Training Units

1. Introduction to PMI and PMBOK® Guide

2. Projects and Their Main Characteristics

3. Project Management

4. Origin and Strategic Context of Projects

5. Project and Product Life Cycles

6. Project Stakeholders

7. Project Team

8. Organizational Context of Projects

9. Project Management Competency Model

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 What is a “Project”?

 A temporary endeavor to create a unique product, service or result

Project Product

Type Examples

Product power plants, steel manufacturing plants, roads, buildings, …

Service design, overhaul maintenance, …

Result market survey, research, census, …

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 Examples of a Project

 Developing a new product or service

 Publishing a dictionary

 Developing a new information system

 Constructing a building

 Building a potable water system

 Running an election campaign

 Implementing a strategic change in an organization

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 Application Areas

 Projects are performed in different application areas (industries), like:

Oil and Gas Power Aerospace Transportation

Software Building Cinema 11

 Project‟s Characteristics - Temporariness

 Each project has a definite start and a definite end.

 A project is not an ongoing, permanent effort.

 Project‟s end:
 Completion: completing project activities and achieving project objectives
 Termination (or cancellation):
 Project objectives will not or cannot be achieved.
 The need for the project no longer exists.

 Temporary does not necessarily mean short in duration.

 Temporariness does not necessarily apply to the project‟s product

(for instance, some national monuments last for centuries).

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 Project‟s Characteristics - Uniqueness

 Each project creates a unique product, service or result:

 Different designs
 Different owners
 Different entities
(clients / contractors / suppliers / …)
 Different locations
 Different climatic conditions
 Different sociocultural environments
 …

 Uniqueness entails uncertainty and necessitates more careful planning

than routine works.

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 Project‟s Characteristics - Progressive Elaboration

 More clarity as the project proceeds

 Elaborating and detailing plans, as more detailed

information and more accurate estimates are
available (i.e. planning processes are iterative)

 Aspects of progressive elaboration:

 Less ambiguity
 More detailed project plans
 More accurate estimates (of durations, costs, …)
 Fewer number of project risks
 Rolling-wave planning
 …

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 Rolling-wave Planning (Type 1)

0 1 2 3 4 5

 Master planning of the entire project

 Detailed planning of short-term periods (e.g. 1-year look-ahead)

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 Rolling-wave Planning (Type 2)

0 1 2 3 4 5

 Detailed planning of the entire project (from the beginning)

 Revising the (detailed) plan at the end of each period (e.g. every year)

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Training Units

1. Introduction to PMI and PMBOK® Guide

2. Projects and Their Main Characteristics

3. Project Management
4. Origin and Strategic Context of Projects

5. Project and Product Life Cycles

6. Project Stakeholders

7. Project Team

8. Organizational Context of Projects

9. Project Management Competency Model

17
 What is “Project Management”?

 Application of knowledge, skills, techniques and tools to meet the

project‟s requirements (i.e. to complete the project successfully)

 Project requirements:
 Scope: what to do? Time Cost
 Time: when to start and finish?
Scope
 Cost: at which cost?
 Quality: to which specifications? Quality

 Project requirements have usually different priorities.

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 Project Main Constraints

 One of the main functions of project management is to balance the

competing project constraints:

Constraint Description

Scope Pre-defined boundary (inclusions and exclusions)

Time Limited duration to complete

Cost Limited budget to spend

Quality Pre-defined specifications to meet

Resources Limited amounts of resources (man / machine / material)

Risks Limited risk tolerance of stakeholders

 Changes in one constraint usually affect one or more other constraints

(example: shortening the schedule may need increase of budget).
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Training Units

1. Introduction to PMI and PMBOK® Guide

2. Projects and Their Main Characteristics

3. Project Management

4. Origin and Strategic Context of Projects

5. Project and Product Life Cycles

6. Project Stakeholders

7. Project Team

8. Organizational Context of Projects

9. Project Management Competency Model

20
Training Sub-units

4. Origin and Strategic Context of Projects

4.1. Projects and Operations

4.2. Different Views of a Project

4.3. Projects, Programs and Portfolios

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 Projects vs. Operations
Operations Projects

Mass production of: - Constructing a new plant

- Peugeot 206 - Mechanizing a paint shop
Examples
- Peugeot 405 - Developing a web-based sales system
- Samand - Developing a new product

Purpose To sustain the current business To develop the business

Management Operations Management Project Management

Processes Ongoing Temporary

Products Repetitive Unique

Operations Project Operations Project Operations

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 Projects and Business Value

 Business value is defined as the entire value of a business.

 Business value = value of tangible assets + value of intangible assets

Tangible Assets Intangible Assets

- Cash - Patents
- Inventories - Trademarks
- Machineries + - Copyrights
- Lands - Goodwill
- Buildings - Brand recognition
-… -…

 Each successful project enhances the business value by adding to

tangible and/or intangible assets.

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 Origin of a Project

 A project is usually initiated (launched) by an organization (in the private

or public sector) to develop business (= to achieve a strategic objective).
 It may then cascade down to companies which are “project-based”
(providing products and services required in the project).

Owner

Contractor

Subcontractor

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Motives to Initiate a Project

Factor Example: Need to …

Market demand A more fuel-efficient car in response to fuel shortages

Organizational need A streamlined process to reduce costs

Customer request A new substation to serve a new industrial park

Technological advance A new laptop due to an arising technology in CPUs

Legal requirement A set of procedures to handle toxic materials

Ecological impact A new mechanism to reduce emissions and effluents

Social need A sewage system for a new town

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Training Sub-units

4. Origin and Strategic Context of Projects

4.1. Projects and Operations

4.2. Different Views of a Project

4.3. Projects, Programs and Portfolios

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 Different Views of a Project

 Owner (or investor) of a project employs a project as a means to

develop its business and to gain business results.

 Contractor of a project provides products and services to the owner,

as required to complete the project; examples:
 General contractors (GC) Owner
 Management contractors (MC)
 Design consultants
 Equipment & material suppliers
Project
 Construction & erection contractors
 Inspection & test service providers
 Logistics service providers Contractor
 …
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Owner's View vs. Contractor‟s View

Owner’s View Contractor’s view

Projects are only „instruments‟ or „vehicles‟ to

Projects are everything! They form the
develop business and to achieve strategic
„business model‟ and how to earn money.
business objectives.

The entire „product life cycle‟ is concerned. Only the „project life cycle‟ is concerned.

A project may start after the feasibility study. A project may start after invitation to tender.

Financial benefits are reaped after the project Financial benefits are reaped during the
(in the form of operational profits). project (in the form of project profits).

Result-oriented Task-oriented

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Training Sub-units

4. Origin and Strategic Context of Projects

4.1. Projects and Operations

4.2. Different Views of a Project

4.3. Projects, Programs and Portfolios

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 Projects, Programs and Portfolios (Owner‟s View)

 Portfolio: a collection of programs, projects and operations that are

grouped together to meet a strategic objective.
 Program: a group of related projects, managed in a coordinated way,
to obtain benefits not available from managing them individually.
 See Appendix 2.
Strategic Objective

Portfolio

Program A Program B Program C

Project 1 Project 4 Project 7 Project 10 Some

Operational
Project 2 Project 5 Project 8 Works
Project 3 Project 6 Project 9

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 Projects, Programs and Portfolios (Contractor‟s View)
Managing Director

Portfolio
Projects Division Director
Level

Program Metro Road

Level Projects Projects
Director Director

Tehran Metro - Line 7 Tehran - Chaloos Highway

Project Project Manager Project Manager
Level
Mashhad Metro - Line 3 Ghazvin - Zanjan Highway
Project Manager Project Manager

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Projects, Programs and Portfolios in PMI

Level PMI’s Standard PMI’s Certificate

Portfolio Management
Portfolio The Standard for Portfolio Management
Professional (PfMP)®

Program Management
Program The Standard for Program Management
Professional (PgMP)®

A Guide to the Project Management Body Project Management

Project
of Knowledge (PMBOK® Guide) Professional (PMP)®

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PMI Standards for Portfolio / Program / Project

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 Organizational Project Management

 A framework, as a hierarchy of portfolios, programs and projects

(as well as organizational enablers) to deploy a strategy.

 Examples of organizational enablers: Organizational

Strategy
 Organizational culture
 Organizational structure
 Accounting & finance Portfolio

 Information & communications technology (ICT)

 Human resources Program

 …
Project

OPM

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 OPM3

 OPM3®: Organizational Project Management Maturity Model

 It helps organizations assess and develop their capabilities in portfolio

management, program management and project management.

 PMI standard for OPM3®:

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