Copyright 2009 John Wiley & Sons, Inc.

Chapter 1

Projects in Contemporary

Organizations

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Introduction

Project management providesan organization with powerful tools that improve

its ability to plan, implement and control its activities

as well as

the ways in which it utilizes its people and resources.

Introduction

Much of project management developed by the military

– Navy’s Polaris program

– NASA’s space program

– Strategic defense initiative

Project management has found wide acceptance in industry

It has many applications outside of construction– Managing legal cases

– Managing new product releases

Introduction Continued

Main forces in driving the acceptance of project and other forms of management:

1. The exponential growth of human knowledge

2. The growing demand for a broad range of complex goods and services

3. Increased worldwide competition

All of these contribute to the need for organizations to do more and to do it faster

Project management is one way to do more faster

Projects Tend to be Large

Projects tend to be large– The Channel Tunnel, or Chunnel

– Denver International Airport

– Panama Canal expansion project

– Three Gorges Dam, China

Projects are getting larger over time– Flying: balloons planes jets rockets

reusable rockets

The more we can do, the more we try to do

Project Management Also Getting Smaller

1. More people are seeing the

advantages of project management

techniques

2. The tools are become cheaper

3. The techniques are becoming more

widely taught and written about

Main Goals of Project Management

1. Time

2. Cost

3. Performance

Time, cost, and performance are all related on a project

Direct Project Goals: Performance, Cost, Time

Figure 1-1

Project Management Institute (PMI)

The Project Management Institute is the major project management organization

Founded in 1969

Grew from 7,500 members in 1990 to over 260,000 in 2007

The Project Management Journal and PM Network are the leading project management journals

Project Manager

PM is expected to

– integrate all aspects of the project,

– ensure that the proper knowledge and resources

are available when and where needed,

and above all,

– ensure that the expected results are produced in

a timely, cost-effective manner.

Project Manager

Project manager is the key individual on a project

Project manager is like a mini-CEO

While project manager always has responsibility,

may not have necessary authority

Risk and conflict avoiders do not make happy project

managers.

Trends in Project Management

Achieving strategic goals

Achieving routine goals

Improving project effectiveness

Virtual projects

Quasi-projects

Recent Changes in Managing Organizations

1. Consensual management

2. Systems approach

3. Projects as preferred way to

accomplish goals

The Definition of a “Project”

A temporary endeavor undertaken to

create a unique product or service

(defined by PMI)

The Definition of a “Project”

Modern project management began with the Manhattan Project

In the early days, project management was used mainly for very complex projects

As the tools became better understood, they began to “trickle down” to smaller projects

It has also moved out of just manufacturing to services

Major Characteristics of a Project

Importance

Performance

Life cycle with a finite due date

Interdependencies

Uniqueness

Resources

Conflict

Why Project Management?

The main purpose for initiating a project is to

accomplish some goal

Project management increases the likelihood

of accomplishing that goal

Project management gives us someone (the

project manager) to spearhead the project

and to hold accountable for its completion

Advantages

Better control and better customer relations

Increase in their project’s return on investment

Shorter development times, lower costs, higher

quality and reliability, and higher profit margins

Sharper orientation toward results, better

interdepartmental coordination, and higher

worker morale

Negative Side to Project Management

Greater organizational complexity

Higher probability organizational policy

will be violated

Says managers cannot accomplish the

desired outcome

Conflict

The Project Life Cycle

Figure 1-3

Time Distribution of Project Effort

Figure 1-4

Another Possible Project Life Cycle

Figure 1-5

Risk During at the Start of the Life Cycle

Figure 1-6

Risk During the Life Cycle

Figure 1-7

The Structure of this Text

Follows the project life cycle

Some topics stand-alone

Other topics incorporated throughout

Part I: Project Initiation

1. Projects in Contemporary Organizations

2. Strategic Management and Project

Selection

3. The Project Manager

4. Negotiation and the Management of Conflict

5. The Project in the Organizational Structure

Part II: Project Planning

6. Project Activity Planning

7. Budgeting and Cost Estimation

8. Scheduling

9. Resource Allocation

Part III: Project Execution

10. Monitoring and Information Systems

11. Project Control

12. Project Auditing

13. Project Termination