Project Management Fundamentals 2nd Edition
Key Concepts and Methodology
Gregory T. Haugan (Author)
Publication date: 10/01/2010
Introduction and Overview
…it will be seen that the development of a science to replace rule of thumb is in most cases by no means a formidable undertaking, and that it can be accomplished by ordinary, everyday men without any elaborate scientific training; but that, on the other hand, the successful use of even the simplest improvement of this kind calls for records, a system and cooperation where in the past existed only individual effort.
—Frederick Winslow Taylor,
The Principles of Scientific Management, 1911, p. 62
To F.W. Taylor, scientific management was a policy of establishing, after scientific study and research, a standard way of performing each industrial operation with the best possible expenditure of material, capital, and labor.1 His principles—and those of Harrington Emerson, Henry Gantt, and others—revolutionized the manufacturing industry in the decade preceding World War I. These principles are followed today in manufacturing processes, and extensions of them provide the basis for today’s project management body of knowledge. The concept of using a standard methodology to perform project management functions is the same concept used by F.W. Taylor in his philosophy of “one best way.”
The recognition that managing projects required skills and techniques different from those required for managing manufacturing processes arose in the late 1950s when the Cold War prompted the United States to develop large, complex weapons systems. Much of the management effort up to that point involved developing principles to manage large companies, organizations, and production processes. These new weapons systems development activities involved integrating the work of several companies involving many disciplines, not just civil or mechanical engineering, to develop one product. Most of the modern project management principles, processes, and practices evolved from the lessons learned in managing early weapons systems development.
These new weapons systems had five things in common: (1) they were one-time efforts and were therefore temporary in that the final products were not endlessly replicated, as occurs on a production line; (2) the final products had to be completed by a specified time; (3) the work required to create the final products had a specified price or budget; (4) the required performance of the final products was specified; and (5) the final products were complex and required coordinating and integrating the activities of several organizations and disciplines in every step of the development process.
Just as scientific management principles were documented in the period from 1910 to 1920, project management principles and practices were documented in many books, company manuals, government reports, and magazine articles starting in the 1960s.
The lead in monitoring and documenting project management practices transitioned from the public to the private sector in the 1980s with the major reductions in the National Aeronautics and Space Administration (NASA) space program, the end of the Cold War, and the rapid growth of the public sector’s awareness of the importance of formal project management.
THE PROJECT MANAGEMENT BODY OF KNOWLEDGE
As the private sector developed its formal project management practices, one organization in particular took the lead in documenting best practices. The Project Management Institute (PMI), a professional association of nearly 300,000 members in 170 countries, provides a forum for the growth and development of project management practices through its conferences, chapter meetings, monthly magazine PM Network, and quarterly journal Project Management Journal.
Building on the seminal work of the U.S. government and the aerospace industry in the 1960s, PMI published a landmark document titled The Project Management Body of Knowledge in August 1987, which was followed in 1996 by A Guide to the Project Management Body of Knowledge (PMBOK® Guide), now in its fourth edition.2
PMI has also published two derivative PMBOK® Guide documents focusing on the construction industry and government, respectively.3 More recently, PMI published standards for portfolio management, program management, work breakdown structures, and organizational project management.4
The PMBOK® Guide documents proven classic practices that are widely applied, as well as more advanced practices used less often but also generally accepted. This book is generally consistent with the PMBOK® Guide and the derivative PMI publications noted here.
Despite the frequency of new project management systems purporting dramatic changes and improved methods, in reality basic project management concepts haven’t changed much since they were developed during the late 1960s and standardized in the original PMBOK® Guide. Two areas developed recently, however, are web-based communications and self-organizing team concepts key to agile project management. Both are discussed in this new edition.
KEY CONCEPTS OF PROJECT MANAGEMENT
An understanding and appreciation of the evolution of project management is useful when applying the techniques to individual problems and situations. It is important to understand why each step in the project management process is performed, so you can effectively tailor that step to individual projects in your organization.
Project management today, just like the scientific management of Taylor’s day, still involves records, a system, and cooperation, although now these are called data collection, planning and control, and communications.
The core of this book is the application of a basic project management process or methodology that consists of a number of steps performed in sequence. Some of these steps require more than one iteration to incorporate unforeseen changes, and several have sub-processes with their own defined steps, as well.
While all projects can be managed successfully by following these steps, the effort and emphasis placed on performing each step must be tailored to the specific project and its context. For example, every project requires planning, but the planning for a major aerospace project is far more extensive than the planning required for a two-week project to develop a marketing brochure. Similarly, the planning that is performed when responding to a request for proposals is different from that required for a new project assigned by a supervisor.
In recognition of each project’s unique conditions, Part 3 presents eight scenarios of different conditions or situations a project manager may encounter and describes how to tailor the basic methodology presented in Part 2 to each of these scenarios.
Part 4 discusses critical project environment elements needed in addition to the basic methodology, including management support, project management software, procedures and directives, and project management maturity. Part 4 also discusses particular facilitating elements needed in addition to the basic methodology, including human resource management, risk management, communications, project procurement management, and configuration management.
Part 5 discusses agile project management, which evolved from software development projects using an incremental approach to delivering the final product. The agile approach assumes that the entire suite of initial requirements cannot be developed or planned at the start of the project. Increments of the final product can be delivered very early, and their testing and evaluation can provide essential input for succeeding iterations and deliveries. The process is continued until a satisfactory set of product functions, performance, or features is attained, fulfilling the customer’s objectives.
For more advanced project managers, Appendix A provides a new discussion of project management maturity and an overview of business development and knowledge management assessments.
Communications methods and tools have evolved rapidly with the evolution of the Internet and social networking applications. A new appendix on project communications systems and networking provides an overview of the tools currently available to the project and program teams.
The world of project management is full of jargon and acronyms. Figure 1.1 defines the most common project management terms used frequently in this book and in the project management field. These definitions are included in similar form in the glossary of the PMBOK® Guide.5
Readers should take care to thoroughly absorb and understand these definitions because they are key to understanding project management. Once you are comfortable with the terminology, the principles and the process will not seem as daunting.
Figure 1.1. Key Project Management Terms
To understand the basic project management process, it is necessary to first discuss what is meant by project management and then discuss how it is accomplished. Going back to Management 101 in college, “management” is generally defined as getting work done through people. The functions of management are planning, organizing, staffing, directing, and controlling (and, depending on the school, coordinating).
Project management can also be defined as the application of management functions, knowledge, skills, tools, and techniques to project activities to meet or exceed stakeholder needs and expectations. Part 2 presents project management tools and techniques along with the methodology the section describes, and the knowledge comes from understanding the methodology and related explanations. The skills come from learning by applying the methodology to your particular situation. Meeting or exceeding stakeholder needs and expectations invariably involves balancing competing demands among five items:
Project goals and objectives: Where are we going? What are we going to deliver to the customer?
Statements of work (scope), time, cost, and performance: What do we have to do to fulfill the customer’s needs and expectations? When do we have to do this, and how much will it cost?
Stakeholders with differing needs and expectations: Who is involved and interested in the project?
Identified requirements (needs and contract items) and unidentified requirements or expectations: What do the deliverable products, services, or results have to achieve? What kind of performance is expected?
Resource requirements and availability: What kinds of human resources, funding, and other resources are needed, and are they available?
Part 2 describes the application of a basic project management process and methodology to plan, organize, staff, direct, control, and coordinate a project. The methodology is applicable to projects of any size. It also can be used on parts of projects that are self-contained, down to the lowest level of the project—the activities. Because each activity should have an associated target completion date, an expected performance level, and a budget, the same core project management principles can be applied to individual activities just as they are to an overall project—the difference is only in degree.
Figure 1.2 summarizes the basic project management process and methodology.
Figure 1.2. Basic Project Management Process
Each of the ten major steps has a specific output that is defined, documented, explained, and discussed in Part 2. The steps are frequently iterative; that is, the work or planning may require revision to adapt to changes that occur throughout the project life cycle, and the steps will have to be repeated. This constant iteration and replanning characterizes day-to-day project management. Part 5 discusses the agile project management approach, during which changes and iterations are planned among the project team and customer while they work toward delivering the final product, service, or result.
Because project management is a process with feedback loops, whenever the information system that tracks data for Step 6 and the analysis conducted during Step 7 indicate an adverse variance and a need for corrective action, the process is repeated for the relevant portions of the project. This may involve repeating one or more steps of the planning phase and perhaps even rethinking project goals and objectives established during the initiation phase. The discipline involved in managing change is an important aspect of project management.
Many years of project management experience have demonstrated again and again that following the basic project management process steps is essential to ensuring success.
Not all projects are successful. Incidents outside the control of the project manager or the project team may occur, preventing the achievement of project goals. Following the methodology described here, however, will minimize the probability of failure caused by preventable events.
The process and methodology focus on achieving the project objectives within the six project management constraints illustrated in Figure 1.3. Standard project management convention refers to the triple constraints of scope, schedule, and cost. Here we include an additional three constraints—quality, resources, and risk—to align with the standard published in the PMBOK® Guide.6
Figure 1.3. Project Management Constraints
If the schedule slips and the scope of the project cannot change, you will have to adjust costs.
If the schedule slips and costs are held constant, the quality or performance of the deliverable will be at risk.
If risks are not fully acknowledged and understood, the project’s successful completion will be threatened.
If the project lacks available resources, the schedule will be compromised.
If the scope is undefined and changes are not managed, the project cost and schedule cannot be established and planned.
Because these are constraints within a predefined system, changing one condition will necessarily affect the others. However, if one or more of the primary constraints of scope, schedule, or cost are not restricted, managing the project would likely not present many challenges or problems because any problem could be resolved simply by making changes to the unrestricted constraints.
Many people do not manage projects well, and organizations do not always provide a supportive environment. Project management is a discipline that requires control and hard work. There are no magic panaceas or snazzy project management schemes that do all the work for you. The methodology presented here is basic, and following it will significantly reduce the possibility of project failure.
Follow three rules to achieve project success:
Follow the methodology.
Listen carefully to the project sponsor and work to exceed quality, schedule, and cost expectations.
The project management process and methodology cannot be implemented in a vacuum. Certain related concepts provide a foundation and setting for the methodology:
Basic management principles—Mary Parker Follett defines management as “the art of getting things done through people.”7 Project managers need to know more than just which steps to take; successful project management requires working through other people.
Project environment—As discussed in Part 4, the project is managed within a larger organizational entity; therefore, methods and tools for working in the specific organizational environment and culture are important.
Project management office (PMO)—The project manager needs an organizational framework for the project. Large projects require the project manager to delegate certain management functions. An efficient PMO significantly improves the project manager’s ability to manage the project effectively and implement the required tools and methodology.
Project types—The type of project requires a corresponding approach and the right tools.
Program management—A program consists of a group of related projects managed or coordinated by a centralized manager.8
Portfolio management—A portfolio consists of a group of programs or projects established and managed to achieve organizational strategic objectives or other business objectives.9
Although this book focuses on the management of projects, all the concepts listed here are discussed to some extent in the sections that follow and in the appendices. The important management building block in the organization is the project, and the important building block in the project is the work performed as project activities or tasks.
1. Frederick M. Feiker, How Scientific Management Is Applied (Chicago: A.W. Shaw Company, 1911).
2. Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fourth Edition (Newtown Square, PA: Project Management Institute, 2008).
3. Project Management Institute, Construction Extension to the PMBOK® Guide, Third Edition (Newtown Square, PA: Project Management Institute, 2007). Project Management Institute, Government Extension to the PMBOK® Guide, Third Edition (Newtown Square, PA: Project Management Institute, 2006).
4. Project Management Institute, Practice Standard for Work Breakdown Structures, Second Edition (Newtown Square, PA: Project Management Institute, 2006). Project Management Institute, The Standard for Portfolio Management, Second Edition (Newtown Square, PA: Project Management Institute, 2008). Project Management Institute, The Standard for Program Management, Second Edition (Newtown Square, PA: Project Management Institute, 2008). Project Management Institute, Organizational Project Management Maturity Model (0PM3®), Second Edition (Newtown Square, PA: Project Management Institute, 2008).
5. Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fourth Edition (Newtown Square, PA: Project Management Institute, 2008).
6. Ibid., 6.
8. See also Project Management Institute, The Standard for Program Management, Second Edition (Newtown Square, PA: Project Management Institute, 2008).
9. See also Project Management Institute, The Standard for Portfolio Management, Second Edition (Newton Square, PA: Project Management Institute, 2008.)
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