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Project Management

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  1. Project Management BehnamFaizabadi PhD , PMP , SSBB IMI Training Center Behnam Faizabadi PhD ,PMP, SSBB

  2. Topics • Main functions in an Enterprise • Operations perspective • Project definition • Project Activity • Project Management Behnam Faizabadi PhD ,PMP, SSBB

  3. Main functions in an Enterprise Behnam Faizabadi PhD ,PMP, SSBB

  4. Top-down Approach to OM Strategy • Operations Strategy Decisions • Strategic (long-range) • Needs of customers(capacity planning) • Tactical (medium-range) • Efficient scheduling of resources • Operational planning and control (short-range) • Immediate tasks and activities Behnam Faizabadi PhD ,PMP, SSBB

  5. Significant Events in Operations Management Behnam Faizabadi PhD ,PMP, SSBB

  6. New Challenges in OM FromTo • Local or national focus • Batch shipments • Low bid purchasing • Lengthy product development • Standard products • Job specialization • Global focus • Just-in-time • Supply chain partnering • Rapid product development, alliances • Mass customization • Empowered employees, teams Behnam Faizabadi PhD ,PMP, SSBB

  7. Competitive Priorities • Quality • Cost • Time Delivery • Diversity Behnam Faizabadi PhD ,PMP, SSBB

  8. Dell Computer Company “How can we make the process of buying a computer better?” • Sell custom-build PCs directly to consumer • Integrate the Web into every aspect of its business • Operate with six days inventory • Build computers rapidly, at low cost, and only when ordered • Focus research on software designed to make installation and configuration of its PCs fast and simple Behnam Faizabadi PhD ,PMP, SSBB

  9. Repetitive Process (Modular) Low-Volume (Intermittent) High-Volume (Continuous) Process focus projects, job shops,(machine, print, carpentry) Standard Register Mass Customization (difficult to achieve, but huge rewards) Dell Computer Co. High Variety One or few units per run, high variety (allows customization) Changes in modules Modest runs, standardized modules Repetitive (autos, motorcycles) Harley Davidson Changes in attributes (such as grade, quality, size, thickness, etc.) Long runs only Poor strategy Product focus (commercial baked goods, steel, glass) Nucor Steel Operation Perspectives Behnam Faizabadi PhD ,PMP, SSBB

  10. Volume and Variety of Products Volume and Low Volume High Repetitive High Volume Variety of Variety Process Process Low Variety Products (Intermittent) (Modular) Process (Continuous) One or very few Projects Mass Customization units per lot Very small runs, high Job Shops variety Modest runs, modest Disconnected variety Repetitive Long runs, modest Connected Poor Strategy (High variable costs) variations Repetitive Very long runs, Continuous changes in attributes Equipment utilization 5%-25% 20%-75% 70%-80% Behnam Faizabadi PhD ,PMP, SSBB

  11. Project Definition (H.Kerzner) A project can be considered to be any series of activities and tasks that: • Have a specific objective to be completed within certain specifications • Have defined start and end dates • Have funding limits (if applicable) • Consume human and nonhuman resources (i.e., money, people, equipment) • Be multifunctional (i.e., cut across several functional lines) Behnam Faizabadi PhD ,PMP, SSBB

  12. Project Definition (James P. Lewis) In recent years writers like Tom Peters have suggested that in typical organizations as much as 50 percent of the work is done in a project format A one-time, multitask job that has clearly defined starting and ending dates, a specific scope of work to be performed, a budget, and a specified level of performance to be achieved. Behnam Faizabadi PhD ,PMP, SSBB

  13. Project definition (Harvey A. Levine) A Project Is • A group of tasks, performed in a definable time period, in order to meet specific set of objectives. • It is likely to be a one-time program. • It has a life cycle, with a specific start and end. • It has a work scope that can be categorized into definable tasks. • It has a budget. • It is likely to require the use of multiple resources. Many of these resources may be scarce and may have to be shared with others. • It may require the establishment of a special organization, or the crossing of traditional organizational boundaries. Behnam Faizabadi PhD ,PMP, SSBB

  14. Project Definition (PMI) A project is a temporary endeavor undertaken to create a unique product, service, orresult. Behnam Faizabadi PhD ,PMP, SSBB

  15. Project Characteristics • Temporary • Unique • Progressive Elaboration Behnam Faizabadi PhD ,PMP, SSBB

  16. Projects vs. Operational Work Organizations perform work to achieve a set of objectives. Generally, work can be categorized as either projects or operations, although the two sometimes overlap. They share many of the following characteristics: • Performed by people • Constrained by limited resources • Planned, executed, and controlled. Behnam Faizabadi PhD ,PMP, SSBB

  17. Projects vs. Operational Work Projects and operations differ primarily in that operations are ongoing and repetitive, while projects are temporary and unique. Behnam Faizabadi PhD ,PMP, SSBB

  18. Examples of projects include • Developing a new product or service • Effecting a change in structure, staffing, or style of an organization • Designing a new transportation vehicle • Developing or acquiring a new or modified information system • Constructing a building or facility • Building a water system for a community • Running a campaign for political office • Implementing a new business procedure or process • Responding to a contract solicitation. Behnam Faizabadi PhD ,PMP, SSBB

  19. Projects and Strategic Planning Projects are a means of organizing activities that cannot be addressed within the organization’s normal operational limits. Projects are, therefore, often utilized as a means of achieving an organization’s strategic plan, whether the project team is employed by the organization or is a contracted service provider. Behnam Faizabadi PhD ,PMP, SSBB

  20. Projects and Strategic Planning • A market demand (e.g., an oil company authorizes a project to build a new refinery in response to chronic gasoline shortages) • An organizational need (e.g., a training company authorizes a project to create a new course in order to increase its revenues) • A customer request (e.g., an electric utility authorizes a project to build a new substation to serve a new industrial park) • A technological advance (e.g., a software firm authorizes a new project to develop a new generation of video games after the introduction of new game playing equipment by electronics firms) • A legal requirement (e.g., a paint manufacturer authorizes a project to establish guidelines for the handling of a new toxic material). Behnam Faizabadi PhD ,PMP, SSBB

  21. What is Project Management? A BRIEF HISTORY OF PROJECT MANAGEMENT Although human history is marked by projects—from the Roman aqueducts to the American transcontinental railroad—project management was not developed as a separate discipline until the mid-twentieth century. Beginning with the nuclear weapons programs after World War II, specific techniques emerged for planning and managing their enormous budgets and workforce. Behnam Faizabadi PhD ,PMP, SSBB

  22. What is Project Management? The most well-known, PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method), have become synonymous for project scheduling techniques. (Both PERT and CPM were much more than scheduling techniques, but the scheduling graphics they produced, called PERT charts and Critical Path charts, were so distinctive that many people have mistakenly equated project management with PERT and Critical Path charts.) Behnam Faizabadi PhD ,PMP, SSBB

  23. What is Project Management? PERT and CPM evolved through the 1950s and 1960s to become commonplace on major space and defense programs, but they saw limited use beyond those industries. From the mid-1960s through the mid-1980s, project management methods grew and matured but still found a relatively limited audience. Even at universities, project management was usually taught on a limited basis in some engineering schools. Behnam Faizabadi PhD ,PMP, SSBB

  24. What is Project Management? However, in the 1990s, interest in project management soared because of a convergence of several factors. Computer technology was making a huge difference in the way we worked. More powerful computers and software also made it easier to use the classic project management techniques. Project management methods today are not that much changed from a generation ago, but they have become commonly accepted in every industry. Behnam Faizabadi PhD ,PMP, SSBB

  25. What is Project Management? • Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. • Project management is accomplished through the application and integration of the project management processes of initiating, planning, executing, monitoring and controlling, and closing. • The project manager is the person responsible for accomplishing the project objectives. Behnam Faizabadi PhD ,PMP, SSBB

  26. Project Management Knowledge Areas Behnam Faizabadi PhD ,PMP, SSBB

  27. Project Life Cycle Project life cycles generally define: • What technical work to do in each phase (for example, in which phase should the architect’s work be performed?) • When thedeliverables are to be generated in each phase and how each deliverable is reviewed, verified, and validated Behnam Faizabadi PhD ,PMP, SSBB

  28. Project Life Cycle • Who is involved in each phase (for example, concurrent engineering requires that the implementers be involved with requirements and design) • How to control and approve each phase. Behnam Faizabadi PhD ,PMP, SSBB

  29. Project Life Cycle Typical Project Cost and Staffing Level Across the Project Life Cycle Behnam Faizabadi PhD ,PMP, SSBB

  30. Portfolio and Program Management Behnam Faizabadi PhD ,PMP, SSBB

  31. What Is a Portfolio? A portfolio is a collection of projects (temporary endeavors undertaken to create a unique product, service, or result) and/or programs (a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually) and other work that are grouped together to facilitate the effective management of that work to meet strategic business objectives. The components of a portfolio are quantifiable; that is, they can be measured, ranked, and prioritized. Behnam Faizabadi PhD ,PMP, SSBB

  32. What Is a Portfolio? Behnam Faizabadi PhD ,PMP, SSBB

  33. Behnam Faizabadi PhD ,PMP, SSBB

  34. What Is Portfolio Management? Portfolio management is the centralized 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. (project portfolio management) Behnam Faizabadi PhD ,PMP, SSBB

  35. What Is Portfolio Management? Portfolio management combines : • the organization’s focus of ensuring that projects selected for investment meet the portfolio strategy with • the project management focus of delivering projects effectively and within their planned contribution to the portfolio. Behnam Faizabadi PhD ,PMP, SSBB

  36. The Link With Organizational Strategy Behnam Faizabadi PhD ,PMP, SSBB

  37. The Link Between Portfolio Management and Organizational Governance Behnam Faizabadi PhD ,PMP, SSBB

  38. Cross-Company Portfolio Management Process Relationships Behnam Faizabadi PhD ,PMP, SSBB

  39. Role of the Portfolio Manager • Playing a key role in project prioritization, making sure there is a balance of components and that the components align with strategic goals • Providing key stakeholders with timely assessment of portfolio and component performance, as well as early identification of (and intervention into) portfolio-level issues and risks that are impacting performance • Measuring the value to the organization through investment instruments, such as return on investment (ROI), net present value (NPV), payback period (PP), meeting Congressional or legislative mandates, achieving the educational needs of current or future students, etc. Behnam Faizabadi PhD ,PMP, SSBB

  40. Role of the Portfolio Manager • Ensuring timely and consistent communication to the stakeholders on progress, impacts, and changes associated with the management of the portfolio, in order to maintain stakeholder understanding and support of the objectives and approach • Participating in program and project reviews to reflect senior level support, leadership, and involvement in important matters. Behnam Faizabadi PhD ,PMP, SSBB

  41. Typical criteria for Project Selection • Business criteria • Strategic alignment • Productivity • Process improvement • Competitive advantage • Business impact • Employee satisfaction • Customer satisfaction • Intellectual property • Impact of not undertaking the project. Behnam Faizabadi PhD ,PMP, SSBB

  42. Typical criteria may include • Financial benefits criteria • Revenue growth • Cost savings • Cost avoidance • Internal Rate of Return (IRR) – See IRR excel file • Net Present Value (NPV)- See NPV excel file • Return on Investment (ROI)- See ROI excel file • Payback period – see Payback period excel file • Cost • Cash flow generation Behnam Faizabadi PhD ,PMP, SSBB

  43. NPV Net present value (NPV) is a standard method for the financial appraisal of long-term projects. NPV = Present value of net cash flows. • If NPV > 0 the investment would add value to the firm the project may be accepted • NPV < 0the investment would subtract value from the firm the project should be rejected • NPV = 0 the investment would neither gain nor lose value for the firm We should be indifferent in the decision whether to accept or reject the project. This project adds no monetary value. Decision should be based on other criteria, e.g. strategic positioning or other factors not explicitly included in the calculation Behnam Faizabadi PhD ,PMP, SSBB

  44. Typical criteria may include • Risk-related criteria • Business risks • Technology risks • Project management risks • Implementation risks • Market acceptance risks • Public relation risks • Brand image risks Behnam Faizabadi PhD ,PMP, SSBB

  45. Typical criteria may include • Legal/Regulatory compliance criteria • Human Resource (HR)-related criteria • Specific competency • Employee satisfaction • Resources availability • HR capacity • HR capacity to integrate the solution • Impact on working condition Behnam Faizabadi PhD ,PMP, SSBB

  46. Typical criteria may include • Marketing criteria • Market impact • Probability of success • Time to market • Impact on existing product lines • Estimated product life Behnam Faizabadi PhD ,PMP, SSBB

  47. Typical criteria may include • Technical criteria • Architectural alignment • Information delivery • Success probability (inverse of risk) • System RAS • Reliability • Availability • Supportability • Conformity to standards Behnam Faizabadi PhD ,PMP, SSBB

  48. Methods of Project Selection • Mathematical methods • Scoring Models Behnam Faizabadi PhD ,PMP, SSBB

  49. Multiple Criteria Weighted Ranking Behnam Faizabadi PhD ,PMP, SSBB

  50. Single Criterion Prioritization Model Behnam Faizabadi PhD ,PMP, SSBB