1.2 - Elements of Project Management ‘Student Workbook 1.2 - Elements of Project Management Many organisations use a project management methodology to achieve their ‘organisational or corporate goals and objectives as well as for process improvement initiatives. This section will discuss project management methodologies, where they are used and why they are used. Case study: CRM system implementation at Max Lionel Realty | To build client relationships and improve client service, Max Lionel Realty intends to ‘source and implement a new customer relationship management (CRM) system. The purchase and initial rollout of the system, including relevant training will constitute a project sponsored by Operations General Manager, Kim Sweeney. The project has a fixed, six month timeframe for completion. Kim Sweeney, your manager, has asked you to project manage this important implementation. You are excited about running this project but, focusing on your role as an estate agent, you have not worked as a project manager for some years. You will need to re-acquaint yourself with important methods and terms, The budget for the implementation will be in the range of $50,000, a significant capital expense for Max Lionel Realty. But, according to cost-benefit analysis already undertaken the project will deliver a sizable return on investment over the next three years. For these reasons, the project must succeed (by meeting all stakeholder expectations regarding scope, quality, cost and time) and has been given the highest, priority. What skills will you need? In order to effectively prepare for projects as a project manager, you must be able to: © identify basic project management principles and methodologies © have an understanding of project management systems and structures © outline legislative and regulatory requirements. ‘BSBPMG522 Undertake projet work Page 14 of 168 (© 2015 Innovation and Business Industry Skis Councl Lid‘Student Workbook Elements of Project Management Increased use of project management tools ‘The last five to ten years have seen increased accountability requirements on companies and government agencies, resulting in a greater focus on efficiency and effectiveness in the way they conduct their business and allocate resources. Today's rapidly changing economic environment, with its diverse opportunities and requirements, can be supported by using project management methodologies to support the achievement of organisational goals, while providing greater assurance to stakeholders that the organisation's resources are being used effectively. Objectives are clarified and agreed, resources identified and allocated, thereby ensuring accountability for performance and results, engendering a focus on the benefits to be achieved for all concerned. ‘Some of the benefits of using project management methodology include: efficiency - so more work is achieved in less time, with fewer resources '* reduced project risk — as risks are identified and managed Increased customer satisfaction - as better quality outputs are produced ‘* learnings from past experience are utilised - so mistakes are not repeated. Tip: Who uses project management? Organisational types currently using project management include: © defence departments, e.g. ship building, re-its, etc. © government departments, e.g. Department of Infrastructure: local government, improvements/upgrades to roads and community amenities '* construction industry ~ houses, shopping centres, high-rises ‘* software developers - customised, modified software ‘© sporting associations - finals, international competitions ‘© large scale organisations (LSOs) ~ product management, implementing new internal systems, complying with new government requirements, ‘* small to medium enterprises (SMEs) ~ small business, including tradespeople ~ tendering for contracts, managing existing contracts. Typical projects Types of projects that are undertaken by various organisations ona regular orad hoc basis include ‘* IT builds ~ new, modified, upgrades of computer systems and software '* building and construction ~ from houses to high-rises, bridges and freeways ‘* major events - Commonwealth and Olympic games, football finals, expo's (e.g. the ‘annual age career expo for students) ‘BSBPMGE22 Undertake projectwork SSS on vr (© 205 Innovetion and Business industry Skills Counell Ltd Page 15 of 1681.2 - Elements of Project Management ‘Student Workbook ‘factory closures, sometimes with off-shore relocation * defence departments - acquiring/building/efurbishing planes, ships, bases * individual or company moving to new premises (requires printing new stationary, physical relocation and set up of all equipment, etc.) «office refurbishment/house renovation (e.g. do staff have to be temporarily relocated or will work be done at the weekend?) + installation of new telephone or computer systems in existing work premises (e.g. ‘computer system would require identifying and training relevant employees, as well 2a the testing and installation of the new system) Key terms and definitions ‘sis often the case, there is some ‘project jargon’ that is often used in project management that will be essential for you to understand, Deliverables ‘A deliverable is an output produced at the end of a project or task. It's usually something, tangible. Examples of deliverables can include products, plans, reports, buildings, computer programs, policies and procedures. Gantt charts ‘AGantt chart is a type of horizontal bar chart that shows a project schedule. They can show the dependencies between tasks. Goals and objectives A goal or objective is @ projected state of affairs that a person or a system plans or Intends to achieve. An objective is a level of performance or achievement and can be monitored and graphed, for example: We will ncrease sales by 10% by the EOY 204X. Milestones Milestones are project checkpoints. They have no duration but they mark significant points of progress in a project. Milestones are used to see whether a project is on time or not. A milestone may be “Design is finished’, ‘Sign contract’, ‘Project ends’, etc. Parameters Parameters are ‘a fact or circumstance that restricts how something is done or what can ‘be done. In a project, this most commonly refers to budgets, timeframes and the scope (or size) of a project. ‘Tredtionyerion? —————S~S~S*~*~SCSCSS*S__ BSG Undertake prolect work Poge 16 of 168 (© 2015 Innovation and Business Industry Sills Councl Ltd‘Student Workbook nts of Project Management Project plan ‘A project pian is a document that describes and brings together the components of a project. The project plan: * is the guidebook for all stakeholders to the project ‘© covers all aspects of the project, with the level of detail dependent on the project size. Scope How ‘big’ is the project? The project scope defines the ‘What's in’ and ‘What's out’ of the project. ‘Scoping processes are required to ensure that the project includes all the work required, and only the work required, to complete the project successfully. ‘Scope creep “Scope creep’ is the continual extension of the scope of a project, often leading to a runaway project. As some projects progress, especially through development, requirements continuously change incrementally, causing the project manager to add to the project objectives. A related concept is ‘feature creep. ‘Stakeholders, Stakeholders are people with a vested interest in the outcome of the project. Individuals. and organisations that are involved in, or may be affected by, project activities. Tasks Tasks are activities with a fied timeframe that contribute to the project outcome. Work breakdown structure ‘A work breakdown structure (WBS) is a hierarchical, sequential breakdown of the tasks (work) to be done in the project. Project management principles Most projects are governed by time, cost and quality. (On time, within budget, to specification. Being capable of understanding and using standard project management methods and tools will help you to ensure that you get the best possible outcome within the parameters of the project brief. BSBPHGEZZ Undertake project work (© 2035 Innovation and Business industry Skills Counc Li12-6 ents of Project Management Student Workbook Principles for project management differ somewhat by methodologies described later in this section. For example, consider the PRINCE2 set of principles. These would apply to all but the most free-wheeling of project management approaches: Continued business | | Keep focused on the business goals the project is meant to Justification promote. Learn from Be wiling to alter your approach to the project, re-plan and try ‘experience new approaches as required. Most project management approaches encourage an ‘iterative approach’ in which outcomes are constantly monitored and plans are altered as ‘more information becomes available. Some methodologies, such as agile, which will be discussed later, focus on rapid cycles of development and improvement. | Define roles and This is a point on which methodologies may differ or interpret responsibilities differently, Manage by stages || The next section, will look more closely at the project life cycle, ‘Manage by exception || Look for project variances and act to keep performance within tolerances. You want to ensure no delays and that team performance meets targets. Remember, over-performance ‘may be as detrimental to your project as underperformance. For example, adding extra but unnecessary features to products, ie, "gold-plating’, may take up your team's time and resources that would be better spent on key outcomes and picking up slack in other areas of the project. Focus on products || What do you need to deliver? To what quality? What does your customer or client need? Tallor to suit the ‘No two projects are the same. The level of control required for project environment || 2 multi-million dollar project is much greater than that required for a project only costing ten thousand dollars. The number of stages required for a high risk project is likely to be greater than a low tisk project. Keep these principles in mind as you make your way through this Student Workbook and note how they are applied in the different phases of the project life cycle and in different knowledge areas of project management, such as risk management or coaching. + Great Britain. Office of Government Commerce, 2009, Managing Successful Projects with PRINCE2, Stationary Office Books, London, p. 41. ‘“edtionvesiont ——~*~*~*~*S*S—S«( SPS Undertal prect work Page 18 of 168 {© 2035 Innovation and Business Industry Skils Councl Lid‘Student Workbook Elements of Project Management Good, fast or cheap? Another look at the triple constraint model Recall the triple constraint model discussed earl. Resouroes are finite, so when you are tang to meet project outcomes, you are balancing scope, cost and time. In the triangle ilustration on the right, you are given the options of fast (time), good (scope) and cheap (cost) and tod to pick any two. Fast refers tothe time required to deliver the product, good is the scope ofthe final product, while cheap refers tothe total cost of designing and building the product. ‘The triangle reflects that these three properties ofa project ate intel, and itis not posse tooptinise al three iS one wil always Suter & Ds @. In other words you have three options: F&F 3, «fast and good, but expensive «fest ane cheap, but oor quality ‘© good and cheap, but it will take a lot longer to produce. Fast Itis important, therefore, to educate your project stakeholders on the interrelationship of time, cost and quality factors to set realistic expectations for the project. This is best done in the project initiation phase, which will be discussed later in this Student Workbook, Project management structures ‘Some types of organisations are more open to project management approaches than others. Not all organisations have the prerequisite structures, systems and behaviours to be able to successfully carry out a project. You need to be aware of your organisational structure in order to manage your projects effectively Functional structures ‘A functional organisational structure is based upon the functions of specific jobs within the organisation. Most organisations in Australia would be organised functionally Office Warehouse Re clag & dace Organisation with a functional structure ‘BSBPMGE22 Undertake projectwork Rn vr (© 2015 Innovation and Business Industry Skile Counel Ltd Page 19 of 1681.2 ~ Elements of Project Management ‘Student Workbook There is only one chain of command in a functional organisation, These types of organisations could carry out a project effectively when one functional area or department (ie. manufacturing) has a dominant role or stake in the project. Project structures Some businesses are organised solely around projects. Typically these include: «= Mbusinesses ‘© construction businesses ‘© consulting businesses. Resources| Organisation with a project structure ‘These types of organisations are structured around projects and obviously need systems and structures that focus on projects, These types of structures are simple, focused and effective. However, they are also expensive to operate. Matrix structures Matrix structures are somewhere between functional and project organisations. There are many variations on the matrix structure but they typically have two chains of command (@ functional manager and a project manager). Office Manufacturing Warehouse Project Rok OG fo ge’ ee ——— —_—___ omer Page 20 of 168 (© 2015 Innovation and Business industy Skils Council id‘Student Workbook 1.2 - Elements of Project Management For example, one such instance of a matrix structure is essentially a functional organisation with a standing project team (see above). The different functional areas can ‘conduct projects under the guidance and support of a standing project team/manager that works with the functional area for the duration of the project. Leaming activity: Project management structures Visit the websites listed below to find more information about the following key areas. For information relating to project structure and organisation: '* Wallace, S., 2007, ‘Project structure and organisation’, The ePMbook, viewed. ‘August 2014, . For information relating to matrix organisation structure: ‘© ‘What is a “matrix organisational structure"?’, 201, Blurtit, viewed August 2014, . ‘* "Matrix management’, 2011, Global integration, viewed August 2014, . For information relating to functional organisation structure: ‘¢ ‘What is a functional organizational structure?’, BusinessMate.org, viewed August 2014, , Take notes relating to what you have learned and any questions you have for your facilitator. Project management systems A project management system is a pre-defined set of management procedures designed a8 a guide to developing, planning, managing and implementing projects and the quality management framework in which projects are conducted.® This can include: © project software ‘© policy and procedures ‘© documentation such as forms. What are workplace systems? Workplace systems aim to guide the business or organisation to conduct its business in an efficient, professional, ethical, reliable and consistent manner. Workplace systems are often supported by project management software and have the ability to provide tasks 5 nter Agency Poly and Projects Unit 2008, Project management factsheet: why project management? Tasmanian Goverment, viewed August 2014, . Outline the key strategies incorporated by both the ISO standard and PMBOK to ensure ‘a successful project is achieved, — Communication systems When planning your project you need to consider how, when and what you will ‘communicate with your stakeholders and the communication system to be used. The strategy that you use will be determined by the systems that your organisation has available. These may include: © intranets ‘+ websites ‘© emalllists or groups + newsletters + SMS gateways * noticebeards. ‘BSBPMGE22 Undertake projectwork SSS von (© 2035 Innovation and Business Industry Skils Counc Ltd Page 23 of 1681.2 - Elements of Project Management ‘Student Workbook Tip: Survey your communication systems Take the time to identify what sort of communication systems that your organisation thas at hand. When your project starts, you will need to be able to make good use of the resources you have available. You may need to: ‘© interview key people to find out how information is transmitted in the organisation © organise training for yourself in things like using: © the organisation's intranet © mailing lists. Legislative and regulatory requirements When implementing project management strategies, you need to make sure that you and your organisation will comply with the legislative and regulatory requirements that apply to your industry. Types of legislation Legislation is frequently updated so it's important that your knowledge is current and that you're aware of recent changes. Some key legislative and regulatory areas to consider include: + Work health and safety (WHS/OHS) + anti- ‘+ The Australian Attorney General's Department provides legal and policy information on domestic human rights matters, ‘State and territory legislation: Australian Capital Territory: ‘+ New South Wales: + Northern Territory: + Queensiand: © South Australia: + Tasmania: ‘© Victoria: ‘* Wester Australia: , Work health and safety (WHS/OHS) The legislative framework for work health and safety in Australia fs made up of: ° hats + Regulations + standards + codes of practice and guidelines. WHS Acts are different for each state and territory, and there are also guidlines and codes of practice that apply to specific industries. Itis important to know which legistation is applicable to you in your workplace. Learning activity: WHS legislation Find a code of practice or piece of legislation relating to work health and ssafety that is specific to an industry sector and explain why itis needed for this industry, ‘ESBPMG522 Undertake project work SS vera: (© 2045 Innovation and Business Industry Skills Counel Lt Page 25 of 1681.2 ~ Elements of Project Management Student Workbook What legislation or codes of practice could apply to the Max Lionel Realty CRM rollout? Anti-discrimination ‘Anti-discrimination legislation promotes equal opportunity forall people by making it Unlawful to treat a person unfavourably based on personal characteristics. These characteristics may include age, gender, marital status, race or disability. There are a number of Acts at both state and federal levels that deal with anti-discrimination and itis essential that you know which ones apply to your workplace. Learning activity: Antl-discrimination legislation ‘Search the internet and find a piece of Commonwealth legisiation that deals with issues of discrimination. Summarise it below. How would the legislation affect the Max Lionel Realty’s CRM Implementation project? ‘Redtionvesiond ———~—SCS~*~*~SCSCSSSSS—~—*C BPS Uta proc work Page 26 of 168, (© 2035 Innovation and Business industry Skis Councl Ltd‘Student Workbook Privacy The Australian Government has restricted the amount of freedom an organisation is allowed when dealing with private information. The Privacy Act outlines how an organisation should protect the privacy of individuals, in regard to: + data collection # data use and disclosure * data quality ~ data isto be accurate, complete and up-to-date * data security © openness ‘© access and correction # identifiers anonymity © transborder data flows # sensitive information Most organisations have their own privacy policy that seeks to establish guidelines and a set of minimum acceptable standards for protecting the privacy of online users. Included in Appendix 2 of this Student Workbook is an example of a privacy policy. Learning activity: Collecting Information Most retail stores rely on keeping up-to-date with customer trends by collecting various types of information. After reading through Max Lionel Realty’s Privacy Policy (Appendix 3 of this Student Workbook), determine whether each which of the following ways of using customer information would be considered appropriate and why: * Collecting a client's postcode, and using it to determine how many clients come from a particular neighbourhood. ‘© Selling a client's contact details and purchasing behaviour to numerous marketing companies. ‘BSBPNIG522 Undertake projectwork Rion arin (© 2035 Innovation and Business industry Sklls Counel Ltd Page 27 of 168(1.2 - Elements of Project Management ‘Student Workbook | «storing client's details onto the company database after the custorner has placed an order va email ‘* Recording a client’s internet address, domain name, and date and time they Visited the Max Lionel Realty website. Ethical principles A code of ethics is a set of rules or standards that help guide staff to determine how to behave on ethical issues during their daily interactions. Every employee shares in the responsibilty for creating and maintaining an organisation's ethical culture. Example: Code of ethics The following is @ summarised list of the Code of Ethics that ABC University staff must, adhere to. The main principles of their Code of Ethics are as follows. © "We are committed to student-centered, quality learning opportunities.’ ‘© "We work towards building a harmonious working environment in which we ‘maximise our professional performance.’ © "We recognise and value the contributions made by people to the University. + ‘We demonstrate openness and faimess in al ur dealings with people.” © ‘We respect the essential dignity ofall people.” # ‘We recognise our responsibilty to build civilised communities.” © ‘We care for the social and natural environment. ‘© "We value and support the right to confidentiality Each of these principles is further explored and detailed in ABC University's Human Resources Code of Ethics policy. ‘“Rediionvesiont ————~S~*~*~*~*~*~SS*« SGD Undertake prolectwor Page 28 of 168, (© 2015 Innovation and Business Industry Skis Council Ltd‘Student Workbook 1.2 - Elements of Project Management Codes of practice Codes of practice are developed through consultation with representatives from industry, workers and employers, special interest groups and government agencies. For example, Codes of practice for work health and safety are made under the relevant state or territory ‘Act and must be approved by the relevant minister before they come into effect. A code of practice is not law, but it should be followed, unless there is an alternative course of action that achieves the same or better standards. Itis important for project managers to be aware that they should determine and follow any code of practice relevant to their work (or the work of employees, contractors, suppliers involved in the project to meet legal obligations. Codes of practice should be used in conjunction with any Act or Regulations that apply to project work. Project roles There are @ number of roles directly associated with project management. These include: project owner ~ initiator/financer of project, project sponsor ~ executive responsible for the project (often the owner) project manager ~ manages the project's implementation project team - undertake tasks involved in the project g a a a stakeholders - other interested parties, for example: © clients © suppliers © company management © customers. Jobs directly related to projects Especially within a large organisation, there are many job roles that use or require project management methodology and skills. Some of the roles are: ‘© product manager © program manager ‘© product development * event managers ‘© continuous improvement manager © project coordinator « IT/software development © engineers. Tip: Who does what? The project manager is not necessarily the one to facilitate each activity For example, a middle manager may prepare a project proposal with the project ‘manager being appointed afterwards. ‘Someone external to the project can conduct the project closing, if required. ‘BSBPNGE22 Undertake projectwork SSS vr ‘© 2015 Innovation and Business Industry Skis Counc! Ltd Page 29 of 168