CHAPTER 1: Modern project management

Project

Complex, non-routine, one-time effort limited by time, budget, resources and performance
specifications designed to meet customer needs
Characteristic Established objective
Defined life span with beginning and an end
Involvement of several departments and professionals
Typically doing something that has never been done before
Specific time, cost and performance requirement
Program
Series of coordinated, related, multiple projects that continue over extended time intended to
achieve a goal
Project life
Defining stage specification are defined; objectives are established; teams are formed
cycle
Planning stage level of effort increases and plans are developed to determine the details of
the project
Executing stage Major portion of project work takes place both physically and mentally.
Time, cost and specification measures are used for control.
Delivering stage delivering project to customer and redeploying project resources which
may include customer training and transferring documents.
Importance
Compression of project life cycle speed is a competitive advantage
Global competition market demands cheaper and better services or products. Besides,
emergence of quality movement across the world with ISO9000 certification.
Knowledge explosion increased complexity of project to include latest advances
Corporate downsizing flatter and leaner organizations with outsourcing
Increased customer focus increased competition on customer satisfaction
Rapid development of third world and closed economies explosion of demand for all
manner of consumer goods and infrastructure development
Small projects with big problems velocity of change required organizational climate in
which hundreds of projects are implemented concurrently
Integration
Development of mission, objectives and organization strategies depend on external and
with strategic
internal environmental factors. The outcome of analysis of all these environmental factors is
plan
a set of strategies designed to best meet the needs of customers.
External environmental factors political, social, economic and technological
Internal environmental factors strengths / weakness of management, facilities, core
competencies and financial condition
Integration
Good project manager balance attention to both the technical and socio cultural dimension of
within
project management.
process of
Technical side formal, disciplined, pure logic part of the process that relies on formal
managing
information system available and effect of project changes are documented / traceable.
actual project Socio cultural side centres on creating a temporary social system within a larger
organizational environment that combines the talents of divergent set of professionals
working to complete the project. It also involves managing the interface between the project
and external environment.

CHAPTER 2: Organization strategy and project selection

Strategic
management

Activities of
strategic
management
process

Problem

Portfolio
management
system

Provides theme and focus of future direction of the organization

Supports consistency of action at every level of the organization
Position the organization to meet the needs and requirements of its customers for long term
Decide the survival of an organization
Review and define organization mission identify the scope of organization in terms of its
product or service and provides focus for decision making when shared by organizational
managers or employees
Long range goals and objective translate mission into specific, measurable, assignable,
realistic, time related terms. Objectives answer in detail where a firm is headed and when it
is going to get there
Analyze and formulate strategies to reach objectives determine and evaluate alternative
that support the organizations objectives and select the best alternative. SWOT (strength,
weakness, opportunities and threat) analysis is used to evaluate past and current position.
Implement strategies through project answers how strategies will be realized (require
allocation of resources, formal organization that complement / supports strategy / project,
planning / control system and motivation to project contributors)
Implementation gap objective and strategies are made independently at different levels by
functional groups within the organization hierarchy causes manifold problems
Organization politics criteria and process for selecting project are ill-defined and not
aligned with the mission of the firm. Sacred crow is a project that a powerful, high-ranking
official is advocating.
Resource conflicts and multitasking competition among project managers can be
contentious and seek to have the best for their projects. Multitasking adds to delays and costs
and changing priorities exacerbate the multitasking problems.
Classification of project compliance (must do), operational (needed to support current
operations to improve efficiency of delivery system) and strategic (directly support
organizations long run mission)
Senior management must provide guidance in establishing selection criteria that strongly
align with the current organization strategies and annually decide how they wish to balance
the available organizational resources among different types of projects
Assessing project portfolio bread & butter (evolutionary improvements to current products
and services), pearls (revolutionary commercial advances using proven technical advances),
oysters (technological breakthrough with high commercial payoff) and white elephant
(project that at one time showed promise but are no longer viable)

CHAPTER 3: Organization structure and culture

Problems
Weak
matrix
Balanced
matrix
Strong
matrix
Structure
factor (7)
Culture

Culture
essence
(10)
Identify
culture

Projects are unique, one-time efforts with distinct beginning and ending
Projects are multi-disciplinary in nature because they require variety of specialist
Similar to functional organization with formally designated project manager who acts as staff assistant. The
project manager has indirect authority but functional manger decide most of them.
Classic matrix where project manager define what needs to be done while functional manger decide how it
will be accomplished.
Project manger controls most aspects of the project including scope trade off and assignment of functional
personnel. The functional manager is only consulted on a need basis.
Size of project, strategic importance, novelty / need for innovation, need for integration, environmental
complexity, budget / time constraints and stability of resource requirement
System of shared norms, beliefs, values and assumptions which binds people together to create shared
meanings. It provides sense of identity, helps legitimize the management system, reinforces standards of
behaviour and create social order.
Member identity (identify with organization), team emphasis, management focus (effect of outcomes), unit
integration (interdependent), control (obedience), risk tolerance (aggressive, innovative), reward criteria,
conflict tolerance (open), means vs end orientation and open system focus (responds to changes in the
external environment)
Study the physical characteristic of an organization
Read about the organization from annual reports, mission statement and press releases
Observe how people interact within the organization
Interpret stories and folklore surrounding the organization

Pros and cons of different structure

Structure
Functional
organization

Project team

Matrix

Network
organization

Pros
Cons
No change in basic functional structure
Lack of focus because of own core routine
Flexibility in the use of staff
Poor integration across functional units
In-depth expertise can be brought
Slow to complete
Easy post-project transition
Lack of ownership and motivation
Simple and operate independently
Expensive and duplication of efforts
Fast to complete because no other obligations
Internal strife and divisiveness of project team
and parent organization
Cohesive and high level of motivation
Cross functional integration and specialist from Limited technological expertise, self-contained
team and we-they syndrome
different areas work closely together
Difficult post-project transition because of
prolonged absence
Efficient because resources can be shared across Dysfunctional conflict because tension between
multiple projects to reduce duplication
functional and project managers. Worthy
discussion can degenerate into heated arguments
Strong project focus by having formally
that engender animosity
designated project manager
Easier post-project transition because they have Infighting because competition for scarce
resources
homeport to return once completed
Flexible utilization of resources and expertise Stressful because each participant have at least
two bosses
within the firm
Slow because decision making can get bogged
down as agreements
Cost reductions because firm can secure Coordination breakdowns because mutual
competitive prices for contracted services
adjustment is required
High level of expertise and technology
Loss of control because there is no direct
authority over
Flexible because firm is no longer bounded by
their own resources with talents of others
Conflict because they do not share the same
values, priorities and culture. Trust is essential to
Small company can go global with foreign
project success.
partners

CHAPTER 4: Defining the project

Defining project Project objective define overall objective to meet customers need
scope
Deliverables expected outputs over the life of project
Milestones significant event in a project that occurs at a point in time
Technical requirements ensure proper performance
Limits and exclusions prevent false expectations
Reviews with customer completion of scope checklists for consensus
Project
Constrain fixed original parameter
priorities
Enhance taking opportunities to reduce costs, shorten schedule or improve performance
Accept tolerable not to meet original parameter
Deliverable
Expected output over the life of the project
WBS
All the elements of the project in a hierarchical framework and establishes their
relationship to the project end item
Create work
Successively subdivided work of project into smaller work elements
breakdown
Work package are short-duration tasks that have a definite start and stop point, consume
structure (WBS)
resources and represent cost
Define work (what), identifies time to complete (how long), time-phased budget (cost),
resources needed (how much), identifies person responsible (who) and monitoring points
for measuring progress
Organization
Provide a framework to summarize organization unit work performance, identify
breakdown
organization units responsible for work packages and cost control accounts
structure (OBS) Control can be checked from outcomes (vertically on deliverables) and responsibility
(horizontally by organization responsibility)
Coding WBS
Allow reports to be consolidated at any level in the structure
for system
Creative combination of letters and numbers to minimize the length of WBS codes
Process
Process oriented projects in which final outcome is a product of a series of steps / phases
breakdown
Deliverable needed to exit a phase and begin a new one
structure (PBS) Quality checkpoints to ensure that deliverables are complete and accurate
Sign offs by those responsible to indicate that the project can move to the next phase
Responsibility
Summarize the tasks to be accomplished and who is responsible for what on a project
matrix (RM)
Provide means for all participants in a project to view their responsibility and agreement

CHAPTER 5: Estimating project times and costs

Importance

Factors

Guidelines

Macro
approaches

Micro
approaches

Types of cost

Importance of
contingency

Support good decisions

Schedule work and determine how long or how much
Determine if it is worth doing and how well the project is progressing
Develop cash flow needs and time phased budges (establish project baseline)
Planning horizon more accurate for nearer events
Project duration longer duration has higher uncertainty
Skills and experience of people
Project structure dedicated project team has better speed and concentrated focus
Padding estimates
Organization culture
Other factors such as equipment downtime, national holidays and legal limits
Responsibility should be assigned to the person most familiar with the task
Use several people to estimate to eliminate extreme estimate errors
Based on normal conditions, efficient methods and normal level of resources
Specific time units should be selected and consistent
Each task is independent of other task
No contingencies allowance in work package estimates
Add risk assessment to estimate to avoid surprises to stake holders
For strategic decision making, high uncertainty, small project and unstable scope
Consensus method Uses a pooled experience of senior managers for meeting
Ratio method Estimate total cost by scaling factor from a single cost
Apportion method Used when projects are almost similar to past projects
Function point method use major parameters such as number of inputs, outputs
Learning curve pattern of improvement phenomenon used to predict reduction in time to
perform repeated task
For fixed-price contract, important cost / time, and customer want details
Template method Costs from similar past projects with adjustment in differences
Parametric procedures for specific tasks detailed ratio method for each item
Detailed estimates for work package Have 3 estimates (low, average and high) as a basis
for assessing risk and determining contingency fund
Direct cost chargeable to a specific work package that represent real cash outflows
Direct overhead cost resources that are being used in project such as salary and rental
General and administrative overhead cost Indirect cost that carried throughout
Hidden interaction costs in estimates such as coordination and adjustment
Normal conditions do not apply and things may go wrong such as design flaws
Changes in project scope and plans as one gets further into the project
Contingency funds and time buffer to offset uncertainty
Changing baseline schedule and budget due to events such as labour strike, political
upheaval, insurmountable technical barriers and skyrocketing material costs

Phase
Need
1
Macro
2
3
4
5

Phase estimating over project life cycle

Specification
Design
Produce
Detailed

Macro
Detailed

Macro
Detailed

Deliver

Macro
Detailed

CHAPTER 6: Developing a project plan

Project network

Approaches

Computation
process

Extended
network
techniques

Activity
Critical path
Slack
Lag
Hammock
activity

Method
AON

AOA

Tool for planning, scheduling and monitoring project progress

Failure to integrate with WBS due to different groups of people involved or WBS is poorly
constructed and not output oriented
Activity-on-node (AON) or Activity-on-arrow (AOA)
Basic rules: Network flows from left to right, activity cannot begin until all preceding
connected activities have been completed, arrows on networks indicate precedence / flow,
each activity with unique identification number, activity identification number be larger
than precedence activity, no looping, no conditional statements and using common start /
end nodes
Forward pass earliest times
Backward pass latest times
Total slack amount of time an activity can be delayed and yet not delay the project
Critical path network path that has the least slack in common. It is important because it
impacts the completion time.
Laddering segmenting a larger activity to gives the appearance of steps on a ladder on
network. It is too restrictive that all immediate preceding activities must be 100%
complete.
Lag minimum amount of time a dependent activity must be delayed to begin or end. It
avoid delays, reduce network detail, and can be used to constrain start or finish of an
activity
Finish to start relationship typical generic network style but there can be delayed even
when the preceding activity is complete
Start to start relationship alternative segmenting activities in which a project can begin
without the 100% completion of precedence activity
Element of the project that requires time
Longest path through the network and the project will be delayed by the same amount of
time if an activity on this path is delayed. Critical path has the least slack.
Amount of time an activity can be delayed and yet not delay the project
Minimum amount of time a dependent activity must be delayed to begin or end
To identify the use of fixed resources or costs over a segment of the project

Pros and cons of different method

Pros
Cons
No dummy activities are used
Path tracing by activity is difficult
Events are not used
Network drawing and understanding are
difficult when dependencies are numerous
Easy to draw if dependencies are not intense
Easily understood by first-level manager
CPM approaches uses deterministic times to
construct networks
Path tracing is simplified by activity Use of dummy activities increases data
numbering scheme
requirements
Easier to draw for intense dependencies
Emphasis on events can detract from
activities
Key events can be easily flagged

CHAPTER 10: Leadership; being an effective project manager

Law of
reciprocity
Network of
stakeholder

Traded
organizational
currencies

Managing by
wandering
around (MBWA)
Leading by
example

Contradictory
nature of work

Core traits of
successful project
manager

One good deed deserves another and likewise, one bad deed deserves another. Similarly maxim,
Quid pro quo.
Project team manage and complete project work. They may want to do a good job, but are
concerned with other obligations and how their involvement on project will contribute to their
personal goals and aspirations
Project manager compete with each other for resources and support of top
Administrative support provide valuable support services. They impose constraints and
requirements on project such as documentation of expenditure
Functional manager responsible for assigning project personnel, resolving technical dilemmas and
overseeing the completion of significant segment of project work.
Top management approve funding of project and establishes priorities within organization. They
define success and adjudicate rewards for accomplishments.
Project sponsor champion the project and use their influence to gain approval of project
Subcontractors may do all the actual work and schedule slips can affect the work of core project
team.
Government agencies place constraints on project work such as permit and codes
Other organization may directly or indirectly affect the project such as supply
Customer define the scope of project and ultimate project success rests in their satisfaction. They
concerned with getting a good deal and naturally breeds tension with the project team.
Task related currencies resources, assistance, cooperation and information
Position related currencies advancement, recognition, visibility and network
Inspiration related currencies vision, excellence and ethical correctness
Relationship related currencies acceptance, personal support and understanding
Personal related currencies challenges, ownership and gratitude
`Mangers spend the majority of their time outside the offices. Through face-to-face interactions,
project manager is able to stay in touch with what is really going on in the project and build
cooperative relationships essential to project success. They are able to intervene to resolve conflicts
and prevent stalemates from occurring.
Highly visible, interactive management style is not only essential to building and sustaining
cooperative relationships but also their own behaviour. It symbolizes how other people should work
on the project. These aspects are priorities, urgency, problem solving, cooperation, standards of
performance and ethics.
See the big picture while getting your hands dirty
Encourage individuals but stress the team
Hands-off and hands-on
Flexible but firm
Team versus organizational loyalties
System thinker take a holistic rather than reductionist approach by managing interactions
Personal integrity establish a firm sense of who you are, what you stand for and how you should
behave to provide the buoyancy to endure ups and downs of project life cycle
Proactive Take action before it is needed to prevent small concern from escalating into major
problems
High tolerance of stress require physical exercise, healthy diet and supportive home front to
endure the rigors
General business perspective have general grasp of business fundamentals and how different
functional disciplines interact to contribute to a successful business
Good communicator able to communicate with a wide variety of individuals
Effective time management budget time wisely and adjust their priorities quickly
Skilful politician deal effectively with people and win their support and endorsement
Optimist display a can-do attitude. Greatest strength lies in sense of humour and playful.