Chapter 1

Introduction
} Many organizations today have a new or renewed interest in project management
} Computer hardware, software, networks, and the use of interdisciplinary and global
work teams have radically changed the work environment
} The world as a whole spends nearly $10 trillion of its $40.7 trillion gross product on
projects of all kinds
} More than 16 million people regard project management as their profession

Project Management Statistics

} The overall information and communications technology market grew by 6 percent
to almost $3 trillion in 2010
} In the U.S. the size of the IT workforce topped 4 million workers in 2008, and the
unemployment rate for IT professionals is half the rate for the overall labor market
} In 2011 the total compensation for the average senior project manager in U.S.
dollars was $105,000 per year in the United States and $160,409 in the Switzerland.
} The number of people earning their Project Management Professional (PMP)
certification continues to increase.

Motivation for Studying Information Technology (IT) Project Management

} IT Projects have a terrible track record, as described in the What Went Wrong?
} A 1995 Standish Group study (CHAOS) found that only 16.2% of IT projects were
successful in meeting scope, time, and cost goals; over 31% of IT projects were
canceled before completion
} A PricewaterhouseCoopers study found that overall half of all projects fail and only
2.5% of corporations consistently meet their targets for scope, time, and cost goals
for all types of project.

Advantages of Using Project Management Techniques

} Better control of financial, } Higher quality and increased
physical, and human resources reliability
} Improved customer relations } Higher profit margins
} Shorter development times } Improved productivity
} Lower costs } Better internal coordination
} Higher worker morale

What Went Right? Improved Project Performance

The Standish Group’s CHAOS studies show improvements in IT projects in the past decade:
} The number of successful IT projects has more than doubled, from 16
percent in 1994 to 37 percent in 2010
} The number of failed projects decreased from 31 percent in 1994 to 21
percent in 2010
} Success rates were the highest ever in the most recent CHAOS study
Why the Improvements?
"The reasons for the increase in successful projects vary. First, the average cost of a
project has been more than cut in half. Better tools have been created to monitor and
control progress and better skilled project managers with better management processes
are being used. The fact that there are processes is significant in itself.”*
*Standish Group, "CHAOS 2001: A Recipe for Success" (2001)

What Is a Project?
} A project is “a temporary endeavor undertaken to create a unique product, service,
or result” (PMBOK® Guide, 5th Edition, 2012)
} Projects end when their objectives have been reached or the project has been
terminated
} Projects can be large or small and take a short or long time to complete

Examples of IT Projects
} A team of students creates a smartphone application and sells it online
} A company develops a driverless car
} A small software development team adds a new feature to an internal software
application for the finance department
} A college upgrades its technology infrastructure to provide wireless Internet access
across the whole campus

Project Attributes
} A project
◦ has a unique purpose
◦ has structure, but is temporary
◦ is developed using progressive elaboration
◦ requires resources, often from various areas
◦ should have a primary customer or project sponsor who usually provides the
direction and funding for the project
◦ involves uncertainty

What is Project Management?

} Project management is “the application of knowledge, skills, tools and techniques to
project activities to meet project requirements”
(PMBOK® Guide, 5th Edition, 2012)
} Project managers strive to meet the triple constraint (project scope, time, and cost
goals) and also facilitate the entire process to meet the needs and expectations of
project stakeholders
Triple Constraint of Project Management

• 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 budget? How will costs be tracked? Who can
authorize changes to the budget?

Project Stakeholders
} Stakeholders are the people involved in or affected by project activities
} Stakeholders include

◦ the project sponsors ◦ customers

◦ the project manager ◦ users
◦ the project teams ◦ suppliers
◦ support staff ◦ opponents to the project

These stakeholders often have very different needs and expectations.

PM Knowledge Areas
} Knowledge areas describe the key competencies that project managers must
develop
} Project managers must have knowledge and
skills in all 10 knowledge areas:

} Project scope management involves defining and managing all the work required to
complete the project successfully.
} Project time management includes estimating how long it will take to com- plete the
work, developing an acceptable project schedule, and ensuring timely completion of the
project.
} Project cost management consists of preparing and managing the budget for the project.
 } Project quality management ensures that the project will satisfy the stated or implied
needs for which it was undertaken.
} Project human resource management is concerned with making effective use of the
people involved with the project.
} Project communications management involves generating, collecting, dissem- inating,
and storing project information.
} Project risk management includes identifying, analyzing, and responding to risks related
to the project.
} Project procurement management involves acquiring or procuring goods and services
for a project from outside the performing organization.
} Project stakeholder management includes identifying and analyzing stake- holder needs
while managing and controlling their engagement throughout the life of the project.
} Project integration management is an overarching function that affects and is affected by
all of the other knowledge areas.

Project Management Tools and Techniques

} assist project managers and their teams in various aspects of project management
} Some specific ones include
◦ Project charter, scope statement, and WBS (scope)
◦ Gantt charts, network diagrams, critical path analysis, critical chain
scheduling (time)
◦ Cost estimates and earned value management (cost)

Project Management Software

} There are hundreds of different products to assist in performing project
management
} Three main categories of tools:
◦ Low-end tools: Handle single or smaller projects well, cost under $200 per
user
◦ Midrange tools: Handle multiple projects and users, cost $200-$1,000 per
user, MS Project 2010 most popular
◦ High-end tools: Also called enterprise project management software, often
licensed on a per-user basis, like Microsoft Enterprise Project Management
solution

Project Portfolio Management

} Organizations group and manage projects and
programs as a portfolio of investments that
contribute to the entire enterprise’s success
} Portfolio managers help their organizations make
wise investment decisions by helping to select and
analyze projects from a strategic perspective
} there are three basic IT project portfolio categories:
} Venture: Projects in this category help transform the business.
} Growth: Projects in this category would help the company grow in terms of rev- enues.
} Core: Projects in this category must be accomplished to run the business.
Project and Program Managers
} Project managers work with project sponsors, project team, and other people
involved in a project to meet project goals
} Program: group of related projects managed in a coordinated way to obtain benefits
and control not available from managing them individually
(PMBOK® Guide, 5th Edition, 2012)
} Program managers oversee programs; often act as bosses for project managers

The Role of the Project Manager

} Job descriptions vary, but most include responsibilities like planning, scheduling,
coordinating, and working with people to achieve project goals
} Remember that 97% of successful projects were led by experienced project
managers, who can often help influence success factors

Most Important Skills and Competencies for Project Managers*

1. People skills 6. Verbal communication
2. Leadership 7. Strong at building teams
3. Listening 8. Conflict resolution, conflict
4. Integrity, ethical behavior, management
consistent 9. Critical thinking, problem solving
5. Strong at building trust 10. Understands, balances priorities

Ethics in Project Management

} Ethics, loosely defined, is a set of principles that guide our decision making based on
personal values of what is “right” and “wrong”
} Project managers often face ethical dilemmas
} In order to earn PMP certification, applicants must agree to PMI’s Code of Ethics and
Professional Conduct and answer exam questions related to professional
responsibility, including ethics

Importance of Leadership Skills

} Effective project managers provide leadership by example
} A leader focuses on long-term goals and big-picture objectives while inspiring people
to reach those goals
} A manager deals with the day-to-day details of meeting specific goals
} Project managers often take on the role of both leader and manager
Different Skills Needed in Different Situations
} Large projects: Leadership, relevant prior 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
} Very novel projects: Leadership, people skills, having vision and goals, self-
confidence, expectations management, and listening skills were most important
Suggested Skills for Project Managers
} The Project Management Body of Knowledge
} Application area knowledge, standards, and regulations
} Project environment knowledge
} General management knowledge and skills
} Soft skills or human relations skills

Project Management Offices

} Many companies began creating PMOs 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 management function throughout an organization
} PMOs promote best practice as “an optimal way recognized by industry to achieve a
stated goal or objective”

Project Success
} The project met scope, time, and cost goals
} The project satisfied the customer/sponsor
} The results of the project met its main objective

What helps projects succeed?

} User involvement } Agile process
} Executive support } Project management expertise
} Clear business objectives } Skilled resources
} Emotional maturity } Execution
} Optimizing scope } Tools and infrastructure