Information Technology Project
Management, Seventh Edition
Note: See the text itself for full citations.
Project managers must coordinate all of the other
knowledge areas throughout a project’s life cycle
Many new project managers have trouble looking
at the “big picture” and want to focus on too many
details (See opening case for a real example)
Project integration management is not the same
thing as software integration
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Management, Seventh Edition Copyright 2014 2
1. Developing the project charter involves working
with stakeholders to create the document that
formally authorizes a project—the charter.
2. Developing the project management plan
involves coordinating all planning efforts to create a
consistent, coherent document—the project
management plan.
3. Directing and managing project work involves
carrying out the project management plan by
performing the activities included in it.
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Management, Seventh Edition Copyright 2014 3
Monitoring and controlling project work involves
overseeing activities to meet the performance
objectives of the project
Performing integrated change control involves
identifying, evaluating, and managing changes
throughout the project life cycle.
Closing the project or phase involves finalizing all
activities to formally close the project or phase.
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Management, Seventh Edition Copyright 2014 4
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Strategic planning involves determining long-term
objectives, predicting future trends, and projecting
the need for new products and services
Organizations often perform a SWOT analysis
◦ analyzing Strengths, Weaknesses, Opportunities, and
Threats
As part of strategic planning, organizations
◦ identify potential projects
◦ use realistic methods to select which projects to work on
◦ formalize project initiation by issuing a project charter
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Management, Seventh Edition Copyright 2014 7
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There are usually more projects than available
time and resources to implement them
Methods for selecting projects include:
◦ focusing on broad organizational needs
◦ categorizing information technology projects
◦ performing net present value or other financial
analyses
◦ using a weighted scoring model
◦ implementing a balanced scorecard
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Management, Seventh Edition Copyright 2014 11
“It is better to measure gold roughly than to count
pennies precisely”
Three important criteria for projects:
◦ There is a need for the project
◦ There are funds available
◦ There’s a strong will to make the project succeed
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Management, Seventh Edition Copyright 2014 12
One categorization is whether the project
addresses
◦ a problem
◦ an opportunity, or
◦ a directive
Another categorization is how long it will take to do
and when it is needed
Another is the overall priority of the project
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Management, Seventh Edition Copyright 2014 13
Financial considerations are often an important
consideration in selecting projects
Three primary methods for determining the projected
financial value of projects:
◦ Net present value (NPV) analysis
◦ Return on investment (ROI)
◦ Payback analysis
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Management, Seventh Edition Copyright 2014 14
Net present value (NPV) analysis is a method of
calculating the expected net monetary gain or loss
from a project by discounting all expected future
cash inflows and outflows to the present point in
time
Projects with a positive NPV should be considered if
financial value is a key criterion
The higher the NPV, the better
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Management, Seventh Edition Copyright 2014 15
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Management, Seventh Edition Copyright 2014 16
Note: See the template called business_case_financials.xls
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Management, Seventh Edition Copyright 2014 17
Determine estimated costs and benefits for the life
of the project and the products it produces
Determine the discount rate (check with your
organization on what to use)
Calculate the NPV
Notes: Some organizations consider the
investment year as year 0, while others start in year
1. Some people entered costs as negative
numbers, while others do not. Check with your
organization for their preferences
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Management, Seventh Edition Copyright 2014 18
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Management, Seventh Edition Copyright 2014 19
Return on investment (ROI) is calculated by
subtracting the project costs from the benefits and then
dividing by the costs
The higher the ROI, the better
Many organizations have a required rate of return or
minimum acceptable rate of return on investment for
projects
Internal rate of return (IRR) can by calculated by
finding the discount rate that makes the NPV equal to
zero
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Management, Seventh Edition Copyright 2014 20
Another important financial consideration is
payback analysis
The payback period is the amount of time it will
take to recoup, in the form of net cash inflows,
the total dollars invested in a project
Payback occurs when the net cumulative
discounted benefits equals the costs
Many organizations want IT projects to have a
fairly short payback period
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Management, Seventh Edition Copyright 2014 21
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A weighted scoring model is a tool that provides a
systematic process for selecting projects based on
many criteria
Identify criteria important to the project selection process
Assign weights (percentages) to each criterion so they add
up to 100%
Assign scores to each criterion for each project
Multiply the scores by the weights and get the total
weighted scores
The higher the weighted score, the better
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Management, Seventh Edition Copyright 2014 23
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Management, Seventh Edition Copyright 2014 24
Drs. Robert Kaplan and David Norton developed
this approach to help select and manage projects
that align with business strategy
A balanced scorecard
◦ is a methodology that converts an organization’s value
drivers, such as customer service, innovation, operational
efficiency, and financial performance, to a series of defined
metrics
See www.balancedscorecard.org for more
information
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Management, Seventh Edition Copyright 2014 25
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Management, Seventh Edition Copyright 2014 26
After deciding what project to work on, it is
important to let the rest of the organization know
A project charter is a document that formally
recognizes the existence of a project and
provides direction on the project’s objectives and
management
Key project stakeholders should sign a project
charter to acknowledge agreement on the need
and intent of the project; a signed charter is a key
output of project integration management
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Management, Seventh Edition Copyright 2014 27
A project statement of work
A business case
Agreements
Enterprise environmental factors
Organizational process assets, which include
formal and informal plans, policies, procedures,
guidelines, information systems, financial systems,
management systems, lessons learned, and
historical information
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A project management plan is a document used
to coordinate all project planning documents and
help guide a project’s execution and control
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Management, Seventh Edition Copyright 2014 32
Introduction or overview of the project
Description of how the project is organized
Management and technical processes used on
the project
Work to be done, schedule, and budget
information
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Involves managing and performing the work
described in the project management plan
The majority of time and money is usually spent
on execution
The application area of the project directly affects
project execution because the products of the
project are produced during execution
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Management, Seventh Edition Copyright 2014 35
Project planning and execution are intertwined
and inseparable activities
Those who will do the work should help to plan the
work
Project managers must solicit input from the team
to develop realistic plans
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Management, Seventh Edition Copyright 2014 36
Project managers must lead by example to
demonstrate the importance of creating and then
following good project plans
Organizational culture can help project execution by
◦ providing guidelines and templates
◦ tracking performance based on plans
Project managers may still need to break the rules
to meet project goals, and senior managers must
support those actions
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Management, Seventh Edition Copyright 2014 37
Expert judgment: Experts can help project managers and
their teams make many decisions related to project
execution
Meetings: Meetings allow people to develop relationships,
pick up on important body language or tone of voice, and
have a dialogue to help resolve problems.
Project management information systems: There are
hundreds of project management software products
available on the market today, and many organizations are
moving toward powerful enterprise project management
systems that are accessible via the Internet
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Management, Seventh Edition Copyright 2014 38
Changes are inevitable on most projects, so it’s
important to develop and follow a process to
monitor and control changes
Monitoring project work includes collecting,
measuring, and disseminating performance
information
A baseline is the approved project management
plan plus approved changes
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Management, Seventh Edition Copyright 2014 39
Three main objectives are:
◦ Influencing the factors that create changes to
ensure that changes are beneficial
◦ Determining that a change has occurred
◦ Managing actual changes as they occur
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Management, Seventh Edition Copyright 2014 40
Former view: The project team should strive to do
exactly what was planned on time and within
budget
Problem: Stakeholders rarely agreed up-front on
the project scope, and time and cost estimates
were inaccurate
Modern view: Project management is a process of
constant communication and negotiation
Solution: Changes are often beneficial, and the
project team should plan for them
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Management, Seventh Edition Copyright 2014 41
To close a project or phase, you must finalize all
activities and transfer the completed or cancelled
work to the appropriate people
Main outputs include
◦ Final product, service, or result transition
◦ Organizational process asset updates
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Management, Seventh Edition Copyright 2014 42
Several types of software can be used to assist in
project integration management
◦ Documents can be created with word processing software
◦ Presentations are created with presentation software
◦ Tracking can be done with spreadsheets or databases
◦ Communication software like e-mail and Web authoring
tools facilitate communications
◦ Project management software can pull everything together
and show detailed and summarized information
◦ Business Service Management (BSM) tools track the
execution of business process flows
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Management, Seventh Edition Copyright 2014 43
Source: www.projectmanager.com
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Management, Seventh Edition Copyright 2014 44
