UNIT-1

Project: A project is unique, non-routine effort, limited by time and budget, defined by a
performance specification, and designed to meet stakeholder needs.

Projects are characterized as follows:

• Projects have an established objective.

In the early stages of a project’s conceptual development, the project is defined by its charter,
which is a short overview of the goals and objectives, and perhaps a desired schedule and rough
budget. The first activity of the project is typically the development of the scope, which precisely
defines the project.

• Projects have a well-defined lifespan.

Projects have a beginning date and an end date. If activities continue indefinitely into the future,
then technically it is not a project. In general, it is a good idea to break up long projects into
several shorter projects, each with a well-defined objective, budget, and completion date.

• Projects require staff participation from across the organization.

Projects are inherently multi-disciplinary. For example, when building a house, the project
manager must interact with the architect and the contractor, as well as assorted subcontractors
such as roofers, plumbers, electricians, and carpenters. There are also technical requirements
such as the permitting process, gas company installation and approval procedures, and
voluminous fire codes, electrical codes, and environmental regulations. Project managers must
also interact with professionals such as accountants, lawyers, engineers, and human resources
personnel. Project managers will quickly find themselves immersed in many disciplines.

• Projects have defined schedules and budgets.

No project has the luxury of an infinite cost or schedule. Customers always have an assigned

budget and a preferred delivery schedule.

• Projects have limited resources.

Resources include staff and equipment, which must be managed. Other factors may limit the
performance of the project, such as competition with other projects for staff and the availability
of funds.

• Projects have multiple, often competing, stakeholders.

The project manager and the team are obvious stakeholders, but there are many more, including
the sponsor (who pays the bill), customers, users, and trainers. Upper management also has a
stake in the project’s success, but if things are not going well, it may be in their best interest to
cancel the project!

Project Management

The Project Management Institute (PMI) defines project management as:

Project Management is the application of knowledge, skills, tools, and techniques to project
activities to meet the project requirements. Fortunately, coming to the aid of the modern project
manager is a discipline and methodology that provides support and professionalism in both
arenas.

1. Sociocultural Skills: A project manager interacts with diverse stakeholders, many of

Who have different goals. The project manager reports to upper management and

Customers. Also, the project manager must acquire the team, and develop their skills.

Communications skills are therefore a critical aspect of project management. These are

often referred to as “soft” skills, and include general management skills, interpersonal

Communications, and staff development.

2. Technical Skills: A project manager must be able to perform a variety of technical

analyses, such as determining the value of the project to stakeholders, performing a cost

estimate, constructing a work breakdown structure, building a network diagram,

determining if the project is on schedule, and whether it is over or under budget. These are

essential skills, as every customer wants to know the cost and the schedule.

The technical and socio-cultural skills of project management.

The Project Manager

The project manager is the person assigned to achieve the project’s objectives.

The project manager must possess three characteristics: Knowledge about project management;
the ability to perform as a project manager; and personal effectiveness, which encompasses both
skills and personality traits. The project manager often has responsibility without authority.
Rarely does the project manager have the luxury of being able to order people around. The
interdisciplinary nature of projects, and the diverse skills required, means that few, if any, of the
staff work directly for the project manager. Therefore, one of the key skills required of a project
manager is being able to induce the right people to do the right thing at the right time. This
includes their staff, stakeholders, customers, and even upper management. This leads to one of
our most cherished beliefs

Project managers induce people to perform. The role of the PM is to:

1. Plan and organize the project from start to finish.

2. Manage relations with stakeholders, and in particular, customers.

3. Manage relations with the parent company.

4. Develop and manage the project team.

5. Monitor and control project progress, particularly the costs and schedule.

6. Deal with uncertainty and changes.

7. Deliver the product or service, and get the customer’s acceptance.

Project managers must exercise control and provide leadership to their team. At the same time,
they cannot do everything and so must learn to delegate, follow up, and provide training and
encouragement as needed. Since projects have not been done before, project managers must deal
with uncertainty. Almost everything in project management is a compromise, there are rarely
correct answers. Projects are inherently messy, and change is a fact of life. Project managers
must deal with complexity and ambiguity, and be able to prioritize. Project managers live in a
permanent competition for resources. They compete for staff and with other projects for
resources. They referee stakeholders, all of whom have different goals, objectives and priorities.

Interactions

The project manager interacts with many different constituencies:

• Stakeholders. This is the most important group. Failure to carefully manage stakeholders will

jeopardize the project. Stakeholders are usually a diverse group with competing priorities.

• Upper Management. The project manager must understand the role of the project in the

Company’s strategy, and be able to defend its budget.

• Sponsor. The person who pays for the project will want regular cost and schedule updates.

• Customers.Thepeoplewhosettheexpectationsforthefinalproductorservice.

• Project Team. It is the project manager’s job to induce the team to perform to the best of their

Ability.

• FunctionalAreas.Thesearetypicallythecompanydepartmentsthatprovide the staff to the project,

And may include:

– System designers and architects.

– Subject matter experts.

– Business analysts, lawyers, and accountants.

– Contractors and subcontractors.

– Testers and quality control staff.

Benefits of Project Management

There are two main benefits to a disciplined approach to project management:

• You are not alone. There is a mountain of information available: Literature, templates, and

advice. You can access it, and learn from others. Someone has probably done something

similar.

• Powerful Tools. The critical path tells you which activity is the most important one to work
on now. Earned value tells you how much your project is over budget and behind schedule.

Project Success

A significant challenge of project management is that every project must aim to be successful. In
a routine manufacturing environment, the failure of a few products (out of a million) might not
be regarded as catastrophic. However, the failure of a project critical to the mission of a company
might lead to a crash of the entire company. Finally, projects are almost always produced to a
tight deadline with constrained funds. This all adds pressure to the project manager to succeed.

When discussing “success,” however, it is important to distinguish between:

1. Project management success. This is typically measured by the traditional factors of

following a quality process, and delivering on schedule and within budget.

2. Project success. This is usually defined in terms of product quality, and measured by whether
the project met its overall objectives, e.g., its critical success factors.

Programs

Programs are collections of projects that have a natural association, and are managed together for

Mutual benefit. The definition of a program is:A program is a group of related projects managed
in a coordinated way to obtain benefits and control not available from managing them
individually. Suppose a company’s marketing department creates a program to launch a new
product. That program might include the following projects:

• Launch the product at a national tradeshow.

• Plan and implement a marketing campaign.

• Create the supply chain for the product.

• Create new marketing channels for the product.

Sometimes a program has routine activities as part of its mission. In the above example, routine
activities might include updating the marketing materials and publication of a weekly sales
brochure to selected clients.

The Program Management Office

Program management is often accomplished in a Program Management Office (PMO).

A Project Management Office is responsible for the coordinated management of projects. The
job of the PMO is to:
• Develop and manage the company standards, policies and procedures that apply to projects.

• Invest in project management technology, best practices, tools and techniques, and implement

them across projects.

• Manage the information technology system

• Supervise functions that are managed centrally, such as the portfolio selection system, and risk

pools.

• Collect and manage lessons learned.

Portfolios

A portfolio is an entity that is managed from a business perspective. A portfolio is a collection of

programs, projects, products, and routine activities managed together for mutual benefit. That is,
a portfolio consists of all the activities necessary to make a product (or line) successful.
Portfolios, therefore, include projects, programs, as well as routine activities. Developing a new
product is a project, but the activities to make the product successful include many routine
activities such as marketing, product maintenance, inventory control, and customer service. A
new product cannot be successful without all of these non-project activities, so it makes sense for
a company to manage it all as a coherent whole.

Difference between Projects, Programs & Portfolio’s

Mission, Goals, Objectives, and Strategy

A project manager must be able to define and articulate clearly the link between their project and
the company’s mission, goals, and objectives. Projects compete for both client and company
funds and resources, and projects without a clear link to the mission are at risk of cancellation.
Mission

The mission is the company’s reason for existing. The mission statement is often aspirational,
providing the vision and values for the company. It defines who you are, what you do, and why.
Every project must have a clear link to the mission and strategy. Otherwise, why do it?

For example, Google’s mission is to “organize the world’s information and make it universally
accessible and useful.” Notice that this does not say anything about search engines. If I had asked
you what Google is known for, you’d probably say something about web searching.Google’s is
an excellent example of mission statement. It is concise and clear, and sets out their goalsfor
everyone to see. An excellent example of how that mission statement helped to guide Google is
tothink about what happened when digital mapping became available. If the Google mission had
been to create a great search engine, then digital mapping might have been viewed as outside the
realm of their mission. But since their mission is to ‘organize information,’ and maps are an
organizational tool, digital mapping was clearly within their domain.

Goals

The goals are what you wish to accomplish. For example, a company goal might be to: Diversify
our products to get into new markets. Objectives

Objectives are detailed, specific statements about what the company wishes to achieve. When
listing objectives, the acronym SMARTO is often used—

Portfolio Management

A portfolio consists of many different projects, all with different goals, stakeholders, and
priorities. Projects must align with corporate objectives, and choosing between projects is a vital
skill. Projects may spring up in unexpected areas. For example, when tax and environmental
regulations change, systems and processes must be upgraded. These so called “compliance
projects” are not glamorous, they cost money, and do not improve the bottom line. However, the
project selection mechanism must also permit the selection of these types of projects.

A good portfolio is characterized by:

• The right number of projects. Many companies take on too many projects. The result is that
their projects do not have enough resources, either money or staff, and it should therefore come
as no surprise that their portfolio performs poorly. Therefore, one of the essential aspects of good
portfolio management is killing projects.

• Good balance: Portfolios need to have a mix of highly innovative projects, moderate
extensions to existing lines, and compliance projects. One of the excellent attributes of the
scoring matrix is that it achieves a balanced portfolio.

• Clearly tied to the business mission and strategy: Company spending and investment are
linked to corporate goals, so the portfolio of projects had better be also. There are many ways of
prioritizing and selecting projects.

Financial methods are popular and until recently dominated the selection process. However,
selecting a project based on its return on investment is generally considered to be the worst way
to select projects. Early in the life of a project quantities such as cash flow, profitability, and
return on investment are very difficult to estimate.

Critical Success Factors

Successful products have a few Critical Success Factors in common. The most important CSFs
are:

1. A unique, differentiated product that provides significant benefits and superior value to the
customer. This is the most important CSF and is much more important than any other factor in
the eventual success of a product.

2. A strong market-driven, customer-focused orientation aimed at an “attractive market.” An

attractive market is one in which there is lots of money and, preferably, no competitors. Also an
attractive market is defined from the customer’s perspective and so is vital to build in the voice
of the customer. That is, solicit opinions from potential customers. Customers, not the project
manager, determine the project's value. Also, one should carefully assess the competition and
their potential responses.

3. Solid up-front project definition. The project’s most important document is the scope, so
investment of time up front is critical. Don’t rush in. Clearly define the project.

4. Don’t stray from core competencies. What are you good at? You can branch out into new
areas, but if you do, be sure you know that it is risky.

5. Execute a disciplined process: Practice good project management and garner upper
management support. Implement a portfolio management system with tough Go/Kill decisions.
Continually check costs, margins, and revenues.