CHAPTER 1

What Is Project Management?

Project Management Concepts and Methodologies

JOAN KNUTSON, PMP, PM GURU UNLIMITED

FRANCIS M. WEBSTER, JR., PHD, WESTERN CAROLINA UNIVERSITY, RETIRED

What do Wall Street and Main Street have in common? Both measure success relative to speed, quality, and teamwork. Growing behemoths and smaller emerging concerns tout project management as a vehicle to success. They use project management to plan and manage enterprise initiatives that generate revenue or contain costs. Those who compete to sell products or services use project management to differentiate themselves by creating a product of higher quality than that of their competitors and getting it to market sooner.

Project management is recognized as a necessary discipline within corporations and governmental agencies. The planning, organizing, and tracking of projects are recognized as core competencies by for-profit and nonprofit organizations of any size.

Projects are mini-enterprises, and each project is a crucial microcosm of any business or organization. You may not be an entrepreneur, but as a project manager you are an “intrapreneur.” Think about it: projects consume money and create benefits. Consider the percentage of your organization’s dollars that are invested in projects, and the amount of your organization’s bottom line generated through projects.

PROJECTS: THE WORK

Pharmaceuticals, aerospace, construction, and information technology are industries that operate on a project basis, and all are notable for developments that have changed the way we live and work. But not all projects are of such magnitude. A community fund-raising or political campaign, the development of a new product, creating an advertising program, and training the sales and support staff to service a product effectively are also projects. Indeed, it is probable that most executives spend more of their time planning and monitoring changes in their organizations—that is, projects—than they do in maintaining the status quo.

All of these descriptions focus on a few key notions. Projects involve change—the creation of something new or different—and they have a beginning and an ending. Indeed, these are the characteristics of a project that are embodied in the definition of project as found in A Guide to the Project Body of Knowledge (PMBOK^® Guide, Fifth Edition) published by the Project Management Institute (PMI): A temporary endeavor undertaken to create a unique product, service, or result.¹ This definition, although useful to project managers, may not be sufficient to distinguish projects from other undertakings. Understanding some of the characteristics of projects and comparing projects to other types of undertakings may give a clearer perspective.

Some Characteristics of Projects

Projects are unique undertakings that result in a single unit of output. The installation of an entertainment center by a homeowner, with the help of a few friends, is a project. The objective is to complete the installation and enjoy the product of the effort. It is a unique undertaking because the homeowner is not likely to repeat this process frequently.

Projects are composed of interdependent activities. Projects are made up of activities. Consistent with the definition of a project, an activity has a beginning and an end. Activities are interrelated in one of three possible ways. In some situations, one activity must be completed before another can begin. Generally, these mandatory relationships are difficult to violate, or to do so just does not make sense. The relationship of other activities is not as obvious or as restrictive. These more discretionary interdependencies are based on the preferences of the people developing the plan. Some activities are dependent on some external event, such as receiving the materials from the vendor. In any of these three instances, mandatory, discretionary, or external, activities have a relationship one to another.

Projects create a quality deliverable. Each project creates its own deliverable(s), which must meet standards of performance criteria. That is, each deliverable from every project must be quality controlled. If the deliverable does not meet its quantifiable quality criteria, that project cannot be considered complete.

Projects involve multiple resources, both human and nonhuman, which require close coordination. Generally there are a variety of resources, each with its own unique technologies, skills, and traits. This aspect, in human resources, leads to an inherent characteristic of projects: conflict. There is conflict among resources as to their concepts, approaches, theories, techniques, and so on. In addition, there is conflict for resources as to quantity, timing, and specific assignments. Thus, a project manager must be skilled in managing both such conflicts.

Projects are not synonymous with the products of the project. For some people, the word project refers to the planning and controlling of the effort. For others, project means the unique activities required to create the product of the project. This is not a trivial distinction, as both entities have characteristics specific to themselves. The names of some of these characteristics apply to both. For example, the life cycle cost of a product includes the cost of creating it (a project), the cost of operating it (not a project), the cost of major repairs or refurbishing (typically done as projects), and the cost of dismantling it (often a project, if done at all). The project cost of creating the product is generally a relatively small proportion of the life cycle cost of the product.

Projects are driven by competing constraints. These competing constraints represent the balance of scope, quality, schedule, budget, resources, and risks, among other factors. One of these constraints is the driving or gating factor of each project. Different projects may be driven by a different constraint, depending on the emphasis established by management. Being first in the market often determines long-term market position, thus creating time pressure as the major driver. Most projects require the investment of considerable money and labor the benefits of the resulting product can be enjoyed. Thus, containing resource expenditures may be the driving factor. A need exists for the resulting product of the project to be of the highest quality, as, for example, with a new system within the healthcare industry.

In summary, projects consist of activities, which have interrelationships among one another, produce quality-approved deliverables, and involve multiple resources. Projects are not synonymous with products. During the life cycle of any product, the concept of project management is used, whereas, at other times, product or operations management is appropriate. Finally, how projects are managed is determined by which of the competing project constraints is the driving factor.

Development Life Cycles

As one of the characteristics above stated, the work to create the product and the work to manage the project that creates the product are different. However, a development life cycle often integrates work efforts to accomplish both. A development life cycle defines the activities to create the product and designates other activities to plan and control work being performed to create the product. The work efforts related to creating the product might be Design It, Build It, Quality Assure It, and Ship It, whereas the processes to manage the project might be Initiating, Planning, Executing, Monitoring and Controlling, and Closing.

The activities to create the product are specific to the industry and to the product being created. In other words, the pharmaceutical product life cycle is very different from the software development life cycle. Yet the same project management life cycle could be used to organize and monitor either the pharmaceutical or the software product creation.

Traditional. The design and the use of the integrated product and project life cycles have changed. Traditionally, the product life cycle is decomposed into phases or stages, such as the example above. Each phase is performed, completed, and approved during a Phase Review effort, and then the next phase begins. This technique is called the waterfall development life cycle. The project management life cycle works in sync with the product life cycle. Each phase of the product life cycle (for example, the design phase) would be planned, executed, controlled, and possibly closed-out before the build phase begins. In other words, the work efforts to produce the product would be performed serially and only once. The efforts to project manage the effort would be repeated for each sequential phase of the product life cycle

Iterative. It is recognized that a phase of the product process might be revisited—for example, if something was discovered during the design phase that necessitated going back and revising the specifications created in the requirements phase. The traditional waterfall can be modified slightly. The modification of the waterfall is called a spiral, or an iterative, approach.

Relative to the project management efforts, the upcoming phase is planned and managed at a very detailed level, whereas the later phases are planned at a lesser level of detail until more information is gained, which justifies a detailed planning effort. This type of project management effort is referred to as the rolling wave, or the phased approach to project management.

Evolving. With time-to-market or time-to-money becoming more important, the above sequential techniques are ineffective. New approaches, such as incremental builds and prototyping, have emerged. A prototype (a working model) is produced. The customers play with it, modifying/adding/deleting specifications, until the product is the way that they want it. Only then is the product officially released to be used by the entire customer community. Incremental build suggests creating a minimally functional product and releasing it. Even before it is in the customer’s hands, more features and functions are being added for the next release.

Still not fast enough? Deliverable-driven and time-boxed efforts, called “agile,” become the basic premises for these faster (cheaper) and better development life cycles. Using the same theory as incremental and interactive, a new version of the product must be completed in a specified, but very short, period of time (often called a sprint). Typical project management schedule charts become extinct or at least modified to accommodate this agile development approach. Short-interval scheduling that produces quality-controlled deliverables becomes the mode of the day. Teams become closer and more energetic. Customers start seeing output quicker. Paperwork becomes less important and flexible decision making becomes a necessity. Risks, mistakes, and some wasted time are acceptable. Yet the product is produced faster, thus generating revenue or containing costs occurs sooner.

In summary, each of the above variations to product/project development life cycles has its place. The trend toward speed will increase. The desire for highest quality products created with minimal cost will influence these techniques as time goes on.

PROJECT MANAGEMENT PROCESS: THE DISCIPLINE

Project Management is a disciple that requires discipline.

The word discipline has the following two definitions: (1) the rules used to maintain control; and (2) a branch of learning supported by mental, moral, or physical training. Project management, therefore, is a discipline (definition 2) that requires discipline (definition 1). It is a branch of learning that deals with the planning, monitoring, and controlling of one-time endeavors. In other words, project management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements.

Some Characteristics of Project Management

Project management is a unique career and profession. Its origins can be traced back to efforts such as U.S. Department of Defense major weapons systems development, NASA space missions, and major construction and maintenance efforts. The magnitude and complexity of these efforts were the driving force in the search for tools that could aid management in the planning, decision making, and control of the multitude of activities involved in the project, especially those occurring simultaneously.

Project management is not just scheduling software. There is a misconception that project management is no more than scheduling using PERT (Program Evaluation and Review Technique) or CPM (Critical Path Method). A more realistic view is that scheduling software is a small part of project management. Software has permitted time scheduling, resource allocation, and cost management to be done much more efficiently and, therefore, in less time and in more detail. Thus, a project can be planned and executed more precisely, leaving more time to perform the other aspects of project management. Constantly improving software also has made it easier to manage the schedules, resources, and costs associated with multiple co-occurring projects.

Project management is different from operations and technical management. Operations management can be characterized as managing the steady state; thus it is recurring and repetitive. As soon as the operation is established, the concern becomes maintaining the operation in a production mode for as long as possible. Technical management tends to focus on the theory, technology, and practice in a technical field concerning itself with questions of policy on strength of materials, safety factors in design, and checking procedures.

However, executives tend to be concerned about setting up a new operation (via a project) to implement organizational strategy. Project management, then, is the interface among general management, operations management, and technical management; it integrates all aspects of the project and causes the project to happen.

A focus on integration. If there is a single word that characterizes project management, it is integration—the integration of this discipline with other driving factors within the organization.

Factors That Influence the Practice of Project Management

Below is a sampling of those driving factors that influence project management and, equally as important, which project management the discipline influences.

Strategic Planning: The Directive. Decisions from the strategic planning process become the directive from which projects are initiated. Project practitioners need to see the alignment between the strategic plan and the project. Strategic planning converted into an ongoing strategic management process continues to review strategic objectives and filter down any changes, so that project managers can redirect their efforts appropriately.

Resource Allocation: The Critical Success Factor. Resources used by projects are defined as skilled human resources (specific disciplines either individually or in crews or teams), equipment, services, supplies, commodities, material, budgets, or funds. The project manager must ensure that the allocation of specific resources is adequate but not overcommitted, and that the right resources are assigned to the right tasks. This is not a simple procedure because of the number of activities that can be in process simultaneously. Fortunately, project management software provides assistance by identifying overloading or underloading of any one resource or pool of resources. Having identified any problems, human judgment is still required to evaluate and make the final decisions. This essential process both determines the cost of the project (budget) and provides oversight.

Change Management: The Differentiator. Modifications to documents, deliverables, or baselines associated with the project are identified, documented, approved, or rejected. This is the definition of change management in the context of project management. However, every project creates significant changes in the culture of the business. Additional attention needs to be paid to planning and managing cultural and organizational change generated by projects.

Quality: Win/Win or Lose/Lose. A quality initiative is the degree to which a set of inherent characteristics fulfills requirements; it begins at the same time as the project management discipline. Quality management in the form of Six Sigma and other approaches combines project management techniques with the quality improvement techniques to ensure verifiable success.

Mentorship: Transfer from One Generation to the Next. Staff members who leave a company/agency or a division/department take with them a history and knowledge of past projects. Cultures survive by passing knowledge from the elders to the young. To keep the information needed to perpetuate the project management culture in house, proactive mentorship programs (as well as knowledge-based systems) are established to orchestrate the passing of the culture onto new project practitioners.

Metrics and Close-Out: Inspect What You Expect. Originally, metrics were the data collected after a project was completed to be used to plan for the next project(s). As project management has evolved, we have learned that we cannot wait until the end of a project to set thresholds and collect the data. Management wants measurement metrics throughout the project that can be managed using executive scorecards or dashboards. Control procedures need to be in place before the project proceeds so that the records can be complete from the beginning. If not, valuable effort can be consumed in retracing the records after the fact, and control can be lost before the project really gets started. Furthermore, legal tests of prudence are better dealt with when accurate and complete records of the project are available.

Productivity: Doing More with Less. The drive to do more with less money and fewer resources, to do it faster, and to produce the highest quality deliverable will never go away. To accomplish this mandate, the biggest bang for the buck comes from increasing productivity. Project practitioners use new and creative techniques (automated and nonautomated) to facilitate greater productivity.

Maturity Tracking: Managing the Evolution of the Project Management Discipline. With increased visibility, project management is being asked to account for what it has contributed lately and, more importantly, for what it plans to contribute tomorrow. To answer these questions, a reasonable maturity growth plan specifically designed for the project management discipline is constructed, which evaluates the growth of today’s environment to ensure planned, rather than chaotic, growth.

Teams: Even More Distant. Remote or distant teams face the challenge of geography and diversity. Project management needs to address variables such as multifunctional, multicultural, multigenerational, multigender, and multipersonality project environment.

Risk: The Defeating Factor. Risks are the holes in the dike. Too much vulnerability in the dike can make it crumble. If risks are isolated and the potential holes they present are plugged up, the dike will remain sound and solid. The subdiscipline of risk management is a major area of focus. One emerging approach is to use these techniques for controlling negative risks (threats) as well as for harvesting positive risks (opportunities).

Competencies: Today and Tomorrow. Initially, project practitioners focus on their subject matter expertise, such as financial analysis, telecommunications design, and marketing creativity. Those who became involved in projects transition to project management competencies, such as scheduling, status reporting, and risk management. The next movement is to add general business awareness skills/competencies, such as financial knowledge, facilitation, leadership, problem solving/decision making, and creativity/innovation. Each of you must ask what’s next in your world.

Behind these integrations exists a superstructure in the form of processes, procedures, and methodologies.

Project Management Process: The Superstructure

The definition of a project is a temporary endeavor undertaken to create a unique product, service, or result. This work is accomplished by instituting a project management process. As with any other discipline, a process or a methodology is created so that consistent rules and standards are employed. Consistent processes provide a common lexicon of terms, a regimented business system, and a frame of reference from which everyone can work. Below are the nine key knowledge areas¹ within a project management discipline.

Integration management has been described earlier in this chapter.

Scope management ensures that the project includes all the work required, and only the work required, to complete the project successfully.¹ The project scope management plan is a component of the project or program management plan that describes how the scope will be defined, developed, monitored, controlled, and verified.¹ Project scope includes the features and functions that characterize the product, service, or result, and includes the work that must be done to deliver it with its specified features and functions. Scoping a project is putting boundaries around the work to be done as well as the specifications of the product to be produced. When defining the scope, it is wise to articulate not only what is included but also what is excluded.

Time management is the processes required to manage the timely completion of the project.¹ The management of time is crucial to the successful completion of a project. The function of time management is divided into six processes: define the activities, sequence the activities, estimate the activity resources, estimate the activity durations, develop the schedule, and control the schedule.¹ Definition and sequencing include depicting what work is intended to be done and in what order or sequence. Estimating is the determination of the duration required to perform each activity, considering the availability and capacity of the resources to carry out the activity. Scheduling portrays the duration on a calendar, recognizing both time and resource constraints. The final deliverable from the scheduling process is the estimated time target to complete the entire project. Schedule control includes a recognition of what has happened and taking action to ensure that the project will be completed on time and within budget.

Cost management processes maintain financial control of projects and includes the processes involved in planning, estimating, budgeting, financing, funding, managing, and controlling costs so that the project can be completed within the approved budget.¹ Cost estimating is the process of assembling and predicting costs of a project. The cost budgeting process involves rolling up those estimates in order to establish budgets, standards, and a monitoring system by which the cost of the project can be measured and managed. Cost control entails gathering, accumulating, analyzing, monitoring, reporting, and managing the costs on an ongoing basis.

Quality management includes the processes and activities of the performing organization that determine quality policies, objectives, and responsibilities so that the project will satisfy the needs for which it was undertaken.¹ Quality management makes use of quality planning, quality assurance, quality control, and quality improvement techniques and tools. If the requirements for the product of the project are consistent with the real, or perceived, needs of the customers, then the customers are likely to be satisfied with the product of the project. The product either conforms to these requirements or it does not. If the product going to the customers has no defects, they can perform their task in the most efficient manner—and do the right thing right the first time.

Human resource management comprises all the processes that organize, manage, and lead the project team.¹ It is all about making the most effective use of people, from sponsors, customers, and partners, to individual contributors. Human resource planning and the formation, development, and management of the project team are all part of human resources management. The project manager is responsible for developing the project team and building it into a cohesive group to complete the project. Two major types of tasks are recognized: behavioral and administrative. The behavioral aspects deal with the project team members, their interaction as a team, and their contacts with individuals outside the project itself. Included in these aspects are communicating, motivating, team building, and conflict management. Administrative tasks include employee relations, compensation, government regulations, and evaluation. Much of the administrative activity of the project manager is directed by organizations and agencies outside the project.

Communications management includes the processes required to ensure timely and appropriate planning, collection, creation, distribution, storage, retrieval, management control, and ultimate disposition of project information.¹ These include communications planning and management, information distribution, and performance reporting. Successful project managers are constantly building consensus or confidence at critical junctures in a project by practicing active communications skills. The project manager must communicate to upper management, to the project team, and to other stakeholders. The communications process is not always easy because the project manager may find that barriers exist to communication, such as lack of clear communication channels and problems in a global team environment. The project manager has the responsibility of knowing what kind of messages to send, knowing when and to whom to send the messages, using the correct mode/medium, and translating the messages into a language that all recipients can understand.

Risk management includes the processes concerned with conducting risk management planning, identification, analysis, responses, and monitoring and controlling on a project. Risk management is the formal process whereby risk factors are systematically identified, assessed, and provided for. The term risk management tends to be misleading because it implies control of events. Risk management must be seen as preparation for possible events in advance, rather than simply reacting to them as they happen.

Procurement management includes the processes to purchase or acquire the products, services, or results needed from outside the project team. Planning for purchases or acquisitions, contracting, requesting seller responses, source selection, and contract administration (including closure) are all part of procurement management. Inherent in the process of managing a project is the procurement of a wide variety of resources. In most instances, this requires the negotiation of a formal, written contract. In a global business environment, it is essential to understand varying social, political, legal, and financial implications in this process.

Stakeholder management includes the processes required to identify the people, groups, or organizations that could impact or be impacted by the project. The newest knowledge area in the standards, its addition reflects the growing realization that project management relies on people—not just the project manager and team, but also the executives, managers, clients or customers, vendors, partners, end-users, and communities that have a stake in the project’s outcome. Identifying and analyzing the needs and roles of stakeholders is a critical basis for planning, risk management, and requirements gathering. A telling detail in the language about stakeholders in the fifth edition of the PMBOK^® Guide is the change from “managing stakeholder expectations” to “managing stakeholder engagement.”

In summary, the superstructure that supports the project management discipline relies on professional and practical scope, time, cost, quality, human resources, communications, risk, and procurement management—all coordinated through the practice of integration management. Each of these processes and their subordinated processes create the methodology by which projects are performed in a logical and consistent manner. The level of detail and the amount of rigor is defined by the culture as well as by the magnitude and complexity of the project itself.

CONCLUSION

Projects are ubiquitous. They are everywhere, and everybody does them. Projects are the driving force for many organizations in most industries. Projects can be looked upon as the change efforts of society, and the pace of change has been increasing. Therefore, effectively and efficiently managing change efforts is the only way organizations can survive and grow in this modern world. It is the mode in which corporate strategy is implemented, business change is addressed, productive teams and their necessary competencies are dealt with, the quality of the deliverables is determined, preestablished metrics for management’s decision making are tracked, the project is closed out, and the lessons learned are determined.

This discipline changes over time, but the basic business premise never changes: Accomplish the right thing right the first time within justifiable time, resources, and budget. Projects are the means for responding to, if not proactively anticipating, the environment and opportunities of the future.

REFERENCE

¹ This definition, and all others in this chapter, are derived from the Project Management Institute’s A Guide to the Project Management Body of Knowledge, 5th edition (Newtown Square, PA: PMI).