CH 1

1. CH 1 Introduction to Project Management 1

2. Objectives: After completion of this chapter you will be able to; • Define what a project is and is not • Define project management • Understand the history of project management • Understand the skills necessary to lead projects • Understand the organizational structures where projects exist

3. General Background Organizations are dependent on succesfull execution of projects to survive now more than ever The profitability of an organization is affected by how succesfull its projects are and how well are managed. One key reason for the complexity is that IT changes quickly , creating a shortage of the required IT skill sets.

4. Importance of Project Management • Due to the size, complexity, and number of information technology (IT) projects, organizations face ever-increasing challenges • Global U.S. government spending topped $150 billion in 2007 • Forrester Research estimates that global IT spending—purchases of computers, software, and services by companies and governments—will drop by 3 percent in 2009, to $1.66 trillion

5. Importance of Project Management 5 billion dollars less spendt in 2008 This is the first time in 7 years that global IT spendings has gone down

6. Importance of Project Management • Forrester Research estimates that about 20 percent of current IT budgets are going into project development • Gartner “In a worst case scenario, our research indicates an IT spending increase of 2.3 percent in 2009, down from our earlier projection of 5.8 percent. Developed economies, especially the United States and western Europe, will be the worst affected, but emerging regions will not be immune. Europe will experience negative growth in 2009; the United States and Japan will be flat.”

7. IT Projects Are Different • Traditionally high turnover rates of IT workers • Level of uniqueness and complexity of each project due to the rapid changes in technology • Software is hard to visualize by the developer let alone the customer • Difficulty in getting accurate customer requirements • Rate of change in requirements • Difficulty in testing all the possible states of software • Constant training needed to keep team members current with the technology

8. IT Projects Are Different

9. Advantages of Using Formal Project Management Practices • Improvement in customer satisfaction • Better cost performance, higher return on investment • Better schedule performance, better allocation of time commitments and better utilization of resources, higher productivity • Increased quality reducing re-work • Increase in delivering required features • Will make everyone happier (stakeholders, team members, management…)

10. History of Project Management • Modern project management began with the Manhattan Project, which the U.S. military led to develop the atomic bomb • In 1917 Henry Gantt developed the Gantt chart as a tool for scheduling work in job shops • In 1958, the Navy developed PERT charts • In the 1970s, the military began using project management software, as did the construction industry • By the 1990s, virtually every industry was using some form of project management

11. History of Project Management A key tool used to this day is the Gantt Chart Today’s PMs use Gantt Chartts to communicate project status with sponsors and the rest of the team.

12. Gantt chart example

13. Project Management Definitions: What Is a Project? • A temporary sequence of related activities that must be completed to create a unique product or service • A project has 4 Key Characteristics: • Temporary • Unique • Progressive Elaboration • Single unique purpose

14. What Is a Project? A project reaches its end when one of the following occurs The project’s objectives have been achieved İt has been determined that the project’s objectives will not or cannot be achieved The need for the project no longer exists and the project is terminated

15. A Project Is Temporary • It must have a beginning and an end • A project is done when one of the following occurs: • The project’s objectives have been achieved, as agreed by the sponsor • It has been determined that the project’s objectives will not or cannot be achieved • The need for the project no longer exists, and the project is terminated

16. A Project Is Temporary • Projects which continue but should be cancelled are referred to as “Death March” projects! (projects that never end)

17. Projects Are Unique • Never been done before • Must contain a well-defined purpose • Because each project is unique, creates uncertainty and risk

18. Projects Are Progressively Elaborated • Refers to the idea that execution of the project occurs in steps (phases) or small increments, adding features and definition until the final objective is achieved • Concept applies to the scope, time, and cost of the project

19. What Is a Project, continued • Secondary Characteristics to define typical projects: • Each project must have a primary sponsor or champion • Projects usually cut across organizational lines requiring resources from several different sources • They must do something, deliver something of value

20. The more you built something the better and faster you become because of repetition. Project management is accomplished via the project management process of Initiating Planning Executing Monitoring and controlling Closing

21. The bullets above are the work which a project manager performs in order to accomplish the projects objectives

22. A Project Manager Manages Projects by: • Setting clear and achievable objectives • Identifying requirements • Adapting the project to the various concerns of the stakeholders • Balancing the demands of the triple constraint

23. Project Management Definitions Why is doing projects in IT so Diffucult? İn repetitive jobs

24. The Triple Constraint Each project is constrained by a list of customer requested requirements such as Scope Time Cost This is referred to as the tripple constraint of a project management

25. The Triple Constraint (figure 1-4)

26. Triple Constraint • Every project is constrained by a list of customer-requested requirements (scope), the amount of time available to produce the system in support of the requirements (time), and the limit of money available (cost) • Every project is constrained differently, according to the goals of the system owner (sponsor) and the project team

27. Triple Constraint Juggling Act • Reducing time allowed will increase cost (especially if overtime is required) and may reduce the scope (functions and features) of the system • Reducing costs (cutting the budget) will increase time (delay schedule) and may reduce the scope (functions and features) of the system • Increasing scope (adding features) will certainly increase time and/or cost • Reducing scope may reduce time and cost (and it may also negatively affect quality)

28. The Need for Better Project Management There is a study of Standish Group called CHAOS. According to Chaos the results for small, medium and large companies showed the succes of the companies;

29. IT Project Management Success Rates

30. Chaos Report Improvements • Better Project Management • Iterative/Incremental Development Process • Better PM tools and techniques • Emerging Web infrastructure • Better management processes • CMMI and now OPM3 maturity models

31. Project Manager Skills • Technical Skills: • Project Management software • Level of understanding of the technology being used in the project (software, hardware, network, etc.) • Basic knowledge of the business • Cost estimating and budgeting Soft skills: • Leadership • Team building • Negotiation • Conflict management • Organization for self and others • Communication both oral and written to both technical and non-technical audiences • Change management • Active listening

32. Project Manager Skills How much technical knowledge is necessary for a project manager to have has been debated at length. Some say that anyone who is a good project manager should be able to manage any project without any knowledge of the industry. (DİSCUSSION)

33. Six Basic Functions of Successful PM’s • manage project scope – make sure the team works on what is needed for the project and nothing else • manage human resources – the team must work together, this doesn’t just happen it takes a directed effort • manage communications – this occurs at many levels, teammates, customers, managers, vendors, and others • manage schedule – must keep people on schedule delivering work on time • manage quality – need to make sure that all work performed meets with customer expected levels of quality • manage costs – must keep an eye on the budget to make sure all the work can be done and not exceed the allocated budget

34. Reasons for demand decline The effect of outsourcing The bursting of the dot-com bubble The reliance on commercial of-the-shelf (COTS) software

35. Organizational Structures • Functional (traditional) • Organized around one of these characteristics: job function, end product, customer groups, a specific process, or geographic locations • Project • Organized completely around projects and sometimes its mere existence is only for one particular project (the Olympic games for example) • Matrix (Weak, Balanced, Strong) • Combination of traditional and project

36. Organizational Structure Influences on Projects

37. Functional (Traditional) Structure

38. Functional (Traditional) Structure Benefits: • Individuals can specialize and become very proficient in one area • Communication channels are well established • Good control over resources since they only have one boss • Easier budgeting and cost control because all budgets differentiated by defined department boundaries • Traditional advancement within the functional department

39. Functional (Traditional) Structure Drawbacks: • Project Manager holds the least amount of authority • Potential underutilization of resources or misallocation of resources • Economies of scale when sharing resources (people and materials) across projects • Individual exposure outside of one’s department limited • Focus not always on the project

40. Project-Based Organizational Structure The project based organizational structure is organized completely around projects and sometimes it exists only for the duration of one particular project.

41. Project-Based Organizational Structure

42. Project Organizational Structure Benefits: • One manager has authority and accountability • authority for work assignments and staff salary reviews • communication channels are direct and open • adaptability to changes is increased, decision making power is put in the hands of the project manager who is involved in the process daily • can build up considerable expertise from repetition of similar technologies

43. Project Organizational Structure Drawbacks: • Potential underutilization of resources or misallocation of resources • Economies of scale when sharing resources (people and materials) across projects • Project myopia, see only the project we are working on • May be a lack of career progression possibilities (Flat structure) • Support for administrative functions more difficult

44. Matrix Organizational Structure The structure was created as a way to combine the benefits of the functional structure and the benefits of the project structure into the organization Matrix organizations come in three general forms Weak Balance Strong

45. Matrix Organizational Structure Each type of matrix represents a different level of project manager authority and a different time commitment for project team members CEO ----Chief Expert Officer

46. Matrix Organizational Structure *3 forms: weak, strong, balanced

47. Matrix Organizational Structure Benefits: • ‘Formal’ project accountability and visibility • More dynamic and adaptable to change • Sharing of knowledge across projects is enhanced • Policies and procedures can vary across projects • Less stress about the project ending

48. Matrix Organizational Structure • Drawbacks: • Multiple supervisors with competing priorities • Budget and cost control becomes more difficult • Project Team motivation • who do I listen to…my boss who controls my salary or to the project manager who is giving me work assignments • Policies and procedures can vary across projects

49. Choosing the Correct Structure • Depends on: • The history of the organization • The industry the organization is in • Project characteristics • The tendency of many organizations today is moving toward a matrix structure

50. Chapter Review 1. Projects exist in every part of our lives,personal and work. At work, IT is growingin importance for every organization,and thus IT-based projects are also growingin importance. 2. IT projects are growing in size, complexity,and strategic importance. For these reasons,IT project management has grownmore difficult and requires advanced projectmanagement skills.