EE415

Management of Engineering Projects

Course Name

Management of Engineering Projects

Course Description

The course covers the principles of management, theory and practice, various approaches to
decision making, managing production and services operations; and project management. Emphasis
is also given on the managerial functions of planning, organizing, staffing, leading and controlling.

A project is a temporary endeavor undertaken to create a unique product, service, or result.

The temporary nature of projects indicates a definite beginning and end. The end is reached when the
project's objectives have been achieved or when the project is terminated because its objectives will
not or cannot be met, or when the need for the project no longer exists. Temporary does not
necessarily mean short in duration. Temporary does not generally apply to the product, service, or
result created by the project; most projects are undertaken to create a lasting outcome. For example,
a project to build a national monument will create a result expected to last centuries. Projects can also
have social, economic, and environmental impacts that far outlast the projects themselves.

A project can create:

 A product that can be either a component of another item or an end item in itself,

 A capability to perform a service (e.g., a business function that supports production or

distribution), or

 A result such as an outcome or document (e.g., a research project that develops knowledge
that can be used to determine whether a trend is present or a new process will benefit society)

Examples of projects include, but are not limited to:

 Developing a new product or service

 Effecting a change in the structure, staffing, or style of an organization

 Developing or acquiring a new or modified information system

 Constructing a building or infrastructure, or

 Implementing a new business process or procedure.

What is Project Management?

Project management is the application of knowledge, skills, tools, and techniques to project
activities to meet the project requirements. Project management is accomplished through the
appropriate application and integration of the 42 logically grouped project management processes
comprising the 5 Process Groups. These 5 Process Groups are:

 Initiating,

 Planning,

 Executing,

 Monitoring and Controlling, and

 Closing.

Managing a project typically includes:

 Identifying requirements,

 Addressing the various needs, concerns, and expectations of the stakeholders as the project
is planned and carried out,

 Balancing the competing project constraints including, but not limited to:

o Scope,

o Quality,

o Schedule,

o Budget,

o Resources, and

o Risk.

Relationships Among Project Management, Program Management, and Portfolio Management

In mature project management organizations, project management exists in a broader

context governed by program management and portfolio management. As Figure 1-1 illustrates,
organizational strategies and priorities are linked and have relationships between portfolios and
programs, and between programs and individual projects. Organizational planning impacts the
projects by means of project prioritization based on risk, funding, and the organization's strategic
plan. Organizational planning can direct the funding and support for the component projects on the
basis of risk categories, specific lines of business, or general types of projects, such as infrastructure
and internal process improvement.
Portfolio Management

What Is Portfolio Management?

A portfolio refers to a collection of projects or programs and other work that are grouped
together to facilitate effective management of that work to meet strategic objectives. The projects or
programs of the portfolio may not necessarily be interdependent or directly related. For example, an
infrastructure firm that has the strategic objective of “maximizing the return of investments” may put
together a portfolio that includes mix of projects in oil and gas, power, water, roads, rail and airports.
From this mix, the firm may choose to manage related projects as one program. All of the power
projects may be grouped together as a power program. Similarly, all of the water projects may be
grouped together as a water program.

Portfolio management refers to the centralizes management of one or more portfolios, which
includes identifying, prioritizing, authorizing, managing, and controlling projects, programs and other
related work, to achieve specific strategic business objectives. Portfolio management focuses on
ensuring that projects and programs are reviews to prioritize resource allocation, and that the
management of the portfolio is consistent with and aligned to organizational strategies.

Table 1-1 Comparative Overview of Project, Program, and Portfolio Management

Program Management

Program Management is an organizational function that oversees a group of individual

projects linked together through a shared organizational goal or common area of impact. This
programmatic grouping of multiple projects provides synergy, consistent management, and greater
visibility to stakeholders than individually managed projects.

What is Effective Program Management?

For program managers to be successful, they need a host of skills they can tap into. This first
and foremost include practical communication skills due to their broad responsibilities and high-level
visibility given the vital nature of the programs they oversee.

There are three distinct types of communication: status reporting, direction setting, and problem-
solving:

 Status reporting requires considerable written, verbal, and organizational communication

capabilities. They must deliver comprehensive yet efficient status updates to a broad
audience in multiple formats with the appropriate level of detail for each individual.

 Direction setting is required to inform and shape the scope and schedule of individual
projects (and project managers) that roll up under their programs. Objectives and deadlines
must be clear, and program managers must be willing to ask hard, probing questions to
determine how projects are truly progressing.

 Problem-solving comes into play continually for program managers. When obstacles,
challenges, and resistance arise (which happens quite often over the life of a program), they
must be willing to dive into the details and create action plans to ensure the program isn’t
put in jeopardy.

A difficult aspect of the role is that program managers must demonstrate their authority regarding
projects related to their program. Very few people are responsible for key deliverables that report to
them. They must establish themselves as both senior leaders and the day-to-day representative for
the executive sponsor of the initiative.
Project and Strategic Planning

Projects are often utilized as a means of achieving an organizations strategic plan. Projects are
typically authorized as a result if one or more of the following strategic considerations:

 Market demand (e.g., a car company authorizing a project to build more fuel-efficient cars in
response to gasoline shortages).

 Strategic opportunity/business need (e.g., a training company authorizing a project to create

a new course to increase its revenues).

 Customer request (e.g., an electric utility authorizing a project to build a new substation to
serve a new industrial park).

 Technological advance (e.g., an electronics firm authorizing new project to develops faster,
cheaper, and smaller laptop after advances in computer memory and electronics
technology), and

 Legal requirements (e.g., a chemical manufacturer authorizes a project to establish

guidelines for the handling of new toxic material).

Projects, within programs or portfolios, are a means of achieving organizational goals and objectives,
often in the context of a strategic plan. Although a group of projects within a program can have
discrete benefits they can also contribute to the benefits of the program, to the objectives of the
portfolio, and to the strategic plan of the organization.

Project Management Office

Project management office (PMO) is an organizational body or entity assigned various

responsibilities related to the centralized and coordinated management of those projects under its
domain. The responsibilities of a PM can range from providing project management support
functions to actually being responsible for the direct management of a project.

The projects supported or administered by the PM may not be related, other than by being
managed together. The specific form, function, and structure of a PMO is dependent upon the needs
of the organization that it supports.

A PMO may be delegated the authority to act as an integral stakeholder and a key decision
maker during the beginning of each project, to make recommendations, or to terminate projects or
take other actions as required to keep business objectives consistent. In addition, the PM may be
involved in the selection, management, and deployment of shared or dedicated project resources

A primary function of a PMO is to support project managers in a variety of ways which may include,
but are not limited to:

 Managing shared resources across all projects administered by the PMO;

 Identifying and developing project management methodology, best practices, and

standards;

 Coaching, mentoring, training, and oversight;

 Monitoring compliance with project management standards, policies, procedures, and

templates via project audits;
  Developing and managing project policies, procedures, templates, and other shared
documentation (organizational process assets); and

 Coordinating communication across projects.

Project managers and PMOs pursue different objectives and, as such, are driven by different
requirements. All of these efforts, however, are aligned with the strategic needs of the organization.
Differences between the role of project managers and a PMO may include the following:

 The project manager focuses on the specified project objectives, while the PM manages
maine program scope changes which may be seen as potential opportunities to better
achieve business objectives.

 The project manager controls the assigned project resources to best meet project objectives
while the PMO optimizes the use of shared organizational resources across all projects.

 The project manager manages the constraints (scope, schedule, cost, and quality, etc.) of the
individual projects while the PM manages the methodologies, standards, overall
risk/opportunity, and interdependencies among projects at the enterprise level.

Project Management and Operations Management

Operations are an organizational function performing the ongoing execution of activities

that produce the same product or provide a repetitive service. Examples include: production
operations, manufacturing operations, and accounting operations. Though temporary in nature,
projects can help achieve the organizational goals when they are aligned with the organization's
strategy. Organizations sometimes change their operations, products, or systems by creating
strategic business initiatives. Projects require project management while operations require business
process management or operations management. Projects can intersect with operations at various
points during the product life cycle, such as:

 At each closeout phase; When developing a new product, upgrading a product, or expanding
outputs;

 Improvement of operations or the product development process; or

 Until the divestment of the operations at the end of the product life cycle.

Role of a Project Manager

The project manager is the person assigned by the performing organization to achieve the
project objectives. The role of a project manager is distinct from a functional manager or operations
manager. Typically the functional manager is focused on providing management oversight for an
administrative area, and operations managers are responsible for a facet of the core business.

Depending on the organizational structure, a project manager may report to a functional

manager. In other cases, a project manager may be one of several project managers who report to a
portfolio or program manager that is ultimately responsible for enterprise-wide projects. In this type
of structure, the project manager works closely with the portfolio or program manager to achieve
the project objectives and to ensure the project plan aligns with the overarching program plan.

Many of the tools and techniques for managing projects are specific to project
management. However, understanding and applying the knowledge, tools, and techniques that
are recognized as good practice is not sufficient for effective project management. In addition to
any area-specific skills and general management proficiencies required for the project, effective
project management requires that the project manager possess the following characteristics:

 Knowledge. This refers to what the project manager knows about project management.

 Performance. This refers to what the project manager is able to do or accomplish while
applying their project management knowledge.

 Personal. This refers to how the project manager behaves when performing the project or
related activity. Personal effectiveness encompasses attitudes, core personality
characteristics and leadership the ability to guide the project team while achieving project
objectives and balancing the project constraints.

Project Management Body of Knowledge

This standard describes the project management processes, tools, and techniques used to
manage a project toward a successful outcome.

It is unique to the project management field and has interrelationships to other project
disciplines such as program management and portfolio management.

Project management standards do not address all details of every topic. This standard is
limited to single projects and the project management processes that are generally recognized as
good practice. Other standards may be consulted for additional information on the broader context
in which projects are accomplished. Management of programs is addressed in The Standard for
Program Management, and management of portfolios is addressed in The Standard for Portfolio
Management

Enterprise Environmental Factors

Enterprise environmental factors refer to both internal and external environmental factors
that surround or influence a project's success. These factors may come from any or all of the
enterprises involved in the project. Enterprise environmental factors may enhance or constrain
project management options and may have a positive or negative influence on the outcome. They
are considered as inputs to most planning processes.

 Enterprise environmental factors include, but are not limited to:

 Organizational culture, structure, and processes;

 Government or industry standards (e.g., regulatory agency regulations, codes of conduct,

product standards, quality standards, and workmanship standards);

 Infrastructure (e.g., existing facilities and capital equipment);

 Existing human resources (e.g., skills, disciplines, and knowledge, such as design,
development, law, contracting, and purchasing);

 Personnel administration (e.g., staffing and retention guidelines, employee performance

reviews and training records, overtime policy, and time tracking);

Enterprise Environmental Factors

 Company work authorization systems;

 Marketplace conditions;
 Stakeholder risk tolerances;

 Political climate;

 Organization's established communications channels;

 Commercial databases (e.g., standardized cost estimating data, industry risk study
information, and risk databases); and

 Project management information systems (e.g., an automated tool, such as a scheduling

software tool, a configuration management system, an information collection and
distribution system, or web interfaces to other online automated systems).