The basis of understanding project management is the understanding of project. A project is defined as “work that is temporary and produces a unique product or service.” Temporary work has a beginning and an end. When the work is finished, the team disbands or moves on to new projects. Producing unique products or services is why projects are often referred to as one-time shots.
It is often easiest to understand what projects are by also stating what they are not. If projects are temporary and unique, ongoing operations are neither; for example:
- Developing a more accurate weather forecasting software model is a project; using the model to forecast the weather week after week is an operation.
- Implementing a software package to process loan applications at a credit union is a project; processing the loan applications becomes an ongoing operation.
- Installing robots to paint automobile bodies at an assembly plant is a project; painting cars is an operation.
- Writing a professional development class on risk management is a project; presenting the class repeatedly to many customers is an ongoing operation.
The project management discipline covers a broad spectrum of concepts, tools, and techniques designed to enable the best possible project selection and execution. Exhibit 1.2 breaks down the discipline of project management into the major functions an organization must perform to take a project from concept to delivery.
Functions of Project Management:
- Selection
- Definition
- Planning
- Control
- Risk Management
- Quality Management
- Close Out
 |
| Project management functions |
Selection:
Pursuing the correct projects is easily as important as the effectiveness with which the project is carried out. Project selection contains the following activities:
- Create a business case for the project. The business case describes the project’s purpose and benefits in relation to the goals of the firm; identifies financial targets for the project such as return on investment, internal rate of return, and payback period; and estimates resources in cost and personnel. It serves as a basis for documenting commitment to the project.
- Align the project’s goals in the organization. Aligning the project tests project goals against strategic goals for the firm and other involved stakeholders. For instance, if multiple departments must cooperate to accomplish a project, understand how the project will help the departments meet their goals.
- Prioritize the project relative to other projects and ongoing operations. Every firm has limited time, people, and money to spend on projects. Therefore, each new project must be weighed against existing commitments and available resources.
It is important to recognize that the project manager responsible for delivering the project is rarely involved in any of the selection activities. Operational or product managers typically develop the business case and test the project for goal alignment. Executives prioritize the project. That is a risk for the project, the project manager, and the organization, which is why the risk management function overlaps project selection.
Definition:
After a project is selected, a project manager is assigned and goes to work building the foundation for the project’s success. Project definition activities include the following:
- Identify all stakeholders on the project and document their goals and involvement. Stakeholders include customers, vendors, core team members, and supporting management in the firm.
- Develop a relationship with the project sponsor. A sponsor is an executive in the organization who is responsible for the success of the project. While the project manager performs the day-to-day oversight of the project, the sponsor provides the executive authority necessary to overcome organizational obstacles.
- Record the goals and constraints of the project using a statement of work or similar document. Goals and constraints can include the scope, budget, key schedule milestones, authority structure for the project, measures of success, communication standards, and other facts or assumptions that will affect the project. This document is then signed by the project stakeholders, establishing a baseline agreement.
Project definition is the foundation for success because it establishes a common understanding of the goals and constraints of the project. Without it, the project team is shooting at a moving target.
Planning:
With a clear goal in place, documented by the statement of work and business case, the project manager builds the action plan that describes the who, what, when, where, and how of accomplishing the project. Planning typically includes the following activities:
- Develop a detailed description of the work on the project using a work breakdown structure (WBS). The WBS breaks the overall work of the project into small, individual tasks, much the same way an organization chart for a company breaks down authority.
- Analyze the sequence of the tasks. For all the tasks on the WBS, understand which tasks have to be performed before others. The classic diagram for this analysis is called a network diagram. (Both PERT and Critical Path charts are forms of network diagrams.)
- Estimate the tasks to determine the required skills, effort, equipment, and materials. Even though the business case provides a high-level cost estimate, it is necessary to have detailed estimates to assign resources to accomplish tasks.
- Use the detailed information derived from the work breakdown structure, network diagram, and task estimating to create “bottom-up” estimates for the project. In other words, add up the cost, and schedule estimates of the individual tasks to determine the cost and duration of the entire project.
- Establish detailed project schedules documenting specific start and finish dates, responsibilities, and completion criteria for each task.
- Determine the number of people on the team and what skills are necessary. For part-time team members, identify the dates their skills and effort are required. Staffing the project team often requires negotiating with other project managers or functional managers.
- Prepare contracts for vendors who are participating in the project.
Control:
The control function can be likened to driving a car: The driver monitors the vehicle and the environment, intentionally steers toward the destination, and takes corrective action as obstacles or unexpected events arise. For project managers, driving the project includes:
- Monitor the progress of the project against the plan. Projects are typically too large for subjective assessments of progress to be valuable. Instead, we need specific measurements, such as the percent of the budget consumed to date. The detailed nature of the project plan allows for detailed measurements of cost and schedule progress. We can see which tasks are late, which are early, and which are consuming more or less effort than was estimated.
- Communicate with the project team and stakeholders. Because life and projects rarely go as planned, continuous, purposeful communication is necessary to keep all project participants informed and working together in harmony. Stakeholder communication includes formal reporting to customers and management.
- Form the project team and attend to its health. Forming the team means assembling a disparate group of people into a team with a shared goal. Consciously build and maintain trusting relationships within the team. Monitor the quality of team decision making to ensure appropriate participation and productivity.
- Maintain the cost-schedule-quality equilibrium. During project selection and definition, the stakeholders agreed on what to create, how much to spend, and when it had to be delivered. The greatest threat to that balance comes from adding scope (additional work) during the project. Any changes to the project that affect the cost, schedule, or product must be approved by the project manager, customer, and other affected stakeholders.
- Take corrective action to keep the project on track.
Risk Management:
Because every project is unique, every project includes a high degree of uncertainty. Risk management is the systematic practice of identifying and reducing the threats that exist in the project and the project’s environment. Planning for risk begins during the development of the business case and continues through definition and planning as each successive function provides a more detailed view of the project. During the control function, risk management activities mirror the other control activities as we monitor and communicate each risk and, if necessary, take action to respond to the risk.
Quality Management:
Delivering the correct product or service, which performs as the customer expects, is no accident. Practices developed and established within the quality discipline (as defined by Deming, Crosby, et al.) can be applied to the project management discipline. This integration begins as the project is conceived and carries forward until the outcome of the project is created and is accepted by the customer. These practices focus on clearly understanding what the customer wants and consciously planning to deliver it, including methods for ensuring the product will be correctly built.
Close Out:
Project completion goes beyond delivery of the product. In addition to ensuring customer acceptance, the project manager will disband the project team and dismantle the project infrastructure. A significant goal of project close out is capturing the lessons of the project so that they can be passed on to the organization.
As demonstrated in Exhibit 1.2, the functions of definition, planning, and control are ongoing throughout the project. It is important to recognize that no matter how well a project is defined or planned, during the course of the project, changes can occur that require the scope, cost, schedule, or some other constraint to be modified. When that happens, the project manager will revisit the activities included in project definition and planning.
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