1. Introduction to Project, Program, and Portfolio Management *Some content in these slides may be copyrighted by Course Technology
2. Outline Understand the growing need for better project, program, and portfolio management What is a project? What are some key terms and items to understand? What about the Project Management Profession? 2
3. Introduction Many organizations today have a new or renewed interest in project management. The U.S. spends $2.3 trillion on projects every year, the world as a whole spends nearly $10 trillion of its $40.7 gross product on projects of all kinds. In many sectors, inadequate project management is a key problem. For example, the U.S. government spends over $70B on IT. In 2008, OMB determined that 352 projects totaling $23.4B were poorly planned because of issues with cost schedule, performance, security, privacy, or acquisition strategy) A 2004 PricewaterhouseCoopers study of 200 companies from 30 different countries found that over half of all projects fail. 3
4. Advantages of Formal Project Management Better control of financial, physical, and human resources Improved customer relations Shorter development times Lower costs Higher quality and increased reliability Higher profit margins Improved productivity Better internal coordination Higher worker morale 4
5. What Is a Project? A project is “a temporary endeavor undertaken to create a unique product, service, or result.” Operations is work done to sustain the business. Projects end when their objectives have been reached or the project has been terminated. Examples: A college campus upgrades its technology infrastructure to provide wireless Internet access. A pharmaceutical company launches a new drug. A team of college students plan, design, and implement an IT system for a research center 5
6. Project Attributes A project: Has a unique purpose. Is temporary. Is developed using progressive elaboration or in an iterative fashion. Requires resources, often from various areas. Should have a primary customer or sponsor. The project sponsor usually provides the direction and funding for the project. Involves uncertainty. Project managers work with the project sponsors, the project team, and the other people involved in a project to meet project goals. 6
7. The Triple Constraint Every project is constrained in different ways by its: Scope: What work will be done as part of the project? What unique product, service, or result does the sponsor expect from the project? Time: How long should it take to complete the project? What is the project’s schedule? Cost: What should it cost to complete the project? What is the project’s budget? 7
8. More on the Triple Constraint It may be good enough to hit the target, or range, of triple constraint goals, but not the bull’s-eye. It’s important to determine which aspects of the triple constraint are the most important. The “quadruple constraint” includes quality as well as scope, time, and cost. 8
9. What is Project Management? Project management is “the application of knowledge, skills, tools, and techniques to project activities to meet project requirements.”* *Project Management Institute, Inc., A Guide to the Project Management Body of Knowledge (PMBOK® Guide, Third Edition) (2004), p. 8. 9
11. Project Stakeholders Stakeholders are the people involved in or affected by project activities. Stakeholders include: The project sponsor The project manager The project team Support staff Customers Suppliers Opponents to the project 11
12. Project Management Knowledge Areas Four core knowledge areas lead to specific project objectives. Project scope managementinvolves defining and managing all the work required to complete the project successfully. Project time managementincludes estimating how long it will take to complete the work, developing an acceptable project schedule, and ensuring timely completion of the project. Project cost managementconsists of preparing and managing the budget for the project. Project quality managementensures that the project will satisfy the stated or implied needs for which it was undertaken. 12
13. Project Management Knowledge Areas (continued) Four facilitating knowledge areas are the means through which the project objectives are achieved. Project human resource managementis concerned with making effective use of the people involved with the project. Project communications managementinvolves generating, collecting, disseminating, and storing project information. Project risk managementincludes identifying, analyzing, and responding to risks related to the project. Project procurement managementinvolves acquiring or procuring goods and services for a project from outside the performing organization. Project integration management affects and is affected by all of the other knowledge areas. 13
14. Project Management Tools and Techniques Project management tools and techniques assist project managers and their teams in various aspects of project management. Specific tools and techniques include: Project charters, scope statements, and WBS (scope) Gantt charts, network diagrams, critical path analyses (time) Net present value, cost estimates, and earned value management (cost) 14
17. What Went Right? Improved Project Performance* The Standish Group’s CHAOS studies show improvements in IT projects in the past decade *Jim Johnson, “CHAOS 2006 Research Project,” CHAOS Activity News, vol. 2: issue 1, (2007). 17
18. Project Success? There are different ways to define project success: The project met scope, time, and cost goals. The project satisfied the customer/sponsor. The project produced the desired results. 18
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20. Project Portfolio Management Project portfolio management is an emerging business strategy in which organizations group and manage projects and programs as a portfolio of investments that contribute to the entire enterprise’s success. Project Management Compared to Project Portfolio Management 20
21. The Project Management Profession Project, program, and portfolio managers need to develop specific skills. Certification is available for project managers. There are many software tools to assist in project, program, and portfolio management. Good knowledge and skills for a project manger? All nine project management knowledge areas The application area, including specific standards and regulations The project environment General management Human relations 21
22. 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. 22
24. Different Skills Needed in Different Situations Large projects: leadership, relevant prior experience, planning, people skills, verbal communication, and team-building skills are most important High uncertainty projects: risk management, expectation management, leadership, people skills, and planning skills are most important Very novel projects: leadership, people skills, having vision and goals, self-confidence, expectations management, and listening skills are most important 24
25. Additional Skills for Program and Portfolio Managers Program managers normally have experience as project managers. They often rely on their past experience, strong business knowledge, leadership capability, and communication skills to manage programs. Portfolio managers must have strong financial and analytical skills and understand how projects and programs can contribute to meeting strategic goals. 25
26. Project Management Certification PMI provides certification as a Project Management Professional (PMP). A PMP has documented sufficient project experience, agreed to follow a code of ethics, and passed the PMP exam. The number of people earning PMP certification is increasing quickly. Growth in PMP Certification, 1993-2006 26
27. Ethics in Project Management Ethics — a set of principles that guide our decision making based on personal values of what is “right” and “wrong” — is an important part of all professions. Project managers often face ethical dilemmas. In order to earn PMP certification, applicants must agree to the PMP code of ethics and professional conduct. Several questions on the PMP exam are related to professional responsibility, including ethics. 27
