Chapter 8

Basics of Project Management

 Goals of This Chapter
• Understand how project management
contributes to project success
• Describe the role that managers play in
this process
• Understand some of the project tools that
can be used
• Explore how change management
practices influence project outcomes
 Projects Defined
• Project: an organized effort involving a
sequence of activities that are temporarily
being performed to achieve a desired
outcome
– Temporary in nature
– Sequencing of events
– Management functions extremely important
(planning, organizing, controlling, leading)
– Focused on achieving positive outcomes
Examples of Healthcare Projects
• Implementing Nursing labor staffing ratios
• Implementation of clinical systems or
technologies, such as picture archiving or
imaging
• Process re-engineering to shorten length of
stay for a clinical procedure or business
process (such as admit-to-pay process)
• Development of a new building or clinic
 Project Management
• Projects consumed more than 1/3 of all work
effort by healthcare managers
• Managing projects take different types of skills
and focus than traditional operations
management
– Team comes together for only a short period of time
– Team is cross-functional
– Projects may have multi-disciplinary approach,
requiring managers to broaden their understanding
– Requires skilled facilitation
 Projects and Power
• Projects often tend to blur lines of
organizational responsibility, creating
tension and conflict
• Sponsorship from physician and executive
groups important
• Formal versus informal power bases
 Project Success
Figure 8-1

Deliverables
(Delivering Expected Key Outcomes and Benefits)

Resource Investment Scope

Success
(Ensuring Actual <= Budget) (Limiting Expansion and
Contraction)

Timelines
(Achieving Milestones and Outcomes by Desired Dates)
Key Project Management Terms
• Deliverable: Tangible outcomes
• Milestones: Key date when major
deliverables should be achieved
• Timeline: Start and stop dates, as well as
for key activities in the project schedule
– they also define expectation for activities and consumption of resources

• Budget: the total investment or resources

required to complete the project
 Phases of Project Management
Figure 8-2

Project
Pre-project Organization
Scheduling and
approval and Definition
Design Project Control
(Identify needs (Resource
(Project Plans, and Change
and outcomes, planning,
Gantt, CPM, Management
Develop Work
PERT)
Business Case) Breakdown
Structure)
 Pre-project Approval
• It involves convincing management and
investment committees.
– How benefits will be realized, worth the risk
• Two important concepts to be considered:
– Risk – factor that jeopardizes project success or
that cause potential loss or delay.
– Realization – results of how successful the
organization is at justifying the risks and
adapting to changes that arise during the project.
Project Organization and Definition
• This phase is also called analysis, planning
or discovery.
• The main tasks are to document all aspects
of business process, including use of the
process engineering tools.
• This phase should confirm and refine all of
the assumptions listed in the business cases
and turn the high-level requirements into
more details specifications.
 Project Scheduling and Design
• It takes the specifications and maps them
against detailed activities and tasks.
• Project schedules are commonly viewed in
Gantt chart form, which shows activities as
blocks or bars over time.
• It is a detailed chart used to show resources
and time allocation for key tasks, and it
supports monitoring of activities during the
management phase.
Project Control and Change Management

• Once projects have been approved,

defined and designed, they enter the
execution phase which requires careful
management to ensure tight control over
time lines, costs and scope.
• Two tools are useful to help improve
management: Gantt chart and project
dashboard or scorecard.
Project Control and Change Management

• The tools help to outline the following:

– all key aspects relative to the project budgeted
versus actual costs.
– Changes in scope
– Estimated time lines
– Earned value to date
– Project risks
– Other updated on the project deliverable or
progress
Project Control and Change Management

• The objective of the project includes

finding ways to keep the project team
motivated and the activities on task to
achieve desired outcomes.
• In addition, the use of tracking tools and
leading indicators help managers see
potential problems or risks before they
arise so that action can be taken.
A Business Case Is Key to Project Approval
Demographics  List project sponsor, manager, contact details

Business  Describes the challenges faced by the process or department

Challenges or  Describes issues and causes of problems faced
Needs  Describe how these opportunities impact performance and
contribute to the organization’s vision

Business  Describe the key performance indicators (KPI) and how the project
Drivers or technology can impact these indicators
 Document benchmark figures for comparison against others, to
show marginal improvement to be gained
Proposed  Document the proposed solution
Solution  Describe implications on organization, policy, processes, or system
architecture
 Document the Risks and how they can be mitigated

Investment  Define the proposed investment

 Estimate the total costs, with annual cash flow breakdown
 Model the Return on Investment analysis (NPV, IRR, Payback)
 Define recommendations for moving forward
 List all key assumptions
 Define the project timelines and key milestones
 Scheduling Tools
• Gantt chart: Scheduling chart, that shows
activities as blocks or bars over time
• Critical Path Method
– Identifies the longest path in a project, to focus
efforts on the most critical path
– Uses nodes to model paths, interdependencies,
constraints, and time estimates
• Program Evaluation and Review Technique
– Similar to CPM, but builds estimates based on a
range of estimates (most likely, best (optimal)
and worst case (pessimistic)
– Te = [O + P + 4M] ÷ 6
Jones & Bartlett: Health Care Operations Management – 2nd Edition (Langabeer & Helton)
Scheduling Projects with Gantt Charts
Figure 8-3
 Nodes in a Network
Figure 8-4
For each node, observe:
•Cycle time (delta between start and stop)
•Queuing or wait time between nodes
•Resources consumed
•Other changes in inputs or outputs
Path A-B-D-E represents the critical path

B D E

Activity
A
Activity E succeeds D and C
Activity A precedes all others
C
 Managing Change
• Projects create improvements, but they also
– Require people and process to change
– Creates uncertainty
– Can cause both physical and emotional discomfort
• Change management is required to overcome and
mitigate these negative impacts
• Y = f (m, p, a, r)
– Management and leadership is essential to making change
palatable and positive
– Plans and vision help to provide others with understanding of
the change and the path necessary
– Aligning incentives for all participants is required
– Resources (human, financial, technological) are necessary to
ensure that projects are done properly and achieve success
 Change Management
• Helps to create alignment with others in
the organization to ensure projects are
operationalized and successful
• Partnering is useful with clinical &
administrative staff to ensure buy-in
• Participation of all affected by change is
required – a voice in change more important than the change itself
• Open communication essential – address concerns
early & often
 Rapid Prototyping
• Definition

A concept in which ideas and solutions can

be targeted toward a very small sample to
see if the solution improves results prior to
wide-scale implementation
 Rapid Prototyping
• Delays and excessive implementation
times are major causes of project failures
or budget overruns
• Rapid prototyping is a way to try a project
on a small part of the organization to see
results – and show fast, early successes
• Will sometimes result in failures – but they can
be used as learning opportunities to “fine tune” ultimate solution
 Rapid Prototyping
Two factors involved in rapid prototyping
are:
a) Proven methodology
b) Supporting culture
 Rapid Prototyping
a) Proven methodology

• The methodology used to deploy

projects must be established and
workable to ensure that the project team
does not reinvent the wheel.
• The methodology must be free from any
ambiguities
 Rapid Prototyping
b) Supporting culture or environment

Encouraging risk taking and the desire

for speed and flexibility—while
acknowledging the potential for failure.
 Risks in Project Management
• What is a Risk?
– Anything that jeopardizes or threatens project success
– A factor that contributes to project failure

• Examples of Risks include: (p. 194)

– Long implementation cycles
– Large scope and scale
– New or immature technologies
– Inexperienced participants
– Poor project managers
– Lack of sponsorship
– Poor communication
– Organizational politics
– etc
 Management Engineering
• Departments of Management Engineering
or Performance Improvement
– Utilize industrial engineering techniques to better manage
projects and improve processes and quality
– Apply analytical and quantitative methods
– Are independent and neutral, and help functional healthcare
managers make process changes

• The objectives of the department is to apply industrial

engineering techniques to control costs and improve
outcomes.
 Management Engineering
• There focusing on:
– Implementing quality management process
– Using continuous process improvement techniques
– Developing operational plans
– Administering patient satisfaction surveys
– Performing accreditation
– Managing complex projects.
 Management Engineering
• Departments of Management Engineering
or Performance Improvement
– Utilize industrial engineering techniques to better manage
projects and improve processes and quality
– Apply analytical and quantitative methods
– Are independent and neutral, and help functional healthcare
managers make process changes

• The objectives of the department are to apply industrial

engineering techniques to control costs and improve
outcomes.
 Management Engineering
• Some specific activities that performance improvement
department can undertake:
– Analyzing the productivity and economic effect of information
technology
– Managing performance scoreboards and benchmarking
processes
– Performing advance process engineering