CIS 586 IS Project and Change
Management
Chapter 1
Jongwook Woo, PhD
jwoo5@calstatela.edu
California State University, LA
Computer Information Systems Department
Chapter 1:
An Introduction to Project,
Program, and Portfolio
Management
Introduction to Project Management
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Learning Objectives
•
•
•
Understand the growing need for better project,
program, and portfolio management.
Explain what a project is, provide examples of
projects, list various attributes of projects, and
discuss the triple constraint of project
management.
Describe project management and key elements
of the project management framework, including
project stakeholders, project management
knowledge areas, common tools and techniques,
and project success factors.
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Learning Objectives (continued)
• Discuss the relationship between project, program,
and portfolio management and their contribution to
enterprise success.
• Describe the project management profession,
including suggested skills for project, program, and
portfolio managers, the role of professional
organizations such as the Project Management
Institute, the importance of certification and ethics,
and the growth of project and portfolio
management software.
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Introduction
• Many organizations today have a new or
renewed interest in project management.
– The U.S. spends $2.3 trillion on projects every year, or
one-quarter of its gross domestic product, and the world
as a whole spends nearly $10 trillion of its $40.7 gross
product on projects of all kinds.*
– In 2006, the average senior project manager in the
U.S. earned over $104,000 per year.**
– Project management certification is popular
worldwide.
*PMI, Inc., The PMI Project Management Fact Book, Second Edition, 2001.
**PMI, Inc., Project Management Salary Survey, Fifth Edition, 2007.
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What Went Wrong?
• A 1995 Standish Group study (CHAOS) found that
only 16.2 percent of information technology (IT)
application development projects were successful in
meeting scope, time, and cost goals.
• Over 31 percent of the projects were canceled before
completion, costing over $81 billion in the U.S. alone.
• A 2004 PricewaterhouseCoopers study of 200
companies from 30 different countries found that over
half of all projects fail.
• The authors of this study were adamant about the need
for better project management.
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Advantages of Using Formal
Project Management
• Better control of financial, physical, and human
resources
• Improved customer relations
• Shorter development times
• Lower costs
• Higher quality and increased reliability
• Higher profit margins
• Improved productivity
• Better internal coordination
• Higher worker morale
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What Is a Project?
• A project is “a temporary endeavor undertaken to
create a unique product, service, or result.”*
• Operations is work done to sustain the business.
• Projects end when their objectives have been
reached, or the project has been terminated.
*Project Management Institute, Inc., A Guide to the Project Management Body of
Knowledge (PMBOK® Guide) (2004), p. 5.
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Examples of Projects
• A young couple hires a firm to design and build
them a new house.
• A college campus upgrades its technology
infrastructure to provide wireless Internet access.
• A television network develops a system to allow
viewers to vote for contestants and provide other
feedback on programs.
• A government group develops a program to track
child immunizations.
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Project Attributes
• A project:
– Has a unique purpose.
– Is temporary.
– Is developed using progressive elaboration or in an
iterative fashion.
– Requires resources, often from various areas.
– Should have a primary customer or sponsor.
• The project sponsor usually provides the direction and
funding for the project.
– Involves uncertainty.
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Figure 1-1. Lost For Words
A good project manager is crucial to a project’s success. Project managers
work with the project sponsors, the project team, and the other people
involved in a project to meet project goals.
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The Triple Constraint
• Every project is constrained in different ways by its:
– Scope: What work will be done as part of the
project? What unique product, service, or result does
the customer or sponsor expect from the project?
– Time: How long should it take to complete the
project? What is the project’s schedule?
– Cost: What should it cost to complete the project?
What is the project’s budget?
• It is the project manager’s duty to balance these
three often competing goals.
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Figure 1-2. The Triple Constraint of Project Management
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More on the Triple Constraint
• It may be good enough to hit the target, or range of
triple constraint goals, but not the bull’s-eye.
• It’s important to determine which aspects of the triple
constraint are the most important.
• The “quadruple constraint” includes quality as well as
scope, time, and cost.
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What is Project Management?
• Project management is “the application of
knowledge, skills, tools and techniques to project
activities to meet project requirements.”*
*Project Management Institute, Inc., A Guide to the Project Management Body of
Knowledge (PMBOK® Guide) (2004), p. 8.
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Figure 1-3. Project Management
Framework
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Project Stakeholders
• Stakeholders are the people involved in or affected
by project activities.
• Stakeholders include:
–
–
–
–
–
–
–
The project sponsor
The project manager
The project team
Support staff
Customers
Suppliers
Opponents to the project
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Project Management Knowledge Areas
• Four core knowledge areas lead to specific project objectives.
– Project scope management involves defining and managing all the
work required to complete the project successfully.
– Project time management includes estimating how long it will take to
complete the work, developing an acceptable project schedule, and
ensuring timely completion of the project.
– Project cost management consists of preparing and managing the
budget for the project.
– Project quality management ensures that the project will satisfy the
stated or implied needs for which it was undertaken.
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Project Management Knowledge Areas
(continued)
• Four facilitating knowledge areas are the means through which
the project objectives are achieved.
– Project human resource management is concerned with making
effective use of the people involved with the project.
– Project communications management involves generating,
collecting, disseminating, and storing project information.
– Project risk management includes identifying, analyzing, and
responding to risks related to the project.
– Project procurement management involves acquiring or procuring
goods and services for a project from outside the performing
organization.
• One knowledge area (project integration management) affects
and is affected by all of the other knowledge areas.
• All knowledge areas are important!
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Project Management Tools and
Techniques
• Project management tools and techniques assist project
managers and their teams in various aspects of project
management.
• Note that a tool or technique is more than just a software
package.
• Specific tools and techniques include:
– Project charters, scope statements, and WBS (scope)
– Gantt charts, network diagrams, critical path analyses (time)
– Net present value, cost estimates, and earned value management
(cost)
– See Figure 1-4 for more examples
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• “Super tools” are those tools that have high use and
high potential for improving project success, such as:
– Software for task scheduling (such as project
management software)
– Scope statements
– Requirements analyses
– Lessons-learned reports
• Tools already extensively used that have been found to
improve project importance include:
– Progress reports
– Kick-off meetings
– Gantt charts
– Change requests
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What Went Right? Improved
Project Performance*
The Standish Group’s CHAOS studies show improvements
in IT projects in the past decade
Measure
Successful Projects
Failed Projects
Money wasted on
failed and challenged
projects
1994 Data
16%
31%
$140B out of
$250B or 56%
2006 Data
35%
19%
$53B out of
$346B or 15%
Result
More than doubled
Almost halved
Well more than
halved
*Jim Johnson, “CHAOS 2006 Research Project,” CHAOS Activity News, vol. 2: issue 1, (2007).
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Why the Improvements?
“The reasons for the increase in successful projects
vary. First, the average cost of a project has been more
than cut in half. Better tools have been created to
monitor and control progress and better skilled
project managers with better management
processes are being used. The fact that there are
processes is significant in itself.”*
*The Standish Group, “CHAOS 2001: A Recipe for Success” (2001).
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Project Success
• There are different ways to define project success:
– The project met scope, time, and cost goals.
– The project satisfied the customer/sponsor.
– The project produced the desired results.
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What is a Program?
• A program is:
– “a group of related projects managed in a coordinated
way to obtain benefits and control not available from
managing them individually.”*
– A program manager provides leadership and direction
for the project managers heading the projects within the
program.
*Project Management Institute, Inc., A Guide to the Project Management Body of
Knowledge (PMBOK® Guide) (2004), p. 8.
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Project Portfolio Management
• Project portfolio management is an emerging
business strategy in which organizations group and
manage projects and programs as a portfolio of
investments that contribute to the entire enterprise’s
success.
• Pacific Edge Software’s product manager, Eric Burke,
defines project portfolio management as “the
continuous process of selecting and managing the
optimum set of project initiatives that deliver
maximum business value.”*
*Eric Burke, “Project Portfolio Management,” PMI Houston Chapter Meeting (July 10, 2002).
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The Project Management Profession
• Project, program, and portfolio managers need to
develop specific skills.
• Certification is available for project managers.
• There are many software tools to assist in project,
program, and portfolio management.
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Suggested Skills for Project Managers
Knowledge of the following:
• All nine project management knowledge areas
• The application area, including specific standards and
regulations
• The project environment
• General management
• Human relations
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Media Snapshot – Good Project Management Skills
from The Apprentice
•
•
•
•
•
Leadership and
professionalism are crucial.
Know what your sponsor
expects from the project,
and learn from your
mistakes.
Trust your team, and
delegate decisions.
Know the business.
Stand up for yourself.
Introduction to Project Management
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•
•
•
•
Be a team player.
Don’t be overly emotional
and stay organized.
Work on projects and for
people you believe in.
Think outside of the box.
Some luck is involved in
project management, and
you should always aim
high.
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Importance of Leadership Skills
• Effective project managers provide leadership by
example.
• A leader focuses on long-term goals and big-picture
objectives while inspiring people to reach those goals.
• A manager deals with the day-to-day details of
meeting specific goals.
• Project managers often take on the role of both leader
and manager.
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• Large projects: leadership, people skills,
– relevant prior experience, planning, verbal
communication, and team-building skills are most
important
• High uncertainty projects: leadership, people skills,
– risk management, expectation management, and
planning skills are most important
• Very novel projects: leadership, people skills,
– having vision and goals, self-confidence, expectations
management, and listening skills are most important
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Additional Skills for Program and Portfolio
Managers
• Program managers normally have experience as
project managers. They often rely on their past
experience, strong business knowledge, leadership
capability, and communication skills to manage
programs.
• Portfolio managers must have strong financial and
analytical skills and understand how projects and
programs can contribute to meeting strategic goals.
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A best practice is “an optimal way recognized by industry to
achieve a stated goal or objective.”*
Robert Butrick suggests that organizations need to follow basic
principles of project management, including these two
mentioned earlier in this chapter:
Make sure your projects are driven by your strategy.
Be able to demonstrate how each project you undertake fits your business strategy,
and screen out unwanted projects as soon as possible.
Engage your stakeholders.
Ignoring stakeholders often leads to project failure. Be sure to engage stakeholders
at all stages of a project, and encourage teamwork and commitment at all times.
*Project
Managementand
Institute,
Organizational to
Project
Maturity Model (OPM3)
Use leadership
open Inc.,
communications
makeManagement
things happen.**
Knowledge Foundation (2003), p. 13.
**Ultimate Business Library, Best Practice: Ideas and Insights from the World’s Foremost Business
Thinkers, Perseus Publishing (2003).
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Project Management Certification
• PMI provides certification as a Project Management
Professional (PMP).
• A PMP has documented sufficient project experience,
agreed to follow a code of ethics, and passed the PMP
exam.
• The number of people earning PMP certification is
increasing quickly.
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Ethics in Project Management
• Ethics
– a set of principles that guide our decision making based on
personal values of what is “right” and “wrong”
– is an important part of all professions.
• Project managers often face ethical dilemmas.
• In order to earn PMP certification, applicants must agree to the
PMP code of professional conduct.
• Several questions on the PMP exam are related to professional
responsibility, including ethics.
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Project Management Software
• There are hundreds of different products available today.
• Three main categories of tools are the following:
– Low-end tools: Handle single or smaller projects well; cost under
$200 per user.
– Midrange tools: Handle multiple projects and users; cost $200-600
per user; MS Project 2007 is the most popular (this text includes a
trial copy).
– High-end tools: Also called enterprise project management
software; often licensed on a per-user basis; example is VPMi
Enterprise Online (www.vcsonline.com); see front cover for trial
version information.
• Project 2007 includes a standard and an enterprise version. See
the Guide to Using Microsoft Project 2007 on the companion
Web site for details.
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Chapter Summary
• A project is a temporary endeavor undertaken to create a unique
product, service, or result.
• Project management is the application of knowledge, skills,
tools, and techniques to project activities to meet project
requirements.
• A program is a group of related projects managed in a
coordinated way to obtain benefits and control not available
from managing them individually.
• Project portfolio management involves organizing and
managing projects and programs as a portfolio of investments
that contribute to the entire enterprise’s success.
• The project management profession continues to grow and
mature.
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