Chapter 1 - Modern Project Management

Chapter 1:
Modern Project Management
Copyright © 2018 The McGraw-Hill Companies. All rights reserved. McGraw-Hill/Irwin 1–1
Learning Outcomes
Define a Project and Its Objectives
Identify and Explain Factors Related to

Successful Project Management
Explain Project Manager Responsibilities and

Authorities
Define and Develop Project Governance System
Align Projects with Organizational Strategy
Explain Different Project Management

Approaches
Projects
Millions watch Olympic Opening Ceremony
Citywide WiFi System Set to Go Live
Hospitals Respond to New Healthcare

Reforms
Apple’s New iPhone Hits the Market
City Receives Stimulus Funds to Expand

Light Rail System
All of these events represent projects.

Demand of Projects Management
The best indicator of demand for project management can be seen in
the rapid expansion of the Project Management Institute (PMI), a
professional organization for project managers.
PMI membership has grown from 93,000 in 2002 to more than

478,000 currently.
It’s nearly impossible to pick up a newspaper or business periodical

and not find something about projects.
Approximately $2.5 trillion (about 25% of the U.S. gross national

product) is spent on projects each year in the United States alone.
The budget for annual development program of Bangladesh for 2022-

23 is TK. 246066 crore.
Other countries are also increasingly spending more on projects.
Project
A complex, non-routine, one-time effort limited
by time, budget, resources, and performance
specifications designed to meet customer
needs.
• Major Characteristics of a Project

–Has an established objective
–Has a defined life span with a beginning and an end
–Requires across-the-organizational participation
–Involves doing something never been done before
–Has specific time, cost, and performance
requirements
Project Characteristics
Defined Objective
Every project has one or more defined objectives, like
building 12-storey apartment complex by Jan 1, 2023,
releasing version 2.0 of a specific software package
as quickly as possible.
This purpose/s has/have often been lacked in daily

organizational activities which are usually repetitive.
Project Characteristics………..
Defined Beginning and End
Projects have a defined start point and an end point.
This is different from ongoing duties and

responsibilities of traditional jobs.
In many jobs, individual move from one project to the

next as opposed to staying in one job.
After helping to construct a desalination installation

along the gulf of Mexico, an engineer may next be
assigned to construct an oil refinery plant in Malaysia.
Project Characteristics…………..
Involvement of Several Departments
- Projects typically require the combined efforts
of a variety of specialists.
- Instead of working in separate offices under

separate managers, project participants
(engineers, financial analysts, marketing
professionals, or quality control specialists,
etc.) work closely together under the guidance
of a project manager to complete a project.
Uniqueness
Projects are non-routine and have some unique
activities/elements for those organizations that have
undertaken the projects.
Projects accomplishes something that has never been

done before in the organizations.
For example, building a hybrid car, landing two

mechanical rovers on Mars, customized construction
project, etc.
This requires solving previously unsolved problems

and sometimes breakthrough technology.
Time, Cost, and Performance Requirements
-Specific time, cost, and performance requirements
bind projects.
-Projects are evaluated according to accomplishment,

cost, and time spent. These triple constraints impose
a higher degree of accountability than in other
routine organizational activities.
-These three also highlight one of the primary

functions of project manager, which is balancing the
trade-offs between time, cost, and performance.
Project Is Not
It is not regular and repetitive

everyday work.
Comparison of Routine Work with Projects
Routine, Repetitive Work Projects

Taking class notes Writing a term paper
Daily entering sales receipts into Setting up a sales kiosk for a
the accounting ledger professional accounting
meeting
Responding to a supply-chain
request Developing a supply-chain
information system
Practicing scales on the piano
Writing a new piano piece
Routine manufacture of an Apple
iPod Designing an iPod that is
approximately 2 X 4 inches,
interfaces with PC, and stores
10,000 songs
Attaching tags on a
manufactured product Wire-tag projects for GE and
TABLE 1.1
Wal-Mart
Programs versus Projects
• Program
– A series of coordinated, related, multiple projects that
continue over an extended time and are intended to
achieve a goal.
– A higher-level group of projects targeted at a common goal.
– Programs and projects are similar in the sense that they
both are directed toward goals and require plans and
resources to reach goals.
– Example:
• Project: completion of a required course in project
management.
• Program: completion of all courses required for a
business major.
Program Management
• It is the process of managing a group of ongoing, inter-
dependent, related projects in a coordinated way to
achieve strategic objectives.
• For example, a pharmaceutical organization could have

a program for curing cancer. The cancer program
includes and coordinates all cancer related projects that
continue over an extended time period. Coordinating all
these projects under the oversight of a team provides
benefits not available from managing them individually.
This team also oversees the selection and prioritizing
of the projects that are included in the cancer program.
Project Life Cycle
•Project life cycle is a unique nature of project work.
•It is uses as a cornerstone of managing projects.
•It recognizes that projects have a limited life span and that
there are predictable changes in the level of effort and focus
over the life of the project.
•There are a number of different life-cycle models in literature.
•The project life cycle typically passes sequentially through four
stages: Defining, Planning, Executing, and Delivering.
•The starting point begins the moment the project is given the
go-ahead. Project effort starts slowly, builds to a peak, and then
declines to delivery of the project to the client (external or
internal).
Project Life Cycle
FIGURE 1.1
Defining
• Specifications of the project are defined
• Project objectives are established
• Teams are formed
• Major responsibilities are assigned
Planning
• In this stage, the level of effort is increased.
• Plans are developed to determine what the

project will entail, when it will be scheduled,
whom it will benefit, what quality level should be
maintained, and what the budget will be.
Executing
• In this stage, major portion of project activities
(both physical and mental) are performed.
• The physical product is produced.
• Time, cost, and specification measures are used

for control (is the project on schedule, on
budget, and meeting specifications? what are
forecasts of each of these measures? what
changes are necessary? etc.)
Delivering/Closing
This stage includes three activities:
-delivering the project’s product to the client (may
include customer training, transferring
documents, etc.)
-redeploying project resources (releasing project

resources to other projects, finding new
assignment for team members, etc.)
-post-project review (assessing performance,

capturing lessons learned, etc.)
Project Life Cycle…….
The project life cycle is used by some project groups
to depict the timing of major tasks over the life of the
project.
For example, the design team might plan a major

commitment of resources in the defining stage, while
the quality team would expect their major effort to
increase in the later stages of the project life cycle.
Because most organizations have a portfolio of

projects going on concurrently, each at a different
stage of each project’s life cycle, careful planning and
management at the organization and project levels are
imperative.
Challenges of Project Management
• The Project Manager (PM)
– Manages temporary, non-repetitive activities and
frequently acts independently of the formal organization.
• Marshals resources for the project.
• Is linked directly to the customer interface.
• Provides direction, coordination, and integration to the
project team.
• Is responsible for performance and success of the
project.
– Must induce the right people at the right time to address
the right issues and make the right decisions.
Project Manager vs Functional Manager
• In small sense, PMs perform the same function (plan,
schedule, motivate, and control) as other traditional
functional managers (FMs).
• The PM is unique in a sense that he/she has to manage

unique set of activities all the time.
• Unlike traditional FMs, PMs generally possess only

rudimentary technical knowledge to make different
decisions.
Unique Activities of PM
• PM creates a project team and organization where none
existed.
• PM must decide what and how things should be done

instead of managing set processes.
• They must meet the challenges of each phase of the

project life cycle, and even oversee the dissolution of
their operation when the project is completed.
• He/She must work with diverse troupe of characters to

complete projects.
Unique Activities of PM……
• He/She must manage the tension between customer
expectations and what is feasible and reasonable.
• Project managers provide direction, coordination, and

integration to the project team, which is often made up of
part-time participants loyal to their functional
departments.
• PM often must work with various external groups –

vendors, suppliers, subcontractors – who do not
necessarily share their project allegiance.
Responsibilities of PM
• PMs are ultimately responsible for performance.
• They must ensure that appropriate trade-offs are

made between time, cost, and performance
requirements of the project.
• They must orchestrate the completion of the

project by inducing the right people, at the right
time, to address the right issues, and make the
right decisions.
Working as PM
• Working on projects can be extremely rewarding.
• Each working day is different from the last day (working is not
boring).
• PM find their work meaningful and satisfying because most
projects are directed at solving some tangible problem or
pursuing some opportunity.
• PM and team members can enjoy the act of creating
something new and innovative.
Good project managers are always in demand. Every industry

is looking for effective PM who can get the right things done
on right time.
Working as Part of a Project Team
• First exposure to project management occurs while
working part-time in a team assigned to complete a
specific project.
• People must learn how to juggle day-to-day

commitments with additional project responsibilities.
• The team may consist of strangers from different

departments and organizations.
• This group has to bear the pain to grow as a team.
• Members should have positive force to help convert the

team into effective project team.
Responsibilities of Team Members
• Project members are expected to use different tools and
techniques of project management.
• They work with others to create a project schedule and budget

that will guide project execution.
• They need to understand the priorities so that they can make

independent decisions.
• They must know how to monitor and report project progress.
• Project members need to avoid the dangers of scope creep,

manage the critical path, engage in risk management,
negotiate, and communicate through virtual tools.
Project Management
• Project management is rapidly becoming a
standard way of doing business.
• An increasing percentage of the typical firm’s

effort is being devoted to implement various
projects.
• The future promises an increase in the

importance and the role of projects in contributing
to the strategic direction of organizations.
The Importance of Project Management
• Factors leading to the increased
use of project management:
– Compression of the product life cycle
– Global competition
– Knowledge explosion
– Corporate downsizing
– Increased customer focus
– Small projects that represent big
problems
Compression of the Product Life Cycle
• It is one of the most significant driving forces behind the

demand for project management.
High-Tech Industry: 6 months to 3 years
30 years back: 10 to 15 years
Time to market for new products with short life cycles has
become increasingly important (6 month delay can result in
33% less revenue)
Speed becomes a major competitive advantage.
Organizations are relying on cross-functional project teams to

reduce time to market of new products.
Knowledge Explosion
• The growth in new knowledge has increased the
complexity of projects.
• In today’s electronic age, it is becoming hard to find a

new product that does not contain a microchip.
• Product complexity has increased the need to integrate

divergent technologies.
• Project management has emerged as an important

discipline for achieving the task.
Triple Bottom Line
• The threat of global warming has brought sustainable

business practices to the forefront.
• Business can no longer simply focus on maximizing profit to

the detriment of environment and society.
• Efforts to reduce carbon imprint and utilize renewable

resources are realized through effective project
management.
• The impact of this movement towards sustainability can be

seen in the objectives and techniques used to complete
projects.
Corporate Downsizing
• Downsizing (rightsizing) and sticking to core
competencies have become necessary to survive in
today’s business environment.
• In today’s flatter and leaner organizations, project

management is replacing middle management as a
way of ensuring that things get done.
• Companies outsource significant segments of project

work, and project managers have to manage not only
their own people but also their counterparts in different
organizations.
Increased Customer Focus
• Increased competition has placed a premium on customer
satisfaction.
• Customers want customized products/services that cater to

their specific needs. This requires much closer relationship
with customers.
• Increased customer attention has prompted the

development of customized products/services.
• Project management is critical both to development of

customized products/services and to sustaining lucrative
relationship with customers.
Small Projects Represent Big Problems
• The need to remain competitive has led to implementation of

many projects concurrently which led to many new problems.
• Sharing and prioritizing is a major challenge.
• Many small projects has increased the level of risk and

amount of required resources and reduced positive impacts
compared to few large projects.
• Efficiency level is reduced in implementing many small

projects concurrently.
• Organizations with many small projects face the most difficult

project management problems.
Project Governance
Competing in a global marketplace influenced by

rapid change, innovation, and time to market means
organizations manage more and more projects.
Centralization of project management process is

required for coordination and management of many
projects in this changing environment.
Centralization entails governance of all project

processes and practices to improve project
management.
Significance of Project Governance
Improve project management process over long time
horizon
Providing overview of all project management

activities
Providing big picture of how resources are being used
Developing rough metric for measuring the

improvement in managing projects
Providing link to senior management with actual

project execution management
Operational Meaning of Project Governance
It necessitates combining all of the major
dimensions of project management under one
umbrella.
Each dimension is connected in a seamless,

integrated domain.
It means applying a set of knowledge, skills, tools,

and techniques to a collection of projects in order to
move the organization toward its strategic goals.
Projects and Organizational Strategy
Projects are the modus operandi for implementing

strategy.
But sometimes projects fail to support the strategic plan

of the organization (written by one group, selected by
another, and implemented by other group)
These independent decisions by different group of

managers create a set of conditions leading to conflict,
confusion, and frequently an unsatisfied customer.
Projects and Organizational Strategy…
Strategic alignment of projects is needed to conserve and

effective use of organization resources.
Selection criteria is needed to ensure each project is

prioritized and contributes to strategic goals.
Ensuring alignment requires a selection process that is

systematic, open, consistent, and balanced.
Management of the project portfolio ensures that only the

most valuable projects are approved and managed across the
entire organization.
Integrated Project Management Systems
• Problems resulting from the use of piecemeal
project management systems:
– Do not tie together the overall strategies of the firm.
– Fail to prioritize selection of projects by their importance of

their contribution to the firm.
– Are not integrated throughout the project life cycle.
– Do not match project planning and controls with

organizational culture to make appropriate adjustments in
support of project endeavors.
Integrated
Management of
Projects
FIGURE 1.2
Project Management: A Socio-Technical
Approach
There are two dimensions within the actual

execution of the project:
i.Technical
ii.Sociocultural
The Technical and
Sociocultural
Dimensions
of the Project
Management
Process
FIGURE 1.3
Technical Dimension
The technical dimension includes planning,

scheduling, and controlling projects.
Scope Statement – To link project and customer,
facilitate planning and control
Work Breakdown Structure – Facilitate planning and
monitoring, group task into a work package
Effects of project changes are documented and
traceable.
This integrated information approach can decision
information to PMs and customers appropriate to their
level and needs.
Sociocultural Dimension
It centers on creating a social system that combines
the talents of a divergent set of people working in a
project.
PMs must shape a project culture that stimulated

teamwork and high level of motivation as well as a
capacity to identify and resolve problems. PM must
build a cooperative social network.
It involves managing the interface between the

project and external environment.
Key Terms
Program
Project
Project life cycle
Sociotechnical perspective

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Chapter 1:

Modern Project Management

Identify and Explain Factors Related to

Explain Project Manager Responsibilities and

Define and Develop Project Governance System

Align Projects with Organizational Strategy

Explain Different Project Management

Citywide WiFi System Set to Go Live

Hospitals Respond to New Healthcare

Apple’s New iPhone Hits the Market

City Receives Stimulus Funds to Expand

All of these events represent projects.

PMI membership has grown from 93,000 in 2002 to more than

It’s nearly impossible to pick up a newspaper or business periodical

Approximately $2.5 trillion (about 25% of the U.S. gross national

The budget for annual development program of Bangladesh for 2022-

Other countries are also increasingly spending more on projects.

• Major Characteristics of a Project

This purpose/s has/have often been lacked in daily

This is different from ongoing duties and

In many jobs, individual move from one project to the

After helping to construct a desalination installation

- Instead of working in separate offices under

Projects accomplishes something that has never been

For example, building a hybrid car, landing two

This requires solving previously unsolved problems

-Projects are evaluated according to accomplishment,

-These three also highlight one of the primary

It is not regular and repetitive

Routine, Repetitive Work Projects

• For example, a pharmaceutical organization could have

• Project objectives are established

• Teams are formed

• Major responsibilities are assigned

• Plans are developed to determine what the

• The physical product is produced.

• Time, cost, and specification measures are used

-redeploying project resources (releasing project

-post-project review (assessing performance,

For example, the design team might plan a major

Because most organizations have a portfolio of

• The PM is unique in a sense that he/she has to manage

• Unlike traditional FMs, PMs generally possess only

• PM must decide what and how things should be done

• They must meet the challenges of each phase of the

• He/She must work with diverse troupe of characters to

• Project managers provide direction, coordination, and

• PM often must work with various external groups –

• They must ensure that appropriate trade-offs are

• They must orchestrate the completion of the

Good project managers are always in demand. Every industry

• People must learn how to juggle day-to-day

• The team may consist of strangers from different

• This group has to bear the pain to grow as a team.

• Members should have positive force to help convert the

• They work with others to create a project schedule and budget

• They need to understand the priorities so that they can make

• They must know how to monitor and report project progress.

• Project members need to avoid the dangers of scope creep,