The World of Project
Management
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WHAT IS A PROJECT?
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Definition
 Project
– a series of jobs usually directed toward some major
output and requiring a significant period of time to
perform
PMI Definition
“A temporary endeavor undertaken
to create a unique product or
service”
Project Management Institute, 2000
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Why the emphasis on project
management?
 Many tasks do not fit neatly into business-
as-usual.
 Need to assign responsibility and authority
for achievement of organizational goals.
 Need to succeed and prosper!
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Characteristics of Projects
Unique
Specific Deliverable
Specific Due Date
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Other Common Characteristics
of Projects
Multidisciplinary
Conflict
Complex
Part of Programs
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Why Some Projects Fail………
Five Reasons for Failure
1.
Lack of Project Manager Authority
“I must be a mushroom. They keep me in the dark,
feed me manure, and then they can me.”
2.
Lack of team participation
“If workers were smart, they’d be managers. Why
ask them anything? After all, I’m the boss.”
3.
Bad reporting
“Reports are just useless paperwork and an
irrelevant management requirement. I fill out the
form and then forget the form.”
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Why Some Projects Fail………
Continued
4.
Lack of people skills
“I don’t thank people just for doing a good job. Doing a
good job is what they get paid for.”
5.
Unrealistic goals and schedules
“Your mission, should you decide to accept it…if caught or
killed, the Secretary will disavow any knowledge…”
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…..and Others Succeed
Three Reasons for Success
1.
Committed teamwork
“If anything goes bad, I did it. If anything goes semi-good,
then we did it. If anything goes real good, then you did it.
That’s all it takes to get people to win football games.”
– Paul “Bear” Bryant
2.
SMART Goals With Real Consensus
“Specific, Measurable, Agreed-Upon, Realistic, and TimeSpecific.”
3.
Use of project management tools as a means, not an
end.
“We have 562 pages of charts and graphs and still don’t have
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a clue!”
Business Failures
The construction industry is the largest single employer
of the United States work force, it makes a major
contribution to the gross national product, and yet
suffers one of the highest annual business failure rates
in the country. Studies have shown that the number of
failures in the construction industry is much higher than
it should be. The reason for the high failure rate is not
because owners of companies do not have the technical
skills required for construction but because owners have
not developed adequate business management skills or
techniques.---- in particular; communication skills.
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Most business failures occur within the first three years of
operation with the major reason being a lack of planning. Some
of the other reasons which lead to business failure are:
• Insufficient working capital
• Failure to qualify for loans
• Excessive growth
• Borrowing money from relatives and friends
• Company officers taking a too large of a salary
• Purchase or lease of expensive vehicles as status symbols
• Not keeping adequate accounting records
• Poor project estimating as a result of:
a.
not knowing the cost of material
b.
under estimating labor costs
c.
not understanding overhead or general conditions
d.
inadequate profit margins
• Loss of owner or key person
• Too many projects starting at the same time
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PROJECT MANAGEMENT
VS. GENERAL
MANAGEMENT
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Skill Requirements for
Effective Project Management
Conflict Resolution
Creativity and Flexibility
Ability to Adjust to Change
Good Planning
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Key Elements of Negotiations
 Each party in the negotiation must believe they have




achieved. In other words, both must feel they are or were
successful.
Do not forget the other party is a human being and needs to
feel the other side cares.
Fairness is essential to success. Both you and your
opponent must perceive that you were treated fairly. (You
will know whether you were fair in your treatment of the
other person.)
A deal is a deal! You need to honor your side of the
agreement and the other side must honor theirs.
The essence of negotiations is to do business again. Both1-16
parties must win.
Universal Truths
The sum and substance or so-called “Universal Truths of
Negotiations” are as follows:
• Everything is negotiable,
• We negotiate continually,
• The process is predictable,
• Information is crucial to success, and
• Time constraints affect the outcome.
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Rules For Negotiating Teams
 When you are negotiating with two people;

Sit where you can watch both.
 When you have two people on your team;

Sit apart so you “speak with two voices.”
 When you have a large group opposing their small
group;

Keep your group together for the
appearance of power.
 When they have a large group opposing your
small group;

Intermingle to diffuse their power.
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WHAT IS MANAGED? THE
THREE GOALS OF A
PROJECT
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Performance, Cost, and Time
Project Targets
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To Put A Man On The Moon
• The year 1962
• “We commit this nation to put a man on the moon
and return him safely to this earth by the end of this
decade, and to do the other things, not because
they are easy but because they are hard.”
• The triple constraint project has begun.
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The Three Constraints Are
• Time constraint: How long do you have?
• Budget constraint: How much can you spend?
• Performance criteria: What results must your
project achieve to meet its purpose?
• Project: Put a man on the moon
• Time: constraint: By the end of the decade.
• Performance: Safe return to Earth
• Budget: Unknown
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Old Joke
• You can have it fast.
• You can have it cheap.
• You can have it good.
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Ranking the Triple Constraint
Try identifying and then ranking the Triple Constraints for the
following project..
Project: The Smithsonian National Air and Space Museum,
the world’s most popular museum, was a Federal government
project accomplished ahead of schedule and under budget.
The goal of the project was to build a world-class aviation
and space museum for a budget of $30 million and open it on
July 4, 1976.
1.
Identify the Triple Constraints.
Project:
Performance criteria:
Budget constraint:
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Ranking the Triple Constraint
2. Rank the Triple Constraints.
Driver:
Middle constraint:
Weak constraint:
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THE LIFE CYCLES OF
PROJECTS
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The Project Life Cycle
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An Alternate Project Life Cycle
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Confronting Uncertainty – The
Management of Risk
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What uncertainties are encountered in
project management?
 Availability of key resources
 Cost of resources
 Timing of solutions to technological problems
 Actions taken by competitors
 Time required to complete a project
 Actions taken by clients
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Can uncertainty surrounding
projects ever be eliminated?
No, but it can be managed
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SELECTING PROJECTS
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Nonnumeric Selection Methods
 The Sacred Cow
 The Operating/Competitive Necessity
 Comparative Benefits
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Numeric Selection Methods
 Financial Assessment Methods
– payback period
– discounted cash flow
 Scoring Methods
– unweighted 0-1 factor method
– weighted factor scoring method
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Confronting Uncertainty – The
Management of Risk
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What uncertainties are encountered
in project management?
 Time required to complete a project
 Availability of key resources
 Cost of resources
 Timing of solutions to technological
problems
 Actions taken by competitors
 Actions taken by clients
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Can uncertainty surrounding projects
ever be eliminated?
 No, but it can be managed
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THE PROJECT PORTFOLIO
PROCESS
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The Project Portfolio Process
 Step 1: Establish a Project Council
 Step 2: Identify Project Categories and Criteria
 Step 3: Collect Project Data
 Step 4: Assess Resource Availability
 Step 5: Reduce the Project and Criteria Set
 Step 6: Prioritize the Projects within Categories
 Step 7: Select the Projects to be Funded and Held
in Reserve
 Step 8: Implement the Process
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The Aggregate Project Plan
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Figure 1-12 An Example
Aggregate Project Plan
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