilities Project Manager Project Contract Administrator Project Management Office (PMO) Project Procurement Planning The Project Procurement Plan The Project Procurement Management Process Requirement Step Requisition Step Solicitation Step Contract Administration Step Closeout Step Exercise: Describe Your Project's Procurement Process Different Types of Contracts Fixed Price or Lump-Sum Contracts Cost-Reimbursable Contracts Cost-Plus-Fee (CPF) Cost-Plus-Percentage-of-Cost (CPPC) Cost-Plus-Incentive-Fee (CPIF) Time-and-Material (T&M) Contracts Indefinite Delivery Contracts Exercise: Types of Contracts on Your Project Procurement Process: Requirement Detailed Requirement Step Process Make-or-Buy Analysis! Documenting Procurement Requirements: Statement of Work Specific Guidelines for Product Procurement 262

12 Contents xv Vendor Evaluation Criteria Prequalification Questionnaire Procurement Process: Requisition Detailed Requisition Step Process Establishing Vendor Evaluation Criteria Examples of Vendor Evaluation Criteria Questions Scoring/Weighting Vendor Evaluation Criteria Simple Scaled Score Weighted/Scaled Score Procurement Process: Solicitation Detailed Solicitation Step Process Issue of Solicitation Package Acquisition Method Advertising Bidders' Conference Receipt of Vendor Proposals Answering Questions Vendor Proposal Evaluations Vendor Selection Inform Vendors of Selection Prepare Negotiation with "In-Range" Vendors Negotiation with Vendors Contract Award.: Exercise: Awarded Contracts on Your Project Procurement Process: Contract Administration Detailed Contract Administration Step Process Managing the Relationship with the Vendor/Seller/Supplier Change Request Management Contract Disputes Disputes due to Interpretations Disputes in Work Instructions Adjudication Arbitration and Conciliation 286

13 xvi Contents Contract Termination Termination for Convenience Default of Contract..., Exercise: Status of Contracts on Your Project Procurement Process: Closeout Detailed Closeout Step Process Contract Closeout 289 Chapter 7 Project Implementation Chapter Overview Project Implementation Overview Effective Project Implementation Start-Up Conducting the Implementation Start-Up Meeting Project Plan Considerations for Implementation Start-Up Specific Focus Areas for Implementation Start-Up Project Team Management Exercise: Project Implementation Start-Up Agenda Scope Management and Change Request Management ; Definition of Change Scope Management and Change Scope Management at Project Implementation Start Change Control versus Issue Management Origin of Changes Exercise: Draft the Project Requested Changes and Their Origins Change Request Management Roles.» Project Manager Change Requestor Change Manager Change Analysis Group 304

14 Contents xvii Change Approval Group Change Implementation Group Exercise: Change Request Roles and v Responsibilities The Change Request Management Process Step 1 Record Change Request Step 2 Change Impact Evaluation Step 3 Change Impact Proposal Step 4 Change Request Approval Step 5 Change Request Implementation Contractual Consequences Project Plan Update Configuration Management Exercise: Your Change Request Management Process Project Performance Tracking and Control Baseline Management Manage Project Schedule Manage Project Budget Project Tracking and Control Project Monitoring and Evaluation Risk Control Monitor Risks Control Risks A3 Monitor Risk Impact on the Baseline Issue Management Manage Acceptance of Deliverables Manage Project Transition Project Reporting Status, Progress, and Forecasting Project Earned Value Management Earned Value Management Terminology EVM Primary Key Values EVM Derived Data Values 330

15 xviii Contents Collecting Actual Costs Incurred Determining Task Completion and Earned Value v Calculating Cost and Schedule Variances Trend Analysis and Forecasting Exercise: Earned Value Reporting Project Documentation Management Project Documentation Planning Overview Types of Documents to Manage Project Documentation Categories Documentation Management Functions Maintaining the Documentation Database Using Electronic and Web-Enabled Technologies Exercise: Project Documentation Project Acceptance Obtaining Acceptance Signature Conduct Final Status Meeting 342 Chapter 8 Project Closeout Chapter Overview Project Closeout Overview Planning Project Closeout Activities Post-Implementation Review Report Key Project Metrics Post-Implementation Review Questions Project Closeout Report Exercise: Project Closeout Review Project Closure and Approval Scope Verification ' Meeting Project Goals and Deliverables Ensuring Project Delivery to Scope and Approved Changes 352

16 Contents xix Completion of All Project Activities Commissioning and Approvals Securing Project Acceptance Exercise: Project Closure and Approval Administrative Closure and Financial Reporting Internal Status Reports Internal Financial Reports Internal Human Resources (HR) and Other Shared Services Reports Archiving Exercise: Administrative Closure Contract Closure Approval of Contractor Deliverables Managing "Punch Lists," "Snag Lists," and Warranty for Handover Organizational Readiness Handover to Operations Education and Training Needs Operational Ramp-up Support Issues and Guarantees/ Warranties Exercise: Organizational Readiness People Management Recognition and Awards Performance Evaluation Celebrations Preparing Team Members' Next Assignment Disbanding the Core Team Exercise: People Management Lessons Learned Planning for Lessons Learned Collating Lessons Learned Checklists for Collecting and Collating, Lessons Learned ^ Lessons-Learned Questionnaire Skills Management Exercise: Lessons Learned 372

17 xx Contents Chapter 9 Project Leadership Skills Chapter Overview The Project Manager's Role as a Leader The Role as a Manager The Role as a Leader Effective Project Leadership Leadership Styles McGregor's Theory X and Theory Y, Project Manager's Influence Continuum Situational Leadership Exercise: Situational Leadership Review of Motivational Theories Maslow Hierarchy of Needs The Herzberg Hygiene- Motivation Theory The Application of Motivational Theories Exercise: Motivation The Project Manager and the Organization Managing the Project Team Team Dynamics Moving from a Group to a Team The Stages of Social Group Development The Performing Team Giving Meaning to the Task Effective Team Characteristics Exercise: Team Dynamics The Project Manager's Communication Communication Basics The Source Sender The Encoder.,.' The Message The Channel the Medium Physical Noise Semantic Noise 409

18 Contents xxi The Decoder The Destination Receiver Feedback Communicating Techniques The Project Team Sponsors and Stakeholders Performing Organization and Peers External Organizations Providers Styles of Communication Listening Guidelines for Communication Achieving Effective Circular Communication Major Causes for Communication Breakdown Exercise: Communication Effectiveness Overview of Conflict Management in Projects Functional Conflict Dysfunctional Conflict Project Conflict Situations Functioning of the Project Functioning of the Team Conflict Resolution Techniques Understanding the Power Model Assertive or Cooperative Techniques Strategies for Exercising Power Exercise: Conflict Management 431 Index 433

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