Chapter 17 : Project Management
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Unique, one-time operations designed to accomplish a specific set of objectives in a limited
time frame; planning, preparing, coordinating
Nature of Projects
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Projects go through a series of stages– a life cycle; constructing a house
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Projects bring together people with a diversity of knowledge and skills, most of whom
remain associated with the project for less than its full life
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Organizational structure affects how projects are managed
Questions for Project Management
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1. How is it different?
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Limited time frame
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Narrow focus, specific objectives
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Less bureaucratic
2. Why is it used?
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Special needs
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Pressures for new or improved products
or services
3. What are the Key Metrics
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Time
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Cost
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Performance objectives
4. What are the Key Success Factors?
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Top-down commitment
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Having a capable project manager
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Having time to plan
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Careful tracking and control
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Good communications
5. What are the Major Administrative Issues?
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Executive responsibilities
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Project selection
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Project manager selection
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Organizational structure
Organizational alternatives
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Manage within functional unit
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Assign a coordinator
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Use a matrix organization with a project leader
6. What are the tools?
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Work breakdown structure
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Network diagram
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Gantt charts
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Risk management
Key Decisions
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Deciding which projects to implement
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Selecting a project manager
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Selecting a project team
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Planning and designing the project
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Managing and controlling project resources
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Deciding if and when a project should be terminated
6 Responsibilities of Manager
Ethical Issues Of Project Management
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Temptation to understate costs
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Withhold information
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Misleading status reports
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Falsifying records
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Compromising workers’ safety
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Approving substandard work
Project champion
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A person who promotes and supports a project
Project Life Cycles
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Usually resides within the organization
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Facilitate the work of the project by ‘talking up’ the project to managers,
and others, who might be asked to share resources with the project team
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The project champion can be critical to the success of a project
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WBS <Work Break down Structure>
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A hierarchical listing of what must be done during a project
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Establishes a logical framework for identifying the required activities for the
project
1. Identify the major elements of the project
2. Identify the major supporting activities for each of the major
elements
3. Break down each major supporting activity into a list of the activities
that will be needed to accomplish it
PERT: Program Evaluation and
Review Technique
CPM:
Critical Path Method
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Graphically displays project activities
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Estimates how long the project will take
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Indicates most critical activities
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Shows where delays will not affect project
Components of Network Diagram
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Network (precedence) diagram: diagram of project activities that shows sequential
relationships by the use of arrows and nodes.
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Activity-on-arrow (AOA): a network diagram convention in which arrows designate activities.
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Activity-on-node (AON): a network diagram convention in which nodes designate activities.
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Activities: steps in the project that consume resources and/or time.
Events: the starting and finishing of activities, designated by nodes in the AOA convention
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Path
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Critical path
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Sequence of activities that leads from the starting node to the finishing node
The longest path; determines expected project duration
Critical activities
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Activities on the critical path
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Slack
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Allowable slippage for path; the difference between the length of path and the
length of critical path
Time Estimates
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Deterministic
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Time estimates that are fairly certain
Probabilistic
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Estimates of times that allow for variation
Optimistic time
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Time required under optimal conditions
Pessimistic time
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Time required under worst conditions
Most likely time
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Most probable length of time that will be required
Calculation
Variance calculation
Time-Cost Trade-Offs: Crashing
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Crash: shortening activity duration
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Procedure for crashing
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Crash the project one period at a time
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Only an activity on the critical path
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Crash the least expensive activity
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Multiple critical paths: find the sum of crashing the least expensive activity on each
critical path
Advantages of PERT
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Forces managers to organize
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Provides graphic display of activities
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Identifies
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Critical activities
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Slack activities
Limitations of PERT
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Important activities may be omitted
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Precedence relationships may not be correct
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Estimates may include
a fudge factor
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May focus solely
on critical path
Goldratt’s Critical Chain
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Goldratt’s insight on project management
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Time estimates are often pessimistic
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Activities finished ahead of schedule often go unreported
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With multiple projects, resources needed for one project may be in use for another
Software of Project Management
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Computer aided design (CAD)
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Groupware (Lotus Notes)
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CA Super Project
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Harvard Total Manager
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MS Project
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Sure Track Project Manager
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Time Line
Advantages
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Imposes a methodology
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Provides logical planning structure
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Enhances team communication
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Flags constraint violations
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Automatic report formats
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Multiple levels of reports
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Enables what-if scenarios
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Generates various chart types
Project Risk Management
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Delays
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Increased costs
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Inability to meet specifications
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Project termination
Process of Risk Management
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Identify potential risks
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Analyze and assess risks
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Work to minimize occurrence of risk
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Establish contingency plans