Project Management

I N F O R M AT I O N T E C H N O L O G Y P R O J E C T M A N A G E M E N T

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Kathy Schwalbe, Ph.D., PMP Professor Emeritus, Augsburg College

I N F O R M AT I O N T E C H N O L O G Y P R O J E C T M A N A G E M E N T

Eighth Edition

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Information Technology Project Management, Eighth Edition Kathy Schwalbe

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Preface xix

Chapter 1 Introduction to Project Management 1

Chapter 2 The Project Management and Information Technology Context 43

Chapter 3 The Project Management Process Groups: A Case Study 79

Chapter 4 Project Integration Management 137

Chapter 5 Project Scope Management 183

Chapter 6 Project Time Management 221

Chapter 7 Project Cost Management 263

Chapter 8 Project Quality Management 299

Chapter 9 Project Human Resource Management 343

Chapter 10 Project Communications Management 389

Chapter11 Project Risk Management 425

BRIEF CONTENTS

Brief Contentsviii

Chapter 12 Project Procurement Management 465

Chapter 13 Project Stakeholder Management 495

Appendix A Guide to Using Microsoft Project 2010 A.1

Glossary G.1

Index I.1

Preface xix

Chapter 1 Introduction to Project Management 1 1.1 Introduction 2 1.2 What Is a Project? 4

1.2a Examples of IT Projects 4 1.2b Project Attributes 6 1.2c Project Constraints 7

1.3 What Is Project Management? 9 1.3a Project Stakeholders 10 1.3b Project Management Knowledge Areas 11 1.3c Project Management Tools and Techniques 12 1.3d Project Success 15

1.4 Program and Project Portfolio Management 17 1.4a Programs 17 1.4b Project Portfolio Management 18

1.5 The Role of the Project Manager 22 1.5a Project Manager Job Description 22 1.5b Suggested Skills for Project Managers 23 1.5c Importance of People Skills and Leadership Skills 25 1.5d Careers for IT Project Managers 27

1.6 The Project Management Profession 28 1.6a History of Project Management 28 1.6b The Project Management Institute 32 1.6c Project Management Certification 33 1.6d Ethics in Project Management 34 1.6e Project Management Software 35

Chapter Summary 37 Quick Quiz 37 Quick Quiz Answers 39 Discussion Questions 39 Exercises 40 Key Terms 41 End Notes 41

Chapter 2 The Project Management and Information Technology Context 43 2.1 A Systems View of Project Management 45

2.1a What Is a Systems Approach? 45 2.1b The Three-Sphere Model for Systems Management 46

TABLE OF CONTENTS

Table of Contentsx

2.2 Understanding Organizations 47 2.2a The Four Frames of Organizations 47 2.2b Organizational Structures 49 2.2c Organizational Culture 51

2.3 Focusing on Stakeholder Needs 52 2.3a The Importance of Top Management Commitment 54 2.3b The Need for Organizational Commitment to Information Technology 55 2.3c The Need for Organizational Standards 56

2.4 Project Phases and the Project Life Cycle 57 2.4a Product Life Cycles 59 2.4b The Importance of Project Phases and Management Reviews 62

2.5 The Context of Information Technology Projects 64 2.5a The Nature of IT Projects 64 2.5b Characteristics of IT Project Team Members 64 2.5c Diverse Technologies 65

2.6 Recent Trends Affecting Information Technology Project Management 65 2.6a Globalization 65 2.6b Outsourcing 66 2.6c Virtual Teams 67 2.6d Agile Project Management 69 2.6e The Manifesto for Agile Software Development 69 2.6f Scrum 70 2.6g Agile, the PMBOK® Guide, and a New Certification 71

Chapter Summary 73 Quick Quiz 74 Quick Quiz Answers 75 Discussion Questions 75 Exercises 76 Key Terms 77 End Notes 77

Chapter 3 The Project Management Process Groups: A Case Study 79 3.1 Project Management Process Groups 80 3.2 Mapping the Process Groups to the Knowledge Areas 85 3.3 Developing an It Project Management Methodology 86 3.4 Case Study 1: JWD Consulting’s Project Management Intranet Site Project

(Predictive Approach) 89 3.4a Project Pre-Initiation and Initiation 89 3.4b Pre-Initiation Tasks 90 3.4c Initiating 93 3.4d Project Planning 98 3.4e Project Execution 107 3.4f Project Monitoring and Controlling 111 3.4g Project Closing 114

3.5 Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach) 117

3.5a Scrum Roles, Artifacts, and Ceremonies 118

Table of Contents xi

3.5b Project Pre-Initiation and Initiation 121 3.5c Planning 122 3.5d Executing 124 3.5e Monitoring and Controlling 124 3.5f Closing 126

3.6 Templates by Process Group 126 Chapter Summary 130 Quick Quiz 130 Quick Quiz Answers 132 Discussion Questions 132 Exercises 133 Key Terms 134 End Notes 134

Chapter 4 Project Integration Management 137 4.1 What is Project Integration Management? 138 4.2 Strategic Planning and Project Selection 141

4.2a Strategic Planning 141 4.2b Identifying Potential Projects 143 4.2c Aligning IT with Business Strategy 144

4.3 Methods for Selecting Projects 146 4.3a Focusing on Broad Organizational Needs 146 4.3b Categorizing IT Projects 146 4.3c Performing Financial Analyses 147 4.3d Using a Weighted Scoring Model 152 4.3e Implementing a Balanced Scorecard 154

4.4 Developing a Project Charter 155 4.5 Developing a Project Management Plan 158

4.5a Project Management Plan Contents 158 4.5b Using Guidelines to Create Project Management Plans 161

4.6 Directing and Managing Project Work 162 4.6a Coordinating Planning and Execution 163 4.6b Providing Strong Leadership and a Supportive Culture 163 4.6c Capitalizing on Product, Business, and Application Area Knowledge 164 4.6d Project Execution Tools and Techniques 165

4.7 Monitoring and Controlling Project Work 166 4.8 Performing Integrated Change Control 168

4.8a Change Control on IT Projects 169 4.8b Change Control System 169

4.9 Closing Projects or Phases 172 4.10 Using Software to Assist in Project Integration Management 172 Chapter Summary 175 Quick Quiz 175 Quick Quiz Answers 177 Discussion Questions 177 Exercises 177 Running Case 178

Table of Contentsxii

Tasks 180 Key Terms 180 End Notes 181

Chapter 5 Project Scope Management 183 5.1 What Is Project Scope Management? 184 5.2 Planning Scope Management 186 5.3 Collecting Requirements 188 5.4 Defining Scope 191 5.5 Creating the Work Breakdown Structure 194

5.5a Approaches to Developing Work Breakdown Structures 199 5.5b The WBS Dictionary 203 5.5c Advice for Creating a WBS and WBS Dictionary 204

5.6 Validating Scope 205 5.7 Controlling Scope 207

5.7a Suggestions for Improving User Input 208 5.7b Suggestions for Reducing Incomplete and Changing Requirements 209

5.8 Using Software to Assist in Project Scope Management 210 Chapter Summary 212 Quick Quiz 212 Quick Quiz Answers 214 Discussion Questions 214 Exercises 214 Running Case 216 Tasks 217 End Notes 218

Chapter 6 Project Time Management 221 6.1 The Importance of Project Schedules 222 6.2 Planning Schedule Management 225 6.3 Defining Activities 225 6.4 Sequencing Activities 228

6.4a Dependencies 228 6.4b Network Diagrams 229

6.5 Estimating Activity Resources 232 6.6 Estimating Activity Durations 233 6.7 Developing the Schedule 234

6.7a Gantt Charts 234 6.7b Adding Milestones to Gantt Charts 236 6.7c Using Tracking Gantt Charts to Compare Planned and Actual Dates 237 6.7d Critical Path Method 238 6.7e Calculating the Critical Path 239 6.7f Growing Grass Can Be on the Critical Path 240 6.7g Using Critical Path Analysis to Make Schedule Trade-Offs 240 6.7h Using the Critical Path to Shorten a Project Schedule 242 6.7i Importance of Updating Critical Path Data 243 6.7j Critical Chain Scheduling 243

Table of Contents xiii

6.7k Program Evaluation and Review Technique (PERT) 247 6.7l Agile and Time Management 248

6.8 Controlling the Schedule 248 6.8a Reality Checks on Scheduling and the Need for Discipline 249

6.9 Using Software to Assist in Project Time Management 250 Words of Caution on Using Project Management Software 251

Chapter Summary 253 Quick Quiz 254 Quick Quiz Answers 256 Discussion Questions 256 Exercises 256 Running Case 259 Tasks 259 Key Terms 259 End Notes 260

Chapter 7 Project Cost Management 263 7.1 The Importance of Project Cost Management 264

7.1a What Is Cost? 265 7.1b What Is Project Cost Management? 266

7.2 Basic Principles of Cost Management 266 7.3 Planning Cost Management 270 7.4 Estimating Costs 271

7.4a Types of Cost Estimates 271 7.4b Cost Estimation Tools and Techniques 273 7.4c Typical Problems with IT Cost Estimates 274 7.4d How to Develop a Cost Estimate 275

7.5 Determining the Budget 281 7.6 Controlling Costs 282

7.6a Earned Value Management 282 7.6b Project Portfolio Management 288

7.7 Using Project Management Software to Assist in Project Cost Management 289 Chapter Summary 291 Quick Quiz 291 Quick Quiz Answers 293 Discussion Questions 293 Exercises 294 Running Case 295 Tasks 295 Key Terms 297 End Notes 297

Chapter 8 Project Quality Management 299 8.1 The Importance of Project Quality Management 300 8.2 What Is Project Quality Management? 302 8.3 Planning Quality Management 304 8.4 Performing Quality Assurance 306

Table of Contentsxiv

8.5 Controlling Quality 307 8.6 Tools and Techniques for Quality Control 308

8.6a Statistical Sampling 314 8.6b Six Sigma 315 8.6c Testing 320

8.7 Modern Quality Management 322 8.7a Deming and His 14 Points for Management 322 8.7b Juran and the Importance of Top Management Commitment to Quality 323 8.7c Crosby and Striving for Zero Defects 323 8.7d Ishikawa’s Guide to Quality Control 324 8.7e Taguchi and Robust Design Methods 324 8.7f Feigenbaum and Workers’ Responsibility for Quality 325 8.7g Malcolm Baldrige National Quality Award 325 8.7h ISO Standards 325

8.8 Improving It Project Quality 326 8.8a Leadership 326 8.8b The Cost of Quality 327 8.8c The Impact of Organizational Influences, and Workplace Factors on Quality 329 8.8d Expectations and Cultural Differences in Quality 329 8.8e Maturity Models 330

8.9 Using Software to Assist in Project Quality Management 333 Chapter Summary 334 Quick Quiz 334 Quick Quiz Answers 336 Discussion Questions 336 Exercises 337 Running Case 338 Tasks 338 Key Terms 338 End Notes 339

Chapter 9 Project Human Resource Management 343 9.1 The Importance of Human Resource Management 344

9.1a The Global IT Workforce 344 9.1b Implications for the Future of IT Human Resource Management 345

9.2 What is Project Human Resource Management? 347 9.3 Keys to Managing and Leading People 348

9.3a Motivation Theories 349 9.3b Influence and Power 353 9.3c Covey and Improving Effectiveness 355 9.3d Emotional Intelligence 357 9.3e Leadership 358

9.4 Developing the Human Resource Plan 359 9.4a Project Organizational Charts 360 9.4b Responsibility Assignment Matrices 362 9.4c Staffing Management Plans and Resource Histograms 363

Table of Contents xv

9.5 Acquiring the Project Team 364 9.5a Resource Assignment 364 9.5b Resource Loading 366 9.5c Resource Leveling 367

9.6 Developing the Project Team 369 9.6a Training 370 9.6b Team-Building Activities 371 9.6c Reward and Recognition Systems 375

9.7 Managing the Project Team 375 9.7a Tools and Techniques for Managing Project Teams 376 9.7b General Advice on Managing Teams 378

9.8 Using Software to Assist in Human Resource Management 379 Chapter Summary 381 Quick Quiz 382 Quick Quiz Answers 384 Discussion Questions 384 Exercises 384 Running Case 385 Key Terms 386 End Notes 387

Chapter 10 Project Communications Management 389 10.1 The Importance of Project Communications Management 390 10.2 Keys to Good Communications 392

10.2a Focusing on Group and Individual Communication Needs 392 10.2b Formal and Informal Methods for Communicating 394 10.2c Distributing Important Information in an Effective and Timely Manner 395 10.2d Setting the Stage for Communicating Bad News 395 10.2e Determining the Number of Communication Channels 396

10.3 Planning Communications Management 398 10.4 Managing Communications 399

10.4a Using Technology to Enhance Information Creation and Distribution 400 10.4b Selecting the Appropriate Communication Methods and Media 401 10.4c Reporting Performance 403

10.5 Controlling Communications 404 10.6 Suggestions for Improving Project Communications 405

10.6a Developing Better Communication Skills 405 10.6b Running Effective Meetings 406 10.6c Using E-Mail, Instant Messaging, Texting, Kanban Boards, and

Collaborative Tools Effectively 408 10.6d Using Templates for Project Communications 411

10.7 Using Software to Assist in Project Communications 414 Chapter Summary 418 Quick Quiz 418 Quick Quiz Answers 420 Discussion Questions 420

Table of Contentsxvi

Exercises 421 Running Case 422 Key Terms 422 End Notes 422

Chapter 11 Project Risk Management 425 11.1 The Importance of Project Risk Management 426 11.2 Planning Risk Management 433 11.3 Common Sources of Risk on IT Projects 434 11.4 Identifying Risks 438

11.4a Suggestions for Identifying Risks 439 11.4b The Risk Register 440

11.5 Performing Qualitative Risk Analysis 442 11.5a Using Probability/Impact Matrixes to Calculate Risk Factors 443 11.5b Top Ten Risk Item Tracking 444

11.6 Performing Quantitative Risk Analysis 447 11.6a Decision Trees and Expected Monetary Value 447 11.6b Simulation 449 11.6c Sensitivity Analysis 451

11.7 Planning Risk Responses 452 11.8 Controlling Risks 454 11.9 Using Software to Assist in Project Risk Management 455 Chapter Summary 457 Quick Quiz 458 Quick Quiz Answers 460 Discussion Questions 460 Exercises 460 Running Case 461 End Notes 463

Chapter 12 Project Procurement Management 465 12.1 The Importance of Project Procurement Management 466 12.2 Planning Procurement Management 471

12.2a Types of Contracts 471 12.2b Tools and Techniques for Planning Procurement Management 476 12.2c Procurement Management Plan 477 12.2d Statement of Work 478 12.2e Procurement Documents 478 12.2f Source Selection Criteria 481

12.3 Conducting Procurements 481 12.4 Controlling Procurements 483 12.5 Closing Procurements 484 12.6 Using Software to Assist in Project Procurement Management 485 Chapter Summary 488 Quick Quiz 489 Quick Quiz Answers 490 Discussion Questions 490

Table of Contents xvii

Exercises 491 Running Case 492 Key Terms 492 End Notes 493

Chapter 13 Project Stakeholder Management 495 13.1 The Importance of Project Stakeholder Management 496 13.2 Identifying Stakeholders 498 13.3 Planning Stakeholder Management 502 13.4 Managing Stakeholder Engagement 503 13.5 Controlling Stakeholder Engagement 506 13.6 Using Software to Assist in Project Stakeholder Management 508 Chapter Summary 511 Quick Quiz 511 Quick Quiz Answers 513 Discussion Questions 513 Exercises 513 Running Case 514 Key Terms 514 End Notes 514

Appendix A Guide to Using Microsoft Project 2013 A.1 Introduction A.2 Project Management Software Reviews A.3 Basic Features of Project Management Software A.6 What’s New in Project 2013 A.7 Using Project 2013 A.7

Before You Begin A.7 Using the 60-Day Trial of Project 2013 A.8 Overview of Project 2013 A.9

Exploring Project 2013 Using an Existing File A.15 Project 2013 Views A.17 Project 2013 Reports A.19 Project 2013 Filters A.21

Creating a New File and Entering Tasks in a Work Breakdown Structure A.23 Creating a New Project File A.23 Creating a Work Breakdown Structure Hierarchy A.25 Creating Summary Tasks A.26 Numbering Tasks A.27 Saving Project Files Without a Baseline A.28

Developing the Schedule A.29 Calendars A.29 Task Durations A.31 Entering Task Durations A.34 Establishing Task Dependencies A.38 Gantt Charts, Network Diagrams, and Critical Path Analysis A.43

Table of Contentsxviii

Project Cost and Resource Management A.46 Entering Fixed and Variable Cost Estimates A.46 Entering Baseline Plans, Actual Costs, and Actual Times A.52

Viewing Earned Value Management Data A.56 Integrating Project 2013 with Other Applications and Apps for Office A.57

Copying Information Between Applications A.57 Creating Hyperlinks to Other Files A.59 Using Project 2013 Apps A.60

Glossary G.1 Index I.1

The future of many organizations depends on their ability to harness the power of in- formation technology, and good project managers continue to be in high demand. Col- leges have responded to this need by establishing courses in project management and making them part of the information technology, management, engineering, and other curricula. Corporations are investing in continuing education to help develop and deepen the effectiveness of project managers and project teams. This text provides a much-needed framework for teaching courses in project management, especially those that emphasize managing information technology projects. The first seven edi- tions of this text were extremely well received by people in academia and the work- place. The Eighth Edition builds on the strengths of the previous editions and adds new, important information and features.

It’s impossible to read a newspaper, magazine, or web page without hearing about the impact of information technology on our society. Information is traveling faster and being shared by more people than ever before. You can buy just about anything online, surf the web on a mobile phone, or use a wireless Internet connection just about anywhere. Companies have linked their systems together to help them fill or- ders on time and better serve their customers. Software companies are continually developing new products to help streamline our work and get better results. When technology works well, it is almost invisible. But did it ever occur to you to ask, “Who makes these complex technologies and systems happen?”

Because you’re reading this text, you must have an interest in the “behind- the- scenes” aspects of technology. If I’ve done my job well, you’ll begin to see the many innovations society is currently enjoying as the result of thousands of success- ful information technology projects. In this text, you’ll read about IT projects in organizations around the world that went well, including the National University Hospital in Singapore, which used critical chain scheduling to decrease patient admission times by more than 50 percent; retailer Zulily, one of a growing number of organizations developing software in-house to meet their need for speed and innova- tion; Dell’s green computing project that saves energy and millions of dollars; Google’s driverless car project, striving to reduce traffic accidents and save lives; and many more.

Of course, not all projects are successful. Factors such as time, money, and un- realistic expectations, among many others, can sabotage a promising effort if it is not properly managed. In this text, you’ll also learn from the mistakes made on many projects that were not successful.

I have written this book in an effort to educate you, tomorrow’s project manag- ers, about what will help make a project succeed—and what can make it fail. You’ll also see how projects are used in everyday media, such as television and film, and how companies use best practices in project management. Many readers tell me how much they enjoy reading these real-world examples in the What Went Right?, What

PREFACE

Prefacexx

Went Wrong?, Media Snapshot, and Best Practice features. As practitioners know, there is no “one size fits all” solution to managing projects. By seeing how different organizations in different industries successfully implement project management, you can help your organization do the same.

Although project management has been an established field for many years, man- aging information technology projects requires ideas and information that go beyond standard practices. For example, many information technology projects fail because of a lack of executive support, poor user involvement, and unclear business objec- tives. This book includes many suggestions for dealing with these issues. New tech- nologies can also aid in managing information technology projects, and examples of using software to assist in project management are included throughout the book.

Information Technology Project Management, Eighth Edition, is the only text- book to apply all 10 project management knowledge areas and all five process groups to information technology projects. As you will learn, the project management knowledge areas are project integration, scope, time, cost, quality, human resource, communications, risk, procurement, and stakeholder management. The five process groups are initiating, planning, executing, monitoring and controlling, and closing.

This text builds on the PMBOK® Guide, Fifth Edition, an American National Stan- dard, to provide a solid framework and context for managing information technology projects. It also includes an appendix, Guide to Using Microsoft Project 2013, that many readers find invaluable.

In addition to the physical text, several resources are available online. Additional case studies, including the one from the Seventh Edition, Manage Your Health, are available, as well as over fifty template files that students can use to create their own project management documents. The author’s personal website (www .kathyschwalbe.com or www.pmtexts.com) also provides additional, up-to-date resources and links related to the field of project management, including topics like Agile, PMP and CAPM certification, simulation software, leadership, mind mapping, sample student projects, and more.

Information Technology Project Management, Eighth Edition, provides practi- cal lessons in project management for students and practitioners alike. By weaving together theory and practice, this text presents an understandable, integrated view of the many concepts, skills, tools, and techniques of information technology project management. The comprehensive design of the text provides a strong foundation for students and practitioners in project management.

N E W T O T H E E I G H T H E D I T I O N

Building on the success of the previous editions, Information Technology Project Management, Eighth Edition, introduces a uniquely effective combination of features. The main changes in the Eighth Edition include the following:

A new running case at the end of Chapters 4–13, the ten knowledge area chapters. Instructors often like to assign running cases to reinforce application of key concepts. The “Manage Your Health” running case from the Seventh Edition is provided online along with several additional running cases.

Preface xxi

Updated and additional exercises to enhance student learning and give in- structors more options for in-class or out-of-class work. Additional content on important topics like leadership and agile. New examples that highlight IT project management at work in real, news- worthy companies. These timely, relevant examples help illustrate the real- world applications and impact of key project management concepts. They also serve as mini-case stories, suitable for class discussion. Many recent studies of IT project management and related topics. Summaries of classic, updated, and the most current research throughout the text build a rich context for essential IT project management concepts. User feedback is incorporated. Based on feedback from reviewers, students, instructors, practitioners, and translators, you’ll see a variety of changes that help clarify information. (This book has been translated into Chinese, Japa- nese, Russian, and Czech.)

Many people have been practicing some form of project management with little or no formal study in this area. New books and articles are written each year as we dis- cover more about the field and as project management software continues to advance. Because the project management field and the technology industry change rapidly, you cannot assume that what worked even a few years ago is still the best approach today. This text provides up-to-date information on how good project management and effective use of software can help you manage projects, especially information technology projects. Distinct features of this text include its relationship to the Project Management Body of Knowledge, its value in preparing for certification, its detailed guide for using Microsoft Project 2013, its inclusion of running case studies and online templates, its emphasis on IT projects, its coverage of several software tools that assist with project management, and its companion website.

Based on PMBOK® Guide, Fifth Edition and Preparing for Certification The Project Management Institute (PMI) created the Guide to the Project Manage- ment Body of Knowledge (the PMBOK® Guide) as a framework and starting point for understanding project management. It includes an introduction to project manage- ment, brief descriptions of all 10 project management knowledge areas, and a glos- sary of terms. The PMBOK® Guide is, however, just that—a guide. This text uses the PMBOK® Guide, Fifth Edition (2013) as a foundation, but goes beyond it by providing more details, discussing the how and why of the knowledge areas, highlighting addi- tional topics, and providing a real-world context for IT project management. This text is an excellent resource for preparing for PMI certifications, such as the Project Man- agement Professional (PMP) and Certified Associate in Project Management (CAPM).

Detailed Guide to Microsoft Project 2013 Software has become a critical tool for helping project managers and their teams ef- fectively manage information technology projects. Information Technology Project Management, Eighth Edition, includes a detailed guide in Appendix A for using the leading project management software on the market—Microsoft Project 2013. Exam- ples that use Project 2013 and other software tools are integrated throughout the text. Appendix A, Guide to Using Microsoft Project 2013, teaches you in a systematic way

Prefacexxii

to use this powerful software to help in project scope, time, cost, human resource, and communications management.

Emphasis on IT Projects and Use of Software Tools Most of the examples of projects in this text are based on IT projects. Research stud- ies and advice are specific to managing IT projects, and include expanded information on agile. Each of the knowledge area chapters includes examples as well as a separate section describing how software can be used to assist in managing that knowledge area. For example, Chapter 5, Project Scope Management, includes examples of us- ing mind maps created with MindView Business software to create a work breakdown structure. Chapter 11, Project Risk Management, shows an example of using Monte Carlo simulation software to help quantify project risk.

Exercises, Running Cases, Templates, and Sample Documents Based on feedback from readers, the Eighth Edition continues to provide challeng- ing exercises and running cases to help students apply concepts in each chapter. The text includes more than 50 templates and examples of real project documents that students can use to help them apply their skills to their own projects.

Students can access all of these materials for free through the companion CourseMate product, and for an additional fee, students who purchase the CourseMate product will gain access to a complete, interactive e-book, crossword puzzles, and additional study tools.

A C C E S S I N G T H E C O U R S E M A T E S I T E

To access the CourseMate site, open a web browser and go to www.cengagebrain .com. Search by ISBN, author name, or title, and click Create My Account to begin the registration process.

O R G A N I Z A T I O N A N D C O N T E N T

Information Technology Project Management, Eighth Edition, is organized into three main sections, which provide a framework for project management, a detailed de- scription of each project management knowledge area, and an appendix of practical information for applying project management. The first three chapters form the first section, which introduces the project management framework and sets the stage for the remaining chapters.

Chapters 4 through 13 form the second section, which describes each of the proj- ect management knowledge areas—project integration, scope, time, cost, quality, hu- man resource, communications, risk, procurement, and stakeholder management—in the context of information technology projects. An entire chapter is dedicated to each knowledge area. Each of these chapters includes sections that map to their major processes as described in the PMBOK® Guide, Fifth Edition. For example, the chapter on project quality management includes sections on planning quality management, performing quality assurance, and controlling quality. Additional sections highlight other important concepts related to each knowledge area, such as Six Sigma, testing,

Preface xxiii

maturity models, and using software to assist in project quality management. Each chapter also includes detailed examples of key project management tools and tech- niques as applied to information technology projects. For example, the chapter on project integration management includes samples of various project-selection tech- niques, such as net present value analyses, ROI calculations, payback analyses, and weighted scoring models. The project scope management chapter includes a sample project charter, a project scope statement, and several work breakdown structures for information technology projects.

Appendix A forms the third section of the text, which provides practical infor- mation to help you learn how to use the most popular project management software available today. By following the detailed, step-by-step guide in Appendix A, which includes more than 60 screen illustrations, you will learn how to use Project 2013. You can download a free trial from the Microsoft website, use your school or company license, or purchase this powerful software.

P E D A G O G I C A L F E A T U R E S

Several pedagogical features are included in this text to enhance presentation of the materials so that you can more easily understand the concepts and apply them. Throughout the text, emphasis is placed on applying concepts to current, real-world information technology project management.

Opening Case and Case Wrap-Up To set the stage, each chapter begins with an opening case related to the material presented in that chapter. These real-life case scenarios, most of which are based on the author’s experiences, spark student interest and introduce important concepts in a real-world context. As project management concepts and techniques are discussed, they are applied to the opening case and other similar scenarios. Each chapter then closes with a case wrap-up—with some ending successfully and some failing—to further illustrate the real world of project management.

What Went Right? and What Went Wrong? Failures, as much as successes, can be valuable learning experiences. Each chapter of the text includes one or more examples of real information technology projects that went right, as well as examples of projects that went wrong. These examples further illustrate the importance of mastering key concepts in each chapter.

Media Snapshot The world is full of projects. Television shows, movies, newspapers, websites, and other media highlight project results that are good and bad. Relating project management con- cepts to the types of projects highlighted in the media helps you understand the impor- tance of this growing field. Why not get excited about studying project management by seeing its concepts at work in popular television shows, movies, or other media?

Best Practice Every chapter includes an example of a best practice related to topics in that chapter. For example, Chapter 1 describes best practices written by Robert Butrick, author of The Project Workout, from the Ultimate Business Library’s Best Practice book. He

Prefacexxiv

instructs organizations to ensure that their projects are driven by their strategy and to engage project stakeholders.

Global Issues Every chapter includes an example of global issues of importance today. For example, Chapter 2 describes some of the problems with outsourcing, such as rioting in Beijing when customers could not buy the latest iPhones. Chapter 12 describes the recent development of urban onshoring, one response to problems with offshoring.

Key Terms The fields of information technology and project management include many unique terms that are vital to creating a workable language when the two fields are combined. Key terms are displayed in boldface and are defined the first time they appear. Definitions of key terms are provided in alphabetical order at the end of each chapter and in a glos- sary at the end of the text. You can also find them by chapter on the companion website.

Application Software Learning becomes much more dynamic with hands-on practice using the top project management software tool in the industry, Microsoft Project 2013, as well as other tools, such as spreadsheet software and the Internet. Each chapter offers many oppor- tunities to get hands-on experience and build new software skills. This text is written from the point of view that reading about something only gets you so far—to really understand project management, you have to do it for yourself. In addition to the ex- ercises and running cases at the end of each chapter, several challenging exercises are provided at the end of Appendix A, Guide to Using Microsoft Project 2013.

S T U D E N T A N D I N S T R U C T O R R E S O U R C E S

Student and Instructor Companion Websites The free Student Companion Website accessed through www.cengagebrain.com pro- vides the template files mentioned in the text, Project 2013 files, a case study describ- ing initiating through closing the ResNet project for Northwest Airlines (now part of Delta), and additional running cases that instructors can assign to students to prac- tice their skills. There is also a link to the author’s website, which provides up-to-date resources on important topics like agile, certifications, and more.

The Instructor Companion Website, also accessed with a single sign-on (SSO) account through www.cengagebrain.com, contains even more resources only for instructors:

Instructor’s Manual The Instructor’s Manual that accompanies this textbook includes additional instructional material to assist in class preparation, such as suggestions for lecture topics and additional discussion questions. Solution Files Solutions to end-of-chapter questions are available on the Instructor Companion Website. PowerPoint Presentations This text comes with Microsoft PowerPoint slides for each chapter. These slides are included as a teaching aid for classroom presentation, to make available to students on the network for chapter re- view, or to print for classroom distribution. Instructors can add their own slides for additional topics they introduce to the class.

Preface xxv

Test Banks In addition to the Test Bank available online through Cognero (see below), the Test Bank is also available in a number of file formats on the Instructor Companion Website. Each chapter’s bank of questions includes dozens of True/False, Multiple Choice, and Essay questions. Instructors can retrieve the appropriate file formats to administer tests through their schools’ learning management systems (Blackboard, Canvas, Moodle, Desire2Learn, etc.), or they can opt for Word documents.

NEW! Test Banks in Cognero The Test Bank for Information Technology Project Management, Eighth Edition, is now available online in the new Cognero system. Cengage Learning Testing Powered by Cognero is a flexible, online system that allows instructors to:

Author, edit, and manage test bank content. Use searchable metadata to ensure tests are complete and compliant. Create multiple test versions in an instant. Deliver tests from your learning management system (LMS), classroom, or wherever you want.

Cengage Learning Testing Powered by Cognero works on any operating system or browser with no special installs or downloads needed. With its intuitive tools and familiar desktop drop-down menus, Cognero enables instructors to easily create and edit tests from school or home—anywhere with Internet access.

IT Project Management CourseMate Engaging, trackable, and affordable, the IT Project Management CourseMate website offers a dynamic way to bring course concepts to life with interactive learning, study, and exam preparation tools that support the printed edition of the text. Watch stu- dent comprehension soar with all-new flashcards and engaging crossword puzzles, test-prep quizzes, and more. A complete e-book provides students and instructors alike with the choice of an entire online learning experience. IT Project Management CourseMate goes beyond the book to deliver what students need.

The complete CourseMate companion product is available for an additional fee, but students can also use the CourseMate website to access the text’s supplemental materials, including project documents, templates, and cases, at no additional charge.

A C K N O W L E D G M E N T S

I never would have taken on the project of writing this book, including all the prior editions, without the help of many people. I thank the staff at Cengage Learning, in- cluding Joe Sabatino, Jason Guyler, Anne Merrill, Jennifer King, Eric LaScola, Chris- tina Ciaramella, and Kathy Kucharek, for their dedication and hard work in helping me produce this book and in doing such an excellent job of marketing it. I’d also like to thank Marilyn Freedman for her excellent assistance in researching and preparing the manuscript, and many more people who did a great job in planning and executing this book and its supplemental materials.

I thank my many colleagues and experts in the field who contributed informa- tion to this book. Joseph W. Kestel, PMP, provided outstanding feedback on the agile

Prefacexxvi

information in this text based on his personal experience in leading agile projects. David Jones, Rachel Hollstadt, Cliff Sprague, Michael Branch, Barb Most, Jodi Curtis, Rita Mulcahy, Karen Boucher, Bill Munroe, Tess Galati, Joan Knutson, Neal Whitten, Brenda Taylor, Quentin Fleming, Jesse Freese, Nick Matteucci, Nick Erndt, Dragan Milosevic, Bob Borlink, Arvid Lee, Kathy Christenson, Peeter Kivestu, and many other people provided excellent materials included in this book. I enjoy the network of proj- ect managers, authors, and consultants in this field who are passionate about improv- ing the theory and practice of project management.

I also thank my students and colleagues at Augsburg College and the University of Minnesota for providing feedback on the earlier editions of this book. I received many valuable comments from them on ways to improve the text and structure of my courses. I learn something new about project management and teaching all the time by interacting with students, faculty, and staff.

I also thank the faculty reviewers for providing excellent feedback for me in writing this book over the years. I thank the many instructors and readers who have contacted me directly with praise as well as suggestions for improving this text. I appreciate the feedback and do my best to incorporate as much as I can. In particular, I’d like to thank the following:

Jody Allen, Mid-America Christian University William Baker, Southern New Hampshire University Tonya Barrier, Missouri State University Kevin Daimi, University of Detroit Mercy Antonio Drommi, University of Detroit Mercy Roger Engle, Franklin University Lisa Foster, Walsh College of Business & Accountancy Esther Frankel, Santa Barbara City College Guy Garrett, Gulf Coast State College James Gibbs, Mount St Joseph University Thomas Haigh, University of Wisconsin, Milwaukee Kay Hammond, Lindenwood University Sam Hijazi, Saint Leo University Henry Jackson, Schreiner University Karen Johnson, Indiana University Northwest Donna Karch, The College of St. Scholastica Carol Kaszynski, Inver Hills Community College Cyril Keiffer, Owens Community College Thomas King, Pennsylvania State University Sang Joon Lee, Mississippi State University Sunita Lodwig, University of South Florida Barbara Miller, Zane State College Kimberly Mitchell, Illinois State University Tim Moriarty, Waubonsee Community College Brandon Olson, The College of St. Scholastica Olga Petkova, Central Connecticut State University April Reed, East Carolina University

Preface xxvii

Jason Riley, Sam Houston State University Carl Scott, University of Houston Ferris Sticksel, Webster University David Syverson, Embry-Riddle Aeronautical University Barbara Warner, Wake Technical Community College Steven White, Anne Arundel Community College

Most of all, I am grateful to my family. Without their support, I never could have written this book. My wonderful husband, Dan, has always supported me in my career, and he helps me keep up-to-date with software development because he is a lead architect for Milner Technologies, Inc. (formerly ComSquared Systems, Inc.). Our three children, Anne, Bobby, and Scott, think it’s cool that their mom writes books and speaks at conferences. They also see me managing projects all the time. Anne, now 31, a research analyst for The New Teacher Project, teases me for being the only quilter she knows who treats each quilt as a project. (Maybe that’s why I get so many done!) After her colleagues at The Minnesota Evaluation Studies Institute at the University of Minnesota heard about my work and books, they hired me to teach a workshop on project management to evaluators, which was sold out. Our two sons are working as software developers in Texas and Oregon and may become IT project managers soon. Our children understand the main reason I write—I have a passion for educating future leaders of the world, including them.

As always, I am eager to receive your feedback on this book. Please send comments to me at schwalbe@augsburg.edu.

Kathy Schwalbe, Ph.D., PMP Professor Emeritus, Department of Business Administration Augsburg College

A B O U T T H E A U T H O R

Kathy Schwalbe, Professor Emeritus in the Department of Business Administration at Augsburg College in Minneapolis, taught courses in project management, problem solving for business, systems analysis and design, information systems projects, and electronic commerce until her retirement in May 2015. She retired from teaching to focus on writing, traveling, and enjoying life. Kathy was also an adjunct faculty member at the University of Minnesota, where she taught a graduate-level course in project management in the engineering department. She also provides training and

consulting services to several organizations and speaks at numerous conferences. Kathy’s first job out of college was as a project manager in the Air Force. She worked for 10 years in industry before entering academia in 1991. She was an Air Force officer, project manager, systems analyst, senior engineer, and information technology consultant. Kathy is an active member of PMI, having served as the Student Chapter

Prefacexxviii

Liaison for the Minnesota chapter, VP of Education for the Minnesota chapter, Editor of the ISSIG Review, Director of Communications for PMI’s Information Sys- tems Specific Interest Group, member of PMI’s test-writing team, and writer for the community posts. Kathy earned her Ph.D. in Higher Education at the University of Minnesota, her MBA at Northeastern University’s High Technology MBA program, and her B.S. in mathematics at the University of Notre Dame. She was named Educator of the Year in 2011 by the Association of Information Technology Professionals (AITP) Education Special Interest Group (EDSIG). Kathy lives in Minnesota with her hus- band. Visit her personal website at www.kathyschwalbe.com or www.pmtexts.com.

Other books by Kathy Schwalbe: An Introduction to Project Management, Fifth Edition (Minneapolis: Schwalbe

Publishing, 2015). Healthcare Project Management, co-authored with Dan Furlong (Minneapolis:

Schwalbe Publishing, 2013).

C H A P T E R 1 INTRODUCTION TO PROJECT MANAGEMENT

L E A R N I N G O B J E C T I V E S

After reading this chapter, you will be able to:

–

1.1 INTRODUCTION

Many people and organizations today have a new—or renewed—interest in project management. Until the 1980s, project management primarily focused on providing schedule and resource data to top management in the military, computer, and construc- tion industries. Today’s project management involves much more, and people in every industry and every country manage projects. Project management is a distinct profession with degree programs, certifications, and excellent career opportunities.

New technologies have become a significant factor in many businesses. Computer hardware, software, networks, and the use of interdisciplinary and global work teams have radically changed the work environment. The following statistics demonstrate the significance of project management in today’s society, especially for projects involving information technology (IT):

Worldwide IT spending was $3.8 trillion in 2014, a 3.2 percent increase from 2013 spending. Telecom services accounted for 45 percent of the spending.1

The Project Management Institute estimates demand for 15.7 million project management jobs from 2010 to 2020, with 6.2 million of those jobs in the United States.2

O P E N I N G C A S E

Anne Roberts, the director of the Project Management Office for a large retail chain, stood in front of 500 people in the large corporate auditorium to explain the company’s new strategies during a monthly all-hands meeting. She was also streaming live video to thousands of other employees at other locations, suppliers, and stockholders through- out the world. The company had come a long way in implementing new information systems to improve inventory control, sell products online, streamline the sales and distribution processes, and improve customer service. However, a recent security breach had alarmed investors and the stock price plummeted. People were anxious to hear about the company’s new strategies.

Anne began to address the audience, “Good morning. As many of you know, we have completed many projects successfully, including the advanced data networks project. That project enabled us to provide persistent broadband between headquarters and our retail stores throughout the world, allowing us to make timely decisions and continue our growth strategy. Our customers love that they can return items to any store, and any sales clerk can look up past sales information. Local store managers can make timely decisions using up-to-date information. Of course, we’ve had some failures, and we need to continually assess our portfolio of projects to meet business needs.

Two big IT initiatives this coming year include providing the best computer security possible and providing enhanced online collaboration tools for our employees, suppliers, and customers. Our challenge is to work even smarter to decide what projects will most benefit the company, how we can continue to leverage the power of information technol- ogy to support our business, and how we can exploit our human capital to successfully plan and execute those projects. If we succeed, we’ll continue to be a world-class corporation.”

“And if we fail?” someone asked from the audience. “Let’s just say that failure is not an option,” Anne replied.

3 The unemployment rate for IT professionals is generally half the rate of the overall labor market in the United States. Between 2011 and 2014, and dur- ing the recession, the average unemployment rate for workers not in science, technology, engineering, and mathematics (STEM) was 7.4 percent, as opposed to just above 3 percent for STEM workers.3

In 2013 (the most recent year of PMI’s salary survey), the average salary in U.S. dollars for someone in the project management profession was $108,000 per year in the United States; $134,658 in Australia, (the highest-paid coun- try); and $24,201 in Egypt (the lowest-paid country). Of the 11,150 people from the United States who responded to PMI’s salary survey, 80 percent had the Project Management Professional (PMP) credential, and their salary was over 20 percent higher than professionals without it.4

The top skills employers look for in new college graduates are all related to project management: team-work, decision-making, problem-solving, and verbal communications. The three degrees most in demand are business, engineering, and computer and information sciences.5

Organizations waste $109 million for every $1 billion spent on projects, according to PMI’s Pulse of the Profession® report. Excelling at project man- agement definitely affects the bottom line.6

The complexity and importance of IT projects, which involve using hardware, soft- ware, and networks to create a product, service, or result, have evolved dramatically. Today’s companies, governments, and nonprofit organizations are recognizing that to be successful, they need to use modern project management techniques, especially for IT projects. Individuals are realizing that to remain competitive in the workplace, they must develop skills to become good project team members and project managers. They also realize that many of the concepts of project management will help them in their everyday lives as they work with people and technology on a day-to-day basis.

W H A T W E N T W R O N G ?

In 1995, the Standish Group published an often-quoted study titled “The CHAOS Report.” This consulting firm surveyed 365 IT executive managers in the United States who managed more than 8,380 IT application projects. As the title of the study suggests, the projects were in a state of chaos. U.S. companies spent more than $250 billion each year in the early 1990s on approximately 175,000 IT application development projects. Examples of these projects included creating a new database for a state department of motor vehicles, developing a new system for car rental and hotel reservations, and implementing a client-server architecture for the banking industry. The study reported that the overall success rate of IT projects was only 16.2 percent. The surveyors defined success as meeting project goals on time and on budget. The study also found that more than 31 percent of IT projects were canceled before completion, costing U.S. compa- nies and government agencies more than $81 billion. The study authors were adamant about the need for better project management in the IT industry. They explained, “Software development projects are in chaos, and we can no longer imitate the three

continued

4 monkeys—hear no failures, see no failures, speak no failures.”7 Although this study was done 20 years ago, it was significant in making senior executives pay attention to the importance of IT project management.

In another large study, PricewaterhouseCoopers surveyed 200 companies from 30 different countries about their project management maturity and found that over half of all projects fail. The study also found that only 2.5 percent of corporations consis- tently meet their targets for scope, time, and cost goals for all types of projects.8

Although several researchers question the methodology of such studies, the results have prompted managers throughout the world to examine ways to improve their prac- tices in managing projects. Many organizations assert that using project management techniques provides advantages, such as:

Better control of financial, physical, and human resources Improved customer relations Shorter development times Lower costs and improved productivity Higher quality and increased reliability Higher profit margins Better internal coordination Positive impact on meeting strategic goals Higher worker morale

This chapter introduces projects and project management, explains how projects fit into programs and portfolio management, discusses the role of the project manager, and provides important background information on this growing profession. Although project management applies to many different industries and types of projects, this text focuses on applying project management to IT projects.

1.2 WHAT IS A PROJECT?

To discuss project management, it is important to understand the concept of a project. A project is “a temporary endeavor undertaken to create a unique product, service, or result.”9 Operations, on the other hand, is work done in organizations to sustain the busi- ness. Projects are different from operations in that they end when their objectives have been reached or the project has been terminated.

1.2a Examples of IT Projects Projects can be large or small and involve one person or thousands of people. They can be done in one day or take years to complete. As described earlier, IT projects involve using hardware, software, and networks to create a product, service, or result. Examples of IT projects include the following:

5 A large network of healthcare providers updates its information systems and procedures to reduce hospital acquired diseases. A team of students creates a smartphone application and sells it online. A company develops a driverless car. A college upgrades its technology infrastructure to provide wireless Internet access across the whole campus as well as online access to all academic and student service information. A company develops a new system to increase sales force productivity and customer relationship management that will work on various laptops, smart- phones, and tablets. A television network implements a system to allow viewers to vote for contes- tants and provide other feedback on programs via social media sites. A government group develops a system to track child immunizations. A large group of volunteers from organizations throughout the world develops standards for environmentally friendly or green IT. A global bank acquires other financial institutions and needs to consolidate systems and procedures. Government regulations require monitoring of pollutants in the air and water. A multinational firm decides to consolidate its information systems into an integrated enterprise resource management approach.

Gartner, Inc., a prestigious consulting firm, identified the top 10 strategic technologies for 2015. A few of these technologies include the following:

Computing everywhere: The needs of mobile users in diverse contexts and environments will continue to drive companies to develop new products and services. The Internet of things: Expanding digitization and connectivity will continue to enable companies to combine information from people, places, and things to extend services, improve how assets or machines operate, or create new sources of revenue. One example, according to Gartner, is that “the pay-per-use model can be applied to assets (such as . . . equipment), services (such as pay-as-you-drive insurance), people (such as movers), places (such as parking spots), and systems (such as cloud services).” 3D printing: Worldwide shipments of 3D printers are expected to nearly double in 2015 compared to 2014 and double again in 2016. New applications continue to be found for producing items at lower costs through improved designs, streamlined prototyping, and short-run manufacturing. Advanced, pervasive, and invisible analytics: Analytics continues to grow in importance as the volume of data generated by embedded systems increases. The challenge is analyzing data to provide “the right information to the right person at the right time.”10

As you can see, a wide variety of projects use information technologies, and organiza- tions rely on them for success.

6 M E D I A S N A P S H O T

One of Gartner’s top 10 strategic technologies for 2012 included application stores and marketplaces for smartphones and tablets. Gartner predicted that by 2014 there would be more than 70 billion mobile application downloads every year, but the actual number was almost double!11 Facebook is by far the most downloaded app, and the most popular category of all apps continues to be games.

There are over 1.3 million apps in Apple’s App store and another 1.3 million in Google’s Play Store. Of course, business professionals use phone applications for produc- tive purposes. The challenge is to develop useful apps and get workers to focus on them instead of the many distracting options available. Business Insider, Forbes, PC Magazine, and website Lifehacker.com provide lists of top productivity apps “to keep you focused and get things done.”12

1.2b Project Attributes Projects come in all shapes and sizes. The following attributes help define a project further:

A project has a unique purpose. Every project should have a well-defined objective. For example, Anne Roberts, the director of the Project Manage- ment Office in the chapter’s opening case, might sponsor an IT collaboration project to develop a list and initial analysis of potential IT projects that might improve operations for the company. The unique purpose of this project would be to create a collaborative report with ideas from people throughout the company. The results would provide the basis for further discussions and selecting projects to implement. As you can see from this example, projects result in a unique product, service, or result. A project is temporary. A project has a definite beginning and end. In the IT collaboration project, Anne might form a team of people to work immediately on the project, and then expect a report and an executive presentation of the results in one month. A project is developed using progressive elaboration. Projects are often defined broadly when they begin, and as time passes, the specific details of the project become clearer. Therefore, projects should be developed in incre- ments. A project team should develop initial plans and then update them with more detail based on new information. For example, suppose that a few peo- ple submitted ideas for the IT collaboration project, but they did not clearly address how the ideas would support the business strategy of improving op- erations. The project team might decide to prepare a questionnaire for people to fill in as they submit their ideas to improve the quality of the inputs. A project requires resources, often from various areas. Resources include people, hardware, software, and other assets. Many projects cross depart- mental or other boundaries to achieve their unique purposes. For the IT

7 collaboration project, people from IT, marketing, sales, distribution, and other areas of the company would need to work together to develop ideas. The company might also hire outside consultants to provide input. Once the collaboration project team has selected key projects for implementation, each of those will probably require additional resources. To meet objectives of these new projects, people from other companies—product suppliers and consulting companies—may be added to the team. Resources, however, are limited and must be used effectively to meet project and other corporate goals. A project should have a primary customer or sponsor. Most projects have many interested parties or stakeholders, but for a project to succeed someone must take the primary role of sponsorship. The project sponsor usually pro- vides the direction and funding for the project. Executive support is crucial to project success, as described in later chapters. Anne Roberts would be the sponsor for the IT collaboration project. Once further IT projects are selected, however, the sponsors for those projects would be senior manag- ers in charge of the main parts of the company affected by the projects. For example, the sponsor of a project to improve online product sales would be the vice president of sales. In this situation, Anne might become part of a project steering committee, helping other managers understand different project objectives, resolve priorities, research issues, or alter constraints within a given project or across multiple projects. A project involves uncertainty. Because every project is unique, it is some- times difficult to define its objectives clearly, estimate how long it will take to complete, or determine how much it will cost. External factors also cause uncertainty, such as a supplier going out of business or a project team mem- ber needing unplanned time off. This uncertainty is one of the main reasons project management is so challenging, especially on projects involving new technologies.

An effective project manager is crucial to a project’s success. Project managers work with the project sponsors, team, and the other people involved to achieve project goals.

1.2c Project Constraints Every project is constrained in different ways, often by its scope, time, and cost goals. These limitations are sometimes referred to in project management as the triple constraint. To create a successful project, a project manager must consider scope, time, and cost and balance these three often-competing goals:

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? How will the scope be verified? Time: How long should it take to complete the project? What is the project’s schedule? How will the team track actual schedule performance? Who can approve changes to the schedule? Cost: What should it cost to complete the project? What is the project’s bud- get? How will costs be tracked? Who can authorize changes to the budget?

8 Figure 1-1 illustrates the three dimensions of the triple constraint. Each area—scope,

time, and cost—has a target at the beginning of the project. For example, the IT collaboration project might have an initial scope of producing a 40- to 50-page report and a one-hour pre- sentation on about 30 potential IT projects. The project manager might further define project scope to include providing a description of each potential project, an investigation of what other companies have implemented for similar projects, a rough time and cost estimate, and assessments of the risk and potential payoff as high, medium, or low. The initial time esti- mate for this project might be one month, and the cost estimate might be $45,000–$50,000. These expectations provide targets for the scope, time, and cost dimensions of the project.

Note that the scope and cost goals in this example include ranges—the report can be 40 to 50 pages long and the project can cost between $45,000 and $50,000. Because proj- ects involve uncertainty and limited resources, projects rarely finish according to their original scope, time, and cost goals. Instead of discrete target goals, it is often more real- istic to set a range for goals, such as spending between $45,000 and $50,000 and having a 40- to 50-page report. These goals might require hitting the target, but not the bull’s eye.

Successful project management means meeting all three goals (scope, time, and cost)—and satisfying the project’s sponsor!

Target

FIGURE 1-1

9 Managing the triple constraint involves making trade-offs between scope, time,

and cost goals for a project. For example, you might need to increase the budget for a project to meet scope and time goals. Alternatively, you might have to reduce the scope of a project to meet time and cost goals. Experienced project managers know that you must decide which aspect of the triple constraint is most important. If time is most important, you must often change the initial scope and cost goals to meet the schedule. If scope goals are most important, you may need to adjust time and cost goals.

To generate project ideas for the IT collaboration project, suppose that the project manager sent an e-mail survey to all employees, as planned. The initial time and cost estimate may have been one week and $5,000 to collect ideas using this e-mail survey. Now, suppose that the e-mail survey generated only a few good project ideas, but the scope goal was to collect at least 30 good ideas. Should the project team use a different method like focus groups or interviews to collect ideas? Even though it was not in the initial scope, time, or cost estimates, it would really help the project. Because good ideas are crucial to project success, it would make sense to inform the project sponsor that adjustments are needed.

Although the triple constraint describes how the basic elements of a project inter- relate, other elements can also play significant roles. Quality is often a key factor in proj- ects, as is customer or sponsor satisfaction. Some people, in fact, refer to the quadruple constraint of project management, which includes quality as well as scope, time, and cost. A project team may meet scope, time, and cost goals but might fail to meet quality stan- dards and satisfy the sponsor. For example, Anne Roberts may receive a 50-page report describing 30 potential IT projects and hear a presentation that summarizes the report. The project team may have completed the work on time and within the cost constraint, but the quality may have been unacceptable.

Other factors might also be crucial to a particular project. On some projects, resources are the main concern. For example, the entertainment industry often needs particular actors for movies or television shows. Project goals must be adjusted based on when particular people are available. Risk can also affect major project decisions. A com- pany might wait to start a project until the risks are at an acceptable level. The project manager should be communicating with the sponsor throughout the project to make sure it is meeting expectations. Chapter 10, Project Communications Management, and Chapter 13, Project Stakeholder Management, address communicating with stakeholders and understanding their expectations in greater detail.

How can you avoid the problems that occur when you meet scope, time, and cost goals, but lose sight of customer satisfaction? The answer is good project management, which includes more than managing project constraints.

1.3 WHAT IS PROJECT MANAGEMENT?

Project management is “the application of knowledge, skills, tools, and techniques to proj- ect activities to meet project requirements.”13 Project managers must strive not only to meet specific scope, time, cost, and quality goals of projects, they must also facilitate the entire process to meet the needs and expectations of people involved in project activities or affected by them.

Figure 1-2 illustrates a framework to help you understand project management. Key elements of this framework include the project stakeholders, project management knowl- edge areas, project management tools and techniques, and the contribution of successful projects to the enterprise.

10 Knowledge areas Tools and techniques

Project 1 Project 2 Project 3 Project 4

Project portfolio

Enterprise success

Stakeholders’ needs and

expectations

Time management

Cost management

Quality management

Scope management

Human resource

management

Communications management

Risk management

Procurement management

Stakeholder management

Project successProject integration management

FIGURE 1-2

1.3a Project Stakeholders Stakeholders are the people involved in or affected by project activities, and include the project sponsor, project team, support staff, customers, users, suppliers, and even oppo- nents of the project. These stakeholders often have very different needs and expectations. A familiar example of a project is building a new house. There are several stakeholders in a home construction project.

The project sponsors would be the potential new homeowners who would be paying for the house. They could be on a very tight budget, so would expect the contractor to provide a realistic idea of what type of home they could afford given their budget constraints. They would also need a realistic idea of when they could move in. Regardless of budget, they would expect the contractor to provide accurate estimates for the building costs. The new homeowners would have to make important decisions to keep the costs of the house within their budget. Can they afford to finish the basement right away? If they can afford to finish the basement, will it affect the projected move-in date? In this example, the project sponsors are also the customers and users of the product, which is the house. The house may require financing by a bank or other financial institution like a credit union, which will secure a legal interest (lien) in the property and

the finished home. This institution is an example of a legal stakeholder who must be informed of any changes to the plans or schedule because the proj- ect is part of a legal contract. The project manager in this example would normally be the general contrac- tor responsible for building the house. The project manager needs to work with all the project stakeholders to meet their needs and expectations. The project team for building the house would include several construc- tion workers, electricians, and carpenters. These stakeholders would need to know exactly what work they must do and when they need to do it. They would need to know if the required materials and equipment will be at the construction site or if they are expected to provide the materials and equip- ment. Their work would need to be coordinated because many interrelated factors are involved. For example, the carpenter cannot put in kitchen cabi- nets until the walls are completed. Support staff might include the buyers’ employers, the general contractor’s administrative assistant, and people who support other stakeholders. The buyers’ employers might expect their employees to complete their work but allow some flexibility so they can visit the building site or take phone calls related to building the house. The contractor’s administrative assistant would support the project by coordinating meetings between the buyers, the con- tractor, suppliers, and other parties. Building a house requires many suppliers. The suppliers would provide the wood, windows, flooring, appliances, and other materials. Suppliers would expect exact details on the items they need to provide, and where and when to deliver those items. A project might have opponents. In this example, a neighbor might oppose the project because the workers make so much noise that she cannot con- centrate on her work at home, or the noise might wake her sleeping children. She might interrupt the workers to voice her complaints or even file a formal complaint. Or, the neighborhood might have association rules concerning new home design and construction. If the homeowners do not follow these rules, they might have to halt construction due to legal issues. Even without such complaints, the home must comply with certain building codes and other restrictions; these considerations may also result in changes to the project’s requirements, making the local government a stakeholder in the project.

As you can see from this example, projects have many different stakeholders, and they often have different interests. Stakeholders’ needs and expectations are important in the beginning and throughout the life of a project. Successful project managers develop good relationships with project stakeholders to understand and meet their needs and expectations.

1.3b Project Management Knowledge Areas Project management knowledge areas describe the key competencies that project managers must develop. The center of Figure 1-2 shows the 10 knowledge areas of project management.

1. Project scope management involves defining and managing all the work required to complete the project successfully.

2. 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.

3. Project cost management consists of preparing and managing the budget for the project.

4. Project quality management ensures that the project will satisfy the stated or implied needs for which it was undertaken.

5. Project human resource management is concerned with making effective use of the people involved with the project.

6. Project communications management involves generating, collecting, disseminating, and storing project information.

7. Project risk management includes identifying, analyzing, and responding to risks related to the project.

8. Project procurement management involves acquiring or procuring goods and services for a project from outside the performing organization.

9. Project stakeholder management includes identifying and analyzing stake- holder needs while managing and controlling their engagement throughout the life of the project.

10. Project integration management is an overarching function that affects and is affected by all of the other knowledge areas.

Project managers must have knowledge and skills in all 10 of these areas. This text includes an entire chapter on each of these knowledge areas because all of them are crucial to project success.

1.3c Project Management Tools and Techniques Thomas Carlyle, a famous historian and author, stated, “Man is a tool-using animal. Without tools he is nothing, with tools he is all.” As the world continues to become more complex, it is even more important for people to develop and use tools, especially for man- aging important projects. Project management tools and techniques assist project man- agers and their teams in carrying out work in all 10 knowledge areas. For example, some popular time-management tools and techniques include Gantt charts, project network diagrams, and critical path analysis. Table 1-1 lists some commonly used tools and tech- niques by knowledge area. You will learn more about these and other tools and techniques throughout this text.

A survey of 753 project and program managers was conducted to rate several project management tools. Respondents rated tools on a scale of 1–5 (low to high) based on the extent of their use and the potential of the tools to help improve project success. “Super tools” were defined as those that had high use and high potential for improving project success. These super tools included software for task scheduling (such as project manage- ment software), scope statements, requirement analyses, and lessons-learned reports. Tools that are already used extensively and have been found to improve project perfor- mance include progress reports, kick-off meetings, Gantt charts, and change requests.

These super tools appear in column 3 of Table 1-1.14 Note that project stakeholder man- agement was not a separate knowledge area at the time of this survey. Of course, different tools can be more effective in different situations. It is crucial for project managers and their team members to determine which tools will be most useful for their particular projects.

TABLE 1-1

Knowledge Area/Category Tools and Techniques Super Tools

Integration management Project selection methods Project management methodologies Stakeholder analyses Work requests Project charters Project management plans Change control boards Project review meetings

Project management software Change requests Lessons-learned reports

Scope management Statements of work Scope management plans Scope verification techniques Scope change controls

Scope statements Work breakdown structures Requirements analyses

Time management Project network diagrams Critical path analysis Crashing Fast tracking Schedule performance measurements

Gantt charts

Cost management Project budgets Net present value Return on investment Payback analysis Earned value management Project portfolio management Cost estimates Cost management plans Cost baselines

Quality management Quality metrics Checklists Quality control charts Pareto diagrams Fishbone diagrams Maturity models Statistical methods Test plans

Human resource management Motivation techniques Empathic listening Responsibility assignment matrices Project organizational charts Resource histograms Team building exercises

(continued)

Knowledge Area/Category Tools and Techniques Super Tools

Communications management Communications management plans Conflict management Communications media selection Status reports Virtual communications Templates Project websites

Kick-off meetings Progress reports

Risk management Risk management plans Risk registers Probability/impact matrices Risk rankings

Procurement management Make-or-buy analyses Contracts Requests for proposals or quotes Source selections Supplier evaluation matrices

W H A T W E N T R I G H T ?

Follow-up studies by the Standish Group (publisher of the annual CHAOS study; see “What Went Wrong?”) have shown some improvement in the success rates of IT projects:

The number of successful IT projects more than doubled, from 16 percent in 1994 to 39 percent in 2012. The number of failed projects decreased from 31 percent in 1994 to 18 percent in 2012.

“This year’s results represent a high watermark for success rates in the history of CHAOS research. The increase in success is a result of several factors, including looking at the entire project environment of processes, methods, skills, costs, tools, decisions, optimi- zation, internal and external influences, and team chemistry. Advances in the understand- ing of the skills needed to be a good executive sponsor have proved to be very valuable for increasing success rates. Increases in project management as a profession and trained project management professionals can be tied directly to increases in success rates.”15

The 2013 CHAOS study also compared small projects (under $1 million) with large projects (over $10 million). Not surprisingly, the success rate for small projects was much higher than for large projects—76 percent versus 10 percent. It is easier to manage smaller projects, and researchers suggest that organizations strive to break large projects into a sequence of smaller ones in a process they call optimization.16

Despite its advantages, project management is not a silver bullet that guarantees success on all projects. Project management is a very broad, often complex discipline. What works on one project may not work on another, so it is essential for project

TABLE 1-1 continued

managers to continue to develop their knowledge and skills in managing projects. It is also important to learn from the mistakes and successes of others.

1.3d Project Success How do you define the success or failure of a project? The list that follows outlines a few common criteria for measuring the success of a project, illustrating each with an example of upgrading 500 desktop computers within three months for $300,000:

1. The project met scope, time, and cost goals. If all 500 computers were upgraded and met other scope requirements, the work was completed in three months or less, and the cost was $300,000 or less, you could consider the project successful. The Standish Group studies used this definition of success, but several people question this simple definition of project success and the methods used for collecting the data. (Search for articles by Robert L. Glass to read more about this debate.)

2. The project satisfied the customer/sponsor. Even if the project met initial scope, time, and cost goals, the users of the computers or their managers might not be satisfied. Perhaps the project manager or team members never returned calls or were rude. Perhaps users had their daily work disrupted during the upgrades or had to work extra hours due to the upgrades. If the customers were not happy with important aspects of the project, it would be deemed a failure. Conversely, a project might not meet initial scope, time, and cost goals, but the customer could still be very satisfied. Perhaps the project team took longer and spent more money than planned, but they were very polite and helped the users and managers solve several work-related problems. Many organizations implement a customer satisfaction rating sys- tem to measure project success instead of tracking only scope, time, and cost performance.

3. The results of the project met its main objective, such as making or saving a certain amount of money, providing a good return on investment, or simply making the sponsors happy. Even if the project cost more than estimated, it took longer to complete, and the project team was hard to work with, the project would be successful if users were happy with the upgraded comput- ers, based on this criterion. As another example, suppose that the sponsor approved the upgrade project to provide a good return on investment by speeding up work and therefore generating more profits. If those goals were met, the sponsor would deem the project a success, regardless of other fac- tors involved.

Why do some IT projects succeed and others fail? Table 1-2 summarizes the results of the 2013 CHAOS study. The factors that contribute most to the success of IT projects are listed in order of importance. Executive support is the most important factor, followed by user involvement. A few of the top success factors relate to good scope management, such as having clear business objectives and optimizing scope. Project management expertise continues to be a key success factor. In fact, experienced project managers, who can often help influence all of these factors to improve the probability of project success, led 97 per- cent of successful projects, based on an earlier CHAOS study in 2001.

TABLE 1-2

1. Executive support

2. User involvement

3. Clear business objectives

4. Emotional maturity

5. Optimizing scope

6. Agile process

7. Project management expertise

8. Skilled resources

9. Execution

10. Tools and infrastructure

Source: The Standish Group, “CHAOS Manifesto 2013: Think Big, Act Small” (2013).

A 2011 U.S. government report listed the top three reasons why federal technology projects succeed:

1. Adequate funding 2. Staff expertise 3. Engagement from all stakeholders

Notice that the CHAOS study list does not include adequate funding. Most nongov- ernment companies must either find adequate funds for important projects or cancel projects if they cannot be funded or get an adequate return. Government projects often require that funds be allocated a year or more before they even start, and estimates often fall short. “The government has struggled when acquiring technology thanks to the con- voluted nature of the federal contracting process and the shortage of qualified contracting officers and technical personnel. Critics argue that federal agencies get little return for the $80 billion the government spends annually on IT. . . . ‘History has shown that gov- ernment IT projects frequently face challenges of meeting cost, schedule or performance goals,’ said Sen. Susan Collins (R-Maine) in a statement.”17

It is interesting to compare success factors for IT projects in the United States with those in other countries. A 2004 study summarizes the results of a survey of 247 information systems project practitioners in mainland China. One of the study’s key find- ings was that relationship management is viewed as a top success factor for information systems in China, while it is not mentioned in U.S. studies. The study also suggested that having competent team members is less important in China than in the United States. The Chinese, like the Americans, included top management support, user involvement, and a competent project manager as vital to project success.18

It is also important to look beyond individual project success rates and focus on how organizations as a whole can improve project performance. Research comparing compa- nies that excel in project delivery—the “winners”—from those that do not found four sig- nificant best practices:

1. Use an integrated toolbox. Companies that consistently succeed in managing projects clearly define what needs to be done in a project, by whom, when,

and how. They use an integrated toolbox, including project management tools, methods, and techniques. They carefully select tools, align them with project and business goals, link them to metrics, and provide them to project managers to deliver positive results.

2. Grow project leaders. The winners know that strong project managers— referred to as project leaders—are crucial to project success. They also know that a good project leader needs to be a business leader as well, with strong interpersonal and intrapersonal skills. Companies that excel in project man- agement often grow or develop their project leaders internally, providing them with career opportunities, training, and mentoring.

3. Develop a streamlined project delivery process. Winning companies have examined every step in the project delivery process, analyzed fluctuations in workloads, searched for ways to reduce variation, and eliminated bottlenecks to create a repeatable delivery process. All projects go through clear stages and clearly define key milestones. All project leaders use a shared road map, focusing on key business aspects of their projects while integrating goals across all parts of the organization.

4. Measure project health using metrics. Companies that excel in project delivery use performance metrics to quantify progress. They focus on a handful of important measurements and apply them to all projects. Metrics often include customer satisfaction, return on investment, and percentage of schedule buffer consumed.19

Project managers play an important role in making projects, and therefore organi- zations, successful. Project managers work with the project sponsors, the project team, and other stakeholders to meet project goals. They also work with sponsors to define success for particular projects. Good project managers do not assume that their defini- tion of success is the same as the sponsors’. They take the time to understand their sponsors’ expectations and then track project performance based on important success criteria.

1.4 PROGRAM AND PROJECT PORTFOLIO MANAGEMENT

As mentioned earlier, about one-quarter of the world’s gross domestic product is spent on projects. Projects make up a significant portion of work in most business organizations or enterprises, and managing those projects successfully is crucial to enterprise success. Two important concepts that help projects meet enterprise goals are the use of programs and project portfolio management.

1.4a Programs A program is “a group of related projects, subprograms, and program activities managed in a coordinated way to obtain benefits and control not available from managing them individually.”20 As you can imagine, it is often more economical to group projects together to help streamline management, staffing, purchasing, and other work. The following are examples of common programs in the IT field.

Infrastructure: An IT department often has a program for IT infrastructure projects. This program could encompass several projects, such as providing more wireless Internet access, upgrading hardware and software, enhancing computer security, and developing and maintaining corporate standards for IT. Applications development: This program could include several projects, such as updating an enterprise resource planning (ERP) system, purchasing a new off-the-shelf billing system, or developing a new capability for a customer relationship management system. User support: In addition to the many operational tasks related to user sup- port, many IT departments have several projects to support users. For ex- ample, a project might provide a better e-mail system or develop technical training for users.

A program manager provides leadership and direction for the project managers heading the projects within a program. Program managers also coordinate the efforts of project teams, functional groups, suppliers, and operations staff supporting the projects to ensure that products and processes are implemented to maximize benefits. Program managers are responsible for more than the delivery of project results; they are change agents responsible for the success of products and processes developed by those projects. For example, the NASA International Space Station Program is led by a program manager who oversees all U.S. projects involved with the station and is accountable for achieving their objectives, funding, and contribution to scientific knowledge.

Program managers often have review meetings with all their project managers to share important information and coordinate important aspects of each project. Many pro- gram managers worked as project managers earlier in their careers, and they enjoy shar- ing their wisdom and expertise with their project managers. Effective program managers recognize that managing a program is much more complex than managing a single project. They recognize that technical and project management skills are not enough—program managers must also possess strong business knowledge, leadership capabilities, and com- munication skills.

1.4b Project Portfolio Management In many organizations, project managers also support an emerging business strategy of project portfolio management or portfolio management, as called in this text, in which organizations group and manage projects and programs as a portfolio of investments that contribute to the entire enterprise’s success. Portfolio managers help their organi- zations make wise investment decisions by helping to select and analyze projects from a strategic perspective. Portfolio managers may or may not have previous experience as project or program managers. It is most important that they have strong financial and analytical skills and understand how projects and programs can contribute to meeting strategic goals.

Figure 1-3 illustrates the differences between project management and project portfolio management. Notice that the main distinction is a focus on meeting tactical or strategic goals. Tactical goals are generally more specific and short-term than strategic goals, which emphasize long-term goals for an organization. Individual projects often address tactical goals, whereas portfolio management addresses strategic goals. Project management addresses questions like “Are we carrying out projects well?”, “Are proj- ects on time and on budget?”, and “Do project stakeholders know what they should be doing?”

Portfolio management addresses questions like “Are we working on the right proj- ects?”, “Are we investing in the right areas?”, and “Do we have the right resources to be competitive?” Pacific Edge Software’s product manager, Eric Burke, defines project portfo- lio management as “the continuous process of selecting and managing the optimum set of project initiatives that deliver maximum business value.”21

Many organizations use a more disciplined approach to portfolio management by developing guidelines and software tools to assist in it. The Project Management Institute (described later in this chapter) first published the Organizational Project Management Maturity Model (OPM3) Knowledge Foundation in 2003.22 OPM3 describes the importance not only of managing individual projects or programs well but the importance of following organizational project management to align proj- ects, programs, and portfolios with strategic goals. OPM3 is a standard that organiza- tions can use to measure their organizational project management maturity against a comprehensive set of best practices.

Tactical goals

Strategic goals

Project management

Project portfolio management

FIGURE 1-3

B E S T P R A C T I C E

A best practice is “an optimal way recognized by industry to achieve a stated goal or objective.”23 Rosabeth Moss Kanter, a professor at Harvard Business School and well-known author and consultant, says that visionary leaders know “the best practice secret: Stretch- ing to learn from the best of the best in any sector can make a big vision more likely to succeed.”24 Kanter also emphasizes the need to have measurable standards for best prac- tices. An organization can measure performance against its own past, against peers, and, even better, against potential. Kanter suggests that organizations need to continue to reach for higher standards. She suggests the following exercise regimen for business leaders who want to adapt best practices in an intelligent way to help their own organizations:

Reach high. Stretch. Raise standards and aspirations. Find the best of the best and then use it as inspiration for reaching full potential. Help everyone in your organization become a professional. Empower people to manage themselves through benchmarks and standards based on best practice exchange. Look everywhere. Go far afield. Think of the whole world as your laboratory for learning.

Robert Butrick, author of The Project Workout, wrote an article on best practices in project management for the Ultimate Business Library’s Best Practice book. He 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.25

As you can imagine, project portfolio management is not an easy task. Figure 1-4 illustrates one approach for project portfolio management in which one large portfolio exists for the entire organization. This allows top management to view and manage all projects at an enterprise level. Sections of the portfolio are then broken down to improve the management of projects in each sector. For example, a company might have the main portfolio categories shown in the left part of Figure 1-4—marketing, materials, IT, and human resources (HR)—and divide each of those categories further to address its unique concerns. The right part of this figure shows how the IT projects could be categorized in more detail to assist in their management. In this example, there are three basic IT project portfolio categories:

Venture: Projects in this category help transform the business. For example, the large retail chain described in the opening case might have an IT project to

provide kiosks in stores and similar functionality on the Internet where custom- ers and suppliers could quickly provide feedback on products or services. This project could help transform the business by developing closer partnerships with customers and suppliers. Growth: Projects in this category would help the company increase its rev- enues. For example, a company might have an IT project to provide informa- tion on its corporate website in a new language, such as Chinese or Japanese. This capability could help the company grow its business in those countries. Core: Projects in this category must be accomplished to run the business. For example, an IT project to provide computers for new employees would fall under this category.

In Figure 1-4, the costs of Core IT projects are nondiscretionary, which means that the company has no choice in whether to fund them. Core IT Projects must be funded for the company to stay in business. Projects in the Venture or Growth category are discretionary costs because the company can use its own discretion or judgment in decid- ing whether to fund them; these projects are not critical to the company fulfilling its mis- sion. The arrow in the center of Figure 1-4 indicates that the risks and value of projects normally increase as you move from Core to Growth to Venture projects. In addition, timeliness becomes increasingly important; growth and venture projects, more than core projects, must be done within a certain time frame to be effective. However, some core projects can also be high risk, have high value, and require good timing. As you can see, many factors are involved in portfolio management.

Many organizations use specialized software to organize and analyze all types of proj- ect data into project portfolios. Enterprise project management software or project and portfolio management software integrates information from multiple projects to show the

Overall project portfolio categories IT project portfolio categories

Ri sk

s, V

al ue

, T im

in g

Nondiscretionary costs

Discretionary costs

Venture: Transform

the business

Growth: Grow the business

Core: Run the business

Marketing

Materials IT

FIGURE 1-4

status of active, approved, and future projects across an entire organization. It also helps organizations prioritize project portfolio investment to deliver results with the best busi- ness value. In 2014, Capterra published an infographic listing the top 20 project manage- ment software tools. Microsoft Project continues to lead the market with over 880,000 customers and 22 million users.26 Figure 1-5 summarizes the capabilities of the Microsoft Project Portfolio Management solution.

1.5 THE ROLE OF THE PROJECT MANAGER

You have already read that project managers must work closely with the other stakehold- ers on a project, especially the sponsor and project team. They are also more effective if they are familiar with the 10 project management knowledge areas and the various tools and techniques related to project management. Experienced project managers help proj- ects succeed. But what do project managers do, exactly? What skills do they really need to do a good job? The next section provides brief answers to these questions, and the rest of this book gives more insight into the role of the project manager. Even if you never become a project manager, you will probably be part of a project team, and it is important for team members to help their project managers.

1.5a Project Manager Job Description A project manager can have many different job descriptions, which can vary tremendously based on the organization and the project. In fact, PMI includes a page on their website to

FIGURE 1-5

23 answer the question, “Who are project managers?” In addition to saying that project man- agers are organized, passionate, and goal-oriented individuals who drive business results by leading projects, PMI emphasizes that they are also change agents who work well under pressure and enjoy challenging work environments.

Project management jobs can be found in every country and every industry. Sites like indeed.com listed hundreds of thousands of job openings in 2015. Monster.com has a job category for project management, and their site says that project managers “smoothly link management, clients and staff to keep projects rolling. To be successful in a project management job, you’ll need people skills, business acumen and technical competence.”27 Here are a few edited postings:

Project manager for a consulting firm: Plans, schedules, and controls activi- ties to fulfill identified objectives applying technical, theoretical, and mana- gerial skills to satisfy project requirements. Coordinates and integrates team and individual efforts and builds positive professional relationships with cli- ents and associates. Project manager for a computer systems firm: Works independently within established practices to assist in the development and implementation process of projects involving departmental, vendor relationships, and/or cross-functional teams. Coordinates with internal/external clients to gather business requirements and coordinate project plans. Monitor projects from initiation through delivery ensuring completion of the project on schedule. IT project manager for a nonprofit consulting firm: Responsibilities include business analysis, requirements gathering, project planning, budget estimat- ing, development, testing, and implementation. Responsible for working with various resource providers to ensure development is completed in a timely, high-quality, and cost-effective manner.

The job description for a project manager can vary by industry and by organization, but most project managers perform similar tasks regardless of these differences. In fact, project management is a skill needed in every major IT field, from database administra- tor to network specialist to technical writer. Because demand for project managers is high, some organizations have hired new college graduates to fill positions normally held by experienced professionals. For example, Boom Lab, a consulting company, is growing quickly by finding, training, and placing talented people as project coordinators. As new project coordinators gain experience and credentials, they often continue their careers by managing larger projects, becoming program managers, or transitioning into other man- agement positions.

1.5b Suggested Skills for Project Managers Project managers need to have a wide variety of skills and be able to decide which skills are more important in different situations. A Guide to the Project Management Body of Knowledge—the PMBOK® Guide—recommends that the project management team un- derstand and use expertise in the following areas:

The Project Management Body of Knowledge Application area knowledge, standards, and regulations

24 Project environment knowledge General management knowledge and skills Soft skills or human relations skills

This chapter introduced the 10 project management knowledge areas, as well as some general tools and techniques project managers use. The following section focuses on the IT application area, including skills required in the project environment, general manage- ment, and soft skills. Note that the PMBOK® Guide, Fifth Edition describes three dimen- sions of project management competency: project management knowledge (knowing about project management), performance competency (being able to apply project man- agement knowledge), and personal competency (attitudes and personality characteristics). Consult PMI’s website at www.pmi.org for further information on skills for project manag- ers and PMI’s Career Framework for Practitioners.

The project environment differs from organization to organization and project to project, but some skills will help in almost all project environments. These skills include understanding change and understanding how organizations work within their social, political, and physical environments. Project managers must be comfortable leading and handling change, because most projects introduce changes in organizations and involve changes within the projects themselves. Project managers need to understand the orga- nization in which they work and how that organization develops products and provides services. The skills and behavior needed to manage a project for a Fortune 100 company in the United States may differ greatly from those needed to manage a government project in Poland. Chapter 2, The Project Management and Information Technology Context, pro- vides detailed information on these topics.

Project managers should also possess general management knowledge and skills. They should understand important topics related to financial management, accounting, pro- curement, sales, marketing, contracts, manufacturing, distribution, logistics, the supply chain, strategic planning, tactical planning, operations management, organizational struc- tures and behavior, personnel administration, compensation, benefits, career paths, and health and safety practices. On some projects, it will be critical for the project manager to have a lot of experience in one or several of these general management areas. On other projects, the project manager can delegate detailed responsibility for some of these areas to a team member, support staff, or even a supplier. Even so, the project manager must be intelligent and experienced enough to know which of these areas are most important and who is qualified to do the work. The project manager must make all key project decisions and take responsibility for them.

Achieving high performance on projects requires soft skills, otherwise called human relations skills. Some of these soft skills include effective communication, influencing the organization to get things done, leadership, motivation, negotiation, conflict management, and problem solving. Why do project managers need good soft skills? One reason is that to understand, navigate, and meet stakeholders’ needs and expectations, project managers need to lead, communicate, negotiate, solve problems, and influence the organization at large. They need to be able to listen actively to what others are saying, help develop new approaches for solving problems, and then per- suade others to work toward achieving project goals. Project managers must lead their project teams by providing vision, delegating work, creating an energetic and positive

25 environment, and setting an example of appropriate and effective behavior. Project managers must focus on teamwork skills to employ people effectively. They need to be able to motivate different types of people and develop esprit de corps within the proj- ect team and with other project stakeholders. Because most projects involve changes and trade-offs between competing goals, it is important for project managers to have strong coping skills as well. Project managers need to be able to cope with criticism and constant change. Project managers must be flexible, creative, and sometimes pa- tient in working toward project goals; they must also be persistent in making project needs known.

Finally, project managers, especially those managing IT projects, must be able to make effective use of technology as it relates to the specific project. Making effective use of technology often includes special product knowledge or experience with a particular industry.

Project managers must make many decisions and deal with people in a wide variety of disciplines, so it helps tremendously to have a project manager who is confident in using the special tools or technologies that are the most effective in particular settings. Project managers do not normally have to be experts on any specific technology, but they have to know enough to build a strong team and ask the right questions to keep things on track. For example, project managers for large IT projects do not have to be experts in the field of IT, but they must have working knowledge of various technolo- gies and understand how the project would enhance the business. Many companies have found good business managers can be very good IT project managers because they focus on meeting business needs and rely on key project members to handle the technical details.

A 2013 survey by CIO.com listed seven skills project managers need in order to be effective and successful in leading IT projects:

1. Be highly organized. 2. Take charge and know how to lead. 3. Be an effective communicator. 4. Know how and when to negotiate. 5. Be detail-oriented. 6. Recognize and solve problems quickly. 7. Possess the necessary technical skills.28

All project managers should continue to develop their knowledge and experience in project management, general management, soft skills, and the industries they support. IT project managers must be willing to develop more than their technical skills to be produc- tive team members and successful project managers. Everyone, no matter how technical they are, should develop business and soft skills.

1.5c Importance of People Skills and Leadership Skills Project management experts from various industries were asked to identify the 10 most important skills and competencies for effective project managers. Table 1-3 shows the results.

26 TABLE 1-3

1. People skills

2. Leadership

3. Listening

4. Integrity, ethical behavior, consistency

5. Strength at building trust

6. Verbal communication

7. Strength at building teams

8. Conflict resolution, conflict management

9. Critical thinking, problem solving

10. Understanding and balancing of priorities

Source: Jennifer Krahn, “Effective Project Leadership: A Combination of Project Manager Skills and Competencies in Context,” PMI Research Conference Proceedings (July 2006).

Respondents were also asked what skills and competencies were most important in various project situations:

Large projects: Leadership, relevant experience, planning, people skills, verbal communication, and team-building skills were most important. High-uncertainty projects: Risk management, expectation management, leadership, people skills, and planning skills were most important. Innovative projects: Leadership, people skills, vision- and goal-setting, self-confidence, expectations management, and listening skills were most important.29

Notice that a few skills and competencies not cited in the top 10 list were mentioned when people thought about the context of a project. To be most effective, project manag- ers require a changing mix of skills and competencies depending on the project being delivered.

Also notice the general emphasis on people and leadership skills. As mentioned earlier, all project managers, especially those working on technical projects, need to demonstrate leadership and management skills. Leadership and management are terms often used interchangeably, although there are differences. Generally, a leader focuses on long-term goals and big-picture objectives while inspiring people to reach those goals. A manager often deals with the day-to-day details of meeting specific goals. Some people say: “Managers do things right, and leaders do the right things.” “Leaders determine the vision, and managers achieve the vision.” “You lead people and manage things.”

However, project managers often take on the role of both leader and manager. Good project managers know that people make or break projects, so they must set a good example to lead their team to success. They are aware of the greater needs of their stakeholders and organizations, so they are visionary in guiding their current projects and in suggesting future ones. As mentioned earlier, companies that excel in project management grow proj- ect “leaders,” emphasizing development of business and communication skills. Yet, good project managers must also focus on getting the job done by paying attention to the details and daily operations of each task. Instead of thinking of leaders and managers as specific

27 people, it is better to think of people as having leadership skills, such as being visionary and inspiring, and management skills, such as being organized and effective. Therefore, the best project managers have leadership and management characteristics; they are visionary yet focused on the bottom line. Above all else, good project managers focus on achieving posi- tive results!

1.5d Careers for IT Project Managers As shown earlier, the IT industry continues to grow, and the need for people to lead IT projects has remained solid. In fact, every IT worker needs some skills in project management.

Computerworld’s 2014 annual forecast survey supports this career projection. Forty- three percent of the 194 respondents said that they expect their IT budgets to increase, and overall IT budgets are expected to increase by 4.3 percent. The top five priorities include spending on:

1. security technologies, 2. cloud computing, 3. business analytics, 4. application development, 5. wireless/mobile.30

IT executives listed the “ten hottest skills” they planned to hire for in 2015. Program- ming and application development remained in first place, mainly due to the increased need for programmers with mobile development expertise and experience building secure applications. Project management skills continue to make the list, as these skills are crucial to prioritizing business needs and implementing effective solutions. Table 1-4 shows the results of the latest survey, as well as the percentage of respondents who listed the skill as being in demand. Even if you choose to stay in a technical role, you still need project management knowledge and skills to help your team and your organization succeed.

TABLE 1-4

Skill Percentage of Respondents

Programming and application development 48

Project management 35

Help desk/technical support 30

Security/compliance governance 28

Web development 28

Database administration 26

Business intelligence/analytics 24

Mobile application and device management 24

Networking 22

Big data 20

Source: Mary K. Pratt, “10 Hottest IT Skills for 2015,” Computerworld, November 18, 2014.

28 1.6 THE PROJECT MANAGEMENT PROFESSION

The project management profession is growing at a very rapid pace. To understand this line of work, it is helpful to briefly review the history of project management, learn about the Project Management Institute (PMI) and some of its services (such as certification), and examine the growth in project management software.

1.6a History of Project Management Most people think that project management is a 20th century invention. But Mark Kozak- Holland, certified PMP and author of books that mine history for insight about project man- agement, says that’s wrong. He notes that major historical projects closely resemble today’s project management best practices. About his 2011 book The History of Project Manage- ment, he said, “The general perception of most people is that project management started in the mid-20th century, or started earlier with Henry Gantt and his charts. . . . Yet, how were all the great projects of the past delivered? Think about the Giza Pyramid, the Parthenon, the Coliseum, the Gothic Cathedrals of Medieval Europe, the great voyages of exploration, the Taj Mahal, and the mega projects of the industrial revolutions. Was project management used on these projects? Were the concepts of project management even understood? Can we connect modern and ancient project management?” Kozak-Holland’s answer to these questions is “yes.” You can see the PMBOK process groups and techniques from the knowledge areas in all of these historical projects. Project management has been around since 2550 B.C.E.31

Although people have worked on projects for centuries, most agree that the modern con- cept of project management began with the Manhattan Project, which the U.S. military led to develop the atomic bomb in World War II. The Manhattan Project involved many people with different skills at several different locations. It also clearly separated the overall manage- ment of the project’s mission, schedule, and budget under General Leslie R. Groves and the technical management of the project under the lead scientist, Dr. Robert Oppenheimer. The Manhattan Project lasted about three years and cost almost $2 billion in 1946.

In developing the project, the military realized that scientists and other technical specialists often did not have the desire or the necessary skills to manage large projects. For example, after being asked several times for each team member’s responsibilities at the new Los Alamos laboratory in 1943, Dr. Oppenheimer tossed the project organization chart at his director and said, “Here’s your damn organization chart.”32 Project manage- ment was recognized as a distinct discipline requiring people with special skills and, more importantly, the desire to lead project teams.

In 1917, long before the Manhattan project, Henry Gantt developed the famous Gantt chart for scheduling work in factories. A Gantt chart is a standard format for displaying project schedule information by listing project activities and their corresponding start and finish dates in calendar form. Initially, managers drew Gantt charts by hand to show project tasks and schedule information. This tool provided a standard format for planning and reviewing all the work on early military projects.

Today’s project managers still use the Gantt chart as the primary tool to communicate project schedule information, but with the aid of computers, it is no longer necessary to draw the charts by hand, and they are easier to share and disseminate to project stakeholders. Figure 1-6 displays a Gantt chart created with Project 2013, the most widely used project management software today. You will learn more about using Project 2013 in Appendix A.

FIGURE 1-6

During the Cold War years of the 1950s and ‘60s, the military continued to play an important role in refining several project management techniques. Members of the U.S. Navy Polaris missile/submarine project first used network diagrams in 1958. These dia- grams helped managers model the relationships among project tasks, which allowed them to create schedules that were more realistic. Figure 1-7 displays a network diagram cre- ated using Project 2013. Note that the diagram includes arrows that show which tasks are related and the sequence in which team members must perform the tasks. The con- cept of determining relationships among tasks is essential in helping to improve project scheduling. This concept allows you to find and monitor the critical path—the longest path through a network diagram that determines the earliest completion of a project. It shows you which tasks affect the target completion date of a project, and it can change as work proceeds and more information becomes available. You will learn more about Gantt charts, network diagrams, critical path analysis, and other time management concepts in Chapter 6, Project Time Management.

By the 1970s, the U.S. military and its civilian suppliers had developed software to assist in managing large projects. Early project management software was very expensive to purchase, and it ran exclusively on mainframe computers. For example, Artemis was an early project management software product that helped managers analyze complex sched- ules for designing aircraft. A full-time employee was often required to run the complicated software, and expensive pen plotters were used to draw network diagrams and Gantt charts.

As computer hardware became smaller and more affordable and software companies developed graphical, easy-to-use interfaces, project management software became less expensive and more widely used. This made it possible—and affordable—for many indus- tries worldwide to use project management software on all types and sizes of projects. New software makes basic tools such as Gantt charts and network diagrams inexpensive, easy to create, and available for anyone to update. See the section later in this chapter on proj- ect management software for more information.

FIGURE 1-7

In the 1990s, many companies began creating Project Management Offices to help them handle the increasing number and complexity of projects. A Project Management Office (PMO) is an organizational group responsible for coordinating the project manage- ment function throughout an organization. A 2014 study found that 80 percent of U.S. companies reported having PMOs. Figure 1-8 shows the percentage of companies with PMOs based on past surveys.33 For large organizations, 90 percent reported having PMOs in 2014, while 61 percent of small organizations did. The percentage of large organiza- tions with PMOs was about the same in 2010, but only 48 percent of small organizations had PMOs in 2010. This increase shows the growing importance of using standard project management processes in organizations of all sizes.

There are different ways to structure a PMO, and they can have various roles and responsibilities. Organizations continue to modify their PMOs to ensure they add value to their unique situations. For some organizations with very mature project management processes and experienced managers, a small PMO focusing on organiz- ing all project data might be all that is needed. For an organization new to project management, a larger PMO might be needed focusing on training and standards. PM Solutions identified three key factors that are playing major roles in the growth of PMOs:

Percentage of Companies with PMOs

77 84

100

2010 201420062000 Year

Pe rc

en ta

FIGURE 1-8

1. The growing strategic value of the PMO 2. The increased role of the PMO in training 3. The ever-present challenge of resource management

Below are possible goals of a PMO:

Collect, organize, and integrate project data for the entire organization. Ensure that the organization’s approaches for project management include accepted and validated best practices. Audit project documentation and offer feedback on project managers’ approaches and compliance with standards. Develop and maintain templates, tools, and standards for project documents and project methodologies to be used. Develop or coordinate training in various project management topics. Provide a formal career path for project managers. Provide project management consulting services. Provide a structure or department that project managers belong to while they are assigned to a project or are between projects.

By the end of the 20th century, people in virtually every industry around the globe began to investigate and apply different aspects of project management to their projects. The sophistication and effectiveness with which project management tools are being

32 applied and used today is enabling companies to do business, use resources, and respond to market requirements with greater speed and accuracy.

Many colleges, universities, and companies around the world now offer courses related to different aspects of project management. You can even earn bachelor’s, master’s, and doctoral degrees in project management. In late 2014, a gradschools.com search for “project management” found 370 campus and online accredited graduate, certificate, and doctoral programs from all types of institutions. PMI reported in 2015 that formal educa- tion programs in project management continue to grow, especially in China and India, where many infrastructure projects are needed. “In China, for example, the 104 institu- tions offering project management programs receive more than 20,000 applications each year.” As projects become more global and teams are no longer stationed in the same city or even country, students are learning a common project management language no matter where they seek their education.34

The problems organizations have in managing projects, increasing education in proj- ect management, and the belief that it can make a difference continue to contribute to the growth of this field.

1.6b The Project Management Institute Although many professional societies suffer from declining membership, the Project Management Institute (PMI), an international professional society for project manag- ers founded in 1969, has continued to attract and retain members, reporting more than 449,000 members worldwide by late 2014. Because so many people work on projects in different industries across the globe (51 million total according to PMI), PMI has created communities of practice that enable members to share ideas about project management in their particular application areas, such as information systems. PMI also has communities

G L O B A L I S S U E S

Based on a survey of more than 1,000 project management leaders across a variety of experience levels and industries, several global dynamics are forcing organizations to rethink their practices:

Talent development for project and program managers is a top concern. Seventy per- cent of organizations have a career path for project and program management, but most are still informal and not documented. Basic project management techniques are core competencies. Seventy percent of organizations said that they always or often use basic practices like change man- agement and risk management on their projects. Organizations want to use more agile approaches to project management. One- quarter of survey respondents said they now use agile techniques, and agile proj- ect management was the most requested article topic. Benefits realization of projects is a key metric. Organizations know that they need to align projects and programs with the organization’s business strategy.35

33P M I S T U D E N T M E M B E R S H I P

As a student, you can join PMI for a reduced fee ($32 versus $139 in 2015). Consult PMI’s website (www.pmi.org) for more information. With student membership, you can network with other project management students by joining a local PMI chapter. Many welcome students to attend free events, including talks and job networking. You can vol- unteer your services to help develop your skills and serve your community. You can also qualify for the Certified Associate in Project Management (CAPM) certification with just a bachelor’s degree and a course in project management.

for aerospace/defense, financial services, government, healthcare, and agile techniques, to name a few. Note that there are other project management professional societies, such as the International Project Management Association (IPMA) and the Association for Project Management (APM).

1.6c Project Management Certification Professional certification is an important factor in recognizing and ensuring quality in a profession. PMI provides certification as a Project Management Professional (PMP) — someone who has documented sufficient project experience and education, agreed to fol- low the PMI code of professional conduct, and demonstrated knowledge of project manage- ment by passing a comprehensive examination. Note that you do not need work experience to qualify for CompTIA’s Project+ certification or PMI’s CAPM certification, so college gradu- ates just entering the workforce can earn these certifications and become more marketable.

The number of people earning PMP certification continues to increase. In 1993, there were about 1,000 certified project management professionals. At the end of April 2015, there were 658,523 active PMPs.36 Figure 1-9 shows the rapid growth in the number of people earning project management professional certification from 1993 to 2014.

Several studies show that organizations supporting technical certification programs tend to operate in more complex IT environments and are more efficient than organiza- tions that do not support certification. Likewise, organizations that support PMP certifi- cation see the value of investing in programs to improve their employees’ knowledge in project management. Many employers today require specific certifications to ensure that their workers have current skills, and job seekers find that they often have an advantage when they earn and maintain marketable certifications. Global Knowledge listed PMP certi- fication as number 5 in their list of top-paying certifications for 2014.37

As IT projects become more complex and global in nature, the need for people with demonstrated knowledge and skills in project management will continue. Just as passing the CPA exam is a standard for accountants, passing the PMP exam is becoming a stan- dard for project managers. Some companies require that all project managers be PMP cer- tified. Project management certification is also enabling professionals in the field to share a common base of knowledge. For example, any person with PMP certification can list, describe, and use the 10 project management knowledge areas. Sharing a common base of knowledge is important because it helps advance the theory and practice of project man- agement. PMI also offers additional certifications, including agile techniques, scheduling, risk, and program management.

Chapter 1

1,000 1,900 2,800 4,400 6,41510,086 18,184

27,052 40,343

52,443 76,550

102,047

175,194

221,144

267,367

318,289

361,238

412,503

467,390

510,434

594,603

626,205

658,523

100,000

200,000

300,000

400,000

500,000

600,000

700,000

19 93

19 94

19 95

19 96

19 97

19 98

19 99

20 00

20 01

20 02

20 03

20 04

20 05

20 06

20 07

20 08

20 09

20 10

20 11

20 12

20 13

20 14

20 15

Year

N um

be r

of P

M Ps

FIGURE 1-9 Growth in PMP Certification, 1993–2014

1.6d Ethics in Project Management Ethics, loosely defined, is a set of principles that guides decision making based on personal values of what is considered right and wrong. Making ethical decisions is an important part of project managers’ personal and professional lives because it generates trust and respect with other people. Project managers often face ethical dilemmas. If project managers can make more money by taking bribes, should they? No! Should project managers accept subpar work to meet a deadline? No! Ethics guide us in making these types of decisions.

PMI approved a Code of Ethics and Professional Conduct that took effect in January 2007. This code applies not only to PMPs but to all PMI members who hold a PMI certifica- tion, apply for a PMI certification, or serve PMI in a volunteer capacity.

It is vital for project management practitioners to conduct their work in an ethical manner. Even if you are not affiliated with PMI, these guidelines can help you conduct your work in an ethical manner, which helps the profession earn the confidence of the public, employers, employees, and all project stakeholders. The PMI Code of Ethics and Professional Conduct includes short chapters addressing vision and applicability, responsibility, respect, fairness, and honesty. A few excerpts from this document include the following:

“As practitioners in the global project management community:

35 2.2.1 We make decisions and take actions based on the best interests of society,

public safety, and the environment. 2.2.2 We accept only those assignments that are consistent with our background,

experience, skills, and qualifications. 2.2.3 We fulfill the commitments that we undertake—we do what we say we will do. 3.2.1 We inform ourselves about the norms and customs of others and avoid engag-

ing in behaviors they might consider disrespectful. 3.2.2 We listen to others’ points of view, seeking to understand them. 3.2.3 We approach directly those persons with whom we have a conflict or

disagreement. 4.2.1 We demonstrate transparency in our decision-making process. 4.2.2 We constantly reexamine our impartiality and objectivity, taking corrective

action as appropriate. 4.3.1 We proactively and fully disclose any real or potential conflicts of interest to

appropriate stakeholders. 5.2.1 We earnestly seek to understand the truth. 5.2.2 We are truthful in our communications and in our

conduct.”38

In addition, PMI added a new series of questions to the PMP certification exam in March 2002 and continues to include this topic to emphasize the importance of ethics and professional responsibility.

1.6e Project Management Software Unlike the tale of the cobbler who neglected to make shoes for his own children, the proj- ect management and software development communities have definitely responded to the need to provide more software to help manage projects. As mentioned earlier, Microsoft Project continues to lead the market with over 880,000 customers and 22 million users. See Appendix A for details on the various configurations available for Microsoft Project and detailed instructions for using Project Professional 2013, the product available for a free trial. TopTenReviews.com has a category for online project management software and listed Clarizen, GeniusProject, and AtTask as the top three products in 2014. There are also several smartphone and tablet apps for project management. There are enough options that deciding which project management software to use has become a project in itself. This section summarizes the basic types of project management software available and provides references for finding more information.

Many people still use basic productivity software such as Microsoft Word and Excel to perform many project management functions, including determining project scope, time, and cost, assigning resources, and preparing project documentation. People often use productivity software instead of specialized project management software because they

M I C R O S O F T P R O J E C T 2 0 1 3

Appendix A includes a Guide to Using Microsoft Project 2013, which will help you develop hands-on skills for using this popular project management software.

36 already have it and know how to use it. However, hundreds of project management soft- ware tools provide specific functionality for managing projects and performing portfolio management. These software tools can be divided into three general categories based on functionality and price:

Low-end tools: These tools provide basic project management features and gen- erally cost less than $200 per user. Smartphone and tablet apps are available for much less, but they often have limited functionality. Low-end tools are often recommended for small projects and single users. Most of these tools allow users to create Gantt charts, which cannot be done easily using current productivity software. Midrange tools: A step up from low-end tools, midrange tools are designed to handle larger projects, multiple users, and multiple projects. All of these tools can produce Gantt charts and network diagrams, and can assist in critical path analysis, resource allocation, project tracking, and status reporting. Prices range from about $200 to $1,000 per user, or less per month for online tools. Several tools require additional server software for using workgroup features. High-end tools: These tools are sometimes referred to as enterprise project management software. They provide robust capabilities to handle very large projects and dispersed workgroups, and they have enterprise and portfolio management functions that summarize and combine individual project infor- mation to provide an enterprise view of all projects. These products are gen- erally licensed on a per-user basis, can be integrated with enterprise database management software, and are accessible via the Internet.

Several free or open-source tools are also available. For example, Basecamp, Trello, and Asana offer free online tools that may work for some projects and offer paid products to meet more complex needs. Most companies, including Microsoft, offer free trials of their project management software. ProjectLibre, LibrePlan, and OpenProject are all free open- source project management tools. Remember, however, that open-source tools are devel- oped, managed, and maintained by volunteers and may not be well supported.

There are many reasons to study project management, particularly as it relates to IT projects. The number of IT projects continues to grow in almost every industry the com- plexity of these projects continues to increase, and the profession of project management continues to expand and mature. As more people study and work in this important field, the success rate of IT projects should continue to improve.

C A S E W R A P – U P

Anne Roberts worked with the VPs and the CEO to form teams to help identify potential IT projects that would support their business strategies. They formed a project team to implement a portfolio project management software tool across the organization. They formed another team to develop project-based reward systems for all employees. They also authorized funds for a project to educate all employees in project management, to help people earn PMP and related certifications, and to develop a mentoring program. Anne had successfully convinced everyone that effectively managing projects was crucial to their company’s future.

37Chapter Summary

– –

–

Quick Quiz

–

Quick Quiz Answers

Discussion Questions

–

Exercises

–

www.pmi.org ®

–

www.microsoft.com

–

Key Terms

best practice p. 20

critical path p. 29

enterprise project management software p. 21

ethics p. 34

Gantt chart p. 28

leader p. 26

manager p. 26

program p. 17

program manager p. 18

project p. 4

project and portfolio management software p. 21

project management p. 9

Project Management Institute (PMI) p. 32

project management knowledge areas p. 11

Project Management Office (PMO) p. 30

Project Management Professional (PMP) p. 33

project management tools and techniques p. 12

project manager p. 7

project portfolio management or portfolio management p. 18

project sponsor p. 7

stakeholders p. 10

triple constraint p. 7

End Notes

vitalsigns.changetheequation.org/#us-United%20 States-Demand (2014).

Project Management Salary Survey

Forbes

® –

www.standishgroup.com Application Development

Trends

A Guide to the Project Management Body of Knowledge (PMBOK® Guide)

Forbes

Business Insider

A Guide to the Project Management Body of Knowledge (PMBOK® Guide)

42 PMI Research Conference Proceedings

The Hill

Proceedings of PMI Research Conference, London

Proceedings of the Project Management Institute Annual Seminars & Symposium

A Guide to the Project Management Body of Knowledge (PMBOK® Guide)

PMI Houston Chapter Meeting

Organizational Project Management Maturity Model (OPM3) Knowledge Foundation

Best Practice: Ideas and Insights from the World’s Foremost Business Thinkers

jobs.monster.com/v-project -management.aspx

CIO.com

PMI Research Conference Proceedings

Computerworld

youtube/dYgMT57I7UI.

PMI’s Pulse of the Profession: Driving Success in Challeng- ing Times

PMI Today

PMP Credential Handbook

C H A P T E R 2 THE PROJECT MANAGEMENT AND INFORMATION TECHNOLOGY CONTEXT

L E A R N I N G O B J E C T I V E S

After reading this chapter, you will be able to:

–

Many of the theories and concepts of project management are not difficult to understand. What is difficult is implementing them in various environments. Project managers must consider many different issues when managing projects. Just as each project is unique, so is its environment. This chapter discusses some of the concepts involved in understanding the project environment, such as using a systems approach, understanding organizations, managing stakeholders, matching product life cycles to the project environment, under- standing the context of IT projects, and reviewing recent trends that affect IT project management.

O P E N I N G C A S E

Tom Walters recently accepted a new position at his college as the Director of Informa- tion Technology. Tom had been a respected faculty member at the college for the past 15 years. The college—a small, private institution in the Southwest—offers a variety of programs in the liberal arts and professional areas. Enrollment includes 1,500 full- time traditional students and about 1,000 working adults who attend evening programs. Many instructors supplement their courses with information on the Internet and course websites, but the college does not offer distance-learning programs. The college’s niche is serving students in the region who like the setting of a small liberal arts college and want to make connections with each other and their community.

Like other institutions of higher learning, the use of IT at the college has grown tremendously in the past 10 years. Wi-Fi is available everywhere on campus. But only a few classrooms on campus have computers for the instructors and students, and most other classrooms have only instructor stations and projection systems. Tom knew that sev- eral colleges throughout the country require that all students lease or own laptops or tab- lets and that these colleges incorporate technology into most courses. This idea fascinated him. He and two other members of the IT department visited a local college that had re- quired all students to lease laptops for the past three years, and they were very impressed with what they saw and heard. Because tablets were becoming more popular, they thought it would make more sense to require tablets instead of laptops. Tom had heard how easy it was for faculty members to create interactive course materials that would run on tablets; these materials also could help reduce the cost of textbooks, a concern expressed by many students. Tom and his staff developed plans to start requiring students either to lease or purchase tablets at their college starting the next academic year.

Tom sent an e-mail to all faculty and staff in September, and briefly described his plans. He did not get much response, however, until the February faculty meeting. As he described some of the details of his plan, the chairs of the History, English, Philosophy, and Economics departments all voiced opposition to the idea. They eloquently stated that the college was not a technical training school and that they did not have time to write their own course materials to run on tablets. They liked the books they used, and students could already buy books in an electronic format, but most preferred the print versions. Members of the Computer Science department voiced their concern that almost all of their students already had state-of-the art laptops and would not want to pay a mandatory fee to lease less-powerful tablets. The director of the adult education program expressed her concern that many adult-education students would balk at an increase in fees or required technology. Tom was in shock to hear his colleagues’ responses, especially after he and his staff had spent a lot of time planning how to implement tablets at their campus. Now what should he do?

2.1 A SYSTEMS VIEW OF PROJECT MANAGEMENT

Even though projects are temporary and intended to provide a unique product or service, you cannot run projects in isolation. If project managers lead projects in isolation, it is unlikely that they will ever truly serve the needs of the organization. Therefore, projects must operate in a broad organizational environment, and project managers need to con- sider projects within the greater organizational context. To handle complex situations effectively, project managers need to take a holistic view of a project and understand how it relates to the larger organization. Systems thinking describes this holistic view of carry- ing out projects within the context of the organization.

2.1a What Is a Systems Approach? The term systems approach emerged in the 1950s to describe a holistic and analytical approach to solving complex problems that includes using a systems philosophy, systems analysis, and systems management. Systems are sets of interacting components that work within an environment to fulfill some purpose. For example, the human body is a system composed of many subsystems, including the nervous system, the skeletal system, the circulatory system, and the digestive system. Organizations are also systems, with people in various roles working together to design, develop, deliver, and sell vari- ous products and services. A systems philosophy is an overall model for thinking about things as systems.

Systems analysis is a problem-solving approach that requires defining the scope of the system, dividing it into components, and then identifying and evaluating its prob- lems, opportunities, constraints, and needs. Once this is completed, the systems ana- lyst then examines alternative solutions for improving the current situation; identifies an optimum, or at least satisfactory, solution or action plan; and examines that plan against the entire system. Systems management addresses the business, technological, and organizational issues associated with creating, maintaining, and modifying a system.

Using a systems approach is critical to successful project management. If top manage- ment and project managers are to understand how projects relate to the whole organization, they must follow a systems philosophy. They must use systems analysis to address needs with a problem-solving approach. They must use systems management to identify key issues in business, technological, and organizational spheres related to each project in order to identify and satisfy key stakeholders and do what is best for the entire organization.

In the chapter’s opening case, Tom Walters planned the tablet project without using a systems approach. Members of his IT department did all of the planning. Even though Tom sent an e-mail describing the tablet project to all faculty and staff, he did not ad- dress many of the organizational issues involved in such a complex project. Most faculty and staff are very busy at the beginning of the fall term, and many may not have read the entire message. Others may have been too busy to communicate their concerns to the IT department. Tom was unaware of the effects the tablet project would have on other parts of the college. He did not clearly define the business, technological, and organizational issues associated with the project. Tom and the IT department began work on the tablet project in isolation. If they had taken a systems approach, considering other dimensions of the project and involving key stakeholders, they could have identified and addressed many of the issues raised at the February faculty meeting before the meeting.

2.1b The Three-Sphere Model for Systems Management Many business and IT students understand the concepts of systems and performing a systems analysis. At the same time, they often overlook systems management. However, addressing the three spheres of systems management—business, organization, and tech- nology—can have a huge impact on selecting and managing projects successfully.

Figure 2-1 provides a sample of business, organizational, and technological issues that could be factors in the tablet project. In this case, technological issues, though not simple by any means, are probably the least difficult to identify and resolve. However, projects must address issues in all three spheres of the systems management model. Although it is easier to focus on the immediate and sometimes narrow concerns of a particular project, project managers and other staff must recognize the effects of any project on the interests and needs of the entire system or organization. The college president and senior administrators, in particular, will focus on whether the tablet project adds value to the college as a whole.

Business

Organization Technology

FIGURE 2-1

Many IT professionals become captivated with the technology and day-to-day problem solving involved in working with information systems. They tend to become frustrated with many of the “people problems” or politics involved in most organizations. In addi- tion, many IT professionals ignore important business questions, such as “Does it make financial sense to pursue this new technology?” or “Should the company develop this soft- ware in-house or purchase it off the shelf?” Using a more holistic approach helps project

managers integrate business and organizational issues into their planning. It also helps them look at projects as a series of interrelated phases. When you integrate business and organizational issues into project management planning and look at projects as a series of interrelated phases, you do a better job of ensuring project success.

2.2 UNDERSTANDING ORGANIZATIONS

The systems approach requires that project managers always view their projects in the con- text of the larger organization. Organizational issues are often the most difficult part of work- ing on and managing projects. In fact, many people believe that most projects fail because of organizational issues like company politics. Project managers often do not spend enough time identifying all the stakeholders involved in projects, especially the people opposed to the projects. Also, project managers often do not spend enough time considering the politi- cal context of a project or the culture of the organization. To improve the success rate of IT projects, it is important for project managers to develop a better understanding of people as well as organizations.

2.2a The Four Frames of Organizations As shown in Figure 2-2, you can try to understand organizations better by focusing on different perspectives. Organizations can be viewed as having four different frames: structural, human resources, political, and symbolic.1

The structural frame deals with how the organization is structured (usually depicted in an organizational chart) and focuses on different groups’ roles and responsibilities to meet the goals and policies set by top management. This frame is very rational and focuses on coordination and control. For example, within the structural frame, a key IT issue is whether a company should central- ize the IT personnel in one department or decentralize across several depart- ments. You will learn more about organizational structures in the next section. The human resources (HR) frame focuses on producing harmony between the needs of the organization and the needs of people. It recognizes that mismatches can occur between the needs of the organization and those of individuals and groups, and works to resolve any potential problems. For example, many projects might be more efficient for the organization if employees worked 80 or more hours a week for several months. However, this work schedule would conflict with the personal lives and health of many

FIGURE 2-2

Structural frame: Roles and responsibilities, coordination, and control. Organizational charts help describe this frame.

Human resources frame: Providing harmony between needs of the organization and needs of people.

Political frame: Coalitions composed of varied individuals and interest groups. Conflict and power are key issues.

Symbolic frame: Symbols and meanings related to events. Culture, language, traditions, and image are all parts of this frame.

employees. Important IT issues related to the human resources frame are the shortage of skilled IT workers within the organization and unrealistic sched- ules imposed on many projects. The political frame addresses organizational and personal politics. Politics in organizations take the form of competition among groups or individuals for power, resources, and leadership. The political frame emphasizes that orga- nizations are coalitions composed of varied individuals and interest groups. Often, important decisions need to be made about the allocation of scarce resources. Competition for resources makes conflict a central issue in orga- nizations, and power improves the ability to obtain those resources. Project managers must pay attention to politics and power if they are to be effective. It is important to know who opposes your projects as well as who supports them. Important IT issues related to the political frame are the differences in power between central functions and operating units or between functional managers and project managers. The symbolic frame focuses on symbols and meanings. In this frame, the most important aspect of any event in an organization is not what actually happened, but what it means. Was it a good sign that the CEO came to a kick-off meeting for a project, or was it a threat? The symbolic frame also relates to the company’s culture. How do people dress? How many hours do they work? How do they run meetings? Many IT projects are international and include stakeholders from various cultures. Understanding those cultures is also a crucial part of the symbolic frame.

Project managers must learn to work within all four frames to function well in organi- zations. Organizational issues are discussed further in Chapter 9, Project Human Resource Management, Chapter 10, Project Communications Management, and Chapter 13, Project Stakeholder Management. The following sections on organizational structures, organiza- tional culture, stakeholder management, and the need for top management commitment provide additional information related to the structural and political frames.

W H A T W E N T W R O N G ?

In a paper titled “A Study in Project Failure,” two researchers examined the success and failure of 214 IT projects over an eight-year period in several European countries. The researchers found that only one in eight (12.5 percent) were considered successful in terms of meeting scope, time, and cost goals. The authors made the following conclusions about factors that contribute to a project’s failure:

“Our evidence suggests that the culture within many organisations is often such that leadership, stakeholder and risk management issues are not factored into projects early on and in many instances cannot formally be written down for political reasons and are rarely discussed openly at project board or steering group meetings although they may be discussed at length behind closed doors. … Despite attempts to make software develop- ment and project delivery more rigorous, a considerable proportion of delivery effort re- sults in systems that do not meet user expectations and are subsequently cancelled. In our view this is attributed to the fact that very few organisations have the infrastructure, edu- cation, training, or management discipline to bring projects to successful completion.”3

2.2b Organizational Structures Many discussions of organizations focus on their structure. Three general classifications of organizational structures are functional, project, and matrix. Many companies today use all three structures somewhere in the organization, but using one is most common. Figure 2-3 portrays the three organizational structures. A functional organizational structure is the hierarchy most people think of when picturing an organizational chart. Functional manag- ers or vice presidents in specialties such as engineering, manufacturing, IT, and human resources report to the chief executive officer (CEO). Their staffs have specialized skills in their respective disciplines. For example, most colleges and universities have very strong functional organizations. Only faculty members in the business department teach busi- ness courses; faculty in the history department teach history; faculty in the art department teach art, and so on.

VP Engineering VP Manufacturing VP IT VP HR

CEO

Staff Staff Staff Staff

Functional

Program Manager A

CEO

Staff Staff Staff

Project

Program Managers

CEO

Staff Staff Staff

Matrix

VP Engineering VP HR

Staff

VP Manufacturing

Staff

VP IT

Project Manager A: 2 engineering 1/2 HR1 manufacturing 31/2 IT

Project Manager B: 5 engineering 1 HR3 manufacturing 10 IT

Project Manager C: 1 engineering 1/10 HR0 manufacturing 4 IT

Program Manager B Program Manager C

FIGURE 2-3

A project organizational structure also is hierarchical, but instead of functional man- agers or vice presidents reporting to the CEO, program managers report to the CEO. Their staffs have a variety of skills needed to complete the projects within their programs. An organization that uses this structure earns its revenue primarily from performing projects for other groups under contract. For example, many defense, architectural, engineering, and consulting companies use a project organizational structure. These companies often hire people specifically to work on particular projects.

A matrix organizational structure represents the middle ground between functional and project structures. Personnel often report both to a functional manager and one or more project managers. For example, IT personnel at many companies often split their time be- tween two or more projects, but they report to their manager in the IT department. Project managers in matrix organizations have staff from various functional areas working on their projects, as shown in Figure 2-3. Matrix organizational structures can be strong, weak, or bal- anced, based on the amount of control exerted by the project managers. Problems can occur if project team members are assigned to several projects in a matrix structure and the project manager does not have adequate control of their time.

Table 2-1 summarizes how organizational structures influence projects and project managers, based on information from several versions of the PMBOK® Guide. Project managers have the most authority in a pure project organizational structure and the least amount of authority in a pure functional organizational structure. It is important that proj- ect managers understand their current organizational structure. For example, if someone in a functional organization is asked to lead a project that requires strong support from several different functional areas, he or she should ask for top management sponsorship. This spon- sor should solicit support from all relevant functional managers to ensure that they cooper- ate on the project and that qualified people are available to work as needed. The project manager might also ask for a separate budget to pay for project-related trips, meetings, and training or to provide financial incentives to the people supporting the project.

TABLE 2-1

Project Characteristics

Organizational Structure Type

Functional Matrix Project

Weak Matrix

Balanced Matrix

Strong Matrix

Project manager’s authority

Little or none

Limited Low to moderate

Moderate to high

High to almost total

Percent of organization’s personnel assigned full- time to project work

Virtually none

0–25% 15–60% 50–95% 85–100%

Who controls the project budget

Functional manager

Mixed Project manager

Project manager

Project manager’s role Part-time Part-time Full-time Full-time Full-time

Common title for project manager’s role

Project coordinator/ project leader

Project manager/ project officer

Project manager/ program manager

Project management administrative staff

Part-time Part-time Part-time Full-time Full-time

Even though project managers have the most authority in the project organizational structure, this type of organization is often inefficient for the company as a whole. Assign- ing staff full-time to the project often creates underutilization and misallocation of staff resources. For example, if a technical writer is assigned full-time to a project, but has no project work on a particular day, the organization is wasting money by paying that person a full-time wage. Project organizations may also miss economies of scale that are available through pooling requests for materials with other projects.

Disadvantages such as these illustrate the benefit of using a systems approach to managing projects. For example, the project manager might suggest hiring an independent contractor to do the technical writing work instead of using a full-time employee. This approach would save the organization money while still meeting the needs of the project. When project managers use a systems approach, they are better able to make decisions that address the needs of the entire organization.

2.2c Organizational Culture Just as an organization’s structure affects its ability to manage projects, so does its culture. Organizational culture is a set of shared assumptions, values, and behaviors that char- acterize the functioning of an organization. It often includes elements of all four frames described previously. Organizational culture is very powerful, and many people believe the underlying causes of many companies’ problems are not in the organizational structure or staff; they are in the culture. It is also important to note that the same organization can have different subcultures. The IT department may have a different organizational culture than the finance department, for example. Some organizational cultures make it easier to manage projects.

According to Stephen P. Robbins and Timothy Judge, authors of a popular textbook on organizational behavior, there are 10 characteristics of organizational culture:

1. Member identity: The degree to which employees identify with the organiza- tion as a whole rather than with their type of job or profession. For example, project managers or team members might feel more dedicated to their com- pany or project team than to their job or profession, or they might not have any loyalty to a particular company or team. As you can guess, an organiza- tional culture in which employees identify more with the whole organization are more conducive to a good project culture.

2. Group emphasis: The degree to which work activities are organized around groups or teams, rather than individuals. An organizational culture that em- phasizes group work is best for managing projects.

3. People focus: The degree to which management’s decisions take into account the effect of outcomes on people within the organization. A project manager might assign tasks to certain people without considering their individual needs, or the project manager might know each person very well and focus on individual needs when assigning work or making other decisions. Good project managers often balance the needs of individuals and the organization.

4. Unit integration: The degree to which units or departments within an organi- zation are encouraged to coordinate with each other. Most project managers strive for strong unit integration to deliver a successful product, service, or result. An organizational culture with strong unit integration makes the proj- ect manager’s job easier.

5. Control: The degree to which rules, policies, and direct supervision are used to oversee and control employee behavior. Experienced project managers know it is often best to balance the degree of control to get good project results.

6. Risk tolerance: The degree to which employees are encouraged to be aggres- sive, innovative, and risk seeking. An organizational culture with a higher risk tolerance is often best for project management because projects often involve new technologies, ideas, and processes.

7. Reward criteria: The degree to which rewards, such as promotions and salary increases, are allocated according to employee performance rather than senior- ity, favoritism, or other nonperformance factors. Project managers and their teams often perform best when rewards are based mostly on performance.

8. Conflict tolerance: The degree to which employees are encouraged to air conflicts and criticism openly. It is very important for all project stakeholders to have good communications, so it is best to work in an organization where people feel comfortable discussing differences openly.

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