Project Integration Management | Affter reading this chapter you will be able to: | t. Describe an overall framevvork Yor project integration management as it relates, i to the wther project management knowledge areas and the project life cycle | 2, Explain the strategic planning process and apply different project selection i methods ; 2% Explain the importance of creating a project charter to formally initiate pupjects | @. Discuss the pracess of creating a preliminary project scope statement | 5. Describe project management plan development, including cantent, using guidelines and templates for developing plans, and performing a stakeholder | analysis to heip manage relationships | & Explain project execution, its relationship te project planaing, the factors related ta successful results, aad tools and Lechnigques to assist in project execution 7. Describe the process of manttoring and controlling project work f 8, Understand the integrated change contro! process, planning for and manag- I ing changes on information technology projects, and developing and using a i change control system | Explain the importance of developing and following good procedures for clos- ing projects 10. Describe how software can assist in project integration management OPENING. CASE fick Carson recently became (he project manager afa critical ¥ biotech project for his company in Silicon Valley, This project inyolved creating (he hardware and software fora DNA-sequencing instrument used in assembling and analyzing the human genome.Tie cuapter 4 Each instrument sold for approximately $200,000, and yarious clients would purchase several instruments. One hundred instru- ments running went four hours per day could decipher the entire human genome in less than two years, The biotech project was the company’s largest project, and it had ire dous potential for fucure ne growth and revenues, Unfortunately, there were problems managing this large project, It had been underway for three years and | already gone (hrough three different project managers. Nick had been the lead software developer on the project befare top manage- ment made hie the project manager. ‘Top management told him to do whatever it took to deliver the first yersion of the software for the DNA-sequencing instrument in far months and a production ver- sian in nine months, Negotiations for a potential corporate buyout s sense of with a larger company influenced top management’ urgency to complete the praject, ick was highly energetic and iftelligent and had the technical background a make the project a suecess. He delyed into the techni- cal problems and found some critical flaws that were keeping the DNA-sequencing instrun col from working. Le was having diffi culty, however, in his new role as project manager, Although Nick and his team got the praduct oul on lime, top m upset because Ni agement was k did nor focus on managing all aspects of the proj: ect, He never provided top management with accurate schedules ar detailed plans of whal was happening on the project. Instead of per- forming the work of project manager, Nick had taken on the role of software integrator and iroubleshoater. Nick, however, did not understand top management's problem—he delivered the product, e how valuable he was? idn’t he? Didn’t they reali WHAT IS.PROJECT INTEGRATION MANAGEMENT? Project integration management involves coordinating all of the other proj- cet management knowledge areas throughout a project's lile cycle. This inte- gration ensures that all the elements of a project come together al (he righ|PAQIECT INTEGRATION MANAGEMENT times to complete a project successfully. According to the PMBOX® Guide 2004. there are seven main processes involved in project inlegration management: |. Develop the project charter, which involves working with stakeholders to creage the dacument that formally authorizes a projeci—the charter. 2, Develop the preliminary project scope statement, which involves jurther work with stakeholders, especially users of the project's products services, ar results, (a develop the high-level scope requirements, The output of this process is Lhe preliminary project scope statement. 3. Develop the project management plan, which involves coordinating all planning efforts to create a consistent, coherent dacument—the proj ect management plan. Direct and manage project execution, which invalves varying oul the project management plan by perfariming the activities included in it ‘The outputs of this process are deliverables, requested changes, work per formance information, implemented change reyucsls, carrective actions, preveniive aclinas, aml delect repair. 5, Monitor and control the project work, which involycs overseeing project work 1a mee! the performance objectives of the project, The out pus of this process are recommended corrective and preventive actions forecasts, recommended defect repair, anal requested changes. 6. Perform integrated change control, which involves coordinating changes that alfeet ut: project's acliverables and organizational process asses. The outputs of this process include approved and rejected change requests, approved corrective and preventive actions, appraved aril vali- dated detect repair, deliveralis, and updaics to the project management plan and project scope statement 7. Close the projet, which involves finalizing all project activities to tor- mally close the project. Outputs of this process include final products, ser- vices, or results, administrative and contract closure procedures, and updates ( organizational process assers Many people consider project integration management the key 112 overall project success, Someane must lake responsibility Cor coordinating alll of the people, plans, and work required to complete a project. Someone must Locus on the big picture of the project and steer the project tear tawaril successful completion. Sameone must make Lhe final decisions when there are conflicts among, projec! goals or people involved, Someone must communicate key proj- ect information to top management. This someone is the project manager, and the project manager's chief means for accomplishing all these tasks is project integration management, Good project integration management is ¢rilival lo providing slakeholder sat- islaction. Project ialegralion manaycment includes interlace management118 CHAPTER 4 Imtertace management involves identifying and managing the points of iierartian between vasious elements ol the project. The number of interfaces can increase exponentially as the number ¢! peaple invelved in a project increases, Thus, one of the most important jobs of a project manager is uy establish and maintain good communication and relationships across organiza- tional interfaces, The project manager must communicate well with all project stakeholders, including customers, the project team, tap management, ollier project managers, ancl opponents of the project Whar happens when a project manager docs nol communicate well with all stakeholders? In the epening case. Nick Carson seemed to ignore a key slake- holder for the DNA-sequencing instrument project—his lop management. Ni was comfortable working with other members ef the project tears, but he was not familiar with his new job as project manager or the needs of the company's top manayerien!. Nick continued ty do bis old job of software developer and took on the added role of software integrate. He mistakenly thought project iniegralion management meant soltware integration management and focused on the project's ieelinical problems. He Lotally ignored what project integration management ig really about —imegrating the work al all of the people involved in the project by focusing an good communication and relationship manage- ment, Recall thar project management. is applying knowledge, skills, tools, and techniques to meet project requirements, while also meeting ar exceeding stakeholder nevis and expectations. Nick did not take the time to find our what top management expected from hin as tle project manager; he assumed that completing the project on time and within budget was sufficient to make tap management Lappy. In addition to not understanding project integralion management, Nick did not use holistic or systems thinking (see Chapter 2), Le burrowed intw (hw technical details af his articular project. He diel not stop to think about whar it meant to be the project manager, how this projec! related te other projects in the organization, or what top Management's expectations were wf him ane his team Project integration management must occur within the conext ef the cnlire siganization, not fust within a particular project. The project manager must integrate the work of Ihe project with the ongoing operations of the per: forming organization. In che opening case, Nick's company was negotiating a potential buyout with a larger company. Consequently, top management needed 19 knew when (he DNA-sejuencing insuument would be ready, how big the market was for the product, and if they had cnough in-house stall wo continue t manage projects like this one in the luture. They wanted to see a project managemem plan and a schedule to help them monitor the project's progress and shew their potential buyer what wag happening. When ij mane agers tric to lalk to Nick about these issues, Nick soon returned to discussingPROJECT [NTEGRATION MANAGEMENT 19 the: isehnival details of the profect. Even hough Nick was very bright, he had no experience or real interest in many of the business aspects of low Lie com= pany operated. Project managers must always view their prajeets in the con ing needs of their mganizalions and respond to requests Ira lext af ihe chang lop management, Following 4 standard process for managing prajeets can help prevent some of the typical problems new and experiewced project managers face. includia communicating with managing stakeholders, Belore organizations hegin proj ects. however, they should go through a formal process ta decide what projects 18 pursue STRATEGIC. PLANNING AND PROJECT SELECTION Successful leaders look at the big picture or strategie plan of the organizalion 10 determine what types of projects will provide the most value. Therefare, pro} ect initiation stars with identilying potential prajecis, using realistic methods ta select which projects to wark on, and then foemalizing their initiation by issuing some sort of project charter. Identifying Potential Projects The first sicp in project management is deciding what projects w do in the first place, Some may argue that jrnject managers should not be invalved in strate= gic planning and project selection, but successtul organizations know that cur te | project managers can provide valuable insight into the project selection process, Figure 4-1 shows a Kinr-siagc planning process tor selecting inforimas tion technology prajecis, Sere the hierarchical structure ol his model and the resuilly produced from each stage. The lirst stp in rhis process, starting at the lop of the hierarchy. ts 10 Lie the inlormation technology stratepie plan 4s the organization's avcrall strategic plan. Strategic planning involves determining Jong-term objectives by analyzing the suengrhs and weaknesses of an organiza~ tion, studying opportunities and chreats in the business environment, predict ing future Lends, and projecting the need for new products and services, Many people are familiar with “SWOT” analysiy—analyzing Screngihs, Weaknesses, Opporiuinities, and Threats—that is used 10 aid in strategic planning. Wis yer important Ist have managers from oursice the infarmalinn technology depart Ment assist in the inlormation technolagy planning process, as they can help information technology personnel understand organizational strategies and identily the business areas that support them. ‘W207 CHAPTER 4 Information Technology Results Produced Planning Stages. Tie informatian technology strateqy formation —=-® 46 mission and vision of organization. J chnoigy Identify key business areas, Steaey Panning Document key business anni Area Analy \\——P* processes that could benefit rom information technology. Define potential projects ——* Define project scope, benefits, and constraints. Project Planning Select information technology projects Assign resources Resource Allocation ad Figure 4-1. Planning Process for Selecting tnformation Technology Projects Alter identilying strategie goals, the newt slep in the planning process lor selvcting irformalion technolagy projects is 10 perform a business area analysi This analysis outlines business processes that are central to achieving strategic goals and helps determine which ones could most benefit [rom information eehnulogy, ‘Then, the next step is tv start defining potential information tech- nology projects, their scope, benefits, and constraints, The last step in the plan- ning process for selecting informaling technology projcels is choosing which projects to da and assigning resources fer working on them. Aligning Information Technology with Business Strategy Iris often easier to identity and select appropriate information technology projects when organizations align their information technology departenents more dosely with the business. ven though many information technology projects do not produce “strategic information systems” or receive great pub licity, it is critical that the information Wechnolagy plaruving process start by analyzing (he avcrall strategy af the organization. Most organizations face thousands of problems and opportunities Jor improvement, Therefore. an urganizatinn’s strategie plan should guide he information technalagy project selection process. Ant organization must develop a strategy for using informa- tion technology to define how it will support the organization’s objectives. This information technology suategy must align will the arganiration’sPAQIECT INTEGRATION MANAGEMENT 121 Suralegie plans and strategy, In tact, research shows that supporting explicit business objectives is the number ane reason cited for why organizations invest in information iechnology projects. Other tap criteria far investing in information technology projects include supporting implicit business objec tives and providing financial inventives, such as a good intemal rate of relucn (IRR) or net present value (NPV)! You will learn more about these financial criteria later in this section, A 2002 study found a direel correlation berween closer business and infor- mation tehnology alignment and reporting structure. Hacket Best Practices found that companies in which the elie! inlermation officer (C1Q) reports direcily to the chied executive officer (CLO} lowered their eperational suppert costs per crs! user by 17 percent, Many CLOs now report io (lw ClO, inereasing {rom 24 percent in 1999 to 37 percent in 2002. The study also found that com- panies with centralized or consolidated information technology operations had 24 percent lawer operational support costs per end user. ‘the consistent use of information technology standards also lowered companies’ application devel opment costs by 41 percent peryser2 Information systems can be and often are central ty business strategy Author Michael Porter, wha developed the concept of the strategic value of competitive advantage, has wrilten several books and articles on stare gic planning and competition, He and many olher experis haye emphasized the importance of using information technology to support strategic plans and provide a competitive advantage. Many information sysiems are classified as “strategic” because they directly support key business strategies. For example, information systems can help ai organization support a strategy of being a low-cost producer. As one of the largest retailers in the U.S., Wal-Mart's inventory control system is a classic example of such a system. Informeion systems can support a strategy of providing specialized products or services that set a company apart [ram others in the industry, Consider tlhe classic exainple af Tederal Express's introduction of oriline package wacking systems. ‘They were the first company tp provide this type of service, which gave (hem a competitive advaniage until others developed similar systems, Information systems can alse support a strategy of selling 1o a particular market or occupy- ing a specific project niche. Owens-Corning developed a strategic information system that boosicd the sales of its home insulation products hy providing its eusiomers with a sysiem for evaluating the energy efliciency of building designs ' Bacon, James. “The Use of Liccisiont Criweris in Selecting Inlormation Systems! techewlugy Investments," MES Quarterly, Vols I. Na. 3 September 1993), ? Cosgrove Ware, Lorraine. “by Ube §) {Seprember 1, 2002) Fs” CLO Magetiate {wiv com)122 CHAPTER 4 Methods for Selecting Projects Organizations identity many potential projects as part of their strategic planning processes, and efter rely on experienged project managers Ly rely thers make project selection decisions, However, organizations need to narraw down the lis; potential projects to thse projects that will be of most benelit, Selecting projecs Dolan cxaet sticnee, bul il is a crili¢al part of project management. Many metbos exist lor selecting [rom among possible projects, Five common techniques are: 1. Focusing ou bread organizational weeds Categorizing information technology projects Performing net present value or other financial analyses Using a wei wen led scoring model 2s Implementing a balanced scorecard Tn practice, organizations usually use a combination of these approaches to select projects, Each approach has advantages and disadvantages, and it is up te management to decid he best approach far selecting projects based ont Useir particular organization, Focusing on Broad Organizational Needs Top managers must lieus on meeting their organization's many needs when deciding what projects to undertake, when to undertake them, and to whal level. Projects that address broad organizational needs are much more likely to he successful bevause Hey will he important (a the a ganization, For example, a broad organizational need might be to improve salety, increase morale, pu vide better communications, or improve customer service. However, it 1s often difficult 1o provide a strong justification foe many information technology pro)- ecis related to these broad organizational needs, Por example, 11 is often impo ble to estimate the financial value of such projects. but everyone agrees that they do hawe a high vahic. As the ald proverb says, “Tis better to measure gold roughly than to count pennies precisely.” One method for selecting projects based on broad organizational needs is to determine whether they first mee! three imporiant criteria: need, Tuning, and will, Bo people in the organization agree that the project needs to be dane? Does the organization have the will and the capacity to provide adequate funds te perfor the project? ts there a strong will ( make the project succeed? For example, many visionary CEOs can describe a broad need to improve certain aspects of their organizations, such as communications, Although they cannot specilically describe haw: to improve communications, Urey nvight alliacate funds 10 projects that address this need. As projects progress, the organization must rcevaluate the need, funding, and will for each project to determine if the project should be continued, redelined, ar terminatedJECT INTEGRATION MANAGEMENT 433 Categorizing Information Technology Projects Anoilur method for selecting projects is bused on various categorizations. One Wype of categorization assesses whether projects provide a response tea prob- lem. an opportunity, «ara directive = Problems are undesirable siliiations that prevent an organization from achieving its goals. ‘These problems can be curren! or anticipated. For example, users of an information system may be having trouble logging, onto the system or getting information ina timely mannee because the system hay reached i's capacity. In response, the company could iaitiate a nrnject Lo enhance the current system by adding more access lines a1 upgrading the hardware will a faster processor, more memory, or more storage space @ Opportunities are chances wo improve the organ the project dleserited i the opening case inyalyes that can make of break the ceire campany. alin. Per example ating a new product @ Dircetives are new requirgments imposed by management, government, or some external influence. Far example, many projects involving medical technologies musi meet rigorous government requirements Organizations selec} projects fi any of these-reasons. I is often easier La get approval and funding for projects that address problems ar directives becaus the organization must respond to these categories of projects to avoid hurting their business. Many problems and direclives must be resolved guickly, but managers must alse apply sysiems thinking and seek opporiunities for improv ing the urganizatian through information techaalagy projects. Another categorization Jor inn mation technology projects is based an the ume i will take 1 complete a project or the date by whieh il must be done, For example, some potential projects must be finished within a specilic time win- dow: IE they cannot be finished hy this set date, they are no longer valid proj- ects. Some projects cant he completed very quickly—within afew weeks, days, or even mingles, Many organizations have an end user support funetion lin handle very small projects that van be completed quickly. Even though many information technoligy projects can be completed quickly, itis still important to privrilize them A third categorization lor project selection is the overall prierity al the prof- ect. Many organizations privritize inlormation technology projects as being high, nicdiumn, or low priority based an Une current business environment. Fur example, if it js crucial to cul operating costs quickly, projects that have the most potential Lado sa would be given a high priority. The organization shoulel always complete high-priority projeets first, even if a low or medium-iarily project could be finished in less time, Usually there are marvy men ¢ potential information tcshuplogy projects than an organiralion can undertake at any one Lime, so itis ¥ery important lo work on the most important ones firstCHAPTER 4 Performing Net Present Value Analysis, Return on [nvestment, and Payback Analysis Financial considerations are often an important aspeet of the project selection process, especially during Lough economic times, As authors Dennis Cohen and Robert Graham pur it, "Projects are never ends in themsclyes, Finncially they are always a means to an end, cash.”! Many organizations require an approwd business case belore pursuing projects, and financial projections are a critical component of the business case, (See Chapter 4 for a sample usinass case.) ‘Thece primary methods for determining the projected financial value of proj- ects include net present value analysis, return on investment, and payback analysis. Because project managers often deal with business executives, they imust iidersiand how to speak their language, which olten boils down to thee important financial concepls. Net Present Value Analysis Everyone knows thé a dollar earned today is worth more than a dollar varncd five years from uiew. Net present value (NPY) analysis is a method of calcu- lating the expected net monetary gait or lass [ram a project by discounting all expected future cash inflows and outflows to the present point in time, An organiration should consider only projects with a positive NPV if financial yalue is @ key criterion for project selection, This is because a positive NPV means the return from a project exceeds the cost of capital—the return avail. able by investing the capital elsewhere. Projects wich higher NPVs are prejerred to projects vith lower NPYs, ifall other laetors are equal Figure 4-2 illustrates this concept lor uwo different projects. Note that this example starts discounting right away in Year 1 and uses a 10 percent discount rate, You can use the NPY function in Microsull bs cel (o-calculate the NPY quickly. Detailed steps on pertorming this caleulation manually are provided later in this section, Note that Figure 4-2 lists the projected benefits first. fol- lowed by the costs, and then the calculated cash flaw amen. Nate that the sum al the cash flow—benetits minus costs or income minus expenses—is the same for both projects al $5,000. The net present values are different, however, because they account for the time value of money, Project | had a negative casli [low ol $5,000 in the first year, while Project 2 had a negative cash flow of only $1,000 in the first year. AUHongh both projects had the same total cash flows without discounting, these cash flows are not of comparable finaneial valuc, Project 2's NPY of $3,201 is better than Project 1’s NPV of $2,316, NPV analysis, therefore, isa methad for making equal comparisons between cash flows for multi-year projects. 3 Cohen, Denals J. and Robert J, Graham, Tire Progect Managers ABA, Sam Francisca, Josey Rass NNT) p. 31PROJECT INTEGRATION MANAGEMENT A B c D E E G 7 [Discount rate 10% _| 2 3 [PROJECT 1| Year 1| YEAR 2 | Year 3 | YEAR4| YEARS | TOTAL 4 [Benefits so| $2,000 | 52,000 | $4,000| $5,000 | $14,000 5 [Costs $5,000 | $1,000 | $1,000 | s1,000| $1,000] $9,000 6 |Cash flow (35,000}|_ $1,000 |_ $2,000 |_s3,000| _sa,o00 | $5,000 7 |NpV-——+ $2,316 8 Formula snpwib 1 b6:f6) 9 19 |PROJECT 2| veari YEAR 4| YEARS | TOTAL ‘i|Benefits | $1,000 $2,000 | $4,000 | $4,000] $4,000 | $15,000 12 | Costs $2,000 | $2,000 | $2,000 | $2,000] $2,000 [ 510,000 48 |Cash flow ($1,000)| $0 | 2,000 | s2,000| $2,000] $5,000 44 |NPV———+ $3,201 15, Formula =npv(b1,b13:F13) 18 | 7 Figure 4-2. Met Present Value Exomple There are seme fics te consider when calculating NPV. Same arganizations refer to the investment year(s) Lor project costs as Year 0 instead ol Year 1 and do not discount costs in Year 0. Other organizations start discounting immedi ately based on their financial procedures; it’s simply a maticr al preference tor the organization. The discount rate can also vary, often based on the prime rate and other economie considerations, You ean enter costs as negalive wum- bers instead of positive numbers, and you can list costs first and then benelitg For example, Figure 4-3 shows the linancial calcilations JWD Consulting pro- vided in the business case for Ihe: Projecl Management Intranet Site Project described in Chapter 3, Note thar the discount rate is 8 percent, benefits are liste first, and costs are entered as pasilive numbers, The NPV and other cal- culations are still the same; anly the farmat is different. A project manager must be sure to cheek with his or her organization to fil ur its guidelines tor when discounting starts, what discount rate 10 use, and what lormat the caga- nization preters.CHAPTER 4 (140,000) 14 4(140,000)| 8,800) 1 Figure 4-3. JWD Consulting Net Present Value Example To determine NI'Y, follow these steps 1. Determine the estimated costs and benefits for the life of the project and the producis it produces. For example, JWD Consulting assumed the project would produce a system in about six months that would be used for three years, so costs are included in Year 6, when the system is evel- oped, and ongoing sysici casts and projected benelits are included for Years 1,2, and 3. 2, Determine the discount rate, A discount rate is the rate used in dis- counting tuture cash flow. [tis alsa called (hie capitalization rate o¢ oppor- junity cost of capital, In Figure 4-2. the discount rate is 10 percent per year, and in Nigure 4-4, (hu: discount rate is $ percent per year, 3. Galeulate dhe net present value, There are several ways to calculate NPY, ‘Most spreadsheet software has a buill-in function te caleulate NPV, For example, Figure 4:2 shows the formula that Mierasolt xecl uses: pv (discount rate, range of cash Lows), where the discount rate is in cell BI] and the range of cash Moss fur Project 1 are in cells B6 through: ¥6, (See Chapter 7, Project Cost Management, for more inforimativg on cash Mow and aller cosi-related terms.) ‘To use the NPV function, there must be a row in the spreadshee! (ar column, depending how itis orga nized) lor the cash {low each year, which is the benefit amount for th, year minus the cos amount, The result of the formula yields an NPY ofPROJECT INTEGRATION MANAGEMENT “a7 $2316 lor Project | and $3201 lor Project 2, Since both projects have pos- itive NPVs, they are both good candidates for selection, Llowever, since Project 2 has a higher NPV than Mroject 1 (38 percent higher), it would be the bear choiee between the two, Hl the two numbers are close: then other methods should be used to hel decide which project to select, The mathematical formula for calculating NPV is: where Lequaly (he year of the cash Hows ais the last year of the eash flow, is the amount of cash flow each year, and ris the diseatnt rate, If you cannot enter the data into spreailshect sallware, you can perform the calculations by haul or wilh a simple calculator, First, determine the annual diseaurt faetor—a multi- plier for eaeh year based on the discon ral and year—and then apply it to the costs and benefits Jor cach year, ‘The formula for the discount factor is (141) where ris the discount rate. such as 8 percent, and fis the year, bor example, the discount actors used in Figure 4:3 are caleulated as follows Year 0: discount factor = (110.08) Year |: discount factor = 14(1+0.08)! = 93 Year 2; discount factor = 1140.08) = 86 Year 3: discount factor = 1/(1-0,08}4 Alter determining the diseount lactor each year, multiply the costs and ben elits each year by the appropriare discount factor, For example, in Figure 4-3, the discounted cost lor Year 1 is $40,000 * .93 = $37,200. Next, sum all of the discounted costs and benelils cach year to get a total. For example. the total discouriud Costs in Migure 4-3 ave $243,200, To calculate the NPY, lake [he total discounted benefits and subtract. the wal discounted costs. In this exam. ple, the NPY is $516,000 ~ $243,200 = $272,800 Return on investment Another important financial consideration is return on investment. Return on investment (RON) is the result ol sulstracting the project costs from the bene fits and then dividing by the costs. Vor example, if you invest $100 lorlay and next year it is worth $110, your ROL ts ($110 -100}/100 ur 0.10 {10 percent) Note that the ROT is alwaysa percentage. ean be positive or negative. It is best to consider discounicd costs and benefits for multi-year projects when eil- ROI, Figure 4-3 shows an ROL of 112 pervert. You calculate chis num- ber as follows: ROL = (total discounted benetits — tetal discounted costs)/discounted casts ROI = (516,000 - 243,200) / 243,200 = 112%28 CHAPTER 4 The higher the ROI, the beer. An ROI of 112 percent is ourstanding. Many organizations have a required rate of return for projects. The required rate of return is the minimum acceptable rale of celure on an investincnt, Por exam: ple, an organization might have a required rate of return of at least LO percent jor projects. The organization bases the required rate of return on what it could exper lo receive elsewhere far an fnvestinent af comparable risk. You cant also determine a projecr’s internal rate of return (IRR) by finding what discount rate results in an NPY of zero for the project, You can use the Goal Seek func. tion in Excel (use Fxcels Help lanction for more information on Goal eck) to determing the IRR quickly, Simply set the cell containing the NPV calculati i gers while changing the cell comaining the diseaunt rate, For example, in Figure 4-2, you cauld set cell 87 to xero while changing cell B1 10 find that the IRR or Project | is 27 percent Many organizations use ROT in the project selection process. The magazine Information Week asked 200 informanian technology and business professionals how alten they measure formal ROT for information technology investments, The poll Jound that-41 percent of oiganizations requied ROT calculations for all information technology mvestments, and 59 percent required il far specific initiatives. é Payback Analysis Payhack analysis is anolher important financial lool to use wher selecting praj- ects. Payback periad is the amount of time it will take to recoup, in the form at net cash intlows, the total dollars invested in a project, In other wards, payback analysis deterrnincs how mucl fine will lapse belene accrued henelils seriake accrued and continuing eosts, Payback occurs when the net discounted cumula- tive benefits and costs reach zero, Figure 4-3 shows how to find the payback period, The cumulative benefits minus costs far Year @ arc: ($140,000). Adding that number to the discounted benelits minus costs for Year 1 results in $8,800, Since that number is positive, the payback occurs in Year 1. Creating a chart helps illustrate more prceisely when the payback period occurs, Figure 4-4 charts the cumulative discounted costs and cumulative dis- counted benefits each year using the numbers Irom Figure 4-3, Note that the lines crosé.a Hale aficr Year 1 starts. The cumulative discoumted benefits aril costs are greater than zero where the lines cross. A payback early in Year Lis, normally considered very good. 4 ielein, Paula, “Fickle Yet Poensed.” tfoa August 3, 2001PROJECT INTEGRATION MANAGEMENT “435 Payback 600,000 _@AA$aAaAM$ aA 500,000 = en ab0,000 as Payback $ 300,000 | - 200,000 700,000 0 a 1 2 3 Year ~ = pee states peeeer ae -% - cumulative costs ~—ai— cumulative benefits Figure 4-4. Charting the Payback Period Many organizations have certain recommendations for the lenigtty of the pay back period of an investment. They might require all information technology Projects to havea payback periad al less chan two years or even one year, regardless al the estimated NPY or ROI, Rhonda Hocker, CIO al San Jose-based BEA Systems Ine, said the middleware vendor has.a general rule thar its infor mation techeulogy prajes ts should have 4 payback period of less than one yea. ‘The company also ties to limit project teams to no more than nvelve peaple daing a job within four months, Giver she economic dimate and rapid pace ot change in businesses anal technology, the company has to locus on delivering positive financial results quickly," However, organizations must alse consider long-range goals when making technolagy invesimemts. Many crucial projects cannot achieve a payback so quickly or be completed in such a short time period. Io aid im project selection, it is important for project managers to understand the organization’s Hinancial expectations lar projects. [tis also important for top 5 Songini. woe L, “Tht Budgets Put More Pressure on TT uf World (December 4, 20.21CHAPTER 4 management to understand Ihe limitations of financial estimates, particularly lor information technology projects, For example, it is very difficult to develop good estimates of projected costs and benelits for information eclinolagy pro} ects. You will learn more about estimating costs and benelits in Chapter 7, Project Cost Management Using a Weighted Scoring Model A weighted scoring model Is a tool that provides a systematic process far selecting projects based on many crilcria, These criteria can include factors such ay meeting broad organizational needs; addressing problems, opportunities, at directives; the amount of time it will take to complete the prajeci; the overall priority of the project; and prajected financial performance of the project The first step in creating a weighted scoring model is to identily criteria important to the project selection process. I alici lakes lime to develop and reach agreement an (lese criteria, Holding facilitated brainstorming sessions of using groupware to exchange ideas can aid in developing these criteria, Some possible criteria for information technology projets include: Supports key business objectives Has strong internal spemnsor Has strong customer support Uses realistic level of technology Can be implemented in one year or less Provides positive NPV Has low risk in meeting scope, time, and cost goals Next, you assign a weight to each criterion, Once again, determining weighs requires consultation and final agreement, These weights indicate haw much you value each criterion or how important each criterion is. You can assign weighs based on percentages, and the sum of all of the evitesia’s weights must roral 100 percent. You then assign numerical seores 19 each criterion (for example, 0 4 100) for each project, The scores indieate-how much each project meets gach criterion, At this point, you can use a spreadshiee! applicalion 1 create a matrix of projects, criteria, weighis, and scores, Figure 4-5 provides an example of a weighted scoring model to evaluate lour different projects. Alter assigning weights for the criteria and scores for each project, you ealculate a weighted score for each project by raulliplying the weight for each criterion by its score aru! adding the resulting values Vor example, you calculate the weighted score fr Piajeet | in Figure + 25%*90-+ 1540704 15% 450+ 10% 425 + 5% 420 + 20%*50 + 109720 = 56 5 asPROJECT INTEGRATION MANAGEMENT FE Criteria Project & “Suppor kay bueinaea abjacines 20 Hae stron intomal sponsor 2 30 70 ‘Can ba aplamantad 6 ane year or 6s ™n a a roves ooutive NPV an 7 a a Hala ein ming ae, hon, an onal al | # a 0 Weighted Project Seorse TOO se] 785 so] ans Weighted Score by Project P|} Project 4 alalzlels|2lele|=|s/>e|+||» -| TL] Priest 3 ] 18 1 | 19 Project & |_| et | LI 20) project 1 H 1 0 20 40 60 80 100 Figure 4-5. Sample Weighted Scoring Medel for Project Selection Nate that in this example, Project 2 would be the obvious choice for selec tion because it has the highes| weighted scare, Creating a lar chagk iy graple the weighted scores tor cach project allows you to see the results ata glance, If you create the weighted sewing model ina spreadsheet, you can enter the data, create and copy formulas, and perfarin a “what-if analysis, Por example, suppose you change the weights lor the criteria, By having the weighted scor- ing model ina sueadsheet, you can easily change the weights to update the weighted scores and charts autamatically, ‘This capaluility allows you In invest gate various options for different slakeholders quickly, Ideally, the result should he reflective of the group's cansensus, ane! any major disagreements should be documented,CHAPTER 4 Many teachers use a weighteil scoring model 10 determine grades, Suppose grades lor a dass ait: based) an two homesarlke assigaiments and two exams, To calculate final grades, the teacher would assign a weight to cach ef these items Suppese Homework One is wart 10 percent of the grade, Homusvork ‘Two is worth 20 percent of the grade, Test One is worth 20 percent of the grade. and Test Two is worth 50 percent of the grade. Students would want to do well ow cach of these items, but they should focus on pertorming well on ‘test two since it is $0 percent al the grade. You can alse establish weights by assigniny paints, For example, a prajeet night receive 10 points if it definitely supports key business abjvetives, 5 points if it somewhat supports them, and 0 points if it is totally unrelated 10 key busi- ness objectives, With a point model, you can simply add all the points La de ning the best projects for selection, without haying to multiply weights and scores and sum the results, You can also determing minimum scores or thresholds for specilic criteria in a weighted scoring model. For example, suppose an organization really should not consider a project if it does not score at least 90 eur of 100 on every crite tion. You can build this type of threshold into the weighted scoring maulel to reject projects that do not imect these minimum standards. As you can see. welghtedscoring models can aid in project selection decisions, Implementing a Balanced Scorecard Drs. Rober! Kaplan and David Norton developed another approach ta hetp select and manage projects thal align with business strategy. A balanced scorecard is a methodology that converts an ozganization’s value drivers, such as customer servicu, innovation, operational efficiency, and financial performance, toa series of defined metrics, Orgartizalions record and analyze these metrics 10 determine how: well projetis help them achieve strategic yeals. Using a balanced scoecart! invalves several detailed steps. You can learn more about how balanced seore- cards work from the Palarwed Scorecard Institute (uwuihalancedtcarecard cag) ar other sources. Alliough this congept can wark within an information teclnology depaniment specifically, itis best 10 implementa balanced scorecard throughout an organization because il helps foster alignment between business and informa tion technology.” The Balanced Scorecard Institute, whieb provides training and guidance to organizations using this methodology, quotes Kaplan and Norton's description of the halarees! scorecard as follows: “The balanced scorecard retains Itaciitinrial financial measures. Bul fimaricial mea sures toll the story of pas! events, an adequate story fur industrial age companies © herkiman, Pric, “How to Use the Balanced SearecanL” Clo Atay:PROJECT INTEGRATION MANAGEMENT for which investinens in long-term capabilities and customer rekalionships were at critical for success, These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create fuluie value Ihreugh investment in customers, suvuliers, emplayess, processes, technology, and innovation.” AS YOU can see, organizations can use many approaches to select pprajeets Many project managers have some say in which projeets their organization selects fur implementation, Even il Lhey in unt, they need to understand the mative and overall business strategy for the projects they ave managing, Project managers an car members are olten asked to justily their projects, and understanding many ol these projec! selection methods can help them to do sa Project Charters After top management devides on which projects to pursue, it is important to let the rest of (he organization know about these jrrajecis, Management needs to create and distribute documentation 1a authorize project initiation. This tue umentation can take many different forms, but one comman form isa project charter. A project ¢harter is 9 document thal foernally recognizes the exis- Icnce of a project and provides direetisn un the projeet’s objectives and man- agement. It authorizes the project manager to use organizaticnal resources to complet: the project. Ldeally, the project manager will provide a major role in deyelaping the project charter. Instead of project charters, some orgaitizalians initiate projects using a simple leier of agreement, while ethers use much longer documents or formal contracts, Key jrraject stakeholders should sign a project charter to acknowledge agreement on the need for and intent of tlie project. A project charter isa key output of the initiation prracess, ay described in Chapter 3 The PMBOK® Guide 2004 lists inputs, teols and techniques, and outputs of the seven project integration management processes, as shown in Ligure 4-6, For example, inputs that are helplul in developing a project chaner include the following @ A contrac H you ate working on a projeet under contract, the contract should include much of the information needed lor creating a good proj- eet charter, Some people might use a contract in place of a chaner; howe ever, many conmacts are ditlicult to read ard can often change, $0 itis still a good idea to create a project. clarter, 7 The Balanced Scorecan! Institute, "What kyu Balereed Soorecatt.” (wwve at February 2003},CHAPTER @ = A statement of work: A statement of work fsa document that describes Ihe products or servives Lo be created by the project team. It usually ineludes a description of the business need for the project. a summary al the requirements and characteristics of the products ar services, and args: nizational information, such as appropriate parts af the strategic plan, showing the alignment of the project with strategic goals. & Enterprise environmental facters: These factors include the organizations stucture, cullure, infrastructure, human resources. personnel polivies, marketplace conditions, stakeholder tisk tolerances, industry risk inform tion, and project management information systems. & Organizational process assets information: Organivational process assets include formal ane informal plans, policies, procedures, guidelines, information systems, financial systems, management systems, lessons learned, and historical information that ely people understand, follow, and improve business processes in a specific organization. How an oreani- vation manages its business processes, promotes learning, and shares knowledge can also provide important information when creating a pro} ect charter, Managers should review formal and informal enterprise plans, polities, procedures, guidelines, and managemet| sysicmy when develop ing a-project charter:PROIFCT INTEGRATION MANAGEMENT PROJECT INTEGRATION WUE Sta FEIT eos 42 Davelop Preliminary Pena Gi Diocese rest tis Roe ty input “np at Wie chit PScieians nln se 2 Stat af a 2 Sitersit anh sere 3 Fare erate 5 Erland 2 Fj ag em ite leno ens Cronin incur Tet ore 2 Erte torment 2 ido Bape imme |] Pitan rsthods 2. Tol and terigues 4 Sate mal procs 2 fewer ai Picea thee eae 2 tool ecboues 4 Roberto herent 2 Reeremmecanmst Wrote erapeen | rman onaneeees sea et agent 2 Beinn 2 2. Ours adapt irowtin en rae snarter ites pugee 3. dum I reject manger ple Pecan GSEs ecnscat Tetaputs ae naabani 2 Apbrevedceretea stl 3 Rporoue preteens 4 perma Phere recess Thoies narmgomen: ran 5 rnd eect apa’ at pert one enue atc Ws tnput WSs: anagem lan aah’ Mota Loe 6 Recommended pravertive 1, cnn 2 Canc a ae Fas nerve praverta A Frasect maneqerte tusbuadoiany 2 ajo manera infarmot on stew 3 Exel jayne 3. dutpue T fpproved change requests 2 Rbjected change ns toecire xrineeri toe eepal Requrvies cvarses 3 Poke marageonk plat tuppates A Peioct cop sateen nate 5 pero ereavsacies fect naoeme nt plat & Acproved preeantive actin, Coie deanna 7 Aparoved niet 3 Bnerpihe barrios Seed sa alae * altos 2 oth pet ew ‘anda Fverablos 2. ole an aches 1 Proje anager frathedsieny 2 Projet manage nent erie ogee 43 Enger wagner 4 Ainpite 1 Belriistative chauas proces 2 Errata peacedioe 2 Creipratbey sens ret 4 Bigertranel peda i. Project integration Management Overview eile 2004, p79,CHAPTER @ ‘Tools and techniques for developing a project charter listed in the PAMBOK® Guide 2004 include project selection methods, a project manage ment rictiodology, a projeck management information sysicim, and expert judgment, The previous section described several project selection methods, and Chapter 3 discussed using a project management methodology. A proj Cel management information systera ty a sev of automated tools that hely ta organize and integrate project management information throughout an organization, In addition 10 project management software, such as Project 2003 or similar software, a project manaycment ilocmation system can include additional software that helps people in an organization create, modify, wack, and communicate project information. See the sections in Chapters 4=12 about using seoflwarc to assist in each knowledge arca. Expert judgment is also an important technique for creating a project char- ter as well as for performing many other project management processes, The only quiput of the process to develap a project charter is a praject chare ter. Although the formar of project charters can vary tremendously. they should include the following basic information: The project's tide and date of authorization w Thepraject manag ual contact information @ Asummary schedule. including the planned start and finish dates; if a summimary milestone schedule is available, it should also be included or referenced ‘ss caeanric = A summary of the project’s budger or reference te budgetary documents & A brief description of the project objectives, including the husiness necd or other justification for authorizing the project @ A summary of the planned approach for managing dhe prajeet, which should describe stakeholder needs and expectations, important assump- tions, and constraints, and reter to related decuments. such as a commu: nicalions management jslan, as availalsle @ Aroles and responsibilities matrix & Asign-oll section Lor signatures ef key project stakeholders & A comments section in which stakeholders can provide impartamt com- ments related to the project Chapters 4 and 5 include samples of project charters, Unfortunarely, many internal projects, like the one in the opening case of this chapter, do not have project charters, They often have a budget and general guidelines, bhutan Ferma, signed documentation, If Nick had a project charter to reler 1o—especially if i included information on the appreach far managing the project—his job would have been easier, Prajeet charlers are usuallly wal difficull ty weile, What is dillie cult is gerting people with the praper knowledge and authority to write and sign the project charters, ‘Top management should have reviewed the charter with Niek, since he was the project manager. tr avin initial eneeting, they shasuld havePROJECT INTEGRATION MANAGEMENT 137 discussed roles and Tesponsibilities, as well as their expectations ol how Nick should work velih them. If there is no project charter, the project manager should work wilh key stakeholders, including top management, to create one. Since many projects fail because of unclear requirements and expectations, starting with a project charter makes a lat of seine. IE project managers are having difficully Gblaiing suppor! {rom project stakehalders, for example, they can teler to what everyone agreed 10 in the project charter. After foimally recognizing the existence of a project, the next step in project integration man AEMCHL 18 preparing a preliminary scope statement. PRELIMINARY SCOPE STATEMENTS. A seape statement isa document used 16 develop and confirm a common understanding of the project scope, It describes in detail the werk Imac eon plish on the project and is an important tool for preventing scope creep—the teruleney for project scope to keep getting bigger, as deseribed in more detail in Chapter 5. It is helpful to create a pretiniizary or initial seope statement ducing project initiation so thei the entire project Icam can start important discussions and work related ta the project scape. A more detailed scope statement is prt pared as patt of project scope management, There are usually several versions of the scope statemen|, ane cach one becomes more detailed as the project pro gresses and more information becomes available. Scope statemems, like project charters, also vary ly Lype al project. Complex projects have very long scape slatcments, whereas smaller projects have shorter scope statements, See Chapter 3 fora sample scope statement for WI Consulting's Project Management Invanet Site Project. Hem often described in a preliminary seope Stalement include the project objectives, product or service requirements and characteristics, project boundaries, deliverables, product acceptance criteria, project assumptions and constraints, the organizational structure for the projest, au initial list of defined risks, a summary of schedule milestones, a rough order of magnitude cost estimate, configuration manag ment requirements, and a description of approval requirements. Relecring again Io tlie opening case, we can assume that Nick and his project twam had a good handle on the project scope since they did produce the desires! product and results, Most of the leam members had been working on the proj- cel fora long time, and they were experts in various aspects of biotechnology. However, Nick and senior management should have discussed ane ageeeil ant what information they needed 10 review, suchas sclicdule milestones and prod- uel acccplarice criteria, since those items had the most elect on the corporate buyout, A preliminary and more detailed scone statement, updated ay the proj cet progressed, would bave been another jon! far impraying communications heoveen Nick and senior managementCHAPTER 4 PROJECT MANAGEMENT. PLANS {iy coordinate and integrate information across project management knowledye areas and across the organization, there must be a good project management plan. A project management plan is a dacument used te coordinate all proj- cet planning documents and help guide a projeet’s execution and control, Plans created in the other knowledge arcas are considered subsidiary parts of the overall project management plan. Project management plans alse lacunnent project planing assucaptions and decisions regarding choices, facilitace commu: nication among stakeholders, define the conten, extent, and timing of key management reviews, and provide a baseline for progress measurement aril project control. Project management plans should be dynamic, llestble, and sub- ject to change when the enviranment or project changes. These plans should greatly assist the project manager in leading the project team and assessing proj: ect status, To create and assemble a good project management plan, the project man- ager must practice the art of project integration management, since inlermas tion is required from all of the projec! management knowledge areas, Working with the project eam and other stakeholders to ¢reate: a project management plan will help the project manager guide the project's execution and under- stand the overall project Project Management Plan Contents Just as projects are unique, so are project management plans. A senall penject invalving a fay people aver a couple of months might have a project manaye- ment plan consisting of only a project charter, scape statement, and Gantt chart. A large project involving a hundred people over three years wauld have a much mare detailed project management plan, [1 is important ro tailor projee management plans to fit the necils of speeilie projects. The project management plans should guide the work, so they should be only as detailed ax needed ler cach project. (Scu the fist Suggested Reading for information on accessing a real example of a complete project management part.) There are, however, common elements to most project management plans, Haris of a project management plan include an introduction of overview of the project, a description of how the project is organized, the management and echnical processes used on the project, and sections describing, the wrk 40 be perfarmed, the schedule, and the budget. The introduction or overview of (he project should include, the following information: a minimum, w The project name: hivery project should have a unique name, Unique names help distinguish each project and avoid confusion among relaied projects.PROJECT INTEGRATION MANAGEMENT 739 @ A bile! description of the project and the need it addresses: ‘This description should clearly outline the goals of the prajcct and reason for the project. It should be written in laypursen’s terms, avoid technical jargon, and include a rough time: and cost estimate. @ The sponsor's name: Fvery project needs a sponsor. Include the name, idle, anil contact information al the sponsor in the introduction. & The names of the project manager and key team members: The project manager should always be the contact lor project infarmatian. Depending on the size and nature of the projet, names of key team members may also be included @ Deliverables of the project: This. section should brielly list and describe Wn: products that will be produced as part of the project. Suliware packages, picces of hardware, technical reports, and training materials are examples of deliverables. = A list of important reference materials: Many projects have a history pre- ceding them. Listing imporiam documents or meetings related Lo a praj- ect helps project stakeholders understand that history. This section should reference the plans prosluced far ether knowledge areas. (Recall from Chapter 3 thal every single knowledge area includes some planning processes.) Therefore, the project management plan shauld reference and. summarize important parts ul te scope management. schedule manage- ment, cost management, yuality management, human resource manage- nicl, communications management, risk management, and procurement management plans. ® Aisi of definitions and acronyms, il appropriate: Many projects, espe cially information technolagy rejects, invalye terminology unique ta particular industry or technology. Providing a list of definilions and acronyms will help avoid contusion. The description of how he proje: information: is organized should includ: the following & Organizational charts: In addition to an organizational chart for (he cam- patty sponsoring the project and for the customer's company {if itis an extemal customer}, there should lea project organizational chart ta shaw the fines of authority, responsibilities, and communication ler the: project. Far example, the Manhattan Project introduced in Chapter | had a very detailed organizational chart to show all ihe people working on the projec @ Project responsibilities; This section of dhe project plan should describe the major project functions and aclivilics and identily these individuals who are responsible for them. A responsibility assignment mat ris: (described in Chapter 9 is a too! olten used for displaying this informacion @ Other organi¢ational or process-related information: Depending an the nature of the project, there may be @ accd 1a decument major processesCHAPTER @ followed on the profect. For example, if the project involves releasing @ major sollware upgrade, it might help everyone involved in the project to see a chiagram or timeline of the major steps involved in this process. The section of the projest inanagement plan describing management and tech- nical approaches should include the following information: @ Management objectives: IL is important 1). understand (op management's view of Ihe project, what the priorities are for the project, and any major assumptions or constraints. a Project controls: This section describes haw 19 monitor project progress and handle changes, Will there be monthly status reviews and «quarterly progress reviews? WAIL there he specilic forms or charts to monitor progress? Will the project use earned value management (described in Ghapter 7) to assess and track perlormance? Whal is dhe process for change control? Whal level of managernent is required to approve differ- ent types of changes? (You will learn more about change contro! later in this chapter.) a Risk management: This section briefly addresses how the project team will idlentily. manage, and control risks, I slank) refer io the eisk management plan, iP one is required for the project. f Project stalling: This section deserihes le umber and types of people required for the project, It should refer to the stalfing management plan, if one is required for the project. = ‘Technical processes; This section describes specific methodologies a project might use and explains how to document inlonmation, Bar example, any information wehnology projects [allow specitic software development methodologies or use particular Computer Aided Software Engineering {CASE} tools, Many companies or customers also have speeifiv formals for Lechnical locurnentation. Wis important to clarily these technical processes inthe project management plan. The next scetion of the project management plan should describe the work vo perfarm and reference the scope management plan. It should summarize the following: = Major work packages: A project manager usually organizes the project work into several work packages using a work breakdowa structure (WBSi, and protluces a scope statement ty ilescribe the work in more detail. This section should briefly summarize the main work packages tor the project and refer to appropriate sections of the scope management plan = Key deliverables: This section lists and describes the key products pro- duced as part of the project, Ik should also describ: (ha: aquality expecta tions for the product deliverablesPROJECT INTRORATION MANAGEMENT iat @ Other work-related information: This section highlights key inlormation related to the work perlormed on the prolect. For exanyple, it might list specific hardware or seliwarc te-use on the project ar certain specilicas tions t0 follow. Lt should document major assumptions made In defining the project work. The project schedule information section should include the following: Summary schedule: 1 i helpful to see a one-page summary af thie overall project schedule. Depending on the size and complexity of the project, the summary schedule might list only key deliverables and their planned completion dates. Bor sinallee projects, it might include all of he werk and associated dates for the entire project in a Gantt chart. For example, the Gantt chart and milestone schedule provided in Chapter 3 for JWD Consulting were fairly shart and sirnple. a Detailed schedule: This section provides infarmation on the project sched- ule that is more detailed. 1 should reference the schedule management plan and discuss dependencies among project activities that could allect the project schedule, For example, itanight explain that a major part of the work cannot start until an external agency prayides funding. A net- work diagram can show these dependencies isee Chapter 6, Project Time Management} © Other schedule related information; Many assumptions are often made in preparing jaject schedules, This seclinn should dlacumenc majer assuienp= tions and highlight other important information related 10 the project schedule, the budget section of the project management plan should include the following: = Summary budget ‘The summary budget includes the total estimate of the overall projecr’s budget, 1 could also include the budget estimate tor each month or year by certain buaiget categories. 11 is timportant tp jirpviele samme explanation of what these numbers mean. For example, is the toral budget estimate a lito number thal cannot change, or is it a rough esti mate based on projected cusls aver Huy next Hire years? Delailed budget; This section summarizes what is in the cost management plant and indiudes tore detailed budge! inksrimation. For example, what are the fixed and recurring cost estimates for the project each year* What are the projected financial benetits of the project? What Lypes al people are nceded to de the work, ail how are the labor costs ca lealated? See Chapter 7, Project Cost Management, for more information on ci cost estimates and budgets eating42° cH aPTER a Other budget-relared information: This section documents majar assump= tions and highlights other important intormation related to financial aspects of Ihe preaje Using Guidelines to Create Project Management Plans Many organizations use guidelines tw create project management plans, Project 2003 and other project management soltware packages come with several tem- plate files 10 ust: as guidelines. However, do not confuse a project management plan with 4 Gantt chart, The project management plan includes all project- planning documents, Plans created in the other knowledge areas can be can- sidered subsidiary parts of ie averall project management plan. Many government agencies also provide guidelines for creating praject man- agement plans. For example, the U.S. Department of Defense (DOD) Standard. 2167, Software Development Plan, describes the [ermal for contractors £0 use in creating a plan for software development for DOD projects. The Institute of Electrical and Electronies Engineers (IEEE) Standard 1058-1998 describes the contents of a Software Project Management Plan (SPMP). Table 4=1 provides some of the categories lor the IEEE SPMP. Companies working on software development projects foe the Department of Delense must follow this or a simi- lar standard Table 4-1: Sample Contents fora Software Project Management Plan (SPP). MAJOR PROJECT MANAGEMENT PLAN SECTIONS Prowect MANaceriat TECHNICAL ‘SUPPORTING ‘Overview ORGANIZATION PROCESS PLANS = Process PLANS PRoctss PLANS Section Purpose, scape, Faternal Sian-upplans Process made Gonliguracion Topics ancl abjectives:—Interlaces: (estimation, meth management assumprions internal ssafting, tools, and plan: veriticar and constraints; structure resource techniques; then and wali- project deliver: roles and acquisition, infrastructure dation plans ables schedule responsibilities and prefect plan: prevtuct documentation and tnacet sal training | acceptance plan: quality sunimary; plansy; work plan assurance evolution of plan (werk. plan revierss the plant acitvibes, caixd ails: schedule, probleti res resource, ant Tustin pian: udiget allow sulscontractor tour eoatrul inanagernent plan: disk man pplon, process agement plan; improvement closeout plan plan IDET Standard 1058-1998,PROIECT INTEGRATION MANAGEMENT In many privates organizations, specific documentation standards are not as rigorous; however, there are usually guidelines for developing project manage- ment plans, Icis good practice to follow standards or guidelines for developing project management plans in ai erganization to facilitate the development and execution of those plans, The organization can work more efficiently if all proj- ect management plans followea similar format, Recall from Chapter | that com panies that excel in project management develop and deploy standardized project delivery systems. The winners clearly spell out what neces to be done in a project, by wrorn, when, and how. for this they une: an inleyraied loollas, inducing PM tools, methods, and techniques.../f a scheduling template is developed and used aver ard ver i hocomes 4 repeatable action that leads to higher productivity and ‘ewer uncertainty Sure, using scheduling templates is neither « break though nor a feat, But laggards exhibited elmost no use ol the templates, Rather, in constructing schedules their project roncgers slaried with aclean sheet, aclear waste of tinie.* For example. in the opening case, Nick Carson’s rop managers were disap pointed because he did not provide them with the project planning informa- Lion they needed to make important husiness decisions. They warited to see detailed project management plans, including schedules and a means far irack= ing progress. Nick had never created a project management plan or a status report belore, and the organization did no! pravide ieinplates or examples to follow. If it had, Nick might have been able to deliver the information lop mari agemen| was expecting, See the companion Web site for templates and samples or real project documents, The first Suggested Reading includes an entire proj- cet management plan, which is available on the author's Web site Stakeholder Analysis and Top Management Support Because he ultimate goal of project management is to meet or exceed stake- holder needs and expectations from a project, il is imperlant Lo include a stake- Jalder analysis as part of project planning. A stakeholder analysi documents information such as key stakeholders’ names and organizations their rales on the project, unique facts about each stakeholder, Heir level of interest in the project, their inluence on the project, and suggestions for man- aging relationships willl cach stakebalier, Since a stakeholder analysis often includes sensitive information, it should not be par! of the overall project plan, whith would be available for all stakeholders to review. In many cases, only project managers and aller key project iam members should see the stake holder analysis. Table 4-2 provides an example of a slakeholkler amalysis that 8 Miloevie, Fragan and And Ozbay, “Delivering Prajects: Wha the Waters Du." Broceettings of tte Moject Management Institute Annual Seminars f Sympostum (November 2001)CHAPTER 4 Nick Carson could have used 10 hel him manage the DNA-sequenciny insine ment project described in the opening case, [t is important fur project managers to take the time to perlonmn a stakeholder analysis of same sort to help under stand and meet slakeholder needs and eapectarions Table 4-2: Sample Stakeholder Analysis 4 KEY STAKEHOLDERS Aviad SUSAN Er Marg Dawn Organization —Lnteral Project vam Prujecttwain JTardware Project senior vendor manages for Management ther iter nal projeus Roi on Hrujeet na Lead Supplier ol Corapetiior project syonserand sequencing peosarimer some for company one ol the expere Ingrmument — resuurces company's harciware founders Taligew fuets Quiet, PhD. in Very smart, Hesdofa Nice guy, deitaading, —bieleyy, easy best prom siai-up. one at the tehes details, ro ewark siuciier! — campany, he uklest peuple usisneys with, has Knurz weird knows we a engnany, focuser, tuatadler sense ol can make | has three Stanfind humor him rich HP kidls MBA this works college Level of Very high Very high High Very high Lanw a interest medium Level of Very high; Subject Highy hand Low; olher Law in influence gancallthe terexpert: — toreplace——yendurs medium shore ecitical bo available success Suggestions — Kees Make sure | Keep him Give tum Hie knows esi managing informed, slic reviews — happy so he enough lead his project vetalionsiiip let him lead speeiticauiony stays: erga time to takes a hock conversa- and leads sive stock deliver seat to this tions doas testing can opclons: tikes huzdware one, burt he saysand do some Mexican ean learn quickly voor frum Load sem him home Astakehtolder analysis will also help the project manager lead the execu tion of the project plan. For example, Nick Carson should have taken the time to get to knew key stakeholders, especially the praject sponsor, so he could understand the project sponsor’s expectations and working style. Because Nick had a tendency to talk al great lengwhis about teehuical details and Ahmed, the project suousar, was very quiet by matnre, Nick should have Jet him lead conversations about the projec! ia determine his concerns aud interests. Once Ahmed told Nick what w do, Nick should have focused onPROJECT INTEGRATION MANAGEMENT 145 meeting his spanstr's expeetalions. If Nick did not Kkriow hoy to perform certain project management functions, he should have asked lor help, Nic should have realized his own limitations and perhaps hired an assistant with @ projecl management background. Likewise, Ahmed and other top managers at the company should have taken the time to understand Nick’s needs and provided him with more sup port. Nick heard, “Me whalewer iL takes to get the job done,” se hu alehved into what he loved to da: technical problem solving. Ahmed did not hire someone Lo fill Nick's previous technical position, so how could he expect Nick to do both the management work aod technical work required lor He: project? He should have seen that Nick needed help and worked with him tw plan the best course of action, Recall irom Chapter 2 that executive support contributed the most (o successful information icclinalogy projects. Tey management must work with project managers to help them plan and execute projects succes fully. Since Nick was the fourth project manager on this project, top manage- ment at his company obviously had some prablems choosing and working will project managers in general PROJECT EXECUTION Directing and managing project execution involves managing and performing the: work described in the project management plan. The majority of time oa project ig usually spent on execution, ag is mast of the prajeet’s budget, ‘The application area of the project direcily affects project execution because the products of the project are produced during prejeet executions For example, the DNA-sequencing instrument project fram the opening case and all assaci- ated soltware and documentation would be produced during project execu The praject eam would aced (i use their expertise it biology, haruwvare anil software development, and testing to produce the product successfully, The project manager weuld also need 10 Locus on leading the project team and managing stakelelder celarionships 1a execute (he project raariayement plan successfully, Project human resource management and project communiea- lions management are crucial to a project’s success, See Chapters 9 and 10 respectively for tore inlerimation on chose kuiewledge areas. Hthe project involves a significant amount of risk or outside resources, the project manager also needs te be well versed in project risk management and project procure ment management, See Chapiers U1 and 12 for details en thase knowledge areas. Many unique situations occur during project execution, so project man- agets niust be Mlexible and creative in dealing with them. Review the situation Prica Hell faced during project execution in Chapter 4. Aly review the ResNet ease study {available on he companion Web site for this texti 10 understand the execution challenges project manager Peeler Kivestu and his project team faced,CHAPTER 4 Coordinating Planning and Execution Project integration management views project planning and execution as inter: twined and inseparable activities. The maint function of creating a jiruject man- agement. plan and all other project plans (e.g., the scope: management plan, schedule management plan, and so on) is te guide project execution. A gal plan should hel: praduce good products or work results, Plans sll docu- ment what good work resulls crmsist of, Updates to plans should reflect knowl edge gained from completing work earlier in the project, Anyone who has iried to write a computer program from poar specifications appreciates the impor tance of a geod plan, Anyene whi has had 10 document a poorly programmed system appreciates the impartance of good execution, A commonsense approach 10 improving the coordination between project plan development and execution is to follow this simple rule: Those who will do the work should plan the werk, All projeel personnel need to develop both planning amd executing skills and nal experience in these areas, In informa- tion technology projects, programmers who have had (a write detailed specili- cations and then create he code from their own specifications become better at writing specifications, Likewise, musi systems analysts begin their careers as programmers, 30 they understand what type of analysis and documentation they need to write goud code, Although project managers are responsible for developing the overall project management plan, they mus! solieir input from the praject team members who are developing plans in each knowledge arca Providing Strong Leadership and a Supportive Culture Strong leadership and a supportive orpanivational culture are crucial during project exec ulin, Project managers must lead by example 1o demonstrate the importance of creating gond project plans and then Following them in project execution. Project managers olten create plans for things they nevi 1a do themselves. If project managers follow through on their awn plang, their team sumbers are more likely 1a de the same. Q)What Went Wrong? Many people have @ aoor view af plans nased on thelr experiences. Top managers often Fequire a projest management plan, bul then ne one follows up on wether the plan was fol lowed. For cxamole, ones project manager said he weal mast with each project ipa leader ‘within two months to review Iheit project plans, The project manager created » detaled Schedule for the reviews. He cancelled the first mesting due to anuthier businese commit ment, He rescheduled thie next mecting tor unexplained personal reasons. Thwo months later, the wroject manager had stil nat mel vith aver pait of the project team lasders. Why shouldPROJECT INTEGRATION MANAGEMENT a7 project members feel obligated to follow their own plans when the project manager obviously ied net follows his? Another examle ot misusing plans comes trom a college dean whe refused to authorize hiring a new faculty member, even though adjunct facuity staffed half of the classes in that t academic discipline. The dean said the departinents strategic plan was outdated, and they could not hire anyone else until they had 3 new strategic plan, The callege itselt had aot Updated its strategic plan. in over sxe years, and members of the department suspected the i situation was related 10 the dean wanting more gatitical power within the department. A i faculty member wha taught strategie planning quickly wrote s new desarment strategie : plan, gat approwal from other denariment mernbers, and serrt it tothe dean, the depart. ment did hire a new faculty member, but no one ever looked at that strategic plan again, Remember that project plans, unlixe meny other plans, should guide execution, not satisly al goals. persinial or pel Good proje execution alse requires. a supportive erganizational culture, Hor example, organizational procedures can help or hinder project execution. Han organization bas useful guidelines and templates for project management that everyone in the organization follows, it will be casier lor project managers and their teams to plan and do their work, I the organization uses the project plans as the basis for performing and monitoring progeess during execution, the cule ture will promore the relationship between good planning and execution, On tbe other hand, if organizations have confusing or bureaucratic project man agement guidelines that hinder gcuing work done ar do not measure progress against plans, project managers and their teams will be frustrated, Even with a supportive organizational culture, project managers may some fines find it necessary to Ireak the rules io pradice projet results ina timely manner, When project managers break the rules, politics will play a role in the results. For example, it a particular project requires use of nonstandard soft- ware, the preject mattager must use his or ber political skills to epavince car cerned stakeholders af the need to break the rules on using only standard soltware, Breaking organizational rules—and getting away with it—requires excellent leadership, comuinivatient, and political skills Capitalizing on Product, Business, and Application Area Knowledge In addition to possessing strong leadership, communication, and political skill project managers also need Lo pasess product, business, arid applicalinn area knowledge t execute projects successfully, It is often helpful for information technology project managers to have prior technical experience or ai least a working knowledge of information technolagy products. For example, if the project manayer were leading a Joint Application Design (JAD) team co help define user requirements. it would be helpful for him or her to understand theCHAPTER @ language of the business and technical experts on the team. See Chapter 5 Project Scope Management, for more information on JAD. Many infartnation technology prajeets are small, se praject managers may be required ta perform some technical work or mentor Leam members 10 com- plete the project, For example, a three-month project to develap a Web-based application wilh andy chree leam members would benelic most fram a project manager who can complete some of the technical work. On larger projects, however, the project manager's primary responsibility is to lead the team and communicate willl key project slakelialders. He or she would not have time tn do any of the technical work. In this case, it is usually best that Lhe project manager understand the business and application area of the projeet more than the wchnology invalved, However, it is very important on large projects for the project manager to understand the business and application area of their project, Far example, Norihyest Airlines completed a series of projects in the last ten years ta develop and upgrade its reservation systems, The company spent millions ol dollars and had moce than seventy full-time people working on tae projects al peak periods, The project manager, Peeter Kivestu, had never worked in an information technology department, but he had extensive knowledge of the airline industry andl the reservations process. He carefully picked his team lead- ers, making sure they had the required technical and product knowledge. ResNet was the first large information technology project at Northwest Airlines Jed by a business manager instead ela ieclinical expert, and i] was a roaring success, Many organizations have found that large inlormaiion technology projects require experienced general managers who understand the business arul application area of the techmolagy, not the technology itself, (You can read the entire ResNet case study from the companion Web site listed in the second Suggested Reading for Chapter 3.) Project Execution Tools and Techniques Dirveting and suinaging praject exceution requires specialized tools and tech= niques, some of which are unique to project management, Project managers can use specific tools and techniques to pertarm activities that are part of exe culian processes. These include & Project management methodology: Ax mentioned earlier, many expe- rienced project managers believe the mast efleetive way Io improve proj eet management is to follow a methodology that describes not only what to do in managing a project, but how tod it, For example, il Nick and his senior management has) agreed thal Hey wauld have weekly status review meetings in Ahmed’s office where Nick and his key project teamPROJECT INTEGRATION MANAGEMENT 145 members would pravide short presentations on specific topics, the execus tion of the project would haye gone much more smoothly. m Project management information systems: As described in Chapter |, there are hundreds of project management software products available on the markel tday. Many large organizations are moving toward powerful enterprise project management systems that are accessible via the Internet, Project managers or other team members can create Gantt charts that include Tinks other planning documents, For example, Nick arene of his teammates could have created a detailed Gantt chart for the biotech project and created a link to other key planning documents. Nick could have shown the summary lasks during Wie stalis review meetings, and if top management had questions, they could link to supporting detail. They could alse have set baselines for completing the project and tracked their progress foward aehivying Hose goals Although these tools and techniques can aid in project execution, project Managers must remember that positive leadership and song teamswvork ace critical to successful project management, Project managers should delegare the detailed work involved in using these tools to other team members and focus on providing lealorship for the whole ppraject lo ensure praject success. iad Wed Right? Malaysia's capital, Kuala Lumpur, has become one of Asia's busiest, most exciting cities, {nhth growth, however, came trafic, to help allewitta this problem, the city hired a local fra ! in mid-2008 to manage a MYR $400 million (U.S. £105 million) project to develog 2 staie- al-the-art Integrated Transport Information System (ITIS}, The Deputy Project Director, clained Thal they broke the puajec | inte fem key phases and focus several key milestanes, They deliberately kept the works loosely structured to allow the team, ts be more flexible and creative in handling uncertainties, They based the entire project eam within a single project office to streariline communications and facilitate: quick prestie lerr solving through ad hes working groups. They alsa used 2 dedicated project intranet te exchange information between the project team and sub-contractars, The new system is i planned fear ecarpletian int Project managers and their teams are most allen remembered for how well they executed a project and handled difficult situations, As John Madden atten says when announcing Super Bowl events, the key to winning is good execu finn. Wher one fasing coach was asked what Ie thou cucion, he responded, “I’m all for it!” tl abant Iris Learns exe "Parkes, Sarah, “Crosstown Tvaldic," £2 Neawork (August 24004)150° carter 4 MONITORING AND CONTROLLING PROJECT WORK (On large projects, many project managers say that 90 percent of the job is communicating and managing changes, Changes are inevitable on most proj= ects, $0 1s iinporlant to develop and tollow a process lv monitor and control changes Monitoring projest wark includes collecting, measuring, and disscrninating performance information, Lt also involves assessing mcasiirements and analyz ing tends to determine what process improvements can be made, The pinjeet Jeam should corminuously memitor project perlormance tw assess tlie overall healt af thu project and identify areas that reajuire special attention The project management plan, work performance information. performance reports, and change requests are all important inputs for monitoring and eon- trolling project work, Key tools and techniques for performing this process include using a projed managemen( methodology and a project managemun! information system, as described for project execution, Additional tools and lee lettiques include expert judgment and caruvd value management, described in detail in Chapter 7, Project Cost Management. < Media Snapshot | Few events get more media allentor than the Olymp.c Games. Imagine all the work i involved in planning and executing an event Ila! invokes thousands of athletes from f around the world with millions of soectators. The 2002 Olyngie Winder Games and t Paralympics tok five years la plan and co 81.9 billion, Pill awarded Ine Salt Lake Organizing Committee (SLOC} the Project af lhe Year award for delivering world-class games that, according 1a the International Olympic Commitee, “merle a profound impact nan the people oF the worl.” 1 avers software-based 545 tom with a cascading color-coled WBS ta integrate planning. A year lisfare the Games, i they added a Venue Intearated Planning Schedule to help the tezm integra needs, luurigets, and pans. For exemple, this software helped the team coordinate differ | ‘ent areas involved in controlling access into and around a venue, such @s toads, pedes- rian pathways, searing and safety provisians, andl nosaltality 2reas, saving neary 310 millon, éhen the team weperivnced a nudget defielt thiee years before Lhe aamies, Lhey sepa rated “must-have” from "nice-to-have" lenis and imaemented a rigorous expense approval process. According to Matthew Lehman, SLOC managing director, using classi / project managemen! tools huirnert a $400 milion deficit inta a $100 miligan surplus the SLOC also used an Executive Ruadinaps, a.one-page list of the top 100 Games-wide activities, lo keen executives apprised of progress. Activil es were tied to detaied project tt "© Posi, Ress, “The Rest Wincer Gyn oy Fete" Aefwent Wlanuary 20044 p. 33(OUECT INTEGRATION MANAGEMENT. 457 iwlorrnation within each deoariment’s schedule, A 96-day highlighter showed which man- agers wore accountable for each Imegrated activry Fraser Buillack, SLOC Chie Operating Officer anc Chief, said, “we knew when we wele on and off schedule and where we had ly apply add tional resources. The interrevation oF the tunctions meant they could nat run solation—it was a smoothly running machine" ‘Two important ourpurs of monitoring and controlling project work inelude recenmmended corrective and preventive actions, Corrective actions should result in improvements in project periarmance, Preventive actions reduce the probability of negative consequences associated with project risks. har example, iI prajeet tearm members have not been reporting hours that they worked, a corrective action would be to show [hem how la eater the inlormation and Let them know that they need to-do IL, A preventive action might be maditying a lime-traicking sysiem serecn te avold common errors people made in the past. Forecasts aré also important ourputs of moniliring aml controlling. Forecasts estimate conditions and events in the project’s future based on past infarma- tion, For example, project managers often provide forecasts of the amount of money they will need to complete a project based att past performance (see Chapter 7, Project Cost Management). vo other outputs of monitoring and cantralliny projeet work are recommended defect repairs and requested changes. NTEGRATED. CHANGE CONTROL Integrated change control involves identifying, evaluating, and managing changes throughout the project lite cycle. The three main objectives of inte- grated change contral arc: J, Influencing the factors that create changes to ensure that changes are beneficial: cnsure that changes ace beneficial and that a project is suc Jul, project managers and their teams must make [rade-olls amnong key project dimensions, such as scope. time, cost, and quality, . Determining thar a change has occurred: To determine that a change has accurred, the project manager must know the status of key project areas atall times. tn aublilian, the project manages must communicate signi cant changes to top management and key stakeholders, top management and ather key stakeholders do not like surprises, especially ones that mean the project might produce less, uke longer ia complete, cost more than planned, or be of lower quality than desired "pou. 23,1527 CHAPTER 4 4, Managing actual changes as they occur: Managing change is a key roleol project managers and their jams. Iris important that peoject managers exereist: discipline in managing the project s helyy minimize the number of changes that occur Important inputs the integrated change control pracess include the proj- eel management plan, work performance information (usually ty the form of performance reports), requesteil changes, tecommended preventive ani cor rective actions, revommiended defect repair, and deliverables. linpertant our puls inehule approved and rejected change requests, appraved corrective and preventive actions, approved and validaced detect sepai, deliverables, and updates to the prnjeet management plan and project scope statement, ‘The project management plan provides thie haseline for idemitying and con- trolling projeet changes, A baseline is the approved project management plan plus approved changes, Hor example, the project managument plan includes a section describing the work to perform ona project, This section of the plan describes the key deliverables for the project, the products af the preject, and quality requirements. ‘The schedule section of the prnjest management plan lists the planned dates for completing key deliverables, and the budget section of the project manageinent plan provides the planned cost for these deliver: ables. The project team must focus on delivering thu: wark as planned. If the project team or someone else causes changes during project execution, they must revise the project manayement plan and have tt approved Iny the project sponsor. Many people refer to dillerent types of baselines, such as a cost base ie ar schedule baseline, ta describe differen project goals more clearly and perlormance toward mecling them Perfurtmance reports provide information on luw project execution is going ‘the main purpose of these repor's is La alert the project manager and projec team of issues that might cause problems in the future. The project manager and project iam must decide if corrective or preventive actions are needed. what the best course of action is, and when to act. For example, supose: ane uf the key deliverables in a profect management plan for the opening case is installaliant of a new server for the project. [1 ane ef the project team members reports that he or she is having problems coordinating the purchase and instal- lation of this server, the project manager should assess what will happen 10 the mojee! if (his deliverable is a little late. TH late installation will cause problems in Other areas of the project, the projesl manager should take necessary actions te help the team member complete this task on time. Perhaps Ue purchase request is held up because one of the purchasiny clerks is on vacation, The project manager could talk Lo (he head of the purchasing department ta make Sure someone processes the order, IE nothing can be dene io meet the planned insiallarion date, che project manager should alert the other people who would he affected by this schedule change, ‘The project manager should also lank at the big picture of len the project is going. If there isa eonsisient trend thatPROJECT INTEGRATION MANAGEMENT 183 schedules are slipping, the project manager should alert key stakeholders and negotiate a later completion date for the project Change requests are common on projects and occur in many different forms. they can be oral or written, formal or informal, tor example, the project tearm member responsible for installing the server might ask the project manager at a progress review meeting il iL is all righ to onder a server willl a Laster processor than planned, from the same manufacturer for the same approximate cost Since this change is positive and should have no negative effects on the project the project manager might give a verbal approval al the progress review meet- ing. Nevertheless, ir ig still important chat the project manager dacument this change to avoid any potential problems in the future. The appropriate team micinber should update the section of Ue scope statement with the rey spexili- cations for the server, Still, keep in mind that many change requests can haye a major impact on a project. For example. customers changing their minds about the umber of pieces af hardware they wanil as part of a project will have a definite impact on the scope and cost af the project. Such a change might also affect the project's schedule, The project team must present such significant changes in werltien fori, ail dere shuld he a ford review process for ana= lyzing and deciding whether to approve these changes. Change is unavoidable and often expected on most information technology projects. Technologies change, personnel change, organizational priarities change, and so on. Careful change control on information technology projects is a critical sucess factor. A good change control system is also impertant for projec! success Change Control on Information Technology Projects From the 1950s 10 the L98Us, a widely held view of information technology {then olten referred to as data automation) project management was that the projec! tate should sirive ie do exaclly what they plarmed om inne and within budget. The problem with this view was that project teams could rarely meet original project goals, especially on projects involving new technologies. Stakeholders rarely agreed up fronton whal (he scope of the project really was or what the finished product should really look like, Time and cost estimates created early in a project were rarely accurate: Beginning in the 1990s, mast project managers and (op management real- ized that project management is a process of constant communication and negotiation about project objectives and siakeholder expectations. This view assumes that changes happen throughout the project life cycle and recognizes that changes are olten beneficial to some projects, For example, if a project team member discovers a new hardware or software technology thal coulll sat= isly the customers’ needs for less time and money, the praject team and key stakeholders should be open to making major changes in the project,154 Change Control System CHAPTER 4 All projects will have some changes, and managing tem isa key issue it project management, especially for inlormation technology projects. Many Information technelogy projects involve the use of hardyare and soltware thi is updated frequently, For example, the initial plan for liv specifications of the server described earlier may have heen eulling-edge technology av that time. I the actual ordering of the server occurred six months later: it is quite pomille that a nore powerful server could be ordered at the same cust, ‘This example illustrates a positive change. On the ather hand, the manufacurer ol the server specitied in the project plan could go out of business, which would result ini negalive change, Information technology project managers should be accus- tomed to changes such as these arul build some flexibility into their project plans and exeeiitien, Gustomers tor infermation technology projects should also be open to meeting project objectives in iifleren! ways, Even it project managers, projec! teams, and customers are flexible, itis important that prejcets have a formal change contol system. This formal change control system is necessary to plan kgir managing change. A change contral system isa formal, documented process that describes when and how olficial project documents may be change. 1 also deseribes the people authorized to make changes, the paperwork required lor this change, and any automated or manual tracking systems the project will use. A change Portia systein often inchides a change control hoard (CCR), cantiguration management, and a process for communicating changes A change cantral hoard (CGB) isa formal group of peaple responsible fur approving ar rejecting changes to a project. The peimary functions of a change control board are to provide guidclines for preparing change requests, evaluat- ing change requcsts, ans! managing the implementation of approved changes An organization could have key stakeholders Jor He cnlire organization on this board, and a few members coulil ruiale based an the unique needs of each project. By ercaling a formal board and process or managing changes, heer overall change contol should result. However, CCBs can have sme drawbacks. One drawback is the time it takes bo make decisions on prapased changes. CCBs olien meet only once a week or once a month and may not make decisions in one meting. Seme organizations have streamlined pracesses for making quick decisions on smaller project changes. One company ereated a “48-hour policy,” in which task leaclers ar a large information fechnology project would reach agreements on key decisions or changes within their expertise and authority. The person in the area most affected by this devision or change then had 48 hours to go to his or her tep manayemen! ly sek approval, If for some reason the project team's decisinn could not be imple- mented, the top manager consuilicd would have 48 hours to reverse a decision: ollicrwise, Ihe project team’s decision was approved, This lype Hf process 18 a greatPROIFCT INTEGRATION MANAGEMENT 155 way to deal with the many time-sensitive decisions or changes thar project teams must make on many information technology projects, Configuration management is anolive inyporlant part of integrated change contral. Configuration management ensures that the descriptions of the project's products are correet and complete. It invalyes identifying and control- ling the functional aud physical design eharacterislies of praducts and their support documentation, Members of the project ream, frequently called configs uration management specialists, are often assigned to perform conliguration management lar large projeets. Their jul is to identily and document the fune- tional and physical characteristics of the project's preducts, contral any changes to such characteristics, record and report the changes, and audit the products to verify conformance to requirements. Another factor in change control is communication. Project managers should use written and oral performance reports to help identity and manage project changes. For example, an sofeware dlevclapmient projects, mast programmers must make their edits to one master file in a database that requires the pro- glares La “check out” the file to edit it, If two programmers check out the same file, they must coordinate their work before they can cheek the file back in to the database. In addition 10 written or Lormal communication methods, oral and] tifocmal communications are also important, Some project managers have stand-up meetings once a week or even every morning, depending on the nature of the project. The goal of a siand-up meeting is to Communicate what is most imiporlant.ou (ie project quickly. For example, the project manager might have an early morning stand-up meeting every day with all of his or her team leaders, There might be a weekly stand-up meeting every Monday morning with all interested stakelaklers, Requiring, parlieipanis lo stand keeps ree tings short and forces everyone to focus on the most important project events, Why is good communication so critical to success? One of the most frustrat aaspecls of project change is not having everyone coonlinated and informed about the latest project informarion, Again, it is the project manager's responsi- bility to integrate all project changes so that the project stays on track. The projec! manager and his or her staff tustilevelop a systens for nalifying every one allected by a change ina timely manner, E-mail, real-time databases, cell phones, and the Web make it easier to disseminate the most current project Information, You will learn more abseut gawd communication in Chapler 10 Project Communications Management. Table 4-3 lists suggestions for pertorming integrated change control. As described carlicr, project management iva pracess of eanstanl commurricalion and negotiation. Project managers should plan for changes and use appropriate wwols and techniques such as a change contro! board, configuration manage- ment, and good communication, [1 is helpful to define procedures far raking, limely decisions on small changes, use written and oral perlormance reports to help identify and manage changes, and use software to assist in planning, updating, and controlling projects156 CHAPTER 4 Table 4-3: Suggestions for Performing Integrated Change Control View projeet management as a process of constant canmmunieation and negoriation Plan lor change: eslablish a forinal change control system, including a change central boar (CCR) Use gand configuration management Deline procedures fur making linely decisions on smaller changes, Use written and oral perinrmance reports te help identify and manage chang Use project uinageriecit and otlicr software to help manage and communicate cha 1, Focus an leading the project team and meeting overall p eet uals aun eaypeetationts Project managets must also provide sirong leadership w steer the project to suecessiil completion, They must not get too involved in managing project changes, Project managers should delegate much of the detailed work ce proj- ect team members and focus on providing overall leadership for the project in general, Remember, project managers must locus on the big picture and per- fornt project integration management well to leaul their (eam and beganiral ion to success. CLOSING PROJECTS. The las. process in project integration management is closing the project. In order to close a project, you must finalize all activities and transfer the com- pleted or cancelled work to the appropriate: people. The main iets of lasing & Administrative closure procedures: It is important for project learns and other stakeholders to develop and follow a stepeby-step process for closing projects, In particular, administrative closure procedures should define the approval process for all project cleliverables & Contract closure procedures: Many projects involve contracts, which are Jegally binding agreements. Contract closure procedures deseribye: the methodology lar making sure the contract has been completed, including delivery of goods and services and payment for them, Final products, serviees, or results: Project sponsors are usually most inter ested in making sure they receive delivery of the final products, services, or results they expected when they authorised the project @ Organizational process asset updates: The project team should provide a ist of projet documentation, project closure documents, and historical information produced by the project ina uselul lormat, This information Js considered a process asset. For example, project leams allen weil aPROJECT INTEGRATION MANAGEMENT 157 lessonselearned reporl at the endl ala project, and this information can he a tremendous asset for future projects. (See Chapter 10, Project Communications Management tor more information on creating lessons- learned reparts.and Appenilix Don the companion Web site fora ter plate for documenting lessons learned. USING SOFTWARE TO ASSIST IN PROJECT INTEGRATION MANAGEMENT. As described throughout this chapter, project teams can use various types ol sallyware le assist im project inlegratian management. Prajec! learns can create documents with word processing soltware, give presentations with presenta- tion soltware, track information with spreadsheets, databases, of customized soleware, and transmit information using variens types of communication soltwrare. Project management sollware is also an important tol ler developing and integrating project planning documents, executing the project management plan and ted projcer plans, monitoring and controlling project activities, and peulurining inlegiated change cori), Sinall project tears can use low end or mid-range project management soltware products to coordinate their work, For large projects, however, like managing the Olympic Games described inthe Mulia Snapshot, organizations ray huaefit mast fram high-entl fouls that provide enterprise project management capabilities and integrate all aspects of project management. All projects can benetit trom using some type GT project management inforrnation syste ty caordinate anel cemurasivale project information As you can see, there is a lot of work invelved in project integration man. agement. Projeet managers ard their weais rust facus or jnulling all the ele ments of a project together to successfully complere projects. CASE. WRAP-UP Without consulting Nick Carson or his team, Nick's CEO hired a new person, Jim, 1 act asa middle manager between himself and the people in Nick“s department. The CEO and other top managers really liked Jim, the new middle manager. He met with them often, shared ideas, and had a great sense of humor. He started developing stan- dards the company could use lo help manage projects in the future.For example, he developed templates for creating plans and progress | reports and pul (hem an (he company’s intranet, However, dim and Nick did not get along. Jim accidentally sent an e~ mail to Nick thar | was Supposed Lo Bo to (ae CBO. Un this &- ail, Jim said te was hard to work with and preoccupied with the birth of his son, Nick was furious when he read the e-mail and stormed into the CRO’s office, The CEO suggested that Nick move wo another depan- Nick | ment, but Nick did not like that option. Without considering the repercussions, the CHO offered Nick a severance package to leave the | company, Because of the planned corporate buyout, the CEO knew | they might have to let seme people go anyway. Nick talked the CHO nlo giving him a two-month sabbatical he had not yet taken plus a | higher percentage an his slack wption . After discussing (he situation with his wife and realizing that he would get over $70,000 if he resipned, Nick took the severance package. He had such a bad expe- | rience as a project manager that he d

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