Project Management in Practice

Fourth Edition
1-1

Mantel, Meredith, Shafer, and Sutton

Prepared by
Scott M. Shafer,
Updated by
William E. Matthews and
Thomas G. Roberts,
William Paterson University

John Wiley and Sons, Inc.

Copyright 2011 John Wiley & Sons, Inc.
 Why the Emphasis on Project Management?
1-2

 Many tasks do not fit neatly into business-as-usual

 Organizations need to assign responsibility and
authority for the achievement of their goals

Copyright 2011 John Wiley & Sons, Inc.

 Characteristics of Projects
1-3

 Unique
 Specific deliverables
 Specific due date

Copyright 2011 John Wiley & Sons, Inc.

 Other Common Characteristics of Projects
1-4

 Multidisciplinary
 Complex
 Often involve conflicts
 Part of programs

Copyright 2011 John Wiley & Sons, Inc.

 Trends in Project Management
1-5

Project management techniques

are increasingly used for:
• Achieving strategic, routine, and business goals
• Improving project effectiveness
• Organizing and handling virtual projects

Copyright 2011 John Wiley & Sons, Inc.

 Definition of a Project
1-6

“A project is a temporary
endeavor undertaken to create
a unique product or service.”
Endeavor: struggle

Project Management Institute, 2007

Copyright 2011 John Wiley & Sons, Inc.

 Definition of Project Management
1-7

“The application of knowledge,

skills, tools, and techniques to
a broad range of activities in
order to meet the
requirements of a particular
project.”
Project Management Institute 2007

Copyright 2011 John Wiley & Sons, Inc.

 Scope, Cost, and Time Project Performance
Targets
1-8

Copyright 2011 John Wiley & Sons, Inc.

 Abilities Needed For Effective Project
Management
1-9

 Ability to resolve conflicts

 Creativity and flexibility
 Ability to adjust to change
 Good planning skills
 Negotiation skills
• win-win versus win-lose

Copyright 2011 John Wiley & Sons, Inc.

 The Life Cycle of Projects
1-10

 All organisms have a life cycle (i.e., they are born,

grow, wane, and die) … and so do projects
 Some projects follow an S-shaped curve … they start
slowly, develop momentum, and then finish slowly
 Other project follow a J-shaped curve … they start
slowly , proceed slowly, and then finish rapidly

Copyright 2011 John Wiley & Sons, Inc.

 Nonnumeric Selection Methods
1-11

 The “Sacred Cow”- a pet project

advocated by a senior executive of
the firm.
 The operating/competitive
necessity
 Comparative benefits

Copyright 2011 John Wiley & Sons, Inc.

 Numeric Selection Methods
1-13

 Financial assessment methods

• payback period
• discounted cash flow (Present Value)
• future opportunity analysis
 Scoring methods
• unweighted factor method
• weighted factor scoring method

Copyright 2011 John Wiley & Sons, Inc.

 Payback Period
1-14

Initial Fixed Investment

Annual Net Cash Inflows

Copyright 2011 John Wiley & Sons, Inc.

 Discounted Cash Flow
1-15

Ft n
NPV (project)  - I 0   t
t 1 (1  k )
where
I0 = the initial investment
Ft = the net cash flow in period t
k = the required rate of return or hurdle rate
FV=PV(1+r)^{n}
FV = future value
PV = present value
r = annual interest rate
{n} = number of periods interest held

Copyright 2011 John Wiley & Sons, Inc.

 The Weighted Scoring Model
1-16

n
Si   sij w j
j 1
where
Si = the total score of the ith project
sij = the score of the ith project on the jth criterion
wj = the weight or importance of the jth criterion

Copyright 2011 John Wiley & Sons, Inc.

 Uncertainties Encountered in Project Management
1-17

Time required to complete a project

Availability and cost of key resources
Timing of solutions to technological problems
Macroeconomic variables: Gross domestic product
(GDP), interest rate, …
The whims of clients
Actions taken by competitors

Copyright 2011 John Wiley & Sons, Inc.

 Can Uncertainty be Eliminated?
1-18

 No … uncertainty cannot be
eliminated. However, if managed
properly, it can be minimized

Copyright 2011 John Wiley & Sons, Inc.

 Risk Analysis
1-19

is the possibility of loss, damage, or any other

undesirable event.

Copyright 2011 John Wiley & Sons, Inc.

 Categories of Projects
1-22

Derivative projects … those that are only

incrementally different from existing offerings
Platform projects … major departures from
existing offerings … the next generation
Breakthrough projects … involving a newer
technology … possibly a “disruptive” technology
R&D projects … “blue sky” or visionary
endeavors

Copyright 2011 John Wiley & Sons, Inc.

 Copyright
1-23

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Copyright 2011 John Wiley & Sons, Inc.