Project Management

Preface xix 1 Overview 1 1.0 Introduction 1 1.1 Understanding Project Management 2 1.2 Defining Project Success 6 1.3 Trade-Offs and Competing Constraints 7 1.4 The Entry-Level Project Manager 9 1.5 The Talent Triangle 10 1.6 Technology-Based Projects 10 1.7 The Project Manager-Line Manager Interface 11 1.8 Defining the Project Manager's Role 13 1.9 Defining the Functional Manager's Role 15 1.10 Defining the Functional Employee's Role 17 1.11 Defining the Executive's Role 17 1.12 Working with Executives 17 1.13 Committee Sponsorship/Governance 19 1.14 The Project Manager as the Planning Agent 20 1.15 Project Champions 21 1.16 Project-Driven versus Non-Project-Driven Organizations 22 1.17 Marketing in the Project-Driven Organization 24 1.18 Classification of Projects 25 1.19 Location of the Project Manager 26 1.20 Differing Views of Project Management 27 1.21 Public-Sector Project Management 28 1.22 International Project Management 31 1.23 Concurrent Engineering: A Project Management Approach 32 1.24 Added Value 32 1.25 Studying Tips for the Pmi(r) Project Management Certification Exam 33 Problems 36 Williams Machine Tool Company 37 2 Project Management Growth: Concepts and Definitions 39 2.0 Introduction 39 2.1 The Evolution of Project Management: 1945-2017 39 2.2 Resistance to Change 43 2.3 Systems, Programs, and Projects: A Definition 45 2.4 Product versus Project Management: A Definition 47 2.5 Maturity and Excellence: A Definition 49 2.6 Informal Project Management: A Definition 50 2.7 The Many Faces of Success 52 2.8 The Many Faces of Failure 54 2.9 Causes of Project Failure 57 2.10 Degrees of Success and Failure 59 2.11 The Stage-Gate Process 60 2.12 Project Life Cycles 61 2.13 Gate Review Meetings (Project Closure) 65 2.14 Engagement Project Management 66 2.15 Project Management Methodologies: A Definition 67 2.16 From Enterprise Project Management Methodologies to Frameworks 69 2.17 Methodologies Can Fail 70 2.18 Organizational Change Management and Corporate Cultures 71 2.19 Benefits Harvesting and Cultural Change 76 2.20 Agile and Adaptive Project Management Cultures 77 2.21 Project Management Intellectual Property 77 2.22 Systems Thinking 79 2.23 Studying Tips for the Pmi(r) Project Management Certification Exam 82 Problems 85 Creating a Methodology 86 3 Organizational Structures 89 3.0 Introduction 89 3.1 Organizational Work Flow 90 3.2 Traditional (Classical) Organization 91 3.3 Pure Product (Projectized) Organization 93 3.4 Matrix Organizational Form 95 3.5 Modification of Matrix Structures 99 3.6 The Strong, Weak, or Balanced Matrix 101 3.7 Project Management Offices 101 3.8 Selecting the Organizational Form 103 3.9 Strategic Business Unit (SBU) Project Management 106 3.10 Transitional Management 107 3.11 Seven Fallacies that Delay Project Management Maturity 109 3.12 Studying Tips for the Pmi(r) Project Management Certification Exam 111 Problems 113 4 Organizing and Staffing the Project Office and Team 115 4.0 Introduction 115 4.1 The Staffing Environment 116 4.2 Selecting the Project Manager: an Executive Decision 117 4.3 Skill Requirements for Project and Program Managers 121 4.4 Special Cases in Project Manager Selection 125 4.5 Today's Project Managers 126 4.6 Duties and Job Descriptions 127 4.7 The Organizational Staffing Process 128 4.8 The Project Office 131 4.9 The Functional Team 133 4.10 The Project Organizational Chart 133 4.11 Selecting the Project Management Implementation Team 136 4.12 Mistakes Made by Inexperienced Project Managers 139 4.13 Studying Tips for the Pmi(r) Project Management Certification Exam 140 Problems 142 5 Management Functions 145 5.0 Introduction 145 5.1 Controlling 146 5.2 Directing 146 5.3 Project Authority 148 5.4 Interpersonal Influences 152 5.5 Barriers to Project Team Development 154 5.6 Suggestions for Handling the Newly Formed Team 157 5.7 Team Building as an Ongoing Process 158 5.8 Leadership in a Project Environment 159 5.9 Value-Based Project Leadership 160 5.10 Transformational Project Management Leadership 163 5.11 Organizational Impact 163 5.12 Employee-Manager Problems 165 5.13 General Management Pitfalls 166 5.14 Time Management Pitfalls 167 5.15 Management Policies and Procedures 171 5.16 Human Behavior Education 171 5.17 Studying Tips for the Pmi(r) Project Management Certification Exam 174 Problems 177 The Trophy Project 178 McRoy Aerospace 180 The Poor Worker 182 The Prima Donna 182 The Reluctant Workers 184 Leadership Effectiveness (A) 185 Leadership Effectiveness (B) 189 Motivational Questionnaire 195 6 Communications Management 203 6.0 Introduction 203 6.1 Modeling the Communications Environment 203 6.2 The Project Manager as a Communicator 208 6.3 Project Review Meetings 212 6.4 Project Management Bottlenecks 212 6.5 Active Listening 213 6.6 Communication Traps 214 6.7 Project Problem Solving 215 6.8 Brainstorming 223 6.9 Predicting the Outcome of a Decision 224 6.10 Facilitation 226 6.11 Studying Tips for the Pmi(r) Project Management Certification Exam 228 Problems 230 Communication Failures 231 The Team Meeting 234 7 Conflicts 237 7.0 Introduction 237 7.1 The Conflict Environment 238 7.2 Types of Conflicts 239 7.3 Conflict Resolution 240 7.4 The Management of Conflicts 241 7.5 Conflict Resolution Modes 242 7.6 Understanding Superior, Subordinate, and Functional Conflicts 244 7.7 Studying Tips for the Pmi(r) Project Management Certification Exam 246 Problems 248 Facilities Scheduling at Mayer Manufacturing 248 Telestar International 250 Handling Conflict in Project Management 251 8 Special Topics 257 8.0 Introduction 257 8.1 Performance Measurement 257 8.2 Financial Compensation and Rewards 262 8.3 Effective Project Management in the Small Business Organization 270 8.4 Mega Projects 271 8.5 Morality, Ethics, and the Corporate Culture 273 8.6 Professional Responsibilities 275 8.7 Internal and External Partnerships 278 8.8 Training and Education 279 8.9 Integrated Product/Project Teams 281 8.10 Virtual Project Teams 283 8.11 Managing Innovation Projects 284 8.12 Agile Project Management 287 8.13 Studying Tips for the Pmi(r) Project Management Certification Exam 289 Problems 295 Is It Fraud? 295 9 The Variables for Success 299 9.0 Introduction 299 9.1 Predicting Project Success 299 9.2 Project Management Effectiveness 302 9.3 Expectations 303 9.4 Lessons Learned 305 9.5 Understanding Best Practices 306 9.6 Studying Tips for the Pmi(r) Project Management Certification Exam 312 Problems 313 Radiance International 313 10 Working with Executives 317 10.0 Introduction 317 10.1 The Project Sponsor 317 10.2 Handling Disagreements with the Sponsor 327 10.3 The Collective Belief 327 10.4 The Exit Champion 328 10.5 The In-House Representatives 329 10.6 Stakeholder Relations Management 329 10.7 Project Portfolio Management 335 10.8 Politics 337 10.9 Studying Tips for the Pmi(r) Project Management Certification Exam 338 Problems 339 The Prioritization of Projects 340 The Irresponsible Sponsors 341 Selling Executives on Project Management 342 11 Planning 345 11.0 Introduction 345 11.1 Business Case 346 11.2 Validating the Assumptions 348 11.3 Validating the Objectives 351 11.4 General Planning 352 11.5 Life-Cycle Phases 355 11.6 Life-Cycle Milestones 356 11.7 Kickoff Meetings 358 11.8 Understanding Participants' Roles 360 11.9 Establishing Project Objectives 360 11.10 The Statement of Work 361 11.11 Project Specifications 363 11.12 Data Item Milestone Schedules 364 11.13 Work Breakdown Structure 365 11.14 Wbs Decomposition Problems 370 11.15 Work Breakdown Structure Dictionary 372 11.16 Project Selection 373 11.17 The Role of the Executive in Planning 377 11.18 Management Cost and Control System 378 11.19 Work Planning Authorization 379 11.20 Why Do Plans Fail? 380 11.21 Stopping Projects 381 11.22 Handling Project Phaseouts and Transfers 381 11.23 Detailed Schedules and Charts 383 11.24 Master Production Scheduling 385 11.25 Project Plan 386 11.26 The Project Charter 391 11.27 Project Baselines 392 11.28 Verification and Validation 395 11.29 Management Control 396 11.30 Configuration Management 397 11.31 Enterprise Project Management Methodologies 398 11.32 Project Audits 399 11.33 Studying Tips for the Pmi(r) Project Management Certification Exam 400 Problems 404 12 Network Scheduling Techniques 409 12.0 Introduction 409 12.1 Network Fundamentals 411 12.2 Graphical Evaluation and Review Technique (GERT) 416 12.3 Dependencies 417 12.4 Slack Time 417 12.5 Network Replanning 423 12.6 Estimating Activity Time 428 12.7 Estimating Total Project Time 429 12.8 Total Pert /Cpm Planning 430 12.9 Crash Times 431 12.10 Pert /Cpm Problem Areas 436 12.11 Alternative Pert /Cpm Models 436 12.12 Precedence Networks 437 12.13 Lag 440 12.14 Scheduling Problems 441 12.15 The Myths of Schedule Compression 441 12.16 Project Management Software 442 12.17 Studying Tips for the Pmi(r) Project Management Certification Exam 445 Problems 448 The Invisible Sponsor 451 13 Pricing and Estimating 453 13.0 Introduction 453 13.1 Global Pricing Strategies 453 13.2 Types of Estimates 455 13.3 Pricing Process 458 13.4 Organizational Input Requirements 460 13.5 Labor Distributions 462 13.6 Overhead Rates 463 13.7 Materials/Support Costs 465 13.8 Pricing Out the Work 466 13.9 Smoothing Out Department Man-Hours 469 13.10 The Pricing Review Procedure 471 13.11 Systems Pricing 472 13.12 Developing the Supporting/Backup Costs 474 13.13 The Low-Bidder Dilemma 474 13.14 Special Problems 477 13.15 Estimating Pitfalls 478 13.16 Estimating High-Risk Projects 479 13.17 Project Risks 480 13.18 The Disaster of Applying the 10 Percent Solution to Project Estimates 483 13.19 Life-Cycle Costing (LCC) 484 13.20 Logistics Support 486 13.21 Economic Project Selection Criteria: Capital Budgeting 488 13.22 Payback Period 488 13.23 The Time Value of Money and Discounted Cash Flow (DCF) 489 13.24 Net Present Value (NPV) 490 13.25 Internal Rate of Return (IRR) 490 13.26 Comparing Irr, Npv, and Payback 491 13.27 Risk Analysis 492 13.28 Capital Rationing 492 13.29 Project Financing 494 13.30 Studying Tips for the Pmi(r) Project Management Certification Exam 496 Problems 498 The Estimating Problem 499 14 Cost Control 501 14.0 Introduction 501 14.1 Understanding Control 503 14.2 The Operating Cycle 506 14.3 Cost Account Codes 506 14.4 Budgets 511 14.5 The Earned Value Measurement System (EVMS) 512 14.6 Variance and Earned Value 513 14.7 The Cost Baseline 529 14.8 Justifying the Costs 531 14.9 The Cost Overrun Dilemma 532 14.10 Recording Material Costs Using Earned Value Measurement 534 14.11 Material Variances: Price and Usage 535 14.12 Summary Variances 536 14.13 Status Reporting 537 14.14 Cost Control Problems 537 14.15 Studying Tips for the Pmi(r) Project Management Certification Exam 539 Problems 542 The Bathtub Period 544 Franklin Electronics 545 15 Metrics 549 15.0 Introduction 549 15.1 Project Management Information Systems 549 15.2 Enterprise Resource Planning 550 15.3 Project Metrics 550 15.4 Key Performance Indicators (KPIS) 555 15.5 Value-Based Metrics 561 15.6 Dashboards and Scorecards 566 15.7 Business Intelligence 569 15.8 Studying Tips for the Pmi(r) Project Management Certification Exam 570 Problems 573 16 Trade-off Analysis in a Project Environment 575 16.0 Introduction 575 16.1 Methodology for Trade-Off Analysis 578 16.2 Contracts: Their Influence on Projects 593 16.3 Industry Trade-Off Preferences 594 16.4 Project Manager's Control of Trade-Offs 597 16.5 Studying Tips for the Pmi(r) Project Management Certification Exam 597 Problems 598 17 Risk Management 599 17.0 Introduction 599 17.1 Definition of Risk 601 17.2 Tolerance for Risk 603 17.3 Definition of Risk Management 604 17.4 Certainty, Risk, and Uncertainty 604 17.5 Risk Management Process 610 17.6 Plan Risk Management 611 17.7 Risk Identification 612 17.8 Risk Analysis 613 17.9 Qualitative Risk Analysis 615 17.10 Quantitative Risk Analysis 616 17.11 Plan Risk Response 619 17.12 Monitor and Control Risks 621 17.13 Some Implementation Considerations 622 17.14 The Use of Lessons Learned 623 17.15 Dependencies between Risks 624 17.16 The Impact of Risk Handling Measures 628 17.17 Risk and Concurrent Engineering 631 17.18 Studying Tips for the Pmi(r) Project Management Certification Exam 633 Problems 637 Teloxy Engineering (A) 640 Teloxy Engineering (B) 640 The Risk Management Department 641 18 Learning Curves 643 18.0 Introduction 643 18.1 General Theory 643 18.2 The Learning Curve Concept 644 18.3 Graphic Representation 646 18.4 Key Words Associated with Learning Curves 647 18.5 The Cumulative Average Curve 648 18.6 Sources of Experience 649 18.7 Developing Slope Measures 653 18.8 Unit Costs and Use of Midpoints 654 18.9 Selection of Learning Curves 654 18.10 Follow-On Orders 655 18.11 Manufacturing Breaks 656 18.12 Learning Curve Limitations 656 18.13 Competitive Weapon 657 18.14 Studying Tips for the Pmi(r) Project Management Certification Exam 658 Problems 659 19 Contract Management 661 19.0 Introduction 661 19.1 Procurement 662 19.2 Plan Procurements 664 19.3 Conducting the Procurements 667 19.4 Conduct Procurements: Request Seller Responses 668 19.5 Conduct Procurements: Select Sellers 669 19.6 Types of Contracts 673 19.7 Incentive Contracts 678 19.8 Contract Type versus Risk 680 19.9 Contract Administration 680 19.10 Contract Closure 683 19.11 Using a Checklist 684 19.12 Proposal-Contractual Interaction 684 19.13 Studying Tips for the Pmi(r) Project Management Certification Exam 686 Problems 691 To Bid or Not to Bid 692 The Management Reserve 693 20 Quality Management 697 20.0 Introduction 697 20.1 Definition of Quality 698 20.2 The Quality Movement 699 20.2 Quality Management Concepts 703 20.3 The Cost of Quality 707 20.4 The Seven Quality Control Tools 709 20.5 Acceptance Sampling 721 20.6 Implementing Six Sigma 722 20.7 Quality Leadership 723 20.8 Responsibility for Quality 724 20.9 Quality Circles 725 20.10 Total Quality Management (Tqm) 725 20.11 Studying Tips for the Pmi(r) Project Management Certification Exam 728 Problems 731 21 Modern Developments in Project Management 733 21.0 Introduction 733 21.1 The Project Management Maturity Model (PMMM) 733 21.2 Developing Effective Procedural Documentation 737 21.3 Project Management Methodologies 741 21.4 Continuous Improvement 742 21.5 Capacity Planning 743 21.6 Competency Models 745 21.7 Managing Multiple Projects 747 21.8 The Business of Scope Changes 748 21.9 End-of-Phase Review Meetings 752 Honicker Corporation 753 Kemko Manufacturing 755 Appendix A: Solution to Leadership Exercise 759 Appendix B: Solutions to the Project Management Conflict Exercise 765 Appendix C: Dorale Products Case Studies 771 Appendix D: Solutions to the Dorale Products Case Studies 783 Appendix E: Alignment of the PMBOK(r) Guide to the Text 789 Index 795