Class2 - Project Initiation 2

P ROJECT INITIATION
ANANTH NATARAJAN
P ROJECTS | P ERFORMANCE | I MPROVEMENT
Portfolio Initiation
Project
Projects Management Stakeholders
Programme Charter
PROJECTS
“A temporary endeavor Scope Scope
undertaken to create a unique budget cost
project service or result.” - PMI Schedule time
Temporary Project
FID Delivery
Execution
Networks of independent Promoter
C
organizations L
C C
O O
1 Contractors 2
Tangible & Unique Value S

C S
S
C
S
C
S
C
1 C 3 4 5
2
Subcontractors
CONFIDENTIAL - DO NOT DUPLICATE OR DISTRIBUTE WITHOUT WRITTEN PERMISSION FROM PROBLOCH LLC
PROJECT
PORTFOLIO
“A project portfolio is a group of
projects to be carried out under
the sponsorship of a particular
organization” – (Archer &
Ghasemzadeh 2009)
PROJECTS, Portfolio
PROGRAMMES,
PORTFOLIOS
“Project Manager is the person assigned
by the performing organization to lead the
team that is responsible for achieving the
project objectives” Program
“Project management is the use of
specific knowledge, skills, tools and
techniques to deliver something of value
to people.
– PMI PMBOK Guide sixth edition Project
MASSIVE
INEFFICIENCY
• Cost overruns approach $1.2 billion on
the average capital project—79 percent
of initial budget*
• Delays run six months to two years”
• 1.6+ Trillion dollars lost annually on

construction projects **
• 250-billion-dollar annual profit

opportunity from digitization in
construction industry alone
• “Reaching net-zero emissions by 2050

requires $9.2 trillion in annual average
spending on physical assets,
* McKinsey (2022), ** McKinsey (2020)

P ROJECT M ANAGEMENT
1980s
1950s
•Primavera P6
•AACE (1956) 1960s (1983)
1917 2010+ 2018+ 2020+
•CPM (1957) •IPMA (1965) •MS Project
•GANTT •PERT (1958) •PMI (1969) (1984) •Cloud •AI Blockchain
PMI
Project Management Institute
Established: 1969
Headquartered: PA, USA
Members: 680,000+
Empower
PROJECT
MANAGER
“Project Manager is the person assigned
by the performing organization to lead the
team that is responsible for achieving the
project objectives” Leadership
“Project management is the use of
specific knowledge, skills, tools and
techniques to deliver something of value
to people.
– PMI PMBOK Guide sixth edition Management
TRIPLE CONSTRAINT
Time
Quality
Cost Scope
P ROJECT M ANAGEMENT L IFECYCLE - P M I
Monitoring
&
Controlling
Initiating Executing Closing
Planning
INITIATING PROCESS GROUP
DEVELOP PROJECT IDENTIFY

CHARTER STAKEHOLDERS
INITIATING
PROCESS
GROUP
Developing project charter
Project is formally approved and assigned
to a project manager
The project charter should include the

business case for the project
Identifying project
stakeholders.
DEVELOP PROJECT CHARTER - PMBOK
DEVELOP PROJECT CHARTER
PROJECT GOALS & OBJECTIVES APPROVAL AND SPONSORSHIP
• Document project's goals and needs. • Executive Management buy-in

• Document relationships between the • Formal Handover to Project Manager
project and organizational strategy
PROJECT
Problem
OBJECTIVES
SMART Goals
•
•
Specific,
Measurable,
Vision
• Achievable,
Mission
• Relevant,
• Time-Bound
PROJECT STAKEHOLDERS
• Projects are “meta-organizations” (Lundrigan, et al., 2015),

• Networks of autonomous legally separate “firms or individuals not bound by
authority” but “characterized by a system-level goal” (Gulati, et al., 2012).
• Agency theory sees the principal-agent conflict from such contractual
relationships as a key governance problem (Müller, 2009).
• A stakeholder theory approach that balances and aligns interests of all
stakeholders such as suppliers and communities, not just focusing on
maximizing financial returns (Müller, 2009), is best suited for project
governance.
S TAKEHOLDER M ANAGEMENT
• The importance of stakeholder management to programme success is

widely recognized (Lycett, et al., 2004).
• A stakeholder is “any group or individual who can affect or is affected by
the achievement of the organization's objectives.” - Freeman’s (1984)
classic definition
• Goodpaster’s (1991) distinguishes between Freeman’s (1984)
stakeholders who can affect or are affected by organizational objectives.
PROJECT
STAKEHOLDERS
External Stakeholders
Local Communities
Governments
Internal stakeholders
Project Financiers,
Contractors,
Vendors, Supply-chain
PROJECT STAKEHOLDERS
External Stakeholders: Internal Stakeholders

External stakeholders are often neglected. Internal stakeholders are vital to programme success
(Beringer, et al., 2013).
Successful project governance requires their
involvement. The contractual relationship amongst parties in
complex projects is often inadequate, proffering
A short-term focus on maximizing benefits to opportunities for conflict (Müller, 2011).
primary stakeholders neglecting indirect external
stakeholders has long-term downside risks
(Sampson & Witold, 2018)
EXTERNAL STAKEHOLDERS IMPORTANCE
• Delays cost a mining project $750 million in South America;

• Foregone opportunity costs resulted in a $379 million write-down and
cancelation of development of reserves valued at $1.33 billion in a mining
project in Argentina. (Franks, et al. 2014).
• The market can severely penalize firms that neglect stakeholders in terms of
valuation and cost of finance (Henisz, 2016).
• Concerns about externalities, especially regarding environment and safety, are
highly corelated to conflict (Franks, et al., 2014)

Class2 - Project Initiation 2

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Class2 - Project Initiation 2

Uploaded by

Copyright:

Available Formats

P ROJECT INITIATION

undertaken to create a unique budget cost

project service or result.” - PMI Schedule time

Tangible & Unique Value S

– PMI PMBOK Guide sixth edition Project

• Delays run six months to two years”

• 1.6+ Trillion dollars lost annually on

• 250-billion-dollar annual profit

• “Reaching net-zero emissions by 2050

* McKinsey (2022), ** McKinsey (2020)

Headquartered: PA, USA

– PMI PMBOK Guide sixth edition Management

Initiating Executing Closing

DEVELOP PROJECT IDENTIFY

The project charter should include the

PROJECT GOALS & OBJECTIVES APPROVAL AND SPONSORSHIP

• Document project's goals and needs. • Executive Management buy-in

• Projects are “meta-organizations” (Lundrigan, et al., 2015),

• The importance of stakeholder management to programme success is

External Stakeholders: Internal Stakeholders

• Delays cost a mining project $750 million in South America;

You might also like