Minggu 1

Projects in Contemporary Organizations

Copyright 2018 John Wiley & Sons, Inc.

Learning Objectives

1-1 Understand why project management (PM) is

crucial in today’s world

1-2 Distinguish a project from routine operations

1-3 Identify the different stages of a project life cycle

1-4 Describe how Agile PM is different from

traditional PM

1-2
Introduction (1)
• Rapid growth in project management
• In the past, most projects were external
• Building a new skyscraper
• New ad campaign
• Launching a rocket
• Growth lately is in internal projects
• Developing a new product
• Opening a new branch
• Improving the services provided

1-3
 Introduction (2)
• Focus of Project Management attention previously (and still) paid to project
management, program management, project portfolios, project maturity,
project management offices (PMOs), Agile, and other such project issues
• Attention also directed to mega-projects, organizational project
management, project governance, strategic projects, benefit realization, the
duties of the project sponsor, the meaning of executive commitment, and
other such issues.
• Rates of success for less traditional projects, such as strategic and
multiorganizational projects, are still poor:
• Projects are only the middle portion of a set of activities involving the
recognition of a need, the selection of a project to meet it, designing a
governance structure for the project, executing the project, and the tasks
needed to ensure the benefits of the project are realized.

1-4
How Project Management Developed (2)
• Historical projects
• Tower of Babel
• Egyptian pyramids
• Great Wall of China
• The Manhattan Project
• Modern credit for the development of project
management goes to the military
• Navy’s Polaris program
• NASA’s Apollo space program
• Development of “smart bombs” and “missiles”

1-5
How Project Management Developed (2)

• Project management has found wide acceptance in

industry
• It has many applications outside of construction
• Managing legal cases
• Managing new product releases
• Wedding Organizer
• What else? ……….

1-6
Projects Tend to be Large
• Projects tend to be large in scope and money:
• The Channel Tunnel, or Chunnel
• Denver International Airport
• Panama Canal expansion project
• Three Gorges Dam, China
• Ibu Kota Nusantara (IKN)
• What else?........
• Projects are getting larger over time
• Flying: balloons  planes  jets  rockets 
reusable rockets
• The more we can do, the more we try to do

1-7
Project Management Also Getting Smaller
• More people are seeing the advantages of project
management techniques
• The tools have become cheaper
• The techniques are becoming more widely taught
and written about

Fundamentally, project management provides an

organization with powerful tools that improve its ability
to plan, implement, and control its activities as well as
the ways in which it utilizes its people and resources

1-8
The Definition of a “Project” (1)
• A temporary endeavor undertaken to create a
unique product, service, or result (PMI)
• Modern project management began with the
Manhattan Project (military project)
• In its early days, project management was used
mainly for large complex projects
• As the tools and techniques were developed, the
use of project organization began to spread

1-9
 The Definition of a “Project” (2)
• The military, the source of most of these terms:
• Program - an exceptionally large, long-range objective that is broken down into a
set of projects with common goal
• Project: A project is a subdivision of a program. The project is a temporary
endeavor that will provide useful solutions to real needs.
• Task - A unit of work within a project
• Work Packages - division of tasks; the work packages generally reflect the lowest
level of detail in the work breakdown structure used to track and control budget
and schedule variances on a project.
• Work Units - division of work packages
• In the broadest sense, a project is a specific, finite task to be
accomplished. Whether large- or small-scale or whether long- or
short-run is not particularly relevant. What is relevant is that the
project be seen as a unit.

1-10
Three Project Objectives: The “Triple Constraint”
• Also referred to as the “Iron Triangle”
• Time
• Cost
• Scope (performance, specifications, quality)
• Time, cost, and performance are all related to a project
• What about Client Expectations? Is it part of the
triangle?
• Ensure that the nebulous elements of the client’s evolving
expectations and desires are identified and realigned with
the client’s latest scope

1-11
Direct Project Goals: Scope, Cost, Time

1-12
Project Objectives:
• Direct Project Objectives:
• Scope/Performance/Specifications/Quality
• Time
• Cost
• Expectations of clients inherent part of the project
specifications
• There are ancillary (process) goals:
• Improving the organisation’s project management
competency & methods
• Individual managerial experience gained
• The health of the project team and the
organisation
• Environment

1-13
 Major Characteristics of a Project
• Three main
• Unique
• One-time occurrence
• Finite duration
• Other
• Interdependencies
• Limited resources
• Multidisciplinary
• Complex
• Conflict
• In many cases, part of a program
• Risk?

1-14
Comparison of Routine Work with Projects
Routine, Repetitive Work
Taking class notes
Daily entering sales receipts into
the accounting ledger
Responding to a supply-chain
request
Practicing scales on the piano
Routine manufacture of an Apple
iPod
Attaching tags on a
manufactured product
Projects
Writing a term paper
Setting up a sales kiosk for a
professional accounting meeting
Developing a supply-chain
information system
Writing a new piano piece
Designing an iPod that is
approximately 2 X 4 inches,
interfaces with PC, and
stores 10,000 songs
Wire-tag projects for GE and
Wal-Mart
1–15
 Non-projects and Quasi-Projects
• Routine tasks are not projects
• Ex: production of weekly reports, delivery of mail, etc
• Quasi-projects
• Poorly defined projects. There is a disconnect between the timeframes and project
objectives. This poorly conceived notion trickles down into other project
parameters such as budgets, unique product or service, project targets and due
dates.
• Scope, schedule, and budget are implied
• No specific task identified, no specific budget given, and no specific deadline
defined.
• In such cases, it is best to try to quickly nail down the scope, schedule, and budget
as precisely as possible
• Example of common phrase: “Bill, would you look into this?” “Mia, we need to
finish this by Friday’s meeting.” “Samir, can you find out about this before we meet
with the customer?”

1-16
 Example of Quasi-Projects
• In information systems area is where the project includes discovery of the
scope or requirements of the task itself (and possibly also the budget and
deadline).
• In this case, the project is, in fact, determining the scope requirements (and possibly
the budget and deadline also).
• If the entire set of work (including the discovery) has been assigned to you
as a project, then the best approach is to set this determination as the first
“milestone” in the project, at which point the resources, budget, deadline,
capabilities, personnel, and any other matters will be reviewed to
determine if they are sufficient to the new project requirements.
• Alternatively, the customer may be willing to pay for the project on a “cost-
plus” basis, and call a halt to the effort when the benefits no longer justify
the cost

1-17
Project Success

• Project efficiency
• Impact on the customer
• Business impact on the organization
• Opening new opportunities for the future

1-18
Formal Definition of Project Management

“The application of knowledge, skills, tools, and

techniques to meet project requirements.”

Project Management Institute, 2013

Comparison of Project Management and General Management
Project Budgets
• Project budgeting differs from standard budgeting
in the way budgets are constructed
• Budgets for non-projects are primarily
modifications of budgets for the same activity in
the previous period
• Project budgets are newly created for each project
and often cover several “budget periods” in the
future
 Project Schedules
• In manufacturing, the sequence of activities is set
when production line designed
• Sequence is not altered when new models are
produced
• Each project has a schedule of its own
• Previous projects with deliverables similar to
current one may provide a rough template
• However, specifics unique to project at hand
Project Manager
• Project manager is the key individual on a project
• Project manager is like a mini-CEO
• PM is responsible: the trade-off, risk analysis, and other skills that
must be used to manage projects; and the means by which the
manager can bring the project to a successful conclusion
• Manages temporary, non-repetitive activities and frequently acts
independently of the formal organization.
• Marshals resources for the project.
• Is linked directly to the customer interface.
• Provides direction, coordination, and integration
to the project team.
• Is responsible for performance and success of the project.
• Must induce the right people at the right time to address the right
issues and make the right decisions.

1-23
 Why Project Management? (1)
• The main purpose for initiating a project is to accomplish some goal
• Project management increases the likelihood of accomplishing that goal
• Project management gives us someone (the project manager) to
spearhead the project and to hold accountable for its completion
• In particular, the project form of organization allows the manager to be
responsive to
(1) the client and the environment,
(2) identify and correct problems at an early date,
(3) make timely decisions about trade-offs between conflicting project goals,
(4) ensure that managers of the separate tasks that comprise the project do not
optimize the performance of their individual tasks at the expense of the total project
—that is, that they do not suboptimize.

1-24
Why Project Management? (2)
• Better control and better customer relations and
apparently an increase in their project’s return on
investment (Ibbs and Kwak 1997).
• Shorter development times
• Lower costs,
• Higher quality and reliability,
• Higher profit margins.
• Other reported advantages include:
• a sharper orientation toward results,
• better interdepartmental coordination,
• and higher worker morale.

1-25
Negative Side to Project Management

• Greater organizational complexity

• Higher probability organizational policy will be violated
• Says managers cannot accomplish the desired outcome
• Conflict
• Higher costs,
• More management difficulties,
• Low personnel utilization.

1-26
 Forces Fostering Project Management
• Main forces in driving the acceptance of project management:
• Exponential growth of human knowledge
• Growing demand for a broad range of complex goods and services
• Compression of the product life cycle (time to market)
• Increased customer focus
• Increased worldwide competition, worldwide markets force us to include
cultural and environmental differences in our managerial decisions about
what, where, when, and how to produce and distribute output.
• Required multidiscipline: This calls for a high level of coordination and cooperation
between groups of people not particularly used to such interactions.
• All of these contribute to the need for organizations to do more and
to do it faster

1-27
Recent Changes in Managing Organizations

• Consensual management
• Systems approach

• Projects are established in order to accomplish

set goals

1-28
Project Management Organizations

• The Project Management Institute, founded in 1969, is the major

project management organization
• Grew from 7,500 members in 1990 to over 450,000 in more than
190 countries by 2017
• Other organizations
• Association for Project Management (UK)
• International Project Management Association (Switzerland)
• These organizations codifies the area of knowledge
• PMBoK
• APMBoK
• PRINCE2

1-29
PMI Certifications
• Project Management Professional
• Program Management Professional
• Portfolio Management Professional
• Certified Associate in Project Management
• PMI Professional in Business Analysis
• PMI Agile Certified Practitioner
• PMI Risk Management Professional
• PMI Scheduling Professional

1-30
Trends in Project Management

• Achieving strategic goals

• Achieving routine goals (projectizing)
• Improving project effectiveness: PMO, maturity
concept
• Virtual projects
• Dynamic and quasi-projects

1-31
The Project Life Cycle

1-32
Time Distribution of Project Effort

1-33
Project Life Cycle (Larson & Gray)

34
• FIGURE 1.1
Another Possible Project Life Cycle

1-35
Risk

• Uncertainty about our ability to meet project

goals due to various factors in the project life
cycle
• Because projects are about uncertainty, we
adopt the view that managing uncertainty is a
second major role of the project manager

1-36
Uncertainties Encountered in Project Management

• Time required to complete a project

• Availability and cost of key resources
• Timing of solutions to technological problems
• Macroeconomic variables
• The whims of clients
• Actions taken by competitors
Can Uncertainty be Eliminated?

• No, uncertainty cannot be eliminated

• However, if managed properly, it can be
minimized
Managing Risk
• The first step in managing risk is to identify
potentially uncertain events and likelihood of
occurrence
• Called risk analysis
• Different organizations approach this differently
• The essence of risk analysis is to make
assumptions about key risk parameters and to
use models to evaluate the desirability of
certain managerial decisions
Modeling Risk

• Estimates or assumptions made about the

probability distributions associated with key
parameters and variables
• Mathematical model of situation constructed that
models relationship between variables and
outcomes of interest
• Model used to generate distribution of outcomes of
interest to decision maker
Risk During at the Start of the Life Cycle

1-41
Risk During the Life Cycle

1-42
Agile Project Management
• Agile project management was developed to deal with two issues in IT:
• When scope cannot be determined in advance, traditional planning
does not work
• Change is a constant
• APM requires close and continual contact between the project team
and the client.
• Small teams are located at a single site
• Entire team collaborates
• Utilizes sprints
• Team deals with one requirement at-a-time with the scope frozen
• Waterfall is a “batch process; APM is a flow process
• Project requirements are a result of client/developer interactions, and
the requirements change as the interaction leads to a better
understanding on both sides of the project requirements, priorities,
and limitations.

6-43
Agile Manifesto
We are uncovering better ways of developing software by doing
it and helping others do it. Through this work we have come to
value:
• Individuals and interactions over processes and tools
• Working software over comprehensive documentation
• Customer collaboration over contract negotiation
• Responding to change over following a plan
That is, while there is value in the items on the right, we value
the items on the left more.”

Will be discussed more thoroughly in Project Planning

6-44
Rolling Wave Development

• Iterations typically last from one to four weeks.

• The goal of each iteration is to make tangible progress such as define

a key requirement, solve a technical problem, or create desired
features to demonstrate to the customer.
• At the end of each iteration, progress is reviewed, adjustments are
made, and a different iterative cycle begins.
• Each new iteration subsumes the work of the previous iterations until
the project is completed and the customer is satisfied.
45
• FIGURE 1.3
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Copyright © 2018 John Wiley & Sons, Inc.
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Copyright ©2017 John Wiley & Son, Inc. 46