Unit 1:Overview of

Projects
What is Project?

 PMI defines a project as “a temporary endeavor undertaken to produce

a unique product, service, or result”.
 The temporary nature of projects indicates a definite beginning and end.
The end is reached when the project’s objectives have been achieved or
when the project is terminated because its objectives will not or cannot
be met, or when the need for the project no longer exists.
Project Characteristics

 Projects have several characteristics:

❑ Projects are unique.
❑ Projects are temporary in nature and have a definite beginning and
ending date.
❑ Projects are completed when the project goals are achieved or it’s
determined the project is no longer viable.

 A successful project is one that meets or exceeds the expectations of the

stakeholders.
 Consider the following scenario: The vice-president (VP) of marketing
approaches you with a fabulous idea. He wants to set up kiosks in local
grocery stores as mini-offices. These offices will offer customers the
ability to sign up for car and home insurance services as well as make
their bill payments. He believes that the exposure in grocery stores will
increase awareness of the company’s offerings. He told you that senior
management has already cleared the project, and he’ll dedicate as many
resources to this as he can. He wants the new kiosks in place in 12
selected stores in a major city by the end of the year. Finally, he has
assigned you to head up this project.
 Is it a Project?
What is the difference between Project
and operations?
 Ford Motor Company is in the business of designing and assembling cars. Each
model that Ford designs and produces can be considered a project. The models
differ from each other in their features and are marketed to people with various
needs. An SUV serves a different purpose and clientele than a luxury car. The
design and marketing of these two models are unique projects. However, the actual
assembly of the cars is considered an operation (i.e., a repetitive process that is
followed for most makes and models).
 In contrast with projects, operations are ongoing and repetitive. They involve work
that is continuous without an ending date and with the same processes repeated to
produce the same results.
 The purpose of operations is to keep the organization functioning while the purpose
of a project is to meet its goals and conclude.
 Therefore, operations are ongoing while projects are unique and temporary.
What is Project Management?
 Project management is the application of knowledge, skills, tools, and
techniques applied to project activities in order to meet the project
requirements.
 Project management is a process that includes planning, putting the
project plan into action, and measuring progress and performance.
 Managing a project includes identifying your project’s requirements
and writing down what everyone needs from the project.
 “What are the objectives for your project?”
 When everyone understands the goal, it’s much easier to keep them all
on the right path.
 On any project, you will have a number of project constraints that are
competing for your attention. They are cost, scope, quality, risk,
resources, and time.
 Cost is the budget approved for the project including all necessary
expenses needed to deliver the project. Within organizations, project
managers have to balance between not running out of money and not
under spending because many projects receive funds or grants that have
contract clauses with a “use it or lose it” approach to project funds.
Poorly executed budget plans can result in a last-minute rush to spend
the allocated funds. For virtually all projects, cost is ultimately a
limiting constraint; few projects can go over budget without eventually
requiring a corrective action.
 Scope is what the project is trying to achieve. It entails all the work
involved in delivering the project outcomes and the processes used to
produce them. It is the reason and the purpose of the project.
 Quality is a combination of the standards and criteria to which the project’s
products must be delivered for them to perform effectively. The product must
perform to provide the functionality expected, solve the identified problem,
and deliver the benefit and value expected. It must also meet other
performance requirements, or service levels, such as availability, reliability,
and maintainability, and have acceptable finish and polish. Quality on a
project is controlled through quality assurance (QA), which is the process
of evaluating overall project performance on a regular basis to provide
confidence that the project will satisfy the relevant quality standards.
 Risk is defined by potential external events that will have a negative impact
on your project if they occur. Risk refers to the combination of the
probability the event will occur and the impact on the project if the event
occurs. If the combination of the probability of the occurrence and the
impact on the project is too high, you should identify the potential event as a
risk and put a proactive plan in place to manage the risk.
 Resources are required to carry out the project tasks. They can be
people, equipment, facilities, funding, or anything else capable of
definition (usually other than labor) required for the completion of a
project activity.
 Time is defined as the time to complete the project. Time is often the
most frequent project oversight in developing projects. This is reflected
in missed deadlines and incomplete deliverables. Proper control of the
schedule requires the careful identification of tasks to be performed and
accurate estimations of their durations, the sequence in which they are
going to be done, and how people and other resources are to be
allocated. Any schedule should take into account vacations and
holidays.
Project Life Cycle
 Another way of illustrating the unique nature of project work is in
terms of the project life cycle. Some project managers find it useful to
use the project life cycle as the cornerstone for managing projects.
 The life cycle recognizes that projects have a limited life span and that
there are predictable changes in level of effort and focus over the life of
the project. There are a number of different life-cycle models in project
management literature. Many are unique to a specific industry or type
of project.
 For example, a new software development project may consist of five
phases: definition, design, code, integration/test, and maintenance.
 The project life cycle typically passes sequentially through four stages:
defining, planning, executing, and delivering.
Initiation or Defining Phase
 During the first of these phases, the initiation phase, the project objective or need
is identified; this can be a business problem or opportunity. An appropriate
response to the need is documented in a business case with recommended
solution options.
 A feasibility study is conducted to investigate whether each option addresses the
project objective and a final recommended solution is determined. Issues of
feasibility (“can we do the project?”) and justification (“should we do the
project?”) are addressed.
 Once the recommended solution is approved, a project is initiated to deliver the
approved solution and a project manager is appointed. The major deliverables
and the participating work groups are identified, and the project team begins to
take shape.
 Approval is then sought by the project manager to move onto the detailed
planning phase.
Planning Phase
 The next phase, the planning phase, is where the project solution is further
developed in as much detail as possible and the steps necessary to meet the
project’s objective are planned.
 In this step, the team identifies all of the work to be done.
 The project’s tasks and resource requirements are identified, along with the
strategy for producing them. This is also referred to as “scope management.” A
project plan is created outlining the activities, tasks, dependencies, and time-
frames.
 The project manager coordinates the preparation of a project budget by providing
cost estimates for the labor, equipment, and materials costs. The budget is used to
monitor and control cost expenditures during project implementation.
 Once the project team has identified the work, prepared the schedule, and
estimated the costs, the three fundamental components of the planning process are
complete.
 This is an excellent time to identify and try to deal with anything that
might pose a threat to the successful completion of the project. This is
called risk management. In risk management, “high-threat” potential
problems are identified along with the action that is to be taken on each
high-threat potential problem, either to reduce the probability that the
problem will occur or to reduce the impact on the project if it does
occur.
 Finally, you will want to document a quality plan, providing quality
targets, assurance, and control measures, along with an acceptance plan,
listing the criteria to be met to gain customer acceptance. At this point,
the project would have been planned in detail and is ready to be
executed.
 Implementation (Execution) Phase
 During the third phase, the implementation phase, the project plan is put into motion
and the work of the project is performed. It is important to maintain control and
communicate as needed during implementation. Progress is continuously monitored and
appropriate adjustments are made and recorded as variances from the original plan.
 During project implementation, people are carrying out the tasks, and progress
information is being reported through regular team meetings. The project manager uses
this information to maintain control over the direction of the project by comparing the
progress reports with the project plan to measure the performance of the project
activities and take corrective action as needed.
 The first course of action should always be to bring the project back on. If that cannot
happen, the team should record variations from the original plan and record and publish
modifications to the plan.
 Throughout this step, project sponsors and other key stakeholders should be kept
informed of the project’s status according to the agreed-on frequency and format of
communication.
 Each project deliverable produced should be reviewed for quality and measured against
the acceptance criteria. Once all of the deliverables have been produced and the
customer has accepted the final solution, the project is ready for closure.
Closing Phase
 During the final closure, or completion phase, the emphasis is on
releasing the final deliverables to the customer, handing over project
documentation to the business, terminating supplier contracts, releasing
project resources, and communicating the closure of the project to all
stakeholders.
 The last remaining step is to conduct lessons-learned studies to examine
what went well and what didn’t. Through this type of analysis, the
wisdom of experience is transferred back to the project organization,
which will help future project teams.
Example: Project Phases on a Large
Multinational Project
 A U.S. construction company won a contract to design and build the first copper mine
in northern Argentina. There was no existing infrastructure for either the mining
industry or large construction projects in this part of South America.
 During the initiation phase of the project, the project manager focused on defining and
finding a project leadership team with the knowledge, skills, and experience to manage
a large complex project in a remote area of the globe.
 The project team set up three offices. One was in Chile, where large mining
construction project infrastructure existed. The other two were in Argentina. One was
in Buenos Aries to establish relationships and Argentinian expertise, and the second
was in Catamarca—the largest town close to the mine site.
 With offices in place, the project start-up team began developing procedures for
getting work done, acquiring the appropriate permits, and developing relationships
with Chilean and Argentine partners.
 During the planning phase, the project team developed an integrated project
schedule that coordinated the activities of the design, procurement, and
construction teams.
 The project control team also developed a detailed budget that enabled the
project team to track project expenditures against the expected expenses.
 The project design team built on the conceptual design and developed
detailed drawings for use by the procurement team.
 The procurement team used the drawings to begin ordering equipment and
materials for the construction team; develop labor projections; refine the
construction schedule; and set up the construction site.
 Although planning is a never-ending process on a project, the planning phase
focused on developing sufficient details to allow various parts of the project
team to coordinate their work and allow the project management team to
make priority decisions.
 The implementation phase represents the work done to meet the requirements
of the scope of work and fulfill the charter.
 During the implementation phase, the project team accomplished the work
defined in the plan and made adjustments when the project factors changed.
 Equipment and materials were delivered to the work site, labor was hired and
trained, a construction site was built, and all the construction activities, from
the arrival of the first dozer to the installation of the final light switch, were
accomplished.
 The closeout phase included turning over the newly constructed plant to the
operations team of the client. A punch list of a few remaining construction
items was developed and those items completed.
 The office in Catamarca was closed, the office in Buenos Aries archived all the
project documents, and the Chilean office was already working on the next
project. The accounting books were reconciled and closed, final reports written
and distributed, and the project manager started on a new project.
The Project Manager
 In a small sense project managers perform the same functions as other
managers. That is, they plan, schedule, motivate, and control.
 However, what makes them unique is that they manage temporary,
nonrepetitive activities, to complete a fixed life project. Unlike functional
managers, who take over existing operations, project managers create a
project team and organization where none existed before.
 They must decide what and how things should be done instead of simply
managing set processes. They must meet the challenges of each phase of
the project life cycle, and even oversee the dissolution of their operation
when the project is completed.
 Project managers must work with a diverse troupe of characters to
complete projects. They are typically the direct link to the customer and
must manage the tension between customer expectations and what is
feasible and reasonable.
 Project managers provide direction, coordination, and integration
to the project team. They often must work with a cadre of
outsiders—vendors, suppliers, subcontractors - who do not
necessarily share their project allegiance.
 Project managers are ultimately responsible for performance.
 They must ensure that appropriate trade-offs are made between
the time, cost, and performance requirements of the project.
The Importance of Project Management
 Project management is no longer a special-need management. It is rapidly
becoming a standard way of doing business.
 Compression of the Product Life Cycle
❑ One of the most significant driving forces behind the demand for project
management is the shortening of the product life cycle. For example, today in
high-tech industries the product life cycle is averaging 1 to 3 years.
❑ Only 30 years ago, life cycles of 10 to 15 years were not uncommon. Time to
market for new products with short life cycles has become increasingly
important.
❑ A common rule of thumb in the world of high-tech product development is
that a six-month project delay can result in a 33 percent loss in product
revenue share. Speed, therefore, becomes a competitive advantage.
 Knowledge Explosion
❑ The growth in new knowledge has increased the complexity of projects
because projects encompass the latest advances.
❑ For example, building a road 30 years ago was a somewhat simple
process. Today, each area has increased in complexity, including
materials, specifications, codes, aesthetics, equipment, and required
specialists.
❑ Similarly, in today’s digital, electronic age it is becoming hard to find a
new product that does not contain at least one microchip. Product
complexity has increased the need to integrate divergent technologies.
Project management has emerged as an important discipline for
achieving this task.
 Triple Bottom Line (planet, people, profit)
❑ The threat of global warming has brought sustainable business practices to the
forefront.
❑ Businesses can no longer simply focus on maximizing profit to the detriment of the
environment and society. Efforts to reduce carbon imprint and utilize renewable
resources are realized through effective project management.
❑ The impact of this movement towards sustainability can be seen in changes in the
objectives and techniques used to complete projects.
 Corporate Downsizing
❑ The last decade has seen a dramatic restructuring of organizational life. Downsizing and
sticking to core competencies have become necessary for survival for many firms.
❑ In today’s flatter and leaner organizations, where change is a constant, project
management is replacing middle management as a way of ensuring that things get done.
❑ Corporate downsizing has also led to a change in the way organizations approach
projects. Companies outsource significant segments of project work, and project
managers have to manage not only their own people but also their counterparts in
different organizations.
 Increased Customer Focus
❑ Increased competition has placed a premium on customer satisfaction.
❑ Customers want customized products and services that cater to their
specific needs. This mandate requires a much closer working relationship
between the provider and the receiver.
❑ Increased customer attention has also prompted the development of
customized products and services.
❑ For example, 10 years ago buying a set of golf clubs was a relatively
simple process: You picked out a set based on price and feel. Today, there
are golf clubs for tall players and short players, clubs for players who tend
to slice the ball and clubs for those who hook the ball, high-tech clubs with
the latest metallurgic discovery guaranteed to add distance, and so forth.
❑ Project management is critical both to development of customized products
and services and to sustaining lucrative relationships with customers.
 Small Projects Represent Big Problems
❑ The velocity of change required to remain competitive or simply keep up has
created an organizational climate in which hundreds of projects are implemented
concurrently. This climate has created a multi-project environment and a plethora
of new problems.
❑ Sharing and prioritizing resources across a portfolio of projects is a major
challenge for senior management. Many firms have no idea of the problems
involved with inefficient management of small projects.
❑ Small projects typically carry the same or more risk as do large projects. Small
projects are perceived as having little impact on the bottom line because they do
not demand large amounts of scarce resources and/or money.
❑ Because so many small projects are going on concurrently and because the
perception of the inefficiency impact is small, measuring inefficiency is usually
nonexistent.
❑ Unfortunately, many small projects soon add up to large sums of money. Small
projects can represent hidden costs not measured in the accounting system.