© UCT/GetSmarter.
MODULE 1 UNIT 1
Project
management
foundations
Table of contents
1. Introduction ................................................................................................................. 3
2. History and context of project management ................................................................. 3
3. Principles of project management ................................................................................ 5
3.1 Defining a project ............................................................................................................ 5
3.2 Commissioning a project ................................................................................................. 6
3.3 Defining project management......................................................................................... 6
3.4 Principles of project management .................................................................................. 7
3.5 Project management activities and processes ................................................................ 8
4. Project management in business ................................................................................ 10
4.1 Defining business projects............................................................................................. 10
4.2 Why projects fail............................................................................................................ 12
4.3 Distinguishing between projects, programmes and portfolios ..................................... 13
4.3.1 What is a programme? ........................................................................................... 15
4.3.2 Project portfolios, programmes and projects ........................................................ 16
5. Conclusion ................................................................................................................. 19
6. Bibliography............................................................................................................... 20
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Learning outcomes:
LO1: Recall the evolution of project management in terms of its historical context.
LO2: Recognise the applications, importance and value of project management.
LO3: Identify the charateristics of a project.
1. Introduction
Project management is a process that aims to ensure the successful completion of a project.
It is an iterative series of events, with the goal of producing a successful product or
deliverable. It may be helpful to think of these events as a cycle, such as the Shewhart and
Deming’s cycle, a process for quality improvement.
Figure 1: Shewhart and Deming’s Cycle.
This cycle is sometimes referred to as PDCA (Plan, Do, Check, Act), and aims to provide
businesses with a method of controlling and continuously improving their processes
(Averson, 1998). Many of the principles outlined in A Guide to the Project Management Book
of Knowledge (PMBOK® Guide) are based on this cycle, and involve thorough planning,
careful monitoring and evaluation during implementation, before the cycle continues and
until the project is concluded.
2. History and context of project management
Throughout the ages, humankind has undertaken many different kinds of projects. Ancient
projects typically involved construction, for example the Great Wall of China, or the
pyramids. These projects lasted hundreds of years, and their success depended on the
contributions of many generations of people. These projects were very costly in terms of
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their resources and scale, and made use of cheap or slave labour. Watch the video below to
learn more about the ancient history of the field of project management.
Video 1: An exploration of the ancient history of project management. (Source:
https://www.youtube.com/watch?v=C1uxCBx2-UQ)
In modern times, projects include similar physical structures, such as bridges, buildings,
aeroplanes and cars. Formal project management evolved in the engineering industry, but
the construction, aerospace, and defence industries also made significant contributions to
refining the processes. Project management knowledge is also applied to the development
of electronic products, as is the development and design of software applications, change
management projects, business process re-engineering, and even event planning.
These processes are not, however, flawless, and there are many instances where projects
have failed in spite of the structure project management can offer. Examples include the
Medupi power station, which was significantly delayed. The construction industry is
notorious for projects running over time and budget.
Look at this infographic, which outlines the recent history of project management as a
discipline.
There are several lessons to be learned from the history of project management. The
following aspects should be prioritised if a project is to be successful:
•
Strong leadership: This is categorised by a single point of communication, strategic
direction, responsibility, and balancing stakeholder interests.
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•
Integration: This includes a smooth transition between design and delivery, and well
planned and executed concurrent engineering.
•
Client-orientation: The project must be strong managerially and financially, and
balance long- and short-term demands in order to ensure sustainability.
•
Project viability: This requires the ability to assess the potential of projects, and is
best learned through inter- and intra-project learning.
It is also important to note that project management is a political process. It involves the
alignment of stakeholder missions, the establishment of agreed definitions, the negotiation
of scope, the establishment of strategy, shared risk and rewards, and the creation of trust.
Additionally, the context in which project management occurs is perpetually changing, as it
occurs at the nexus of socio-political, social-economic, and techno-economic shifts. This
means that project management as a field is defined by ambiguity and the challenges of the
context in which it occurs.
3. Principles of project management
Management is an integral part of all business endeavours. It involves budgeting resources
such as money, equipment, people, and time, as well as planning, coordinating, and
controlling these resources as they are implemented. Unfortunately, no matter how
carefully a project or event is planned, it may go awry. Therefore, management also involves
creativity and innovation, such as coming up with new products or services for customers, or
finding more efficient ways of working.
3.1 Defining a project
A project can be defined as “a unique endeavour to produce a set of deliverables within a
clearly specified time, and within cost and quality constraints” (Westland, 2006:2). The
Guide to the Project Management Book of Knowledge (PMBOK® Guide) defines a project as
“a temporary endeavor undertaken to create a unique product or service” (PMI®®, 2013:3).
They can be distinguished from the standard operations of business in the following ways.
Projects are:
•
Unique: Every project is different, and involves different resources.
•
Limited in time: A project has a defined time scale, including clear start and end
dates, and a carefully planned schedule.
•
Limited in budget: A project will be allocated financial resources, with which all
necessary resources must be procured.
•
Risky: Project success is uncertain, therefore projects are risky.
•
Able to effect positive change: The project should have a clearly defined purpose
which it sets out to achieve.
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•
Overseen by a single person: The project manager or leader is responsible for the
whole project.
•
Completed by teams: A project team will be formed to address a project.
3.2 Commissioning a project
There are several reasons why a project may be commissioned:
•
Strategic initiative: For example, the decision to rebrand a business would require
careful coordination in order to ensure that all branches implement the change
simultaneously. This would be particularly challenging in an international business.
•
Market demand: For example, an oil company may commission a project to build a
new refinery as a result of petrol shortages.
•
Organisational need: For example, a structure needs to change, or a process needs
to be implemented.
•
Customer request: For example, customers required more power than Eskom was
able to provide, so it was necessary for Eskom to build a new power station.
•
Technological advancement: For example, it may be necessary to create a new
video game that is compatible with new video game hardware or software.
•
Legal requirement: For example, implementing employment equity or affirmative
action based on new legislation.
3.3 Defining project management
Project management is a term used to describe “the application of knowledge, skills, tools
and techniques to project activities in order to meet the project requirements” (PMI®,
2013:47). It comprises the following:
•
A set of skills and knowledge, including specialist experience.
•
A suite of tools, such as document templates, registers, planning software,
modelling software, checklists, and forms.
•
A series of processes, which can help project managers to monitor and control the
project, such as time management, cost management, quality management,
change management, risk management, and issue management processes.
The Association of Project Managers Book of Knowledge (APM BoK) gives the following
definition of project management: change can be introduced most efficiently by: Defining
what has to be accomplished, generally in terms of time, cost and various technical and
quality performance parameters;
•
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Developing a plan to achieve these and then working this plan, ensuring that
progress is maintained in line with these objectives;
•
Using appropriate project management techniques and tools to plan, monitor and
maintain progress;
•
Employing persons skilled in project management – including normally a project
manager – who are given responsibility for introducing the change and are
accountable for its successful accomplishment.”
(Burke, 2007:18)
3.4 Principles of project management
As a discipline, project management is concerned with balancing time, cost and quality. The
relationship between these characteristics is referred to as the triple constraint or the iron
triangle. A project manager’s role is to balance time, cost and scope, while ensuring quality.
Note:
There are different variations of the Triple Constraint or Iron triangle in practice. For
example, some project managers use these terms to refer to time, cost and scope, while
others use them to mean time, cost and quality. Scope refers to the set of features and
functions that will be provided as part of the project. Neither model is better than the other.
Be aware that you may come across other variations in practice.
Figure 2: The iron triangle.
Consider the example of the Sydney Opera House, a project scheduled to take four years
and cost AUD $7 million (money of the day), but which ended up taking 14 years, and
costing AUD $102 million. According to the iron triangle, this was a project management
failure. The cost and budget overruns were unacceptable from a project management point
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of view. However, the end product of the project (i.e. the opera house) was, and continues
to be, a great success. Just because a product is well received by its intended market does
not mean that the project to produce that product was managed well or successfully. As the
saying goes, “the success of the product lasts far longer than the forgotten overrun of the
project”.
A project can vary enormously in its scope, budget and time constraints; some large
companies may even group projects together. You will learn more about this in section 3 of
these notes. It can be helpful to classify projects by the clarity of the objectives they set out
to achieve. Frigenti and Comninos (2005) propose a framework in which projects are divided
into one of four categories, along the axes of the clarity of the objective, and the extent to
which the tools and process of project management are well developed.
Figure 3: Frigenti and Comnino’s framework. (Adapted from: Frigenti & Comninos, 2005:14)
Paint by numbers-type projects, categorised by clear objectives and well-defined processes,
are likely to go as planned, as there have been many similar projects. Contrastingly, questtype projects have a clear objective, but lack clear processes. A project team working on a
quest-project knows what they want to achieve, but is uncertain of how that can be done.
This framework is helpful in determining the best way of managing a project, and whether
there are best practices or previous examples that can be followed.
3.5 Project management activities and processes
There are several iterative activities that must be performed as part of project management.
The project manager is responsible for ensuring that each of the many project activities are
completed. These can be categorised into three broad categories:
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1. Planning
2. Scheduling
3. Controlling
These occur cyclically. Consider the cycle in Figure 4 below in relation to Figure 1.
Figure 4: The iterative cycle of planning, scheduling and controlling activities.
Project management makes use of several clearly defined processes, which you will learn
about in more detail in Module 2. The PMBOK® Guide also outlines 10 Knowledge Areas
(PMI®®, 2013:61):
1. Project Scope Management involves specifying the requirements that are necessary
to achieve the project objectives, as well as the overall definition of what the project
is meant to achieve. Project Scope Management essentially involves ensuring that
the project includes all the work required to reach successful completion.
2. Project Time Management involves estimating the time needed to complete all
activities in a time-based schedule. It involves several techniques, including:
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•
Activity definition;
•
Activity sequencing;
•
Activity resource estimating;
•
Activity duration estimating;
•
Schedule development; and
•
Schedule control.
3. Project Cost Management includes all the processes involved in planning,
estimating, budgeting, financing, funding, managing and controlling project costs to
ensure that the project can be completed within a specified budget.
4. Project Quality Management is required to ensure that the project is meeting the
requirements of the client and that project organisation is as effective and efficient
as possible.
5. Project Risk Management involves identifying unexpected events that could have a
negative or positive impact on the project in some way. It involves developing plans
for dealing with those risks if they occur, as well as monitoring the status of the risks
on an ongoing basis and responding when necessary. New plans should also be put
in place for risks that are identified during the project.
6. Project Human Resources (or Talent) Management involves managing the team
members who work on the project to ensure that their skills are being used
effectively.
7. Project Communications Management is essential, as it takes up the majority of a
project manager’s time. It involves all of the processes and procedures needed to
ensure that all aspects of the project status are communicated clearly to those
involved.
8. Project Procurement Management involves acquiring the services and products
necessary when in-house skills and resources are not available.
9. Project Integration Management is the “big picture” Knowledge Area that links the
project life cycle activities with the Knowledge Areas. Project Integration
Management refers to the initiation and closing phases of the project as well as the
overall monitoring and controlling processes of Knowledge Areas at a higher level. In
addition, this Knowledge Area involves activities leading to the completion of the
project charter, project plan, stakeholder identification and closure activities.
10. Project Stakeholder Management refers to the management of stakeholders who
have an interest in the project, especially those who might have the most influence
on its outcome. This Knowledge Area involves identifying stakeholders, prioritising
their needs and influence, and managing their expectations.
4. Project management in business
4.1 Defining business projects
When you hear about projects in the media, they usually refer to construction or
engineering projects of some kind or another. These large and noticeable projects are
usually what people think of when they hear the term “project”. If, however, you were to
ask someone to explain to you what a business project is, they may run into some
difficulties.
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To begin with, a business project meets all the parameters of the standard definition. It is
temporary, produces a unique product, service, or result, and has a defined beginning and
end. Therefore, building an office park (construction) is a project, as well as producing a new
product for a company (business). A business project is specifically aimed at achieving a
business objective. A new marketing campaign to increase sales of a flagging product would,
therefore, be a business project, because it meets the business objective of increasing sales
of a specific product. Likewise, the development of a new product is a business project, as is
a project aimed at improving the way the business handles its day-to-day operations.
Project management in business has a strong focus on the aspects shown in the following
diagram. These will be discussed in detail in this topic.
Figure 5: Attributes of business project management.
Business project management involves a holistic perspective to ensure that the project
aligns to the goals of the organisation and relates to the organisation’s values and standards.
Additionally, strong people and team management skills are required to ensure projects run
efficiently.
Construction and engineering projects are often undertaken on a far larger scale than
business projects, and the results tend to be large structures rather than products, services
or processes. Consequently, construction and engineering projects are far more complex
and there are a range of project management factors that apply solely to them. In fact, the
Construction Extension to the PMI® PMBOK® Guide identifies the differences and offers
several different Knowledge Areas. This course focuses on business projects and, although
there are similarities that students involved in construction and engineering may be able to
draw from, there are also specific construction and engineering areas that will not be
covered in this course.
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4.2 Why projects fail
The rate at which projects fail is exceptionally high, even years after project management
was first recognised as a valuable tool in modern business. Despite everything that is known
about the discipline, and all the lessons that have been learned about what can make a
project succeed, there are still too many failures.
It is important to distinguish project management failure from product failure (think back to
the Sydney Opera House example).
Success terminology:
Product success: This relates to whether or not the final product produced as a result of the
project is successful. It therefore happens after the project is over.
Project management success: This is the “journey” through the project, using the iron
triangle to determine if the actual project is a success over the duration of the project’s life
cycle. Project management success doesn’t necessarily mean product success (and vice
versa) but the two are often linked.
Project success: This is a more vague term. For the purposes of this course, project success
is a broad measure that takes into account both product success and project management
success.
The iron triangle explains the three constraints (as well as quality) and clarifies why it is
extremely difficult to satisfy all of them at the same time. It is near impossible for a project
manager to satisfy the triple constraint.
It is important to note that, despite these clearly defined categories, project management
success rates fluctuate significantly with little long-term improvement. IT projects are a
prime example. A KPMG study reported that 49% of survey participants had experienced at
least one project failure in the previous year (2005:18). The vast majority of IT projects are
classified as challenged, indicating the need for a new framework for determining project
management success. You should therefore be aware that the iron triangle constraints
demand careful consideration of how to handle these variables.
Discussion question: Fast, good or cheap?
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Figure 6: This version of the iron triangle includes speed, cost, and quality as its constraints.
The above version of the iron triangle suggests that a project can either be fast and good,
cheap and good, or fast and cheap, but not all three at once. Do you believe this to be true?
Give examples of situations to justify your answer, and discuss the implications of this.
Where does scope fit it?
Join the discussion.
4.3 Distinguishing between projects, programmes and
portfolios
A project comprises five Process Groups. You will learn more about these in Module 2. For
the moment, you need to know that these Process Groups are:
1. Initiating;
2. Planning;
3. Controlling;
4. Executing, and
5. Closing.
Figure 7 below shows how these Process Groups are presented during a project.
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Figure 7: The relationship between the Process Groups of a project, and the actions associated with
each Process Group.
In contrast, Project Portfolio Management is concerned with the management of portfolios
of projects in order to “achieve strategic objectives” (PMI®, 2013:10). The goal of Project
Portfolio Management is to make sure that projects and programmes are overseen in order
to allocate resources appropriately, and that its management is in line with the
organisation’s strategies (PMI®, 2013:10). It is important to note that the projects within a
portfolio may not be directly related or dependent on one another; instead, a portfolio
“represents a view of its selected components that both reflect and affect the strategic goals
of the organization” (PMI®, 2006a:4), meaning that the portfolio is representative of the
organisation’s current programmes, projects, sub-portfolios and other work.
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Figure 8: The various components that can interact under a project portfolio. (Source: PMI®,
2006a:5).
According to the PMI®, Project Portfolio Management has three main characteristics (PMI®,
2006a:10):
1. PPM results in valuable information that affects organisational strategies.
2. PPM aids in decisions made about groups of project portfolio elements.
3. PPM balances conflicting resources and support demands between different project
portfolio components.
From these characteristics and Figure 8 it is clear that project portfolios are distinctly
different to ordinary projects and programmes within an organisation.
4.3.1 What is a programme?
Note:
“Programme” and “program” refer to the same thing; the spelling difference is based on
location. In the USA, “programs” is used, while in the UK “programmes” is used. This course
uses UK spelling.
According to the Project Management Institute (PMI®), a programme can be defined as “a
group of related projects, sub-programmes, and programme activities that are managed in a
coordinated way to obtain benefits not available from managing them individually” (PMI®,
2006b:4).
Programmes can be comprised of various components, mostly consisting of projects, as well
as related work such as training, operations and maintenance activities. In addition,
programmes can include activities related to managing the performance of the programme
itself, such as programme governance, programme strategy alignment or programme
stakeholder engagement activities (to be covered in section 6).
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Programmes are primarily a means of executing corporate strategies and achieving business
and organisational goals and objectives. According to the PMI® (2013), they can deliver
benefits to an organisation by:
•
Generating business value;
•
Enhancing current capabilities;
•
Facilitating business change;
•
Maintaining an asset base;
•
Offering new products and services to the market; or
•
Developing new capabilities for the organisation.
Business benefits may be realised incrementally throughout the duration of programme
execution, or all at once at the end of the programme. An example of incremental benefits
delivery is an organisation-wide modernisation or process improvement programme
consisting of multiple projects. These may include: a project to standardise and consolidate
financial management across multiple sites; a project to improve personnel hiring and
performance appraisals, and one to streamline logistical services. Each project could be on a
different schedule and deliver incremental benefits, but the overarching objective to
modernise will only be achieved once the programme has completed all the necessary
projects.
Contrastingly, programmes may deliver planned benefits all at once, as a unified whole. For
example, if an organisation plans to relocate its offices to a new building, the move could
include several projects such as furnishing the meeting rooms, setting up the technological
infrastructure, relocating existing equipment, etc. In this case, the individual projects do not
begin delivering benefits until the entire programme is operational. In other words, the
value of the office move as a programme is only realised upon completion of all the
individual projects. Alternatively, a part of a programme may deliver early business value. A
programme can therefore be defined as a collection of related projects that are justified by a
common business case, with some interdependence between projects.
4.3.2 Project portfolios, programmes and projects
As mentioned above, a project portfolio refers to a collection of projects, programmes, subportfolios, and operations grouped together to facilitate their effective management and
thereby meet the strategic business objectives.
Individual projects that are either within or outside of a programme are still considered part
of a portfolio. Whether or not projects or programmes are interdependent or directly
related, they are still linked to the organisation’s strategic plan by means of the portfolio
they form part of. According to the PMI® (2013), components within a programme are
related through a common outcome or delivery of a collective set of benefits. Therefore, if
the relationship between two projects is determined to be only that of a shared client,
seller, technology, or resource, the effort should be managed as a portfolio of projects
rather than as a programme.
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Figure 8 illustrates the links between project portfolios and programmes, and between
programmes and projects. The links between these components will largely depend on the
state of organisational strategies and priorities. Through careful planning, the executive
leadership of an organisation determines the strategies and then prioritises the programmes
and projects in each portfolio based on their associated risks, costs and benefits. Following
this, support and resources get allocated to programmes and projects in order of priority.
Programmes or projects may be deferred by the organisation when the risk of adding them
to the current portfolio would unreasonably upset the balance and exceed the
organisational risk tolerance.
The interactions between the components illustrated in Figure 8 are largely influenced by
the relationship between an organisation’s project portfolios and its strategy and objectives.
For example, as the organisation manages project portfolios, its programmes are influenced
by portfolio needs such as organisational strategy and objectives, benefits, funding
allocations, requirements, timelines and constraints. These all translate into the programme
scope, deliverables, budget and schedule, which in turn determine how the projects in these
programmes will be structured. In other words, the direction of influence is top-down,
flowing from the project portfolio level to the programme level and down to the project and
operational level.
Further reading:
Table 1 below outlines the differences between projects, programmes and project
portfolios, according to the PMI® (PMI®, 2013:8). The table shows how projects,
programmes and project portfolios differ based on the different considerations to be made
for each in terms of scope, change, planning, management, success and monitoring.
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Table 1: Comparative overview of projects, programmes, and project portfolios (PMI®,
2013:8).
While it is important to be aware of all these differences, it may be useful to look at change
as a differentiating factor in more detail. As shown in Table 1, project managers expect
change in projects, and have set processes for managing and controlling change. Programme
managers, however, need to be prepared to manage change from both inside and outside of
the programme. Project portfolio managers on the other hand, must continuously monitor
change on a broad level in the organisation’s internal and external environments. Visually,
this distinction can be represented in Figure 9.
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Figure 9: A programme comprising many projects with several objectives.
5. Conclusion
Project management is a broad discipline, with a long history, and can be a useful tool in
managing projects to success, although there is no guarantee that the principles will be
effective. There are many variables which affect projects. The iron triangle represents one of
the most important and challenging tensions in creating a quality project, although a
successful project depends on factors beyond scope, time and quality.
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6. Bibliography
Arverson, P. 1998. The Deming Cycle. Available:
https://balancedscorecard.org/Resources/Articles-White-Papers/The-Deming-Cycle
[2016, April 19].
Burke, R. 2007. Project management techniques. Burke Publishing.
Frigenti, E. & Comninos, D. 2005. The practice of project management: A guide to the
business-focused approach. London: Kogan Page.
KPMG International. 2005. Information Risk Management: Global IT Management. Available:
http://www.kpmg.com.au/Portals/0/irmpmqa-global-it-pm-survey2005.pdf [2016,
April 1].
Müller, R. & Jugdev, K. 2012. Critical success factors in projects: Pinto, Slevin and Prescott the elucidation of project success. International Journal of Managing Projects in
Business. 5(4):757-775.
Oracle. 2011. Why projects fail: Avoiding the classic pitfalls (White Paper). Redwood Shores,
CA: Oracle Corporation.
Project Management Institute (PMI®). 2006a. The Standard for Portfolio Management. USA:
Project Management Institute, Inc.
Project Management Institute (PMI®). 2006b. The Standard for Program Management. USA:
Project Management Institute, Inc.
Project Management Institute (PMI®). 2013. A Guide to the Project Management Body of
Knowledge (PMBOK® Guide). 5th ed. USA: Project Management Institute, Inc.
Shenhar, A.J., Dvir, D., Levy, O. & Maltz, A.C. 2001. Project success: a multidimensional
strategic concept. Long Range Planning. 34(6): 699–725.
The Project Management Hut. 2012. What is a business project? Available:
http://www.pmhut.com/what-is-a-business-project. [2016, March 4].
The Standish Group, 2001. Extreme chaos. Available:
http://www.cin.ufpe.br/~gmp/docs/papers/extreme_chaos2001.pdf [2016, March
4].
Westland, J. 2006. The Project Management Life Cycle. London: Kogan Page Limited.
PMI and PMBOK are marks of the Project Management Institute, Inc.
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