Managing Technology-Based Projects
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Preface xiii
1 Challenges of Managing Projects in a Technology World 1
Apple iPhone 5 1
1.1 Project Management in a Changing World: Challenges and Opportunities 2
1.2 Global Dimensions 2
1.3 Project Deserve Special Attention within the Enterprise 3
1.4 The Unique Nature of Technology Projects 4
1.5 Evolution and Growth of Project Management and Technology 11
1.6 Where Are We Heading? 15
1.7 Key Points, Lessons, and Conclusions 16
1.8 Questions for Discussion and Exercises 17
1.9 PMBOK® References and Connections 17
Internet Links and Resources 18
References and Additional Readings 18
2 Contemporary Project Management: Concepts and Principles 19
Amazon 19
2.1 The Big Picture: The Art of Managing Projects 20
2.2 Project Management Defined 21
2.3 The Project Life Cycle (PLC) 22
2.4 Programs, Projects, Tasks, and Committees 24
2.5 The Role of the Project Manager 27
2.6 Classification of Projects 28
2.7 Project Management Standards and Guidelines 30
2.8 Key Points, Lessons, and Conclusions 36
2.9 Questions for Discussion and Exercises 36
2.10 PMBOK® References and Connections 37
Internet Links and Resources 37
References and Additional Readings 37
3 The Effective Project Manager: Skills, Values and Agility 39
Project Management Skills Emphasized in PMI's Annual Report 39
3.1 Project-based Organizational Cultures and Values 39
3.2 Measuring Managerial Performance 40
3.3 Skill Requirements for Managing Technology Projects 43
3.4 How Learnable Are These Skills? 48
3.5 Transitioning from Individual Contributor to Project Management 48
3.6 Implications for Senior Management 50
3.7 Summary of Key Points and Conclusions 54
3.8 Questions for Discussion 55
3.9 PMBOK® References and Connections 56
Internet Links and Resources 56
References and Additional Readings 56
4 Aligning Projects with the Enterprise 59
Summer Olympics, 2016 in Rio. 59
4.1 Making the Case for Enterprise Project Management 60
4.2 Connecting with the Existing Strategy Framework 62
4.3 Project Portfolio Management (PPM) 64
4.4 Strategic Project Leadership 65
4.5 Where Are We Heading? 67
4.6 Summary of Key Points and Conclusions 70
4.7 Questions for Discussion 70
4.8 PMBOK® References and Connections 71
Internet Links and Resources 71
References and Additional Readings 71
5 Understanding Project Organizations 73
General Motors, Shanghai 73
5.1 Today's Business Processes Require Flexibility, Speed, and Efficiency 74
5.2 Why Do We Need to Organize Differently to Manage Projects? 75
5.3 Organizational Layers and Subsystems 76
5.4 Organizational Designs for Project Management 78
5.5 Managerial Perspective 89
5.6 Building the Project Organization 91
5.7 Working Effectively in Resource-Shared Environments 97
5.8 Summary of Key Points and Conclusions 97
5.9 Questions for Discussions and Exercises 98
5.10 PMBOK® References and Connections 99
Internet Links and Resources 99
References and Additional Readings 99
6 The Project Management Office 102
IBM Wins PMO of the Year Award 102
6.1 Management Perspective 103
6.2 PMO Concept and Functionality 104
6.3 Reason for Establishing a Project Management Office (PMO) 110
6.4 Establishing a Project Management Office 116
6.5 A Final Note 122
6.6 Summary of Key Points and Conclusions 122
6.7 Questions for Discussion 123
6.8 PMBOK® References and Connections 124
Internet Links and Resources 124
References and Additional Readings 125
7 Project Evaluation and Selection 127
Multiple Project Selection at DIRECTV 127
7.1 Management Perspective 128
7.2 Quantitative Approaches to Project Evaluation and Selection 131
7.3 Qualitative Approaches to Project Evaluation and Selection 138
7.4 Recommendations for Effective Project Evaluation and Selection 139
7.5 Concluding Remarks 142
7.6 Summary of Key Points and Conclusions 143
7.7 Questions for Discussion and Exercises 144
7.8 PMBOK® References and Connections 144
Internet Links and Resources 145
References 145
7.9 Appendix: Summary Description of Terms, Variables, and Abbreviations used in This Chapter 147
8 Setting Up an Effective Planning and Control Cycle 148
Project Management for NASA 148
8.1 Planning the Cornerstone to Effective Project Management 150
8.2 An Integrated Approach to Project Planning 156
8.3 Managing the Planning Process 162
8.4 Summary of Key Points and Conclusions 162
8.5 Questions for Discussion and Exercises 164
8.6 PMBOK® References and Connections 164
Internet Links and Resources 165
References and Additional Readings 165
9 The Tools for Integrated Project Planning and Control 167
2012 London Summer Olympics 167
9.1 Management Perspective 168
9.2 The Basic Tools and Techniques for Project Management 176
9.3 Using Project Management Tools Property 206
9.4 A Model for Project Performance 207
9.5 Summary of Key Points and Conclusions 209
9.6 Questions for Discussion 210
9.7 PMBOK® References and Connections 210
Internet Links and Resources 211
References and Additional Readings 211
10 Defining the Project 213
Chevrolet Volt Electric Cars Development 213
10.1 The Need for a Clear Plan 214
10.2 Building the Project Plan 215
10.3 A Life Cycle Approach to Project Planning 228
10.4 Summary of Key Points and Conclusions 228
10.5 Questions for Discussion and Exercises 229
10.6 PMBOK® Guide References and Connections 230
Internet Links and Resources 230
References and Additional Readings 230
11 Resource Estimating and Budgeting 232
At Google, Technology Projects Are Done on a Rapid Schedule. 232
11.1 Why We Need Budgets 233
11.2 Cost Estimating Methods 234
11.3 Where to Begin? 238
11.4 Cost Estimating and Budgeting Philosophy 240
11.5 Summary of Key Points and Conclusions 243
11.6 Questions for Discussion and Exercises 244
11.7 PMBOK® Guide References and Connections 245
Internet Links and Resources 245
References and Additional Readings 246
12 Monitoring and Controlling Technology-Intensive Projects 248
Prairie Waters Project Wins PMI's Project of the Year Award 248
12.1 The Challenges of Managerial Control 249
12.2 What We Know About Managerial Control of Complex Projects 251
12.3 What Do We Want to Control? 252
12.4 Available Tools and Techniques 254
12.5 Recommendations for Using Project Controls Effectively 261
12.6 Conclusion 264
12.7 Summary of Key Points and Conclusions 265
12.8 Questions for Discussion 266
12.9 PMBOK® References and Connections 267
Internet Links and Resources 268
References and Additional Readings 268
12.10 Appendix: Management Techniques for Project Control 270
13 Concurrent Engineering and Other Project Management Systems 278
The Pentagon Reconstruction Project 278
13.1 The Need for Effective Project Management Processes 279
13.2 A Spectrum of Contemporary Management Systems 281
13.3 Criteria for Success 284
13.4 Defining the Management Process-A Team-Based Effort 286
13.5 Understanding the Challenges 288
13.6 Understanding Organizational Linkages and Benefits 289
13.7 Recommendations for Setting Up and Managing Contemporary Systems 291
13.8 Conclusion 298
13.9 Summary of Key Points and Conclusions 300
13.10 Questions for Discussion 301
13.11 PMBOK® References and Connections 302
Internet Links and Resources 302
References and Additional Readings 302
14 Managing Risk and Uncertainty 307
Risk-Taking in New Product Developments is Part of Staying Competitive at Intel 307
14.1 The Role of Uncertainty in Managing Projects 308
14.2 What We Know about Risk Management 311
14.3 Key Variables Affecting Risk Management 313
14.4 A Simple Risk-Impact Model 317
14.5 How Do Risks Affect Project Performance? 321
14.6 Managing Risks in Projects: Lessons from the Field 323
14.7 Criteria for Effective Risk Management 326
14.8 A Final Note 331
14.9 Summary of Key Points and Conclusions 331
14.10 Questions for Discussion 333
14.11 PMBOK® References and Connections 334
Internet Links and Resources 334
References and Additional Readings 334
15 Managing by Commitment and Collaboration 338
Wind Energy Research 338
15.1 The Critical Role of Commitment and Collaboration 339
15.2 What Do We Know about Collaboration and Commitment? 342
15.3 Drivers and Barriers to Collaboration and Commitment 343
15.4 Managing by Commitment 346
15.5 Conclusion 349
15.6 Summary of Key Points and Conclusions 349
15.7 Questions for Discussion 350
15.8 PMBOK® References and Connections 350
Internet Links and Resources 351
References and Additional Readings 351
15.9 Appendix: Field Research Summary on Commitment 353
16 Managing People and Interfaces 362
At GE, Management Philosophy Focuses on People 362
16.1 Changing Roles and Challenges of Managerial Leadership 362
16.2 What Drives Performance in Technology-Based Teams 366
16.3 How To Motivate and Inspire 370
16.4 The Power Profile of Project Managers 378
16.5 Criteria and Recommendations for Working Effectively with People on Projects 381
16.6 Concluding Remark 383
16.7 Summary of Key Points and Conclusions 384
16.8 Questions for Discussion 386
16.9 PMBOK® References and Connections 386
Internet Links and Resources 387
References and Additional Readings 387
17 Managing Conflict in Project Organizations 391
Sun Tzu-The Ancient Art of Leadership: Making Conflict Unnecessary 391
17.1 Conflict-Good, Bad, and Inevitable 392
17.2 Categorizing Conflict in Organizations 393
17.3 How to Anticipate Issues 395
17.4 Conflict in the Project Life Cycle 398
17.5 How to Deal with Conflict 403
17.6 Criteria for Managing Conflict in Projects Effectively 410
17.7 Summary of Key Points and Conclusions 414
17.8 Questions for Discussion and Exercises 416
17.9 PMBOK® References and Connections 416
Internet Links and Resources 417
References and Additional Readings 417
18 Leading Technology Teams 421
Boeing 787 Dreamliner 421
18.1 Team Leadership-Critical to Project Success 422
18.2 Measuring Team Performance 426
18.3 Fostering Conditions for Collaboration, Commitment, and Self-Control 428
18.4 Building High-Performance Teams 430
18.5 Team Leadership Lessons 433
18.6 Guidelines for Effective Team Management 434
18.7 How to Make It Work 439
18.8 Summary of Key Points and Conclusions 441
18.9 Questions for Discussion and Exercises 441
18.10 PMBOK® References and Connections 442
Internet Links and Resources 443
References and Additional Readings 443
19 Professional Development: Training and Education 446
Developing Management Talent at GE 446
19.1 Project Managers Have Special Needs for Professional Development 447
19.2 Linking Knowledge, Skills, and Competency 448
19.3 Building Knowledge, Skills, and Competency 449
19.4 Developing Project Managers 453
19.5 Professional Education 454
19.6 Professional Certification and Accreditation 456
19.7 Career Opportunities in Project Management 459
19.8 Summary of Key Points and Conclusions 460
19.9 Questions for Discussion and Exercises 461
19.10 PMBOK® References and Connections 462
Internet Links and Resources 462
References and Additional Readings 463
20 The Future of Project Management 465
20.1 Is the Future Predictable? 465
20.2 Changes and Trends in the Project Environment 465
20.3 What Does It Mean for the Future of Project Management? 468
20.4 Summary of Key Points and Conclusions 470
20.5 Questions for Discussion and Exercises 471
Internet Links and Resources 471
References and Additional Readings 472
Appendix 1: Policy and Procedure Examples 473
Appendix 2: Professional Societies, Journals, and Conferences in Project Engineering, and Technology Management 481
Glossary 491
Index 499
Chapter 1
Challenges of Managing Projects in a Technology World
APPLE IPHONE 5
Photo courtesy of Apple Inc.
When Apple introduced its newest smartphone iPhone 5 at the Yerba Buena Center in San Francisco in late 2012, it was positioned for success. “iPhone 5 is the most beautiful consumer device that we’ve ever created,” said Philip Schiller, Apple’s senior vice president of Worldwide Marketing. “We’ve packed an amazing amount of innovation and advanced technology into a thin and light, jewel-like device with a stunning 4-inch retina display, blazing-fast A6 chip, ultrafast wireless, even longer battery life; and we think customers are going to love it.”
The announcement marked the end of an 18-month product development cycle that included intricate collaboration with several software developers, dozens of component manufacturers, partners and the iPhone fabrication at Hon Hai Precision Industry (also known as Foxconn in Zhengzhou, China). Indeed, the new product is state of the art. It is the thinnest and lightest iPhone ever, completely redesigned to feature the new display screen, the world’s most advanced mobile operating system, and over 200 new features such as new maps, turn-by-turn navigation, Facebook, Passbook, and more Siri® features.
However, recovering the investment for product development and rollout of the new 16 GB iPhone is not without challenges. For one thing, the cost to produce the phone is high. At over $200 per unit, Apple had to count on wireless companies to subsidize the purchasing price. Nevertheless, business analysts were optimistic that the iPhone 5 would be profitable in the long run—and as it turned out, their optimism was not misplaced. Following up on the impressive success of the iPhone 5, in September 2013, Apple introduced the iPhone 5S and the iPhone 5C.
1.1 PROJECT MANAGEMENT IN A CHANGING WORLD: CHALLENGES AND OPPORTUNITIES
The complexities and challenges faced by Apple in developing the iPhone 5 might look modest by comparison to super projects, such as major aerospace missions, the relocation of Tata’s steel plant to the Gulf of Bengal, or the organization of the next Summer Olympics. Yet, the iPhone 5 has all of the characteristics that we find in millions of technology-intensive projects. Project management has become an important variable for success in today’s complex business environment, where projects span organizational lines, involving a broad spectrum of personnel, support groups, subcontractors, vendors, partners, government agencies, and customer organizations. Hence, successful execution relies on effective linkages, cooperation, and alliances among various organizational functions, critical for proper communication, and decision making. Top-down control no longer works in most of these environments, but authority must be earned and team commitment must be built as critical conditions to successful project management.
Despite its challenges, this changing environment—especially advances in computers, IT, and communication technology—creates enormous opportunities for enterprises across all industries. It is possible to execute larger, more complex projects, with leaner budgets and more predictable schedules, and to connect with a wide spectrum of resources across the world. However, technology creates its own challenges, requiring additional investment in equipment, software, infrastructure, services, and skill sets. Advances in technology have also accelerated the changes in our business environment, leading to tougher competition, lower barriers of market entry, and shorter product life cycles, requiring more agile and flexible approaches to project management. These changes have shifted the project paradigm with strong impact on business performance. This got the attention of management across all industries, many of them recognizing project management as a critical toolset for providing common language and methodology for executing multidisciplinary ventures.
1.2 GLOBAL DIMENSIONS
The changes in the global business environment have pushed these challenges to an even higher level. To succeed in our ultracompetitive, interconnected world of business, companies are continuously searching for ways to improve effectiveness. They look for partners that can perform the needed work better, cheaper and faster. Speed especially has become one of the great equalizers of competitive performance. In the case of the iPhone, a new product may be obsolete in less than a year, unless provisions for continuous upgrading and enhancement have been built into the system and are implemented in response to evolving market needs. This results in complex project organization and execution processes, involving joint ventures, alliances, multinational sourcing and elaborate vendor relations across the globe, ranging from R&D to manufacturing, and from customer relations to field services.
Project complexity has been increasing in virtually every segment of industry and government, including computer, pharmaceutical, automotive, health care, transportation, and financial businesses, just to name a few of the most noticeable ones. New technologies, especially in computers and communications, have radically changed the workplace and transformed our global economy, focusing on effectiveness, value and speed. These technologies offer more sophisticated capabilities for cross-functional integration, resource mobility, effectiveness and market responsiveness, but they also require more sophisticated skill sets both technically and socially, dealing effectively with a broad spectrum of contemporary challenges, including managing conflict, change, risks and uncertainty.
As a result of this paradigm shift we have seen a change in the dynamics of teamwork and a change in managerial focus from efficiency to effectiveness, and from a focus on traditional performance measures, such as the quadruple constraint, to include a broader spectrum of critical success factors that support innovation, work integration, organizational collaboration, human factors, business process agility, and strategic objectives. Traditional linear work processes and top-down controls are no longer sufficient, but are gradually being replaced with alternate organizational designs, new management techniques and business processes, such as agile processes, concurrent engineering, User-Centered Design, and Stage-Gate protocols (Thamhain 2011). These techniques offer more sophisticated capabilities for cross-functional integration, resources mobility, effectiveness, and market responsiveness, but they also require more sophisticated management skills and leadership.
1.3 PROJECT DESERVE SPECIAL ATTENTION WITHIN THE ENTERPRISE
Projects are different from ongoing operations. They are one-time undertakings, such as the Apple’s iPhone development, with a specific mission, purpose, and objective, usually driven by the needs and wants of a sponsor or customer, who could be an individual or an organization, internal or external to the enterprise, or both. In essence, this description identifies the components and uniqueness of projects:
Producing specific deliverables within given time, resource and quality constraints that satisfy the project sponsor/customer.
It also identifies the boundary conditions of time, resources, quality, and customer satisfaction, referred to as quadruple constraint, to be discussed in the next chapter in more detail.
By their very nature projects are multidisciplinary, requiring resources and support from many organizational units. This is disruptive to the ongoing operations of the enterprise. It interferes with the mission and objectives of functional departments, and is inconsistent with established central management processes for command, control, and communications.
Thus, to minimize interference with ongoing operations, projects need to be organized and managed separately from the ongoing operations, yet well integrated with the enterprise. With the emergence of contemporary project management, virtually every enterprise with project-related activities established its own project management system with various degrees of formality and sophistication. The aim is to have a common infrastructure with methodologies, supportive processes, tools, and measurement systems that ensures consistent project delivery across the enterprise. Communication is at the heart of any of these management systems for effectively connecting among all team members, including partners, support organizations and other internal and external stakeholder communities.
As it has evolved over the past 60 years, modern project management provides the type of disciplined yet flexible framework for effectively planning, organizing, and executing projects. It has its own body of knowledge, providing a common language and methodology with tools and techniques for managing multidisciplinary ventures, regardless of their size, shape, or industry.
1.4 THE UNIQUE NATURE OF TECHNOLOGY PROJECTS
Technology-intensive projects have their unique characteristics and challenges. By definition, these projects have to deal with technology, a fast-changing knowledge area associated with risk and uncertainty. The problems to be solved are often complex and solutions untried, requiring experimental, iterative approaches, innovation and creativity, and highly specialized skill sets. Although one could make an argument that these issues also exist in many low-technology projects, they are amplified as dependence on...
